A Place in the Auvergne, Monday, 29th December 2008

Israel blasts Hamas sites for 3rd day

By Taghreed El-Khodary and Isabel Kershner
Monday, December 29, 2008
GAZA: In a third straight day of deadly airstrikes against the emblems and institutions of Hamas on Monday, Israeli warplanes pounded targets in Gaza, including the Interior Ministry, while in Jerusalem, Israeli Defense Minister Ehud Barak vowed "an all-out war on Hamas and its kind."
The three-day death toll surpassed 350, some 60 of them civilians, according to United Nations officials. Palestinian hospital officials reported that some 1,500 people were wounded.
Israel says that its onslaught — its most ferocious against Palestinians in decades — is designed to prevent Palestinians from attacking towns in southern Israel with missiles. But Hamas fired more than 60 rockets into southern Israel on Monday, killing an Israeli Arab construction worker in Ashkelon and wounding several others.
A long-range rocket also struck the Israeli city of Ashdod some 18 miles from Gaza, where it hit a bus stop, killing a woman and injuring two other people. Thousands of Israelis huddled in shelters.
The airstrikes followed bombing late Sunday that hit the Islamic University in Gaza, a Hamas stronghold, and the Interior Ministry, according to Hamas. Footage recorded from Israeli warplanes showed bombs striking the entrances to tunnels allegedly used to smuggle weapons into Gaza from Egypt.
The Hamas-owned television station Al Aqsa was also hit, as was a mosque that the Israeli military said was being used as a terrorist base. Speaking in Parliament, Barak said that the attack in Gaza would be "widened and deepened as is necessary" and referred to its operations as part of Israel's long-term struggle against Israel's Islamist enemies.
"Hamas is responsible for everything that happens in Gaza and which emanates from it," Barak said.
The Bush administration placed the responsibility for ending the violence on Hamas.
"In order for the violence to stop, Hamas must stop firing rockets into Israel and agree to respect a sustainable and durable cease-fire," a White House spokesman, Gordon Johndroe, told reporters in Texas. "Hamas has once again shown its true colors as a terrorist organization."
But international calls for Israel to pull back intensified. At the United Nations, Secretary-General Ban Ki-moon again condemned Israel's excessive use of force and called for an immediate cease-fire.
"The frightening nature of what is happening on the ground, in particular its effects on children, who are more than half the population, troubles me greatly," he said. "I have continuously stressed the need for strict observance of international humanitarian law."
In a statement on Monday, the Israeli Army said some areas around Gaza had been declared a closed military zone, a move which some analysts depicted as a potential precursor to a ground offensive. The military said the declaration meant that civilians, including journalists, could be denied access to an area up to two miles from Gaza.
The government on Sunday approved the emergency call-up of thousands of army reservists in preparation for a possible ground operation, as Israeli troops, tanks, armored personnel carriers and armored bulldozers massed at the border.
A military spokeswoman, Major Avital Leibovich, said the closed zone around Gaza had mostly to do with concerns of safety. She said the military had information that Hamas may employ either suicide bombers or more powerful missiles from the border area and it wanted to clear the area. She said she was sure journalists would be permitted to return.
"No one is trying to hide anything," she said.
The continued airstrikes, which Israel said were in retaliation for sustained rocket fire from Gaza into its territory, unleashed a furious reaction across the Arab world, raising fears of greater instability in the region.
Much of the anger was also directed at Egypt, seen by Hamas and some nearby governments as having acceded to Israel's military action by sealing its border with Gaza and forcing back many Palestinians at gunpoint who were trying to escape the destruction.
Witnesses at the Rafah border crossing described a chaotic scene as young men tried to force their way across into Egypt, amid sporadic exchanges of gunfire between Hamas and Egyptian forces. Egyptian state television reported that one Egyptian border guard was killed by a Hamas gunman. A Palestinian man was killed by an Egyptian guard near Rafah, Reuters reported.
In Gaza, officials said medical services, stretched to the breaking point after 18 months of Israeli sanctions, were on the verge of collapse as they struggled to care for the wounded. At Shifa Hospital in Gaza City, women wailed as they searched for relatives among bodies that lay strewn on the hospital floor. One doctor said that given the dearth of facilities, not much could be done for the seriously wounded, and that it was "better to be brought in dead."
Dr. Hussein Ashour, director of Shifa Hospital, said there were some 1,500 wounded distributed among Gaza's nine hospitals with far too few intensive care units, equipped ambulances or dozens of other kinds of equipment.
The International Committee of the Red Cross appealed on Sunday for urgent humanitarian assistance, including medical supplies, to be allowed to enter Gaza. Some of the wounded were permitted to pass through the closed Rafah crossing to be treated at Egyptian hospitals on Monday, and the Egyptian government said it had sent 17 trucks to Gaza filled with medical supplies. Israeli officials said some aid had been allowed through one of the crossings from Israel.
Israel made a strong push to justify the attacks, saying it was forced into military action to defend its citizens. At the same time, the supreme religious leader of Iran and the leader of Hezbollah expressed strong support for Hamas.
Across Gaza, families huddled indoors as Israeli jets streaked overhead. Residents said that there were long blackouts and that they had no cooking gas. Some ventured out to receive bread rations at bakeries or to brave the streets to claim their dead at the hospitals. There were few mass funerals; rather, families buried the victims in small ceremonies.
At dusk on Sunday, Israeli fighter jets bombed over 40 tunnels along Gaza's border with Egypt. The Israeli military said that the tunnels, on the Gaza side of the border, were used for smuggling weapons, explosives and fugitives. Gazans also use many of them to import consumer goods and fuel in order to get around the Israeli-imposed economic blockade.
While Israeli officials vowed to deal a critical blow to Hamas, Prime Minister Ehud Olmert said Israel's goal was not to reoccupy Gaza, which it left unilaterally in 2005, but to "restore normal life and quiet to residents of the south" of Israel.
Tzipi Livni, Israel's foreign minister, appeared on American talk shows to press Israel's case. She said on "Fox News Sunday" that the operation "is needed in order to change the realities on the ground, and to give peace and quiet to the citizens in southern Israel."
But in Damascus, Syria, a senior exiled Hamas official said that there can be no talk of a truce with Israel until the assault ends and Israel reopens the Gaza crossings.
"We need our liberty, we need our freedom and we need to be independent. If we don't accomplish this objective, then we have to resist," the official Abu Marzouk, told The Associated Press.
In Lebanon, the leader of the Shiite militant group Hezbollah, Sheik Hassan Nasrallah, put his fighters on alert, expressing strong support for Hamas and saying that he believed Israel might try to wage a two-front war, as it did in 2006. He called for a mass demonstration in Beirut on Monday. And he, too, denounced Egypt's leaders. "If you don't open the borders, you are accomplices in the killing," he said in a televised speech.
Iran's supreme religious leader, Ayatollah Ali Khamenei, condemned the silence of some Arab countries, which he said had prepared the grounds for the "catastrophe," an Iranian news agency, ISNA, reported.
"The horrible crime of the Zionist regime in Gaza has once again revealed the bloodthirsty face of this regime from disguise," he said in a statement. "But worse than this catastrophe is the encouraging silence of some Arab countries who claim to be Muslim," he said, apparently in a reference to Egypt and Jordan.
Egypt has mediated talks between Israel and the Palestinians and between Hamas and Hamas's rival, Fatah, leaving it open to criticism that it is too willing to work with Israel. In turn, Egypt and other Western-allied Sunni Arab nations are deeply opposed to Hezbollah and Hamas, which they see as extensions of Iran, their Shiite nemesis.
Across the region, the Israeli strikes were being broadcast in grisly detail almost continually on Arab satellite networks.
In the Syrian capital, Damascus, a large group of protesters marched to Yusuf al Azmeh Square, where they chanted slogans and burned Israeli and American flags.
In Beirut, protesters were bused to a rally outside the United Nations building, holding up Palestinian flags and Hamas banners. Muhammad Mazen Ibrahim, a 25-year-old Palestinian who lives in one of the refugee camps here, choked up when asked about the assault on Gaza.
"There's an agreement between Egypt, Saudi Arabia, Jordan and Israel against Hamas," he said. "They want to end them; all the countries are in league against Hamas, but God willing, we will win."
That sentiment is widespread here. Many see Livni's visit to Cairo last week as evidence that Egypt, eager to be rid of Hamas, had consented to the airstrikes.
The anger echoes what happened in July 2006, when the leaders of Saudi Arabia and Egypt publicly blamed Hezbollah for starting the conflict with Israel. Popular rage against Israel soon forced the leaders to change their positions.
Hamas, sworn to the destruction of Israel, took control of Gaza when it ousted Fatah last year. An Egyptian-brokered six-month truce between Israel and Hamas, always shaky, began to unravel in early November. It expired 10 days ago.

Swiss release man held in smuggling case

The Associated Press
Monday, December 29, 2008
GENEVA: A Swiss man suspected of involvement in the world's biggest nuclear smuggling ring has been released from prison after more than four years of investigative detention, his family said Sunday.
Urs Tinner, 43, was freed several days ago, his mother, Hedwig Tinner, told The Associated Press by telephone from eastern Switzerland.
His brother, Marco Tinner, 40, remains in detention while prosecutors appeal for his release to the federal criminal court in Bellinzona, she said.
The family's information was confirmed by an official who spoke on condition of anonymity because of confidentiality rules.
The Swiss Supreme Court had rejected previous requests for the release of the Tinner brothers, but told investigators in August to consider — "within months" — whether to set them free pending a possible trial.
The brothers, along with their father, Friedrich, are suspected of supplying the clandestine network of Abdul Qadeer Khan — creator of Pakistan's atomic bomb — with technical know-how and equipment that was used to make gas centrifuges. Khan sold the centrifuges to countries with secret nuclear weapons programs, including Libya and Iran, before his operation was disrupted in 2003.
Swiss investigators have struggled to piece together a complete picture of the alleged activities of the Tinners within the Khan network since their arrest.
If the Tinners are formally charged and their case goes to trial in Switzerland, they face up to 10 years in prison if found guilty of breaking laws on the export of sensitive goods. Time in pretrial detention would count toward any prison sentence.

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IW: This blog is making me ill, dragging me down deep. I count the deaths, the endless violence and the days to go until the end of this year of loss.

Renewed focus on women who farm
By Megan RowlingReuters
Monday, December 29, 2008
LONDON: Like many other African women, Mazoe Gondwe is her family's main food provider. Lately, she has struggled to farm her plot in Malawi as the unpredictability of rain makes her hard life even tougher.
"Now we can't just depend on rain-fed agriculture, so we plant two crops - one watered with rain and one that needs irrigating," she explained. "But irrigation is back-breaking and can take four hours a day."
Gondwe, who was flown by the development agency ActionAid to Poland for UN talks on climate change this month, said she wanted access to technology that would cut the time it took to water her crops and till her garden. She would also be glad of help in improving storage facilities and seed varieties.
"As a local farmer, I know what I need and I know what works. I grew up in the area and I know how the system is changing," Gondwe said.
This year, agricultural experts have renewed calls for policy makers to pay more attention to small-scale female farmers like Gondwe, who grow as much as 80 percent of the crops raised for food consumption in Africa.
After decades in the political wilderness, farming became a hot topic in 2008 when international food prices hit record high levels in June, sharply increasing hunger around the world. The proportion of development aid spent on agriculture has dropped to just 4 percent from a peak of 17 percent in 1982.
The former UN secretary general Kofi Annan has called for women to be at the heart of a "policy revolution" to improve small-scale farming in Africa.
Women have traditionally shouldered the burden of household food production both there and in Asia, while men tend to focus on growing cash crops or migrate to cities to find paid work.
Yet women own a tiny percentage of the world's land - some experts say as little as 2 percent - and receive only about 5 percent of farming information services and training.
"Today the African farmer is the only farmer who takes all the risks herself," Annan said at an October conference on fighting hunger. "No capital, no insurance, no price supports, and little help - if any - from governments. These women are tough and daring and resilient, but they need help."
A new publication by the UN Food and Agriculture Organization explaining how to tackle gender issues in farming development projects, highlights the potential returns of improving women's access to technology, land and finance.
In Ghana, for example, if women and men had equal land rights and security of tenure, women's use of fertilizer and profits per hectare would nearly double.
In Burkina Faso, Kenya and Tanzania, giving female entrepreneurs the same inputs and education as men would increase business revenue by as much as 20 percent. And in Ivory Coast, raising women's income by $10 brings improvements in children's health and nutrition that would require a $110 increase in men's income.
"The knowledge is there, the know-how is there, but the world - and here I'm talking rich and poor - doesn't apply it as much as it could," said Marcela Villarreal, director of the Food and Agriculture Organization's gender, equity and rural employment division.
Many African governments have introduced formal laws making women and men equal, but have trouble enforcing them where they clash with customary laws giving property ownership rights to men, she said.
Often if a woman's husband dies, she has little choice but to marry one of his relatives so she can keep farming her plot and feeding her children, Villarreal said. But if a widow is HIV positive, she might be chased off her land.
In Malawi, the Food and Agriculture Organization is working with legislators and village chiefs to let rural women know they are legally able to hold land titles. They are given wind-up radios so they can listen to farming shows in local languages and are taught how to write wills.
"People continue to think that doing things for women is part of a welfare program, and doing things for men - big investments or credit - that is agriculture, that is GDP-related," Villarreal said. "Women continue not to be seen as part of the productive potential of a country."
One powerful woman trying to change that is Agnes Kalibata, Rwanda's minister of state for agriculture. She said government land reform and credit programs specifically focus on struggling female farmers, many of whom are bringing up children alone, their husbands having been killed in the 1994 genocide.
This has helped raise their incomes, leading to better nutrition, health and education for their children, Kalibata said. Women are also getting micro-credit loans, which they use to access markets and cooperatives or set up small businesses, such as producing specialty coffee for export.
"They are not like rocket scientists, they are women from the general population who finally feel empowered that they can come out and do some of these things," explained Kalibata.
In the private sector, the Bill and Melinda Gates Foundation has decided to put women at the center of its agricultural development program by attaching conditions to grants. It no longer finances projects that ignore gender issues, and it requires women to be involved in their design and implementation.
Catherine Bertini, a senior fellow at the foundation and professor of public administration at Syracuse University, said aid donors had not spent enough on support for women who farm.
"You can find the rhetoric but it's a limited number of people who actually walk the walk," she said.
Bertini, who headed the UN World Food Program in the 1990s, said policy makers could best be persuaded to focus on women farmers by playing up the economic benefits rather than talking about gender equality. "You convince people to do it because it's the most practical way to increase productivity and income to women," she said.

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In San Francisco, a cocktail is not just a drink
By Gregory Dicum
Monday, December 29, 2008
The bartender at the Alembic took my order for a mint julep. He unfolded a small canvas sack, which he filled with ice and laid on the bar. He took up a black bat and began whaling on the pouch, reaching above his head to pummel the bag over and over again.
He mounded the resulting gravel-sized ice in a silver cup into which followed 12-year Old Fitzgerald bourbon and simple syrup. He snapped a generous bunch of dark mint sprigs and planted it in the ice. He concealed a small straw inside the bouquet, such that my first experience of the now-frosted cup was a clean, soaring nose of pure mint. A bracing, richly sweet wash of bourbon followed close behind.
It was the best mint julep I have ever had. By far.
In the San Francisco Bay Area, a growing scene of local distillers and bartenders capable of wielding their elixirs to maximum effect has emerged. With wry flair, they combine technical perfection with subtle, deniable showmanship and an eagerness to experiment with Northern California's agricultural bounty. "The West Coast does liquids well," said Alembic's bar manager, Daniel Hyatt, reflecting on his contribution to the region's fluid scenes.
Anchor Distillery in San Francisco makes gin and rye whiskies in tiny lots. Distillery No. 209, on Pier 50, makes only gin. But St. George Spirits, across the bay in Alameda, is the only one open to the public.
When I visited this fall, the air was redolent with Montmorency pie cherries finishing their mash in a chilled steel tank. Shining copper stills, industrial macerators and barrels filled a huge, light-filled hangar on a former Naval base (the vodka is named for it: Hangar One). Within an hour the cherries had become eau de vie, dripping from a stainless steel pipe while Jörg Rupf, the founder, offered tastes to an impressively informed group of about 30 visitors.
Absinthe Verte, perfected by Lance Winters, Rupf's distilling partner, is one of the handful of American absinthes on the market again after a centurylong drought. The spirit epitomizes the fervid scene in the Bay Area: it is at once classic, with a 19th-century aesthetic, and innovative — something that had not been available at all, much less in this highly cultured form.
The bar that best reflects this dichotomy is Bourbon & Branch. Styled a modern-day speakeasy, it is in a space in the seedy Tenderloin neighborhood that was once an actual speakeasy. A password (get it online with your reservation) is required to enter the den of wood, leather, distantly twinkling tinplate and oceans of brown liquors. Twenties jazz plays quietly, and guests are greeted with small glasses of champagne punch on linen coasters.
If it all seems a bit pompous — a reservation at a bar? — it works. Even on a Friday evening, Bourbon & Branch is an intimate setting for the contemplation of fine cocktails. It draws a diverse crowd of aficionados who are rewarded with exquisite drinks: the Sazerac is not too sweet, its rye bite balanced with a lemony nose. The 1794 (really a Boulevardier) is delicious. My Democrat, a concoction of peach and bourbon, was tasty but lacked heft. I sent it back and the bartender happily fixed the problem with a splash of bourbon.
The bar features a seasonal menu of what Brian Sheehy, one of the owners, calls "market fresh cocktails," as well as two that change every day. Bourbon & Branch has become the nexus of a tight-knit community, with alumni opening bars and developing menus throughout the city. Last month, Sheehy and co-owners opened Cask, a store selling craft spirits and bartending paraphernalia.
Todd Smith, who helped start Bourbon & Branch, developed the bar at Beretta, in the Mission District. I visited on a Thursday, the day Smith still works the bar. It was hot, so I led a small group of obliging friends through an extended flight of gorgeous drinks. A lucid pink Nuestra Paloma, of tequila, elderflower and grapefruit, glowed in the sun. The Agricole Mule was a tangy song of Martinique rum, sweet but not cloying housemade ginger syrup, lime and mint. The almond viscosity of fresh orgeat made by Small Hand Foods, a Berkeley company that specializes in craft cocktail ingredients, offset the phenolic astringency of St. George absinthe in the Gaby de Lys.
We continued with a Pisco Punch that married satisfying pineapple gomme richness with pisco's depth. The Airmail was beautiful — the cocktail version of latte art — and mixed the tickle of prosecco with honey's roundness. It gave way to the best thing we drank that day: a refreshing Rangoon Gin Cobbler that tasted like a liquid Dreamsicle.
The Clock Bar, which opened this summer in the Westin St. Francis on Union Square, is one of Michael Mina's endeavors — a counterpart to his eponymous restaurant across the lobby. His hand is visible in the bar food: treats like lobster corn dogs or black truffle popcorn are $12.
But I was there to drink, and the St. Francis Cocktail was an unfortunate start. Why call a martini anything but? And why sully Anchor's Junipero gin with Noilly Pratt? (Here I might as well reveal my own martini recipe: two thirds Junipero, one third Vya dry vermouth, stirred with ice and served up with a single Armstrong martini olive. After that, a martini in which every ingredient is produced little more than an hour's drive from Martinez, California, one of the drink's putative birthplaces, there's hardly any point in doing it any other way.)
The Clock Bar is cool, with black wood setting off a gleaming floor and a magnificently lit bank of bottles. The place filled quickly with a crowd of stunned-looking hotel guests perched on black leather cubes and boisterous locals on their way to dinner.
The bar redeemed itself with its gin rickey: with a pellucid lime-ness that shone on the palate, it was the standout of the evening. I ordered a Boulevardier made with Bulleit bourbon and Carpano Antica Formula vermouth. Though swamped, Merran, the bartender, took the time to re-twist a lemon peel after the first broke. The flame of an orange peel outlined her face in brief, diabolical light.
The Alembic sits on a tawdry block of Haight Street, near Golden Gate Park. Yet it is a pleasant neighborhood bar (and restaurant) of high, mustard-yellow walls and generous skylights, with a casual air arising from civilized and knowledgeable regulars.
Hyatt, who often works the bar, divides his menu into canonical and new school: Sazerac, pisco sour, and Ramos gin fizz face inventions like the Gilded Lily, a surprising drink of Plymouth gin, Yellow Chartreuse and orange flower water under a glittering slick of gold dust.
But it is with the Old-Fashioned, a drink with roots easily 200 years old, that the Alembic achieves cult status. When I visited, a cheerful, bald man at the bar was having one made with Anchor's single malt Hotaling rye.
"Old-Fashioneds are too fruity," observed the woman sitting next to me. She was drinking — and let me try — a Southern Exposure of Junipero gin, mint and lime with a surprisingly savory undertone of celery juice.
"Not here," said the man at the bar. He waited until her date had returned to order an Old-Fashioned for her.
I ordered one as well, made with Buffalo Trace bourbon from the single barrel the Alembic owns. It was warmly syrupy, coating a few sharply cubic lumps of ice. It lay on my tongue like a soothing balm.
I went outside to take a call, and a woman stopped to look at the menu.
"Have you tried the Old-Fashioned?" she asked me.
"There's one waiting for me on the bar," I said, tasting again my sweetened lips and a fragrant allspice aftertaste.
"It's so ... " She smiled slightly and paused, unused to saying the word she had in mind unironically. "It's so sophisticated."
WATERING HOLES
St. George Spirits, on the former Alameda Naval Air Station (2601 Monarch Street, Alameda, California; 510-769-1601; www.stgeorgespirits.com) offers free distillery tours weekends at 1 p.m. The tasting room, where flights begin at $10 (which buys the glass that you can take home), is open Wednesday through Saturday, noon to 7 p.m., Sunday noon to 6 p.m.
The Alembic (1725 Haight Street; 415-666-0822; www.alembicbar.com) is a bar and restaurant. Specialty cocktails are $9; hours noon to 2 a.m.
Reservations are required at Bourbon & Branch (501 Jones Street; 415-346-1735; open daily starting at 6 p.m.). Get them at www.bourbonandbranch.com. You can also sign up for classes at the Beverage Academy, where the mysterious rites of the cocktail are passed on from the masters. Seasonal, "market fresh" cocktails are $12.
Cocktails at Beretta (1199 Valencia Street; 415-695-1199; www.berettasf.com) are $9. It fills up fast so get there early (opens 5:30 weekdays and noon on weekends) if you hope to talk cocktails with the bartenders.
The Clock Bar is off the lobby of the Westin St. Francis (335 Powell Street; 415-397-9222; www.michaelmina.net/clockbar). Open 4 p.m. Classic cocktails start at $11.
Cask is a recently opened store that specializes in artisanal spirits and obsessive barware (17 Third Street; 415-424-4844; www.caskstore.com).

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A sinking feeling for West Coast fishermen
The Associated Press
Monday, December 29, 2008
HALF MOON BAY, California: An unusually weak Dungeness crab harvest on the West Coast of the United States is compounding the financial woes of fishermen who already were struggling with depressed consumer demand and the unprecedented collapse of the Pacific chinook salmon fishery.
Commercial fishermen in California, Oregon and Washington are struggling to stay afloat financially. They say the downturn could force fishermen who depend heavily on crab and salmon to leave the shrinking ranks of the region's fishing fleet.
"With this crab season being slim at best, it's going to be pretty hard to make it through to the next one," said Duncan MacLean, 58, a commercial fisherman since 1972. "I would suspect there are going to be lots of people falling by the wayside."
The Dungeness season that began in mid-November is shaping up to be one of the least productive in years. In Half Moon Bay, about 25 miles, or 40 kilometers, south of San Francisco, MacLean and other crabbers are not doing much fishing because the catch is so poor and prices offered by seafood processors are so low.
"It's disappointing to everybody because you want to support your family," said Steve Mills, 45. "Even though we're not catching crab, the bills still pile up."
Last spring, federal regulators for the first time canceled the commercial salmon season on the West Coast after a near-record low number of chinook returned to spawn in the rivers of the Central Valley of California. The season also could be called off next year to allow salmon populations to rebound.
Congress approved $100 million in federal disaster relief to help trollers and businesses that depend on West Coast salmon fishing. Many fishermen say they would be hurting even more without the aid, but they still had been counting on a robust Dungeness season.
Scientists attribute the weak crab harvest to increased fishing earlier this year, ocean conditions that disrupted the marine food chain and the natural cycle of crab populations, which tend to peak every seven to 10 years.
The catch in California this season is expected to fall below the 8 million pounds caught last year, which was down from 25 million pounds four years ago, according to the state Department of Fish and Game.
"I'd characterize it as near the bottom of the natural cycle," said Peter Kalvass, a state biologist in Fort Bragg. He expects the harvest to rebound in a couple of years, based on the large number of young crabs found in traps.
In most years, low supply means higher prices, but this year crab fishermen are getting paid less than they got in more abundant years.
"The economy is in the toilet, and people that normally buy crabs are not buying the crabs," said Dale Beasley, a fisherman in Ilwaco, Washington, who heads the Columbia River Crab Fishermen's Association.
The lack of locally caught chinook, or "king," salmon and the disappointing crab harvest is a loss not just for fishermen but for businesses that draw tourists based on their communities' ties to the ocean.
"Our preference would be to sell as much local seafood as possible, and that's becoming increasingly difficult now," said Paul Shenkman, who owns Sam's Chowder House. "A lot of our guests want local fish, and we can't give it to them."
Fishermen wonder whether they can afford to keep fishing for a living.
John Mellor, a fisherman from San Francisco, said he did not receive any federal aid and had been banking on a decent crab harvest to pay for his taxes, boat insurance and daughter's braces. "I have to come up with money to pay these big bills," Mellor said.
To get by, fishermen plan to catch herring, squid, sardine, rockfish and albacore, but they say fishing for those species is not as lucrative.
The salmon fishing ban and poor crab harvest could force more commercial fishermen to leave the business at a time when the Pacific Coast fleet is aging and shrinking amid increasing regulation, declining fisheries and the expansion of farmed fish.
Over the past three decades, membership in the Pacific Coast Federation of Fishermen's Associations has dropped from about 4,500 to 1,000 members, said executive director Zeke Grader. The average age of group members has risen from the mid-30s to the late-50s as few young people choose to fish for a living. "People don't think there's a future in it," Grader said.

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Brazilian rancher to be charged in 2005 killing of nun
By Myrna Domit
Monday, December 29, 2008
A Brazilian rancher suspected of orchestrating the 2005 death of Sister Dorothy Stang, an American nun who spoke out against logging in the Amazon rain forest, will be charged in the killing and brought to trial following his arrest in a land fraud case, prosecutors said.
The federal police arrested the rancher, Regivaldo Galvão, on Friday at his home in the northern Amazon state of Pará. He was accused of trying to use forged titles to claim possession of the same public land that Stang was protecting when she was shot and killed in February 2005.
Felício Pontes, a federal prosecutor, said Sunday that documents believed to have been forged that were seized from Galvão contradict his earlier statement that he had no connection to the Roman Catholic nun or her killing.
The case attracted international attention from human rights groups and cast scrutiny on the Brazilian justice system, which has been plagued by corruption.
Galvão was arrested and charged in connection with the killing in 2005, but he was freed the next year after a series of appeals claiming he had no commercial interest in the land where Stang, 73, was killed. The land is in a region near the Trans-Amazon Highway.
Pontes said Sunday that the arrest of Galvão "shows that he had direct connection and interest in the lands that Sister Dorothy died to protect."
Edson Cardoso, a state prosecutor, said he would seek to have Galvão tried in the nun's killing next month.
Stang, who was from Dayton, Ohio, spent 30 years trying to prevent ranchers from taking the land of poor Amazon settlers.
Her struggle and killing were detailed in the 2008 documentary "They Killed Sister Dorothy," narrated by the American actor Martin Sheen.
Pontes said the film had prompted his office to reinvestigate Galvão's existing land titles, which were mentioned by the suspect's lawyer during an interview in the documentary.





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Thousands of protesters surround Thai Parliament
By Seth Mydans and Mark McDonald
Monday, December 29, 2008
BANGKOK: Politics returned to the streets in Thailand on Monday as thousands of anti-government demonstrators surrounded the Parliament building, forcing a delay in the legislature's opening session under a new government.
With power changing hands in Thailand, the protests shifted as well, this time to the "red shirts" who support Thaksin Shinawatra, the former prime minister who was ousted in a coup in 2006. A pro-Thaksin government was dissolved Dec. 2 when a court determined that the governing party had committed electoral fraud.
The demonstration called to mind recent protests by anti-Thaksin "yellow shirts" who had barricaded the prime minister's office for three months and shut down Bangkok's airports for a week this month.
Chai Chidchob, the Parliament speaker, said the new session was being postponed until Tuesday morning because of threats to the safety of lawmakers.
The new government, which is headed by Prime Minister Abhisit Vejjajiva of the Democrat Party, must by law present its core policies to Parliament by Jan. 7. The prime minister was originally scheduled to outline those plans in an address to Parliament on Monday morning.
Abhisit, 44, who was born in Britain and schooled at Eton and Oxford, became prime minister Dec. 17 following the court ruling that disbanded the governing party and banned its leaders from Thai politics for five years.
The new protest group, which calls itself the Democratic Alliance Against Dictatorship, is demanding that the Abhisit government dissolve the legislature and call a new election.
Although Thaksin, a wealthy telecommunications tycoon, has fled Thailand to avoid corruption cases against him, he remains a powerful force in politics.
His backers say they could win a new election with the support of his broad rural base. They claim the new government has seized power through what they call a "silent coup" that involved political pressure from the military.
Thousands of police officers were deployed around the Parliament building, but Abhisit said force would not be used against the demonstrators.
The protests Monday marked a continuation of months of political street theater that has tested both the patience of residents of the capital and the resilience of the national economy.
An estimated 300,000 tourists were stranded during the blockades of the Bangkok airports by the yellow-shirted demonstrators from the People's Alliance for Democracy. Revenues this year from tourism are expected to show very little growth, and one tourism official said he expected business to be worse than after the tsunami of 2004.
The blockades also shut down mail, parcel and cargo services, crippling exports of items as diverse as orchids, mangos, asparagus and electronics. Imports stopped, too, especially of dairy products, fresh fish and specialty foods.
Earlier this month, Standard & Poor's, the rating agency, lowered its economic outlook for Thailand because of the turmoil.
Mark McDonald reported from Hong Kong.

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From the left, a call to end the current Dutch notion of tolerance
By John Vinocur
Monday, December 29, 2008
AMSTERDAM: Two years ago, the Dutch could quietly congratulate themselves on having brought what seemed to be a fair measure of consensus and reason to the meanest intersection in their national political life: the one where integration of Muslim immigrants crossed Dutch identity.
In the run-up to choosing a new government in 2006, just 24 percent of the voters considered the issue important, and only 4 percent regarded it as the election's central theme.
What a turnabout, it seemed - and whatever the reason (spent passions, optimism, resignation?), it was a soothing respite for a country whose history of tolerance was the first in 21st-century Europe to clash with the on-street realities of its growing Muslim population.
Since the Sept. 11, 2001, attacks in the United States, the Netherlands had lived through something akin to a populist revolt against accommodating Islamic immigrants led by Pim Fortuyn, who was later murdered; the assassination of the filmmaker Theo Van Gogh, accused of blasphemy by a homegrown Muslim killer; and the bitter departure from the Netherlands of Ayaan Hirsi Ali, a Somali woman who became a member of Parliament before being marked for death for her criticism of radical Islam.
Now something fairly remarkable is happening again.
Two weeks ago, the country's biggest left-wing political grouping, the Labor Party, which has responsibility for integration as a member of the coalition government led by the Christian Democrats, issued a position paper calling for the end of the failed model of Dutch "tolerance."
It came at the same time Nicolas Sarkozy was making a case in France for greater opportunities for minorities that also contained an admission that the French notion of equality "doesn't work anymore."
But there was a difference. If judged on the standard scale of caution in dealing with cultural clashes and Muslims' obligations to their new homes in Europe, the language of the Dutch position paper and Lilianne Ploumen, Labor's chairperson, was exceptional.
The paper said: "The mistake we can never repeat is stifling criticism of cultures and religions for reasons of tolerance."
Government and politicians had too long failed to acknowledge the feelings of "loss and estrangement" felt by Dutch society facing parallel communities that disregard its language, laws and customs.
Newcomers, according to Ploumen, must avoid "self-designated victimization."
She asserted, "the grip of the homeland has to disappear" for these immigrants who, news reports indicate, also retain their original nationality at a rate of about 80 percent once becoming Dutch citizens.
Instead of reflexively offering tolerance with the expectation that things would work out in the long run, she said, the government strategy should be "bringing our values into confrontation with people who think otherwise."
There was more: punishment for trouble-making young people has to become so effective such that when they emerge from jail they are not automatically big shots, Ploumen said.
For Ploumen, talking to the local media, "The street is mine, too. I don't want to walk away if they're standing in my path.
"Without a strategy to deal with these issues, all discussion about creating opportunities and acceptance of diversity will be blocked by suspicion and negative experience."
And that comes from the heart of the traditional, democratic European left, where placing the onus of compatibility on immigrants never found such comfort before.
It's a point of view that makes reference to work and education as essential, but without the emphasis that they are the single path to integration.
Rather, Labor's line seems to stand on its head the old equation of jobs-plus-education equals integration. Conforming to Dutch society's social standards now comes first. Strikingly, it turns its back on cultural relativism and uses the word emancipation in discussing the process of outsiders' becoming Dutch.
For the Netherlands' Arab and Turkish population (about 6 percent of a total of 16 million) it refers to jobs and educational opportunities as "machines of emancipation." Yet it also suggests that employment and advancement will not come in full measure until there is a consciousness engagement in Dutch life by immigrants that goes far beyond the present level.
Indeed, Ploumen says, "Integration calls on the greatest effort from the new Dutch. Let go of where you come from; choose the Netherlands unconditionally." Immigrants must "take responsibility for this country" and cherish and protect its Dutch essence.
Not clear enough? Ploumen insists, "The success of the integration process is hindered by the disproportionate number of non-natives involved in criminality and trouble-making, by men who refuse to shake hands with women, by burqas and separate courses for women on citizenship.
"We have to stop the existence of parallel societies within our society."
And the obligations of the native Dutch? Ploumen's answer is, "People who have their roots here have to offer space to traditions, religions and cultures which are new to Dutch society" - but without fear of expressing criticism. "Hurting feelings is allowed, and criticism of religion, too."
The why of this happening now when a recession could accelerate new social tensions, particularly among nonskilled workers, has a couple of explanations.
A petty, political one: It involves a Labor Party on an uptick, with its the party chief, Wouter Bos, who serves as finance minister, showing optimism that the Dutch can avoid a deep recession. The cynical take has him casting the party's new integration policy as a fresh bid to consolidate momentum ahead of elections for the European Parliament in June.
A kinder, gentler explanation (that comes, remarkably, from Frits Bolkestein, the former Liberal Party leader, European commissioner, and no friend of the socialists, who began writing in 1991 about the enormous challenge posed to Europe by Muslim immigration):
"The multi-cultis just aren't making the running anymore. It's a brave step towards a new normalcy in this country. "




Earthquake hits Afghanistan
Reuters
Monday, December 29, 2008
KABUL: An earthquake of 5.9 magnitude jolted parts of Afghanistan Monday but caused no casualties or damage, officials said.
The epicentre of the earthquake was in the Badakhshan provincial capital Faizabad, 260 km (160 miles) northeast of Kabul. It was also felt in neighbouring Pakistan and Tajikistan.
Authorities contacted remote regions and had received no reports of losses of damage, officials said.
Mountainous Afghanistan has suffered a series of earthquakes that have killed thousands of people in the last decade.
(Reporting by Hamid Shalizi; Editing by Dean Yates)


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Slow recovery in a quake-devastated county in China
By Edward Wong
Monday, December 29, 2008
BEICHUAN, China: He lost his wife of 35 years when their home collapsed during the earthquake in May. She lost her husband of 20 years the same day in a cascade of debris at a construction site. They are distant relatives from the same town whose eyes still tear up when they talk about their dead spouses.
But within months of the earthquake, the deadliest natural disaster to befall China in more than three decades, Jiang Zhongfu, 60, began courting Zhu Xiaoqiong, 42. Last month, he moved into Zhu's prefabricated housing cube in a refugee camp in these scarred hills.
"We're considering getting married," Jiang said as Zhu sat beside him, knitting a gray sweater.
More than seven months after the earthquake ravaged southwestern China, new couples like Jiang and Zhu are one sign that, psychologically at least, there have been the beginnings of a recovery. About 370 couples here in the devastated county of Beichuan have registered to remarry, and the local government plans to hold a matchmaking fair soon, said Wang Hongfa, a county official.
But progress across the stricken region has been much slower in some critical ways, tempered by the economic downturn and the harsh conditions of winter. The earthquake left 88,000 people dead or missing and more than five million homeless.
Now, many survivors are huddled in temporary shelters without jobs, trying to stay warm with little more than blankets and hot-water bottles handed out by the government. In one area of Sichuan Province, where the destruction has been greatest, people are sleeping in subway cars donated by Beijing.
Gray rows of prefabricated housing arranged into camps, some with as many as 10,000 residents, lie scattered across farm fields. Everywhere hang red banners extolling aid provided by the Communist Party. "The care of the party is our power," says one.
Local governments have promised that everyone will get supplies for the winter. But late last month, the vice governor of Sichuan Province said at a news conference in Beijing that survivors still needed 330,000 quilts and some heating equipment.
The vice governor, Wei Hong, also said government financing would account for only a fifth of the estimated $438 billion needed for reconstruction. The rest would have to come from loans and investments by private companies and state-owned enterprises, he said.
The authorities are encouraging survivors to build their own permanent homes using a government subsidy that averages $2,900 per household. Officials in the city of Mianyang, which oversees administration in a large swath of the quake region, say construction has begun on 410,000 permanent homes in that area. Half-finished brick homes dot the countryside.
But here in Beichuan, reconstruction has been particularly slow. Nestled deep in the mountainous folds of Sichuan Province, the county has become a symbol of the savagery of the quake. Nearly 20,000 of a population of 180,000 were killed, and landslides along the steep valley walls surrounding the county seat buried half the town.
A green chain-link fence topped with barbed wire prevents survivors from moving back into the town. Instead, they live in purgatory, spread across 11 large camps.
Construction on a new town of Beichuan has not yet begun.
"The pace of reconstruction is too slow," said Han Dongmei, 26, as she cradled her 6-month-old daughter in a camp where hot water has been sporadic. "Of course I want to move into a permanent home. The problem is they don't even have a plan yet."
Beichuan's mayor said it was difficult "to balance the demands of the refugees with the process of reconstruction." In an interview at a reconstruction meeting in Mianyang, the mayor, Jing Dazhong, said, "Of course, we want it to be faster, but we need to meet scientific standards."
Survivors have found different ways to cope. On a hill above the town of Beichuan, enterprising residents sell earthquake souvenirs to tourists who come each day to gawk at the ruins. Hundreds of tourists arrive on the weekends. Laminated photos and DVDs with grisly scenes of destruction go for $1.50 each, as do sets of incense sticks to burn in memory of the dead.
"I'm not afraid of ghosts here," said one survivor, a 17-year-old girl named Zhou Qiaoyun, as she stared down at the ruined town from her souvenir stand. "I've seen a lot of dead people. The day I escaped from Beichuan, you had to step on dead bodies to get out."
She had a stoic facade, but it broke down when a tourist with a large camera asked her about the destruction of the town. She began weeping.
Two aunts who lived with Qiaoyun died in the quake, she said, as did 90 of 1,000 students in her vocational school. Her parents left over the summer to find migrant work on the east coast. Qiaoyun now lives alone in a nearby camp and earns little more than $3 a day selling souvenirs. Most camp residents make do with just a small stipend from the government — $1.50 a day and some rice.
Some survivors are even poorer, those who live not in the camps but among the rubble in remote mountain villages. A few hike down each day to sell medicinal herbs and fruit to the tourists. Their makeshift shelters in the mountains are little more than plastic tarps draped across sticks.
One farmer, He Yifu, said the government had given him $300 to help with repairs and promised that his village would be rebuilt in three years.
"The government pays attention to those living on the side of the road, not those far away," said He, 56, as he handed a bagful of herbs to a tourist. "But I understand the government has its own difficulties."
He lives with his wife, who has had problems since the quake. "Her memory fades," he said. "She has a hard time remembering things."
The camps have taken on the air of permanent settlements.
One near the entrance to Beichuan has a police station and an elementary school and a woman who walks around selling hot cornbread. The grocery store is hiring. There is a mental health clinic next to the party secretary's office.
The party secretary, Jia Dechun, was able to recite from memory the exact number of residents here: 5,008 people in 1,175 households. Many are of the Qiang ethnic minority.
A sign at the camp entrance has a tally of the supplies: 1,050 pieces of winter clothing, 800 quilts and 45 tons of rice.
The residents are already preparing for the Lunar New Year in January by hanging dry sausages, a local specialty, from their ceilings and walls.
"This is far better than tents," said Liu Xihua, 62, who lives with her eldest son in a prefabricated cube, a plastic tarp separating two beds. "I think the government is good. They've provided many daily supplies."
A few houses down live Jiang and Zhu, the widower and widow who became lovers after their spouses died in the quake. They sat together one afternoon watching television. They were living in separate camps after the quake, until a common relative introduced them. "We just started to get together," Zhu said.
Jiang's youngest daughter disapproves of the relationship, he said. On the day of the earthquake, she escaped from their home in Beichuan. Jiang was far away, doing menial labor in the coastal city of Xiamen. His wife, eldest daughter and the daughter's husband were all crushed together in the house.
The bodies were never found. They are still beneath the rubble.

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UN ties massacre to Ugandan rebel group
By Jeffrey Gettleman
Monday, December 29, 2008
NAIROBI: The Lord's Resistance Army, the fearsome Ugandan rebel group known for its lurid violence and penchant for kidnapping children, massacred nearly 200 people last week, UN officials said Monday.
The rebels were being chased by a multinational military offensive against them, and as they fled, they hacked to death dozens of villagers in their path, according to Ugandan military officials.
The killings may not be over. Most of the rebels escaped the military offensive and have scattered across a vast swath of rugged territory in the northeastern corner of Congo.
"The civilian population is really in danger," said Ivo Brandau, a UN spokesman in Congo. "They are under attack."
The Lord's Resistance Army used to be the bane of Uganda's existence. Starting in the late 1980s, the rebels terrorized villages in northern Uganda, killing tens of thousands of people and displacing nearly two million. They were notorious for kidnapping girls and boys as young as 10 and turning them into sex slaves and killers. They were driven by a strange mix of political grievances, bloodlust and self-proclaimed fundamentalist Christian beliefs.
The Ugandan military drove the rebels out of Uganda about five years ago, and the rebels have been mostly hiding out in a thickly forested area of northeastern Congo ever since. There have been several high-profile efforts, backed by the United Nations and the United States, to persuade Joseph Kony, the commander of the rebels, to surrender.
The latest peace effort failed in late November, when once again, Kony did not show up to sign a peace agreement. The armies of Congo, Uganda and semi-autonomous South Sudan then teamed up to wipe out the rebel bases. But the rebels are known as excellent jungle fighters. They often carry solar panels on their backs to power their satellite phones and they can live off of very little food and water. In the past several weeks, they seemed to have eluded the government troops and airstrikes.
In the process, they have raided several villages, possibly to signal that they are still a lethal force to be reckoned with. According to UN officials, the rebels struck a village called Faradje on Dec. 25, killing 40 people. Over the next two days, the rebels attacked two more villages, Doruma and Gurba, killing 149 more people.
Ugandan military officials have said most of the victims were women and children, who were cut into pieces. David Matsanga, a rebel spokesman, denied responsibility for the killings, telling The Associated Press that rebels were not in the area.

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Rio wants to meet Guinea govt on iron ore project
Reuters
Monday, December 29, 2008
LONDON: Mining group Rio Tinto is seeking a meeting with the new military junta in Guinea to discuss its $6 billion (4 billion pound) Simandou iron ore project, the firm said on Monday.
Rio -- the world's fourth biggest diversified mining group by market value -- had been locked in a dispute about Simandou with the previous government of President Lansana Conte, who died last week, sparking a military coup.
"One of main priorities is that we want to fix up a meeting with the new government as soon as possible to discuss the situation," spokesman Nick Cobban said.
On Saturday, the military junta led by Captain Moussa Dadis Camara in the West African state said "defective" mining contracts would be revised, without naming firms or projects.
On December 11, Rio said it had received a letter from the Mines Ministry indicating the government planned to withdraw Rio's rights to the northern portion of the huge Simandou concession.
Later, a company belonging to Israeli diamond trader Beny Steinmetz said it had obtained the rights to north Simandou.
Rio Tinto, the world's No. 2 iron ore miner, has repeatedly vowed to fight to retain rights to the entire Simandou project, which it has described as the world's biggest known undeveloped iron ore deposit.
The firm had said it was deferring all non-essential spending on the project for 2009 until it could verify its licence, but still planned to spend $58 million between January and April.
"Our position really is the same, that we still we have a valid claim there," Cobban said, who added that prospecting work on the site had been continuing.
"Of course this is the Christmas break, but we have been drilling. Work is continuing there."
The company had forecast that Simandou's production would begin in 2013 at 8 million tonnes, rising to 70 million tonnes by 2018. Rio Tinto says it has already spent $400 million on Simandou.
(Reporting by Eric Onstad; Editing by David Cowell)

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Those lost in wilderness may find bill for a rescue
By Katie Zezima
Monday, December 29, 2008
LINCOLN, New Hampshire: When two hikers from the Boston area became hopelessly lost in the New Hampshire woods in October, they dialed 911 for help and were promptly rescued by state fish and game wardens.
Wayward trekkers finding themselves in need of a similar helping hand in the future may well find a bill for their rescue in the mail.
In response to the multitude of hikers, cross-country skiers and others who venture unprepared into the wilderness, become lost and have to call for help, the State of New Hampshire is billing people for rescues stemming from their own negligence, like not taking a map on a hike, wandering away from a group or going out in dangerous conditions.
The state Fish and Game Department coordinates all rescues, and a vast majority of them are here in the rugged White Mountains, where weather and trail conditions are often unpredictable. Money for rescues comes out of a budget that was financed mainly by a surcharge on registrations for snowmobiles, boats and other recreational vehicles.
But in July, a law which had been on the books since 1999 was changed to lower the threshold for when to bill hikers and others for being rescued. Under the original law, hikers had to engage in "reckless" behavior; now they need only be "negligent."
"The Fish and Game Department was rescuing many people who were negligent by having not taken normal precautions for hiking or whatever," said State Representative Dennis Abbott, chairman of the House Fish and Game Committee, which drafted the revised law. "We felt it was unfair to pass that burden onto the sportsmen of New Hampshire."
But the law also applies to nursing homes and hospitals, holding supervisors responsible if a patient wanders off and has to be rescued.
Officials are reviewing the cases of four groups of hikers to determine whether they should be billed, said Lieutenant Todd Bogardus of the Fish and Game Department.
In most situations, rescue charges are minimal. For example, the two lost hikers from the Boston area who were rescued would have to pay $75 each.
Bogardus said his department conducted, on average, 150 rescues a year, about 60 percent involving hikers.
On a morning drive around Franconia Notch, Lincoln and Crawford Notch, three of the state's most popular outdoor destinations, he pointed out spots where he frequently dispatched teams for rescues, like Falling Waters Trail in Franconia, a deceptively steep and rocky hike tried by many beginners.
"We call it the falling people trail," Bogardus said. He drove a short stretch down Interstate 93 and pointed out where the two Boston women became lost. "They said they could hear the highway, which means you're not far," Bogardus said. The women simply could not find their way out and sat on a log and waited for rescue crews, he said.
The law leaves the decision to investigate a case up to the Fish and Game Department. If a case is found to meet the threshold of negligence, it is passed on to the attorney general, who makes the final decision on whether to bill the hikers.
Since 1999, 20 groups or people have been rescued and charged, and the state — which collects only what it costs in equipment and personnel for a rescue — has recouped $47,000. Officials said only two people who were rescued have not paid. Those billed who do not pay could face civil charges.
Last year, the Fish and Game Department spent $280,000 on search and rescue missions, slightly more than its rescue budget, Bogardus said. Volunteer crews from around the White Mountains and other parts of the state help with rescues.
Most of the billed rescues are relatively simple, but some are dangerous and complicated.
In February, a Boston man became separated from his hiking party as winds started gusting over 100 miles per hour and temperatures plummeted.
Bogardus was able to track the man's position from text messages he was sending, and he was rescued by helicopter two days later. Because the man separated from his group, ignored weather forecasts and did not have adequate equipment, he was billed $16,000 for his rescue, Bogardus said.
In 2003 Bogardus started Hike Safe, a program intended to educate people on the risks of hiking and the need for proper equipment.
Signs imploring hikers to bring 10 essential items, including a compass, first aid kid and pocket knife, as well as the "Hiker Responsibility Code," which tells hikers they are responsible for themselves, are posted at the beginning of New Hampshire trails.
Sam and Greg Wood, brothers from Thornton, New Hampshire, were at a trailhead in Lincoln clearly marked with Hike Safe signs. Neither had heard of the program, nor did they agree with billing hikers for a rescue.
"We're going out for an hour and not bringing food because it's an hour," Greg Wood, 28, said. "Is that negligent?" Wood and his brother planned to cross-country ski.
Mary Young, 54, of Compton, New Hampshire, and her friend Jodi Nelson, 58, of Lincoln, planned to spend the afternoon cross-country skiing. Both agreed with the rescue law.
"If it were me and I were ill-prepared and not fit to be there, I'd want to pay," Nelson said. "I'd feel responsible. I'd be thanking them for the rest of my life and sending cookies."

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Six dead and two missing in Canada avalanches
Reuters
Monday, December 29, 2008
VANCOUVER, British Columbia: Searchers recovered the bodies on Monday of six of the eight snowmobilers missing since they were hit by a pair of avalanches in Canada's Rocky Mountains.
The two men still unaccounted for since Sunday's accident about 40 km (25 miles) south of Fernie, British Columbia, are believed buried in the snow, according to the Royal Canadian Mounted Police.
"There are six bodies recovered, and we're still looking for two more," said RCMP Cpl. Chris Faulkner, who acknowledged it was very unlikely the missing men were still alive.
Eleven snowmobilers were caught in two slides in Harvey Pass, a backcountry recreation area popular with local residents in southeast British Columbia. Three people dug themselves out and suffered minor injuries.
The snowmobilers were residents of the nearby coal mining community of Sparwood, British Columbia. They were experienced in winter travel in the rugged area, but ignored warnings of a high danger of avalanches in the region, which has received more than 70 cm (28 inches) of snow in recent days.
The threat of new slides slowed rescue efforts and technicians used explosives to stabilise the mountain snow before ground crews could safely begin searching the site on Monday morning.
It took two of the men who survived about 20 minutes to dig themselves free. They then rescued a third man, but the danger of additional avalanches forced them to leave the area on foot before they could dig for anyone else.
Radio beacons carried by the victims help search crews locate their bodies in the snow, police said.
(Reporting Allan Dowd, editing by Rob Wilson)







Oil prices rally on Middle East tensions
By Matthew Saltmarsh
Monday, December 29, 2008
PARIS: Oil prices rose Monday, lifting energy stocks and other commodities on concern that the Israeli attacks on Hamas would stoke tensions across the Middle East.
In a third straight day of air strikes against Hamas on Monday, Israeli warplanes pounded targets in Gaza, raising the death toll to more than 300, Palestinian medical officials said.
Those events underscored the market's sensitivity to conflict in a volatile region that produces about a third of global crude oil. Some analysts also said the commodity was benefiting from heightened tensions between India and Pakistan.
On the New York Mercantile Exchange, light, sweet crude for February delivery was up 41 cents, or 1.1 percent at $38.12 a barrel in afternoon trading. It earlier touched a session high of $42.20. The February gold futures contract in New York added 1.1 percent, to $880.50 an ounce, while copper prices also rose.
Helen Henton, head of commodity research at Standard Chartered Bank in London, said that while the price spike was driven by events in the Middle East, it also suggested that "over the longer term, the oil price has found a floor."
Before the latest trouble in the Middle East, the price of a barrel had plunged - from a record $147.27 in July to a recent low of $32.40 on Dec. 19 - as demand collapsed.
Demand is not expected to rebound any time soon. In December, the U.S. Department of Energy, the International Energy Agency and the Organization of Petroleum Exporting Countries all significantly cut their estimates for 2009.
In a research report released after the OPEC announcement this month, a Deutsche Bank analyst, Adam Sieminski, forecast that additional output cuts would be adopted throughout next year as demand stays soft.
The top exporters have already responded by reducing supply. This month, OPEC announced a 2.2 million barrel-a-day cut in productive, effective Jan. 1. That was the third cut since September.
"As the OPEC cuts start to feed through, the market will appear tighter" and prices should start to rise, Henton said.
She added that $40 a barrel appeared to be too low given the production cuts, as emerging market economies are widely expected to recover by the start of 2010 and as it becomes apparent that investment in extraction has slowed.
"There's a danger that the price could move quite sharply - there could be a crunch" in 2009, she said, as supply dwindles.
Still, for coming months, she added, the outlook was for soft but "very volatile" prices.
European stocks were mostly higher Monday, following a similar pattern in Asia, lifted by energy and mining shares. The FTSE 100 index in London gained 2.4 percent and the DAX in Frankfurt closed 1.6 percent higher.
Energy and resource stocks led the gains in Europe. BP, the British oil company, added 3.7 percent and Repsol of Spain was up less than 1 percent. BHP Billiton, the world's biggest mining company, rose 4.1 percent in London.
Martin van Vliet, an economist at ING in Amsterdam, cautioned against assuming a meaningful year-end rally in European stocks given thin market conditions and continued weakness in financial stocks.
"Let's get into 2009 and see if there is some light at the end of the tunnel - then we can start thinking about a recovery in 2010," he said.


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Gazprom, once mighty, is reeling
By Andrew E. Kramer
Tuesday, December 30, 2008
MOSCOW: A year ago, Gazprom, the Russian natural gas monopoly, aspired to be the largest corporation in the world. Buoyed by high oil prices and political backing from the Kremlin, it had already achieved third place judging by market capitalization, behind Exxon Mobil and General Electric.
Today, Gazprom is deep in debt and negotiating a government bailout. Its market cap, the total value of all the company's shares, has fallen 76 percent since the beginning of the year. Instead of becoming the world's largest company, it has tumbled to 35th place. And while bailouts are increasingly common, none of Gazprom's big private sector competitors in the West is looking for one.
That Russia's largest state-run energy company needs a bailout so soon after oil hit record highs last summer is a telling postscript to a turbulent period. Once the emblem of the pride and the menace of a resurgent Russia, Gazprom has become a symbol of this oil state's rapid economic decline.
During the boom times, Gazprom and the other Russian state energy company, Rosneft, became vehicles for carrying out creeping renationalization.
As oil prices rose, so did their stocks. But rather than investing sufficiently in drilling and exploration, Russia's president at the time, Vladimir Putin, used them to pursue his agenda of regaining public control over the oil fields, and much of private industry beyond.
As a result, by the time the downturn came, they entered the credit crisis deeply in debt and with a backlog of capital investment needs. (Under Putin, now the prime minister, Gazprom and Rosneft are so tightly controlled by the Kremlin that the companies are not run by mere government appointees, but directly by government ministers who sit on their boards.)
"They were as inebriated with their success as much as some of their investors were," James Fenkner, the chief strategist at Red Star, a Russian-dedicated hedge fund, said of Gazprom's ambition to become the world's largest company. "It's not like they're going to produce a better mousetrap," he said. "Their mousetrap is whatever the price of oil is. You can't improve that."
Investors are now fleeing Gazprom stock, once such a favorite that it alone accounted for 2 percent of the Morgan Stanley index of global emerging market companies. Gazprom is far from becoming the world's largest company; its share prices have fallen more quickly than those of private sector competitors. The company's debt, amassed while consolidating national control over the industry, is one reason.
After five years of record prices for natural gas, Gazprom is $49.5 billion in debt. By comparison, the entire combined public and private sector debt coming due for India, China and Brazil in 2009 totals $56 billion, according to an estimate by Commerzbank.
Putin used Gazprom to acquire private property. Among its big-ticket acquisitions, in 2005 it bought the Sibneft oil company from Roman Abramovich, the tycoon and owner of the Chelsea soccer club in London, for $13 billion. In 2006 it bought half of Shell's Sakhalin II oil and gas development for $7 billion. And in 2007, it spent more billions to acquire parts of Yukos, the private oil company bankrupted in a politically tinged fraud and tax evasion case.
Rosneft is deeply in debt, too. It owes $18.1 billion after spending billions acquiring assets from Yukos. And in addition to negotiating for a government bailout, Rosneft is negotiating a $15 billion loan from the China National Petroleum Corporation, secured by future exports to China.
Under Putin, more than a third of the Russian oil industry was effectively renationalized in such deals. But unlike Hugo Chávez of Venezuela or Evo Morales of Bolivia, who sent troops to seize a natural gas field in that country, the Kremlin used more sophisticated tactics.
Regulatory pressure was brought to bear on private owners to encourage them to sell to state companies or private companies loyal to the Kremlin. The assets were typically bought at prices below market rates, yet the state companies still paid out billions of dollars, much of it borrowed from Western banks that called in the credit lines in the financial crisis.
Rosneft, which was also held up as a model of resurgent Russian pride and defiance of the West as it was cobbled together from Yukos assets once partly owned by foreign investors, was compelled to meet a margin call on Western bank debt in October.
Critics predicted Russia's policy of nationalization would foster inefficiency, or at the very least disruption as huge companies were bought and sold, divided up and repackaged as state property. At stake were assets worth vast sums: Russia is the world's largest natural gas producer and became the world's largest oil producer after Saudi Arabia reduced output this summer to support prices.
A deputy chief executive of Gazprom, Aleksandr Medvedev, predicted the company would achieve a market capitalization of $1 trillion by 2014. Instead, its share price has fallen 76 percent since the beginning of the year and its market cap is now about $85 billion.
By comparison, Exxon's share price Monday of $78.02 is down 18 percent since January. The company's market capitalization is $393 billion. And the Standard & Poor's 500-stock index stocks is down more than 40 percent for the year
Medvedev, the Gazprom executive, defended Gazprom's performance and attributed the steep drop in its share price relative to other energy companies to the company's listing on the Russian stock exchange, which is volatile and lacks investors who put their money into companies for the long term.
Medvedev said share price "does not reflect the company's value" and blamed the financial crisis that began on Wall Street for the company's woes.
It is true that Gazprom is far from broke. The company made a profit of 360 billon rubles, or $14 billion, from revenue of 1,774 billion rubles, or $70 billion, in 2007, the most recent audited results released by the company.
Valery A. Nesterov, an oil and gas analyst at Troika Dialog bank in Moscow, said Gazprom's ratio of debt to revenue — before interest payments, taxes and amortization — was 1 to 5 in 2007, high by oil industry standards but not so excessive as to jeopardize the company's investment grade debt rating.
The company, meanwhile, says it will go ahead with capital spending to develop new fields in the Arctic, and continues to pour money into subsidiaries in often losing sectors like agriculture and media. It is also assuming, through its banking arm, a new role in the financial crisis of bailing out struggling Russian banks and brokerages.
Investors say an unwillingness to cut costs in a downturn is a common problem for nationalized industries, and another reason they have fled the stock. When oil sold for less than $50 a barrel in 2004, Gazprom's capital outlay that year was $6.6 billion; for 2009, the company has budgeted more than $32 billion.
Gazprom executives say they are reviewing spending but will not cut major developments, including two undersea pipelines intended to reduce the company's reliance on Ukraine as a transit country for about 80 percent of exports to Europe. Gazprom and Ukraine are again locked in a dispute over pricing that Gazprom officials say could prompt them to cut supplies to Ukraine by Thursday.
"All our major projects in our core business — upstream, midstream and downstream — will continue with very simple efforts to meet demand both in Russia and in our export markets," Medvedev said.
But revenue is projected to fall steeply next year. Gazprom received an average of $420 per 1,000 cubic meters for gas sold in Western Europe this year; that is projected to fall to $260 to $300 in 2009.
"For them, like everybody else, sober realism has intruded," Jonathan Stern, the author of "The Future of Russian Gas and Gazprom" and a natural gas expert at Oxford Energy, said in a telephone interview.
A significant portion of the country's corporate bailout fund — about $9 billion out of a total of $50 billion — was set aside for the oil and gas companies. Gazprom alone is seeking $5.5 billion.
For a time, Gazprom, a company that evolved from the former Soviet ministry of gas, had been embraced by investors as the model for energy investing at a time of resource nationalism, when governments in oil-rich regions were shutting out the Western majors. In theory, minority shareholders in government-run companies would not face the risk their assets would be nationalized.
But with 436,000 employees, extensive subsidiaries in everything from farming to hotels, higher-than-average salaries and company-sponsored housing and resorts on the Black Sea, critics say Gazprom perpetuated the Soviet paternalistic economy well into the capitalist era.
"I can describe the Russian economy as water in a sieve," Yulia Latynina, a commentator on Echo of Moscow radio, said of the chronic waste in Russian industry.
"Everybody was thinking Russia had succeeded, and they were wondering, how do you keep water in a sieve?" Latynina said. "When the input of water is greater than the output, the sieve is full. Everybody was thinking it was a miracle. The sieve is full! But when there is a drop in the water supply, the sieve is again empty very quickly."
More Articles in Business » A version of this article appeared in print on December 30, 2008, on page B1 of the New York edition.

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EDITORIAL
Russia's pipeline politics with Ukraine and the West
The Boston Globe
Monday, December 29, 2008
Ukraine and Russia are at odds again over the price of natural gas and how it is delivered. This latest dispute underlines the need for President-elect Barack Obama to eliminate avoidable causes of friction in the West's relationship with Russia.
The state-owned Russian company Gazprom is threatening to halt deliveries to Ukraine unless a new contract is signed at more than double the current price. This month's confrontation presents less of a risk than one in January 2006, when Russia cut supplies to Ukraine, and deliveries to Europe were interrupted.
Unlike the situation then, Ukraine and Germany both have ample reserves to get through the winter heating season. So even if Gazprom carries out its threat, consumers in Ukraine and elsewhere in Europe should not go cold.
Europe receives about a fourth of its natural gas from Russia, nearly all of which is transported by pipeline across Ukraine. Accordingly, Russian officials have been saying that if supplies to Europe are reduced, the Europeans should blame Ukraine, not Russia. The Russian insinuation is that Ukraine will siphon off gas meant for Western Europe.
With energy prices plummeting, Russia has no market motive to double the price of its gas. Rather, the Kremlin wants to show that steps toward NATO membership for Kiev will incur Russia's displeasure and then could affect energy supplies for Europe.
However Russia and Ukraine resolve this latest quarrel, the Obama administration should set out to completely recast relations with Russia. Once the Kremlin no longer fears the Bush administration's attempt to absorb Ukraine into NATO, Russian leaders will have no excuse for using energy supplies to apply geopolitical pressure.



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Kerkorian sells off Ford shares at deep loss
Reuters
Monday, December 29, 2008
DETROIT: Billionaire investor Kirk Kerkorian has sold off all of his remaining shares of Ford Motor Co , completing a retreat from a high-profile stake in the No. 2 U.S. automaker that cost him hundreds of millions of dollars.
A spokeswoman for Kerkorian's investment firm, Tracinda Corp, said that the firm's remaining Ford shares had been sold. A spokesman for Ford had no comment on the development.
Tracinda, which briefly ranked as Ford's largest outside investor, said in a regulatory filing in October that it had begun working with bankers to sell the 133.5 million shares of the No. 2 U.S. automaker it still held at that time.
It was not immediately clear when Tracinda had completed those remaining sales of Ford stock over the past two months.
The pullout from Ford by Kerkorian caps a two-year period during which the activist investor took a run at all three Detroit-based car companies as they struggled to restructure.
Kerkorian, 91, previously held a nearly 10 percent stake in General Motors Corp and made a failed bid for Chrysler LLC last year.
Since October, he has been cutting his losses on a $1 billion (692 million pound) investment in Ford that had lost most of its value.
It was not immediately clear how deep Kerkorian's losses on the Ford investment were. But even if Tracinda sold all its remaining shares at the recent high for Ford stock, the firm would have been facing a loss of some $475 million based on its average acquisition cost for the shares.
If the firm had sold out at the bottom of the market for Ford stock in November, it would have lost more than $800 million.
Kerkorian surprised analysts and investors in April when he began buying Ford shares and spent more than $1 billion to take a stake in the automaker at an average price per share of $7.10.
At the peak of his investment, Kerkorian held a 6.5 percent stake in Ford. In June, he had also offered to support the automaker's turnaround efforts with an infusion of additional capital.
Ford has been widely considered to be the best-positioned of the three Detroit automakers at a time when all three have been hit hard by declining sales and tight credit.
When GM and Chrysler negotiated $17.4 billion of emergency loans from the U.S. government earlier this month, Ford held back, saying it expected to be able to weather the downturn on its own.
But conditions across the auto industry have taken a dramatic turn for the worse since September when credit suddenly tightened for both car shoppers and dealers.
In late October, Tracinda began selling Ford shares at $2.43, representing a loss of almost 66 percent from what the fund paid on average.
Since then, Ford's shares have traded between a low of $1.02 in November and a high of $3.54 earlier this month.
Ford shares closed down 3 percent on Monday to end the New York trading day at $2.22.
The Ford family holds slightly less than 3 percent of the automaker's shares but controls 40 percent of the voting power through a separate class of shares.
Kerkorian's offer of additional capital for Ford had been seen as an endorsement of the company's strategy and management under Chief Executive Alan Mulally.
But Kerkorian's record as an activist investor had also raised questions earlier this year about whether his investment could be a threat to the Ford family's continued control of the automaker.
(Reporting by Kevin Krolicki; editing by Phil Berlowitz and Matthew Lewis)

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Breakingviews.com:
Monday, December 29, 2008
IS DOW'S LOSS KUWAIT'S GAIN?
Kuwait's botched handling of its $17 billion joint-venture agreement with Dow Chemical will do little to enhance its reputation as an international business partner.
To recap, a Kuwait Petroleum subsidiary, Petrochemical Industries, agreed to buy half of Dow's struggling basic chemicals business for $9.5 billion in cash one year ago. The Gulf state lowered the price by $2 billion four weeks ago amid a weakening oil price and falling demand for chemicals. That downward revision was fair enough. But now Kuwait has decided to scrap the deal altogether, after a further 20 percent drop in oil prices. Kuwait's caution might be financially sensible, but the eleventh-hour change of heart so soon after recommitting to the proposed transaction is embarrassing.
Arguably, Kuwait could have driven a harder bargain when it renegotiated the terms earlier this month. The average U.S. chemical company has seen its market capitalization fall 40 percent over the past 12 months. Kuwait ought to have factored in further short-term oil price volatility into its calculations - or been surer of its view that this transaction was for the long haul.
The late U-turn leaves Dow in the lurch. The chemicals giant, based in Midland, Michigan, won't get much-needed access to inexpensive raw materials. And without the Kuwaiti funds, it is unclear how Dow will finance its subsequent $15 billion agreement to buy a rival in Philadelphia, Rohm & Haas. To terminate the R&H deal, Dow could face a minimum $750 million fee, lifting its debt to just over two times next year's earnings before interest, tax, depreciation and amortization. But Dow may not have the ability to terminate the deal if it gets the expected regulatory clearance, according to people close the situation.
Yet Dow's loss isn't fully Kuwait's gain. The two-step demise of the joint venture has drawn attention to the country's political infighting, which seems to have been a factor in the deal's failure. Kuwait is under pressure to increase domestic spending as part of its response to the financial crisis. Parliamentary ministers, allegedly encouraged by rival factions in the ruling Al-Sabah family, have accused the government of squandering public funds abroad. They can point to highly visible losses by the country's sovereign wealth fund on stakes in Citigroup and Merrill Lynch.
Kuwait's relative oil wealth means bankers will always be knocking on its door offering international investment opportunities in a world where capital is scarce. But after Dow's experience, Kuwait's wealthy neighbors may get that call first. - Una Galani

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Passive houses guard against waste of heat energy
By Elisabeth Rosenthal
Monday, December 29, 2008
DARMSTADT, Germany: From the outside, there is nothing unusual about the stylish new gray-and-orange row houses in the Kranichstein district here, with wreaths on the doors and Christmas lights twinkling through a freezing drizzle.
But these houses are part of a revolution: Though the ground around them is frozen, they are toasty-warm inside, even though they are not using any heating. No drafts. No cold tile floors. No snuggling under blankets while the furnace kicks in.
In Berthold Kaufmann's house, there is, to be fair, one radiator for emergency backup in the living room, but it is not in use. Indeed, even on the very coldest nights, Kaufmann's new "passive house" - and others of this design - can get all the heat and hot water they need from the amount of energy used to run a hair dryer.
"You don't think about temperature - the house just adjusts," said Kaufmann, watching his 2-year-old daughter, dressed in a T-shirt, tuck into her sausage in the spacious living room, whose soaring glass doors give way to a patio. His new home uses about one-twentieth the heating energy of his parents' home, which is the same size, he said.
In attempts to meet new energy-efficiency standards, architects all over the world are designing more sustainable homes using better insulation and high-efficiency appliances, as well as tapping into new sources of power, like solar panels and wind turbines - the icons of the green building.
The passive house concept, pioneered in this small town outside of Frankfurt, approaches the challenge from a different angle: Using ultra-thick insulation and complex doors and windows, passive-house architects engineer homes that are effectively encased in an airtight shell so that heat never escapes and the cold outside never seeps in.
As such, passive houses can be warmed by their occupants' bodies, the heat from appliances and the sun.
Decades ago, attempts at creating sealed solar-heated homes failed because of stagnant air and mold, for example. But at the heart of each new passive house is an ingenious central ventilation system. The warm air going out passes side-by-side with clean cold air coming in, exchanging heat with 90 percent efficiency.
"The myth before was that to be warm you had to have heating. Our goal is to create a warm house without energy demand," said Wolfgang Hasper, an engineer at the Passivhaus Institut here in Darmstadt. "This is not about wearing thick pullovers, turning the thermostat down and putting up with drafts. It's about being comfortable with less energy input, and we do this by recycling heating."
There are now an estimated 15,000 passive houses worldwide, the vast majority built in the past few years and almost all of them in German-speaking countries or Scandinavia. The first passive home was built here in 1991 by Wolfgang Feist, a local architect, but diffusion of the idea was slowed by language. The courses and literature were mostly in German, the parts still only mass-produced in this part of the world.
There is now a thriving passive-house building industry in Germany - new schools in Frankfurt are built with the technique - and it is spreading. The European Commission, the European Union's executive body, is promoting passive house building, and the European Parliament proposed that new buildings should meet passive-house standards by 2011. The U.S. Army, long a presence in this part of Germany, is considering passive-house barracks.
"Awareness is skyrocketing; its hard for us to keep up with requests," Hasper said.
Nabih Tahan, an architect who worked in Austria for 11 years, is completing one of the first passive house for his family in Berkeley, California, and heads a group of 70 Bay Area architects and engineers to encourage adoption of the standard.
"This is a recipe for energy that makes sense to people - why not reuse this heat you get for free?" he said.
But ironically, when California inspectors came to assess whether the house met green building codes (it did) he could not get credit for the heat exchanger, a device unknown in the United States.
"When you think about passive-house standards, you start looking at buildings in a different way," he said.
A house that is certified hermetically sealed may understandably sound a bit suffocating. (To meet the standard, buildings undergo a "blow test" to show that it loses minimal air under pressure.) In fact, there are plenty of windows - though far more facing south than north - and all can be opened.
Inside, passive homes are slightly different from conventional houses, just as electric cars drive differently than their gas cousins. There is a kind of spaceship-like uniformity of air and temperature, with all the air from the outside going through high-efficiency filters before entering the rooms. The concrete floor of the basement is not cold. The walls and the air are basically the same temperature.
Look closer and there are technical differences: When the windows are swung open, their layers of glass and gas are visible, as are the elaborate seals around the edges. A small grated duct near the ceiling in the living room brings in clean air. In the basement there is no furnace but instead what looks like a giant Styrofoam cooler, containing the heat exchanger.
Though passive houses need no human tinkering, most architects put in a switch with three settings that can be turned down for vacations or up for circulating air for a party - though window could also just be opened.
"We've found it's very important to people that they feel they can influence the system," Hasper said.
It may be too radical for those nostalgic about drinking hot chocolate in a cold kitchen. But not for others.
"I grew up in a great old house that was always 10 degrees too cold, so I knew I wanted to make something different," said Georg Zielke, who built his first passive house here, for his family, in 2003 and now designs nothing else.
Passive houses cost about 5 to 7 percent more than conventional houses to build, but with growing popularity and an ever-larger array of attractive off-the-shelf components, the buildings have become cheaper.
Feist's original passive house, a boxy white building with four flats, looks like the science project that it was intended to be. But new passive houses come in many shapes and styles. (Feist still calls the house home, though he spends much of his time in Austria, where he now teaches.) The Passivhaus Institut, which he founded a decade ago, continues research, teaches architects and tests homes to make sure they meet standards. It now has affiliates in Britain in the United States.
Still, there are challenges.
Because a successful passive house requires interplay between the house, the sun and the climate, architects need to be careful about site selection. Passive-house heating might not work in a small shady valley in Switzerland, for example, or on an urban street with no south-facing wall. Researchers are now looking into whether the concept will work in warmer climates, as well, where a heat exchanger could be used to keep cool air in and warm air out.
Most important, those who want passive-house mansions may be disappointed. Compact shapes are simpler to seal; sprawling homes are too hard to insulate and heat. Most passive houses allow 50 square meters, or 540 square feet, per person, a comfortable though not luxurious living space.
"It doesn't make sense to heat 1,000 square meters for just one person," Hasper said, reflecting: "Anyone who feels they need that much space to live - well, that's a different discussion."

EDITORIAL OBSERVER

Just following orders
By Adam Cohen
Monday, December 29, 2008
In 1963, Stanley Milgram, an assistant professor of psychology at Yale, published his infamous experiment on obedience to authority. Its conclusion was that most ordinary people were willing to administer what they believed to be painful, even dangerous, electric shocks to innocent people if a man in a white lab coat told them to.
For the first time in four decades, a researcher has repeated the Milgram experiment to find out whether, after all we have learned in the last 45 years, Americans are still as willing to inflict pain out of blind obedience.
The Milgram experiment was carried out in the shadow of the Holocaust. The trial of Adolf Eichmann had the world wondering how the Nazis were able to persuade so many ordinary Germans to participate in the murder of innocents. Milgram devised a clever way of testing, in a laboratory setting, man's (and woman's) willingness to do evil.
The participants - ordinary residents of New Haven - were told they were participating in a study of the effect of punishment on learning.
A "learner" was strapped in a chair in an adjacent room, and electrodes were attached to the learner's arm. The participant was told to read test questions, and to administer a shock when the learner gave the wrong answer.
The shocks were not real. But the participants were told they were - and instructed to increase the voltage with every wrong answer. At 150 volts, the participant could hear the learner cry in protest, complain of heart pain, and ask to be released from the study. After 330 volts, the learner made no noise at all, suggesting he was no longer capable of responding. Through it all, the scientist in the room kept telling the participant to ignore the protests - or the unsettling silence - and administer an increasingly large shock for each wrong answer or non-answer.
The Milgram experiment's startling result - as anyone who has taken a college psychology course knows - was that ordinary people were willing to administer a lot of pain to innocent strangers if an authority figure instructed them to do so. More than 80 percent of participants continued after administering the 150-volt shock, and 65 percent went all the way up to 450 volts.
Jerry Burger of Santa Clara University replicated the experiment and has published his findings in American Psychologist. He made one slight change in the protocol, in deference to ethical standards developed since 1963. He stopped when a participant believed he had administered a 150-volt shock. (He also screened out people familiar with the original experiment.)
Burger's results were nearly identical to Milgram's. Seventy percent of his participants administered the 150-volt shock and had to be stopped. That is less than in the original experiment, but not enough to be significant.
Much has changed since 1963. The civil rights and antiwar movements taught Americans to question authority. Institutions that were once accorded great deference - including the government and the military - are now eyed warily. Yet it appears that ordinary Americans are about as willing to blindly follow orders to inflict pain on an innocent stranger as they were four decades ago.
Burger was not surprised. He believes that the mindset of the individual participant - including cultural influences - is less important than the "situational features" that Milgram shrewdly built into his experiment. These include having the authority figure take responsibility for the decision to administer the shock, and having the participant increase the voltage gradually. It is hard to say no to administering a 195-volt shock when you have just given a 180-volt shock.
The results of both experiments pose a challenge. If this is how most people behave, how do we prevent more Holocausts, Abu Ghraibs and other examples of wanton cruelty? Part of the answer, Burger argues, is teaching people about the experiment so they will know to be on guard against these tendencies, in themselves and others.
An instructor at West Point contacted Burger to say that she was teaching her students about his findings. She had the right idea - and the right audience. The findings of these two experiments should be part of the basic training for soldiers, police officers, jailers and anyone else whose position gives them the power to inflict abuse on others.
Adam Cohen is the assistant editor of the New York Times editorial board.

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U.S. TV networks leaving Iraq
By Brian Stelter
Monday, December 29, 2008
NEW YORK: Quietly, as the U.S. presidential election and its aftermath have dominated the news, three American broadcast networks - CBS, NBC and ABC - have stopped sending full-time correspondents to Iraq.
At the same time, the major U.S. television networks have been trying to add newspeople in Afghanistan and Pakistan, with expectations that the administration of Barack Obama will focus on the conflict there.
In short, the story, certainly on television, is shifting to Afghanistan. CNN now has a reporter assigned to the country at all times.
Michael Yon, an independent reporter who relies on contributions from Internet users to report from both areas of conflict, has already perceived a shift in both media and reader attention from Iraq to Afghanistan.
"Afghanistan was the forgotten war; that's what they were calling it, actually," he said. "Now it's swapping places with Iraq."
The staff cuts appear to be the latest evidence of budget pressures at the networks. And those pressures are not unique to television: Many newspapers and magazines have also curtailed their presence in Baghdad. As a consequence, the war is gradually fading from television screens, newspapers and, some worry, the consciousness of the American public.
For Yon and others who continue to cover Iraq, the cutbacks are a disheartening reminder of the war's diminishing profile at a time when about 130,000 U.S. service members remain on duty there - as opposed to 30,000 in Afghanistan. More than 4,200 Americans and many more thousands of Iraqis have died in fighting there since 2003.
ABC, CBS and NBC declined to speak on the record about their news coverage decisions. But representatives for the networks emphasized that they would continue to cover the war and said the staff adjustments reflected the evolution of the conflict in Iraq from a story primarily about violence to one about reconstruction and politics.
In Baghdad, ABC, CBS and NBC still maintain skeleton bureaus in heavily fortified compounds. Correspondents rotate in and out when stories warrant.
But employees who are familiar with the staffing pressures of the networks say the bureaus are a shadow of what they used to be. Some of the offices have only one Western staff member.
The TV networks have talked about sharing some resources in Iraq, although similar discussions have stalled in the past because of concerns about editorial independence. Parisa Khosravi, CNN's senior vice president for international news gathering, said such talks among the networks were not currently under way.
But journalists in Iraq expect further cooperative agreements and other pooling of resources in the months ahead.
ABC and the British Broadcasting Corp, longtime partners on polling in Iraq, may consolidate some back office operations early in 2009, two people with knowledge of the talks said. They spoke anonymously because they were not authorized to talk about the plans.
As the war claims fewer American lives, Iraq is fading from TV screens. The three network evening newscasts devoted 423 minutes to Iraq this year as of Dec. 19, compared with 1,888 minutes in 2007, said Andrew Tyndall, a television news consultant.
"But clearly, viewers' appetite for stories from Iraq waned when it turned from all-out battle into something equally important but more difficult to describe and cover," said Jane Arraf, a former Baghdad bureau chief for CNN who has remained in Iraq as a contract reporter for The Christian Science Monitor. She recalled hearing one of her TV editors say, "I don't want to see the same old pictures of soldiers kicking down doors."
"You can imagine how much more tedious it would be to watch soldiers running meetings on irrigation," she said.
It is an expensive and dangerous operation to run at a time of diminishing resources and audience interest.
"Some news organizations just cannot afford to be there," said Yon, the independent reporter. "And the ones who can are starting to shift resources over to Afghanistan."
CNN and the Fox News Channel, both cable news channels with 24 hours to fill, each keep one correspondent in Iraq. Among newspapers, The New York Times and The Washington Post continue to assign multiple reporters to the country. The Associated Press and Reuters also have significant operations in Iraq.
Stories from Iraq that are strongly visual - as when an Iraqi journalist threw two shoes at President George W. Bush this month - are still covered by the networks, though often with footage from freelance crews and video agencies.
"But these other stories - ones that require knowledge of Iraq, like the political struggles that are going on - are going uncovered," said Joseph Angotti, a former vice president of NBC News.
Mike Boettcher, a Baghdad correspondent for NBC News from 2005 to 2007, said nightly news segments and assignments with military units occurred less frequently as the war continued.
"Americans like their wars movie-length and with a happy ending," Boettcher said. "If the war drags on and there is no happy ending, Americans start to squirm in their seats. In the case of television news, they began changing the channel when a story from Iraq appeared."
A year ago, Boettcher left NBC after the network rejected his proposal for a "permanent embed" in Iraq and he started the project on his own. In August, he and his son Carlos, 22, started a 15-month embed assignment with U.S. forces in Iraq. His reporting appears online at NoIgnoring.com.
Iraq has been, according to some executives, the most expensive war ever for TV news organizations.
Most of the costs go for the security teams that protect each bureau and travel with reporters. Iraq remains the deadliest country in the world for journalists, according to a report compiled by the Committee to Protect Journalists. On Nov. 30, a National Public Radio correspondent and three local staff members survived an apparent assassination attempt in Baghdad when a bomb detonated under their armored vehicle.
Keeping fewer people stationed in Iraq and traveling on assignment often cuts costs for the news organizations. In an unrelated interview this month, Alexandra Wallace, an NBC News vice president, said the network had correspondents in Iraq "most of the time."
"If a bomb blew up in the Green Zone and Richard Engel wasn't there, we do have an option," she said. Engel, NBC's chief foreign correspondent, rotates in and out of Baghdad.
Boettcher was not convinced. "Like it or not, the country is at war and there is not a correspondent to cover it," he said. "Sad."

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Ex-Saddam officials and others go on trial over execution of thousands
By Sam Dagher
Monday, December 29, 2008
BAGHDAD: Two dozen people, including some of the most senior figures of Saddam Hussein's government, went on trial on Sunday for what prosecutors said was their role in the execution of thousands of members of Prime Minister Nuri Kamal al-Maliki's political party during Saddam's rule.
Many welcomed the action, especially relatives of victims hoping for a measure of long-awaited justice.
But critics saw the trial's timing as a highly politicized and even cynical move by Maliki and his partisans to bolster their stature among their core Shiite constituency before crucial provincial elections that are scheduled for the end of January. The fact that some of the defendants had already been convicted in other cases added to the argument that the trial was at least partly for show.
The defendants include Saddam's cousin, Ali Hassan al-Majid, better known as Chemical Ali, who received the death sentence during two previous trials. Several others, like Sabawi and Watban Ibrahim, Saddam's half brothers; and Tariq Aziz, Saddam's deputy prime minister, face charges in other trials being heard by the same court.
They were charged on Sunday with the organized killing of as many as 250,000 members of the Islamic Dawa Party, which opposed Saddam's Baath Party, from 1968 to 2003.
"We want to present a vivid portrait of what the ruling Saddamist bunch perpetrated against the Iraqi people in Balad so that it becomes evident to Arabs everywhere, particularly those who still describe Saddam's ill-fated regime as pan-Arabist, populist and democratic," the prosecutor, Mahdi al-Haddo, said in his opening remarks.
He cited a massacre in July 1981, when 1,135 Dawa partisans and their families were rounded up in the town of Balad, north of Baghdad. They were taken to a desert camp in southern Iraq near the Saudi border, where the men, ages 15 and older, were separated and later executed. The women and children were released in 1984, but their homes and land in Balad were confiscated.
Haddo spoke of other Dawa members who were fatally poisoned or strapped with dynamite. Many wives and daughters of Dawa members were raped, he said. He added that no "honorable" Iraqi man would accept this, and, his voice rising with emotion, he called the perpetrators "bastards."
Walid al-Hilli, a senior Dawa member who was jailed for a year in 1979, testified that several fellow members had been killed and their bodies tossed in acid vats.
Hilli, one of those pleased to see the trial finally begin, dismissed suspicions that it was politically motivated. The court is an independent body, preparations have been under way since 2004, and at least a million documents have been gathered in evidence, he said.
"We are upset it took this long for the trial to start," he said.
Others were more skeptical. There had been virtually no previous public discussion of the trial, and even some officials were taken by surprise that it had begun.
"I think the timing of this trial is propaganda for the elections," said Wael Abdul-Latif, a Shiite member of Parliament from Basra. "They are going all out."
Saad al-Hadithi, a professor of politics at Bagdad University, said the government may have been trying to deflect the electorate's disgruntlement with religious parties. A high-profile recapitulation of past horrors could sway public opinion in the victims' favor.
"Iraqis are driven by emotion, not reason," Professor Hadithi said.
Abdul-Latif, who is also a judge with intimate knowledge of the workings of the Iraqi High Tribunal, which is hearing the trial, said he was concerned about the court's neutrality because Maliki's government was responsible for its financing and staffing with little oversight from Parliament.
The tribunal is a special court set up by the American-led occupation authority after the invasion of Iraq in 2003 to try members of the Saddam government for crimes against humanity. It is the same court that sent Saddam to the gallows in 2006 amid accusations of intense pressure on the court by Maliki.
An official at the American Embassy here, speaking on condition of anonymity, said that while American officials continued to advise and provide extensive support to the tribunal and Iraq's judicial system as a whole, this trial was an entirely "Iraqi process."
Dawa, a leading party in the current government coalition, was founded by Shiite clerics and politicians in 1957 with the aim of combating secularism and Communism and creating an Islamic state. It immediately clashed with Saddam's Baath Party, which was initially secular and intolerant of opposition.
Dawa was outlawed in 1980, with membership punishable by death. That same year, its spiritual leader, Ayatollah Mohammed Baqir al-Sadr, and his sister were executed.
Two of the defendants on trial Sunday, Abdelghani Abdul-Ghafor al-Ani, a former government minister, and Majid, were given death sentences this month in a trial involving the crushing of a Shiite uprising in 1991. Majid was also given the death sentence last year in a separate trial for his leadership of a military campaign in the 1980s that killed as many as 180,000 Kurds.
Several of the defendants were also facing charges in three other current trials, a court spokeswoman said. These involve the execution of merchants during the Baathist era, the suppression of Shiites in 1999 and another trial dealing exclusively with the use of poison gas in the town of Halabja in 1988 that killed about 5,000 Kurds.
Ani, who had upset Judge Mohammed Oraibi al-Khalifa with an outburst at his previous trial, refused to speak on Sunday. He responded to the judge's questions by waving a notebook in which he had written the answers.
The once-defiant Majid, 64, dressed in traditional tribal robes and walking with a cane, looked frail and resigned. Aziz, 72, who also used a cane, wore ill-fitting pants and old sneakers, a far cry from his debonair image before the government fell.
Also on Sunday, one person was killed by a suicide bomber on a bicycle at a demonstration in Mosul to protest the Israeli assault in Gaza.
In Baghdad, an American soldier died of wounds sustained by the explosion of a homemade bomb, the military said in a statement.
Turkish warplanes bombed several sites near Iraq's northern border that had been used by the Kurdish rebel group the Kurdistan Workers' Party, or PKK, according to a rebel spokesman. He said there were no casualties.
Elsewhere, two prisoners who remained free after a deadly prison break that left 13 dead in Ramadi, west of Baghdad, were caught by the Iraqi police early on Sunday.
Major General Tareq al-Yousef, the police commander of Anbar Province, said the police acted on a tip from a resident. "The two escaped prisoners asked him to serve them food, and he recognized them instantly," Yousef said.
A third prisoner who had escaped, described as a Sunni insurgent leader, was killed in a gun battle with the police on Saturday.

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Deadly bombings shake Afghanistan for a 2nd day
By Adam B. Ellick
Monday, December 29, 2008
KABUL: A day after a suicide bomber killed at least 16 people, including 13 schoolchildren, in a region bordering Pakistan, a new rash of bombings shook different areas of Afghanistan on Monday, killing two civilians north of Kabul and two more in Kandahar Province.
The explosion on Sunday detonated outside a local government compound in Khost Province and wounded 53, local government officials and coalition forces said. The bombing, near the border with Pakistan, occurred next to a school, and many children were among the wounded.
The Taliban claimed responsibility for the attack.
Coalition forces provided a video showing about 15 children walking on the street as they were engulfed by a ball of fire. Mark Larter, a spokesman for the coalition forces, said the death toll also was based on reports of troops at the scene. Two police officers were among the dead.
The number of suicide bombings in Afghanistan has fallen sharply since 2006, mainly because of better intelligence and a proliferation of security checkpoints. But in Khost Province, which borders the tribal area of the Pakistani region known as North Waziristan, a wave of violence continues to overwhelm security officials.
On Monday morning, a suicide car bomber in a black Toyota Corolla killed 2 civilians and wounded 15, including 2 American servicemen in Chire-kar, the capital city of Parwan Province, just north of Kabul, U.S. forces and local government officials said.
The attack occurred outside of the local governor's office, and most of the wounded were government employees, said Abdul Jabar Taqwa, the governor. Taqwa said he entered the compound only two minutes before the blast and was unharmed. He said he noticed a U.S. convoy on the road near his office.
Several hours later, in Kandahar Province, a remote-controlled bomb exploded at a marketplace in Spin Boldak district, killing 2 civilians and wounding 19. Five of the wounded are in critical condition, said Zalmay Ayobi, spokesman for the governor of Kandahar. The bomb was apparently aimed at a passing police vehicle but missed.
Despite the overall drop in the number of bombings, suicide attacks around the country have become more technically sophisticated and have grown in scale, including the attack Sunday, in which a huge fireball towered over the compound's security blockade.
The blast on Sunday occurred as local leaders and tribal elders gathered inside the government building to discuss security and elections, said Tahir Kahn Sabari, the deputy governor of Khost Province. At the nearby school, the bomb rattled students, ages 6 to 12, who were receiving certificates on the last day of the school year.
President Hamid Karzai condemned the attack, saying those responsible "are not aware of the Islamic teachings which outlaw the killing of innocent people."
Sangar Rahimi and Taimoor Shah Noori contributed reporting.

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No easy Indian response to Pakistan's troop shift
By Somini Sengupta
Monday, December 29, 2008
NEW DELHI: Though tensions have risen in the past few days, neither India's governing coalition led by the Congress Party nor its habitually hawkish political opposition is advocating a military confrontation with Pakistan, the country's neighbor and archrival.
Pakistan's redeployment of troops late last week to its border with India, from its tribal areas in the northwest, raised fears. The troop movement came a month after the attacks in Mumbai, India's financial capital, which India says were orchestrated by Pakistan-based militants.
Fear of a conflict in South Asia is unlikely to pass quickly, as Pakistan has resisted a broad crackdown on the militants India says were behind the Mumbai assault.
But for India, many here say, the cost is too high, not just because both sides have nuclear arms. As an Indian official put it, "Almost anything against Pakistan would be messy."
The Mumbai attacks prompted bellicose outbursts from the Indian news media and led Indian officials to state that their "restraint" should not be mistaken for "weakness." Yet even a surgical strike on terrorists' training camps in Pakistan, one of the options floated in the immediate aftermath of the attack, would bring unwanted risks, according to policy makers and analysts.
They say it could damage India's economic prospects at a time when the country is vulnerable to the global downturn.
Moreover, past military engagements with Pakistan strengthened the political influence of Pakistan's army and weakened its civilian government. Many in India say they are reluctant to do anything to undermine civilian rule there.
"The Pakistan military is itching for a fight," said Lalit Mansingh, a retired Indian ambassador to the United States. "That will give them the excuse not to carry on the fight on Afghanistan."
This time, he said, the Indian government is left with no choice but to mount a diplomatic offensive against Pakistan, in part by appealing to some of its most stalwart allies, like Saudi Arabia, China and the United States. "People realize war would be more costly in its impact," Mansingh said.
In that sense, the stakes for the next American president, Barack Obama, are potentially as high as they are for India. A new spike in tension would give the Pakistani Army the rationale it needs to refocus its energy on the eastern flank. The United States has strongly urged Pakistan to concentrate instead on fighting Islamic militants along its western border with Afghanistan.
The calculus is complicated by India's need to project itself as a world power that cannot be seen as doing nothing in the face of the terrorist attack that killed 163 people, including nearly two dozen foreigners, in Mumbai a month ago.
The Indian government insists that the gunmen, including the sole survivor, were Pakistani. It has sent Pakistan a letter that India says he wrote requesting assistance from his home country. The government in Islamabad says it cannot confirm that the man is a Pakistani.
Nor has Islamabad agreed to India's chief demand to date: to turn over suspects implicated in this and prior attacks.
Pakistan's prime minister, Asif Ali Zardari, said Saturday that his government would rein in extremist groups, but "not on your démarche," a clear reference to India. Pakistani officials have also gone on record as saying they do not want war.
The troops Pakistan moved toward India, believed to number several thousand, represent only a small fraction of its military presence in the northwest. But a Taliban suicide bombing at a polling place in Pakistan on Sunday served as a reminder of the risks of taking too many troops away from battling insurgents inside the country.
One of Pakistan's leading newspapers, Dawn, editorialized Sunday that the army "just cannot afford to redeploy any large number of its troops" and thus leave "the 'wild' west in a free fall."
Indians point out that their most recent effort to mobilize troops on the border with Pakistan did not end terror attacks. That occurred after a suicide attack on the Indian Parliament in December 2001. It ended in early 2004 with a peace deal, which has been effectively suspended since the Mumbai strike.
"You can't fire the same bullet twice," said Arun Shourie, a member of Parliament from the opposition Bharatiya Janata Party, or BJP, which was in power at the time. In a speech in Parliament last week, Shourie said neither a punitive airstrike nor a conventional troop mobilization was viable now.
The only safeguard against a future attack, he offered, would be to "do a Kashmir on Pakistan" — to provide aid to insurgents against the Pakistani state inside its restive provinces, including Baluchistan in the west.
The Indian official who warned that almost any action would be messy, speaking on condition of anonymity because he is not authorized to discuss strategic matters with the news media, said the 2001 standoff had accomplished little and resulted in "hundreds" of casualties among Indian troops.
"It didn't achieve anything last time," he said. "It didn't scare off the Pakistanis."
But whether the United States can or will lean hard enough on the Pakistani Army is hotly debated. Kanwal Sibal, a former foreign secretary of India, said he doubted that the Obama administration would impose conditions on future aid to Pakistan, which Islamabad needs to supplement its strained budget and finance military operations.
Sudheendra Kulkarni, a BJP leader writing in The Indian Express on Sunday, said that it was pointless to expect the United States to "fight our battle."
Yet the real crisis, argued Stephen Cohen, a South Asia expert at the Brookings Institution in Washington, is Pakistan's inability to control what happens inside its territory. For India, a military strike seems unlikely to change that situation, he said. "It's hard to find a military way of responding," Cohen said.

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Pakistan urges "de-escalation" with India
Reuters
Monday, December 29, 2008
By Kamran Haider
Pakistan and India should reduce tension inflamed by last month's militant attacks in Mumbai and resume a peace dialogue, Pakistani military chiefs told a visiting Chinese official on Monday.
India has blamed Pakistan-based militants for the assault on Mumbai in which 179 people were killed, reviving old hostilities between the nuclear-armed rivals and raising fears of conflict.
Indian and Pakistani military officials held an unscheduled hotline call on the weekend as China's Vice Foreign Minister He Yafei arrived in Pakistan to ease tension between the neighbours.
The Chinese minister met military chiefs and Foreign Minister Shah Mehmood Qureshi on Monday.
The chairman of Pakistan's joint chiefs of staff committee, General Tariq Majid, reiterated Pakistan's commitment to regional peace and cooperation, the military said.
"(He) emphasised the need for avoidance of provocative belligerent posturing, initiation of reciprocal measures for immediate de-escalation and earliest resumption of the peace dialogue," the military quoted Majid as telling He.
India has put a "pause" on a five-year peace process.
Army chief General Ashfaq Kayani "highlighted the need to de-escalate and avoid conflict in the interest of peace and security," it said.
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 most analysts say war is very unlikely, international unease is growing and the United States has urged both sides not to further raise tension.
Senior military officials from India and Pakistan held an unscheduled conversation on a hotline at the weekend, said a Pakistani security officer, who declined to be identified.
The two countries' directors general of military operations talk every Tuesday, but spoke at the weekend because of "the current situation," said the officer. He did not give details.
Pakistan has condemned the Mumbai attacks and has denied any state role, blaming "non-state actors."
India, the United States and Britain have blamed the attacks on Pakistan-based Islamist group Lashkar-e-Taiba (LeT), set up by Pakistani security agencies in the late 1980s to fight Indian rule in the disputed Kashmir region.
The group was banned in Pakistan in 2002.
"ABSOLUTE RUBBISH"
Since the attacks, Pakistan has detained scores of militants, including several top leaders, and shut offices and frozen the assets of the Jamaat-ud-Dawa charity group, which the United Nations says is a front for the LeT.
India is demanding Pakistan dismantle what it calls the infrastructure of terrorism.
The Chinese minister expressed concern over the escalation of tension and emphasised the need for resolving issues through dialogue and cooperation, the Pakistani Foreign Ministry said.
"Mr He Yafei said that conflict was not the solution of the problem as it will only strengthen the hands of terrorists and extremists," it said.
He was due to travel to India later on Monday, a government official said.
As tension has increased, Pakistan has cancelled army leave and shifted some troops from its western border with Afghanistan.
Pakistani military spokesmen have denied any build-up of troops on the eastern border with India, but a security official said some troops had been moved to that border.
Pakistani military officials have declined to say how many troops had been moved off the Afghan border, where 100,000 soldiers had been fighting al Qaeda and Taliban militants, saying only "limited numbers" were involved.
One military official, who declined to be identified, described as "absolute rubbish" a report that 20,000 soldiers had been withdrawn from the western border and moved east.
The movement of Pakistani troops off the Afghan border is likely to cause alarm in the United States, which does not want to see Pakistan distracted from the battle against militants.
(Additional reporting by Augustine Anthony; Writing by Robert Birsel; Editing by Alex Richardson)

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Sanctions don't stop Hewlett-Packard from selling in Iran
By Farah StockmanThe Boston Globe
Monday, December 29, 2008
TEHRAN: Behind an unmarked door on a crowded side street in Tehran, a stack of Hewlett-Packard printers rises to the ceiling. A fleet of motorbikes swarms outside as deliverymen wait to take printers to buyers across the sprawling capital.
HP printers have become a top seller here, despite a comprehensive embargo that prohibits the company from sending its products to Iran.
The prevalence of such American-made goods in Iran has led U.S. officials to crack down on the cottage industry of smugglers in nearby Dubai who purchase everything from iPhones to Bratz dolls to sell in Iran. But the biggest share of HP printers, among the most visible of U.S. goods here, come not through smugglers, but through a series of international transactions that enable HP to sidestep U.S. sanctions.
In 1997, two years after President Bill Clinton banned trade with Iran, HP struck a partnership with a newly formed company in Dubai to sell its products in the Middle East. At the time, the company, called Redington Gulf, had only three employees and its sole purpose was to "sell HP supplies to the Iran market," according to a history on Redington Gulf's Web site and Rajesh Chandragiri, the administrative manager in Redington Gulf's Dubai office.
If U.S. executives at HP cut the deal knowing the printers were destined for Iran, it would be in violation of the law, sanctions specialists said. But despite the crackdown on U.S. companies that sell their products in Iran, some American businesses whose products are sold through third-party distributors like Redington Gulf have thus far avoided scrutiny.
"Using a distributor makes it much more difficult to prove that the manufacturer has knowledge of the sales to Iran," said Robert Clifton Burns, a lawyer based in Washington who specializes in export law.
A spokeswoman for HP, which is based in Palo Alto, California, declined to say how much the company knew about the popularity of its printers in Iran, offering only a statement that said HP has "a policy of complete compliance with all U.S. export laws."
But in 1999, before sanctions enforcement became as rigorous as it is today, Albrecht Ferling, the general manager of HP Middle East, was quoted in the media as estimating HP's growth rate in Iran to be about 50 percent a year.
"Iran is a big market for Hewlett-Packard printers," he was quoted as saying in Gulf News, an English-language newspaper in the United Arab Emirates. Attempts to reach Ferling, who has since left HP, were unsuccessful.
In any case, HP's ability to avoid sanctions undermines the impact of the U.S. economic boycott of Iran, which Clinton announced in 1995 to pressure the country to stop financing the militant groups Hamas and Hezbollah, and to curb its nuclear program.
In recent years, the administration of President George W. Bush has cracked down even harder on companies that find ways to do business with Iran.
"The easier it is for the targeted country or entity to avoid or circumvent the sanctions measures, the lesser their impact and utility," said Victor Comras, who supervised sanctions policy for the U.S. State Department.
"Computers and related products are keystone items in today's economy," Comras added. "Inhibiting trade in such products imposes a greater cost than more mundane and easily substituted products. That makes inhibiting the availability of such products an important part of U.S. trade sanctions program. HP is an important player in this sector."

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Book Review: 'The King's Messenger'
Reviewed by Barry Gewen
Monday, December 29, 2008
BOOKS The King's Messenger
Prince Bandar bin Sultan and America's Tangled Relationship With Saudi Arabia
By David B. Ottaway
321 pages. Walker & Co. $27.
Those who take pleasure in reading about foreign policy because it is like a chess game played in three dimensions will find much to savor in "The King's Messenger," David B. Ottaway's account of Prince Bandar bin Sultan, the longtime Saudi ambassador to the United States. Saudi Arabia's relationship with the United States isn't chess so much as string theory, with 10 or 11 dimensions. Here are two allies that have struggled to maintain close ties although they have almost nothing in common. Every agreement between them has been fraught with contradiction. Every push has produced a pull.
Managing this awkward and potentially combustible quid pro quo required energy, intelligence, sensitivity and a large dollop of deviousness. Bandar, who arrived in Washington as a lobbyist in the late 1970s and served as ambassador from 1983 to 2005, was the right man in the right place. President George H.W. Bush's secretary of state, James Baker, spoke of Bandar's extraordinary influence, along with his "aura of charming roguishness." The Middle East expert Dennis Ross called him indispensable at times, but also "probably part con man."
The modern U.S.-Saudi relationship began during World War II, when President Franklin Roosevelt declared, "The defense of Saudi Arabia is vital to the defense of the United States," and at first it must have seemed like simplicity itself: The Saudis would supply the United States with oil, and the Americans would guarantee the security of the kingdom.
Oil was oil, but security meant something different to each country. For Washington, it meant protection against the Communists. For the Saudis, it meant support against their rivals, the Hashemite royal families in Jordan and Iraq. Even after the Soviet invasion of Afghanistan in 1979 produced a common enemy, perspectives diverged. Ronald Reagan called the embattled Afghans "freedom fighters," while to the Saudis they were "holy warriors."
Then there was the contradiction that repeatedly tore Washington apart: The more secure the Saudis felt, the less secure the Israelis believed themselves to be. Proposals to sell arms to the kingdom produced titanic battles in Congress and, Ottaway reports, at least one occasion when the Saudis and the Israelis edged near to open warfare. Bandar made his name helping the Carter administration gain approval for a sale of F-15s to the Saudis in 1978, and he remained at the center of all subsequent arms disputes, winning more than one victory against the powerful Israel lobby.
Culture also divided the two allies. Bandar termed Saddam Hussein's invasion of Kuwait a "defining moment" of his life, bonding him not only to the first President Bush but also to the rest of the White House team.
Yet Ottaway highlights the bizarre conflicts that can develop between wartime allies when one is a postindustrial society and the other is still mired in the Middle Ages. More than a half-million American troops were sent to the kingdom during the first Gulf war, but Bibles had to be smuggled in to circumvent Saudi customs officials, and Jewish soldiers who wanted to hold religious services had to be smuggled out to ships.
Bandar never again achieved the level of influence he enjoyed during the first Gulf war. The Clinton administration viewed him with suspicion because of his ties to the Bush family. And while the 2000 election of the second Bush was, as Bandar put it, "too good to be true," the Sept. 11, 2001, attacks turned relations sour, ruining almost everything to which he had devoted his life. Americans were never comfortable with the conservative and aggressive variety of Islam practiced by the Saudis, and once it became clear that 15 of the 19 hijackers were Saudis, Bandar had a "public relations disaster" on his hands.
After November 2003, when Bush announced a policy of promoting democracy in the Middle East, the Saudis reacted with a crackdown on democrats within the kingdom.
"Bush's 'freedom speech,"' Ottaway writes, "represented a fundamental shift in what had been a U.S. policy of ignoring the state of Saudi internal politics, an attitude that dated back to the start of the special relationship in 1945." In 2005, Bandar resigned his ambassadorial post.
There is probably no one better qualified to tell this story than Ottaway. He spent 35 years with The Washington Post, including four as the paper's Cairo bureau chief, which gave him the opportunity to make several visits to Saudi Arabia. He has reported on Bandar's Washington maneuvers, profiled him for The Post, interviewed him frequently and even spent eight hours in conversation with him after 9/11. Yet Ottaway has produced a choppy, disjointed book in which Bandar never really emerges from the shadows. The image of Bandar a reader takes away from "The King's Messenger" is that he is one of those people who become more unknowable the closer you get to them.

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OPINION

How Moscow courts the Muslim world
By Jacques Lévesque
Monday, December 29, 2008
Vladimir Putin was the first head of a non-Muslim majority state to speak at the Organization of the Islamic Conference, a gathering of 57 Muslim states, in October 2003. That was a political and diplomatic feat, especially since Russia was waging a long-running war in Chechnya at the time. Putin stressed that 15 percent of the population of the Russian Federation is Muslim and that all the inhabitants of eight of its 21 autonomous republics are Muslim, and he won observer member status with the organization, thanks to support from Saudi Arabia and Iran.
Since then, Putin and other Russian leaders, including the foreign minister, Sergei Lavrov, claim that Russia "is, to some extent, a part of the Muslim world." In an interview with Al Jazeera on Oct. 16, 2003, Putin stressed that, unlike Muslims living in Western Europe, those in Russia were indigenous, and that Islam had been present on Russian territory long before Christianity. So Russia now claims to have a privileged political relationship with the Arab and Muslim world and believes that, as a mostly European state, it has a historic vocation as a mediator between the Western and Muslim worlds.
There are reasons for these claims. The first is to counter the pernicious effect of the war in Chechnya, in Russia as much as in the rest of the world. The aim is to avoid, or at least limit, polarization between Russia's ethnic majority and its Muslims by reinforcing Muslims' feelings of belonging to the state. "We must prevent Islamophobia," said Putin in the Al Jazeera interview. That will be difficult, given the way anyone suspected of being a Muslim fundamentalist is pursued, and not just in Chechnya. "Terrorism should not be identified with any one religion, culture or tradition," Putin insisted. Before 9/11 he called Chechen rebels "Muslim fundamentalist terrorists." Now he speaks of "terrorists connected to international criminal networks and drug and arms traffickers," avoiding any reference to Islam.
The other purpose in seeking special ties with the Arab and Muslim world is related to Russia's foreign policy aim to "reinforce multipolarity in the world" - to sustain and develop poles of resistance to U.S. hegemony and unilateralism. This means taking advantage of the hostility to U.S. foreign policy in the Arab and Muslim world. The Soviet Union used to present itself as the natural ally of anti-imperialist Arab states "with a socialist orientation." Now Russia is seeking strong political relations not only with Iran and Syria, but also with Saudi Arabia, Egypt and Turkey, which have long been close American allies.
Economic considerations are important, especially in the energy sector - the power behind Russia's return to the international stage. The Kremlin believes there is a major future in nuclear energy and the export of nuclear power stations, which may give Russia a competitive edge in technology and make it more than just an exporter of raw energy. The same is true of high-tech weapons, which were the most successful economic sector of the former Soviet Union before serious difficulties in the 1990s.
The Kremlin is no longer seeking formal alliances. It wants strong but non-restrictive political ties in frameworks such as the Shanghai Cooperation Organization (Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan), which do not put it in direct opposition to the United States. Significantly, Iran only has observer status in this organization, although it would like to be a full member.
One more explanation for this new policy toward the Muslim world is the quest for a post-Soviet Russian identity at home and abroad. This is not just political opportunism. In 2005, the academic Sergei Rogov wrote in the official Foreign Ministry review: "The Islamic factor in Russian policy is first and foremost a question of identity. ... That is one of the reasons why Russia cannot yet be a nation state in the European sense of the term. ... Our relations with the Islamic world directly affect our security."
It is important to grasp what that means. In September 2003, Igor Ivanov, then foreign minister, said the war in Iraq had increased the number of terrorist attacks on Russian territory as elsewhere in the world. That was before Beslan, but Russia was already fearful of terrorism as a consequence of the Iraq war. Russia had hoped that a new multipolar configuration would emerge from the concerted opposition at the UN Security Council by France, Germany and Russia, which had deprived the U.S. of international legitimacy for the war.
Russian leaders were seriously concerned that a "clash of civilizations" would become a self-fulfilling prophecy. Given the wars in Afghanistan and Iraq, and unconditional U.S. support for Israel's most intransigent policies, Russian leaders thought potential U.S. attacks on Iran would be a catastrophe, with destabilizing consequences in Iran, so close to Russia, as well as in several former Soviet republics and in Russia.
This is a key to understanding the complex and difficult relationship that Moscow has with Tehran. Iran is an important geopolitical partner, as well as being the third-biggest buyer of Russian arms after China and India, and a showcase for the controlled export of nuclear power plants. Iran's leaders have refrained from expressing support for Chechen rebels. Iran and Russia cooperated in supporting armed opposition to the Taliban in Afghanistan, long before the United States. (Afghanistan under the Taliban was the only state in the world to recognize the independence of Chechnya and offer assistance to Chechen fighters.) But Moscow did denounce President Mahmoud Ahmadinejad's remarks about Israel as "shameful" and put pressure on Tehran by voting with the United States for economic sanctions at the UN Security Council, although it excluded military action.
By risking a deterioration of its relations with Iran, Russia wants to show the United States and other Western powers that it is responsible when it comes to nuclear nonproliferation. It also wants to persuade Iran to find a modus vivendi with the International Atomic Energy Agency. By agreeing to limited sanctions, Russia hopes to reduce the threat of an armed attack against Iran for as long as possible. Russia does not want an Iran equipped with nuclear weapons on its frontiers, but it would prefer to live with a nuclear Iran than face the consequences of a U.S. attack on Iran.
The ambivalence of these positions has contributed to a rapprochement with traditional U.S. allies such as Turkey and Saudi Arabia - both concerned that Iran may have access to nuclear weapons. However, like Russia and for the same reasons, they are opposed to U.S. military action. They fear the consequences at home as well as among their immediate neighbors.
As a result of the war in Iraq, Turkey has a de facto independent Kurdistan on its borders, a problem that would be seriously aggravated by a destabilized Iran. Russia intends to take advantage of this at a time when its economic exchanges with Turkey - and political convergence - are at their best for two centuries.
Russia also intends to keep improving its relations with Saudi Arabia, which opposed the war in Iraq despite its hostility to Saddam Hussein. In February 2007, Putin made a first visit by a Russian or Soviet head of state to Saudi Arabia and offered contracts for the construction of nuclear power plants and arms. He also pleaded for an increase in the number of Russian Muslims authorized to make the annual pilgrimage to Mecca. Saudi support for the Chechen rebels, openly expressed until 2002 (without recognition of the independence they claimed), suddenly stopped.Jacques Lévesque teaches at the faculty of political science and law at the University of Quebec, Montreal. This article first appeared in Le Monde diplomatique. Distributed by Agence Global

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OPINION

Provoking Russia
By Muammar el-Qaddafi
Monday, December 29, 2008
TRIPOLI: Once again, the West's policy toward Russia and its addiction to interfering in the affairs of other countries is having dangerous effects on the rest of the world.
The seeds for the current danger were sown by NATO's expansion to Russia's borders after the fall of the Soviet Union. That deliberate, provocative, and continuing process echoes in Russia's long memory the painful experience of the Napoleonic and German armies storming across Europe into their motherland, hell-bent on conquest.
NATO's expansion was not merely an attempt to secure Russia's vast resources - the sole objective of those earlier adventures. Its other aim was to fill the political vacuum left by the dismantlement of the Soviet Union. It was "independence mania" being driven down the throats of the former Soviet republics. However, Russia perceives its encirclement - from Central Asia to the Black Sea and the Baltic Sea - to be a threat, the effects of which are now playing out on the regional stage, including the recent hostilities in Georgia.
The real danger lies in the fact that Russia possesses 16,000 nuclear weapons, among the largest stock in the world. Intimidating Russia and attempting to besiege it fuels nationalism and threatens the world, again, with nuclear war. A new arms race is already afoot in the wake of the West's decision to install a missile system in Eastern Europe, just miles from the Russian border.
Interestingly, the West's misread of Russia's reaction to NATO expansion was a precursor of recent strategic blunders - such as the invasion of Iraq - based on misleading information and short-sighted and naïve analysis. Did the West really expect that "independence mania" would stop at pro-West Kosovo and not reach Abkhazia and South Ossetia? Now NATO is considering Georgia and Ukraine for their military alliance, more geopolitical bombs at Russia's borders.
The continuation and expansion of NATO has no justification anymore, after the dismantlement of the Soviet Union and the end of the Cold War. And, unlike during the Cold War, Russia is not defending a political, economic, or philosophical ideology; it has none. What it will defend is Russian nationalism and the integrity of the Russian nation itself. In fact, it will be defending its very existence. This makes the current situation all the more dangerous.
America, like any other country, has the right to defend itself as well as to seek to live in permanent peace. Its remote geographical location - insulated by two oceans and with nonthreatening neighbors to the north and south - has made it a safe haven for immigrants and refugees, away from the conflicts and ambitions of the old world. Such a stature makes America the worthy host of the United Nations. Such a status would also qualify it to be a neutral country.
As America reassesses its role in the world under a new president, it should consider a return to the Monroe Doctrine, which called for non-interference in problems or relations with Europe, and non-expansion by European countries of their colonial hegemony toward America. This principle of non-interference should be extended by and for all countries of the world.
Greed, stupidity, recklessness and miscalculation must not continue to implicate humanity in war. Russia is not the Soviet Union. The world has moved on. Cooperation, not intimidation, is the key to peace and progress. Will the West wake up to this fact in time?
Muammar el-Qaddafi, the Libyan leader, recently returned from a state visit to Russia.

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EDITORIAL

'Firm and patient' on North Korea
Monday, December 29, 2008
President Bush has offered good advice about the off-again-on-again North Korea nuclear deal. The United States, he said recently, must remain "firm and patient" as President-elect Barack Obama assumes the challenge of separating North Korea from its nuclear program.
We won't dwell on the fact that if Bush had followed that course from the start of his administration, North Korea might not be sitting on enough plutonium for six or more nuclear weapons. His prescription was good; the administration still isn't following it.
Before Bush spoke, the State Department announced that the United States and its partners would halt deliveries of heavy fuel oil because Pyongyang refused to agree, in writing, on a plan for verifying its nuclear stockpile and facilities.
China and Russia insisted that they had not agreed to any such decision. South Korea said it would delay shipping steel plates for North Korean power stations. Japan was already reneging on its commitment to supply fuel aid, and Australia, which had stepped into the breach, announced that it would withhold its contribution.
If the shipments stop, North Korea would be within its rights to stop disabling its nuclear facilities at Yongbyon and resume producing plutonium for weapons. That would present Obama with an immediate crisis.
North Korea has a long history of cheating, and robust verification is essential. That includes getting it to commit in writing to allow inspections of key facilities, interviews with scientists and environmental sampling. But under the deal, a verification plan was supposed to come later. The timing was pushed forward as a condition for taking North Korea off the terrorism list by hard-liners seemingly bent on sabotaging the agreement.
The deal is premised on action-for-action, including that Washington and its allies provide one million tons of heavy fuel oil in return for North Korea's disabling the reactor and fuel production facilities at Yongbyon. By one estimate, Pyongyang has completed 85 percent of the disablement while the United States and its partners have delivered no more than 60 percent of the fuel oil.
The North Koreans are frustrating, erratic and likely trying to hide nefarious activities. That has always been the challenge. There is much less chance of prying away their nuclear program if this deal falls apart.
North Korea missed an opportunity to set a positive tone with the new Obama administration by not signing a formal verification plan now. Its leaders may want to deprive Bush of a last-minute foreign policy success or may be hoping to force his successor to offer more fuel or other benefits. They shouldn't count on it.
As Bush suggested, Obama must be firm and patient as he takes on the challenge of persuading Pyongyang to give up its weapons and stop selling nuclear technology and know-how.
He should signal early on that he is sincerely committed to full relations with a nuclear-free Pyongyang and include a North Korean official in a Washington event soon after his inauguration. Obama also must leave no doubt that he will push the Security Council to impose dormant sanctions - approved after Pyongyang's 2006 nuclear weapons test - if North Korea walks away from the deal.

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Fighting breaks out among Islamist groups in Somalia
By Jeffrey Gettleman
Monday, December 29, 2008
NAIROBI: Islamist militants in Somalia, long a bane of the country's weakening government, are now officially fighting one another.
A powerful, newly militarized Islamist group on Sunday declared a "holy war" against other Islamist factions, and it seems to have the muscle to back up its intentions. Over the weekend, the group, the Ahlu-Sunna Wal-Jama, killed more than 10 fighters from the Shabab, a rival Islamist faction that was known as one of Somalia's toughest.
The group issued a statement calling on its followers to "prepare themselves for jihad against these heretic groups," referring to some of the other, more hard-line Islamist factions, and "to restore stability and harmony in Somalia and achieve a genuine government of national unity."
Many analysts had been predicting that this would happen: that as the transitional government headed toward collapse - it now controls just a few city blocks - the Islamist insurgents of varying agendas would begin to slug it out among themselves. This weekend's violence is a strong sign that the infighting is under way.
An episode of grave desecration may have been what started it. In early December, fighters from the Shabab, one of Somalia's most militant Islamic groups, ransacked the graves of moderate Islamist clerics who had been buried in Kismaayo, a town the Shabab controls.
On Sunday, moderate Islamist leaders brought this up and condemned the Shabab for such un-Islamic behavior.
"It is a politically motivated act, which can ignite a sectarian war," warned Sheik Sharif Sheik Ahmed, one of the moderate Islamists, at a news conference in Mogadishu, Somalia's capital.
On Saturday and Sunday, gunmen from Ahlu-Sunna Wal-Jama took back two towns that the Shabab had controlled, Guriel and Dusa Marreb, and they vowed to roll back recent Shabab gains in other parts of the country. Until recently, Ahlu-Sunna Wal-Jama was known as a religious brotherhood of moderate Islamists, and it did not have a formidable military wing.
The tension among Islamic groups comes at a time when politics here are as precarious as ever. Somalia's transitional president, Abdullahi Yusuf Ahmed, resigned Monday.
Yusuf blamed the international community for not doing enough to shore up the transitional government. "Most of the country was not in our hands and we had nothing to give our soldiers," Yusuf told legislators in Baidoa, the seat of Parliament. "The international community has also failed to help us."
Mohammed Ibrahim contributed reporting from Mogadishu, Somalia.

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Opportunities and risks after Somali president quits
By Jeffrey Gettleman
Tuesday, December 30, 2008
NAIROBI, Kenya: Abdullahi Yusuf Ahmed, the cantankerous president of beleaguered Somalia, resigned Monday. The question now is, will it make a difference?
Could it be the death knell of Somalia's transitional government, whose zone of control is down to a few city blocks in a country nearly as big as Texas? Or will it be the government's saving grace?
For weeks, Western diplomats, Somali elders and United Nations officials have been crossing their fingers that Yusuf, widely blamed for trying to block a peace deal with Somalia's increasingly powerful Islamist insurgents, would step aside.
Yusuf, one of Somalia's first warlords, never seemed able to shake his warlord ways. Western diplomats have accused him of favoring his clan at the expense of all others, enabling corruption and too often trying to solve knotty political problems, which called for a little finesse, with the business end of a machine gun.
Kenyan officials even threatened sanctions against him this month, calling him "an obstacle to peace" and warning that unless he changed tack, he would no longer be welcome in Kenya. That was a serious threat because Yusuf, who claims to be 74 but is widely believed to be several years older, has gone to Kenya several times for lifesaving medical treatment for an ailing liver.
In stepping down, Yusuf said he could not unite Somalia's feuding leaders, news agencies reported, and as soon as he resigned, the United Nations' top official for Somalia, Ahmedou Ould-Abdallah, said that "a new page of Somalia history is now open."
But what will be written on it?
The scramble to succeed Yusuf could set off an ugly clan-based political melee. By contrast, the prime minister and other top Somali officials could give the post to a moderate Islamist leader, who might be the unifying figurehead that Somalia so desperately needs.
Or it may simply be too late because so much of the country has already fallen into the hands of powerful, hard-line Islamists who behead opponents and have, on at least one occasion, stoned to death a teenage girl who said she had been raped.
Rashid Abdi, a Somalia analyst at the International Crisis Group, which tracks conflicts worldwide, said Yusuf's resignation was "good news" because "it may create the opportunity to put a more conciliatory figure in charge of the government."
That figure could be someone like Sheik Sharif Sheik Ahmed, a well-respected, moderate Islamic cleric who has struggled to walk the tightrope between negotiating with the transitional government and being dismissed as a sellout.
Earlier this year, Sheik Sharif's faction signed a power-sharing agreement with the transitional government, despite the president's objections, and many Somalis are hoping the deal will stick.
"If that power-sharing deal is applied, it will help a lot," said Muhammad Dheere, a pharmacist in Mogadishu, Somalia's battle-scarred capital. "Then the other problems could finish soon."
Somalia certainly has a lot of them. Famine is steadily creeping toward millions of people. Pirates off Somalia's coast have netted countless headlines and as much as $100 million in ransoms. Violence is rising again and finding new forms, with Islamist factions now fighting one another to take over the areas the government no longer controls.
Over the weekend, in two towns, a moderate Islamist group routed the Shabab, one of the nation's most fearsome and radical Islamist militias. But the Shabab were fighting back fiercely on Monday, and they also took over a United Nations food distribution office, imperiling a critical lifeline.
The thousands of Ethiopian troops who have been in Somalia for two years are threatening to leave any day now. If they do, the transitional government may have no one to protect it from Islamist insurgents, except a relatively small contingent of African Union peacekeepers and a few ragtag Somali militiamen.
It will not be easy finding someone qualified — and willing — to serve as president, considering all this. Somalia's transitional government, created four years ago (with Yusuf at the helm) as a temporary solution until Somalia could hold elections, is carefully balanced on a formula that divides power among Somalia's four major clans.
One considerable strike against Sheik Sharif is that he is not only from the same clan, but from the same subclan as the prime minister, who is well regarded and not believed to be going anywhere.
Many people expect that the next president could come from the same clan as Yusuf, to minimize clan friction. The speaker of Parliament will take over the presidency for one month until Parliament elects a new president.
Yet, after nearly 18 years of unbridled anarchy, many Somalis have lost hope.
"Somalis are a God-forsaken nation," said Abdirizak Adam Hassan, a Canadian-Somali who used to work with Yusuf and is now looking for a job. "They are so oblivious to what is happening. One tribe, one religion, one language, one culture — but they don't see what unites them, they only see what divides them.
"Maybe on the outside, to the international community, the resignation will matter," he said. "But not on the inside."

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Gaza fighting adds to expectations for Obama
By Steven Lee Myers and Helene Cooper
Monday, December 29, 2008
WASHINGTON: When President-elect Barack Obama visited Israel in July - to the very town, in fact, whose repeated shelling culminated in new fighting in Gaza this weekend - he all but endorsed the punishing Israeli attacks now unfolding.
"If somebody was sending rockets into my house, where my two daughters sleep at night, I'm going to do everything in my power to stop that," he told reporters in Sderot, a small city on the edge of Gaza that has been attacked repeatedly by rocket fire. "And I would expect Israelis to do the same thing."
Now, Obama's presidency will begin facing the consequences of just such a counterattack, one of Israel's deadliest against Palestinians in decades, presenting him with yet another foreign crisis to deal with the moment he steps into the White House on Jan. 20, even as he and his advisers have struggled mightily to focus on the country's economic problems.
Since his election, Obama has said little specific about his foreign policy - in contrast to more expansive remarks about the economy. He and his advisers have deferred questions - critics could say, ducked them - by saying that until Jan. 20, only President George W. Bush would speak for the nation as president and commander in chief. "The fact is that there is only one president at a time," David Axelrod, Obama's senior adviser, said Sunday on CBS, reiterating a phrase that has become a mantra of the transition. "And that president now is George Bush."
Obama, vacationing in Hawaii, talked to Secretary of State Condoleezza Rice on Saturday. "But the Bush administration has to speak for America now," Axelrod said. "And it wouldn't be appropriate for me to opine on these matters." As the fighting in Gaza shows, however, events in the world do not necessarily wait for Inauguration Day in the United States.
Even before the conflict flared again, India and Pakistan announced troop movements that have raised fears of a military confrontation following the terrorist attacks in Mumbai. North Korea scuttled a final agreement on verifying its nuclear dismantlement earlier this month, while Iran continues to stall the international effort to stop its nuclear programs. And there are still two American wars churning in Iraq and Afghanistan. All demand his immediate attention.
Obama's election has raised expectations, among allies and enemies alike, that new American policies are forthcoming, putting more pressure on him to signal more quickly what he intends to do. In the case of Israel and the Palestinians, Obama has not suggested he has any better ideas than Bush had to resolve the existential conflict between the Israelis and Hamas, the Palestinian movement that controls Gaza.
"What this does is present the incoming administration with the urgency of a crisis without the capacity to do much about it," said Aaron David Miller, a scholar at the Woodrow Wilson Center in Washington and author of "The Much Too Promised Land," a history of the Israeli-Palestinian peace efforts. "That's the worst outcome of what's happening right now."
The renewed fighting - and the international condemnation of the scope of Israel's response - has dashed already-limited hopes for quick progress on the peace process that Bush began in Annapolis, Maryland, in November 2007. The omission of Hamas from any talks between the Israelis and President Mahmoud Abbas, who controls only the West Bank, had always been a land mine that risked blowing up a difficult and sensitive peace process, but so have Israel's own internal political divisions.
Obama might have little to gain from setting out an ambitious agenda for an issue as intractable as the Palestinian-Israeli conflict. But the conflict in Gaza, like the building tensions between India and Pakistan, suggests that he may have no choice. "You can ignore it, you can put it on the back burner, but it will always come up to bite you," said Ghaith al-Omari, a former Palestinian peace negotiator.
For Obama, the conundrum is particularly intense since he won election in part on promises of restoring America's image around the world. He will assume office with high expectations, particularly among Muslims around the world, that he will make an effort at dealing with the Arab-Israeli conflict.
Early on as a candidate, Obama suggested that he did not necessarily oppose negotiations with groups like Hamas, though he spent much of the campaign retreating from that position under fire from critics.
By the time he arrived in Israel in July, he suggested he would not even consider talks without a fundamental shift in Hamas and its behavior, effectively moving his policy much closer to Bush's. "In terms of negotiations with Hamas, it is very hard to negotiate with a group that is not representative of a nation-state, does not recognize your right to exist, has consistently used terror as a weapon, and is deeply influenced by other countries," he said then.
Obama received an intelligence briefing on Sunday and talked as well with his nominee for secretary of state, Hillary Rodham Clinton, and his choice for national security adviser, James Jones.
One option would be for an Obama administration to respond much more harshly to Israel's policies, from settlements to strikes like those this weekend, as many in the Arab world and beyond have long urged. On Sunday, though, Axelrod said the president-elect stood by the remarks he made in the summer and, when asked, noted the "special relationship" between the United States and Israel.
Otherwise, Obama could try to pressure surrogates to lean on Hamas, including Egypt, which shares a border with Gaza. He can try to build international pressure on Hamas to stop the rocket attacks into Israel. He can try to nurture a peace between Israel and Abbas on the West Bank, hoping that somehow it spreads to Hamas. All have been tried, and all have failed to avoid new fighting.
"The reality is, what options do we have?" Miller said.
Jackie Calmes contributed reporting from Hawaii.

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Israel reminds its foes it has teeth
By Ethan Bronner
Monday, December 29, 2008
JERUSALEM: Israel's military operation in Gaza is aimed primarily at forcing Hamas to end its rocket barrages and military buildup. But it has another goal as well: to expunge the ghost of its flawed 2006 war against Hezbollah in Lebanon and re-establish Israeli deterrence.
On the second day of the offensive, which has already killed hundreds and is devastating Hamas's resources, Israeli commanders were lining up tanks and troops at the border. But they were also insisting that they do not intend to reoccupy the coastal strip of 1.5 million Palestinians or to overthrow the Hamas government there.
This is because whatever might replace Hamas — anarchy, for example — could in fact be worse for Israel's security. So the goal, as stated by a senior military official, is "to stop the firing against our civilians in the south and shape a different and new security situation there."
This means another peace treaty with Hamas that has more specific terms than the one that ended 10 days ago. Such a concrete goal, however, should not obscure the fact that Israel has a larger concern — it worries that its enemies are less afraid of it than they once were or should be. Israeli leaders are calculating that a display of power in Gaza could fix that.
"In the cabinet room today there was an energy, a feeling that after so long of showing restraint we had finally acted," said Mark Regev, spokesman for Prime Minister Ehud Olmert, speaking of the weekly government meeting that he attended.
Mark Heller, a senior researcher at the Institute for National Security Studies at Tel Aviv University, said that energy reflected the deep feeling among average Israelis that the country had to regain its deterrent capacity.
"There has been a nagging sense of uncertainty in the last couple years of whether anyone is really afraid of Israel anymore," he said. "The concern is that in the past — perhaps a mythical past — people didn't mess with Israel because they were afraid of the consequences. Now the region is filled with provocative rhetoric about Israel the paper tiger. This operation is an attempt to re-establish the perception that if you provoke or attack you are going to pay a disproportionate price."
Numerous commentators on Sunday, both in Israel and in the Arab world, noted that the shadow of the 2006 Lebanon war was hanging over the attack on Gaza. Then, an Iranian-backed Islamist group was lobbing deadly rockets into Israel with apparent impunity and had captured an Israeli soldier in a crossborder raid.
Israel invaded southern Lebanon and for 34 days carried out air, sea and land assaults before a truce was negotiated. But Hezbollah, by successfully shooting thousands of rockets into Israel while under attack and sounding defiant to the end, won a great deal of credit among Arabs across the region and used its prestige to grab a decisive role in the Lebanese government.
The risk to Israel in Gaza seems of a parallel nature — that if the operation fails or leaves Hamas in the position of scrappy survivor or even somehow perceived victor, that it could then dominate Palestinian politics over the more conciliatory and pro-Western Fatah movement for years to come. Since Hamas, like Hezbollah, is committed to Israel's destruction, that could pose a formidable strategic challenge.
And despite unwavering expressions of support for Israel from President-elect Barack Obama during his campaign, Israel is also gambling that its aggressive military posture will not alienate the new administration.
There are internal complications as well. At Sunday's government meeting, Olmert portrayed the Lebanon war, which he led, not as a failure but as something of a model for the current operation, since the northern border has been completely quiet ever since. But most Israelis disagree.
Israel began that war vowing to decimate Hezbollah without fully realizing the extent of its military infrastructure, underground bunkers and rocket arsenals. And while many in Lebanon and overseas considered Israel's military activities to be excessive, in Israel the opposite conclusion was reached — that it had been too restrained, too careful about distinguishing between Hezbollah and the state of Lebanon.
"We were not decisive enough, and that will not happen again," a senior military officer said in reference to that war, speaking on condition of anonymity, some weeks ago. He added, "I have flown over Gaza thousands of times and we know how to hit something within two meters."
The current operation started only after preparation and intelligence work, military commanders said, leading to a true surprise attack on Saturday and the instant deaths of scores of Hamas men. The Israeli military had mapped out Hamas bases, training camps and missile storehouses and systematically hit them simultaneously in an Israeli version of "shock and awe," the sudden delivery of overwhelming force.
It was Ehud Barak, the defense minister, who directed the preparations, and politically it is Barak who stands to gain or lose most. As chairman of the Labor Party, he is running for prime minister in the February elections and polls show him to be a distant third to the Likud leader, Benjamin Netanyahu, and the Kadima leader, Foreign Minister Tzipi Livni.
But if Hamas is driven to a kind of cease-fire and towns in Israel's south no longer live in fear of constant rocket fire, he will certainly be seen as the kind of leader this country needs. If, on the other hand, the operation takes a disastrous turn or leads to a regional conflagration, his political future seems bleak and he will have given Hamas the kind of prestige it has long sought.
Ron Ben-Yishai, a veteran military correspondent who writes for Yediot Aharonot, said that Barak had phoned him shortly after the 2006 Lebanon war and said it had been an enormous error. Israel should have waited and prepared before reacting to Hezbollah, choosing its moment and circumstances, he said.
And that, Ben-Yishai said, is what Barak did, not only behind the scenes but through a subtle public disinformation campaign. On Friday night, after having decided to launch the operation, he appeared on a satirical television program. An attack seemed at least several days away and Hamas, which had been holding its breath, relaxed. The next day, the Jewish Sabbath and the first day of the Arab workweek, Israel struck.
There is palpable satisfaction at the moment in the government and the military because the operation so far is seen as a success. Few have focused on the fact that at this stage in the 2006 Lebanon war, there was the same satisfaction — before things turned disastrous.

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In the midst of war's horror, a terrible vengeance
By Taghreed el-Khodary and Ethan Bronner
Monday, December 29, 2008
GAZA: At Shifa Hospital on Monday, armed Hamas militants in civilian clothes roved the halls. Asked their function, they said they were providing security. But there was internal bloodletting under way.
In the fourth floor orthopedic section, a woman in her late twenties asked a militant to let her see Saleh Hajoj, her 32-year-old husband. She was turned away and left the hospital. Fifteen minutes later, Hajoj was carried out of his room by young men pretending to transfer him to another hospital section. As he lay on the stretcher, he was shot in the left side of the head. A bit of brain emerged on the other side of his skull.
Hajoj, like five others who were killed at the hospital in this way in the previous 24 hours, was accused of collaboration with Israel. He had been in the central prison awaiting trial by Hamas judges, and when Israel destroyed the prison on Sunday he and the others were transferred to the hospital. But their trials were short-circuited.
A crowd at the hospital showed no pity after the shooting, which was widely observed. A man in his thirties mocked a woman who expressed horror at the scene.
"This horrified you?" he shouted. "A collaborator that caused the death of many innocent and resistance fighters?"
Another man told her, "It was his brother who killed him to wipe away the shame from his family."
Sobhia Jomaa, a lawyer with the Palestinian Independent Commission for Human Rights, said 115 collaborators were in the central prison. None had been executed by Hamas since it took office and their cases were monitored closely, she said.
"The prison provided the sole protection to all of them," she said. "But once it was bombed, many wanted to take revenge."
Dr. Hussein Ashour, director of Shifa Hospital, said keeping his patients alive from their wounds was hard enough for him. He said there were some 1,500 wounded distributed among Gaza's nine hospitals with far too few intensive care units, equipped ambulances or dozens of other kinds of equipment.
Around the city, families huddled around battery-powered radios. Electricity arrives only a few hours a day, offering the diversion of television, but nothing local. The Hamas station has been shut because of an Israeli missile hit and most local radio stations have closed their doors out of fear of suffering the same fate.
Israeli drones buzz overhead taking photographs.
International calls on Israel to pull back intensified, but Ehud Barak, the defense minister, said that no country should sit still while rockets were fired upon it and added that "Hamas is responsible for everything that happens in Gaza and which emanates from it." He added, "This operation will be widened and deepened as we see fit."
Despite fairly precision bombing, civilians are constantly caught up in the fire. On Saturday, when dozens of Israeli sorties were made simultaneously, a group of young people, 18 to 20, were hit when a missile was fired at a group of Hamas policemen in the street. According to a statement by the United Nations special coordinator, Robert Serry, eight of the young people, emerging from a UN training center, were killed instantly and 19 wounded. Eight were in critical condition Monday, and one was awaiting emergency transfer to an Israeli hospital.
Serry sent Barak a letter of protest.
Meanwhile, in Israel, warning sirens wailed over mostly empty streets in the seaside city of Ashkelon, where a man was killed by a missile fired from Gaza. Storefronts were battened shut.
Families clustered together inside the city's stretches of towering white apartment blocks and single-family houses. Wary of venturing too far outside, they scurried into protected rooms when sirens sounded, listening for another rocket crashing somewhere in their city.
It is a city that is reluctantly getting used to its new status as the front line.
"It's frightening, but what can we do?" said Chen Hassan, 18, a high school senior.
She woke up Monday morning, jolted by the sound of a missile hitting a public library under construction across the street. The rocket killed a construction worker and injured several of his co-workers, Bedouins from the Negev Desert of Israel.
Ethan Bronner reported from Jerusalem. Dina Kraft contributed reporting from Ashkelon.

U.S. downturn hitting German exporters hard
By Carter Dougherty
Monday, December 29, 2008
MUNICH: When American consumers stop buying, companies around the world - even those with little direct business in the United States - start running for cover.
Take the case of Hawe Hydraulics, which makes all manner of valves and conduits here in southern Germany. Its sales boomed in recent years, driven largely by growing demand from China and the rest of Asia for industrial components. But in the past few months, new orders have virtually dried up.
What happened? Only 5 percent of Hawe's products are sold in the United States. But Chinese purchases from around the world dropped off as their factories stopped churning out as much stuff for Americans, and the effects almost immediately ricocheted around the globe, back to Germany.
"It used to be that it took years," said Karl Haeusgen, Hawe's genial chief executive, who drove the company's global expansion this decade. "But now the global link works very quickly."
The United States, with its credit-happy consumers, has long ensured that others, notably China, Germany and Japan, have been able to pile up bulging trade surpluses. That dynamic has now lurched into reverse, with strapped Americans paring purchases from abroad at a ferocious rate.
"As the American consumer now capitulates, the export bubble is the next to go," said Stephen Roach, the chairman of Morgan Stanley in Asia. "Export-led economies around the world are in for a very tough rebalancing."
In Germany, which since 2003 has been the world's largest merchandise exporter, sales to other countries drove growth for the past five years. But in the third quarter the slump in exports dragged down the economy, pushing Germany firmly into recession.
Virtually all economists expect 2009 to be a lost year for Germany, which will pay a heavy price for the slump in the global economy. Estimates range from a decline in economic activity for the year of about 1.5 percent to as much as 4 percent.
The retrenchment bears out what Haeusgen feels in his bones, that there is a link between the Chinese prosperity that rested in part on U.S. profligacy, and German sales to China and elsewhere. German exports of capital goods feed a Chinese industrial economy that itself is fed by U.S. demand for inexpensive consumer goods.
Jacques Cailloux, chief Europe economist at Royal Bank of Scotland in London, has established a strong correlation between Chinese exports to the United States and German exports to China. The U.S. trade deficit in 2007 was $708.5 billion: Trade surpluses of $288.5 billion in Germany and $262.2 billion in China represent much of the other side of that equation.
Already, overall manufacturing orders in Germany have plunged. In September, they fell by the largest one-month amount since 1990, when the economy of communist East Germany was disintegrating. October was nearly as bad. Business confidence has fallen to levels not seen in 16 years.
Hawe, founded by Haeusgen's grandfather after World War II, belongs to the group of German companies known as the Mittelstand - midsize business, almost always family owned. Their products are as ubiquitous as they are invisible to consumers, but whether valve, pump or turbine, they are vital to the functioning of modern economic life.
With metal shavings littering parts of its shop floor and employees grinding blocks of steel by hand, Hawe looks like the sort of company that modern economics textbooks suggest would better exist in places with low labor costs.
In fact, skilled Hawe employees are able to mill important parts of its hydraulic systems to tolerances of one micron with a deft human touch. Hawe has not been able to find any machine - to say nothing of a low-paid worker - that can repeat the feat. It manufactures solely at sites in and around Munich, the wealthy capital of Bavaria.
But for all its success, Hawe is by no means immune to the global economic sickness.
Hawe generated revenue of €238 million, or $340 million, in 2007, capping five years of blazing growth. But sales for 2008 were flat; they are expected to decline slightly in 2009, with January shaping up in terms that Haeusgen described with an expletive.
The rapid slowdown in global growth during the past three months led to Hawe extending its traditional Christmas break, to varying degrees, depending on the product line. Several hundred temporary workers have been let go. Other idled employees are drawing full paychecks by tapping accounts in which they stored up overtime hours during the fat years.
"A year ago this would have been full of employees," Michael Knobloch, Hawe's director of marketing, said as he stood between two dormant sorters. "Every machine would have been running."
With machines at Hawe and so many other plants silent, much other activity in Germany, a country set up for export, has fallen off.
Deutsche Bahn, the railway operator, has rented space at ports to store train cars this winter for lack of freight. It expects shipments to drop by about 40 percent in December from the same period a year earlier. Specialized manufacturers like Hawe are part of that, but so are automakers like BMW, Daimler, Porsche and Volkswagen, which all extended their holiday shutdown periods.
Deutsche Post, the German logistics giant that owns DHL, has been hit by a 15 percent to 20 percent decline in its freight-forwarding business compared with levels a year earlier. It is trying to corral new business by cutting rates, as are many of its competitors.
"We are trying to gain market share," said Hermann Ude, who runs the freight business. "That doesn't necessarily mean you gain volume."
If a company can't sell as much to the world, it has to sell more to its homeland or suffer the consequences. Recognizing this economic truth, export nations in the rest of the world have embraced vast domestic stimulus programs aimed at halting the slide.
Earlier this month, Japan announced a $250 stimulus program, while China was planning a $586 billion investment over two years in infrastructure and other projects. In Washington, the incoming Obama administration is talking about spending at least $675 billion and perhaps as much as $1 trillion in the next two years in a bid to revitalize the rapidly contracting U.S. economy.
Not so Germany.
The bitterest political dustup in recent memory has erupted in Europe over Germany's unwillingness to pump larger amounts of cash into its shrinking economy. Content, at least so far, with one modest package and another on the way, German officials are wary of spending programs that would bust a nearly-balanced budget.
The economy minister, Michael Glos, fought for more stimulus spending to spur Germany's traditionally weak domestic demand but lost to the pugnacious finance minister, Peer Steinbrück. That prompted Glos to note laconically that perhaps packages put in place by other countries would "help our export economy."
This perspective resonates at companies like Hawe.
"My fear is that the Chinese are reacting more strongly, in a psychological sense, than other countries," Haeusgen said. "Our hope is that someone decides to turn on the lights again in the next few months."
Indeed, German companies, not expecting growth at home, are using the current crisis to reassess how to tap the most lucrative export business. Hawe's product designers, executives said, are using the lull to ramp up their efforts; their floor of the Munich headquarters throbs with energy.
A new pattern of trade may ultimately emerge. German companies say that in place of voracious U.S. consumers, they look forward to Chinese customers saving less and spending more as Beijing encourages domestic-led growth.
"I could imagine that a future boom comes from the countries that have big savings, particularly in Asia," Ude of Deutsche Post said. "We shouldn't lose sight of that."
But even under the best of circumstances it will take a long time to fill the void left by American consumers. Global trade may well shrink and even the most successful German exporters, new products notwithstanding, will have to settle for less.
"This strategy can work for one or the other company," said Andreas Rees, chief Germany economist at UniCredit in Munich. "It cannot work for Germany as a whole."

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Euro zone governments trying to persuade consumers to spend
By Mark John

Reuters
Monday, December 29, 2008
BRUSSELS: Governments are trying everything from sales tax cuts to mortgage rate caps and favorable loans to lure European consumers off their sofas and back into shops, restaurants and car showrooms.
But with recession casting a pall over the winter sales season in Europe, efforts to persuade people to spend are unlikely to be as successful as governments would like in 2009, and the benefit to the economy will be limited.
Take reductions in value added taxes, like the cut to 15 percent from 17.5 percent offered by Prime Minister Gordon Brown of Britain.
Across-the-board VAT cuts are blunt instruments. There is no guarantee they will help the sectors that need it most, and some of the desired help for the home-grown economy will be lost to imports.
In addition, there is a possibility that retailers will not pass on all of the tax rebate to customers, particularly if they are already feeling the pinch, and demand could take a new hit whenever taxes increase again.
In the 15 euro zone countries, governments are banking on a mixed bag of policies to put cash in the pockets of consumers to allay a recession that officially started in the third quarter of 2008.
Italy has promised tax breaks for poorer families and is capping variable mortgage rates at 4 percent. Belgium is offering energy bill rebates and tax-efficient food vouchers.
Commercial banks, meanwhile, were told by European Union leaders this month that they should pass on deep cuts in central bank interest rates to borrowers.
Such efforts will free up some cash, but it is not certain that households will immediately spend these modest windfalls.
With many people fearing for their jobs and facing monthly credit card bills, Charles Dickens's character Scrooge is likely to be a role model this year for many.
Consumer sentiment across the euro zone showed a reading for November heading toward the record trough of July 1993.
A survey of 2,700 people by Boston Consulting released this month indicated that more than half of all consumers planned to cut discretionary spending, like dining out or new music systems, by an average of 12 percent next year.
The poll suggested about 47 percent of European consumers expected the economy to get worse in 2009 and about a third felt financially insecure - more than last year. Nearly half said they expected to be saving more.
Officials in Germany have pointed to traditionally high savings rates as a reason not to try to tune up their economy, the largest in Europe, for a consumer-led rush for growth.
In Britain, Brown says the VAT cut is already working. But there are questions about how reliable evidence of this is - stores are resorting to ever bigger discounts to attract shoppers.
British shoppers now face a dilemma over whether to succumb to the temptation of big one-time savings in the sales when the average household is burdened with debt estimated at 186 percent of disposable income.
Faced with a recession whose roots are in overreaching by households and banks, they may feel the more sensible option is to tighten belts and sit out a lean spell likely to last though 2009 and much of 2010.
Governments now face the task of ensuring that the European welfare safety net does what it was designed to do - function swiftly and efficiently for those hit hardest.
Households may be advised to use short-term savings to reduce credit card debt, and homeowners could take advantage of low interest rates to accelerate mortgage payments.
Governments may find there is no quick fix and aim more investment at making the economy fitter - as is planned under a number of national stimulus plans.
Now could be the time for home-owners to investigate the myriad state grants for energy efficiency. This year, splurging on ceiling insulation foam rather than a new television may make better sense for both consumers and the economy.

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Obama advisor puts stimulus plan at $675 to $775 billion
By Sharon Otterman
Monday, December 29, 2008
The last Sunday of the year was a quiet one on the network's morning talk shows, with David Axelrod, President-elect Barack Obama's political advisor, looking ahead to the new administration while Laura Bush and Secretary of State Condoleezza Rice reflected on the past eight years.
In addition, Israeli Foreign Minister Tzipi Livni defended Israel's ongoing air assault on Gaza on "Fox News Sunday" and NBC's "Meet the Press." Axelrod said that Obama was monitoring the situation in Gaza, and that he has spoken with Rice about the attack.
Axelrod, speaking on "Face the Nation" and "Meet the Press," underscored the special relationship between the United States and Israel but did not elaborate on the specifics of the situation in Gaza, stating that "in America, there's only one president at a time."
Regarding the new administration's stimulus plan, Axelrod also said that the exact dollar amount Obama will seek has not yet been determined. "We've talked about a package from $675 billion to $775 billion," he said on CBS's "Face the Nation."
"One thing I think everyone agrees on, economists from left to right, is that we have to do something very large," he said.
The president-elect also intends to follow through quickly on his promise for tax relief for most Americans, Axelrod said, this time on "Meet the Press." As for repealing the Bush tax cut for the wealthiest Americans, he said that whether it was repealed early or allowed to expire as scheduled at the end of 2010, the tax cut would eventually disappear.
"It's going to go, it has to go," he said.
The "Meet the Press" host, David Gregory, pressed Axelrod on whether Rahm Emanuel, the Obama's chief of staff, or any of his other advisers had been asked for any favors by Illinois Governor Rod. Blagojevich, who faces federal corruption charges that include trying to sell Obama's vacant Senate seat to the highest bidder.
Axelrod said no. "There was no reason to believe that there was anything unusual or untoward going on that would require contact with the U.S. attorney's office," he said.
And speaking on CBS's "Face the Nation," Illinois Lieutenant Governor Pat Quinn said that he believed Blagojevich would be impeached by the Illinois legislature — by Lincoln's 200th birthday on Feb. 12 — and that he stood ready to step into his place.
He said that if he became governor, he would hold a special election for the vacant Senate seat, but that it probably would not be able to take place until June. In the interim, a temporary senator would be appointed.
"If I am the governor, I would certainly push that kind of a law, and we'll see what happens," he said. It's important, he said, to "make sure Illinois has two senators at all times."
Axelrod also defended Obama's decision to invite Rick Warren, the influential evangelical pastor, to deliver the invocation at his inauguration. Warren, who brought both John McCain and Obama to his California church this past August, in at least one interview likened committed gay relationships to incest and polygamy.
While Obama and Warren disagree about "civil rights for gays and lesbians and a woman's right to choose," Axelrod said, the two men agree on issues like fighting poverty and disease in Africa.
Warren's inclusion, he said, was a symbol of Obama's campaign promise to "build bridges of understanding and move this country forward."
"The important point here is that you have a conservative evangelical pastor who's coming to participate in the inauguration of a progressive president, and this is a healthy thing and a good thing for our country," Axelrod said.
Also on Sunday, Rice and Laura Bush took a moment to share some things about themselves that might be little known.
On CBS's "Sunday Morning," Rice shared her surprise about the reaction she got in 2005, when she wore the nearly knee-high leather boots with heels paired with a short skirt one chilly afternoon in Weisbaden, Germany. The picture made fashion headlines around the world.
"Well, but I wore the boots because it was cold. I've tried so hard to explain to people that that outfit was — it was really a surprise to me that there was any commentary about it, because I grew up — well, spent a lot of my life in Colorado. When it's cold, you wear boots," she said.
On her own look-back interview on "Fox News Sunday," First Lady Laura Bush said that President George W. Bush "was in trouble" for telling an interviewer recently that one thing he was not looking forward to after the White House was her cooking.
But then she conceded on "Fox News Sunday" that she "can't even remember cooking."
"It's been 14 years since we moved into the Texas governor's mansion," she said. But, she added, "I love to read cookbooks. I'm very interested in food, and I'm a reader, as you know."
Interviewer Chris Wallace responded, "I hate to say this, but — all due respect, Mrs. Bush, reading doesn't actually get the meal on the table."
The First Lady smiled, and said that she intended to cook for her husband "when it's just us.".

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Bank failure in Russia revives fears of financial turmoil and domestic unrest
By Clifford J. Levy
Monday, December 29, 2008
MOSCOW: Roman Malinovsky had been salting away his salary at his local bank to pay for graduate school in Germany. Yelena Samoilova, a supervisor at a publishing house, was saving at the same branch to buy a Ford Focus. Olga Sudakova, who was a little embarrassed to be living with her parents at age 33, had almost enough money in her account there for a down payment on an apartment.
They were part of the new middle class in Moscow, confident that with the Russian economic revival and with the government's guarantees, they could rely on the banking system, no matter what its troubled history suggested.
But when they went to the small bank on Kalanchyovskaya Street to retrieve their money over the past two months, they got a shock that made them question whether life here had truly changed.
"They said, 'There's no money,"' said Malinovsky, 26, who had about 100,000 rubles, or $3,450, at the bank, Capital Credit. "'There is no cash.' That is how they explained it."
What happened next offered a glimpse into the kind of public discontent that could grow in Russia as the financial crisis deepens here. Capital Credit's depositors, who for the most part had never before agitated against the government, began doing just that.
"The government made promises to us," said Samoilova, 25. "The president every day went on television and told us that our deposits are insured, that people should put money in banks. In truth, the situation is not like the one they have portrayed."
A depositor, Denis Davydov, 30, who works for the railroad system, took the lead.
He used the Internet to find others with similar grievances against the bank.
They called politicians and circulated petitions demanding that the Russian central bank revoke Capital Credit's license, thereby making the depositors eligible for government insurance so they could recover at least some of their money.
Post-Soviet Russia has a history of bank runs and other financial tribulations that have often badly shaken the public's faith. In the current financial crisis, the Russian government has allocated billions of dollars in an effort to shore up the banking system.
Still, the depositors at Capital Credit felt forgotten.
For weeks, the central bank ignored their pleas, as did Capital Credit. (Neither would answer a reporter's questions.) Many depositors, to no avail, went every few days to the Capital Credit branch to seek information.
"They always said that the executives of the bank had left for the day, or were in a meeting, or just could not talk," Davydov said.
The depositors were instructed to go to a small basement room in the branch to fill out paperwork about their accounts. Many depositors said they later received calls indicating that their money was available. Some did receive it. But others showed up at the branch and were told that there had been a mistake.
"We very much fear that the management of the bank is gone, that they have gone abroad with our money," said Sudakova, who manages a translation service and had about $35,500 in the bank.
Frustrated, the depositors took to the streets.
They held a protest earlier this month in front of the bank, waving banners - "Central Bank, Wake Up!" - demanding that regulators do something. Another slogan, "1998=2008?," referred to the Russian financial crisis of 1998, when the government defaulted on its debt, banks failed, the ruble was sharply devalued and many Russians lost everything.
The analogy is provocative because the Kremlin under Vladimir Putin has positioned itself as having rescued the country from the disorder of that era. Just last week, President Dmitri Medvedev assured the public that "there is no cause for alarm or hysteria."
Even so, a senior Interior Ministry official also warned last week that Russia could face many protests over unemployment and other financial hardships caused by the crisis. The Russian economy is based largely on the export of oil, natural gas and other natural resources, and thus has been badly hurt by the sharp decline in commodity prices.
Demonstrations have already occurred this month against an increase in tariffs on imported cars, which the government imposed to protect the domestic automobile industry. A protest in Vladivostok, in the country's far east, was broken up by riot police officers.
At the protest in front of Capital Credit this month, the authorities limited the number of people to a few dozen but did not try to disrupt it. They were apparently reluctant to do so because the grievances were genuine and not political.
Last Friday, the depositors planned to hold another protest, this time in front of the central bank. But they awoke to the news that the regulators had finally responded to them and seized the bank's license. That move allowed them to apply for government insurance for as much as about $24,800.
Still, some depositors said they feared that it would take many weeks of slogging through the bureaucracy to get the money. Whatever happens, they said, their trust in the government and the banks has been shaken.
"This really reminds us of the 1990s," Sudakova said. "The situation really scares us. I have always believed in our government and our authorities. I very much loved our president. I believed in him. Now I don't. I just fear for the future."

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Breakingviews.com: An accelerating decline in the ruble
breakingviews.com
Monday, December 29, 2008
As it devalues the ruble, the Bank of Russia is trying to prevent a soft landing from becoming a sudden fall. It has sought to have the currency slide gracefully in recent months by gradually broadening the ruble's reference trading band against the dollar and the euro. But the pace of devaluation is accelerating. The decline Monday means the ruble has now experienced 12 mini-devaluations since mid-November.
The Russian currency has fallen nearly 20 percent against the dollar since August. Foreign currency reserves are down by about 25 percent in the same period, to $450 billion, partly because they were used to defend the ruble. The Bank of Russia could have saved the money by allowing a sharp, one-time devaluation when oil prices went into a tailspin. Oil and oil-related products account for more than 70 percent of Russian exports.
More rapidly than planned, the country seems to be heading towards its stated goal of having a free-floating currency - leaving the central bank focused solely on fighting inflation. But getting there could still be painful, and a hard landing for the ruble is looking increasingly likely.
It seems that the main argument within the Russian government against a one-time devaluation is that it could open the way to a run on banks, of the type last seen in 1998 when Moscow set off panic by defaulting on its foreign debt. But today, markets are already braced for further falls in the ruble, which according to most analysts probably needs another devaluation of 20 percent or thereabouts before it can stabilize. Russians care more about the dollar than the euro-dollar basket.
So why is the Bank of Russia holding back from a decisive devaluation? The answer may be that Vladimir Putin, the prime minister, is opposed to such a move, which his own finance officials seem to favor. Russia's boom years are fast turning into a major slump. Officially making Russia poorer with a full devaluation would suggest to Russians that "Putin's prosperity" was based on booming oil prices, and little else. - Pierre Briançon

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Citigroup to inject $800 million into South Korean unit

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How one family's mortgage is linked to meltdown
Reuters
Monday, December 29, 2008
By Daniel Trotta
Cynthia Goldrick's daughter is in and out of the hospital for brain surgery, her mother has Stage 4 lung cancer and her father has moved into a home for the elderly.
So when the Goldrick family's adjustable rate mortgage reset while husband Patrick was off work for a job-related injury, it eliminated the thin margin between their income and the mortgage payment and put them on the road to foreclosure.
While these circumstances may seem extreme -- a perfect storm of bad luck -- the basic economics of a hike in mortgage rates and a bank's inability or unwillingness to modify terms have been shared by many Americans over the past year.
The Goldricks took out a $375,000 (255,681 pound) mortgage in 2005, when they refinanced a previous mortgage on their 1,800-square-foot (167-square-metre) house in semirural Hampton Bays, some 90 miles (150 km) east of New York city.
At first, the interest rate was 6.5 percent and the monthly payment was $2,370. After two years, it rose to 9.5 percent and suddenly the payment of $3,850 was beyond the means of a family living off Patrick Goldrick's salary as a cable guy.
Appraised at $605,000 in 2005, the house today is surrounded by others with "For Sale" signs out front and is probably worth less than the outstanding loan.
It is also the only home the Goldrick children have known. "It's just walls. But this is where my daughter comes home after surgery, so they're comfortable walls," Cynthia Goldrick said.
The loan was granted by Rose Mortgage Inc. of New Jersey and is being serviced by Saxon Mortgage Services, a unit of Morgan Stanley.
But the mortgage is in the hands of neither because it was securitized, pooled with $700 million worth of mortgages into an investment vehicle created by Morgan Stanley known as IXIS 2005-HE4, and sold to investors.
Such pools constitute much of the so-called toxic assets at the heart of the worst financial crisis in the United States since the 1930s.
Today's investors in IXIS 2005-HE4 include Prudential Insurance, Pimco Advisors, Western Asset Management and Legg Mason -- institutions that manage money for the wealthy and the population at large.
NOT JUST A HOUSE BUT A HOME
"We didn't jump on the refinancing bandwagon to take a cruise or buy a Mercedes," Cynthia Goldrick said. "We refinanced to give my child a life, not a lifestyle, but a life."
The Goldricks' 10-year-old daughter, Erin, has had 10 operations for hydrocephalus, a Chiari malformation and spina bifida. Most of the medical bills are paid by insurance and a fund established from the settlement of a malpractice suit over Erin's treatment as a baby.
Erin is an honour student who would have made high honours but for a score of 83 in dance. She bears little outward sign of her medical history, unless she pulls up her hair to show scars on her neck and an open wound on her scalp. She looks after her little sister, Emily, 6, and their room is decorated by dozens of stuffed animals.
But her constant medical needs prevent Cynthia from going back to work. "How can you go to work when your daughter's on the operating table?" Cynthia said.
At one point, the Goldricks considered selling their home and moving to a larger and cheaper one in North Carolina, but that would separate Erin from the doctors who have been treating her since she was 2.
So they enlisted the services of Sal Pane, president of AmeriMod, a company specializing in modifying mortgages, a process in which banks agree to lower mortgage payments and interest rates to avoid the cost of foreclosures.
"Modifications can save this economy," Pane said. "My company could do 60,000 loan modifications a month with our current staffing. Give us government assistance and I can modify the entire country in a year."
But modification efforts have encountered difficulties. Increasingly, people are falling behind on loans that have already been modified and regulators warn the trend may worsen. Of all the modifications made in the first quarter, 55 percent were at least 30 days delinquent after six months, according to a government report.
Then there are the rights of bondholders -- the financial institutions that invest in mortgage-backed securities like the pool that contains the Goldrick mortgage.
While modification advocates say it is better for investors to accept a lower rate of return rather than nothing, bondholders don't see much benefit if modifications just delay an inevitable foreclosure.
Moreover, some securitizations prohibit modifications, as is the case with the pool containing the Goldrick mortgage. Such clauses are meant to protect bondholders -- sometimes a hedge fund, sometimes a pension fund -- who have been guaranteed a certain return.
So even though the Goldricks could afford to stay in their home if the interest rate was 6.5 percent, and the bondholders would benefit by continuing to receive income on the loan rather than have it stuck in foreclosure, the servicer of the loan -- Saxon -- cannot budge.
"Your loan modification request has been denied because the investor does not allow modifications for this loan. We apologise for any inconvenience," a Saxon customer service representative wrote to AmeriMod on December 19.
Saxon referred inquiries on the Goldrick mortgage to its parent, Morgan Stanley, which declined to comment.
Despite the notice, Pane vowed to continue fighting to modify the loan, citing the extraordinary circumstances of the Goldrick family and a clerical error that put the Goldricks further into arrears when a payment to cover property taxes was credited to the wrong account.
POOL RULES
Back in 2005, the securitisation pool containing the Goldrick mortgage looked like a safe bet for fixed-income investors. Fitch Ratings gave the senior debt in that pool a grade of AAA -- a rating it maintains to this day -- and Fitch said 80 percent of the AAA bonds have been repaid in full.
The lower-rated debt in the pool has not fared as well, resulting in multiple downgrades.
Three years after the deal closed, 24.3 percent of what is left in the fund is in foreclosure and another 13.1 percent delinquent by at least 30 days, according to November data on Morgan Stanley's website.
And 2005 was still a pretty good year. Mortgage bonds from 2006 and 2007 are even more "distressed."
Until the credit crisis blew up in 2007, Wall Street institutions were piling into mortgage-backed securities. It was dominated by Lehman Brothers, which has since collapsed, and Bear Stearns, which was sold to JPMorgan Chase & Co in an emergency deal.
Investment banks were making 1.25 to 1.35 percent on securitizations, which would mean a profit of $875,000 to $945,000 on a $700 million pool.
"That doesn't sound like a lot, but mortgage markets are so big there's a lot of profitability," said Brad Hintz a securities industry analyst for Sanford C. Bernstein & Co.
Firms were in frenzied competition for market share at a time when mortgage companies were handing out easy credit.
Now, that bubble has burst and new issues of securitized mortgages have come to a halt. Investors are buying mortgage bonds at a steep discount on the secondary market.
"Distressed yields are on the order of 15 to 20 percent, so people are kind of responding to that," said JPMorgan analyst Chris Flanagan.
For example, Whitney Tilson, founder of the hedge fund T2 Partners LLC, said he was betting that losses on underlying loans won't be as bad as the market expects. In other words, enough people will continue to make their mortgage payments.
"For the first time in our 10-year history we are buying distressed debt, and we are selling equities to do it," Tilson told the Reuters Investment Outlook Summit earlier this month.
But that won't help the Goldricks, who like many other families are in danger of losing their house and not likely to benefit from the $700 billion that Congress has allocated to Wall Street for bailing out financial institutions.
"I am absolutely bitter," said Patrick Goldrick, who sees the scandal surrounding investment advisor Bernard Madoff as further evidence of Wall Street wrongdoing. "I am bitter towards Congress and bitter towards the big banks and the creepy billionaires who get away with stealing pensions."
"I just don't even listen anymore. I turn it off. It's all bad news."
(Reporting by Dan Trotta; Editing by Eddie Evans)

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Skaters jump in as foreclosures in U.S. drain the pool
By Jesse Mckinley and Malia Wollan
Monday, December 29, 2008
On a recent morning, a 27-year-old skateboarder who goes by the name Josh Peacock peered into a swimming pool in Fresno, California, emptied by his own hands — and the foreclosure crisis — and flashed a smile as wide as a half-pipe.
"We have more pools than we know what to do with," said Peacock, who lives in Fresno, the Central Valley city where thousands of homes, many with pools behind them, are in foreclosure. "I can't even keep track of them all anymore."
Across the nation, the ultimate symbol of suburban success has become one more reminder of the economic meltdown, with builders going under, pools going to seed and skaters finding a surplus of deserted pools in which to perfect their acrobatic aerials.
In these boom times for skaters, Peacock travels with a gas-powered pump, five-gallon buckets, shovels and a push broom, risking trespassing charges in the pursuit of emptying forlorn pools and turning them into de facto skate parks.
"We can just hit them back to back," said Peacock, who preferred to give his skateboarding name because of the illegality of his activities.
Skaters are coming to places like Fresno from as far as Germany and Australia. Peacock said his floor and couch were covered by sleeping bags of visiting skateboarders each weekend.
Some skateboarders use realty tracking sites like realquest.com and realtor.com to find foreclosed houses with pools, while others trawl through satellite images from Google Earth. On the Web site skateandannoy.com, where skaters trade tips about how to find and drain abandoned pools, one poster wrote about the current economic malaise. "God bless Greenspan," the post read, "patron saint of pool skatin'."
Pool builders feel differently, of course. In Phoenix, for example, where scorching summers can make pools seem like a survival tool, the city has issued fewer than half the number of residential pool permits this year as in 2007, as builders are being pummeled by declining home construction and evaporating credit for potential buyers. Several large companies have gone bust this year, including Riviera Pools, which once sponsored the swimming pool at Chase Field, where the Arizona Diamondbacks play baseball. Smaller contractors, retailers and pool cleaning companies have also failed, leaving unpaid bills and unfinished projects.
"You've got people that still want to build pools, but now you're getting maybe 20 percent or 10 percent that can actually qualify now," said Dave Brandenburg, a pool builder in north Phoenix who estimated business was off 40 percent to 70 percent. "Before it was, 'Sure, no problem.' Now it's like, 'Sorry.' "
Business is just as bad in Florida, where builders like Ben Evans, the chief executive at American Pools and Spas in Orlando, said he had let much of his staff go as orders for pools dropped to 150 this year, from about 1,000 in 2007.
"I'm just looking for my bailout money," Evans said, ruefully. "Do you know where that is?"
In many warmer states, the authorities are trying literally to bail out pools, using pumps, dredges and strong stomachs to attack a surge in abandoned ones that have attracted all manner of nastiness — rats or belligerent raccoons, or algae, dead leaves and worse. These so-called green pools can become a breeding ground for mosquitoes carrying West Nile virus.
California officials estimate that there are tens of thousands of abandoned pools in the state, with as many as 5,000 in places like Sacramento County, where a building boom in the capital's suburbs has gone bust. California law calls for fines of up to $1,000 per day for egregious cases of pools left with standing water, but officials say the sheer numbers of cases are daunting.
John Rusmisel, the district manager for Alameda County's mosquito abatement district, said he used a promotional company that flies banners over football games and other events to help find the fetid swimming pools.
"They were up there seeing all these funky pools," said Rusmisel, who added that his workload had doubled in the last year. "So they just started to take pictures."
Once he finds a problem pool, his workers treat it with a combination of insecticide and mosquitofish, pinky-size carp that find mosquito larvae delectable. But they do not empty any pools, he said, because in a good rain, an empty pool can be partially lifted out of the hole by groundwater, he said. "I've seen them float up a foot or two," Rusmisel said.
Dirk Voss, a code enforcement agent in Oxnard, California, northwest of Los Angeles, said even those residents who manage to stay in their homes often could not maintain the pool. "They don't want to pay for the power to run the motor or pay for the chemicals to treat them," Voss said.
But skaters do not mind doing the work, whether it is that of scouting for pools or scouring them. Adam Morgan, 28, a skater from Los Angeles, said it used to take months to find a good skating pool. Now the task is a breeze.
"There are more pools right now than I could possibly skate," Morgan said. "It's pretty exciting." Peacock travels around town in his pickup searching for the addresses of homes he has learned have been foreclosed on, either via the Internet or from a friend who works in real estate. He has also learned to spot a foreclosed house, he said, by looking for "dead grass on the lawn and lockboxes on the front door."
Once he has found a pool he likes — he prefers older, kidney-shaped ones — he drains the water into the gutter with his pool pump, sometimes setting up orange cones on the sidewalk to appear more official. Later, he returns to shovel out the muck, and then lets the pool dry. In order to maintain a sense of public service, the skateboarders adhere to basic rules: no graffiti, pack out trash and never mess with or enter the houses.
A day or two later, the skating begins, often in short bursts during the workday to avoid disturbing neighbors or attracting police attention. Twice in recent weeks, Peacock said, the police caught the skateboarders in an empty pool and demanded they leave but did not issue citations.
Peacock said he was helping the environment. "I'm doing the city a favor," he said, by emptying fetid pools. "They're always talking about West Nile on the news. Those little fish can only eat so much."

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Veterans of 1990s bailout of U.S. thrifts stand to profit from bank crisis
By Eric Lipton and David D. Kirkpatrick
Monday, December 29, 2008
WASHINGTON: A tightly knit group of former senior U.S. government officials who were central players in the savings and loan bailout of the 1990s is seeking to capitalize on the latest economic meltdown, enjoying a surge in new business in their current work as private lawyers, investors and lobbyists.
With $700 billion in bailout money up for grabs and billions of dollars in bad debt or failed bank assets probably headed for sale or auction, these former officials are helping clients get a piece of the bailout money or the chance to buy, at fire-sale prices, some of the bank assets taken over by the U.S. government.
"It is a good time to be me," said John Douglas, a partner in Atlanta at the law firm Paul Hastings, a lawyer for bank regulators who helped create Resolution Trust Corp., the agency that administered the last federal bailout.
Some of these former U.S. officials, like L. William Seidman, the first chairman of the RTC, are serving as advisers - sharing ideas with Treasury Secretary Henry Paulson Jr. and the transition team for the president-elect, Barack Obama - even while they are separately directing investors or banks on how best to profit from this advice.
"It is an enormous market," said Seidman, who has already joined two such potential moneymaking efforts and was evaluating proposals to participate in a third. "I am enjoying this."
David Iannarone, a former RTC lawyer who is managing partner at a firm that handles defaulted commercial real estate loans, added: "The people who worked on this back in the early 1990s are back in vogue."
The RTC was set up by the government in 1989 to sell off what ultimately grew to $450 billion worth of real estate and other assets assembled from 747 collapsed savings banks.
What is obvious to former RTC officials is that, as in the last go-round, a great deal of money will be made by a select group of investors and business operators, particularly those with government contacts. The former government officials said during interviews that much of what was motivating them was a desire to help the nation recover from this latest stumble. But they acknowledged that they intended to be among the winners who emerge.
"Fortunes will be made here - no doubt about it," said Gary Silversmith, one of more than a dozen former Resolution Trust officials interviewed who are involved in enterprises seeking to profit from bank bailouts.
The busiest moneymaking arena so far for these RTC alumni is in helping distressed banks line up cash infusions from the Treasury as they seek pieces of the bailout.
Robert Clarke - controller of the currency under Presidents Ronald Reagan and George H.W. Bush and a former Resolution Trust board member - has been advising banks throughout the South on how to get their shares of bailout money.
"I have been absolutely inundated," said Clarke, who works at Bracewell & Giuliani, the Houston-based law firm affiliated with the former New York mayor and presidential candidate, Rudolph Giuliani.
Clarke's labor on behalf of his clients has included calling up U.S. regulators to urge them to reconsider plans to reject applications for bailout money. He would not identify the banks, saying doing so might undermine public confidence in them.
But Clarke said that his intervention, in at least some cases, had been successful.
Eugene Ludwig, the comptroller of the currency under President Bill Clinton during the final stages of the savings and loan cleanup, runs Promontory Financial Group, a banking consultant group whose clients include struggling banks.
"I must get an e-mail a day from people who I worked with back then about what to do about the current mess," he said. "It is not so much capitalizing on it as really just, how do we contain the flames?"
Many of the former governemtn officials like Ludwig have stayed in the field, working as lawyers or contractors who buy up and resell seized bank properties. What is remarkable now is just how busy they are.
"It is a great time to be a banking lawyer," said Thomas Vartanian, a partner in the Washington office of Fried Frank, who is a former general counsel to the Federal Savings and Loan Insurance Corp., which led a bank bailout effort in the 1980s.
The planned sale by the Federal Deposit Insurance Corp., the U.S. agency that insures bank deposits, of the assets of the failed IndyMac Bancorp has turned into an alumni event of sorts for veterans of the RTC era. One of those is John Oros, who advised bank regulators during the savings and loan crisis. Now he is a partner in J.C. Flowers, one of the private equity firms negotiating to buy a portion of IndyMac.
In the space of one weekend in September he explored buying out the troubled insurer AIG and worked with Bank of America on an aborted acquisition of Lehman Brothers. Then he advised Bank of America on its last-minute switch to buy Merrill Lynch before Lehman's collapse hammered Wall Street.
Although the financial meltdown is a disaster for the country, Oros said, "the opportunity going forward is unprecedented. It is fantastic. It is as if I had been training for this for the last 40 years of my career."
The biggest profits will most likely be made, the former U.S. bank officials agreed, by those who figure out a way to benefit from what could turn into one of the greatest fire sales of bad debt and bank assets in American history.
Through September of this year, 25 banks had failed, compared with only three in 2007. An additional 171 banks are on the FDIC's list of troubled banks, more than twice as many as at the end of last year.
As a result of these failures, and other related industry troubles, billions of dollars worth of real estate or at least mortgage-backed securities and other "illiquid" financial instruments will likely need to sold off at discounted prices to investors who stand to profit if they can sell the assets at a higher price once the economy recovers. The open question is just how this unloading of bad debt will take place.
So far, the U.S. government is relying upon financial institutions to find ways on their own to sell off bad debts or assets they end up with as a result of foreclosures. But some financial industry players are arguing that a modern Resolution Trust Corp. should be established to help set prices for this bad debt and speed the move toward a recovery.
The RTC alumni are prepared to profit either way.
Seidman, for example, has been hired as an adviser to SecondMarket, a company based in New York that early next year will start a virtual marketplace that intends to resell some of the trillions of dollars worth of distressed mortgage-backed securities, the financial instruments that helped fuel the surge in housing prices.
Seidman has already set up meetings between company executives and U.S. government regulators, including at the FDIC, said Barry Silbert, the company's founder.
Silversmith, meanwhile, who during the savings and loan crisis helped arrange the sale of thrift assets, has teamed with Barry Fromm, the chief executive of Value Recovery Holding, one of the big government contractors who handled these sales. The two in recent weeks have held meetings with some of Silverstein's former colleagues, including James Wigand, the deputy director in charge of the FDIC division that sells seized assets, to work on a plan to get ahold of some of the new wave of properties the U.S. government intends to put on the market as a result of recent bank failures.
Many of the investors who built legendary fortunes during the savings and loan crisis - like Sam Zell, the chief executive of the Tribune Company, and Joseph Robert Jr., the chief executive of J. E. Robert Companies - are also looking for ways to get back into or expand their distressed assets trade.
Zell, who has fared less well in his Tribune investment, recalled the instinct for capitalizing on the misfortune of others that earned him the sobriquet "the grave dancer" when he started buying up properties from failed savings and loans.
"When I started the first opportunity fund in 1988, I was the only one bidding - if they didn't sell to me, they didn't sell to anyone," Zell recalled.
Now, he said, "The best opportunity right now is in the debt area, mortgages. We have been buying all along."
RTC experience is certainly no guarantee of success, the agency veterans acknowledge.
Peter Monroe, who was president of the RTC oversight board from 1990 to 1993, has already bought about 300 distressed properties in Detroit, through a venture capital company he formed called Wilherst Oxford. Figuring out a way to profit from the investment - even though some of the houses cost him only a few hundred dollars — has proven to be a challenge.
"It is like a high-hurdle race: you can get going fast, but you have to jump over one hurdle after the other," Monroe said. "It has turned out to be more complicated than even I expected."

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COLUMNIST

Paul Krugman: Fifty Herbert Hoovers
Monday, December 29, 2008
No modern American president would repeat the fiscal mistake of 1932, in which the federal government tried to balance its budget in the face of a severe recession. The Obama administration will put deficit concerns on hold while it fights the economic crisis.
But even as Washington tries to rescue the economy, the nation will be reeling from the actions of 50 Herbert Hoovers - state governors who are slashing spending in a time of recession, often at the expense both of their most vulnerable constituents and of the nation's economic future.
These state-level cutbacks range from small acts of cruelty to giant acts of panic - from cuts in South Carolina's juvenile justice program, which will force young offenders out of group homes and into prison, to the decision by a committee that manages California state spending to halt all construction outlays for six months.
Now, state governors aren't stupid (not all of them, anyway). They're cutting back because they have to - because they're caught in a fiscal trap. But let's step back for a moment and contemplate just how crazy it is, from a national point of view, to be cutting public services and public investment right now.
Think about it: Is America - not state governments, but the nation as a whole - less able to afford help to troubled teens, medical care for families, or repairs to decaying roads and bridges than it was one or two years ago? Of course not. Our capacity hasn't been diminished; our workers haven't lost their skills; our technological know-how is intact. Why can't we keep doing good things?
It's true that the economy is currently shrinking. But that's the result of a slump in private spending. It makes no sense to add to the problem by cutting public spending, too.
In fact, the true cost of government programs, especially public investment, is much lower now than in more prosperous times. When the economy is booming, public investment competes with the private sector for scarce resources - for skilled construction workers, for capital. But right now many of the workers employed on infrastructure projects would otherwise be unemployed, and the money borrowed to pay for these projects would otherwise sit idle.
And shredding the social safety net at a moment when many more Americans need help isn't just cruel. It adds to the sense of insecurity that is one important factor driving the economy down.
So why are we Americans doing this to ourselves?
The answer, of course, is that state and local government revenues are plunging along with the economy - and unlike the federal government, lower-level governments can't borrow their way through the crisis. Partly that's because these governments, unlike the feds, are subject to balanced-budget rules. But even if they weren't, running temporary deficits would be difficult. Investors, driven by fear, are refusing to buy anything except federal debt, and those states that can borrow at all are being forced to pay punitive interest rates.
Are governors responsible for their own predicament? To some extent. Arnold Schwarzenegger, in particular, deserves some jeers. He became governor in the first place because voters were outraged over his predecessor's budget problems, but he did nothing to secure the state's fiscal future - and he now faces a projected budget deficit bigger than the one that did in Gray Davis.
But even the best-run states are in deep trouble. Anyway, we shouldn't punish our fellow citizens and our economy to spite a few local politicians.
What can be done? Ted Strickland, the governor of Ohio, is pushing for federal aid to the states on three fronts: help for the neediest, in the form of funding for food stamps and Medicaid; federal funding of state- and local-level infrastructure projects; and federal aid to education. That sounds right - and if the numbers Strickland proposes are huge, so is the crisis.
And once the crisis is behind us, we should rethink the way we pay for key public services.
As a nation, we don't believe that our fellow citizens should go without essential health care. Why, then, does a large share of funding for Medicaid come from state governments, which are forced to cut the program precisely when it's needed most?
An educated population is a national resource. Why, then, is basic education mainly paid for by local governments, which are forced to neglect the next generation every time the economy hits a rough patch? And why should investments in infrastructure, which will serve the nation for decades, be at the mercy of short-run fluctuations in local budgets?
That's for later. The priority right now is to fight off the attack of the 50 Herbert Hoovers, and make sure that the fiscal problems of the states don't make the economic crisis even worse.

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For better or worse, ads we'll remember from 2008
By Stuart Elliott
Monday, December 29, 2008
NEW YORK: Queen Elizabeth II described 1992 as "an annus horribilis" for her and the royal family. This annus may have not been that horribilis for Madison Avenue, but it came pretty close.
The biggest problem was that most advertising was overtaken by events as the year wore on. The best-laid marketing plans proved no match for a historic presidential race and an enormous financial crisis.
That cut both ways for agencies and marketers: overshadowing the best ads, but also drawing attention away from the worst.
So half the industry is ending the year cursing its poor timing while the other half is breathing a loud sigh of relief.
Here is a recap of some high and low points of 2008.
After years of enduring a mocking campaign from Apple that turned the phrase "I'm a PC" into a punch line, Microsoft struck back with ads that appropriated and effectively repurposed the phrase as a rallying cry.
Teaser spots that preceded the Microsoft counterattack, featuring Bill Gates and Jerry Seinfeld as a talkative odd couple, were less successful.
But they generated almost as much publicity as if the pair had plighted their troth as an actual couple. Agency: Crispin Porter & Bogusky, part of MDC Partners.
Print and online ads for Motrin, the pain reliever sold by a division of Johnson & Johnson, foolishly tried to be funny by comparing babies carried by mothers to fashion accessories. "Wearing your baby" is the term used for carrying infants in slings, but J&J wound up wearing tons of Pablum tossed at it by parents offended that their efforts to bond with their babies were being trivialized.
The complaints, many delivered in the form of angry "tweets" via the Twitter site, eventually seemed like overkill, but they killed the campaign. Agency: Taxi.
A tongue-in-cheek campaign for the Routan minivan sold by Volkswagen of America, part of the German automaker Volkswagen, sought to spoof the image of minivans as mom-mobiles. A celebrity mother, Brooke Shields, was featured as a scold who accused expectant parents of wanting children just so they could experience the "German engineering" of the Routan.
Like the campaign for Motrin, the Routan campaign seemed tone deaf. Maybe Americans consider motherhood no laughing matter. Or maybe a company based in a country that once deified motherhood ought to stick to safer subjects for ads. Agency: Crispin Porter & Bogusky.
At Coca-Cola, a Super Bowl commercial for the Classic brand was a warm and fuzzy winner in the spirit of Coke classics. Over the skies of New York, two breakaway balloons from the Macy's Thanksgiving Day parade battle for a balloon bottle of Coke, only to lose out to that lovable loser, Charlie Brown. Agency: Wieden & Kennedy.
After the success of the audacious "Whopper Freakout" campaign, which began in 2007, Burger King kept the heat on its rivals in the fast-food category, with mixed results. Stunts like selling Flame, a meat-scented body spray for men, were viral-marketing hits. But a campaign called "Whopper Virgins" - asking residents of places like Greenland and Romania to take part in taste tests, which pitted the Whopper against the Big Mac - was off-putting; the premise came off like cultural imperialism. Agency for both: Crispin Porter & Bogusky.
One reason that so few people paid attention to advertising this year was a race for the White House filled with milestones, which ended with a precedent-setting president-to-be. One reason for that outcome was the deft use of media, new and traditional, by the Barack Obama campaign and by his supporters.
An example of an official ad that broke through was a 30-minute infomercial that the campaign ran on seven broadcast and cable networks on Oct. 29.
The commercial, filmed like a documentary, managed to be slick and earnest at the same time, and finished with a live flourish with Obama at a rally in Florida. Agencies: GMMB, part of the Omnicom Group, and Murphy Putnam Media.
An example of an unofficial Obama ad that succeeded was a video clip, produced by the musician Will.i.am, called "Yes We Can," which was viewed on YouTube and other video-sharing Web sites more than 20 million times.
Almost 50 years after Tony Curtis and Jack Lemmon demonstrated that in Chicago, some like it hot, Kraft Foods turned on the heat there to promote its Stove Top brand of stuffing.Heated roofs were installed in 10 downtown bus shelters to bring to life the Stove Top promise of a warm feeling when eating a meal with stuffing as a side dish. The clever campaign was emblematic of what is known as experiential marketing, which has brought sounds and smells to bus shelters in addition to hot air. Agencies: Draft FCB, part of the Interpublic Group of Companies; JCDecaux North America, part of JCDecaux; and MediaVest, part of the Starcom MediaVest Group division of the Publicis Groupe.
A commercial to promote zero percent loans offered by Toyota Motor Sales USA, part of Toyota Motor, featured a version of a 1983 song, "Saved by Zero," by the Fixx. The spot seemed innocuous enough, but incessant repetition got on America's nerves to the point where consumers were threatening to fix Toyota's wagon, station or otherwise.There were even groups formed on Facebook to urge Toyota to pull the commercial. Still, all the publicity may have been beneficial at a time when people were thinking more about bailing out carmakers than buying cars; a headline in The Daily News, over an article about the Federal Reserve Board's decision to slash interest rates, asked, "Are We Saved by Zero?" Agency: Saatchi & Saatchi, part of Publicis.

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The new route to musical stardom: Shilling for products
By Jon Pareles
Monday, December 29, 2008
In "Creator," the rawest track on Santogold's debut and self-titled album, the singer Santi White boasts, "Me I'm a creator/Thrill is to make it up/The rules I break got me a place up on the radar." It's a bohemian manifesto in a sound bite, brash and endearing, or at least it was for me until it showed up in a beer commercial. And a hair-gel commercial too.
It turns out that the insurgent, quirky rule-breaker is just another shill. Billboard reported that three-quarters of Santogold's excellent album has already been licensed for commercials, video games and soundtracks, and White herself appears in advertisements, singing for sneakers. She has clearly decided that linking her music to other, mostly mercenary agendas is her most direct avenue to that "place up on the radar."
The question is: What happens to the music itself when the way to build a career shifts from recording songs that ordinary listeners want to buy to making music that marketers can use? That creates pressure, subtle but genuine, for music to recede: to embrace the element of vacancy that makes a good soundtrack so unobtrusive, to edit a lyric to be less specific or private, to leave blanks for the image or message the music now serves. Perhaps the song will still make that essential, head-turning first impression, but it won't be as memorable or independent.
Music always had accessory roles: a soundtrack, a jingle, a branding statement, a mating call. But for performers with a public profile, as opposed to composers for hire, the point was to draw attention to the music itself. Once they were noticed, stars could provide their own story arcs of career and music, and songs got a chance to create their own spheres, as sanctuary or spook house or utopia. If enough people cared about the song, payoffs would come from record sales (to performer and songwriter) and radio play (to the songwriter).
When Moby licensed every song on his 1999 album, "Play," for ads and soundtracks, the move was both startling and cheesy, but it did lead to CD sales; an album that set staticky samples of blues and gospel to dance-floor beats managed to become a million-seller. Nearly a decade later, platinum albums are much scarcer.
And as music becomes a means to an end - pushing a separate product, whether it's a concert ticket or a clothing line, a movie scene or a Web ad - a tectonic shift is under way. Record sales channeled the taste of the broad, volatile public into a performer's paycheck. As music sales dwindle, licensers become a far more influential target audience. Unlike nonprofessional music fans who might immerse themselves in a song or album they love, music licensers want a track that's attractive but not too distracting - just a tease, not a revelation.
It's almost enough to make someone miss those former villains of philistinism, the recording companies. Labels had an interest in music that would hold listeners on its own terms; selling it was their meal ticket. Labels, and to some extent radio stations and music television, also had a stake in nurturing stars who would keep fans returning to find out what happened next, allowing their catalogues to be perennially rediscovered. By contrast, licensers have no interest beyond the immediate effect of a certain song, and can save money by dealing with unknowns.
As the influence of major labels erodes, licensers are seizing their chance to be talent scouts. They can be good at it, song by song, turning up little gems like Chairlift's "Bruises," heard in an iPod ad. For a band, getting such a break, and being played repeatedly for television viewers, is a windfall, and perhaps an alternate route to radio play or the beginning of a new audience. But how soon will it be before musicians, perhaps unconsciously, start conceiving songs as potential television spots, or energy jolts during video games, or ringtones? Which came first, Madonna's "Hung Up" or the cellphone ad?
Not wanting to appear too crass, musicians insist that exposure from licensing does build the kind of interest that used to pay off in sales and/or loyalty. Hearing a song on the radio or in a commercial has a psychological component; someone else has already endorsed it.
Musicians who don't expect immediate mass-market radio play have gotten their music on the air by selling it to advertisers. That can rev up careers, as Apple ads have done for Feist and for this year's big beneficiary, Yael Naim, whose "New Soul" introduced the MacBook Air. (Sites like findthatsong.net help listeners identify commercial soundtracks.)
The Sri Lankan art-pop-rapper M.I.A. already had all the hipster adoration she could ever want for her song "Paper Planes," which compares international drug dealing to selling records, and it turns gunshots and a ringing cash register into hooks. But having the song used in the trailer for "Pineapple Express" was probably what propelled the song to a Grammy nomination for record of the year. And if the song now conjures images of the movie trailer for many listeners, that's the tradeoff for recognition.
The old, often legitimate accusation against labels was that they sold entire albums with only one good song or two. Now there's an incentive for a song to have only 30 seconds of good stuff. It's already happening: Chris Brown's hit "Forever" is wrapped around a jingle for chewing gum.
Apparently there's no going back, structurally, to paying musicians to record music for its own sake. Labels that used to make profits primarily from selling albums have been struggling since the Internet caused them to lose their chokehold on distribution and exposure. Now, in return for investing in recording and promotion, and for supplying their career-building expertise (such as it was), they want a piece of musicians' whole careers.
Old-fashioned audio recording contracts are increasingly being replaced by so-called 360 deals that also tithe live shows, merchandising, licensing and every other conceivable revenue stream - conceding, in a way, that the labels' old central role of selling discs for mere listening is obsolescent. Some musicians, like the former record company president Jay-Z, have concurred, but by signing 360 deals not with labels but with the concert-promotion monolith Live Nation.
Maybe such dire thoughts are extreme, since some people are still buying music. The iTunes Music Store has sold more than 5 billion songs since 2003. But it's harder and harder to find a song without a tie-in. It took Guns N' Roses 15 years between albums to complete "Chinese Democracy," certainly long enough to receive worldwide notice when the album was released this year. But instead of letting the album arrive as an event in itself, the band licensed one of the album's best songs, "Shackler's Revenge," to a video game that came out first. Metallica fans have complained that the band's new album, "Death Magnetic," sounds better in the version made for the "Guitar Hero" video game than on the consumer CD, which is compressed to the point of distortion so it will sound louder on the radio. But they take for granted that the music will end up in the game in the first place. Consumers reinforce the licensers almost perversely: They pay for music as a ringtone, or tap along with it on the iPhone game "Tap Tap Revenge," but not as a high-fidelity song.
Perhaps it's too 20th century to hope that music could stay exempt from multitasking, or that the constant insinuation of marketing into every moment of consciousness would stop when a song begins. But for the moment I'd suggest individual resistance. Put on a song with no commercial attachments. Turn it up. Close your eyes. And listen.

Labor gets its hopes up
By Steven Greenhouse
Monday, December 29, 2008
NEW YORK: Unions in the United States are looking to Barack Obama and rising economic anxiety to reverse organized labor's long slide.
Through three decades of decline, union leaders have been predicting a renaissance that never came. But labor invested more than $300 million to help elect Obama and enlarge the Democratic majority in Congress, and it is counting on Democrats to work together to enact legislation that will make it easier for millions of American workers to unionize.
"The people we helped elect, the people America elected," said Andy Stern, president of the Service Employees International Union, stand in sharp contrast to those who brought about "25 years of a market-worshiping, trickle-down economy.
"The discussion in America is no longer so much about national security or guns and gays," Stern added. "It's about something that unions are incredibly important to - in the future, am I going to get a raise and will I get health coverage and a pension?"
Skeptics say the outlook for labor is as bleak as ever. Business leaders and congressional Republicans have vowed to block the new legislation labor wants, and Obama might want to avoid a bitter, divisive fight.
Moreover, corporate leaders say, a shrinking economic pie could work against union organizing as much as it could work in its favor.
"What's happened with the United Auto Workers has undercut the whole argument that unions are a ticket to the middle class, that unions will lead you to a better life," said Randel Johnson, vice president for labor policy at the U.S. Chamber of Commerce.
As the Detroit automakers have retreated in the face of foreign competition and their own failures, the UAW has shrunk to fewer than 500,000 members from 1.5 million in the late 1970s, as the proportion of U.S. workers who belong to unions plunged to 12 percent from 24 percent.
"A lot of people see that the unions drove the auto companies off the cliff," Johnson said. "That clearly has undermined the argument that unions are a way to a secure and better future."
Charles Craver, a labor relations expert at George Washington University, said workers and unions could learn a lesson from the auto workers and what he sees as their stubborn resistance to accept concessions to keep the carmakers competitive.
"What's happened with the UAW is their very success brought them to the brink of disaster," Craver said, referring to union members' traditionally high wages and benefits. "It's Samuel Gompers who said a century ago that the enemy of the worker is an unprofitable employer. Unions have to work to make the company successful, and employers have to recognize the contribution of the worker."
While union leaders' optimism has proved excessive in the past, they say it is justified this time. In the view of the AFL-CIO's president, John Sweeney, rising frustration over stagnating wages, declining health and retirement benefits, and soaring chief executive salaries has shifted the political landscape in labor's favor.
"People are economically pressed and are looking for solutions and protections for themselves," Sweeney said. "Working people know they need more power to counter corporate power, and they understand that unions can provide that counterbalance."
The possibility of enacting the Employee Free Choice Act, which would make it easier to unionize private-sector workers, is crucial to organized labor's hopes for the future. Many labor leaders say the bill would help add millions of workers to union rolls.
Under the bill, employees could gain union recognition as soon as a majority signed cards saying they wanted a union. In a move that business and Republicans say would betray a basic American right, unions could bypass secret ballot elections.
If enacted into law, unions say they would be able to organize many workplaces - perhaps even banks, McDonald's and Wal-Marts - that have largely been impervious to union drives.
"In a recession, workers are looking for stability and security, and that will cause a lot of them to turn to unions," said Stewart Acuff, the AFL-CIO's organizing director.
As proof, he pointed to several recent developments.
At JetBlue, 1,800 pilots worried about their health and retirement benefits are scheduled to vote whether to unionize in January.
After a 15-year effort to keep out a union, Smithfield Packing said this month that it would grant union recognition to 4,600 workers at its North Carolina pork-processing plant who just voted to unionize. Last month, the Pequot tribe granted union recognition to 2,600 dealers at the Foxwoods Resort Casino in Connecticut.
Union leaders also note a Peter D. Hart poll, commissioned by the AFL-CIO and conducted in December 2006, that found that 53 percent of the 808 nonunion, nonsupervisory workers surveyed said they would vote to unionize immediately if they could.
No one doubts that unions will survive in the public sector, where millions of teachers, firefighters and other public employees have unionized in recent decades. But labor's survival in the private sector is more problematic - just one in 14 private-sector workers is in a union, down from two in five a half-century ago.
Over all, union membership has fallen to 15.7 million from 21 million three decades ago, although last year union membership rose by 311,000, according to the Bureau of Labor Statistics. Some academics have called that a statistical fluke, but labor leaders say the increase was the result of their hard work in unionizing construction, health care and government workers in a year when employment climbed to record levels.
But whether the gains are more than temporary depends on the tug of war between political and economic forces.
"Unions are going to survive this downturn," said Harley Shaiken, a labor economist at the University of California at Berkeley, who was on Obama's short list for labor secretary. "But whether they survive as a significant social force depends," he added, on the ability of the Obama administration "to strengthen working families in a cold winter economically."

A place to curl up with the company
By Steven Kurutz
Monday, December 29, 2008
OXFORD, Mississippi: It probably wouldn't be accurate to say that the most interesting people within a 75-mile radius were gathered at the home of Richard and Lisa Howorth here on a recent Thursday evening, but, then again, the claim might not be too far off.
In the Howorths' living room, the humorist John Hodgman was chatting with the actress Joey Lauren Adams. John T. Edge, a food writer, was hanging out in the kitchen, near a big pot of gumbo Lisa Howorth had cooked the night before, as was a mellifluously named Mississippian, Semmes Luckett, who was telling Hunter S. Thompson stories (they were buddies in Aspen, Colorado). Roy Blount Jr., meanwhile, held forth in the dining room, drinking whiskey and proving that a good party can sustain more than one professional humorist.
Other guests included the novelist Jack Pendarvis; a co-founder of Fat Possum Records, Matthew Johnson; and the author Dean Faulkner Wells, whose uncle, William Faulkner, is Oxford's most famous son. At some point, the New York-based singer and songwriter known as Milton and members of his backup band, who were passing through Oxford on tour, began twisting to '60s dance records, like the Bar-Kays' "Soul Finger." It was, as they say, that kind of night.
The link among all of these people is the Howorths, who own Square Books, a local institution and one of the country's better-known independent bookstores. (They also operate an annex, Off Square Books, and a store specializing in children's books.)
Located in a 19th-century brick building on Oxford's elegantly preserved town square, the store is a popular stop on book tours, and the couple has become friendly with a lot of writers in the 29 years they've been in business. They often invite visiting authors to stay at their five-bedroom house instead of in a hotel.
Hodgman, who is a contributing writer to The New York Times Magazine, and Blount - both in town to appear on "Thacker Mountain Radio," a variety program co-created by Richard Howorth and broadcast live each Thursday from Off Square Books - were the writers-in-residence on this particular night. But on any given week, especially in the fall, the publishing industry's busy season, a best-selling novelist or first-time author is likely to be sleeping in the downstairs guest room.
"We run a pretty relaxed household," said Lisa Howorth. To stay there, "you have to be able to put up with dog hair and a certain amount of slack housekeeping."
The novelists Nick McDonell and the journalist Nicholas Dawidoff were recent guests; the full guestbook is slightly longer than Joyce's "Ulysses" and includes such literary names as Richard Ford, Ann Patchett, Alexander McCall Smith, Donna Tartt and Madison Smartt Bell.
As the Howorths' 27-year-old daughter, Claire, explained it, her parents "basically run a B&B for writers," although there's no cost and the entertainment tends to be livelier than a traditional innkeeper might provide. Take, for instance, the time Lisa Howorth took the British novelist Graham Swift on a road trip through the Delta. Or the many nights when the couple piled into their car and drove a writer out to a juke joint in Chulahoma, Mississippi, owned by the bluesman Junior Kimbrough, who died in 1998. "It's 30 miles away," she said, "but what's 30 miles when you have a car and a bottle of bourbon?"
For authors engaged in the often dispiriting ritual known as the book tour, rolling into Oxford is a blessed respite.
"When you go to a bookstore, you think of it as a lonely outpost, but this is the opposite of a lonely outpost," said Blount, whose affection for the Howorths and their store is such that in the author photo for his most recent book, "Alphabet Juice," he's wearing a Square Books ball cap.
Gary Fisketjon, an editor at Knopf, has sent many writers to Oxford and himself stayed with the Howorths. "I love their house - it's amazing how many people you can wad in that place," he said. Asked to describe a typical evening, Fisketjon said: "It's food, it's music, it's plenty of whiskey. They are people who know how to have a good time."
If there were a publication called Southern Home and Book, the Howorth place would be the editorial template. There's a big wrap-around porch typical of antebellum manors, and the downstairs hall is given over to floor-to-ceiling bookshelves. The décor is a mix of eccentricity and faded gentility; in the parlor stands a wobbly-sounding piano, topped by a toy talking monkey.
Across the hall is the room where visiting writers stay. It's furnished simply, with a table, an armoire, a desk, file cabinets and antique twin beds that a friend picked up at a flea market in Atlanta.
Lisa Howorth's approach to houseguests is laissez-faire. "If they want to be left alone to work, that's fine," she said. "If they'd like to get out and go into town to socialize at a restaurant or bar, we can do that, too."

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In Canada, National Gallery seeks to leave controversy behind
By Ian Austen
Monday, December 29, 2008
OTTAWA: Like most prominent and publicly financed institutions here, the National Gallery of Canada does not escape controversy.
Usually the fuss is over art. In 1990, several politicians derided the museum in Parliament for acquiring "Voice of Fire" (1967), a huge minimalist painting with three vertical stripes by Barnett Newman, for $1.45 million. (The disturbance eventually died down, and the painting's value has risen considerably.)
Now as Pierre Théberge prepares to end his 11-year tenure as the director of the National Gallery, Canada's wealthiest art institution, the museum is immersed in a controversy that has more in common with television comedies like "The Office" than debates about expenditures on paintings.
The chain of events has included the dismissal of David Franklin, the museum's deputy director and curator; the filing of a lawsuit by Franklin and his subsequent rehiring; the release of a series of unusually vitriolic internal e-mail messages; court filings that discuss the gallery's "toxic" working atmosphere; and, finally, the appointment of a new director who is to take over next month.
Throughout the conflict, Théberge, 66, who was once mainly seen by the public as an eccentric who brought his terriers to work, has faced allegations from Franklin, 47, that he is "medically unfit" for his job.
"This has been a disgrace," said René Blouin, a leading art dealer in Montreal, adding, "It's very damaging for museums of that caliber when there is not pride at the top."
Unions that represent some of the workers at the gallery have complained for years about the lack of respect toward employees under the leadership of Théberge and Franklin. Three years ago, the auditor general, a parliamentary body that analyzes government operations, found that the gallery lacked a system for evaluating its workers properly.
Yet it was a seemingly minor act, the deletion of e-mail messages, that has put the gallery's internal workings on public display.
In April, Franklin dismissed Erika Dolphin, the assistant curator of European and American art, along with several other people in what he described in a court filing as a cost-cutting move.
Soon afterward, Dolphin's union filed a request under the federal government's access-to-information laws for the release of all material related to her dismissal, including e-mail messages, which the law requires government departments and agencies to archive.
There was a problem: Franklin was unusually methodical about deleting e-mail messages.
In a court filing, he describes how he would regularly engage in sessions of "double-deleting," a practice that might be more accurately termed triple-deleting. First, he deleted e-mail messages from his sent box and in box. Then he removed them from a deleted messages folder, and finally he removed them from a folder for recovering deleted e-mail messages. It was, he said in a sworn statement, all for his mental well-being.
"I find this process of purging around 2,000 e-mails each week to be very therapeutic," Franklin testified in an affidavit. "This routine of clearing e-mail assists me to clear my mind in order to concentrate on research and scholarly work."
One of his e-mail purges immediately followed Dolphin's removal. It was intended, Franklin testified, to remove any material that might embarrass her.
Franklin, who did not respond to requests for comment for this article, disputes that the process completely destroyed his messages. The National Gallery and its lawyers contend otherwise. After several exchanges over the deletions, he was dismissed for what the museum called "just cause" - which means that it did not offer him severance pay - on June 11. The gallery's director of personnel, who was involved in the deleting, was suspended.
But in suing to recover his job, Franklin argued that the accusations about his e-mail deletions, which are the subject of a federal investigation with the potential for criminal charges, were merely a pretext to remove him as a challenger to Théberge, whose term as director expires on Sunday.
"I believe that Mr. Théberge is desperate to do anything in his power to prolong his term as director," Franklin testified. "Removing me as a strong potential candidate for his position is part of his strategy."
Despite Franklin's e-mail deletions, the National Gallery did recover messages sent to and from others, including some from Graham Larkin, the curator of European and American art and an ally of Franklin.
In one e-mail message addressed to Franklin and released by the Federal Court of Canada, Larkin used a vulgar expression to describe most of the gallery's senior managers and curators and offered a similarly coarse suggestion for what should be done to Franklin's opponents, including Théberge. Adding to the embarrassment was an affidavit in which Franklin testified that Théberge had become unfit for his job because of Parkinson's disease. He cited what he said was Théberge's tendency to doze off at meetings and "increasing nostalgia."
In an interview, Théberge declined to discuss any of Franklin's assertions. He said that running the museum, which receives more than $40 million of its $47 million budget from the national government, posed unique challenges.
"In Ottawa, you have to learn how it works," he said, referring to the government's oversight of the museum. What is more, he said, it took him a while to adjust to the National Gallery's ways.
"The gallery has a structure on paper that's very clear," he said. "But in fact it's full of quirky characteristics."
Although Franklin returned to his job - without the administrative duties - in July under an out-of-court settlement, he failed in his bid to succeed Théberge.
Because the National Gallery's director is appointed by the federal Cabinet, the succession process became a source of anxiety in the arts community this fall. During a federal election campaign, Prime Minister Stephen Harper cut financing for some arts projects while characterizing artists as a "bunch of people at, you know, a rich gala all subsidized by taxpayers claiming their subsidies aren't high enough."
Yet after the vote kept a Conservative government in office, Harper pleasantly surprised many in the arts community by appointing Marc Mayer, 52, who currently heads the Musée d'Art Contemporain de Montréal, to replace Théberge. Mayer has curatorial experience in museums in the United States and Canada.

Book review: 'On Architecture'
Reviewed by Justin Davidson
Monday, December 29, 2008
On Architecture Collected Reflections on a Century of Change. By Ada Louise Huxtable. 478 pages. Walker & Company. $35
"The first observation that one must make about the new CBS headquarters," Ada Louise Huxtable wrote in 1966, "is that it is a building."
It takes a lot of moxie to open a piece of serious criticism with such a lofty declaration of the obvious, offered in praise, without sarcasm or irony. But then Huxtable, who was the architecture critic for The New York Times from 1963 to 1982 and still, at 87, tosses out the occasional bravura essay for The Wall Street Journal, has never lacked nerve. With an authority that verges on the oracular, she flicks away giants: "The style of the Kennedy Center is Washington superscale, but just a little bit bigger. Albert Speer would have approved." She calls out eminences ("Inside Edward Durell Stone, there is an architect signaling to get out") and ordains geniuses ("Frank Gehry is the most staggeringly talented architect that this country has produced since Frank Lloyd Wright"). So if Huxtable declares "Black Rock," the glowering corporate palazzo that Eero Saarinen bestowed on CBS, to be a building, then it's worth reading on to discover what she means.
Her point, which remains as germane today as it was four decades ago, is that the mute brawn of the tower's exterior can't be separated from its structure and function. Rather than trying to disguise its bulk in a shiny, frilly sheath, Black Rock displays the muscle that is every tower's birthright, and the masses who find it charmless are just plain wrong. "The dark dignity that appeals to architectural sophisticates puts off the public, which tends to reject it as funereal," she acknowledges. "The first fault, therefore, is in the public eye."
Huxtable has been training that eye for nearly half a century. Given how often it still gets blackened by architectural sucker punches, she hasn't yet completed her task. But "On Architecture," a career-spanning collection of articles and essays, demonstrates that she has always pursued her mission with reason, elegance and wisdom. Huxtable's work remains the gold standard of criticism, and not just the architectural variety, because she brings to the job a rare combination of aesthetic certitude and roving curiosity.
Her aesthetic forged by the austerities of highest modernism, she adapted cheerfully to successive waves of flamboyance. From the start of her career, she admired Mies van der Rohe and Le Corbusier because they were her generation's deities, and later had no trouble recognizing the more baroque talents of Gehry, Daniel Libeskind and Santiago Calatrava. Review by review, essay by persuasive essay, she erects an impressive structure supported by the force of sheer reasonableness. She applauds economy but detests cheapness, appreciates expressivity but abhors showiness, and above all demands that a building make sense.
For a colleague less than half her age, it is awesome to observe her pronouncing judgment on elements of New York City that have come to seem immemorial.
In 1963, she reported with dismay on the Pan Am Building's new immensity: "A $100 million building cannot really be called cheap. But Pan Am is a colossal collection of minimums. ... Pan Am's one effective aesthetic feature is its brutality. In afternoon sun, from lower Park Avenue, its patterned mass rises with striking power behind the dwarfed familiarity of Grand Central's proper academic facade."
Today, the building (rebaptized the MetLife in 1991) has become so familiar, so comfortingly alpine in its overweening bulk, that it's difficult to imagine a time before its construction.
The reader who switches back and forth between these sparsely illustrated pages and a good collection of historical photographs (or nyc-architecture.com) can watch the millennial metropolis take shape and metamorphose. Under Huxtable's gaze, Midtown acquires its parade of pinstriped boxes. Lincoln Center opens ("expensively suave, extravagantly commonplace"). Le Corbusier passes into legend, bequeathing the 20th-century city his great art and disastrous philosophies. The World Trade Center goes up, the twin towers "could be the start of a new skyscraper age or the biggest tombstones in the world," she wrote in 1966. Huxtable responds to the destruction of 9/11 with a far-seeing suite of essays in which she (1) outlines the debacle that will follow disaster if the usual development narrative unfolds; (2) pronounces Libeskind's initial master plan an unexpected miracle amid "a dyslexic process (everything backward) that made all the mistakes in the plan book and invented a few"; and (3) falls back in a quintessentially Huxtabulatory mixture of optimism and exasperation. "I do not believe for a moment that we are no longer capable of building great cities of symbolic beauty and enduring public amenity," she writes. "What ground zero tells us is that we have lost the faith and the nerve, the knowledge and the leadership, to make it happen now."
Anyone who cares about architecture will want to argue with Huxtable. Her opinions are too finely honed not to draw blood, her targets too varied not to include some admirers, too. An ardent preservationist, she reserves her most tempered blades of scorn for the champions of false restoration. If the closest you get to buying this book is skimming it in a bookstore aisle, at least turn to Page 424 and read "The Way It Never Was," in which she fulminates coolly against Colonial Williamsburg, where "studious fudging of facts received its scholarly imprimatur," and where "history and place as themed artifact hit the big time."
Though Huxtable has survived innumerable conversions of conventional wisdom, she declares in the introduction that, like Edith Piaf, she regrets rien, not even her praise for Boston's much-detested City Hall. To disagree with her is to confront a nimble and thorough foe. Her arguments are impeccably engineered, her style frugal and efficient, her tolerance for humbug nil. The biggest buildings rise in a swirl of jargon and flackery, which she always pointedly ignores.
The stance of queenly sagacity overlaps only occasionally with the messy reality of cities that evolve simultaneously at every scale. Architecture is not just the product of architects, but of the people who use it, the tides of humanity that flow through a large building year after year, simultaneously wreaking havoc on the design and defining its degree of success. Cities also require a great many small and undistinguished buildings, without which the standouts would not stand out. Huxtable, however, is only rarely moved by the contradictions of urbanism or the architecture of the ordinary. Her beat is monuments.
Which brings us back to the CBS building, a brooding stele that defies employees to enter it without a heavy sigh. Like the devout modernist she is, Huxtable savors the lucidity of Saarinen's design because "it all fits together in an economical scheme that unifies structure, planning and aesthetics."
The same might be said for her prose. She shuns metaphor and doesn't bother to riffle the thesaurus for active verbs. The word "is" tolls through her sentences, and in her hands that weak, neutral syllable acquires a kind of prophetic majesty. (And it doesn't depend on what the meaning of "is" is.) She has always understood, and sometimes wished, that a quarter-mile-high agglomeration of concrete and steel could be discarded. Nevertheless, she writes with the hope that the greatest buildings will prove perennial, and so she hammers at the fact of their existence. A bad building might disappoint or overreach; a good one simply is.
Justin Davidson, who won the Pulitzer Prize for criticism in 2002, is the classical music and architecture critic for New York magazine.

Mexican officer accused of working with cartels
By Sam Dillon and Antonio Betancourt
Monday, December 29, 2008
MEXICO CITY: Mexicans got new word Saturday of the narcotics mafias' relentless efforts to infiltrate the government here when authorities accused a midranking army officer in the elite presidential guard of selling information about the whereabouts of President Felipe Calderón to the drug lords.
The officer, Major Arturo González Rodríguez, was taken into custody, and a judge authorized his provisional detention for 40 days, giving prosecutors time to collect evidence that he accepted thousands of dollars from traffickers in exchange for reports on President Calderón's movements, the federal attorney general's office said Saturday.
The communiqué announcing González's arrest did not clarify the motives the cartels might have had in buying the classified information, and a government official interviewed about the arrest late Saturday was not more specific. But Mexican newspapers quoted officials as saying that González was paid $100,000 for information about the president's movements so that the traffickers, who move in heavily armed convoys of SUVs, could avoid crossing paths with his security detail.
Calderón, a technocrat from Mexico's center-right party who began a six-year term in 2006, has used thousands of army troops and federal police officers in an offensive aimed at curbing the traffickers' increasing violence. There have been some 5,000 grisly killings this year, and a wave of kidnappings for ransom. Many of the murders have resulted from turf wars between rival cartels, but the drug lords have also carried out terrorist attacks of a type little known here previously, seemingly intended to defy the power of the Mexican state head-on.
These attacks have included a grenade explosion on a crowd of Independence Day revelers in the capital of Calderón's home state, Michoacán, in September that killed eight people and wounded more than 100.
And on Dec. 21, traffickers kidnapped at least seven army recruits as they left a garrison in the state of Guerrero for a Christmas leave. After torturing and decapitating the unarmed soldiers, the killers left their heads on public display with a message warning the military to discontinue antidrug operations.
The terrifying proliferation of the drug war is spurring a strategic debate. This month, Rubén Aguilar, the former spokesman for President Calderón's predecessor, Vicente Fox, said publicly that the drug war was unwinnable, offering to legalize some forms of drug commerce if the cartels would end their attacks.
"Narcotics trafficking is not going to end," Aguilar said. "What we can do is diminish the violence."
President Calderón said days later that he would never negotiate. "Using the entire force of the state, we will confront and defeat the enemies of Mexico," he said.
González's detention was not the first of its kind here. In 2005, authorities detained a former travel coordinator for then-President Fox, accusing the staff member of selling information to traffickers. But a judge threw out the charges.

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U.S. Congress to examine Madoff case on Monday
Reuters
Tuesday, December 30, 2008
By Rachelle Younglai
U.S. lawmakers will take their first close look next Monday at financier Bernard Madoff's alleged $50 billion (34.6 billion pound) fraud and why the Securities and Exchange Commission failed to discover the scandal.
Information gleaned from the hearing will help guide Congress as it attempts to reform laws regulating the U.S. financial system, said Rep. Paul Kanjorski, a Pennsylvania Democrat and chairman of the House capital markets subcommittee.
"Madoff's actions have further weakened the already battered investor confidence in our securities markets," Kanjorski said in a statement on Monday.
Madoff, a former Wall Street fund manager, is accused of running a $50 billion fraud that ensnared investors and charities around the world, according to authorities.
Critics say the SEC missed warning signs and failed to uncover the scandal until Madoff's sons went to the authorities and told them he confessed to the fraud. SEC Chairman Christopher Cox has asked an internal watchdog to probe the investor protection agency's conduct in the case.
Kanjorski said the Congressional hearing will examine if the SEC had enough staff and budget to police the markets.
"These proceedings will help us to discern whether or not the SEC had the resources needed to get the job done, how such a sizable scheme could have evaded detection for so long, and what new safeguards we need to put in place to protect investors," the lawmaker said.
Kanjorski did not identify who will testify at the hearing, scheduled for the day before the new Congress convenes. President-elect Barack Obama will be sworn into office on January 20.
The Madoff scandal, Kanjorski added, "provides a glaring example" of why Congress must launch the biggest reform of financial markets regulation since the Great Depression. Other lawmakers, including Senate Banking Committee Chairman Christopher Dodd, have said they want to streamline and improve the tangled U.S. regulatory structure that oversees banks and financial services.
Madoff is accused of running a giant Ponzi scheme, where he paid off early investors with money from later investors. He faces a criminal fraud charge filed by the U.S. Justice Department and a civil lawsuit filed by the SEC.
A federal judge in New York City recently set a December 31 deadline for Madoff to give the SEC a verified written accounting of his firm's records, bank accounts and other investments.
In addition to the federal lawsuits, a New York City investor who said she gave Madoff $2 million to manage sued the SEC and is seeking $1.7 million in damages from the federal agency.
(Editing by Phil Berlowitz)

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Impeachment panel offered tapes on Blagojevich
Reuters
Monday, December 29, 2008
CHICAGO: Prosecutors agreed on Monday to provide an impeachment panel with tape-recordings in which investigators say Illinois Gov. Rod Blagojevich is heard scheming to sell the powers of his office.
Patrick Fitzgerald, the U.S. Attorney in Chicago, said he will ask a judge next week for permission to turn over redacted versions of four intercepted conversations in which investigators say Blagojevich is heard talking about exchanging state funding and contracts for campaign contributions.
Up to now, Fitzgerald has asked the impeachment committee not to subpoena witnesses that might bear on the criminal conspiracy case against Blagojevich that includes charges the second-term Democratic governor tried to peddle his power to fill President-elect Barack Obama's vacant U.S. Senate seat.
The impeachment panel acceded to Fitzgerald's request not to call Obama's future chief of staff, Rahm Emanuel, and two other Obama aides to testify. Fitzgerald has said Obama is not implicated in the case.
Blagojevich's attorney, Edward Genson, submitted to the panel an internal report ordered by Obama that concluded there were no inappropriate dealings between Obama's staff and the governor or his office.
The fate of Obama's vacant Senate seat is in limbo, with Blagojevich not expected to fill it because of the taint of the investigation and Democrats who control the state legislature putting off consideration of a special election.
Also on Monday, Emanuel announced he would resign his seat representing a Illinois district in the U.S. House of Representatives on January 2. The seat will be filled by a special election.
Blagojevich, 52, has vehemently denied doing anything wrong, defying calls from within his own party to resign and saying the impeachment effort is led by "a political lynch mob."
Genson said the governor would not appear before the impeachment panel, which he criticized as failing to follow standards for evidence.
(Reporting by Andrew Stern, editing by Vicki Allen)

Spain offers citizenship to exiles' descendants
By Rachel Donadio
Monday, December 29, 2008
ROME: Descendants of those exiled from Spain during the Spanish Civil War and the fascist dictatorship of General Francisco Franco may claim Spanish citizenship under new legislation that went into effect over the weekend.
The Spanish government expects half a million people, many of them in Argentina, Venezuela, Cuba and elsewhere in Latin America, to file for citizenship under the new measure, the Spanish newspaper El País reported.
A government spokesman was not immediately able to confirm the figure.
The citizenship law covers the period from July 18, 1936, to Dec. 31, 1955, which includes the Spanish Civil War from 1936 to 1939 and the first decades of the fascist dictatorship, which ended with Franco's death in 1975.
The act is part of the "law of historical memory," a landmark and controversial piece of legislation passed last year by the Socialist government of Prime Minister José Luis Rodríguez Zapatero aimed at encouraging Spain to resolve issues from its bloody 20th-century history.
The law also provides public financing to unearth the mass graves in which thousands of Spaniards were buried during the war. It also requires the removal of many symbols from the Franco dictatorship from state buildings and public spaces.
Those applying for citizenship must present proof of their parents' or grandparents' place and date of birth, according to the Web site of the Spanish Justice Ministry. The government plans to accept applications until December 2010. Those deemed eligible would not have to renounce their other citizenship.

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COLUMNIST

From the left, a call to end the current Dutch notion of tolerance
By John Vinocur
Monday, December 29, 2008
AMSTERDAM: Two years ago, the Dutch could quietly congratulate themselves on having brought what seemed to be a fair measure of consensus and reason to the meanest intersection in their national political life: the one where integration of Muslim immigrants crossed Dutch identity.
In the run-up to choosing a new government in 2006, just 24 percent of the voters considered the issue important, and only 4 percent regarded it as the election's central theme.
What a turnabout, it seemed - and whatever the reason (spent passions, optimism, resignation?), it was a soothing respite for a country whose history of tolerance was the first in 21st-century Europe to clash with the on-street realities of its growing Muslim population.
Since the Sept. 11, 2001, attacks in the United States, the Netherlands had lived through something akin to a populist revolt against accommodating Islamic immigrants led by Pim Fortuyn, who was later murdered; the assassination of the filmmaker Theo Van Gogh, accused of blasphemy by a homegrown Muslim killer; and the bitter departure from the Netherlands of Ayaan Hirsi Ali, a Somali woman who became a member of Parliament before being marked for death for her criticism of radical Islam.
Now something fairly remarkable is happening again.
Two weeks ago, the country's biggest left-wing political grouping, the Labor Party, which has responsibility for integration as a member of the coalition government led by the Christian Democrats, issued a position paper calling for the end of the failed model of Dutch "tolerance."
It came at the same time Nicolas Sarkozy was making a case in France for greater opportunities for minorities that also contained an admission that the French notion of equality "doesn't work anymore."
But there was a difference. If judged on the standard scale of caution in dealing with cultural clashes and Muslims' obligations to their new homes in Europe, the language of the Dutch position paper and Lilianne Ploumen, Labor's chairperson, was exceptional.
The paper said: "The mistake we can never repeat is stifling criticism of cultures and religions for reasons of tolerance."
Government and politicians had too long failed to acknowledge the feelings of "loss and estrangement" felt by Dutch society facing parallel communities that disregard its language, laws and customs.
Newcomers, according to Ploumen, must avoid "self-designated victimization."
She asserted, "the grip of the homeland has to disappear" for these immigrants who, news reports indicate, also retain their original nationality at a rate of about 80 percent once becoming Dutch citizens.
Instead of reflexively offering tolerance with the expectation that things would work out in the long run, she said, the government strategy should be "bringing our values into confrontation with people who think otherwise."
There was more: punishment for trouble-making young people has to become so effective such that when they emerge from jail they are not automatically big shots, Ploumen said.
For Ploumen, talking to the local media, "The street is mine, too. I don't want to walk away if they're standing in my path.
"Without a strategy to deal with these issues, all discussion about creating opportunities and acceptance of diversity will be blocked by suspicion and negative experience."
And that comes from the heart of the traditional, democratic European left, where placing the onus of compatibility on immigrants never found such comfort before.
It's a point of view that makes reference to work and education as essential, but without the emphasis that they are the single path to integration.
Rather, Labor's line seems to stand on its head the old equation of jobs-plus-education equals integration. Conforming to Dutch society's social standards now comes first. Strikingly, it turns its back on cultural relativism and uses the word emancipation in discussing the process of outsiders' becoming Dutch.
For the Netherlands' Arab and Turkish population (about 6 percent of a total of 16 million) it refers to jobs and educational opportunities as "machines of emancipation." Yet it also suggests that employment and advancement will not come in full measure until there is a consciousness engagement in Dutch life by immigrants that goes far beyond the present level.
Indeed, Ploumen says, "Integration calls on the greatest effort from the new Dutch. Let go of where you come from; choose the Netherlands unconditionally." Immigrants must "take responsibility for this country" and cherish and protect its Dutch essence.
Not clear enough? Ploumen insists, "The success of the integration process is hindered by the disproportionate number of non-natives involved in criminality and trouble-making, by men who refuse to shake hands with women, by burqas and separate courses for women on citizenship.
"We have to stop the existence of parallel societies within our society."
And the obligations of the native Dutch? Ploumen's answer is, "People who have their roots here have to offer space to traditions, religions and cultures which are new to Dutch society" - but without fear of expressing criticism. "Hurting feelings is allowed, and criticism of religion, too."
The why of this happening now when a recession could accelerate new social tensions, particularly among nonskilled workers, has a couple of explanations.
A petty, political one: It involves a Labor Party on an uptick, with its the party chief, Wouter Bos, who serves as finance minister, showing optimism that the Dutch can avoid a deep recession. The cynical take has him casting the party's new integration policy as a fresh bid to consolidate momentum ahead of elections for the European Parliament in June.
A kinder, gentler explanation (that comes, remarkably, from Frits Bolkestein, the former Liberal Party leader, European commissioner, and no friend of the socialists, who began writing in 1991 about the enormous challenge posed to Europe by Muslim immigration):
"The multi-cultis just aren't making the running anymore. It's a brave step towards a new normalcy in this country. "

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Hundreds of migrants feared dead in Indian Ocean
By Mark McDonald
Monday, December 29, 2008
HONG KONG: Hundreds of migrants from Bangladesh and Myanmar are missing and feared dead in the Bay of Bengal, Indian Coast Guard officials and news agencies said Monday.
A coast guard official in Port Blair, the capital of the Andaman and Nicobar Islands, said by telephone Monday that 99 migrants had been rescued, although more than 300 were still missing and presumably drowned.
The official, who said rescue efforts were ongoing, said it was still not clear where the migrants were headed, although an earlier coast guard statement said the men had left Bangladesh about 45 days ago, bound for Malaysia, where they were expecting to find work.
A survivor identified as Mohammad Ismail Arafat said he and others had paid a Bangladeshi agent for promised jobs, according to the statement.
"We were left to the mercy of God," he said, adding that their boat had drifted for about two weeks, apparently after losing power. "When finally we saw a lighthouse, many jumped into the water."
A coast guard commander, S.P. Sharma, said 88 men had been rescued in a small boat near Little Andaman Island, Reuters reported. Eleven others had been found on a small island nearby.
Little Andaman Island lies 1,300 kilometers, or about 800 miles, south of Bangladesh. If the men had been headed to Malaysia, they had another 1,100 kilometers to go.
The survivor told the police there had been there had been 412 men in their original vessel, according to Reuters. He said the migrants, between the ages of 18 and 60, had very little food and water, with only a plastic sheet for a sail.
Sharma said the survivor told the police that seven men had died at sea and their bodies were put over the side.

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Bangladesh holds first vote in 2 years
By Somini Sengupta and Julfikar Ali Manik
Monday, December 29, 2008
NEW DELHI: After two years of army-backed emergency rule, democracy returned to Muslim-majority Bangladesh on Monday, as voters thronged the polls to choose their next government in a largely peaceful and in many places festive atmosphere.
If the apparently high turnout - election officials said that it could exceed 70 percent - was an endorsement of elected civilian rule, it was also a challenge to the nation's political leaders to conduct themselves better than they had in recent years.
"I know politics in this country is dirty," said Monira Khanam, 22, a medical student who voted in the capital, Dhaka. "Now that the country is returning to democracy after two years, I expect politicians will behave better. It is out of this expectation that I've come out to vote."
These national elections had to be postponed for nearly two years because of repeated, violent clashes between rival political parties. The army-backed government, in taking over in January 2007, banned political activity altogether, took 11 million fake names off the old voter rolls, and arrested scores of politicians and businessmen on charges of corruption. According to human rights groups it also arrested scores of people arbitrarily and on some occasions, subjected them to torture.
Most of all, in its bid to clean up politics, the caretaker government sought to drive the two women who head the country's two principal parties out of politics forever: Sheikh Hasina of the Awami League and Khaleda Zia of the Bangladesh Nationalist Party. It failed. The leaders refused to go into exile. Then, even after they were jailed on corruption charges, they fought to be let out and campaign for office.
The government relented, releasing both women - "the ladies," as they are known - earlier this year on bail as their cases wound through the courts.
They have alternately ruled this Muslim-majority nation of 153 million, and one of them is certain to head the next government. Hasina has formed an alliance with something called the Jatiya Party, while Zia has one with an Islamist faction known as Jamaat-e-Islamia.
Whether either will embrace reform remains to be seen. The final results for the 300-seat assembly are expected to be announced on Tuesday. It is unclear whether the loser in the race will accept the election verdict or resort to street violence as in the past. Equally unknown is whether the army will fully give up the reins of government and go back into the barracks.
Politics has long been a road to riches in Bangladesh, and connections to local politicians have been used to gain access to basic public goods, from university admissions to government jobs. Bangladesh has ranked as one of the most corrupt countries in the world, even as it faces some of the toughest challenges, from a rise of Islamist extremism to climate change to abiding poverty.
For some voters, especially the poor, price rise of essential items was the most important issue. For others, it was public safety. "If the elected government upholds the law, people will be afraid to break it," Ariful Islam, 24, said in Dhaka.
Like Islam, at least a fifth of the country's 81 million registered voters are estimated to be first-time voters.
Julfikar Ali Manik reported from Dhaka, Bangladesh.

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China's great migration wrenched back by crisis
Reuters
Tuesday, December 30, 2008
By Simon Rabinovitch
The biggest migration in human history has gone into reverse.
China's ocean of blue-collar workers is streaming back to the country's farming hinterland, bringing thwarted aspirations and rising discontent in tow as their city jobs, their paths out of poverty, fall victim to the global economic crisis.
Train K192 is a daily conduit of the reversing flow.
Every afternoon it pulls into Chengdu, capital of populous Sichuan province, after a 31-hour trip from Guangzhou, centre of China's once-thriving export heartland.
Hundreds of weary passengers, some of whom stand through the entire journey because seats are sold out, straggle into the grey light of the Chengdu winter and an uncertain future.
"Lots of factories have closed. Mine shut about three months ago. There was nothing to do, so I came home," said Wu Hao, 21, sporting a stylish striped sweater and a sleek metal suitcase.
After a year spent making circuit boards in Guangzhou, he was heading back to his family's patch of farmland, a full month before the Chinese new year when he would usually visit home.
Officials estimate that more than 10 million migrant labourers have already returned to the countryside as thousands of companies have been dragged under by weak global demand for everything from clothes to cars.
The government, always concerned about social instability, is now on high alert, fearful of the consequences of a huge mass of jobless, disappointed, rootless young men.
Beijing has urged firms to avoid cutting jobs despite falling profits, and many bosses have obliged by retaining workers but giving them unpaid leave.
"Sales were really bad and the boss just kept giving us holidays. We had 15 days off last month," said Tan Jun, who also clambered off train K192 in Chengdu. "Next year I won't go back."
With an impish smile, Tan looked more like a student than the factory hand he had been for a drug company in Dongguan, an industrial city next to Guangzhou.
"MENACE TO STABILITY"
Over the past three decades, about 130 million people have left China's countryside for the smokestacks, assembly lines and construction sites of cities.
That migration, described as the world's biggest ever by the United Nations, has underpinned the country's heady growth and also given its poorest citizens a share of the spoils, as urban residents' incomes are much higher than farmers'.
Known as China's "floating population," labourers rarely settle permanently where they work -- effectively prohibited from doing so by residency rules -- and return in droves to their hometowns for the Chinese lunar new year.
State media have put the best possible gloss on the in-bound tide of migrants under way: they are simply returning home early, one month ahead of the Year of the Ox which begins on January 26.
But China is heading into uncharted territory and the picture could deteriorate quickly. Many economists forecast growth next year of less than 7.5 percent, the country's lowest since 1990 and a level that would swell the ranks of the jobless.
"The redistribution of wealth through theft and robbery could dramatically increase and menaces to social stability will grow," Zhou Tianyong, a leading Communist Party scholar, wrote this month in a newspaper issued by a state think-tank.
Workers and officials alike hope the migration reversal is only temporary, but the numbers are too vast to ignore. The social security ministry says 10 percent of all migrants have already gone back to the countryside.
NEW ECONOMY?
China, in the short term at least, is pinning its hopes on a smooth absorption of the returnees.
"We expect that there will be a big change early next year, probably in March or April," said Wang Min, a director at the Yuhui LabourMarket in Chengdu. "A lot of people will stay here in Sichuan to look for work and not go to other provinces."
If so, they could be redrawing China's economic map.
Coastal provinces have long been the wealthiest in China and the main destination for migrants. But they have borne the brunt of falling exports, while the country's poorer hinterland is more closely tied to domestic fortunes that could rise on the back of a hefty government stimulus spending.
"We are seeing quite a few good, talented people come our way from Guangdong, people with business experience and skills," said Wei Chengyi, manager at Chengdu Doulton Trading Co., which sells ceramic filters. "It's a big help for us."
Unveiling its rural policy priorities for next year, the government said on Sunday that it will encourage unemployed people who return home to start their own businesses. Officials in Chongqing and Henan, two big sources of migrants, have already pledged to lend seed money.
Reconstruction after the devastating earthquake centred on Sichuan this year has also created a huge need for labour that will sop up some of the floating population.
"I'm not worried. There are still places you can find a job. And when you've got a lot of friends, it's quite easy," said Long Zhaojun, who had spent nearly four years in coastal factories.
Just off the train in Chengdu, Long said he would stay in the bustling city of 10 million for a while to hunt for jobs and have some fun. He was in no rush to return to his farming village.
(Additional reporting by Royston Chan; editing by Megan Goldin)

Fritzl incest victims leave clinic
The Associated Press
Monday, December 29, 2008
VIENNA, Austria: A lawyer says Josef Fritzl's daughter and her children have left the psychiatric clinic where they were recovering from their incest ordeal.
Christoph Herbst says the woman and six of the seven children he fathered with her while holding her captive for 24 years have moved into their own home at an undisclosed location.
Herbst announced the family's move in an interview Monday with the Austria Press Agency. He could not immediately be reached for more details.
Prosecutors in November charged 73-year-old Fritzl with murder for refusing to arrange medical treatment for the seventh child, who died in infancy. He also faces charges of rape, incest, false imprisonment and enslavement and is expected to go on trial in March.
The crime came to light in April.

Lessons for other smokers in Obama's efforts to quit
By Denise Grady and Lawrence K. Altman
Monday, December 29, 2008
Will one of President-elect Barack Obama's New Year's resolutions be to quit smoking once and for all?
His good-humored waffling in various interviews about smoking made it plain that Obama, like many who have vowed to quit at this time of year, had not truly done so.
He told Tom Brokaw of NBC several weeks ago, for example, that he "had stopped" but that "there are times where I've fallen off the wagon." He promised to obey the no-smoking rules in the White House, but whether that meant he would be ducking out the back door for a smoke is not known. His transition team declined to answer any questions about his smoking, past or present, or his efforts to quit.
Anti-smoking activists would love to see Obama use his bully pulpit to inspire others to join him in trying to kick the habit, but he has not yet taken up their cause.
The last president to smoke more than occasionally was Gerald Ford, who was quite fond of his pipes. Jimmy Carter and both Presidents George Bush were reportedly abstainers, but Bill Clinton liked cigars from time to time - though he may have chewed more than he smoked.
Obama's heaviest smoking was seven or eight cigarettes a day, but three was more typical, according to an interview published in the November issue of Men's Health magazine. In a letter given to reporters before the election, Obama's doctor described his smoking history as "intermittent," and said he had quit several times and was using Nicorette gum, a form of nicotine replacement, "with success." Obama was often seen chewing gum during the campaign.
His pattern matches that of millions of other people who have resolved but stumbled in their efforts to give up cigarettes. Today, 21 percent of Americans smoke, down from 28 percent in 1988.
Off-again-on-again smoking and serial quitting are common, as is the long-term use of nicotine gum and patches.
"It takes the average smoker 8 to 10 times before he is able to quit successfully," said Dr. Steven Schroeder, director of the Smoking Cessation Leadership Center at the University of California, San Francisco.
Schroeder said that counseling was helpful and that if Obama were his patient, he would urge him to try it, even if only by telephone. With nicotine replacements and counseling, quit rates at one year are 15 percent to 30 percent, Schroeder said, about twice the rates of people who try to stop without help.
But Obama has apparently been chewing nicotine gum for quite a while. Is it safe? Dr. Neal Benowitz, another specialist on nicotine addiction from the University of California, San Francisco, said that long-term use of the gum or patches, "if it keeps you off cigarettes, is O.K."
He said people had the best chances of quitting if they used more than one type of nicotine replacement at the same time - like wearing a patch every day, but also using the gum when cravings took hold.
Studies have found that 5 percent to 10 percent of people who tried nicotine replacements were still using them a year later, and nicotine itself appears not to be harmful, except possibly during pregnancy and for people at risk for diabetes, Benowitz said. The risks of cancer, lung disease and heart problems come from other chemicals in cigarette smoke.
"If nicotine is harmful, it is a minuscule risk compared to cigarette smoking," Benowitz said. "If people want to continue using gum or patches, and not cigarettes, their health will be enhanced."
Nicotine can speed up the heart rate somewhat, he said, and it may raise blood pressure very slightly. More important, it can reduce the body's sensitivity to insulin and may aggravate diabetes or pre-diabetic conditions. It also constricts blood vessels in the skin and may interfere with wound healing.
But still, Benowitz emphasized, "If the choice is between taking nicotine or smoking, nicotine is far, far better."
Falling off the wagon is typical. Three months, six months and a year are major milestones, and most people who can quit for a year will be able to stay off cigarettes for good, Benowitz said. But about 10 percent relapse even after a year or more.
"It's generally prompted by a stressful situation, when they're fatigued and they need to concentrate and focus," Benowitz said. "Obama talked about that. People are used to having a cigarette in that situation."
Nicotine is strongly addictive for many people, and withdrawal can leave them irritable, restless, sleepless, depressed and struggling to concentrate. Some experts say it is harder to give up than cocaine or heroin.
"Then there is something called hedonic dysregulation," Benowitz said. "It involves pleasure. Nicotine involves dopamine release, which is key in signaling pleasure. When people quit smoking, they don't experience things they used to like as pleasure. Things are not as much fun as they used to be. It's something you get over in time."
People become hooked on nicotine in part because, like alcohol and other addicting drugs, it alters the brain. Some of the changes are long-lasting, and the younger people are when they take up smoking, the stronger their addiction.
"There is increasing evidence that you lay down new neural circuits related to smoking, sort of memory tracks," Benowitz said. "Nicotine does it, and other aspects of smoke do, too. Your brain is forever changed."
Those memory tracks could be hindering Obama's efforts to quit.
Schroeder also noted that for someone who smoked fewer than 10 cigarettes a day, as Obama reportedly did, nicotine replacements may be less helpful because the addiction may be more to the habit than to nicotine.
One of the best things that Obama has going for him is that he is a jogger.
"There is increasing evidence that if you can exercise, it's often helpful" in quitting, Benowitz said. "I hope Obama can still find time to play basketball on a regular basis."

COLUMNIST

A tipping point for Gladwell?
By Alex Beam
Monday, December 29, 2008
MEANWHILE
I've just had a flash of intuition, a moment of "rapid cognition ... the kind of thinking that happens in the blink of an eye," as Malcolm Gladwell explains in his book "Blink." My thought: Has Gladwell reached his tipping point?
His latest book, "Outliers: The Story of Success" is of course a monster hit, flying off bookshelves everywhere. But do I detect a certain impatience with Gladwell's glib repackagings of social scientists' ideas this time around?
Recently the New York Times columnist David Brooks opined that Gladwell's "social determinism ... slights the centrality of individual character and individual creativity. And it doesn't fully explain the genuine greatness of humanity's outliers."
Brooks may represent the fulcrum in what looks like an epidemic of anti-Gladwell screeds, the epidemic metaphor being the lynchpin of Gladwell's earlier, gajillion-selling work, "The Tipping Point." The germ started festering two years ago, when Brooks's New York Times colleague Joe Nocera suggested that a Gladwell article about Enron was full of bushwa.
Gladwell had wandered into a field that a strong-minded writer with a big megaphone knew something about - Nocera edited the book "The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron" - and the results weren't pretty.
Nocera made short shrift of Gladwell's contention that Enron's deviousness lay in the complexity of its Star-Trekkie financial tools dreamed up by B-school geniuses. Enron's deviousness, Nocera wrote, actually lay in its propensity for fraud. Gladwell calls Nocera's column "just grumpiness," to which I add: Yes, but grumpy in a good way.
In Britain, they don't seem to hold Gladwell in very high esteem. Appearing on a BBC show while promoting "Blink," Gladwell recalled, the interviewer turned to him halfway through and said, "You know, I just don't buy it." London's Sunday Times said of his latest book, "the problem with 'Outliers' is not that it is contentious but that it is largely platitudinous." The Guardian headlined its review of "Outliers": "Stating the obvious, but oh, so cleverly."
Writing for The Register, Andrew Orlowski served up a diverting, scorched-earth tour of Gladwell's books headlined, "The Dumb, Dumb World of Malcolm Gladwell." "As we can see, each time Gladwell has the opportunity to engage with challenging ideas he cops out," Orlowski wrote. "Addressing rationality, social trends or genius properly - and failing - would still leave us richer than Gladwell's approach, which is empty, cynical and trite. But Gladwell can't do science. He can't do people .. [and] he can't really do journalism, either."
Ouch!
I want to make clear that none of this is personal. Apart from a healthy envy of Gladwell's supercalifragilistic book sales, I am unencumbered by prejudice toward, or any special knowledge of, his work. I've read most of his New Yorker articles, and the ideas undergirding the books seem to leach out effortlessly into book reviews, public radio jawfests and airline flight magazines.
I have noticed a certain tendency to repeat himself. Gladwell has merchandised a hilarious, somewhat off-color anecdote about a woman friend baring her breasts more than once. And if you know anything about a subject he alights upon, you might be disappointed. One of the key moments in "Outliers" - his explanation of the famous 1997 Korean Air 801 air crash on Guam - is super-antiquated news to anyone who follows airline disaster literature. And Korean Air is now one of the world's safest airlines.
Patrick Smith, a professional pilot who writes the "Ask the Pilot" column for Salon.com, teed off on Gladwell's contention that "the single most important variable in determining whether a plane crashes is not the plane, it's not the maintenance, it's not the weather, it's the culture the pilot comes from." "That is a reckless and untrue statement," Smith wrote. "That is totally absurd, and I am extremely disappointed that somebody as influential as Malcolm Gladwell said it."
Is it time to short Gladwell stock? "Interesting question," Gladwell wrote in an e-mail. "I actually think there was more negativity around 'Blink' than 'Outliers' ... I've always thought that a writer's job is very different from a politician's job. Politicians succeed when they convince people to agree with them. Writers succeed when they spark discussion, and I couldn't be more delighted with the discussion 'Outliers' has sparked."

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Publisher cancels false memoir of Holocaust
By Motoko Rich and Joseph Berger
Monday, December 29, 2008
A man whose memoir about his experience during the Holocaust was to have been published in February has admitted that his story was embellished, and his publisher has canceled the release of the book.
And, once again, a New York publisher and Oprah Winfrey were among those fooled by a too-good-to-be-true story.
This time, it was the tale of Herman Rosenblat, who said he first met his wife while he was a child imprisoned in a Nazi concentration camp and she, disguised as a Christian farm girl, tossed apples over the camp's fence to him. He said they met again on a blind date 12 years after the end of war in Coney Island and married, celebrating their 50th anniversary earlier this year.
Winfrey, who hosted Rosenblat and his wife, Roma Radzicki, on her show twice, called their romance "the single greatest love story" she had encountered in her 22 years on the show. On Saturday night, after learning from Rosenblat's agent that the author had confessed that the story was fabricated, Berkley Books, a unit of Penguin Group that was planning to publish "Angel at the Fence," Rosenblat's memoir of surviving in Schlieben, a sub-camp of the Buchenwald concentration camp, with the help of Radzicki, canceled the book and demanded that Rosenblat return his advance.
Harris Salomon, who is producing a movie based on the story, said he would go ahead with the film, but as a work of fiction, adding that Rosenblat had agreed to donate all earnings from the film to Holocaust survivor charities.
Another unit of Penguin, Riverhead Books, was duped this year by Margaret Seltzer, the author of "Love and Consequences," her fabricated gang memoir about her life as a white girl taken into a black foster home in South Central Los Angeles. She had in fact been raised by her biological family in a well-to-do section of the San Fernando Valley.
This latest literary hoax is likely to raise yet more questions as to why the publishing industry has such a poor track record of fact-checking.
In the latest instance, no one at Berkley questioned the central truth of Rosenblat's story until last week, according to Andrea Hurst, his agent. Neither Leslie Gelbman, president and publisher of Berkley, nor Natalee Rosenstein, Rosenblat's editor at Berkley, returned calls or e-mail messages seeking comment. Craig Burke, director of publicity for Berkley, declined to elaborate beyond the company's brief statement announcing the cancellation of the book. In an e-mail message, a spokesman for Winfrey also declined to comment.
After several scholars and family members attacked Rosenblat's story in articles last week in The New Republic, Rosenblat confessed Saturday to Hurst and to Salomon that he had concocted the core of his tale. Hurst said that in an emotional telephone call with herself and Salomon, Rosenblat said Radzicki had never tossed him apples over the fence.
In a statement released through his agent, Rosenblat wrote that he had once been shot during a robbery and that while he was recovering in the hospital, "my mother came to me in a dream and said that I must tell my story so that my grandchildren would know of our survival from the Holocaust."
He said that after the incident he began to write. "I wanted to bring happiness to people, to remind them not to hate, but to love and tolerate all people," he wrote in the statement. "I brought good feelings to a lot of people and I brought hope to many. My motivation was to make good in this world. In my dreams, Roma will always throw me an apple, but I now know it is only a dream."
According to Hurst, who represents other inspirational writers including Bernie Siegel, author of "Love, Medicine and Miracles," Rosenblat first concocted his story in the mid-1990s as an entry to a newspaper contest soliciting the "best love stories." In 1996, he appeared on Winfrey's show with his wife and repeated the fabricated story. From there, it snowballed, with versions appearing in magazines, a volume of the "Chicken Soup for the Soul" series, and a children's book, "Angel Girl," by Laurie Friedman, released in September by an imprint of Lerner Publishing. Rosenblat and Radzicki, who live in Miami, appeared on CBS's "Early Show" in October.
As media coverage of Rosenblat's story spread, scholars and others began to question the veracity of the romance throughout the blogosphere, pointing out that, among other things, the layout of the camp would have prevented Rosenblat and Radzicki from meeting at a fence.
In a telephone interview in November, Rosenblat defended his story against such doubts. He said that his section of Schlieben was not well guarded and that he could stand between a barracks and the 6-to-8-foot, or 1.8-to-2.4-meter, fence out of sight of guards. Radzicki was able to approach him because there were woods that would have concealed her.
In recounting the stunning "reunion" with Radzicki 12 years later as survivors living in New York, Rosenblat said Radzicki told him she had saved a boy by hurling apples over a fence to him.
"Did he have rags on his feet instead of shoes?" Rosenblat said he asked her.
She said yes and he told her, "That boy was me." In a telephone interview on Sunday, Hurst, who sold the book to Berkley for less than $50,000, said she always believed the essential truth of Rosenblat's tale until last week. "I believed the teller," Hurst said. "He was in so many magazines and books and on 'Oprah.' It did not seem like it would not be true." On Sunday, Hurst said that she was reviewing her legal options because "I've yet to see what kind of repercussions could come from this, and I was lied to."
That so many would get taken in by Rosenblat's inauthentic love story seems incredible given the number of fake memoirs that have come to light in the past few years. The Holocaust in particular has been fertile territory for fabricated personal histories: this year, Misha Defonseca confessed that her memoir, "Misha: A Mémoire of the Holocaust Years," about her childhood spent running from the Nazis and living with wolves, was not true.
A decade ago, a Swiss historian debunked Binjamin Wilkomirski's 1996 memoir, "Fragments," which described how he survived as a Latvian Jewish orphan in a Nazi concentration camp. It turns out the book was written by Bruno Doessekker, a Swiss man who spent the war in relative comfort in Switzerland. Rosenblat, at least, appears to have told the truth about being a prisoner in the Nazi concentration camps.
The primary sleuth in unmasking his fabrication of the apple story was Kenneth Waltzer, director of Jewish studies at Michigan State University. He has been working on a book on how 904 boys - including the Nobel Peace Prize laureate Elie Wiesel - were saved from death by an underground rescue operation inside Buchenwald, and he has interviewed hundreds of survivors - including boys from the ghetto at Piotrkow, Poland, who were taken with the young Herman Rosenblat to Buchenwald.
When Waltzer asked other survivors who were with Rosenblat about the apple story, they said the story could not possibly be true.
In his research of maps drawn by ex-prisoners, Waltzer learned that the section of Schlieben where Rosenblat was housed had fences facing other sections of the camp and only one fence - on the south - facing the outside world. That fence was adjacent to the barracks of the SS, who would have been able to spot a boy regularly speaking to a girl on the other side of the fence, Waltzer said. Moreover, the fence was electrified, and civilians outside the camp were forbidden to walk along the road that bordered the fence.
Waltzer also learned from online documentation that Radzicki, her parents and two sisters were hidden as Christians at a farm not outside Schlieben but 335 kilometers, or 210 miles, away near Breslau.
Holocaust survivors and scholars are fiercely on guard against any fabrication of memories because they taint the truth of the Holocaust and raise doubts about the millions who were killed or brutalized.
"There's no need to embellish, no need to aggrandize," said Deborah Lipstadt, the Dorot professor of modern Jewish and Holocaust studies at Emory University. "The facts are horrible, and when you're teaching about horrible stuff, you just have to lay out the facts."

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HP elbowing its way into 'truth' computing
By Ashlee Vance
Monday, December 29, 2008
AUSTIN, Texas: Shortly after taking the helm of Hewlett-Packard in early 2005, Mark Hurd realized that, despite being one of the world's leading technology suppliers, HP had an embarrassing and crippling technology problem.
There was no easy way for executives to get a picture of what was happening in the entire company.
Each unit of the Palo Alto, California, computer giant had its own systems for tracking information about crucial areas like inventory, component costs and marketing expenditures. No central system pulled all the data together into what Hurd liked to call "a single version of the truth."
Hurd developed his passion for that quest during a previous job running the Teradata division of NCR. Teradata pioneered a technology called data warehousing, which allows managers to get a coherent picture of a company's inventory, production, marketing and sales.
With all of that information at their fingertips, employees can sift through and see once-hidden trends. Such technology helps companies like Wal-Mart Stores determine which shirt colors are preferred by people in Cincinnati, tells Best Buy what offers it should dangle in front of online shoppers in mid-March and suggests to Wynn Resorts which frequent gamblers should be coddled.
To Hurd, who rode his success at Teradata into the chief executive's spot at NCR, data warehousing is a vital tool for making a business much more efficient.
He had a few options for fixing HP's information problem: buy Teradata's products, acquire Teradata outright or have HP build its own data warehousing technology.
Taking a large risk, he chose the third option, encouraging HP engineers to meld decades-old technology inherited from the Compaq Computer acquisition with HP data analysis software to create a product called NeoView.
Hurd declined to be interviewed about HP's data management strategy. But Randy Mott, HP's chief information officer, said, "Mark made the assessment that he did not have the information he needed to run the company the way he needed to run it. So the assessment was that, as a company, we were going to have the technology needed to fix that."
After testing NeoView internally at HP, Hurd decided to sell it to HP's customers - in effect, declaring war on his former employer.
HP has a tiny presence in the data warehousing business, which is dominated by Teradata, IBM, Oracle and Microsoft, with a number of smaller companies also getting in. In the last 18 months, HP has managed to sell only around 30 of its systems, according to Donald Feinberg, an analyst with the technology research firm Gartner.
Some experts in the field say HP's systems, built on expensive, older technology rather than cheap industry-standard components, are dated and too costly. NeoView set-ups can cost more than $10 million, placing HP at the wrong end of a technology that has been declining in price.
But HP is hoping that its recent $13.9 billion purchase of Electronic Data Systems, the data services giant, will change the equation. The reach of EDS could lift HP's data warehouse consulting business. HP is telling corporate customers that its data warehouse technology, combined with an EDS overhaul of their overall data processes, could save them a lot of money.
HP is also hinting that it intends to bring NeoView onto cheaper hardware and may rent space in its own data centers to customers instead of asking them to buy hardware. The rental model would complement something EDS has specialized in for years: managing data centers for a large number of businesses.
In the current difficult economy, HP argues, companies need "truth" more than ever. "This is not a nice-to-have toy for some data analyst," said Mott, who works in Austin, where two of HP's data centers are located. "It matters more than anything else."
Indeed, the idea of using technology to achieve the legendary efficiencies of companies like Wal-Mart or Dell is alluring to many corporations. Bon-Ton Stores, a retailer that purchased HP's technology, has about 1,000 of its 32,000 employees digging into a NeoView database. Bon-Ton gathers information from 13,000 cash registers and feeds it into the data warehouse.
"We are using the tools to understand the most optimal use of every dollar we spend in the corporation," said Jim Lance, chief information officer at Bon-Ton.
HP's push into the market comes as other technology companies are also recognizing the growing importance of data warehousing. Oracle and IBM are revamping their relevant products, while a host of start-ups have cropped up offering cheaper, faster hardware aimed at specialized tasks. Analysts think SAP wants to increase its reach in the market, possibly through an acquisition. Microsoft also signaled its intent to take this technology to the masses by purchasing the start-up Datallegro in July.
Stephen Brobst, chief technology officer at Teradata, commends HP for presenting a relevant message at the relevant time, but he contends that HP's technology is too expensive and unproven.
HP's approach to data warehousing is based on database technology originally developed by Tandem Computers, which HP had acquired in the 2002 Compaq merger. The Tandem technology, called NonStop, occupies a lofty position in computing lore, running some of the most reliable computer systems ever made, including many at the world's financial exchanges.
But NonStop was untried for data warehousing applications when HP first decided to enter the business. To prove it would work, the company's own data centers became the guinea pigs. After working on the project for months, HP assembled a unified database that 30,000 employees could turn to for instant information about every aspect of the company's business.
Now HP is using the experience of converting its own business as a selling point to other customers.
But HP's data warehouse strategy revolves as much around personalities as it does technology. Hurd poached Mott from Dell just a few months after he arrived at HP. Mott has been heralded as the master of data warehouse technology, setting up Teradata-based systems at Wal-Mart and Dell as chief information officer at those companies.
And in November, HP chose a former Teradata executive, Kristina Robinson, to be the head of a new unit, Business Intelligence Solutions. Robinson joined HP in mid-2006 and had been a vice president within HP's printing group. It will be Robinson's task to sell this expensive technology in one of the most difficult economic periods in recent history, and develop the fledgling business.
To come from behind in this market, HP has turned to a hard-sell pitch that says customers can either model themselves after the revamped HP by adopting data warehousing or continue to be a mess.
"It's the difference in my mind between winners and losers," Mott said.

The office pool, 2009
By William Safire
Monday, December 29, 2008
When Dolph Camilli, Brooklyn Dodger star slugger of the 1940s, stepped up to the plate after whiffing ignominiously in his two previous times at bat, we fans in the Ebbets Field bleachers would nod sagely and murmur, "He's due."
Last year, in the 34th annual Office Pool in this space, I predicted that the Dow Jones industrial average would break 15,000 in 2008. (Readers whose pick was "recession has brokers selling apples for €5 on Wall Street" won that round.) But this year - I'm due. For each item, choose one, all or none. Only those daring to play now can claim hooting rights later.
1. In Demo-dominated Washington, post-postpartisan tension will pit:
(a) lame-duck Fed Chairman Ben Bernanke against Fed Chairman-in-Waiting Larry Summers and Fed Chairman-of-Christmas-Past Paul Volcker (aka "The GDP Deflator") over an "imperial Fed"
(b) Hillary Clinton at State and Trade Rep Ron Kirk against Labor's Hilda Solis over protectionism
(c) Chief of Staff Rahm Emanuel against UN Ambassador Susan Rice, a Zbigniew Brzezinski acolyte, over Mideast policy
2. Springtime for GM will lead to:
(a) a slippery-slope series of industrial bailouts exceeding $100 billion
(b) a "pre-pack bankruptcy" auto rescue sweetened by federal pension protection and guarantee of new-car warranties
(c) a multinational merger with troubled Toyota
3. Toughest foreign affairs challenge will come if:
(a) Afghanistan becomes "Obama's War" or "Obama's Retreat"
(b) Iraq backslides into chaos after too-early U.S. withdrawal
(c) Depressed Russia moves on Ukraine
(d) India-Pakistan fighting breaks out
4. Oil selling below $50 a barrel will:
(a) threaten President Mahmoud Ahmadinejad's June election in Iran
(b) reduce Arab support of Hamas and, in Israel's February election, help Bibi Netanyahu's Likud Party reach the Tzipping point
(c) be the equivalent of a huge U.S. tax-cut stimulus
5. Best-picture Oscar goes to:
(a) "Doubt"
(b) "Slumdog Millionaire"
(c) "Revolutionary Road"
(d) "Gran Torino"
(e) "Frost/Nixon"
6. The nonfiction sleeper will be:
(a) "Power Rules," a Machiavellian view of foreign policy by the former diplomat and New York Times editor Les Gelb
(b) "Deep Brain Stimulation," by the neuroscience writer Jamie Talan
(c) "Bold Endeavors," by the financier and infrastructuralist Felix Rohatyn
(d) "Losing the News," by Alex Jones
(e) "Ponzi Shmonzi: The Bernie Madoff Story," crash-published by a dozen houses
7. America's don't-ask deficit at year's end will be:
(a) under $1 trillion, thanks to the new administration's cutting of waste, fraud and abuse, as well as tax-soaking of the remaining rich
(b) $2 trillion, adding to the inherited Bush bailouts a raising-Keynes handout to shovel-ready contractors
(c) $1,393,665,042,198 and no cents. (Why so specific? A billion is a thousand million, and a trillion is a thousand billion. That's 10 to the 12th power, or 1 followed by 12 zeroes)
8. In Congress:
(a) House Republicans Eric Cantor and Mike Pence will energize the Republican Party
(b) Senate Republicans Lindsey Graham and Lamar Alexander will be the fulcrum of a bipartisan "Gang of 20"
(c) among Senate Democrats, Judiciary Chairman Pat Leahy's influence will rise because Supreme Court nominations will take center stage, while Harry Reid's clout dissipates because of home-state weakness
9. Post-honeymoon journalists and bloody-minded bloggers will dig into:
(a) the jailhouse singing by Chicago's felonious fixer, Tony ("Who You Callin' 'Boneheaded'?") Rezko, to Dewey-eyed prosecutor Patrick Fitzgerald to reduce his six-year sentence
(b) suspicion by conspiracy theorists about the unremarked lobbying that led to the expensive renaming, after 72 years, of New York's Triborough Bridge to the Robert F. Kennedy Bridge just in time for Caroline Kennedy's campaign for anointment to an open Senate seat
(c) the retaliatory scheme to rename the Brooklyn Bridge the Clintons Bridge
10. The Supreme Court will decide:
(a) in nipple exposure or "fleeting expletives" on live TV, that the FCC exceeded its authority in fining Fox for indecency
(b) that the Federal Election Commission was wrong to censure a moviemaker whose "biopic" was hostile to Hillary Clinton during her campaign
(c) that the appearance of impropriety in financial dealings of a West Virginia judge disqualified him from sitting in a coal-company dispute
(d) that Attorney General John Ashcroft and FBI Director Robert Mueller had a "qualified immunity" from being sued for racial profiling in imprisoning suspected terrorists
(e) that in al-Marri v. Pucciarelli, a legal U.S. resident cannot be held indefinitely at Guantánamo
11. Obama philosophy will be regarded as:
(a) proudly liberal on environment and regulation
(b) determinedly centrist on health care, immigration and protectionism
(c) unexpectedly right of center on national security
(d) all over the lot
12. Year-end presidential approval rating will be:
(a) eroding as recovery stalls
(b) soaring after economic turnaround propels Dow above 12,000
(c) sinking but 30 points higher than that of Congress and the news media
My picks: 1 (all); 2 (b); 3 (a); 4 (all); 5 (b) (an uplifting film has an edge in hard times); 6 (d); 7 (b); 8 (c); 9 (b) (diehards will still say, "Take the Triborough to Idlewild"); 10 (all) (I aced the Supremes' decisions in last year's pool); 11 (d); 12 (b).
William Safire is a former op-ed columnist for the New York Times.

Unemployment expected to soar in Britain in 2009
Reuters
Monday, December 29, 2008
LONDON: As many as 600,000 people could lose their jobs in Britain next year, making 2009 the worst year for unemployment since 1991, personnel experts warned on Monday.
The Chartered Institute of Personnel and Development, or CIPD, said that a widely-expected recession would hurt Britain next year and could push unemployment close to the three million mark before the economy begins to recover.
"By the end of 2009 the number of people unemployed and actively seeking work will have increased to 2.8 million, one million above the autumn 2008 figure," John Philpott, the CIPD's chief economist, wrote in its annual Barometer Report.
The first few months of the year, he said, were likely to be the worst for almost two decades.
"Our current expectation, based on available survey evidence and employer soundings, is that the number of redundancies will jump sharply in the early months of 2009, once employers take stock of the economic outlook. The period between New Year and Easter is likely to be the worst for redundancies since 1991."
The CIPD's warning came as another British retailer - the children's clothing shop Adams - collapsed.
The demise of Adams, which employs about 2,000 staff, follows that of other nationwide retailers including the chain store Woolworths, the music chain Zavvi, the tea and coffee outlet Whittard, and the menswear group The Officer's Club.
Woolworths collapsed into administration in November and its administrators said all its stores would close by Jan. 5, with the loss of 27,000 jobs, unless a last-minute buyer were found.
The CIPD also conducted a survey of 2,600 workers and found that those employees who keep their jobs expect to have their pay frozen or even cut in 2009. Some 28 percent do not expect a pay rise in 2009, while 26 percent think their pay rise will be lower than in 2008. Only 11 percent are expecting a higher wage increase than last year and two percent expect a pay cut.
"With job cuts seemingly lurking around every corner and trading conditions tight, employees are realistic about their pay prospects for the year ahead," said CIPD reward adviser Charles Cotton.
"Against this backdrop, employers will need to work hard to find new ways to motivate their employees to perform. Targeting pay increases to reward superior performance, making intelligent use of non-financial rewards, and targeted investment in training and development are all ways of making limited budgets go further."

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Sterling hits all-time low versus euro
Reuters
Monday, December 29, 2008
By Naomi Tajitsu
Sterling hit a record low against the euro and a basket of currencies on Monday, stung by an ongoing view that the weak economy will require more interest rate cuts.
The euro climbed to 97.98 pence in extremely thin trade, edging closer to parity after figures showed that home prices fell in December, taking them nearly 10 percent lower since the start of the credit crunch in August 2007.
As evidence shows the economy is falling deeper into recession, the Bank of England is expected to cut rates more, which would keep borrowing costs below those in the euro zone and make euro zone investments more appealing than UK ones.
"Sterling is continuing to be hit by the belief that rates in the UK still have to fall much more, and underlying fears of a very deep recession in the UK," said Antje Praefcke, currency strategist at CBCM in Frankfurt.
"There's still a gravitational pull towards parity (with the euro) in the thin market," she added.
The euro has soared more than 32 percent against sterling this year -- jumping a record 18 percent so far this month alone -- and its rise on Monday pushed the UK currency down to 74.2 on a trade-weighted basis, its lowest according to daily records kept by the Bank which date back to 1990.
Sterling suffered across the board, slipping 0.1 percent against the dollar to $1.4630. It tumbled 0.8 percent to 131.72 yen, its weakest level against the Japanese currency since 1995.
Market participants said trading volumes were far lower than usual, which was aggravating year-end trade. In such conditions, many said that it was just a matter of time before the euro reaches parity with sterling.
Many analysts said that the pair may reach parity before the new year due to poor liquidity. Still, they said that the euro may be unable to sustain such lofty gains, given it is already overbought against sterling.
UK ECONOMY SUFFERS
Figures on Monday from property consultant Hometrack showed that housing prices in England and Wales fell 8.7 percent in 2008. They fell 0.9 percent in December, showing that prices have now fallen consistently over the last 15 months and 9.3 percent since the credit crisis began.
Adding to gloom about the economy were figures from the Chartered Institute of Personnel and Development at the weekend showing that 600,000 UK jobs could be lost in 2009 due to the recession.
In addition, children's wear retailer Adams will become the latest firm to fall into administration, fuelling speculation that more businesses are poised to fail.
A shrinking economy, ongoing deterioration in the housing market and rising unemployment are contributing to an grim outlook in 2009, which has battered sterling across the board.
This has fed the belief that the Bank of England will cut rates further -- and perhaps even explore other options to shore up the economy during in the recession -- even after an aggressive round of cuts has left rates at a five-decade low of 2.0 percent, lower than 2.5 percent in the euro zone.
"There's a sense that UK rates will fall closer to zero, and that the BoE may be forced into some sort of quantitative easing, while there's no sense of that in the euro zone," said Daragh Maher, senior currency strategist at Calyon in London.
He added that the negative view of the economy will continue to weigh on the pound, although additional weakness in the euro zone economy may start to chip away at the euro's appeal in the new year.
Higher interest rates in the euro zone have increased the euro's appeal against the pound as it has narrowed the yield spread between euro zone and UK government bonds.
The yield on 10-year UK bonds hovered around 3.121 percent on Monday, near a record low of 3.008 percent hit last week, while the yield on its euro zone counterpart fell to an all-time trough of 2.909 percent.
Both yields have tumbled due to economic deterioration and falling interest rates but the bigger fall in UK yields due to the Bank's particularly aggressive easing has shrunk the yield spread between the two to around 0.109 percent on Monday, the narrowest yield advantage for sterling in a decade.
(Editing by Andy Bruce)

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In 2008, actors shone, but the ensemble was the star
By Matt Wolf
Monday, December 29, 2008
LONDON: It's tempting, of course, to think of the London stage awash in singular men and women of the theater: Derek Jacobi, Ralph Fiennes, and Michael Gambon, to name but a few from the year just gone, with the promise of Jude Law, Judi Dench, and Helen Mirren to come during 2009.
But to reflect on the traffic both on and off the West End over the last 12 months was to be reawakened to the strength of the ensemble work one regularly finds in London. Chicago's Steppenwolf Theatre, its company of players in town to scalding, savagely funny effect with "August: Osage County," served as merely one example out of many of the bracing results when the collective is the star.
That was the case time and again, in theaters both big and small. The novice dramatist Alexi Kaye Campbell's extraordinarily accomplished "The Pride" had too short a run this month at the Royal Court's tiny Theatre Upstairs, which meant that only a select few were able to savor a fully able quartet of actors in Bertie Carvel, JJ Feild, Lyndsey Marshal and Tim Steed. The cast was considerably larger but scarcely less sharp across town in north London at Tricycle Theatre in the spring, when the director Maria Aberg put a youthful, mostly unknown assemblage through the bruising paces of "Days of Significance," Roy Williams's merciless dissection of Britain's binge drinking culture as it bled into - and away from - the war in Iraq.
That play arrived as a commission from the Royal Shakespeare Company, which fielded the Bardic collective of many a season in the director Michael Boyd's exhilarating sequence - eight in all - of Shakespeare history plays. A genuine event, the Roundhouse cycle of plays found veterans like David Warner passing the classical baton to such comers as Jonathan Slinger, a previously unheralded actor possessed of a raw power and theatrical intuition that should take him far. Slinger's Richard II, by turns petulant and woundingly human, was the Shakespeare performance of the year, though stiff competition emerged in recent weeks when an understudy Hamlet, Edward Bennett, stepped into the breach and had an opening night audience breathlessly following his every existential musing.
Those still griping about the absence of an infirm David Tennant, the theater talent turned TV name, could nonetheless take solace in a troupe of players surrounding Hamlet that reduced all cavils to silence, from Patrick Stewart's seductively low-key Claudius to Oliver Ford Davies's matchless Polonius, at once authoritative and addled.
At some plays, the name attraction proved merely the icing on an unexpectedly rich cake. Kenneth Branagh returned to the West End after too long an absence to play the title role in "Ivanov," an early Chekhov play that gets seen in London far more frequently, it seems, than some of the Russian master's later ones. Exciting though it was to find Branagh in middle age mining a soulfulness he didn't necessarily possess on stage when he was younger, the director Michael Grandage ensured that equal time went to such top-rank supporting players as Gina McKee, Malcolm Sinclair and Tom Hiddleston.
Shakespeare's Globe doesn't put stars above the titles, a decision that seems appropriate to a unique venue in which the audience itself on occasion likes to play the star. (That's what can happen when you have 700 "groundlings" per show, vulnerable to London's ever-unpredictable elements.) But an especially fine summer slate of Shakespeare found David Calder's mournful Lear moving aside in my memory to make room for an unusually frolicsome "Merry Wives of Windsor" alongside that rare "Midsummer Night's Dream" that did justice to the numerous realms - regal, amorous, amateur theatrical - of this perennially popular play. Most exciting of all was the director Lucy Bailey's fierce "Timon of Athens," complete with aerial performers swooping vulture-like on proceedings below. One only wishes this production were around now so that its impact could be felt even more forcefully in our imperiled economic climes. As it is, I have a feeling we haven't heard the last of Timon's tale of largesse turned grievously to woe; as is often the case, Shakespeare yet again seemed the canniest, most contemporary writer in town.
The modern-day big guns of British playwriting were largely absent throughout the year, though Tom Stoppard did contribute the spiky new version of "Ivanov" that kicked off the cozy, not-for-profit Donmar's season-long residency in larger premises in the commercial West End.
David Hare was represented by the London debut of his erstwhile Broadway premiere, "The Vertical Hour," that managed to get right what the New York version had gotten wrong (the female lead, for starters) and botch what the Broadway incarnation did so well (the play's two male roles). Hare returned in November with a National Theatre world premiere in "Gethsemane" that didn't earn its closing epiphany, however skillful the acting and design. Elsewhere at the National, Hare's onetime playwriting colleague, Howard Brenton, in "Never So Good" made his leisurely, historically themed way through to an awkward ending that delivered no epiphany at all; on the other hand, Jeremy Irons's star turn as the former prime minister Harold Macmillan was one of several casting gambles during 2008 that thoroughly paid off. There were deserved cheers, too, for the Argentinian actress-singer Elena Roger's immersion in the role of the doomed French songbird Edith Piaf in Pam Gems's play "Piaf," here in a streamlined production from the director Jamie Lloyd to intrigue even those sated by this doomy biographical tale courtesy the Oscar-winning film "La Vie En Rose."
American acting got a look in, and how, from Kevin Spacey and Jeff Goldblum, brilliant both separately and together in the Old Vic revival of "Speed-the-Plow," David Mamet's play about loyalty in the land of the Hollywood hustle here bitingly served up by the British director Matthew Warchus, whose sellout production eclipsed the later, entirely separate Broadway reappraisal of the same play. Warchus returned in the fall to the Old Vic with "The Norman Conquests" from Alan Ayckbourn, seven hours of theater across three tragicomic plays that still felt too short. For that, credit the triptych's incomparable cast of six. And one will long be crediting the late Nobel laureate Harold Pinter, who died last week, with changing the theatrical landscape for keeps. London audiences could judge for themselves at various Pinter revivals across the year, the first of which - a double bill of "The Lover" and "The Collection," two one-acts from the 1960s - registered most strongly. Watching its flawless cast of four encompass seduction and fear, intimidating power plays and erotic potency, one felt the theater at its most alive, which is surely the best legacy that a playwright of Pinter's lasting influence could leave behind.

ALL PHOTOGRAPHS COPYRIGHT IAN WALTHEW 2008

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