Casualties rise as Israel strikes on Gaza persist
By Taghreed El-Khodary and Isabel Kershner
Sunday, December 28, 2008
GAZA: Israeli aircraft pounded Gaza for a second day on Sunday, increasing the death toll to nearly 300, as Israeli troops and tanks massed along the border and the government said it had called up reserves for a possible ground operation.
The continued strikes, 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 fatally shot by a Hamas gunman. A Palestinian man was killed by an Egyptian guard near Rafah, Reuters reported.
In Gaza on Sunday, 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 more than 600 wounded in the past two days.
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."
The International Committee of the Red Cross appealed on Sunday for urgent humanitarian assistance, including medical supplies, to be allowed to enter Gaza. Israeli officials said that some aid had been allowed in through one of the crossings. Egypt temporarily opened the Rafah crossing on Saturday to allow some of the wounded to be taken to Egyptian hospitals.
Israel made a strong push to justify the attacks, saying it was forced into military action to defend its citizens. At the same time, heated statements from 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 that were attacked, 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.
Over the past two days, Israeli jets destroyed at least 30 targets in Gaza, including the main security compound and prison in Gaza City known as the Saraya, metal workshops throughout Gaza that were suspected of manufacturing rockets, and Hamas military posts.
Hamas said Israel bombed a government ministry compound and the Islamic University in Gaza, a stronghold of Hamas, late Sunday night. The Hamas-owned television station Al Aqsa was also struck, as was a mosque that the Israeli military said was being used as a terrorist base.
Israel appeared to be settling in for a longer haul. 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 along the border.
Speaking before the weekly cabinet meeting in Jerusalem, Israel's defense minister, Ehud Barak, said the army "will deepen and broaden its actions as needed" and "will continue to act." 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."
Militants in Gaza again fired barrages of rockets and mortar shells further into Israel on Sunday. One rocket fell in Gan Yavneh, a village near the major port city of Ashdod, almost 20 miles north of Gaza. Two others landed in the coastal city of Ashkelon. Several Israelis were wounded.
Fawzi Barhoum, a spokesman for Hamas, told reporters that Israel had started a "war" but that it would not be able to choose how it would end. He called for revenge in the form of strikes reaching "deep into the Zionist entity using all means," including suicide attacks.
The hundreds of thousands of Israeli citizens now within rocket range have been instructed by the authorities to stay close to protected spaces.
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, in an apparent reference to Egypt and Jordan.
Egypt has mediated talks between Israel and the Palestinians and between Hamas and 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 last year. An Egyptian-brokered six-month truce between Israel and Hamas, always shaky, began to unravel in early November. It expired ten days ago.
Oil jumps after Israel-Hamas violence
Reuters
Monday, December 29, 2008
SINGAPORE: Oil prices extended gains and rose more than $2 a barrel on Monday after weekend violence flared between Israel and Hamas, reminding traders of the geopolitical risk to crude supplies from the Middle East.
U.S. light, sweet crude advanced $2.04 to $39.75 a barrel by 0037 GMT, while London Brent crude rose $2.13 to $40.50 a barrel.
(Reporting by Chua Baizhen, Editing by Anshuman Daga)
0810
Bargain books have an unexpected cost
By David Streitfeld
Sunday, December 28, 2008
U.S. book publishers and booksellers are full of foreboding - even more than usual for an industry that has been anticipating its demise since the advent of television. The holiday season that just ended is likely to have been one of the worst in decades. Publishers have been cutting back and laying off. Houghton Mifflin Harcourt announced that it would not acquire any new manuscripts, a move akin to a butcher shop proclaiming it had stopped ordering fresh meat.
American bookstores, both new and secondhand, are faltering as well.
Olsson's, the leading independent chain in Washington, went bankrupt and shut down in September. Robin's, which says it is the oldest bookstore in Philadelphia, will close next month. The once-mighty Borders chain is on the rocks. Powell's, the huge store in Portland, Oregon, said sales were so weak that it was encouraging its staff to take unpaid sabbaticals.
Do not blame this carnage on the recession or any of the usual suspects, including increased competition for the reader's time or diminished attention spans. What is undermining the book industry is not the absence of casual readers but the changing habits of devoted readers.
In other words, it is all the fault of people like myself, who increasingly use the Internet both to buy books and later, after their value to us is gone, to sell them. This is not about Amazon peddling new books at discounted prices, which has been a factor in the book business for a decade, but about the rise of a worldwide network of amateurs who sell books from their homes or, if they are lazy like me, in partnership with an Internet dealer who does all the work for a chunk of the proceeds.
They get their books from friends, yard sales, recycling centers, their own shelves, castoffs. Some list them for as little as a penny, although most aim for at least a dollar. This growing market is achieving an aggregate mass that is starting to prove problematic for publishers, new bookstores and secondhand bookstores.
For readers and collectors, these resellers, as they are called, offer a great service. Lost in the hand-wringing over the state of the book industry is the fact that this is a golden age for those in love with old-fashioned printed volumes: More books are available for less effort and less money than ever before. A book search engine like ViaLibri.net can knit together 20,000 booksellers around the world offering tens of millions of nearly new, used or rare books.
One consequence has been to change the calculations traditionally involved in buying a book: Given the price, do I really want to read this? Now it has become an economic and a moral issue. How much do I want to pay, and where do I want that money to go? To my community via a bookstore? To the publisher? To the author?
In theory, I want to support all of these fine folks. In practice, I decide to save a buck.
Here is one example of how I casually wreak destruction. I was reading "Sylvia," an account by the late short-story master Leonard Michaels of his unstable first wife. Looking for material about Michaels, I saw his friend Wendy Lesser had written a long essay about him in a book published last year by Pantheon. I could buy a new paperback edition of that book, "Room for Doubt," for $13.95 plus tax in a bookstore. But there were dozens of copies available online from resellers for as little as one cent, plus shipping.
A penny felt a little chintzy, even for me, so I bought a hardcover copy for 25 cents from someone who called herself Heather Blue, plus a few bucks for shipping. Neither my local bookstore nor Pantheon - whose parent, Random House, announced this month it would cut costs by reducing five divisions to three - nor the author got a share. The book looked good as new.
Lesser is the publisher of The Threepenny Review, a literary journal. She lives in Berkeley, California, where, as it happens, there is no longer a large, general-interest bookstore. Cody's, which was once one of the country's great stores, closed its last outlet in June. The Barnes & Noble store there also recently closed.
Andy Ross, the former owner of Cody's, told me that buying books online "was not morally dubious, but it is tragic. It has a lot of unintended consequences for communities."
Ross said he realized that Cody's was doomed when he noticed that in the last year he had not sold a single copy of Immanuel Kant's "Critique of Pure Reason." Students presumably were buying it online. Sales of classics and other backlist titles used to be the financial engine of publishers and bookstores, allowing them to take chances on new authors. Clearly, that model is breaking. Simon & Schuster, which laid off staffers this month, cited backlist sales as a particularly troubled area.
Michael Barnard, who owns Rakestraw Books in Danville, California, not far from Berkeley, was more critical of me. He said that I was taking Lesser's work while depriving her of an income and that I would regret my selfish actions when all the physical stores were gone.
Lesser's editor, Dan Frank, said that the rise of resellers like Heather Blue meant that there was no longer a set price for a book at any one time. If you want it during those first few weeks when it is new, you will pay a premium. If you can wait, it might be only a pittance. "These cracks and fractures will only grow bigger," he said.
Lesser herself was philosophical. "I am a pragmatist, not a thin-skinned, delicate little writer who thinks everything needs to be what it is in heaven," she said. Still, she sounded a little taken aback at the going rate for her books. "Twenty-five cents? That's all it was?"
At least this way, the writer said, she gained a reader if not an income. Maybe I would never have found the book in a store.
"With the Internet, nothing is ever lost," Lesser said. "That's the good news, and that's the bad news."
And what of the woman who sold me the book? She told me in an e-mail message that her real name was Heather Mash and that she worked as a domestic violence case manager in a women's shelter not far from Berkeley.
She did not set out to subvert the publishing and bookselling world, she said. Like most of us who sell online, Mash began because she had too many books and wanted to raise money to buy more. "I would rather sell a book for a penny and let someone enjoy it than keep it collecting dust," she said.
By David Streitfeld
Sunday, December 28, 2008
U.S. book publishers and booksellers are full of foreboding - even more than usual for an industry that has been anticipating its demise since the advent of television. The holiday season that just ended is likely to have been one of the worst in decades. Publishers have been cutting back and laying off. Houghton Mifflin Harcourt announced that it would not acquire any new manuscripts, a move akin to a butcher shop proclaiming it had stopped ordering fresh meat.
American bookstores, both new and secondhand, are faltering as well.
Olsson's, the leading independent chain in Washington, went bankrupt and shut down in September. Robin's, which says it is the oldest bookstore in Philadelphia, will close next month. The once-mighty Borders chain is on the rocks. Powell's, the huge store in Portland, Oregon, said sales were so weak that it was encouraging its staff to take unpaid sabbaticals.
Do not blame this carnage on the recession or any of the usual suspects, including increased competition for the reader's time or diminished attention spans. What is undermining the book industry is not the absence of casual readers but the changing habits of devoted readers.
In other words, it is all the fault of people like myself, who increasingly use the Internet both to buy books and later, after their value to us is gone, to sell them. This is not about Amazon peddling new books at discounted prices, which has been a factor in the book business for a decade, but about the rise of a worldwide network of amateurs who sell books from their homes or, if they are lazy like me, in partnership with an Internet dealer who does all the work for a chunk of the proceeds.
They get their books from friends, yard sales, recycling centers, their own shelves, castoffs. Some list them for as little as a penny, although most aim for at least a dollar. This growing market is achieving an aggregate mass that is starting to prove problematic for publishers, new bookstores and secondhand bookstores.
For readers and collectors, these resellers, as they are called, offer a great service. Lost in the hand-wringing over the state of the book industry is the fact that this is a golden age for those in love with old-fashioned printed volumes: More books are available for less effort and less money than ever before. A book search engine like ViaLibri.net can knit together 20,000 booksellers around the world offering tens of millions of nearly new, used or rare books.
One consequence has been to change the calculations traditionally involved in buying a book: Given the price, do I really want to read this? Now it has become an economic and a moral issue. How much do I want to pay, and where do I want that money to go? To my community via a bookstore? To the publisher? To the author?
In theory, I want to support all of these fine folks. In practice, I decide to save a buck.
Here is one example of how I casually wreak destruction. I was reading "Sylvia," an account by the late short-story master Leonard Michaels of his unstable first wife. Looking for material about Michaels, I saw his friend Wendy Lesser had written a long essay about him in a book published last year by Pantheon. I could buy a new paperback edition of that book, "Room for Doubt," for $13.95 plus tax in a bookstore. But there were dozens of copies available online from resellers for as little as one cent, plus shipping.
A penny felt a little chintzy, even for me, so I bought a hardcover copy for 25 cents from someone who called herself Heather Blue, plus a few bucks for shipping. Neither my local bookstore nor Pantheon - whose parent, Random House, announced this month it would cut costs by reducing five divisions to three - nor the author got a share. The book looked good as new.
Lesser is the publisher of The Threepenny Review, a literary journal. She lives in Berkeley, California, where, as it happens, there is no longer a large, general-interest bookstore. Cody's, which was once one of the country's great stores, closed its last outlet in June. The Barnes & Noble store there also recently closed.
Andy Ross, the former owner of Cody's, told me that buying books online "was not morally dubious, but it is tragic. It has a lot of unintended consequences for communities."
Ross said he realized that Cody's was doomed when he noticed that in the last year he had not sold a single copy of Immanuel Kant's "Critique of Pure Reason." Students presumably were buying it online. Sales of classics and other backlist titles used to be the financial engine of publishers and bookstores, allowing them to take chances on new authors. Clearly, that model is breaking. Simon & Schuster, which laid off staffers this month, cited backlist sales as a particularly troubled area.
Michael Barnard, who owns Rakestraw Books in Danville, California, not far from Berkeley, was more critical of me. He said that I was taking Lesser's work while depriving her of an income and that I would regret my selfish actions when all the physical stores were gone.
Lesser's editor, Dan Frank, said that the rise of resellers like Heather Blue meant that there was no longer a set price for a book at any one time. If you want it during those first few weeks when it is new, you will pay a premium. If you can wait, it might be only a pittance. "These cracks and fractures will only grow bigger," he said.
Lesser herself was philosophical. "I am a pragmatist, not a thin-skinned, delicate little writer who thinks everything needs to be what it is in heaven," she said. Still, she sounded a little taken aback at the going rate for her books. "Twenty-five cents? That's all it was?"
At least this way, the writer said, she gained a reader if not an income. Maybe I would never have found the book in a store.
"With the Internet, nothing is ever lost," Lesser said. "That's the good news, and that's the bad news."
And what of the woman who sold me the book? She told me in an e-mail message that her real name was Heather Mash and that she worked as a domestic violence case manager in a women's shelter not far from Berkeley.
She did not set out to subvert the publishing and bookselling world, she said. Like most of us who sell online, Mash began because she had too many books and wanted to raise money to buy more. "I would rather sell a book for a penny and let someone enjoy it than keep it collecting dust," she said.
****************
OPINION
Beware of grammarians who rule by whim
By Jan Freeman
Sunday, December 28, 2008
Nothing could be easier than finding an outlandish assertion, a baldfaced lie, a counterfactual claim on the Web, where anyone can say anything - at least temporarily.
Still, a linguistics student named Gabe Doyle was surprised by what he found on the list of "English words with disputed usage" at Wikipedia. Most of the entries were familiar - comprise, nauseous, unique - but one, says Doyle in a post at Motivated Grammar, was novel: "Some prescriptivists argue not should not conclude a sentence," it said.
Seriously? he asked. Where were these prescriptivists who thought it was wrong to say "I think not," or "She thought she was free, but she's not"? He checked usage books, and found that "none of them make even the scarcest mention of this supposed controversy."
And there it is: A new usage rule, fresh out of the oven and ready to feed to the unsuspecting masses. It reminded me of a recent e-mail from Kevin, whose high school English teacher had a similarly inventive usage theory.
She rejected the sentence "The pitcher threw no strikes," he recalled: "She asked me to show her how to throw 'no strike.' She said the correct way to say it would be, 'The pitcher didn't throw any strikes."'
This doctrine, of course, was just plain nutty. No in this construction means "not any," as it has since Old English. No grammarian has banned it. Yet Kevin was successfully browbeaten: "For years I avoided writing things such as "The store had no bananas," "I have no opinion," "I ate no onions," he wrote.
But a surprising number of the old, familiar usage rules are just as arbitrary as this one. When the idea of tidying up English caught on, usage guidance became a kind of sport, with grammarians trashing one another and pitching their own, ever subtler refinements.
Thus John Dryden, in a 1672 essay, suggested that a preposition at the end of a sentence - a natural occurrence in English - was a less than elegant phrasing; his opinion launched a fetish that persists today.
In Dryden's time, though, at least you could still call foods "healthy": "There is no flesh more healthy ... than lamb" wrote one diet guru in 1683. Two centuries later, an American usage writer decided healthy and healthful had to be pried apart. In "The Verbalist" (1881), Alfred Ayres declared that we ought to reserve wholesome for food, healthful for living conditions, and healthy for living beings, setting the table for a feast of pointless nitpicking. (Healthy still outdoes healthful, and it's still correct.)
The journalistic notion that you can't use "over" for "more than" - still enshrined in the AP stylebook - is another 19th-century invention. It first appeared on a list of banned expressions issued by William Cullen Bryant when he was editor of the New York Evening Post. Over had been used this way for 500 years when Bryant took a dislike to it. But that was 150 years ago. Surely these days, a journalist can't issue a usage edict based on nothing but whim. Or can he?
He can, apparently, if he's James J. Kilpatrick. This fall, Kilpatrick has issued at least two new rules in his syndicated usage column.
The first one came in a column criticizing The New York Times for calling the Lincoln Center renovation an "enormous reconstruction project." Enormous is the wrong word, he said, because it is tainted by enormity; as all peevologists know, we're supposed to use enormity to mean "great wickedness," not simply "immensity."
But Kilpatrick has it backward. Enormous lost its last trace of wickedness a couple of centuries ago; it really does mean just "huge." And the now-innocent enormous is sweetening enormity, not being tainted by it.
Not long after, Kilpatrick decided something was wrong with expressions like "he seems like a good candidate." "The 'like' in these erring constructions is excess baggage," he admonished. If the meaning of seems is "appears to be," you should skip the word like, and just say "He seems a good candidate."
Kilpatrick's version is fine, though it sounds more British than American.
But seems like has never been bad usage. Samuel Pepys, in a 1664 diary entry, said that a British naval encounter "seems like a victory." And Richard Grant White, in his popular 19th-century guide "Words and Their Uses," also employs the phrase: "Citizen is used by some ... with what seems like an affectation of the French usage."
So if a usage rule sounds far-fetched, check it out. Sure, it might have roots in Anglo-Saxon declensions, but it's just as likely it was invented by a scholar or editor in a fit of usage crankiness.
By Jan Freeman
Sunday, December 28, 2008
Nothing could be easier than finding an outlandish assertion, a baldfaced lie, a counterfactual claim on the Web, where anyone can say anything - at least temporarily.
Still, a linguistics student named Gabe Doyle was surprised by what he found on the list of "English words with disputed usage" at Wikipedia. Most of the entries were familiar - comprise, nauseous, unique - but one, says Doyle in a post at Motivated Grammar, was novel: "Some prescriptivists argue not should not conclude a sentence," it said.
Seriously? he asked. Where were these prescriptivists who thought it was wrong to say "I think not," or "She thought she was free, but she's not"? He checked usage books, and found that "none of them make even the scarcest mention of this supposed controversy."
And there it is: A new usage rule, fresh out of the oven and ready to feed to the unsuspecting masses. It reminded me of a recent e-mail from Kevin, whose high school English teacher had a similarly inventive usage theory.
She rejected the sentence "The pitcher threw no strikes," he recalled: "She asked me to show her how to throw 'no strike.' She said the correct way to say it would be, 'The pitcher didn't throw any strikes."'
This doctrine, of course, was just plain nutty. No in this construction means "not any," as it has since Old English. No grammarian has banned it. Yet Kevin was successfully browbeaten: "For years I avoided writing things such as "The store had no bananas," "I have no opinion," "I ate no onions," he wrote.
But a surprising number of the old, familiar usage rules are just as arbitrary as this one. When the idea of tidying up English caught on, usage guidance became a kind of sport, with grammarians trashing one another and pitching their own, ever subtler refinements.
Thus John Dryden, in a 1672 essay, suggested that a preposition at the end of a sentence - a natural occurrence in English - was a less than elegant phrasing; his opinion launched a fetish that persists today.
In Dryden's time, though, at least you could still call foods "healthy": "There is no flesh more healthy ... than lamb" wrote one diet guru in 1683. Two centuries later, an American usage writer decided healthy and healthful had to be pried apart. In "The Verbalist" (1881), Alfred Ayres declared that we ought to reserve wholesome for food, healthful for living conditions, and healthy for living beings, setting the table for a feast of pointless nitpicking. (Healthy still outdoes healthful, and it's still correct.)
The journalistic notion that you can't use "over" for "more than" - still enshrined in the AP stylebook - is another 19th-century invention. It first appeared on a list of banned expressions issued by William Cullen Bryant when he was editor of the New York Evening Post. Over had been used this way for 500 years when Bryant took a dislike to it. But that was 150 years ago. Surely these days, a journalist can't issue a usage edict based on nothing but whim. Or can he?
He can, apparently, if he's James J. Kilpatrick. This fall, Kilpatrick has issued at least two new rules in his syndicated usage column.
The first one came in a column criticizing The New York Times for calling the Lincoln Center renovation an "enormous reconstruction project." Enormous is the wrong word, he said, because it is tainted by enormity; as all peevologists know, we're supposed to use enormity to mean "great wickedness," not simply "immensity."
But Kilpatrick has it backward. Enormous lost its last trace of wickedness a couple of centuries ago; it really does mean just "huge." And the now-innocent enormous is sweetening enormity, not being tainted by it.
Not long after, Kilpatrick decided something was wrong with expressions like "he seems like a good candidate." "The 'like' in these erring constructions is excess baggage," he admonished. If the meaning of seems is "appears to be," you should skip the word like, and just say "He seems a good candidate."
Kilpatrick's version is fine, though it sounds more British than American.
But seems like has never been bad usage. Samuel Pepys, in a 1664 diary entry, said that a British naval encounter "seems like a victory." And Richard Grant White, in his popular 19th-century guide "Words and Their Uses," also employs the phrase: "Citizen is used by some ... with what seems like an affectation of the French usage."
So if a usage rule sounds far-fetched, check it out. Sure, it might have roots in Anglo-Saxon declensions, but it's just as likely it was invented by a scholar or editor in a fit of usage crankiness.
Bird flu found in poultry in northern Vietnam
Reuters
Sunday, December 28, 2008
HANOI: Bird flu has resurfaced in poultry in northern Vietnam after many months without any cases, killing ducks and chickens at two farms, a state-run newspaper reported on Sunday.
Animal health officials confirmed on Saturday the H5N1 virus had killed several birds among a flock of more than 100 ducks in Thai Nguyen city, 80 km (50 miles) north of Hanoi, the Ho Chi Minh City Communist Youth league-run Tuoi Tre newspaper said.
Officials had also detected the virus in dead chickens at a farm in the same city and nearly 4,200 chickens had been slaughtered to prevent the virus from spreading, the report said without giving a timeframe.
Deputy Health Minister Trinh Quan Huan said this week that there was a very high risk of bird flu returning during the winter and spring in northern Vietnam. The H5N1 strain seems to thrive best in low temperature.
Five Vietnamese have died of bird flu so far this year out of six reported H5N1 infections and all were found in northern Vietnam during the first quarter of the year.
The H5N1 strain has killed 247 people globally among the 391 confirmed cases of infection since 2003, according to the World Health Organisation.
Vietnam has 106 infections, the second highest number of cases among 15 countries with known human cases after Indonesia.
(Reporting by Ho Binh Minh; Editing by Jeremy Laurence)
Reuters
Sunday, December 28, 2008
HANOI: Bird flu has resurfaced in poultry in northern Vietnam after many months without any cases, killing ducks and chickens at two farms, a state-run newspaper reported on Sunday.
Animal health officials confirmed on Saturday the H5N1 virus had killed several birds among a flock of more than 100 ducks in Thai Nguyen city, 80 km (50 miles) north of Hanoi, the Ho Chi Minh City Communist Youth league-run Tuoi Tre newspaper said.
Officials had also detected the virus in dead chickens at a farm in the same city and nearly 4,200 chickens had been slaughtered to prevent the virus from spreading, the report said without giving a timeframe.
Deputy Health Minister Trinh Quan Huan said this week that there was a very high risk of bird flu returning during the winter and spring in northern Vietnam. The H5N1 strain seems to thrive best in low temperature.
Five Vietnamese have died of bird flu so far this year out of six reported H5N1 infections and all were found in northern Vietnam during the first quarter of the year.
The H5N1 strain has killed 247 people globally among the 391 confirmed cases of infection since 2003, according to the World Health Organisation.
Vietnam has 106 infections, the second highest number of cases among 15 countries with known human cases after Indonesia.
(Reporting by Ho Binh Minh; Editing by Jeremy Laurence)
Massive quake rebuild holds key for China economy
Reuters
Monday, December 29, 2008
By Simon Rabinovitch
ANXIAN, China (Reuters) -- In 80 seconds of shaking, China's devastating earthquake earlier this year cut a swathe of death and destruction through remote hilly towns.
In a recovery that will take years, the whole country's prosperity is at stake.
Quake reconstruction is a central plank of the government's stimulus plan for the ailing Chinese economy, set to take one-quarter of Beijing's promised 4 trillion yuan (398 billion pounds) spending boost and to create millions of sorely needed jobs.
Already, the disaster zone has been transformed into a vast, manic construction site, a trail of bricks, steel and cement coursing through its heart, those made homeless hammering away to reverse their fate and entrepreneurs from far-flung corners of the country attracted by the whiff of profit in calamity.
"I've been doing this job for about 20 years and I've never seen things so busy," said Zhao Renjun, bending steel girders into shape on a construction site in Anxian county, part of the huge area rocked by the May 12 earthquake that killed more than 80,000 people in China's southwest.
"I haven't had time to fix my own house. I've been so busy working for others," he said.
A partial list of needs includes 4.5 million homes, 51,000 kms (31,690 miles) of roads and 5,500 kms (3,418 miles) of railways -- enough to occupy at least some of the 20 million people who could lose jobs in China's once-humming export factories hit by the global slowdown.
The feverish activity inspires confidence about the financial muscle of the state and the vigour of the economy that it is trying to nurse back to health, but it also carries warning signs of the corruption, waste and unforeseen complications that are already dogging China's economic plans.
COMPLICATIONS
"Because everyone is building, prices for materials have shot up," said Liu Siyin, 34, taking a break from hauling buckets of cement on a shoulder pole at his quake-damaged home.
"We can't buy everything we need now and we might have to stop building for a while," he said. "We really wish the government could control prices."
Liu had just started laying bricks for the second-floor wall of his house up a treacherous mountain road.
Only half joking, he said fast-inflating material costs would neutralise his 50,000 yuan interest-free loan from the government for rebuilding. Bricks and cement from local vendors have trebled in price in just a few months.
Some local authorities, such as the city government in Mianyang, have vowed to crack down on price gouging.
However, a degree of price increases is exactly what the government wants. As with the stimulus package for the wider economy, Beijing is providing a huge pot of cash to kick off quake reconstruction but expects to lure private businesses into the fold, to have the investment momentum spread more widely.
A profit-chasing zeal has already been unleashed.
Piles of bricks, bundles of steel girders, wood boards and small concrete mixers -- all for sale -- line the narrow highways in the disaster zone, many in front of makeshift shops set up by entrepreneurs from Chongqing, a huge city 350 kms (217 miles) to the east.
Some have come from much further afield.
Tang Qinghua, a young energetic man with close-cropped hair, said his last job had been selling apartments in Shenzhen, the one-time boomtown across from Hong Kong where property prices have dropped by nearly 20 percent over the past year.
He and two friends now ply rutted back roads in a small van to drum up customers for their selection of tiles -- green, white and clay, glazed and unglazed, interior and exterior.
"People have no choice here. They have to rebuild. And we're making a contribution, helping them out," Tang said.
CORRUPTION WORRIES
Glimpses of a darker side to the reconstruction effort have come through in official reports.
Any country in the world that throws so much cash at disaster recovery, when urgency overwhelms usual budgetary checks and balances, must contend with mismanagement and outright theft.
China, which has long struggled to rein in corruption, is no exception. Small, isolated cases have been publicised so far.
A national audit found that a half-dozen villages had improperly spent subsidies meant for quake victims, or demanded illegal reconstruction fees. An investigation in Chongqing concluded that a hospital had sold donated medicine for profit.
A little more than one month after the quake, the National Bureau of Corruption Prevention said it had already received more than 1,000 complaints from the public and punished 43 officials.
Aid agencies lavished praise on China for mobilising rescue workers just minutes after the 7.9 magnitude quake reduced homes, schools and offices to rubble. It was China's worst earthquake in three decades.
The planning and oversight required in the next three years, during which the government has pledged to spend 1 trillion yuan on rebuilding, may prove more vexing.
"There has to be a process. We want it to be fast but not too fast, not too rushed," said Tan Li, Communist Party secretary of Mianyang. "Things have to be well built, to proper standards."
Getting it right in the quake zone is a critical part of China's bigger plan for reviving its economy.
The torrent of investment flowing towards reconstruction and the country's interior more broadly should transform inland provinces into China's growth engine in 2009, as the coastal factories that have long propelled the country struggle, Standard Chartered Bank economists say.
But among the cranes and steamrollers, brick layers and steel workers now busily rebuilding, there is one place that is completely silent. The jagged buildings and boulder-strewn roads at the epicentre of the earthquake in Beichuan are untouched, preserved as an open-air memorial to the tens of thousands who died that May afternoon when the earth shook so violently.
(Editing by Megan Goldin)
Reuters
Monday, December 29, 2008
By Simon Rabinovitch
ANXIAN, China (Reuters) -- In 80 seconds of shaking, China's devastating earthquake earlier this year cut a swathe of death and destruction through remote hilly towns.
In a recovery that will take years, the whole country's prosperity is at stake.
Quake reconstruction is a central plank of the government's stimulus plan for the ailing Chinese economy, set to take one-quarter of Beijing's promised 4 trillion yuan (398 billion pounds) spending boost and to create millions of sorely needed jobs.
Already, the disaster zone has been transformed into a vast, manic construction site, a trail of bricks, steel and cement coursing through its heart, those made homeless hammering away to reverse their fate and entrepreneurs from far-flung corners of the country attracted by the whiff of profit in calamity.
"I've been doing this job for about 20 years and I've never seen things so busy," said Zhao Renjun, bending steel girders into shape on a construction site in Anxian county, part of the huge area rocked by the May 12 earthquake that killed more than 80,000 people in China's southwest.
"I haven't had time to fix my own house. I've been so busy working for others," he said.
A partial list of needs includes 4.5 million homes, 51,000 kms (31,690 miles) of roads and 5,500 kms (3,418 miles) of railways -- enough to occupy at least some of the 20 million people who could lose jobs in China's once-humming export factories hit by the global slowdown.
The feverish activity inspires confidence about the financial muscle of the state and the vigour of the economy that it is trying to nurse back to health, but it also carries warning signs of the corruption, waste and unforeseen complications that are already dogging China's economic plans.
COMPLICATIONS
"Because everyone is building, prices for materials have shot up," said Liu Siyin, 34, taking a break from hauling buckets of cement on a shoulder pole at his quake-damaged home.
"We can't buy everything we need now and we might have to stop building for a while," he said. "We really wish the government could control prices."
Liu had just started laying bricks for the second-floor wall of his house up a treacherous mountain road.
Only half joking, he said fast-inflating material costs would neutralise his 50,000 yuan interest-free loan from the government for rebuilding. Bricks and cement from local vendors have trebled in price in just a few months.
Some local authorities, such as the city government in Mianyang, have vowed to crack down on price gouging.
However, a degree of price increases is exactly what the government wants. As with the stimulus package for the wider economy, Beijing is providing a huge pot of cash to kick off quake reconstruction but expects to lure private businesses into the fold, to have the investment momentum spread more widely.
A profit-chasing zeal has already been unleashed.
Piles of bricks, bundles of steel girders, wood boards and small concrete mixers -- all for sale -- line the narrow highways in the disaster zone, many in front of makeshift shops set up by entrepreneurs from Chongqing, a huge city 350 kms (217 miles) to the east.
Some have come from much further afield.
Tang Qinghua, a young energetic man with close-cropped hair, said his last job had been selling apartments in Shenzhen, the one-time boomtown across from Hong Kong where property prices have dropped by nearly 20 percent over the past year.
He and two friends now ply rutted back roads in a small van to drum up customers for their selection of tiles -- green, white and clay, glazed and unglazed, interior and exterior.
"People have no choice here. They have to rebuild. And we're making a contribution, helping them out," Tang said.
CORRUPTION WORRIES
Glimpses of a darker side to the reconstruction effort have come through in official reports.
Any country in the world that throws so much cash at disaster recovery, when urgency overwhelms usual budgetary checks and balances, must contend with mismanagement and outright theft.
China, which has long struggled to rein in corruption, is no exception. Small, isolated cases have been publicised so far.
A national audit found that a half-dozen villages had improperly spent subsidies meant for quake victims, or demanded illegal reconstruction fees. An investigation in Chongqing concluded that a hospital had sold donated medicine for profit.
A little more than one month after the quake, the National Bureau of Corruption Prevention said it had already received more than 1,000 complaints from the public and punished 43 officials.
Aid agencies lavished praise on China for mobilising rescue workers just minutes after the 7.9 magnitude quake reduced homes, schools and offices to rubble. It was China's worst earthquake in three decades.
The planning and oversight required in the next three years, during which the government has pledged to spend 1 trillion yuan on rebuilding, may prove more vexing.
"There has to be a process. We want it to be fast but not too fast, not too rushed," said Tan Li, Communist Party secretary of Mianyang. "Things have to be well built, to proper standards."
Getting it right in the quake zone is a critical part of China's bigger plan for reviving its economy.
The torrent of investment flowing towards reconstruction and the country's interior more broadly should transform inland provinces into China's growth engine in 2009, as the coastal factories that have long propelled the country struggle, Standard Chartered Bank economists say.
But among the cranes and steamrollers, brick layers and steel workers now busily rebuilding, there is one place that is completely silent. The jagged buildings and boulder-strewn roads at the epicentre of the earthquake in Beichuan are untouched, preserved as an open-air memorial to the tens of thousands who died that May afternoon when the earth shook so violently.
(Editing by Megan Goldin)
***************
Indonesian mining project dwarfs businessman's other ventures
By Fitri WulandariReuters
Sunday, December 28, 2008
JAKARTA: Yusuf Merukh, an Indonesian politician turned businessman, has 500 mining concessions in his portfolio. But his latest venture could dwarf the rest.
Despite the bursting of the global commodities bubble, his unlisted Merukh Enterprises plans to push ahead with what has the potential to be one of the world's largest copper and gold mines, on the island of Lembata, off the island of Flores, in eastern Indonesia.
But the project is controversial. Merukh says the site has preliminary reserves of 61.7 billion kilograms, or 136.1 billion pounds, of copper and 2.27 million kilograms, or 80.3 million ounces, of gold, but some media reports have questioned the size of the deposits.
At $17 billion, the cost of development is also being criticized, while environmental and community groups have raised concerns about the effect of the project locally.
"I reject the project," said Sonny Keraf, a former environment minister and current member of the Indonesian Parliament's mining committee. "Its mining potential is unclear."
Merukh, 72, was born on the Indonesian island of Rote, in East Nusa Tenggara Province, and was a politician for many years. During his political career he sat on a mining committee in Parliament and worked as a top government agrarian official.
In a rare interview this month, Merukh said his group would start to invest in infrastructure for the Lembata project next year, but he declined to say where he would obtain financing.
Mining projects in Indonesia have often been a source of conflict because of effects on the environment and local people, especially when it comes to the distribution of the proceeds.
"We are last to benefit from a project," Merukh said. "No. 1 is the local people."
The Lembata project would involve the relocation of about 100,000 people. Many of them lack the skills to work on the mining project, so Merukh plans to bring in outside workers, who are to be housed on a nearby island to reduce the risk of conflicts with local residents.
The Indonesian business magazine Globe says Merukh is worth $174 million. His early business ventures included chrome exploration, but he moved into gold concessions when the price was far below the current level of about $845 an ounce.
"He is the first Indonesian who has held so many mining concessions," said Hartojo Wignjowijoto, an economist who has known Merukh for many years. "At first, I thought he was just trading mining licenses, but he proved to be a good mining partner" for foreign investors. "He's shrewd. But he's shrewd for the national interest, and patriotic."
Merukh said he was optimistic that demand for copper from the auto and electronics industries would hold up despite the slump in commodities. "As long as the industry is still there and still alive, they still need copper," he said.
By Fitri WulandariReuters
Sunday, December 28, 2008
JAKARTA: Yusuf Merukh, an Indonesian politician turned businessman, has 500 mining concessions in his portfolio. But his latest venture could dwarf the rest.
Despite the bursting of the global commodities bubble, his unlisted Merukh Enterprises plans to push ahead with what has the potential to be one of the world's largest copper and gold mines, on the island of Lembata, off the island of Flores, in eastern Indonesia.
But the project is controversial. Merukh says the site has preliminary reserves of 61.7 billion kilograms, or 136.1 billion pounds, of copper and 2.27 million kilograms, or 80.3 million ounces, of gold, but some media reports have questioned the size of the deposits.
At $17 billion, the cost of development is also being criticized, while environmental and community groups have raised concerns about the effect of the project locally.
"I reject the project," said Sonny Keraf, a former environment minister and current member of the Indonesian Parliament's mining committee. "Its mining potential is unclear."
Merukh, 72, was born on the Indonesian island of Rote, in East Nusa Tenggara Province, and was a politician for many years. During his political career he sat on a mining committee in Parliament and worked as a top government agrarian official.
In a rare interview this month, Merukh said his group would start to invest in infrastructure for the Lembata project next year, but he declined to say where he would obtain financing.
Mining projects in Indonesia have often been a source of conflict because of effects on the environment and local people, especially when it comes to the distribution of the proceeds.
"We are last to benefit from a project," Merukh said. "No. 1 is the local people."
The Lembata project would involve the relocation of about 100,000 people. Many of them lack the skills to work on the mining project, so Merukh plans to bring in outside workers, who are to be housed on a nearby island to reduce the risk of conflicts with local residents.
The Indonesian business magazine Globe says Merukh is worth $174 million. His early business ventures included chrome exploration, but he moved into gold concessions when the price was far below the current level of about $845 an ounce.
"He is the first Indonesian who has held so many mining concessions," said Hartojo Wignjowijoto, an economist who has known Merukh for many years. "At first, I thought he was just trading mining licenses, but he proved to be a good mining partner" for foreign investors. "He's shrewd. But he's shrewd for the national interest, and patriotic."
Merukh said he was optimistic that demand for copper from the auto and electronics industries would hold up despite the slump in commodities. "As long as the industry is still there and still alive, they still need copper," he said.
****************
Creative solutions in tough times
By Alice Rawsthorn
Sunday, December 28, 2008
LONDON: They cost more than the people who need them can afford. They belch out noxious fumes. They often cause fires, and it isn't safe to leave kids alone with them in case they accidentally burn themselves, or drink poisonous fluid.
Why do people use them? Because they don't have a choice. If you lived in a home without electricity like most people in sub-Saharan Africa do, how else would you light it after dark other than with potentially lethal kerosene lamps? Candles? They're dangerous too. That's why the Freeplay Foundation, a charity that provides sustainable technologies to help poor people in developing countries, is planning this spring to distribute Lifelights, a lantern powered by renewable energy, to 100,000 orphaned households in Rwanda.
The Lifelight checks most of the necessary boxes for "good design" in 2009. One, it uses design innovation to help the poorest 90 percent of the world's population whom designers have traditionally ignored. Two, it's environmentally responsible, since it is charged by solar power and a wind-up technology developed by Freeplay Energy, the sustainable energy company that funds the foundation. Three, it has adapted a new technology - the tiny, energy-efficient light sources known as light emitting diodes, or LEDs - to produce something that's genuinely useful for people who urgently need it. And four, it was developed in collaboration with them, rather than by a designer who'd already decided what they "needed."
All of those themes - empowerment, sustainability, innovation and inclusion - will surface again and again in design next year. Many of the most eagerly awaited new projects of 2009 embrace some of them. Take the new Prius, the roomier, more fuel-efficient version of Toyota's hugely successful gas-electric hybrid car, which is to be unveiled next month at the Detroit motor show. Or the Lunar Reconnaissance Orbiter that NASA has scheduled for lift-off in February as its first unmanned spaceship for more than a decade. Then there's NASA's new Mars Rover and the collection of sustainable products being developed by Hella Jongerius, Yves Béhar and other designers for The Nature Conservancy. Even design's leap into reality television - a BBC series soon to be broadcast in Britain in which would-be designers vie to impress the rumbustious French design star Philippe Starck - promises to be inclusive. Up to a point.
It makes perfect sense that design, which strove to build a better world for much of the 20th century, should be dominated by such concerns at a time of environmental crisis, geopolitical turmoil and technological change. Similarly it seems sensible that design should be seen as a possible solution to the world's problems in an era when politicians and economists are seeking alternatives to the systems that regulated our lives in the last century, but are no longer fit for that purpose.
One question is whether the deepening recession will change this. Will consumers in the developed world be quite so keen on splashing out (and often paying a premium) for environmentally and ethically sound products when they're strapped for cash? Will designers be willing to devote quite so much time to poorly paid or pro bono humanitarian projects? Will their clients feel confident enough to invest in innovation at such a turbulent time?
Much as I'd love to answer those questions with a resounding "yes," I can't. The surge of investment that has fostered experimentation in once-buoyant, now recession-struck, sectors like furniture design is already dwindling, as it is in other areas of consumer products. Without it, established designers will find it harder to develop new ideas, and younger ones to make their mark.
But the recession will also create opportunities for designers to help us to adjust to economic austerity. Consumers will still want to score sustainability points, but to save money while doing so. The new cadre of "service designers," who apply design thinking to help organizations structure themselves more efficiently and behave differently, will be called upon to develop new business models to address this. One example is the recent flood of "rentalist" services, whereby you acquire the right to use, say, a car or bicycle, for period of time rather than buying it outright.
The economic crisis has also squashed any lingering doubts about the urgency of finding new ways to address acute social problems more efficiently - from caring for the expanding elderly population, to improving the management of over-stretched health care services. This newfound realism is already benefiting the emerging breed of "social designers."
Another question is whether designers are ready to respond to these challenges, as "service" and "social" design involve very different skills to conventional design practice. The 20th-century notion of the lone "designer-hero" (there were depressingly few "heroines") shaping his projects from start to finish was always illusory, but the new approaches to design require far greater collaboration, not just with fellow designers but with experts from other disciplines like economists, social scientists, anthropologists and programmers too. Designers also have to make the leap from a material culture where their work generally had a definitive outcome, such as an object or image, to one in which they are applying design thinking to analyze problems and develop solutions that are neither visible nor tangible.
This is a significant shift, which some designers, especially older ones steeped in 20th-century design culture, may be unwilling or unable to contemplate. The next generation of designers are likely to think - and work - very differently, which makes it timely that the leadership of many of the world's top design schools is poised to change in 2009. The Rhode Island School of Design in the United States led the way by appointing the maverick software designer John Maeda as its president. Design Academy Eindhoven in the Netherlands and the Royal College of Art in London have since made new appointments, and Art Center in Pasadena, California, is soon to do so. Those schools must now nurture the designers who'll redefine design in 2009 - and beyond.
By Alice Rawsthorn
Sunday, December 28, 2008
LONDON: They cost more than the people who need them can afford. They belch out noxious fumes. They often cause fires, and it isn't safe to leave kids alone with them in case they accidentally burn themselves, or drink poisonous fluid.
Why do people use them? Because they don't have a choice. If you lived in a home without electricity like most people in sub-Saharan Africa do, how else would you light it after dark other than with potentially lethal kerosene lamps? Candles? They're dangerous too. That's why the Freeplay Foundation, a charity that provides sustainable technologies to help poor people in developing countries, is planning this spring to distribute Lifelights, a lantern powered by renewable energy, to 100,000 orphaned households in Rwanda.
The Lifelight checks most of the necessary boxes for "good design" in 2009. One, it uses design innovation to help the poorest 90 percent of the world's population whom designers have traditionally ignored. Two, it's environmentally responsible, since it is charged by solar power and a wind-up technology developed by Freeplay Energy, the sustainable energy company that funds the foundation. Three, it has adapted a new technology - the tiny, energy-efficient light sources known as light emitting diodes, or LEDs - to produce something that's genuinely useful for people who urgently need it. And four, it was developed in collaboration with them, rather than by a designer who'd already decided what they "needed."
All of those themes - empowerment, sustainability, innovation and inclusion - will surface again and again in design next year. Many of the most eagerly awaited new projects of 2009 embrace some of them. Take the new Prius, the roomier, more fuel-efficient version of Toyota's hugely successful gas-electric hybrid car, which is to be unveiled next month at the Detroit motor show. Or the Lunar Reconnaissance Orbiter that NASA has scheduled for lift-off in February as its first unmanned spaceship for more than a decade. Then there's NASA's new Mars Rover and the collection of sustainable products being developed by Hella Jongerius, Yves Béhar and other designers for The Nature Conservancy. Even design's leap into reality television - a BBC series soon to be broadcast in Britain in which would-be designers vie to impress the rumbustious French design star Philippe Starck - promises to be inclusive. Up to a point.
It makes perfect sense that design, which strove to build a better world for much of the 20th century, should be dominated by such concerns at a time of environmental crisis, geopolitical turmoil and technological change. Similarly it seems sensible that design should be seen as a possible solution to the world's problems in an era when politicians and economists are seeking alternatives to the systems that regulated our lives in the last century, but are no longer fit for that purpose.
One question is whether the deepening recession will change this. Will consumers in the developed world be quite so keen on splashing out (and often paying a premium) for environmentally and ethically sound products when they're strapped for cash? Will designers be willing to devote quite so much time to poorly paid or pro bono humanitarian projects? Will their clients feel confident enough to invest in innovation at such a turbulent time?
Much as I'd love to answer those questions with a resounding "yes," I can't. The surge of investment that has fostered experimentation in once-buoyant, now recession-struck, sectors like furniture design is already dwindling, as it is in other areas of consumer products. Without it, established designers will find it harder to develop new ideas, and younger ones to make their mark.
But the recession will also create opportunities for designers to help us to adjust to economic austerity. Consumers will still want to score sustainability points, but to save money while doing so. The new cadre of "service designers," who apply design thinking to help organizations structure themselves more efficiently and behave differently, will be called upon to develop new business models to address this. One example is the recent flood of "rentalist" services, whereby you acquire the right to use, say, a car or bicycle, for period of time rather than buying it outright.
The economic crisis has also squashed any lingering doubts about the urgency of finding new ways to address acute social problems more efficiently - from caring for the expanding elderly population, to improving the management of over-stretched health care services. This newfound realism is already benefiting the emerging breed of "social designers."
Another question is whether designers are ready to respond to these challenges, as "service" and "social" design involve very different skills to conventional design practice. The 20th-century notion of the lone "designer-hero" (there were depressingly few "heroines") shaping his projects from start to finish was always illusory, but the new approaches to design require far greater collaboration, not just with fellow designers but with experts from other disciplines like economists, social scientists, anthropologists and programmers too. Designers also have to make the leap from a material culture where their work generally had a definitive outcome, such as an object or image, to one in which they are applying design thinking to analyze problems and develop solutions that are neither visible nor tangible.
This is a significant shift, which some designers, especially older ones steeped in 20th-century design culture, may be unwilling or unable to contemplate. The next generation of designers are likely to think - and work - very differently, which makes it timely that the leadership of many of the world's top design schools is poised to change in 2009. The Rhode Island School of Design in the United States led the way by appointing the maverick software designer John Maeda as its president. Design Academy Eindhoven in the Netherlands and the Royal College of Art in London have since made new appointments, and Art Center in Pasadena, California, is soon to do so. Those schools must now nurture the designers who'll redefine design in 2009 - and beyond.
***************
Grocer Waitrose posts surge in pre-Xmas sales
Reuters
Sunday, December 28, 2008
LONDON: Upmarket grocer Waitrose benefited from a late surge in spending in the week before Christmas, enjoying its busiest ever shopping day and a 3.5 percent rise in like-for-like sales, it said on Sunday.
The chain, part of employee-owned retailer John Lewis, said total sales in the seven days before Christmas Day rose 6 percent and sales on December 27 were up 36.9 percent on the same day last year.
Like-for-like sales for December 22, 23 and 24 were up 12 percent, and the chain had its busiest ever trading day on December 23, with sales of 34.4 million pounds and over 879,000 transactions.
Waitrose said it sold 231,000 fresh and frozen turkeys for Christmas, over 12 million mince pies and 34 million sprouts during December, up 13 percent on the same month last year
Reuters
Sunday, December 28, 2008
LONDON: Upmarket grocer Waitrose benefited from a late surge in spending in the week before Christmas, enjoying its busiest ever shopping day and a 3.5 percent rise in like-for-like sales, it said on Sunday.
The chain, part of employee-owned retailer John Lewis, said total sales in the seven days before Christmas Day rose 6 percent and sales on December 27 were up 36.9 percent on the same day last year.
Like-for-like sales for December 22, 23 and 24 were up 12 percent, and the chain had its busiest ever trading day on December 23, with sales of 34.4 million pounds and over 879,000 transactions.
Waitrose said it sold 231,000 fresh and frozen turkeys for Christmas, over 12 million mince pies and 34 million sprouts during December, up 13 percent on the same month last year
*******************
Whaling foes claim a victory
Reuters
Sunday, December 28, 2008
SYDNEY: The anti-whaling group Sea Shepherd Conservation Society says it has achieved its aim of forcing the Japanese whaling fleet out of Antarctic waters claimed by Australia.
In a statement on its Web site, dated Saturday, the U.S. group said its ship, the Steve Irwin, had forced the fleet into waters off the Ross Dependency, which is a New Zealand possession.
Australia has declared an "economic exclusion zone" in waters off the coast of its Antarctic territories, and an Australian court order bans whaling there. Sea Shepherd has said it is enforcing that order by pursuing the Japanese whaling fleet, which is in the area for an annual hunt to kill around 900 whales.
Japan does not recognize the exclusion zone and says its whaling fleet is in international waters.
In the statement, the Sea Shepherd founder, Paul Watson, promised that his organization would continue its pursuit of the Japanese fleet.
"The good news is that they are no longer whaling in Australian waters, and they only managed to hunt in the waters of the Australian Antarctic Territory for about a week," the Sea Shepherd statement said.
"They are now in the waters of the Ross dependency, and the Steve Irwin is in pursuit," he said, referring to a region of the Antarctic. Watson said this was "bad news" for whales in waters south of New Zealand.
Japan's Institute of Cetacean Research, which runs the hunt, has accused Sea Shepherd of "ecoterrorism" and of ramming its vessel, the Kaiko Maru, during a protest action last Friday. Sea Shepherd blamed the Japanese for the collision.
In a video of the incident released on its Web site, the anti-whaling group showed the crew of the Kaiko Maru warning Sea Shepherd in English that its protesters would be treated as "illegal intruders under Japanese law" if they tried to board.
During the last whaling season, two Sea Shepherd activists were briefly held on a Japanese vessel after they had boarded it during a protest.
Despite an international moratorium on whaling since 1986, Japan justifies the hunt on the grounds that its whaling is for scientific purposes. Much of the meat ends up on supermarket shelves.
Reuters
Sunday, December 28, 2008
SYDNEY: The anti-whaling group Sea Shepherd Conservation Society says it has achieved its aim of forcing the Japanese whaling fleet out of Antarctic waters claimed by Australia.
In a statement on its Web site, dated Saturday, the U.S. group said its ship, the Steve Irwin, had forced the fleet into waters off the Ross Dependency, which is a New Zealand possession.
Australia has declared an "economic exclusion zone" in waters off the coast of its Antarctic territories, and an Australian court order bans whaling there. Sea Shepherd has said it is enforcing that order by pursuing the Japanese whaling fleet, which is in the area for an annual hunt to kill around 900 whales.
Japan does not recognize the exclusion zone and says its whaling fleet is in international waters.
In the statement, the Sea Shepherd founder, Paul Watson, promised that his organization would continue its pursuit of the Japanese fleet.
"The good news is that they are no longer whaling in Australian waters, and they only managed to hunt in the waters of the Australian Antarctic Territory for about a week," the Sea Shepherd statement said.
"They are now in the waters of the Ross dependency, and the Steve Irwin is in pursuit," he said, referring to a region of the Antarctic. Watson said this was "bad news" for whales in waters south of New Zealand.
Japan's Institute of Cetacean Research, which runs the hunt, has accused Sea Shepherd of "ecoterrorism" and of ramming its vessel, the Kaiko Maru, during a protest action last Friday. Sea Shepherd blamed the Japanese for the collision.
In a video of the incident released on its Web site, the anti-whaling group showed the crew of the Kaiko Maru warning Sea Shepherd in English that its protesters would be treated as "illegal intruders under Japanese law" if they tried to board.
During the last whaling season, two Sea Shepherd activists were briefly held on a Japanese vessel after they had boarded it during a protest.
Despite an international moratorium on whaling since 1986, Japan justifies the hunt on the grounds that its whaling is for scientific purposes. Much of the meat ends up on supermarket shelves.
******************
U.S. Navy and environmental groups settle suit over sonar use
The Associated Press
Sunday, December 28, 2008
HONOLULU: The U.S. Navy has settled a lawsuit filed by environmentalists challenging its use of sonar in hundreds of submarine-hunting exercises around the world.
The navy said Saturday the deal reached with the Natural Resources Defense Council and other groups required it to continue to research how sonar affects whales and other marine mammals.
It does not require sailors to adopt additional measures to protect the animals when they use sonar.
The agreement comes one month after the U.S. Supreme Court ruled in favor of the navy in another sonar lawsuit the defense council filed.
The navy said the settlement, which was reached Friday, called on it to spend $14.75 million over three years on marine mammal research topics of interest to both the navy and the plaintiffs.
"The navy is pleased that after more than three years of extensive litigation, this matter has been brought to an end on favorable terms," Frank Jimenez, the navy's general counsel, said in a statement.
Officials from the Natural Resources Defense Council could not immediately be reached for comment. The plaintiffs asked the judge to dismiss the case on Friday.
The council and five other plaintiffs filed the lawsuit in U.S. court in the Central District of California on Oct. 19, 2005.
The complaint sought a court order to curb mid-frequency sonar, the navy's preferred method for detecting enemy submarines, on the ground that the sonar disturbs and sometimes kills whales and dolphins.
The navy said the suit was amended twice so that it challenged its use of sonar in 370 specific training and testing activities around the world.
In the years since, U.S. courts in California and Hawaii ruled in favor of the council and other environmental groups and ordered the navy to restrict its use of sonar to protect the animals.
But last month, in a ruling on a council lawsuit challenging the navy's sonar training exercises off Southern California, the Supreme Court ruled that military training trumps protecting whales.
Chief Justice John Roberts wrote that forcing the navy to deploy an inadequately trained anti-submarine fleet would jeopardize the safety of the fleet. He also wrote it was unclear how many marine mammals the navy's sonar exercises might harm.
The navy uses mid-frequency active sonar to send sound pulses through the water. Sailors listen for what objects the sound bounces off to identify if enemy submarines are lurking nearby.
This technology is different from passive sonar, which sailors use to listen for the sounds enemy submarines emit themselves.
Environmentalists argue that mid-frequency active sonar can disrupt whale feeding patterns, and in the most extreme cases can kill whales by causing them to beach themselves.
But scientists aren't sure why sonar affects some species more than others. They also do not fully know how it hurts whales.
The navy acknowledges that sonar may harm marine mammals but says it takes steps to protect whales. It says more research needs to be done to better understand how sonar affects whales before it adopts additional protective measures.
The Pacific Fleet has made anti-submarine warfare a top priority as more countries, including North Korea, Iran and China, have been acquiring quiet, diesel-electric submarines that are increasingly difficult to track.
The navy said the long-range research program it adopted under the settlement is basically the same as the one it set out to follow in August 2005, two months before the lawsuit was filed.
Other plaintiffs were: International Fund for Animal Welfare, Cetacean Society International, League for Coastal Protection, Ocean Futures Society and Jean-Michel Cousteau.
The Associated Press
Sunday, December 28, 2008
HONOLULU: The U.S. Navy has settled a lawsuit filed by environmentalists challenging its use of sonar in hundreds of submarine-hunting exercises around the world.
The navy said Saturday the deal reached with the Natural Resources Defense Council and other groups required it to continue to research how sonar affects whales and other marine mammals.
It does not require sailors to adopt additional measures to protect the animals when they use sonar.
The agreement comes one month after the U.S. Supreme Court ruled in favor of the navy in another sonar lawsuit the defense council filed.
The navy said the settlement, which was reached Friday, called on it to spend $14.75 million over three years on marine mammal research topics of interest to both the navy and the plaintiffs.
"The navy is pleased that after more than three years of extensive litigation, this matter has been brought to an end on favorable terms," Frank Jimenez, the navy's general counsel, said in a statement.
Officials from the Natural Resources Defense Council could not immediately be reached for comment. The plaintiffs asked the judge to dismiss the case on Friday.
The council and five other plaintiffs filed the lawsuit in U.S. court in the Central District of California on Oct. 19, 2005.
The complaint sought a court order to curb mid-frequency sonar, the navy's preferred method for detecting enemy submarines, on the ground that the sonar disturbs and sometimes kills whales and dolphins.
The navy said the suit was amended twice so that it challenged its use of sonar in 370 specific training and testing activities around the world.
In the years since, U.S. courts in California and Hawaii ruled in favor of the council and other environmental groups and ordered the navy to restrict its use of sonar to protect the animals.
But last month, in a ruling on a council lawsuit challenging the navy's sonar training exercises off Southern California, the Supreme Court ruled that military training trumps protecting whales.
Chief Justice John Roberts wrote that forcing the navy to deploy an inadequately trained anti-submarine fleet would jeopardize the safety of the fleet. He also wrote it was unclear how many marine mammals the navy's sonar exercises might harm.
The navy uses mid-frequency active sonar to send sound pulses through the water. Sailors listen for what objects the sound bounces off to identify if enemy submarines are lurking nearby.
This technology is different from passive sonar, which sailors use to listen for the sounds enemy submarines emit themselves.
Environmentalists argue that mid-frequency active sonar can disrupt whale feeding patterns, and in the most extreme cases can kill whales by causing them to beach themselves.
But scientists aren't sure why sonar affects some species more than others. They also do not fully know how it hurts whales.
The navy acknowledges that sonar may harm marine mammals but says it takes steps to protect whales. It says more research needs to be done to better understand how sonar affects whales before it adopts additional protective measures.
The Pacific Fleet has made anti-submarine warfare a top priority as more countries, including North Korea, Iran and China, have been acquiring quiet, diesel-electric submarines that are increasingly difficult to track.
The navy said the long-range research program it adopted under the settlement is basically the same as the one it set out to follow in August 2005, two months before the lawsuit was filed.
Other plaintiffs were: International Fund for Animal Welfare, Cetacean Society International, League for Coastal Protection, Ocean Futures Society and Jean-Michel Cousteau.
******************
Ghana vote peaceful in presidential runoff
The Associated Press
Sunday, December 28, 2008
ACCRA, Ghana: Ghanaians voted peacefully Sunday to choose a president for Africa's newest emerging oil producer in a runoff election that many hope can salvage the continent's battered democratic credentials.
In the capital, Accra, and across the West African state, the world's No. 2 cocoa grower, lines formed outside schools and other public buildings where polling stations were operating, guarded by soldiers and the police.
Election officials said voting went ahead generally smoothly, despite some minor hitches and disputes. Turnout by midday appeared to be lower than in the inconclusive first round on Dec. 7. Final results were not expected to be released until at least 48 hours after polls closed at 5 p.m.
The presidential contest pits Nana Akufo-Addo, of the governing New Patriotic Party, against John Atta Mills of the opposition National Democratic Congress, after neither managed an outright victory in the first round.
Both are foreign-trained lawyers, both are 64 and both have pledged to maintain the stability and economic growth of recent years, which made the former British colony a favorite of investors on a turbulent continent.
The first-round vote in Ghana was praised as fair and orderly by observers, a contrast to other countries in Africa, where setbacks to constitutional democracy this year were posed by flawed elections in Kenya and Zimbabwe and military coups in Mauritania and Guinea.
Long lines snaked out of several polling stations in the capital even before they opened at 7 a.m.
About 12.4 million Ghanaians, out of a population of 23 million, are registered to vote to choose a successor to President John Kufuor, who is stepping down after two terms, the constitutional limit for remaining in office.
The campaign for the runoff had been spiced with heated rhetoric, and the National Democratic Congress had protested to electoral officials about "irregularities." The authorities deployed extra troops and police officers to guarantee security in the second round.
"We still have confidence in the good will of Ghanaians that they will not do anything to dent the credibility and the image of Ghana as a beacon in West Africa," said Kwesi Ofori, the deputy police superintendent.
In the close-fought first round, Akufo-Addo finished first with just over 49 percent, more than one percentage point ahead of Mills, but he failed to gain the more than 50 percent of votes required for victory.
Analysts said the election could go either way.
Voter turnout, at nearly 70 percent in the first round, could be key to deciding a winner.
A higher turnout would favor Akufo-Addo, while a lower turnout - traditional in second rounds - could enhance Mills's chances.
The election came as Ghana, which is also the continent's second largest gold producer, is preparing to start producing oil in commercial quantities from late 2010.
Analysts see some risks in the outcome of the vote, which follows the New Patriotic Party losing its majority in Parliament in legislative elections Dec. 7.
"Either way, the next president of Ghana - whether from the NPP or the NDC - is likely to face a hostile and acrimonious Parliament that his party won't be able to easily control," wrote Sebastian Spio-Garbrah, an Africa analyst at the Eurasia Group.
Two of the legislature's 230 seats still need to be declared by the electoral commission, which is handling outstanding constituency disputes, and the Parliament now appears split, with the NDC holding 114 seats and the NPP 108.
Ghana suffered back-to-back coups in the 1970s and 1980s. But after ruling for 11 years, the strongman Jerry Rawlings organized elections. He won two terms, then surprised the world by ceding power when his party's candidate lost to Kufuor in the 2000 vote.
Ghana - called the best place in West Africa to do business by the World Bank - has seen growth of over 6 percent in the past eight years. Investment has grown 20-fold and the discovery of oil offshore last year is expected to start pumping $2 billion to $3 billion annually into the state purse. Yet many say there is little to show for all the statistics indicating success. Ghana remains one of the world's poorest countries.
The Associated Press
Sunday, December 28, 2008
ACCRA, Ghana: Ghanaians voted peacefully Sunday to choose a president for Africa's newest emerging oil producer in a runoff election that many hope can salvage the continent's battered democratic credentials.
In the capital, Accra, and across the West African state, the world's No. 2 cocoa grower, lines formed outside schools and other public buildings where polling stations were operating, guarded by soldiers and the police.
Election officials said voting went ahead generally smoothly, despite some minor hitches and disputes. Turnout by midday appeared to be lower than in the inconclusive first round on Dec. 7. Final results were not expected to be released until at least 48 hours after polls closed at 5 p.m.
The presidential contest pits Nana Akufo-Addo, of the governing New Patriotic Party, against John Atta Mills of the opposition National Democratic Congress, after neither managed an outright victory in the first round.
Both are foreign-trained lawyers, both are 64 and both have pledged to maintain the stability and economic growth of recent years, which made the former British colony a favorite of investors on a turbulent continent.
The first-round vote in Ghana was praised as fair and orderly by observers, a contrast to other countries in Africa, where setbacks to constitutional democracy this year were posed by flawed elections in Kenya and Zimbabwe and military coups in Mauritania and Guinea.
Long lines snaked out of several polling stations in the capital even before they opened at 7 a.m.
About 12.4 million Ghanaians, out of a population of 23 million, are registered to vote to choose a successor to President John Kufuor, who is stepping down after two terms, the constitutional limit for remaining in office.
The campaign for the runoff had been spiced with heated rhetoric, and the National Democratic Congress had protested to electoral officials about "irregularities." The authorities deployed extra troops and police officers to guarantee security in the second round.
"We still have confidence in the good will of Ghanaians that they will not do anything to dent the credibility and the image of Ghana as a beacon in West Africa," said Kwesi Ofori, the deputy police superintendent.
In the close-fought first round, Akufo-Addo finished first with just over 49 percent, more than one percentage point ahead of Mills, but he failed to gain the more than 50 percent of votes required for victory.
Analysts said the election could go either way.
Voter turnout, at nearly 70 percent in the first round, could be key to deciding a winner.
A higher turnout would favor Akufo-Addo, while a lower turnout - traditional in second rounds - could enhance Mills's chances.
The election came as Ghana, which is also the continent's second largest gold producer, is preparing to start producing oil in commercial quantities from late 2010.
Analysts see some risks in the outcome of the vote, which follows the New Patriotic Party losing its majority in Parliament in legislative elections Dec. 7.
"Either way, the next president of Ghana - whether from the NPP or the NDC - is likely to face a hostile and acrimonious Parliament that his party won't be able to easily control," wrote Sebastian Spio-Garbrah, an Africa analyst at the Eurasia Group.
Two of the legislature's 230 seats still need to be declared by the electoral commission, which is handling outstanding constituency disputes, and the Parliament now appears split, with the NDC holding 114 seats and the NPP 108.
Ghana suffered back-to-back coups in the 1970s and 1980s. But after ruling for 11 years, the strongman Jerry Rawlings organized elections. He won two terms, then surprised the world by ceding power when his party's candidate lost to Kufuor in the 2000 vote.
Ghana - called the best place in West Africa to do business by the World Bank - has seen growth of over 6 percent in the past eight years. Investment has grown 20-fold and the discovery of oil offshore last year is expected to start pumping $2 billion to $3 billion annually into the state purse. Yet many say there is little to show for all the statistics indicating success. Ghana remains one of the world's poorest countries.
COLUMNIST
Thomas L. Friedman: Win, win, win, win, win ...
Sunday, December 28, 2008
How many times do we have to see this play before we admit that it always ends the same way?
Which play? The one where gasoline prices go up, pressure rises for more fuel-efficient cars, then gasoline prices fall and the pressure for low-mileage vehicles vanishes, consumers stop buying those cars, the oil producers celebrate, we remain addicted to oil and prices gradually go up again, petro-dictators get rich, we lose. I've already seen this play three times in my life. Trust me: It always ends the same way - badly.
So I could only cringe when reading this article from CNNMoney.com on Dec. 22: "After nearly a year of flagging sales, low gas prices and fat incentives are re-igniting America's taste for big vehicles. Trucks and SUVs will outsell cars in December ... something that hasn't happened since February. Meanwhile, the forecast finds that sales of hybrid vehicles are expected to be way down."
Have a nice day. It's morning again - in Saudi Arabia.
Of course, it's a blessing that people who have been hammered by the economy are getting a break at the pump. But for America's long-term health, getting re-addicted to oil and gas guzzlers is one of the dumbest things we could do.
That is why I believe the second biggest decision Barack Obama has to make - the first is deciding the size of the stimulus - is whether to increase the federal gasoline tax or impose an economy-wide carbon tax. Best I can tell, the Obama team has no intention of doing either at this time. I understand why. Raising taxes in a recession is a no-no. But I've racked my brain trying to think of ways to retool America around clean-power technologies without a price signal - i.e., a tax - and there are no effective ones. Without a higher gas tax or carbon tax, Obama will lack the leverage to drive critical pieces of his foreign and domestic agendas.
How so? According to AAA, U.S. gasoline prices now average about $1.67 a gallon. Funny, that's almost exactly what gas cost on the morning of Sept. 11, 2001. In the wake of 9/11, President Bush had the political space to impose a gasoline tax, a "Patriot Tax," to weaken the very people who had funded 9/11 and to stimulate a U.S. renewable-energy industry. But Bush wimped out and would not impose a tax when prices were low or a floor price when they got high.
Today's financial crisis is Obama's 9/11. The public is ready to be mobilized. Obama is coming in with enormous popularity. This is his best window of opportunity to impose a gas tax. And he could make it painless: Offset the gas tax by lowering payroll taxes, or phase it in over two years at 10 cents a month. But if Obama, like Bush, wills the ends and not the means - wills a green economy without the price signals needed to change consumer behavior and drive innovation - he will fail.
The two most important rules about energy innovation are: 1.) Price matters - when prices go up people change their habits. 2.) You need a systemic approach. It makes no sense for Congress to pump $13.4 billion into bailing out Detroit - and demand that the auto companies use this cash to make more fuel-efficient cars - and then do nothing to shape consumer behavior with a gas tax so more Americans will want to buy those cars. .
There has to be a system that permanently changes consumer demand, which would permanently change what Detroit makes, which would attract more investment in battery technology to make electric cars, which would hugely help the expansion of the wind and solar industries - where the biggest drawback is the lack of batteries to store electrons when the wind isn't blowing or the sun isn't shining. A higher gas tax would drive all these systemic benefits.
The same is true in geopolitics. A gas tax reduces gasoline demand and keeps dollars in America, dries up funding for terrorists and reduces the clout of Iran and Russia at a time when Obama will be looking for greater leverage against petro-dictatorships. It reduces our current account deficit, which strengthens the dollar. It reduces U.S. carbon emissions driving climate change. And it increases the incentives for U.S. innovation on clean cars and clean-tech.
Which one of these things wouldn't we want? A gasoline tax "is not just win-win; it's win, win, win, win, win," says the foreign policy specialist Michael Mandelbaum. "A gasoline tax would do more for American prosperity and strength than any other measure Obama could propose."
I know it's hard, but we have got to stop "taking off the table" the tool that would add leverage to everything we want to do at home and abroad. We've done that for three decades, and we know with absolute certainty how the play ends - with an America that is less innovative, less wealthy, less respected and less powerful.
Sunday, December 28, 2008
How many times do we have to see this play before we admit that it always ends the same way?
Which play? The one where gasoline prices go up, pressure rises for more fuel-efficient cars, then gasoline prices fall and the pressure for low-mileage vehicles vanishes, consumers stop buying those cars, the oil producers celebrate, we remain addicted to oil and prices gradually go up again, petro-dictators get rich, we lose. I've already seen this play three times in my life. Trust me: It always ends the same way - badly.
So I could only cringe when reading this article from CNNMoney.com on Dec. 22: "After nearly a year of flagging sales, low gas prices and fat incentives are re-igniting America's taste for big vehicles. Trucks and SUVs will outsell cars in December ... something that hasn't happened since February. Meanwhile, the forecast finds that sales of hybrid vehicles are expected to be way down."
Have a nice day. It's morning again - in Saudi Arabia.
Of course, it's a blessing that people who have been hammered by the economy are getting a break at the pump. But for America's long-term health, getting re-addicted to oil and gas guzzlers is one of the dumbest things we could do.
That is why I believe the second biggest decision Barack Obama has to make - the first is deciding the size of the stimulus - is whether to increase the federal gasoline tax or impose an economy-wide carbon tax. Best I can tell, the Obama team has no intention of doing either at this time. I understand why. Raising taxes in a recession is a no-no. But I've racked my brain trying to think of ways to retool America around clean-power technologies without a price signal - i.e., a tax - and there are no effective ones. Without a higher gas tax or carbon tax, Obama will lack the leverage to drive critical pieces of his foreign and domestic agendas.
How so? According to AAA, U.S. gasoline prices now average about $1.67 a gallon. Funny, that's almost exactly what gas cost on the morning of Sept. 11, 2001. In the wake of 9/11, President Bush had the political space to impose a gasoline tax, a "Patriot Tax," to weaken the very people who had funded 9/11 and to stimulate a U.S. renewable-energy industry. But Bush wimped out and would not impose a tax when prices were low or a floor price when they got high.
Today's financial crisis is Obama's 9/11. The public is ready to be mobilized. Obama is coming in with enormous popularity. This is his best window of opportunity to impose a gas tax. And he could make it painless: Offset the gas tax by lowering payroll taxes, or phase it in over two years at 10 cents a month. But if Obama, like Bush, wills the ends and not the means - wills a green economy without the price signals needed to change consumer behavior and drive innovation - he will fail.
The two most important rules about energy innovation are: 1.) Price matters - when prices go up people change their habits. 2.) You need a systemic approach. It makes no sense for Congress to pump $13.4 billion into bailing out Detroit - and demand that the auto companies use this cash to make more fuel-efficient cars - and then do nothing to shape consumer behavior with a gas tax so more Americans will want to buy those cars. .
There has to be a system that permanently changes consumer demand, which would permanently change what Detroit makes, which would attract more investment in battery technology to make electric cars, which would hugely help the expansion of the wind and solar industries - where the biggest drawback is the lack of batteries to store electrons when the wind isn't blowing or the sun isn't shining. A higher gas tax would drive all these systemic benefits.
The same is true in geopolitics. A gas tax reduces gasoline demand and keeps dollars in America, dries up funding for terrorists and reduces the clout of Iran and Russia at a time when Obama will be looking for greater leverage against petro-dictatorships. It reduces our current account deficit, which strengthens the dollar. It reduces U.S. carbon emissions driving climate change. And it increases the incentives for U.S. innovation on clean cars and clean-tech.
Which one of these things wouldn't we want? A gasoline tax "is not just win-win; it's win, win, win, win, win," says the foreign policy specialist Michael Mandelbaum. "A gasoline tax would do more for American prosperity and strength than any other measure Obama could propose."
I know it's hard, but we have got to stop "taking off the table" the tool that would add leverage to everything we want to do at home and abroad. We've done that for three decades, and we know with absolute certainty how the play ends - with an America that is less innovative, less wealthy, less respected and less powerful.
*********************
South Korea announces major energy investment
Bloomberg News
Sunday, December 28, 2008
SEOUL: South Korea plans to invest 37 trillion won, or $28.5 billion, from 2009 to 2022 on new power plants, including 12 new nuclear plants, to improve fuel efficiency and cut emissions, the Energy Ministry said Sunday.
South Korea, one of the largest importers of crude oil, will also build seven new coal plants, 11 liquefied natural gas plants and 1 heavy fuel plant by 2022, but it will get rid of 3 existing coal plants, 6 liquefied natural gas plants and 13 heavy fuel units to improve efficiency, the ministry said.
"The plan is to generate more low-carbon power while decreasing the use of high-priced reserves such as LNG and coal," the ministry said, referring to liquefied natural gas. "Under the plan, the fuel cost will be about 56 percent lower than this year."
The total number of nuclear power units will rise to 32, or 32.92 million kilowatts, by 2022 and account for 48 percent of the country's total power generation, from 34 percent this year, the ministry said.
Liquefied natural gas, which is the most expensive fuel, will account for just 6 percent of total power generation in 2022 under the plan, down from the current 22 percent. The overall electricity power capacity will increase to 100.89 million kilowatts by 2022, up from 71.36 million by the end of 2008.
The cost of nuclear power generation is 3 won per kilowatt compared with 22 won at coal-fired plants and 89 won for gas, according to the ministry.
Separately, the ministry said it would lend a combined 289.8 billion won to petroleum developers in 2009 to help the country secure stable energy supplies. Of the finished budget, 60 percent is to go to existing projects, both at home and abroad, and the remainder to new exploration.
The ministry said the government would increase the ratio of lending support to non government companies in 2009, while it would curtail lending to the state-run Korea National Oil Corporation.
South Korea also plans to expand its use of alternative energy. Under the government's long-term plan, renewable energy sources, including solar, wind and water, should account for 11 percent of power consumption by 2030 from the current 2.2 percent.
To achieve its goals, South Korea intends to invest 100 trillion won in alternative energy by 2030. The country seeks a 44-fold increase in the supply of solar power to 3,504 megawatts, a 37- fold gain in wind power to 7,301 megawatts and a 19-fold increase in biofuels supply.
Bloomberg News
Sunday, December 28, 2008
SEOUL: South Korea plans to invest 37 trillion won, or $28.5 billion, from 2009 to 2022 on new power plants, including 12 new nuclear plants, to improve fuel efficiency and cut emissions, the Energy Ministry said Sunday.
South Korea, one of the largest importers of crude oil, will also build seven new coal plants, 11 liquefied natural gas plants and 1 heavy fuel plant by 2022, but it will get rid of 3 existing coal plants, 6 liquefied natural gas plants and 13 heavy fuel units to improve efficiency, the ministry said.
"The plan is to generate more low-carbon power while decreasing the use of high-priced reserves such as LNG and coal," the ministry said, referring to liquefied natural gas. "Under the plan, the fuel cost will be about 56 percent lower than this year."
The total number of nuclear power units will rise to 32, or 32.92 million kilowatts, by 2022 and account for 48 percent of the country's total power generation, from 34 percent this year, the ministry said.
Liquefied natural gas, which is the most expensive fuel, will account for just 6 percent of total power generation in 2022 under the plan, down from the current 22 percent. The overall electricity power capacity will increase to 100.89 million kilowatts by 2022, up from 71.36 million by the end of 2008.
The cost of nuclear power generation is 3 won per kilowatt compared with 22 won at coal-fired plants and 89 won for gas, according to the ministry.
Separately, the ministry said it would lend a combined 289.8 billion won to petroleum developers in 2009 to help the country secure stable energy supplies. Of the finished budget, 60 percent is to go to existing projects, both at home and abroad, and the remainder to new exploration.
The ministry said the government would increase the ratio of lending support to non government companies in 2009, while it would curtail lending to the state-run Korea National Oil Corporation.
South Korea also plans to expand its use of alternative energy. Under the government's long-term plan, renewable energy sources, including solar, wind and water, should account for 11 percent of power consumption by 2030 from the current 2.2 percent.
To achieve its goals, South Korea intends to invest 100 trillion won in alternative energy by 2030. The country seeks a 44-fold increase in the supply of solar power to 3,504 megawatts, a 37- fold gain in wind power to 7,301 megawatts and a 19-fold increase in biofuels supply.
Sarkozy pardons ex-official convicted of bribery
By Verena von DerschauThe Associated Press
Sunday, December 28, 2008
PARIS: Among 27 French prisoners granted presidential pardons this holiday season is one with an unusual résumé.
Jean-Charles Marchiani, 65, helped free French hostages in Lebanon in the 1980s and Bosnia in the 1990s, and served in the European parliament and as a governor in the south of France. He has also been convicted twice of taking bribes for business contracts and is now on trial in a weapons trafficking case.
But President Nicolas Sarkozy decided that Marchiani had paid his dues and granted him a partial pardon this week that could see him soon free.
Sarkozy's enemies are crying foul.
"How can we talk about justice when the same rules are not applied to everyone?" said the leader of the opposition Socialists, Martine Aubry. She noted that Sarkozy had rejected appeals for the early release of prisoners convicted of certain minor crimes.
Sarkozy was in Brazil all week, away from the fray. His office made no direct comment about Marchiani's pardon, but issued a statement Tuesday announcing 27 partial or total pardons "motivated by acts of courage or bravery exhibited during or before their incarceration."
Four former French hostages in Lebanon appealed to Sarkozy to pardon Marchiani. So did his former boss - Charles Pasqua, a fixture of France's conservative establishment who is himself facing a tangle of corruption charge.
A former interior minister, Pasqua said there was "nothing extraordinary" about Sarkozy's decision. "Let's look at the services rendered, look at the risks undertaken, the courage that he exhibited, the results he obtained in freeing the hostages," Pasqua said on RTL radio.
Marchiani rose to prominence after helping negotiate the release of three French hostages held by the Islamic Jihad movement in Lebanon in 1988. They were among several foreigners, including Americans, who were being held in Lebanon at the time.
In exchange, France agreed to restore diplomatic relations with Iran, which had been strained over the Iran-Iraq war, and paid off the last segment of a billion-dollar dispute over a nuclear energy project with Iran.
Marchiani was later accused of laundering money meant for use as a ransom for the hostages, though the French government has denied paying a ransom.
Marchiani was convicted in 2005 in two corruption cases - one for taking kickbacks in the sale of gearboxes from a German company to the Defense Ministry for use in Leclerc tanks, and one for profiting from a contract between a Dutch company and the Paris airports authority in the 1980s. He was a government official for at least part of the period when he allegedly took the bribes.
Marchiani was notified Tuesday that his sentence was reduced by six months. Since he has already served 13 months of a three-year sentence, the partial pardon means he is now eligible to request conditional release.
Even if Marchiani leaves prison soon, he will not be free of legal woes. He and Pasqua are among 42 people on trial in a tangled case of alleged arms trafficking to Angola. The trial began in October and is expected to last until March.
By Verena von DerschauThe Associated Press
Sunday, December 28, 2008
PARIS: Among 27 French prisoners granted presidential pardons this holiday season is one with an unusual résumé.
Jean-Charles Marchiani, 65, helped free French hostages in Lebanon in the 1980s and Bosnia in the 1990s, and served in the European parliament and as a governor in the south of France. He has also been convicted twice of taking bribes for business contracts and is now on trial in a weapons trafficking case.
But President Nicolas Sarkozy decided that Marchiani had paid his dues and granted him a partial pardon this week that could see him soon free.
Sarkozy's enemies are crying foul.
"How can we talk about justice when the same rules are not applied to everyone?" said the leader of the opposition Socialists, Martine Aubry. She noted that Sarkozy had rejected appeals for the early release of prisoners convicted of certain minor crimes.
Sarkozy was in Brazil all week, away from the fray. His office made no direct comment about Marchiani's pardon, but issued a statement Tuesday announcing 27 partial or total pardons "motivated by acts of courage or bravery exhibited during or before their incarceration."
Four former French hostages in Lebanon appealed to Sarkozy to pardon Marchiani. So did his former boss - Charles Pasqua, a fixture of France's conservative establishment who is himself facing a tangle of corruption charge.
A former interior minister, Pasqua said there was "nothing extraordinary" about Sarkozy's decision. "Let's look at the services rendered, look at the risks undertaken, the courage that he exhibited, the results he obtained in freeing the hostages," Pasqua said on RTL radio.
Marchiani rose to prominence after helping negotiate the release of three French hostages held by the Islamic Jihad movement in Lebanon in 1988. They were among several foreigners, including Americans, who were being held in Lebanon at the time.
In exchange, France agreed to restore diplomatic relations with Iran, which had been strained over the Iran-Iraq war, and paid off the last segment of a billion-dollar dispute over a nuclear energy project with Iran.
Marchiani was later accused of laundering money meant for use as a ransom for the hostages, though the French government has denied paying a ransom.
Marchiani was convicted in 2005 in two corruption cases - one for taking kickbacks in the sale of gearboxes from a German company to the Defense Ministry for use in Leclerc tanks, and one for profiting from a contract between a Dutch company and the Paris airports authority in the 1980s. He was a government official for at least part of the period when he allegedly took the bribes.
Marchiani was notified Tuesday that his sentence was reduced by six months. Since he has already served 13 months of a three-year sentence, the partial pardon means he is now eligible to request conditional release.
Even if Marchiani leaves prison soon, he will not be free of legal woes. He and Pasqua are among 42 people on trial in a tangled case of alleged arms trafficking to Angola. The trial began in October and is expected to last until March.
**************
For champagne industry, a bubbly niche emerges
By Joseph Schmid
Sunday, December 28, 2008
PARIS: When the slump in the financial markets began to worsen in September, Francis Egly, who makes Champagne from his own grapes in Ambonnay, France, started getting calls from his customers. They wanted to know if the bad news might mean he had a few extra bottles to sell.
He didn't. About 80 percent of the roughly 100,000 bottles he will sell this year was reserved and paid for a year in advance, and he has no doubt that he will sell next year's vintage just as easily. "This crisis doesn't affect me at all," Egly said by telephone recently. "I don't have enough wine."
A few kilometers down the road, in Bouzy, Delphine Vesselle, who owns the Jean Vesselle Champagne house, sent letters to her customers in September telling them that not only would she not be accepting new buyers for this year's output, but that orders would only be partially filled, to a degree based on purchases from prior years.
For small producers, like Egly and Vesselle, times are good.
But for the Champagne industry as a whole, the traditional year-end surge in sales is looking anything but festive. Overall shipments by producers started falling in September, and that downward trend accelerated in October.
The major producers like Moët & Chandon or Veuve Clicquot Ponsardin, who sell the bulk of their bottles through retailers, saw shipments drop 21 percent in October from a year earlier, the most recent figures that have been compiled by the Interprofessional Committee of the Wines of Champagne, or CIVC in French, a trade group. And the weak economy has darkened the prospects for the last two months of the year, which represent at least a third of a major producer's annual sales.
For the nearly 5,000 houses that make Champagne exclusively from their own grapes - called vignerons - as opposed to buying from vineyards throughout the region, shipments in October were up 3.3 percent. These producers, like Egly and Vesselle, sell mainly to individuals, and for many years their customers often lived within a tight radius of their vineyards, meaning that people could drive over to pick up orders.
"The vignerons are the ones that mainly sell direct to their clients, and they're the ones that have been increasing their shipments recently," said Daniel Lorson, the spokesman for the committee.
It is a corner of the €4.5 billion, or $6.3 billion, Champagne industry that is proving resilient to the retrenchment of holiday spending in France and elsewhere. Of the 36.2 million bottles shipped in October alone, the major producers shipped 25 million bottles, down about 6.6 million from a year earlier. Vigneron houses shipped nearly 7.5 million bottles.
Egly said a major reason that vignerons were thriving amid the slump was price. "The big houses have raised their prices a lot," Egly said. He increased his prices 5 percent this year, mainly to cope with higher fuel prices.
At Lavinia, the large Paris wine emporium, sales of vigneron Champagne have been brisk in December, even though overall sales of Champagne were "dead" for the first three weeks of the month, said a clerk, who didn't want to be identified because he did not have permission to speak on the record.
"It's much easier to sell a Champagne that costs €20 to €30, and the quality is absolutely comparable" to the major brands, most of which start at €40, the clerk said.
He said the major houses had imposed two price increases this year, an average of 5 percent in April, and another 8 percent during the summer. The least expensive Veuve Clicquot at Lavinia now costs €36.
Prices of vigneron Champagnes at Lavinia start at €23, and only a handful exceed €35. A 1999 vintage made by Pierre Gimonnet, for example, costs €34, but the least expensive vintage Champagne from a top brand is a 2002 Deutz, at €45. For a 1999 vintage from that brand, the Amour de Deutz, the price jumps to €130. "There are not a lot of people who are going to spend that much for a vintage Champagne," the clerk said.
At Legrand Filles & Fils, an institution for fine wine in Paris, bottles of Elgy's Champagne, Elgy-Ouriet, start at €31, and the 2000 vintage costs €69. The store's perennial top seller is a vigneron Champagne made by Jean-Mary Tarlant, at €27. They sell 10,000 bottles of it a year.
But while price may explain the choice of a vigneron Champagne for the holidays this year, that does not appear to be helping the least expensive mass producers. The CIVC groups these companies in the same sector as the well-known houses, and together, their shipments dropped 21 percent in October.
The vast majority of these "entry-level" Champagnes are sold in supermarkets, and mainly at the end of the year. At a Cora hypermarket outside Paris, the least expensive bottle on Christmas Eve was from G.H. Martin, at €15, and no bottle cost more than €30.
Lorson, of the CIVC, said supermarkets were using low-priced Champagne to draw in customers, who were then likely to buy other holiday items as well. "The question is whether this sector is going to increase," but he said it was too early to judge this year's holiday sales. The shipments for November and December will not be known for several weeks.
But beyond the question of price, growing numbers of customers are looking for Champagnes off the tracks that have been beaten by the most famous houses. Export shipments of vigneron bottles to the European Union climbed 17 percent in October, when EU exports of the biggest houses slumped 20 percent.
Despite the fact that very few of these houses advertise extensively, restaurants around the world are giving top billing to vigneron Champagnes on their wine lists, and wine merchants are encouraging clients to search out the particularities of different Champagnes in the same way they look for particular bottles of Bordeaux or Bourgogne.
For Egly, this trend means that many growers like him will have to continue to turn away clients. "People like to know that there's a fellow behind the wine," he said.
By Joseph Schmid
Sunday, December 28, 2008
PARIS: When the slump in the financial markets began to worsen in September, Francis Egly, who makes Champagne from his own grapes in Ambonnay, France, started getting calls from his customers. They wanted to know if the bad news might mean he had a few extra bottles to sell.
He didn't. About 80 percent of the roughly 100,000 bottles he will sell this year was reserved and paid for a year in advance, and he has no doubt that he will sell next year's vintage just as easily. "This crisis doesn't affect me at all," Egly said by telephone recently. "I don't have enough wine."
A few kilometers down the road, in Bouzy, Delphine Vesselle, who owns the Jean Vesselle Champagne house, sent letters to her customers in September telling them that not only would she not be accepting new buyers for this year's output, but that orders would only be partially filled, to a degree based on purchases from prior years.
For small producers, like Egly and Vesselle, times are good.
But for the Champagne industry as a whole, the traditional year-end surge in sales is looking anything but festive. Overall shipments by producers started falling in September, and that downward trend accelerated in October.
The major producers like Moët & Chandon or Veuve Clicquot Ponsardin, who sell the bulk of their bottles through retailers, saw shipments drop 21 percent in October from a year earlier, the most recent figures that have been compiled by the Interprofessional Committee of the Wines of Champagne, or CIVC in French, a trade group. And the weak economy has darkened the prospects for the last two months of the year, which represent at least a third of a major producer's annual sales.
For the nearly 5,000 houses that make Champagne exclusively from their own grapes - called vignerons - as opposed to buying from vineyards throughout the region, shipments in October were up 3.3 percent. These producers, like Egly and Vesselle, sell mainly to individuals, and for many years their customers often lived within a tight radius of their vineyards, meaning that people could drive over to pick up orders.
"The vignerons are the ones that mainly sell direct to their clients, and they're the ones that have been increasing their shipments recently," said Daniel Lorson, the spokesman for the committee.
It is a corner of the €4.5 billion, or $6.3 billion, Champagne industry that is proving resilient to the retrenchment of holiday spending in France and elsewhere. Of the 36.2 million bottles shipped in October alone, the major producers shipped 25 million bottles, down about 6.6 million from a year earlier. Vigneron houses shipped nearly 7.5 million bottles.
Egly said a major reason that vignerons were thriving amid the slump was price. "The big houses have raised their prices a lot," Egly said. He increased his prices 5 percent this year, mainly to cope with higher fuel prices.
At Lavinia, the large Paris wine emporium, sales of vigneron Champagne have been brisk in December, even though overall sales of Champagne were "dead" for the first three weeks of the month, said a clerk, who didn't want to be identified because he did not have permission to speak on the record.
"It's much easier to sell a Champagne that costs €20 to €30, and the quality is absolutely comparable" to the major brands, most of which start at €40, the clerk said.
He said the major houses had imposed two price increases this year, an average of 5 percent in April, and another 8 percent during the summer. The least expensive Veuve Clicquot at Lavinia now costs €36.
Prices of vigneron Champagnes at Lavinia start at €23, and only a handful exceed €35. A 1999 vintage made by Pierre Gimonnet, for example, costs €34, but the least expensive vintage Champagne from a top brand is a 2002 Deutz, at €45. For a 1999 vintage from that brand, the Amour de Deutz, the price jumps to €130. "There are not a lot of people who are going to spend that much for a vintage Champagne," the clerk said.
At Legrand Filles & Fils, an institution for fine wine in Paris, bottles of Elgy's Champagne, Elgy-Ouriet, start at €31, and the 2000 vintage costs €69. The store's perennial top seller is a vigneron Champagne made by Jean-Mary Tarlant, at €27. They sell 10,000 bottles of it a year.
But while price may explain the choice of a vigneron Champagne for the holidays this year, that does not appear to be helping the least expensive mass producers. The CIVC groups these companies in the same sector as the well-known houses, and together, their shipments dropped 21 percent in October.
The vast majority of these "entry-level" Champagnes are sold in supermarkets, and mainly at the end of the year. At a Cora hypermarket outside Paris, the least expensive bottle on Christmas Eve was from G.H. Martin, at €15, and no bottle cost more than €30.
Lorson, of the CIVC, said supermarkets were using low-priced Champagne to draw in customers, who were then likely to buy other holiday items as well. "The question is whether this sector is going to increase," but he said it was too early to judge this year's holiday sales. The shipments for November and December will not be known for several weeks.
But beyond the question of price, growing numbers of customers are looking for Champagnes off the tracks that have been beaten by the most famous houses. Export shipments of vigneron bottles to the European Union climbed 17 percent in October, when EU exports of the biggest houses slumped 20 percent.
Despite the fact that very few of these houses advertise extensively, restaurants around the world are giving top billing to vigneron Champagnes on their wine lists, and wine merchants are encouraging clients to search out the particularities of different Champagnes in the same way they look for particular bottles of Bordeaux or Bourgogne.
For Egly, this trend means that many growers like him will have to continue to turn away clients. "People like to know that there's a fellow behind the wine," he said.
Bailout of Long-Term Capital: A bad precedent?
By Tyler Cowen
Sunday, December 28, 2008
THE financial crisis is a result of many bad decisions, but one of them hasn't received enough attention: the 1998 bailout of the Long-Term Capital Management hedge fund. If regulators had been less concerned with protecting the fund's creditors, our current problems might not be quite so bad.
Long-Term Capital was advised by finance quants, or quantitative analysts, who made a number of unsound, esoteric bets, including investments in interest rate derivatives. When Russia's inability to pay its debts roiled global markets, the fund, saddled with high-leverage and off-balance-sheet obligations, was near collapse.
Because Long-Term Capital owed large sums to banks and other financial institutions, the Federal Reserve Bank of New York organized a consortium of companies to buy it out and cover the debts. Alan Greenspan, then the Fed chairman, eased monetary policy to restart capital markets, which were starting to freeze up. Long-Term Capital's shareholders were wiped out, but none of the creditors took losses.
At the time, it may have seemed that regulators did the right thing. The bailout did not require upfront money from the government, and the world avoided an even bigger financial crisis. Today, however, that ad hoc intervention by the government no longer looks so wise. With the Long-Term Capital bailout as a precedent, creditors came to believe that their loans to unsound financial institutions would be made good by the Fed — as long as the collapse of those institutions would threaten the global credit system. Bolstered by this sense of security, bad loans mushroomed.
Of course, there were many reasons for the reckless lending and failures of risk management that led to the most recent systemic credit shocks. And we have now entered the realm of trillion-dollar bailouts, vast contagion across financial institutions, rapid deleveraging of banks and an economic crisis that some people are starting to compare to the Great Depression.
The Long-Term Capital episode looks small when viewed against all of that. But it was important precisely because the fund was not a major firm. At the time of its near demise, it was not even a major money center bank, but a hedge fund with about 200 employees. Such funds hadn't previously been brought under regulatory protection this way. After the episode, financial markets knew that even relatively obscure institutions — through government intervention — might be able to pay back bad loans.
The major creditors of the fund included Bear Stearns, Merrill Lynch and Lehman Brothers, all of which went on to lend and invest recklessly and, to one degree or another, pay the consequences. But 1998 should have been the time to send a credible warning that bad loans to overleveraged institutions would mean losses, and that neither the Fed nor the Treasury would make these losses good.
What would have happened without a Fed-organized bailout of Long-Term Capital? It remains an open question. An entirely private consortium led by Warren Buffett might have bought the fund, but capital markets might still have frozen because of the realization that bailouts were not guaranteed.
And Fed inaction might have had graver economic consequences, especially if a Buffett deal had fallen through. In that case, a rapid financial deleveraging would have followed, and the economy would have probably plunged into recession. That sounds bad, but it might have been better to have experienced a milder version of a downturn in 1998 than the more severe version of 10 years later.
In 1998, there was no collapsed housing bubble, the government's budget was in surplus rather than deficit, bank leverage was much lower, and derivatives markets were smaller and less far-reaching. A financial crisis related to Long-Term Capital, however painful, probably would have been easier to handle than the perfect storm of recent months.
The ad hoc aspect of the bailout created a precedent for what has come to be called "regulation by deal" — now the government's modus operandi. Rather than publicizing definite standards and expectations for bailouts in advance, the Fed and the Treasury confront each particular crisis anew. Decisions are made as to whether a merger is possible, whether a consortium can be organized, what kind of loan guarantees can be offered and what kind of concessions will be extracted in return. So far, every deal — or lack thereof, in the case of Lehman Brothers — has been different.
While there are some advantages to leaving discretion in regulators' hands, this hasn't worked out very well. It has become increasingly apparent that the market doesn't know what to expect and that many financial institutions are sitting on the sidelines, waiting to see what regulators will do next. Regulatory uncertainty is stifling the ability of financial markets to engineer at least a partial recovery.
John Maynard Keynes famously proclaimed that "in the long run we are all dead." From the vantage point of 1998, today is indeed the "long run."
We're not quite dead, but we are seriously ailing. As we look ahead, we may be tempted again to put off the hard choices. But perhaps the next "long run," too, is no more than 10 years away. If we take the Keynesian maxim too seriously, and focus only on the short run, our prospects will be grim indeed.
By Tyler Cowen
Sunday, December 28, 2008
THE financial crisis is a result of many bad decisions, but one of them hasn't received enough attention: the 1998 bailout of the Long-Term Capital Management hedge fund. If regulators had been less concerned with protecting the fund's creditors, our current problems might not be quite so bad.
Long-Term Capital was advised by finance quants, or quantitative analysts, who made a number of unsound, esoteric bets, including investments in interest rate derivatives. When Russia's inability to pay its debts roiled global markets, the fund, saddled with high-leverage and off-balance-sheet obligations, was near collapse.
Because Long-Term Capital owed large sums to banks and other financial institutions, the Federal Reserve Bank of New York organized a consortium of companies to buy it out and cover the debts. Alan Greenspan, then the Fed chairman, eased monetary policy to restart capital markets, which were starting to freeze up. Long-Term Capital's shareholders were wiped out, but none of the creditors took losses.
At the time, it may have seemed that regulators did the right thing. The bailout did not require upfront money from the government, and the world avoided an even bigger financial crisis. Today, however, that ad hoc intervention by the government no longer looks so wise. With the Long-Term Capital bailout as a precedent, creditors came to believe that their loans to unsound financial institutions would be made good by the Fed — as long as the collapse of those institutions would threaten the global credit system. Bolstered by this sense of security, bad loans mushroomed.
Of course, there were many reasons for the reckless lending and failures of risk management that led to the most recent systemic credit shocks. And we have now entered the realm of trillion-dollar bailouts, vast contagion across financial institutions, rapid deleveraging of banks and an economic crisis that some people are starting to compare to the Great Depression.
The Long-Term Capital episode looks small when viewed against all of that. But it was important precisely because the fund was not a major firm. At the time of its near demise, it was not even a major money center bank, but a hedge fund with about 200 employees. Such funds hadn't previously been brought under regulatory protection this way. After the episode, financial markets knew that even relatively obscure institutions — through government intervention — might be able to pay back bad loans.
The major creditors of the fund included Bear Stearns, Merrill Lynch and Lehman Brothers, all of which went on to lend and invest recklessly and, to one degree or another, pay the consequences. But 1998 should have been the time to send a credible warning that bad loans to overleveraged institutions would mean losses, and that neither the Fed nor the Treasury would make these losses good.
What would have happened without a Fed-organized bailout of Long-Term Capital? It remains an open question. An entirely private consortium led by Warren Buffett might have bought the fund, but capital markets might still have frozen because of the realization that bailouts were not guaranteed.
And Fed inaction might have had graver economic consequences, especially if a Buffett deal had fallen through. In that case, a rapid financial deleveraging would have followed, and the economy would have probably plunged into recession. That sounds bad, but it might have been better to have experienced a milder version of a downturn in 1998 than the more severe version of 10 years later.
In 1998, there was no collapsed housing bubble, the government's budget was in surplus rather than deficit, bank leverage was much lower, and derivatives markets were smaller and less far-reaching. A financial crisis related to Long-Term Capital, however painful, probably would have been easier to handle than the perfect storm of recent months.
The ad hoc aspect of the bailout created a precedent for what has come to be called "regulation by deal" — now the government's modus operandi. Rather than publicizing definite standards and expectations for bailouts in advance, the Fed and the Treasury confront each particular crisis anew. Decisions are made as to whether a merger is possible, whether a consortium can be organized, what kind of loan guarantees can be offered and what kind of concessions will be extracted in return. So far, every deal — or lack thereof, in the case of Lehman Brothers — has been different.
While there are some advantages to leaving discretion in regulators' hands, this hasn't worked out very well. It has become increasingly apparent that the market doesn't know what to expect and that many financial institutions are sitting on the sidelines, waiting to see what regulators will do next. Regulatory uncertainty is stifling the ability of financial markets to engineer at least a partial recovery.
John Maynard Keynes famously proclaimed that "in the long run we are all dead." From the vantage point of 1998, today is indeed the "long run."
We're not quite dead, but we are seriously ailing. As we look ahead, we may be tempted again to put off the hard choices. But perhaps the next "long run," too, is no more than 10 years away. If we take the Keynesian maxim too seriously, and focus only on the short run, our prospects will be grim indeed.
*****************
At Washington Mutual, a relentless urge to approve any loan
By Peter S. Goodman and Gretchen Morgenson
Sunday, December 28, 2008
SAN DIEGO: "We hope to do to this industry what Wal-Mart did to theirs, Starbucks did to theirs, Costco did to theirs and Lowe's-Home Depot did to their industry. And I think if we've done our job, five years from now you're not going to call us a bank."
- Kerry Killinger, chief executive of Washington Mutual, 2003
As a supervisor at a Washington Mutual mortgage processing center, John Parsons was accustomed to seeing baby sitters claiming salaries worthy of college presidents, and schoolteachers with incomes rivaling those of stockbrokers. He rarely questioned them. A real estate frenzy was under way and WaMu, as his bank was known, was all about saying yes.
Yet even by WaMu's relaxed standards, the mortgage on one home four years ago raised eyebrows. The borrower was claiming a six-figure income and an unusual profession: mariachi singer.
Parsons could not verify the singer's income, so he had the applicant photographed in front of the home, dressed in his mariachi outfit. The photo went into a WaMu file. Approved.
"I'd lie if I said every piece of documentation was properly signed and dated," said Parsons, speaking through wire-reinforced glass at a California prison near here, where he is serving 16 months for theft after his fourth arrest - all involving drugs.
While Parsons, whose incarceration is not related to his work for WaMu, oversaw a team screening mortgage applications, he was snorting methamphetamine daily, he said.
"In our world, it was tolerated," said Sherri Zaback, who worked for Parsons and recalls seeing drug paraphernalia on his desk. "Everybody said, 'He gets the job done."'
At WaMu, getting the job done meant lending money to nearly anyone who asked for it - the force behind the bank's meteoric rise and its precipitous collapse this year in the biggest bank failure in American history.
In a financial landscape littered with wreckage, WaMu, a Seattle-based bank that opened branches at a clip worthy of a fast-food chain, stands out as a singularly brazen case of lax lending. By the first half of this year, the value of its bad loans had reached $11.5 billion, having nearly tripled from $4.2 billion a year earlier.
Interviews with two dozen former employees, mortgage brokers, real estate agents and appraisers show the relentless pressure to churn out loans that produced such results. While that sample may not fully represent a bank with tens of thousands of people, it does reflect the views of employees in WaMu mortgage operations in California, Florida, Illinois and Texas.
Their accounts are consistent with those of 89 other former employees who are confidential witnesses in a class action filed against WaMu in U.S. court in Seattle by former shareholders.
According to these accounts, pressure to keep lending emanated from the top, where executives profited from the swift expansion - not least, Kerry Killinger, who was WaMu's chief executive from 1990 until he was forced out in September.
Between 2001 and 2007, Killinger received compensation of $88 million, according to the Corporate Library, a research firm. He declined to respond to a list of questions, and his spokesman said he was unavailable for an interview.
During Killinger's tenure, WaMu pressed sales agents to pump out loans while disregarding borrowers' incomes and assets, according to former employees. The bank set up what insiders described as a system of dubious legality that enabled real estate agents to collect fees of more than $10,000 for bringing in borrowers, sometimes making the agents more beholden to WaMu than they were to their clients.
WaMu gave mortgage brokers handsome commissions for selling the riskiest loans, which carried higher fees, bolstering profits and ultimately the compensation of the bank's executives. WaMu pressed appraisers to provide inflated property values that made loans appear less risky, enabling Wall Street to bundle them more easily for sale to investors.
"It was the Wild West," said Steven Knobel, a founder of an appraisal company - Mitchell, Maxwell & Jackson - that did business with WaMu until 2007. "If you were alive, they would give you a loan. Actually, I think if you were dead, they would still give you a loan."
JPMorgan Chase, which bought WaMu for $1.9 billion in September and received $25 billion a few weeks later as part of the taxpayer bailout of the financial services industry, declined to make former WaMu executives available for interviews.
JPMorgan also declined to comment on WaMu's operations before it bought the company. "It is a different era for our customers and for the company," a spokesman said.
For those who placed their faith and money in WaMu, the bank's implosion came as a shock.
"I never had a clue about the amount of off-the-cliff activity that was going on at Washington Mutual, and I was in constant contact with the company," said Vincent Au, president of Avalon Partners, an investment firm. "There were people at WaMu that orchestrated nothing more than a sham or charade. These people broke every fundamental rule of running a company."'Like a sweatshop'
Some WaMu employees who worked for the bank during the boom now have regrets.
"It was a disgrace," said Dana Zweibel, a former financial representative at a WaMu branch in Tampa, Florida. "We were giving loans to people that never should have had loans."
If Zweibel doubted whether customers could pay, supervisors directed her to keep selling, she said. "We were told from up above that that's not our concern," she said. "Our concern is just to write the loan."
The ultimate supervisor at WaMu was Killinger, who joined the company in 1983 and became chief executive in 1990. He inherited a bank that had been founded in 1889 and had survived the Depression and the savings and loan scandal of the 1980s.
An investment analyst by training, he was attuned to Wall Street's hunger for growth. Between late 1996 and early 2002, he transformed WaMu into the sixth-largest U.S. bank through a series of acquisitions.
A crucial deal came in 1999, with the purchase of Long Beach Financial, a California lender specializing in subprime mortgages - loans extended to borrowers with troubled credit.
WaMu underscored its eagerness to lend with an advertising campaign introduced during the 2003 Academy Awards: "The Power of Yes." No mere advertising pitch, this was also the mantra inside the bank, underwriters said.
"WaMu came out with that slogan, and that was what we had to live by," Zaback said. "We joked about it a lot." A file would get marked problematic and then somehow get approved. "We'd say: 'O.K.! The power of yes."'
Revenue at WaMu's mortgage unit swelled from $707 million in 2002 to almost $2 billion the following year, when the "The Power of Yes" campaign started.
Between 2000 and 2003, the number of WaMu's retail branches grew 70 percent, reaching 2,200 across 38 states, as the bank used an image of cheeky irreverence to attract new customers. In offbeat television ads, casually dressed WaMu employees ridiculed staid bankers in suits.
Branches were pushed to increase lending. "It was just disgusting," said Zweibel, the Tampa representative. "They wanted you to spend time, while you're running teller transactions and opening checking accounts, selling people loans."
Employees in Tampa who fell short were ordered to drive to a WaMu office in Sarasota, an hour away. There, they sat in a phone bank with 20 other people, calling customers to push home equity loans.
"The regional manager would be over your shoulder, listening to every word," Zweibel recalled. "They treated us like we were in a sweatshop."
At the other end of the country, at WaMu's processing office in San Diego, Zaback's job was to take loan applications from branches in Southern California and make sure they passed muster. Most of the loans she said she handled required the borrower to provide only an address and a Social Security number and to state income and assets.
She ran applications through WaMu's computer system for approval. If she needed more information, she had to consult a loan officer, which she described as an unpleasant experience. "They would be furious," Zaback said. "They would put it on you, that they weren't going to get paid if you stood in the way."
On one loan application in 2005, a borrower identified himself as a gardener and listed his monthly income as $12,000, Zaback recalled. She could not verify his business license, so she took the file to her boss, Parsons.
He used the mariachi singer as inspiration: a photo of the borrower's truck emblazoned with the name of his landscaping business went into the file. Approved.
Parsons, who worked for WaMu in San Diego from about 2002 through 2005, said his supervisors constantly praised his performance. "My numbers were through the roof," he said.
On another occasion, Zaback asked a loan officer for verification of an applicant's assets. The officer sent a letter from a bank showing a balance of about $150,000 in the borrower's account, she recalled. But when Zaback called the bank to confirm, she was told the balance was only $5,000.
The loan officer yelled at her, Zaback recalled. "She said, 'We don't call the bank to verify."' Zaback said she had told Parsons that she no longer wanted to work with that loan officer, but he had replied: "Too bad."
Shortly thereafter, Parsons disappeared from the office. Zaback later learned of his arrest for burglary and drug possession.
The sheer workload at WaMu ensured that loan reviews were limited. Zaback's office had 108 people, and several hundred new files a day. She was required to process at least 10 files daily.
"I'd typically spend a maximum of 35 minutes per file," she said. "It was just disheartening. Just spit it out and get it done. That's what they wanted us to do. Garbage in, and garbage out."Referral fees for loans
WaMu's boiler room culture flourished in Southern California, where housing prices rose so rapidly during the bubble that creative financing was needed to attract buyers.
To that end, WaMu embraced so-called option ARMs - adjustable-rate mortgages that enticed borrowers with a selection of low initial rates and allowed them to decide how much to pay each month. But people who chose minimum payments were underpaying the interest due and adding to their principal, eventually causing loan payments to balloon.
Customers were often left with the impression that low payments would continue long term, according to former WaMu sales agents.
For WaMu, variable-rate loans - option adjustable-rate mortgages, in particular - were especially attractive because they carried higher fees than other loans and allowed WaMu to book profits on interest payments that borrowers deferred. Because WaMu was selling many of its loans to investors, it did not worry about defaults: by the time loans went bad, they were often in other hands.
WaMu's adjustable-rate mortgages expanded from about one-fourth of new home loans in 2003 to 70 percent by 2006. In 2005 and 2006 - when WaMu pushed option adjustable-rate mortgages most aggressively - Killinger received pay of $19 million and $24 million respectively.The ARM loan niche
WaMu's retail mortgage office in Downey, California, specialized in selling option ARMs to Latino customers who spoke little English and depended on advice from real estate brokers, according to a former sales agent who requested anonymity because he was still in the mortgage business.
According to that agent, WaMu turned real estate agents into a pipeline for loan applications by giving them "referral fees" for clients who became WaMu borrowers.
Buyers were typically oblivious to agents' fees, the agent said, and agents rarely explained the loan terms.
"Their realtor was their trusted friend," the agent said. "The realtors would sell them on a minimum payment, and that was an outright lie."
According to the agent, the strategy was the brainchild of Thomas Ramirez, who oversaw a sales team of about 20 agents at the Downey branch during the first half of this decade, and now works for Wells Fargo.
Ramirez confirmed that he and his team had allowed real estate agents to collect commissions, but he maintained that the fees had been fully disclosed.
"I don't think the bank would have let us do the program if it was bad," Ramirez said.
Ramirez's team sold nearly $1 billion worth of loans in 2004, he said. His performance made him a perennial member of WaMu's President's Club, which brought big bonuses and recognition at an awards ceremony for which Killinger typically was host at warm-weather locations like Hawaii.
Ramirez's success prompted WaMu to populate a neighboring building in Downey with loan processors, underwriters and appraisers who worked for him. The fees proved so enticing that real estate agents arrived in Downey from all over Southern California, bearing six and seven loan applications at a time, the former agent said.
WaMu banned referral fees in 2006, fearing they could be construed as illegal payments from the bank to agents. But the bank allowed Ramirez's team to continue using the referral fees, the agent said.Forced out with millions
By 2005, the word was out that WaMu would accept applications with a mere statement of the borrower's income and assets - often with no documentation required - as long as credit scores were adequate, according to Zaback and other underwriters.
"We had a flier that said, 'A thin file is a good file,"' recalled Michele Culbertson, a wholesale sales agent with WaMu.
Martine Lado, an agent in the Irvine, California, office, said she had coached brokers to leave parts of applications blank to avoid prompting verification if the borrower's job or income was sketchy.
"We were looking for people who understood how to do loans at WaMu," Lado said.
Top producers became heroes. Craig Clark, called the "king of the option ARM" by colleagues, closed loans totaling about $1 billion in 2005, according to four of his former coworkers, a tally he amassed in part by challenging anyone who doubted him.
"He was a bulldozer when it came to getting his stuff done," said Lisa Alvarez, who worked in the Irvine office from 2003 to 2006.
Christine Crocker, who managed WaMu's wholesale underwriting division in Irvine, recalled one mortgage to an elderly couple from a broker on Clark's team.
With a fixed income of about $3,200 a month, the couple needed a fixed-rate loan. But their broker earned a commission of three percentage points by arranging an option ARM for them, and did so by listing their income as $7,000 a month. Soon, their payment jumped from about $1,000 a month to about $3,000, and they fell behind.
Clark, who now works for JPMorgan, referred calls to a company spokesman, who provided no further details.
In 2006, WaMu slowed the use of option adjustable-rate mortgages. But earlier, ill-considered loans had already begun hurting its results. In 2007, it recorded a $67 million loss and shut down its subprime lending unit.
By the time shareholders joined WaMu for its annual meeting in Seattle last April, WaMu had posted a first-quarter loss of $1.14 billion and increased its loan loss reserve to $3.5 billion. Its stock had lost more than half its value in the previous two months. Anger was in the air.
Some shareholders were irate that Killinger and other executives were excluding mortgage losses from the computation of their bonuses. Others were enraged that WaMu had turned down an $8-a-share takeover bid from JPMorgan.
"Calm down and have a little faith," Killinger told the crowd. "We will get through this."
WaMu asked shareholders to approve a $7 billion investment by Texas Pacific Group, a private equity firm, and other unnamed investors. David Bonderman, a founder of Texas Pacific and a former WaMu director, declined to comment.
Hostile shareholders argued that the deal would dilute their holdings, but Killinger forced it through, saying WaMu desperately needed new capital.
Weeks later, with WaMu in tatters, directors stripped Killinger of his board chairmanship. And the bank began including mortgage losses when calculating executive bonuses.
In September, Killinger was forced to retire. Later that month, with WaMu buckling under about $180 billion in mortgage-related loans, regulators seized the bank and sold it to JPMorgan for $1.9 billion, a fraction of the $40 billion valuation the stock market had given WaMu at its peak.
Billions that investors had plowed into WaMu were wiped out, as were prospects for many of the bank's 50,000 employees. But Killinger still had his millions, rankling laid-off workers and shareholders alike.
"Kerry has made over $100 million over his tenure based on the aggressiveness that sunk the company," said Au, the money manager. "How does he justify taking that money?"
In June, Au sent an e-mail message to the company, asking executives to return some of their pay. He says he has not heard back
By Peter S. Goodman and Gretchen Morgenson
Sunday, December 28, 2008
SAN DIEGO: "We hope to do to this industry what Wal-Mart did to theirs, Starbucks did to theirs, Costco did to theirs and Lowe's-Home Depot did to their industry. And I think if we've done our job, five years from now you're not going to call us a bank."
- Kerry Killinger, chief executive of Washington Mutual, 2003
As a supervisor at a Washington Mutual mortgage processing center, John Parsons was accustomed to seeing baby sitters claiming salaries worthy of college presidents, and schoolteachers with incomes rivaling those of stockbrokers. He rarely questioned them. A real estate frenzy was under way and WaMu, as his bank was known, was all about saying yes.
Yet even by WaMu's relaxed standards, the mortgage on one home four years ago raised eyebrows. The borrower was claiming a six-figure income and an unusual profession: mariachi singer.
Parsons could not verify the singer's income, so he had the applicant photographed in front of the home, dressed in his mariachi outfit. The photo went into a WaMu file. Approved.
"I'd lie if I said every piece of documentation was properly signed and dated," said Parsons, speaking through wire-reinforced glass at a California prison near here, where he is serving 16 months for theft after his fourth arrest - all involving drugs.
While Parsons, whose incarceration is not related to his work for WaMu, oversaw a team screening mortgage applications, he was snorting methamphetamine daily, he said.
"In our world, it was tolerated," said Sherri Zaback, who worked for Parsons and recalls seeing drug paraphernalia on his desk. "Everybody said, 'He gets the job done."'
At WaMu, getting the job done meant lending money to nearly anyone who asked for it - the force behind the bank's meteoric rise and its precipitous collapse this year in the biggest bank failure in American history.
In a financial landscape littered with wreckage, WaMu, a Seattle-based bank that opened branches at a clip worthy of a fast-food chain, stands out as a singularly brazen case of lax lending. By the first half of this year, the value of its bad loans had reached $11.5 billion, having nearly tripled from $4.2 billion a year earlier.
Interviews with two dozen former employees, mortgage brokers, real estate agents and appraisers show the relentless pressure to churn out loans that produced such results. While that sample may not fully represent a bank with tens of thousands of people, it does reflect the views of employees in WaMu mortgage operations in California, Florida, Illinois and Texas.
Their accounts are consistent with those of 89 other former employees who are confidential witnesses in a class action filed against WaMu in U.S. court in Seattle by former shareholders.
According to these accounts, pressure to keep lending emanated from the top, where executives profited from the swift expansion - not least, Kerry Killinger, who was WaMu's chief executive from 1990 until he was forced out in September.
Between 2001 and 2007, Killinger received compensation of $88 million, according to the Corporate Library, a research firm. He declined to respond to a list of questions, and his spokesman said he was unavailable for an interview.
During Killinger's tenure, WaMu pressed sales agents to pump out loans while disregarding borrowers' incomes and assets, according to former employees. The bank set up what insiders described as a system of dubious legality that enabled real estate agents to collect fees of more than $10,000 for bringing in borrowers, sometimes making the agents more beholden to WaMu than they were to their clients.
WaMu gave mortgage brokers handsome commissions for selling the riskiest loans, which carried higher fees, bolstering profits and ultimately the compensation of the bank's executives. WaMu pressed appraisers to provide inflated property values that made loans appear less risky, enabling Wall Street to bundle them more easily for sale to investors.
"It was the Wild West," said Steven Knobel, a founder of an appraisal company - Mitchell, Maxwell & Jackson - that did business with WaMu until 2007. "If you were alive, they would give you a loan. Actually, I think if you were dead, they would still give you a loan."
JPMorgan Chase, which bought WaMu for $1.9 billion in September and received $25 billion a few weeks later as part of the taxpayer bailout of the financial services industry, declined to make former WaMu executives available for interviews.
JPMorgan also declined to comment on WaMu's operations before it bought the company. "It is a different era for our customers and for the company," a spokesman said.
For those who placed their faith and money in WaMu, the bank's implosion came as a shock.
"I never had a clue about the amount of off-the-cliff activity that was going on at Washington Mutual, and I was in constant contact with the company," said Vincent Au, president of Avalon Partners, an investment firm. "There were people at WaMu that orchestrated nothing more than a sham or charade. These people broke every fundamental rule of running a company."'Like a sweatshop'
Some WaMu employees who worked for the bank during the boom now have regrets.
"It was a disgrace," said Dana Zweibel, a former financial representative at a WaMu branch in Tampa, Florida. "We were giving loans to people that never should have had loans."
If Zweibel doubted whether customers could pay, supervisors directed her to keep selling, she said. "We were told from up above that that's not our concern," she said. "Our concern is just to write the loan."
The ultimate supervisor at WaMu was Killinger, who joined the company in 1983 and became chief executive in 1990. He inherited a bank that had been founded in 1889 and had survived the Depression and the savings and loan scandal of the 1980s.
An investment analyst by training, he was attuned to Wall Street's hunger for growth. Between late 1996 and early 2002, he transformed WaMu into the sixth-largest U.S. bank through a series of acquisitions.
A crucial deal came in 1999, with the purchase of Long Beach Financial, a California lender specializing in subprime mortgages - loans extended to borrowers with troubled credit.
WaMu underscored its eagerness to lend with an advertising campaign introduced during the 2003 Academy Awards: "The Power of Yes." No mere advertising pitch, this was also the mantra inside the bank, underwriters said.
"WaMu came out with that slogan, and that was what we had to live by," Zaback said. "We joked about it a lot." A file would get marked problematic and then somehow get approved. "We'd say: 'O.K.! The power of yes."'
Revenue at WaMu's mortgage unit swelled from $707 million in 2002 to almost $2 billion the following year, when the "The Power of Yes" campaign started.
Between 2000 and 2003, the number of WaMu's retail branches grew 70 percent, reaching 2,200 across 38 states, as the bank used an image of cheeky irreverence to attract new customers. In offbeat television ads, casually dressed WaMu employees ridiculed staid bankers in suits.
Branches were pushed to increase lending. "It was just disgusting," said Zweibel, the Tampa representative. "They wanted you to spend time, while you're running teller transactions and opening checking accounts, selling people loans."
Employees in Tampa who fell short were ordered to drive to a WaMu office in Sarasota, an hour away. There, they sat in a phone bank with 20 other people, calling customers to push home equity loans.
"The regional manager would be over your shoulder, listening to every word," Zweibel recalled. "They treated us like we were in a sweatshop."
At the other end of the country, at WaMu's processing office in San Diego, Zaback's job was to take loan applications from branches in Southern California and make sure they passed muster. Most of the loans she said she handled required the borrower to provide only an address and a Social Security number and to state income and assets.
She ran applications through WaMu's computer system for approval. If she needed more information, she had to consult a loan officer, which she described as an unpleasant experience. "They would be furious," Zaback said. "They would put it on you, that they weren't going to get paid if you stood in the way."
On one loan application in 2005, a borrower identified himself as a gardener and listed his monthly income as $12,000, Zaback recalled. She could not verify his business license, so she took the file to her boss, Parsons.
He used the mariachi singer as inspiration: a photo of the borrower's truck emblazoned with the name of his landscaping business went into the file. Approved.
Parsons, who worked for WaMu in San Diego from about 2002 through 2005, said his supervisors constantly praised his performance. "My numbers were through the roof," he said.
On another occasion, Zaback asked a loan officer for verification of an applicant's assets. The officer sent a letter from a bank showing a balance of about $150,000 in the borrower's account, she recalled. But when Zaback called the bank to confirm, she was told the balance was only $5,000.
The loan officer yelled at her, Zaback recalled. "She said, 'We don't call the bank to verify."' Zaback said she had told Parsons that she no longer wanted to work with that loan officer, but he had replied: "Too bad."
Shortly thereafter, Parsons disappeared from the office. Zaback later learned of his arrest for burglary and drug possession.
The sheer workload at WaMu ensured that loan reviews were limited. Zaback's office had 108 people, and several hundred new files a day. She was required to process at least 10 files daily.
"I'd typically spend a maximum of 35 minutes per file," she said. "It was just disheartening. Just spit it out and get it done. That's what they wanted us to do. Garbage in, and garbage out."Referral fees for loans
WaMu's boiler room culture flourished in Southern California, where housing prices rose so rapidly during the bubble that creative financing was needed to attract buyers.
To that end, WaMu embraced so-called option ARMs - adjustable-rate mortgages that enticed borrowers with a selection of low initial rates and allowed them to decide how much to pay each month. But people who chose minimum payments were underpaying the interest due and adding to their principal, eventually causing loan payments to balloon.
Customers were often left with the impression that low payments would continue long term, according to former WaMu sales agents.
For WaMu, variable-rate loans - option adjustable-rate mortgages, in particular - were especially attractive because they carried higher fees than other loans and allowed WaMu to book profits on interest payments that borrowers deferred. Because WaMu was selling many of its loans to investors, it did not worry about defaults: by the time loans went bad, they were often in other hands.
WaMu's adjustable-rate mortgages expanded from about one-fourth of new home loans in 2003 to 70 percent by 2006. In 2005 and 2006 - when WaMu pushed option adjustable-rate mortgages most aggressively - Killinger received pay of $19 million and $24 million respectively.The ARM loan niche
WaMu's retail mortgage office in Downey, California, specialized in selling option ARMs to Latino customers who spoke little English and depended on advice from real estate brokers, according to a former sales agent who requested anonymity because he was still in the mortgage business.
According to that agent, WaMu turned real estate agents into a pipeline for loan applications by giving them "referral fees" for clients who became WaMu borrowers.
Buyers were typically oblivious to agents' fees, the agent said, and agents rarely explained the loan terms.
"Their realtor was their trusted friend," the agent said. "The realtors would sell them on a minimum payment, and that was an outright lie."
According to the agent, the strategy was the brainchild of Thomas Ramirez, who oversaw a sales team of about 20 agents at the Downey branch during the first half of this decade, and now works for Wells Fargo.
Ramirez confirmed that he and his team had allowed real estate agents to collect commissions, but he maintained that the fees had been fully disclosed.
"I don't think the bank would have let us do the program if it was bad," Ramirez said.
Ramirez's team sold nearly $1 billion worth of loans in 2004, he said. His performance made him a perennial member of WaMu's President's Club, which brought big bonuses and recognition at an awards ceremony for which Killinger typically was host at warm-weather locations like Hawaii.
Ramirez's success prompted WaMu to populate a neighboring building in Downey with loan processors, underwriters and appraisers who worked for him. The fees proved so enticing that real estate agents arrived in Downey from all over Southern California, bearing six and seven loan applications at a time, the former agent said.
WaMu banned referral fees in 2006, fearing they could be construed as illegal payments from the bank to agents. But the bank allowed Ramirez's team to continue using the referral fees, the agent said.Forced out with millions
By 2005, the word was out that WaMu would accept applications with a mere statement of the borrower's income and assets - often with no documentation required - as long as credit scores were adequate, according to Zaback and other underwriters.
"We had a flier that said, 'A thin file is a good file,"' recalled Michele Culbertson, a wholesale sales agent with WaMu.
Martine Lado, an agent in the Irvine, California, office, said she had coached brokers to leave parts of applications blank to avoid prompting verification if the borrower's job or income was sketchy.
"We were looking for people who understood how to do loans at WaMu," Lado said.
Top producers became heroes. Craig Clark, called the "king of the option ARM" by colleagues, closed loans totaling about $1 billion in 2005, according to four of his former coworkers, a tally he amassed in part by challenging anyone who doubted him.
"He was a bulldozer when it came to getting his stuff done," said Lisa Alvarez, who worked in the Irvine office from 2003 to 2006.
Christine Crocker, who managed WaMu's wholesale underwriting division in Irvine, recalled one mortgage to an elderly couple from a broker on Clark's team.
With a fixed income of about $3,200 a month, the couple needed a fixed-rate loan. But their broker earned a commission of three percentage points by arranging an option ARM for them, and did so by listing their income as $7,000 a month. Soon, their payment jumped from about $1,000 a month to about $3,000, and they fell behind.
Clark, who now works for JPMorgan, referred calls to a company spokesman, who provided no further details.
In 2006, WaMu slowed the use of option adjustable-rate mortgages. But earlier, ill-considered loans had already begun hurting its results. In 2007, it recorded a $67 million loss and shut down its subprime lending unit.
By the time shareholders joined WaMu for its annual meeting in Seattle last April, WaMu had posted a first-quarter loss of $1.14 billion and increased its loan loss reserve to $3.5 billion. Its stock had lost more than half its value in the previous two months. Anger was in the air.
Some shareholders were irate that Killinger and other executives were excluding mortgage losses from the computation of their bonuses. Others were enraged that WaMu had turned down an $8-a-share takeover bid from JPMorgan.
"Calm down and have a little faith," Killinger told the crowd. "We will get through this."
WaMu asked shareholders to approve a $7 billion investment by Texas Pacific Group, a private equity firm, and other unnamed investors. David Bonderman, a founder of Texas Pacific and a former WaMu director, declined to comment.
Hostile shareholders argued that the deal would dilute their holdings, but Killinger forced it through, saying WaMu desperately needed new capital.
Weeks later, with WaMu in tatters, directors stripped Killinger of his board chairmanship. And the bank began including mortgage losses when calculating executive bonuses.
In September, Killinger was forced to retire. Later that month, with WaMu buckling under about $180 billion in mortgage-related loans, regulators seized the bank and sold it to JPMorgan for $1.9 billion, a fraction of the $40 billion valuation the stock market had given WaMu at its peak.
Billions that investors had plowed into WaMu were wiped out, as were prospects for many of the bank's 50,000 employees. But Killinger still had his millions, rankling laid-off workers and shareholders alike.
"Kerry has made over $100 million over his tenure based on the aggressiveness that sunk the company," said Au, the money manager. "How does he justify taking that money?"
In June, Au sent an e-mail message to the company, asking executives to return some of their pay. He says he has not heard back
*********************
Blockbuster openings, lackluster U.S. box office
By Michael Cieply
Sunday, December 28, 2008
LOS ANGELES: What a year for movie openings.
I mean, who could forget "Twilight"? Teenagers screaming for free tickets outside the dual-theater Westwood premiere here. Mayhem in the malls. Girls thirsting for Robert Pattinson. Box-office projections growing bigger and bigger as online vendors sold out theater after theater.
It was amazing. When all is said and done, maybe 24 million tickets will be sold to that movie, based on current sales. That makes it almost as big as, what?
"Patch Adams," the No. 10 movie of 1998. Or roughly the size of "George of the Jungle," which placed No. 13 the year before. Or any number of films that are fondly remembered as midsize hits.
Looking back, in fact, 2008 may be remembered as the year when Hollywood succeeded in redefining the Big Event.
A "movie of the century" — something that made you want to dress up, get in line, and act silly just to see it — used to come along every year or two. The "Star Wars" films had that quality. So did "Titanic," in a quieter, dreamier sort of way.
But heart-stopping film events like that have been popping up every few weeks this year.
Or at least it felt that way if you were willing to close your eyes and take a ride with Hollywood's marketing mavens and those who help them along in the media, old and new.
(Yes, yours truly has sometimes played the game. Many film writers have.)
It's all great fun — and, in the heat of the moment, can seem tantalizingly real. Remember the high-heeled stampede toward "Sex and the City"? What a romp! Cosmopolitans. Bus tours. Girls' nights out.
Eventually, about 22 million tickets were sold. That puts it on a par with "Steel Magnolias" in 1989 or "The First Wives Club" in 1996 — movies that played to about the same number of viewers, but did so with considerably less noise.
Even this year's really big one, "The Dark Knight," was never quite as big as it felt. Clear away the urgent reports about 6 a.m. screenings and Imax-size demand, and you are left, according to an always-sobering tally kept by the Box Office Mojo Web site, at boxofficemojo.com/alltime/adjusted.htm, with the 26th-most-popular movie of all time, in terms of tickets sold.
Apparently, movie events that were once routine are now routinely treated as thrilling.
Part of the reason is obvious: Those vast, exciting openings we all love have acquired a kind of false amplitude from ticket price inflation. A movie ticket in 2007 cost $6.88, on average (and at least 20 cents more in 2008), up nearly 47 percent from $4.69 in 1998. In general, the cost of consumer goods rose only about 27 percent in the same 10 years, according to a popular inflation calculator available on the Web at westegg.com/inflation/.
Inevitably, the weekend box-office numbers loomed larger and larger, even as fewer people were going to see the pictures.
According to Media By Numbers, a consulting company that tracks such things, admissions to theaters — adrift for years — are now about 3 percent behind last year's count, even as box-office revenue is poised to top the $9.7 billion record set in 2007.
If inflation-soaked numbers consistently look exceptional — with a $42 million opening weekend, even "High School Musical 3: Senior Year" began to feel like a blockbuster — they have appeared to grow still more in the magnifying lens of the Internet.
Who can resist the drama when box-office aficionados at Fandango.com, Movietickets.com, Boxofficeguru.com and Deadlinehollywooddaily.com start pumping up the volume, and building their own traffic, in the weeks before a movie like "Twilight" opens?
Before you know it, fans trample one another at a mall and make TMZ.com. Pretty soon, even The New York Times is staking out "Twilight"-mania at a shopping center in suburban Philadelphia.
All not to be scooped on a movie that so far has had about as many viewers as the dimly recalled angel romance "Michael," from 1996.
(At the same time, the population has been growing, so a movie with the same number of viewers is actually drawing a smaller chunk of the market. If you were to count the percentage of Americans who actually watched in a theater, "Twilight" was probably closer to the performance of "Congo," a jungle thriller from the year before.)
Maybe everything looks a little bigger than it really is in these somewhat hysterical times.
"It's certainly easier to create a media event, if you have the right stars and get the right traction," said Howard Bragman, a Hollywood publicist who, with Michael Levin, has made a study of contemporary publicity in a book, "Where's My Fifteen Minutes?," which was recently published by Portfolio Hardcover.
The problem, Bragman said, "is that there's shockingly little relationship between the publicity, i.e., the hype, and butts in seats."
In truth, a little exaggeration is probably good for the movie industry (though it does not do much for journalism). Studios need the excitement of seemingly enormous openings to juice waning DVD sales while they wait for the next truly big thing — a new distribution format that would let companies once again resell all those movies that have been peddled previously on broadcast television, cable, videocassettes and discs.
Until that happens, though, it may be a good idea to keep an inflation calculator handy. Just so we don't start kidding ourselves about what is really going on here.
As colossal as it seemed back in May, "Iron Man" was no "Twister." The 1996 tornado film, that year's No. 2, easily outsold the superhero, this year's second-biggest event, 55 million tickets to 45 million.
And "Turner & Hooch," from 1989, would have looked like a very big deal — more than a third bigger in ticket sales than Disney's dog-movie-of-the-century "Beverly Hills Chihuahua," actually — if that sloppy old hound had slobbered on Tom Hanks in 2008.
By Michael Cieply
Sunday, December 28, 2008
LOS ANGELES: What a year for movie openings.
I mean, who could forget "Twilight"? Teenagers screaming for free tickets outside the dual-theater Westwood premiere here. Mayhem in the malls. Girls thirsting for Robert Pattinson. Box-office projections growing bigger and bigger as online vendors sold out theater after theater.
It was amazing. When all is said and done, maybe 24 million tickets will be sold to that movie, based on current sales. That makes it almost as big as, what?
"Patch Adams," the No. 10 movie of 1998. Or roughly the size of "George of the Jungle," which placed No. 13 the year before. Or any number of films that are fondly remembered as midsize hits.
Looking back, in fact, 2008 may be remembered as the year when Hollywood succeeded in redefining the Big Event.
A "movie of the century" — something that made you want to dress up, get in line, and act silly just to see it — used to come along every year or two. The "Star Wars" films had that quality. So did "Titanic," in a quieter, dreamier sort of way.
But heart-stopping film events like that have been popping up every few weeks this year.
Or at least it felt that way if you were willing to close your eyes and take a ride with Hollywood's marketing mavens and those who help them along in the media, old and new.
(Yes, yours truly has sometimes played the game. Many film writers have.)
It's all great fun — and, in the heat of the moment, can seem tantalizingly real. Remember the high-heeled stampede toward "Sex and the City"? What a romp! Cosmopolitans. Bus tours. Girls' nights out.
Eventually, about 22 million tickets were sold. That puts it on a par with "Steel Magnolias" in 1989 or "The First Wives Club" in 1996 — movies that played to about the same number of viewers, but did so with considerably less noise.
Even this year's really big one, "The Dark Knight," was never quite as big as it felt. Clear away the urgent reports about 6 a.m. screenings and Imax-size demand, and you are left, according to an always-sobering tally kept by the Box Office Mojo Web site, at boxofficemojo.com/alltime/adjusted.htm, with the 26th-most-popular movie of all time, in terms of tickets sold.
Apparently, movie events that were once routine are now routinely treated as thrilling.
Part of the reason is obvious: Those vast, exciting openings we all love have acquired a kind of false amplitude from ticket price inflation. A movie ticket in 2007 cost $6.88, on average (and at least 20 cents more in 2008), up nearly 47 percent from $4.69 in 1998. In general, the cost of consumer goods rose only about 27 percent in the same 10 years, according to a popular inflation calculator available on the Web at westegg.com/inflation/.
Inevitably, the weekend box-office numbers loomed larger and larger, even as fewer people were going to see the pictures.
According to Media By Numbers, a consulting company that tracks such things, admissions to theaters — adrift for years — are now about 3 percent behind last year's count, even as box-office revenue is poised to top the $9.7 billion record set in 2007.
If inflation-soaked numbers consistently look exceptional — with a $42 million opening weekend, even "High School Musical 3: Senior Year" began to feel like a blockbuster — they have appeared to grow still more in the magnifying lens of the Internet.
Who can resist the drama when box-office aficionados at Fandango.com, Movietickets.com, Boxofficeguru.com and Deadlinehollywooddaily.com start pumping up the volume, and building their own traffic, in the weeks before a movie like "Twilight" opens?
Before you know it, fans trample one another at a mall and make TMZ.com. Pretty soon, even The New York Times is staking out "Twilight"-mania at a shopping center in suburban Philadelphia.
All not to be scooped on a movie that so far has had about as many viewers as the dimly recalled angel romance "Michael," from 1996.
(At the same time, the population has been growing, so a movie with the same number of viewers is actually drawing a smaller chunk of the market. If you were to count the percentage of Americans who actually watched in a theater, "Twilight" was probably closer to the performance of "Congo," a jungle thriller from the year before.)
Maybe everything looks a little bigger than it really is in these somewhat hysterical times.
"It's certainly easier to create a media event, if you have the right stars and get the right traction," said Howard Bragman, a Hollywood publicist who, with Michael Levin, has made a study of contemporary publicity in a book, "Where's My Fifteen Minutes?," which was recently published by Portfolio Hardcover.
The problem, Bragman said, "is that there's shockingly little relationship between the publicity, i.e., the hype, and butts in seats."
In truth, a little exaggeration is probably good for the movie industry (though it does not do much for journalism). Studios need the excitement of seemingly enormous openings to juice waning DVD sales while they wait for the next truly big thing — a new distribution format that would let companies once again resell all those movies that have been peddled previously on broadcast television, cable, videocassettes and discs.
Until that happens, though, it may be a good idea to keep an inflation calculator handy. Just so we don't start kidding ourselves about what is really going on here.
As colossal as it seemed back in May, "Iron Man" was no "Twister." The 1996 tornado film, that year's No. 2, easily outsold the superhero, this year's second-biggest event, 55 million tickets to 45 million.
And "Turner & Hooch," from 1989, would have looked like a very big deal — more than a third bigger in ticket sales than Disney's dog-movie-of-the-century "Beverly Hills Chihuahua," actually — if that sloppy old hound had slobbered on Tom Hanks in 2008.
*********************
Printing money - and its price
By Peter S. Goodman
Sunday, December 28, 2008
Borrowing and spending beyond ordinary limits largely explains how the United States got into such economic trouble. For decades, businesses and consumers feasted relentlessly, as if gravity, arithmetic and the tyranny of debt had been defanged by financial engineering.
Armed with credit cards and belief in a bountiful future, Americans brought home ceaseless volumes of iPods and cashmere sweaters, and never mind their declining incomes and winnowing savings. Banks lent staggering sums of money to homeowners with dubious credit, convinced that real estate prices could only go up. Government spent as it saw fit, secure that foreigners could always be counted on to finance U.S. debt.
So it may seem perverse that in this new era of reckoning — with consumers finally tapped out, government coffers lean and banks paralyzed by fear — many economists have concluded that the appropriate medicine is a fresh dose of the very course that delivered the disarray: Spend without limit. Print money today, fret about the consequences tomorrow. Otherwise, lost jobs and business failures could cripple the nation for years.
Such thinking carries the moment as President-elect Barack Obama puts together plans to spend more than $700 billion on projects like building roads and classrooms to put people back to work. It is the philosophy behind the Federal Reserve's decision to drop interest rates near zero — meaning that banks can essentially borrow money for free — while lending directly to financial institutions. This is the mentality that has propelled the U.S. Treasury to promise up to $950 billion to aid Wall Street, Detroit and perhaps other recipients.
But where does all this money come from? And how can a country that got itself in peril by borrowing and spending without limit now borrow and spend its way back to safety?
In the case of the Fed, the money comes from its authority to print dollars from thin air. Since late August, the Fed has expanded its balance sheet from about $900 billion to more than $2.2 trillion, creating $1.3 trillion that did not exist to replace some of the trillions wiped out by falling house prices and vengeful stock markets. The Fed has taken troublesome assets off the hands of banks and simply credited them with having reserves they previously lacked.
In the case of the Treasury, the money comes from the same wellspring that has been financing U.S. debt for decades: Investors in the United States and around the world — not least, the central banks of China, Japan and Saudi Arabia, which have parked national savings in the safety of U.S. government bonds.
Americans have gotten accustomed to treating this well as bottomless, even as anxiety grows that it could one day run dry with potentially devastating consequences.
The value of outstanding U.S. Treasury bills now reaches $10.6 trillion, a number sure to increase as dollars are spent building bridges, saving auto jobs and preventing the collapse of government-backed mortgage giants. Worry centers on the possibility that foreigners could come to doubt the U.S. wherewithal to pay back such an extraordinary sum, prompting them to stop — or at least slow — their deposits of savings into the United States.
That could send the dollar plummeting, making imported goods more expensive for U.S. consumers and businesses. It would force the Treasury to pay higher returns to find takers for its debt, increasing interest rates for home- and auto-buyers, for businesses and credit-card holders.
"We got into this mess to a considerable extent by overborrowing," said Martin Baily, a chairman of the Council of Economic Advisers under President Bill Clinton and now a fellow at the Brookings Institution. "Now, we're saying, 'Well, O.K., let's just borrow a bunch more, and that will help us get out of this mess.' It's like a drunk who says, 'Give me a bottle of Scotch, and then I'll be O.K. and I won't have to drink anymore.' Eventually, we have to get off this binge of borrowing."
Some argue that the moment for sobriety is long overdue, and postponing it further only increases the ultimate costs. "Our government doesn't have enough spare cash to bail out a lemonade stand," declared Peter Schiff, president of Euro Pacific Capital, a Connecticut-based trading house. "Our standard of living must decline to reflect years of reckless consumption and the disintegration of our industrial base. Only by swallowing this tough medicine now will our sick economy ever recover."
But most economists cast such thinking as recklessly extreme, akin to putting an obese person on a painful diet in the name of long-term health just as they are fighting off a potentially lethal infection. In the dominant view, now is no time for austerity — not with paychecks disappearing from the economy and gyrating markets wiping out retirement savings. Not with the financial system in virtual lockdown, and much of the world in a similar state of retrenchment, shrinking demand for U.S. goods and services.
Since the Great Depression, the conventional prescription for such times is to have the government step in and create demand by cycling its dollars through the economy, generating jobs and business opportunities. That such dollars must be borrowed is hardly ideal, adding to the long-term strains on the nation. But the immediate risks of not spending them could be grave.
"This is a dangerous situation," Baily says, essentially arguing that the drunk must be kept in Scotch a while longer, lest he burn down the neighborhood in the midst of a crisis. "The risks of things actually getting worse and us going into a really severe recession are high. We need to get more money out there now."
Had the government worried more about limiting spending than about the potential collapse of the mortgage giants, Fannie Mae and Freddie Mac, it might have triggered precisely the dark scenario that consumes those who worry most about growing American debt, argues Brad Setser, an economist at the Council on Foreign Relations.
China purchased a lot of Fannie and Freddie bonds with the understanding that they were backed by the American government. No bailout "would have been portrayed in China as defaulting on the Chinese people," Setser said. That would have increased the likelihood that China would start parking its savings somewhere other than the United States.
The most frequently voiced worry about the bailouts is that the Fed, by sending so much money sloshing through the system, risks generating a bad case of rising prices later on. That puts the onus on the Fed to reverse course and crimp economic activity by lifting interest rates and selling assets back to banks once growth resumes.
But finding the appropriate point to act tends to be more art than science. The Fed might move too early and send the economy back into a tailspin. It might wait too long and let too much money generate inflation.
"It's a tricky business," says Allan Meltzer, an economist at Carnegie Mellon University, and a former economic adviser to President Ronald Reagan. "There's no math model that tells us when to do it or how."
But that, as most economists see it, is a worry for another day. Some policy makers are focused on staving off the opposite problem — deflation, or falling prices, as demand weakens to the point that goods pile up without buyers, sending prices down and reducing the incentive for businesses to invest. That could shrink demand further and perhaps even deliver the sort of downward spiral that pinned Japan in the weeds of stagnant growth during the 1990s.
"Those who claim that sharp increases in federal borrowing and the national debt would be ill advised at the present time, when the economy is weakening while deflation threatens, have failed to study Japan's history," declared the economist John Makin in a report published by the conservative American Enterprise Institute — ordinarily, a staunch advocate for lean government.
So back to the well Americans go, putting aside worries about debt, unleashing another wave of synthesized money in an effort to prevent deeper misery.
"Right now," Setser says, "the risk is not doing enough."
By Peter S. Goodman
Sunday, December 28, 2008
Borrowing and spending beyond ordinary limits largely explains how the United States got into such economic trouble. For decades, businesses and consumers feasted relentlessly, as if gravity, arithmetic and the tyranny of debt had been defanged by financial engineering.
Armed with credit cards and belief in a bountiful future, Americans brought home ceaseless volumes of iPods and cashmere sweaters, and never mind their declining incomes and winnowing savings. Banks lent staggering sums of money to homeowners with dubious credit, convinced that real estate prices could only go up. Government spent as it saw fit, secure that foreigners could always be counted on to finance U.S. debt.
So it may seem perverse that in this new era of reckoning — with consumers finally tapped out, government coffers lean and banks paralyzed by fear — many economists have concluded that the appropriate medicine is a fresh dose of the very course that delivered the disarray: Spend without limit. Print money today, fret about the consequences tomorrow. Otherwise, lost jobs and business failures could cripple the nation for years.
Such thinking carries the moment as President-elect Barack Obama puts together plans to spend more than $700 billion on projects like building roads and classrooms to put people back to work. It is the philosophy behind the Federal Reserve's decision to drop interest rates near zero — meaning that banks can essentially borrow money for free — while lending directly to financial institutions. This is the mentality that has propelled the U.S. Treasury to promise up to $950 billion to aid Wall Street, Detroit and perhaps other recipients.
But where does all this money come from? And how can a country that got itself in peril by borrowing and spending without limit now borrow and spend its way back to safety?
In the case of the Fed, the money comes from its authority to print dollars from thin air. Since late August, the Fed has expanded its balance sheet from about $900 billion to more than $2.2 trillion, creating $1.3 trillion that did not exist to replace some of the trillions wiped out by falling house prices and vengeful stock markets. The Fed has taken troublesome assets off the hands of banks and simply credited them with having reserves they previously lacked.
In the case of the Treasury, the money comes from the same wellspring that has been financing U.S. debt for decades: Investors in the United States and around the world — not least, the central banks of China, Japan and Saudi Arabia, which have parked national savings in the safety of U.S. government bonds.
Americans have gotten accustomed to treating this well as bottomless, even as anxiety grows that it could one day run dry with potentially devastating consequences.
The value of outstanding U.S. Treasury bills now reaches $10.6 trillion, a number sure to increase as dollars are spent building bridges, saving auto jobs and preventing the collapse of government-backed mortgage giants. Worry centers on the possibility that foreigners could come to doubt the U.S. wherewithal to pay back such an extraordinary sum, prompting them to stop — or at least slow — their deposits of savings into the United States.
That could send the dollar plummeting, making imported goods more expensive for U.S. consumers and businesses. It would force the Treasury to pay higher returns to find takers for its debt, increasing interest rates for home- and auto-buyers, for businesses and credit-card holders.
"We got into this mess to a considerable extent by overborrowing," said Martin Baily, a chairman of the Council of Economic Advisers under President Bill Clinton and now a fellow at the Brookings Institution. "Now, we're saying, 'Well, O.K., let's just borrow a bunch more, and that will help us get out of this mess.' It's like a drunk who says, 'Give me a bottle of Scotch, and then I'll be O.K. and I won't have to drink anymore.' Eventually, we have to get off this binge of borrowing."
Some argue that the moment for sobriety is long overdue, and postponing it further only increases the ultimate costs. "Our government doesn't have enough spare cash to bail out a lemonade stand," declared Peter Schiff, president of Euro Pacific Capital, a Connecticut-based trading house. "Our standard of living must decline to reflect years of reckless consumption and the disintegration of our industrial base. Only by swallowing this tough medicine now will our sick economy ever recover."
But most economists cast such thinking as recklessly extreme, akin to putting an obese person on a painful diet in the name of long-term health just as they are fighting off a potentially lethal infection. In the dominant view, now is no time for austerity — not with paychecks disappearing from the economy and gyrating markets wiping out retirement savings. Not with the financial system in virtual lockdown, and much of the world in a similar state of retrenchment, shrinking demand for U.S. goods and services.
Since the Great Depression, the conventional prescription for such times is to have the government step in and create demand by cycling its dollars through the economy, generating jobs and business opportunities. That such dollars must be borrowed is hardly ideal, adding to the long-term strains on the nation. But the immediate risks of not spending them could be grave.
"This is a dangerous situation," Baily says, essentially arguing that the drunk must be kept in Scotch a while longer, lest he burn down the neighborhood in the midst of a crisis. "The risks of things actually getting worse and us going into a really severe recession are high. We need to get more money out there now."
Had the government worried more about limiting spending than about the potential collapse of the mortgage giants, Fannie Mae and Freddie Mac, it might have triggered precisely the dark scenario that consumes those who worry most about growing American debt, argues Brad Setser, an economist at the Council on Foreign Relations.
China purchased a lot of Fannie and Freddie bonds with the understanding that they were backed by the American government. No bailout "would have been portrayed in China as defaulting on the Chinese people," Setser said. That would have increased the likelihood that China would start parking its savings somewhere other than the United States.
The most frequently voiced worry about the bailouts is that the Fed, by sending so much money sloshing through the system, risks generating a bad case of rising prices later on. That puts the onus on the Fed to reverse course and crimp economic activity by lifting interest rates and selling assets back to banks once growth resumes.
But finding the appropriate point to act tends to be more art than science. The Fed might move too early and send the economy back into a tailspin. It might wait too long and let too much money generate inflation.
"It's a tricky business," says Allan Meltzer, an economist at Carnegie Mellon University, and a former economic adviser to President Ronald Reagan. "There's no math model that tells us when to do it or how."
But that, as most economists see it, is a worry for another day. Some policy makers are focused on staving off the opposite problem — deflation, or falling prices, as demand weakens to the point that goods pile up without buyers, sending prices down and reducing the incentive for businesses to invest. That could shrink demand further and perhaps even deliver the sort of downward spiral that pinned Japan in the weeds of stagnant growth during the 1990s.
"Those who claim that sharp increases in federal borrowing and the national debt would be ill advised at the present time, when the economy is weakening while deflation threatens, have failed to study Japan's history," declared the economist John Makin in a report published by the conservative American Enterprise Institute — ordinarily, a staunch advocate for lean government.
So back to the well Americans go, putting aside worries about debt, unleashing another wave of synthesized money in an effort to prevent deeper misery.
"Right now," Setser says, "the risk is not doing enough."
*****************
Dubious accounting undermines aid for U.S. homeowners
By Gretchen Morgenson
Sunday, December 28, 2008
With U.S. home prices in free fall and mortgage delinquencies mounting, pressure to modify troubled loans is ratcheting up.
But lawyers who represent candidates for modifications say the programs are hobbled by the complexity of securitization pools that hold the loans, as well as by uncertainty about who actually owns the notes underlying the mortgages.
Problems often emerge because these notes - which are written promises to repay the full amount of a mortgage - were not recorded properly when they were bundled by Wall Street into pools or were subsequently transferred to other holders.
How can a loan be modified, these lawyers ask, if the lender cannot prove that it actually owns the note? More and more judges are asking the same thing about lenders who are trying to foreclose on borrowers.
And here is another hurdle: Most loan servicers - the people responsible for handling all the paperwork surrounding monthly mortgage payments - are not set up to handle all of the details involved in a modification.
Loan servicing operations are intended to receive borrowers' payments. Producing loan histories and verifying that payments have been received or junk fees have not been applied is considerably more labor-intensive. This cuts into profits.
"These servicers are not staffed up and they don't have a chance in the world to do the stuff they are supposed to do," said April Charney, a consumer lawyer at Jacksonville Legal Aid in Florida. Many servicers stonewall troubled borrowers who ask for histories of their loan payments and fees, she said.
"This is your biggest, hugest expense - your home - and when you ask for a life-of-loan history, your servicer tells you to get lost," she said. "And when you ask for a list of charges in the loan history that's not going to happen."
So even if loan modifications were to rise rapidly, it is unclear that borrowers could trust what lenders told them about what they owed.
Consider a U.S. bankruptcy court case in Colorado. It involves two borrowers who got into trouble on their loan but agreed, under a bankruptcy plan, to make revised mortgage payments to get back on track.
The lender in the case is Wells Fargo, and on Dec. 22 the judge overseeing the matter took a tough stance on the bank's record-keeping and billing practices.
In June 2004, Brandon Burrier and Denon Burrier received a $183,126 loan for a property in Arvada, Colorado. The note was later transferred to Wells Fargo, court filings show.
The Burriers fell behind on their loan and in February 2007, they filed a Chapter 13 bankruptcy, agreeing to pay $12,000 that Wells Fargo said they owed. Chapter 13 bankruptcies allow debtors to retain their properties and work out repayment plans based on their incomes and levels of indebtedness.
The Burriers' payment plan was confirmed by the bankruptcy court in August 2007. Last December, a second plan requiring higher payments was approved by the court.
Two months later, Wells Fargo told the court that the Burriers had failed to make four of their payments and that it should be allowed to begin foreclosure proceedings.
The Burriers denied that they had missed payments, but in April, to keep their home, they agreed to make double payments to cover the ones Wells Fargo claimed they had missed.
If the borrowers could prove that the mortgage checks had been submitted, Wells Fargo said, their account would be credited and they would no longer have to make up the payments. The proof required by Wells Fargo and approved by the court was "valid, accurate and true copies" of the fronts and backs of the checks the borrowers had sent in.
Last August, the parties were back in court, with Wells Fargo stating that the borrowers had failed to comply with the condition. Denon Burrier testified that she had asked her local bank repeatedly for proof of the payments made to Wells Fargo, but had had no luck. The payments to Wells Fargo had been processed electronically, she learned, and that meant Wells Fargo had not returned the checks to her bank.
The borrowers did produce bank statements showing that the checks Wells Fargo said were missing had been cashed by "WFHM," an entity that they assumed was Wells Fargo Home Mortgage.
But Tara Gaschler, the lawyer representing the borrowers, said Wells Fargo continued to maintain that it had not received the money.
The bank flew in an expert to testify that all checks received by Wells Fargo from borrowers in Chapter 13 cases were processed by hand, Gaschler said. "Even when presented with bank statements, they told the court there must be some mistake," she added.
Finally, Wells Fargo demanded that the Burriers provide the routing number of the account at Wells Fargo that their money went into. If they could not, the bank said, they would have to keep making extra payments.
But Sidney Brooks, the judge overseeing the case, was clearly dismayed by the bank's performance.
In his opinion, he fumed that Wells Fargo had asked the borrowers for canceled checks as proof of payment, even though such checks were often not available. Wells Fargo's request for canceled checks was especially troubling, the judge said, given that the bank was a proponent of the 2003 law that had allowed banks to stop returning canceled checks to customers.
The only institution that could have the original checks was Wells Fargo, he concluded.
"The payments have, evidently, been lost in a black hole of the creditor's organization or through accounting mismanagement," the judge wrote. "This is a major lender/mortgage loan servicer where the left hand does not know what the right hand is doing - the collection department does not know what the check processing and accounting departments are doing."
Because this is not the first time the judge has encountered problems in Wells Fargo's operations, he is considering sanctions on the bank.
"This dispute might portend a widespread abuse of collection practices or creditor overreaching," he wrote, "demanding of debtors what it, the creditor itself, is unable to provide: accurate and reliable record keeping and billing practices."
A spokesman for Wells Fargo said: "We are currently reviewing the court's opinion to determine whether or not an appeal is appropriate. The Burrier case is quite factually specific, and we disagree with the court's conclusions. We are confident that our payment processing practices are accurate and sound."
Gaschler says that this kind of dispute is becoming more common in her practice and that borrowers wind up losing too often.
"A lot of times clients don't keep canceled checks or maybe their bank account was closed and they can't go and get the proof," she said. "The bank gets that extra money for as long as the debtor can keep it up and when they can't, they are pushed out of their homes."
While judges are starting to see how flawed loan servicers' systems can be, those rushing to modify loans may not be as aware of the problems.
By Gretchen Morgenson
Sunday, December 28, 2008
With U.S. home prices in free fall and mortgage delinquencies mounting, pressure to modify troubled loans is ratcheting up.
But lawyers who represent candidates for modifications say the programs are hobbled by the complexity of securitization pools that hold the loans, as well as by uncertainty about who actually owns the notes underlying the mortgages.
Problems often emerge because these notes - which are written promises to repay the full amount of a mortgage - were not recorded properly when they were bundled by Wall Street into pools or were subsequently transferred to other holders.
How can a loan be modified, these lawyers ask, if the lender cannot prove that it actually owns the note? More and more judges are asking the same thing about lenders who are trying to foreclose on borrowers.
And here is another hurdle: Most loan servicers - the people responsible for handling all the paperwork surrounding monthly mortgage payments - are not set up to handle all of the details involved in a modification.
Loan servicing operations are intended to receive borrowers' payments. Producing loan histories and verifying that payments have been received or junk fees have not been applied is considerably more labor-intensive. This cuts into profits.
"These servicers are not staffed up and they don't have a chance in the world to do the stuff they are supposed to do," said April Charney, a consumer lawyer at Jacksonville Legal Aid in Florida. Many servicers stonewall troubled borrowers who ask for histories of their loan payments and fees, she said.
"This is your biggest, hugest expense - your home - and when you ask for a life-of-loan history, your servicer tells you to get lost," she said. "And when you ask for a list of charges in the loan history that's not going to happen."
So even if loan modifications were to rise rapidly, it is unclear that borrowers could trust what lenders told them about what they owed.
Consider a U.S. bankruptcy court case in Colorado. It involves two borrowers who got into trouble on their loan but agreed, under a bankruptcy plan, to make revised mortgage payments to get back on track.
The lender in the case is Wells Fargo, and on Dec. 22 the judge overseeing the matter took a tough stance on the bank's record-keeping and billing practices.
In June 2004, Brandon Burrier and Denon Burrier received a $183,126 loan for a property in Arvada, Colorado. The note was later transferred to Wells Fargo, court filings show.
The Burriers fell behind on their loan and in February 2007, they filed a Chapter 13 bankruptcy, agreeing to pay $12,000 that Wells Fargo said they owed. Chapter 13 bankruptcies allow debtors to retain their properties and work out repayment plans based on their incomes and levels of indebtedness.
The Burriers' payment plan was confirmed by the bankruptcy court in August 2007. Last December, a second plan requiring higher payments was approved by the court.
Two months later, Wells Fargo told the court that the Burriers had failed to make four of their payments and that it should be allowed to begin foreclosure proceedings.
The Burriers denied that they had missed payments, but in April, to keep their home, they agreed to make double payments to cover the ones Wells Fargo claimed they had missed.
If the borrowers could prove that the mortgage checks had been submitted, Wells Fargo said, their account would be credited and they would no longer have to make up the payments. The proof required by Wells Fargo and approved by the court was "valid, accurate and true copies" of the fronts and backs of the checks the borrowers had sent in.
Last August, the parties were back in court, with Wells Fargo stating that the borrowers had failed to comply with the condition. Denon Burrier testified that she had asked her local bank repeatedly for proof of the payments made to Wells Fargo, but had had no luck. The payments to Wells Fargo had been processed electronically, she learned, and that meant Wells Fargo had not returned the checks to her bank.
The borrowers did produce bank statements showing that the checks Wells Fargo said were missing had been cashed by "WFHM," an entity that they assumed was Wells Fargo Home Mortgage.
But Tara Gaschler, the lawyer representing the borrowers, said Wells Fargo continued to maintain that it had not received the money.
The bank flew in an expert to testify that all checks received by Wells Fargo from borrowers in Chapter 13 cases were processed by hand, Gaschler said. "Even when presented with bank statements, they told the court there must be some mistake," she added.
Finally, Wells Fargo demanded that the Burriers provide the routing number of the account at Wells Fargo that their money went into. If they could not, the bank said, they would have to keep making extra payments.
But Sidney Brooks, the judge overseeing the case, was clearly dismayed by the bank's performance.
In his opinion, he fumed that Wells Fargo had asked the borrowers for canceled checks as proof of payment, even though such checks were often not available. Wells Fargo's request for canceled checks was especially troubling, the judge said, given that the bank was a proponent of the 2003 law that had allowed banks to stop returning canceled checks to customers.
The only institution that could have the original checks was Wells Fargo, he concluded.
"The payments have, evidently, been lost in a black hole of the creditor's organization or through accounting mismanagement," the judge wrote. "This is a major lender/mortgage loan servicer where the left hand does not know what the right hand is doing - the collection department does not know what the check processing and accounting departments are doing."
Because this is not the first time the judge has encountered problems in Wells Fargo's operations, he is considering sanctions on the bank.
"This dispute might portend a widespread abuse of collection practices or creditor overreaching," he wrote, "demanding of debtors what it, the creditor itself, is unable to provide: accurate and reliable record keeping and billing practices."
A spokesman for Wells Fargo said: "We are currently reviewing the court's opinion to determine whether or not an appeal is appropriate. The Burrier case is quite factually specific, and we disagree with the court's conclusions. We are confident that our payment processing practices are accurate and sound."
Gaschler says that this kind of dispute is becoming more common in her practice and that borrowers wind up losing too often.
"A lot of times clients don't keep canceled checks or maybe their bank account was closed and they can't go and get the proof," she said. "The bank gets that extra money for as long as the debtor can keep it up and when they can't, they are pushed out of their homes."
While judges are starting to see how flawed loan servicers' systems can be, those rushing to modify loans may not be as aware of the problems.
*******************
Downturn ends building boom in New York
By Christine Haughney
Sunday, December 28, 2008
Nearly $5 billion in development projects in New York City have been delayed or canceled because of the economic crisis, an extraordinary body blow to an industry that last year provided 130,000 unionized jobs, according to numbers tracked by a local trade group.
The setbacks for development — perhaps the single greatest economic force in the city over the last two decades — are likely to mean, in the words of one researcher, that the landscape of New York will be virtually unchanged for two years.
"There's no way to finance a project," said the researcher, Stephen Blank of the Urban Land Institute, a nonprofit group.
Charles Blaichman is not about to argue with that assessment. Looking south from the eighth floor of a half-finished office tower on 14th Street on a recent day, Blaichman pointed to buildings he had developed in the meatpacking district. But when he turned north to the blocks along the High Line, once among the most sought-after areas for development, he surveyed a landscape of frustration: the planned sites of three luxury hotels, all stalled by recession.
Several indicators show that developers nationwide have also been affected by the tighter lending markets. The growth rate for construction and land development loans shrunk drastically this year — to 0.08 percent through September, compared with 11.3 percent for all of 2007 and 25.7 percent in 2006, according to data tracked by the Federal Deposit Insurance Corporation.
And developers who have loans are missing payments. The percentage of loans in default nationwide jumped to 7.3 percent through September 2008, compared with 1 percent in 2007, according to data tracked by Reis Inc., a New York-based real estate research company.
New York's development world is rife with such stories as developers who have been busy for years are killing projects or scrambling to avoid default because of the credit crunch.
Blaichman, who has built two dozen projects in the past 20 years, is struggling to borrow money: $370 million for the three hotels, which include a venture with Jay-Z, the hip-hop mogul. A year ago, it would have seemed a reasonable amount for Blaichman. Not now.
"Even the banks who want to give us money can't," he said.
The long-term impact is potentially immense, experts said. Construction generated more than $30 billion in economic activity in New York last year, said Louis Coletti, the chief executive of the Building Trades Employers' Association. The $5 billion in canceled or delayed projects tracked by Coletti's association include all types of construction: luxury high-rise buildings, office renovations for major banks and new hospital wings. Coletti's association, which represents 27 contractor groups, is talking to the trade unions about accepting wage cuts or freezes. So far there is no deal.
Not surprisingly, unemployment in the construction industry is soaring: in October, it was up by more than 50 percent from the same period last year, labor statistics show.
Experience does not seem to matter. Over the past 15 years, Josh Guberman, 48, developed 28 condo buildings in New York and Manhattan, many of them purchased by well-paid bankers. He is cutting back to one project in 2009.
Donald Capoccia, 53, who has built roughly 4,500 condos and moderate-income housing units in all five boroughs, took the day after Thanksgiving off, for the first time in 20 years, because business was so slow. He is shifting his attention to projects like housing for the elderly on Staten Island, which the government seems willing to finance.
Some of their better known and even wealthier counterparts are facing the same problems. In August, Deutsche Bank started foreclosure proceedings against William Macklowe over his planned project at the former Drake Hotel on Park Avenue. Kent Swig, Macklowe's son-in-law, recently shut down the sales office for a condo tower planned for 25 Broad Street after his lender, Lehman Brothers, declared bankruptcy in September. Several commercial and residential brokers said they were spending nearly half their days advising developers who are trying to find new uses for sites they fear will not be profitable.
"That rug has been pulled out from under their feet," said David Johnson, a real estate broker with Eastern Consolidated who was involved with selling the site for the proposed hotel to Blaichman, Jay-Z and their business partners for $66 million, which included the property and adjoining air rights. Johnson said that because many banks are not lending, the only option for many developers is to take on debt from less traditional lenders like foreign investors or private equity firms that charge interest rates as high as 20 percent.
That doesn't mean that all construction in New York will grind to a halt immediately. Guberman is moving forward with one condo tower at 87th Street and Broadway that awaits approval for a loan; he expects it will attract buyers even in a slowing economy. Capoccia is trying to finish selling units at a downtown Brooklyn condominium project, and is slowly moving ahead on applying for permits for an East Village project.
Blaichman, 54, is keeping busy with four buildings financed before the slowdown. He has found fashion and advertising firms to rent space in his tower at 450 West 14th St. and buyers for two downtown condo buildings. He recently rented a Lower East Side building to the School of Visual Arts as a dorm.
Blaichman had success in Greenwich Village and the meatpacking district, where he developed the private club SoHo House, the restaurant Spice Market and the Theory store. He had similar hopes for the area along the High Line, where he bought properties last year when they were fetching record prices.
An art collector, he considered the area destined for growth because of its many galleries and its proximity to the park being built on elevated railroad tracks that have given the area its name. The park, which extends 1.45 miles from Gansevoort Street to 34th Street, is expected to be completed in the spring.
Other developers have shown that buyers will pay high prices to be in the area. Condo projects designed by well-known architects like Jean Nouvel and Annabelle Selldorf have been eagerly anticipated. In recent months, buyers have paid $2 million for a two-bedroom unit and $3 million for a three-bedroom at Selldorf's project, according to Streeteasy.com, a real estate Web site.
"It's one of the greatest stretches of undeveloped areas," Blaichman said. "I still think it's going to take off."
In August 2007, Blaichman bought the site and air rights of a former Time Warner Cable warehouse. He thought the neighborhood needed its first full-service five-star hotel, in contrast to the many boutique hotels sprouting up downtown. So with his partners, Jay-Z and Abram and Scott Shnay, he envisioned a hotel with a pool, gym, spa and multiple restaurants under a brand called J Hotels. But since his mortgage brokers started shopping in late summer for roughly $200 million in financing, they have only one serious prospect for a lender.
For now, he is seeking an extension on the mortgage — monthly payments are to begin in the coming months — and trying to rent the warehouse. (He currently has no income from the property.)
It is perhaps small comfort that his fellow developers are having as many problems getting loans. Shaya Boymelgreen had banks "pull back" recently on financing for a 107-unit rental tower the developer is building at 500 West 23rd St., according to Sara Mirski, managing director of development for Boymelgreen Developers. The half-finished project looked abandoned on two recent visits, but Mirski said that construction will continue. Banks have "invited" the developer to reapply for a loan next year and have offered interim bridge loans for up to $30 million.
Blaichman cuts a more mellow figure than many other developers do. He avoids the real estate social scene, tries to turn his cellphone off after 6 p.m. and plays folk guitar in his spare time.
For now, Blaichman seems stoic about his plight. At a diner, he polished off a Swiss-cheese omelet and calmly noted that he had no near-term way to pay off his debts. He exercises several times a week and tells his three children to curb their shopping even as he regularly presses his mortgage bankers for answers.
"I sleep pretty well," Blaichman said. "There's nothing you can do in the middle of the night that will help your projects."
But even when the lending market improves — in months, or years — restarting large-scale projects will not be a quick process. A freeze in development, in fact, could continue well after the recession ends.
Blank of the Urban Land Institute said he has taken to giving the following advice to real estate executives: "We told them to take up golf."
By Christine Haughney
Sunday, December 28, 2008
Nearly $5 billion in development projects in New York City have been delayed or canceled because of the economic crisis, an extraordinary body blow to an industry that last year provided 130,000 unionized jobs, according to numbers tracked by a local trade group.
The setbacks for development — perhaps the single greatest economic force in the city over the last two decades — are likely to mean, in the words of one researcher, that the landscape of New York will be virtually unchanged for two years.
"There's no way to finance a project," said the researcher, Stephen Blank of the Urban Land Institute, a nonprofit group.
Charles Blaichman is not about to argue with that assessment. Looking south from the eighth floor of a half-finished office tower on 14th Street on a recent day, Blaichman pointed to buildings he had developed in the meatpacking district. But when he turned north to the blocks along the High Line, once among the most sought-after areas for development, he surveyed a landscape of frustration: the planned sites of three luxury hotels, all stalled by recession.
Several indicators show that developers nationwide have also been affected by the tighter lending markets. The growth rate for construction and land development loans shrunk drastically this year — to 0.08 percent through September, compared with 11.3 percent for all of 2007 and 25.7 percent in 2006, according to data tracked by the Federal Deposit Insurance Corporation.
And developers who have loans are missing payments. The percentage of loans in default nationwide jumped to 7.3 percent through September 2008, compared with 1 percent in 2007, according to data tracked by Reis Inc., a New York-based real estate research company.
New York's development world is rife with such stories as developers who have been busy for years are killing projects or scrambling to avoid default because of the credit crunch.
Blaichman, who has built two dozen projects in the past 20 years, is struggling to borrow money: $370 million for the three hotels, which include a venture with Jay-Z, the hip-hop mogul. A year ago, it would have seemed a reasonable amount for Blaichman. Not now.
"Even the banks who want to give us money can't," he said.
The long-term impact is potentially immense, experts said. Construction generated more than $30 billion in economic activity in New York last year, said Louis Coletti, the chief executive of the Building Trades Employers' Association. The $5 billion in canceled or delayed projects tracked by Coletti's association include all types of construction: luxury high-rise buildings, office renovations for major banks and new hospital wings. Coletti's association, which represents 27 contractor groups, is talking to the trade unions about accepting wage cuts or freezes. So far there is no deal.
Not surprisingly, unemployment in the construction industry is soaring: in October, it was up by more than 50 percent from the same period last year, labor statistics show.
Experience does not seem to matter. Over the past 15 years, Josh Guberman, 48, developed 28 condo buildings in New York and Manhattan, many of them purchased by well-paid bankers. He is cutting back to one project in 2009.
Donald Capoccia, 53, who has built roughly 4,500 condos and moderate-income housing units in all five boroughs, took the day after Thanksgiving off, for the first time in 20 years, because business was so slow. He is shifting his attention to projects like housing for the elderly on Staten Island, which the government seems willing to finance.
Some of their better known and even wealthier counterparts are facing the same problems. In August, Deutsche Bank started foreclosure proceedings against William Macklowe over his planned project at the former Drake Hotel on Park Avenue. Kent Swig, Macklowe's son-in-law, recently shut down the sales office for a condo tower planned for 25 Broad Street after his lender, Lehman Brothers, declared bankruptcy in September. Several commercial and residential brokers said they were spending nearly half their days advising developers who are trying to find new uses for sites they fear will not be profitable.
"That rug has been pulled out from under their feet," said David Johnson, a real estate broker with Eastern Consolidated who was involved with selling the site for the proposed hotel to Blaichman, Jay-Z and their business partners for $66 million, which included the property and adjoining air rights. Johnson said that because many banks are not lending, the only option for many developers is to take on debt from less traditional lenders like foreign investors or private equity firms that charge interest rates as high as 20 percent.
That doesn't mean that all construction in New York will grind to a halt immediately. Guberman is moving forward with one condo tower at 87th Street and Broadway that awaits approval for a loan; he expects it will attract buyers even in a slowing economy. Capoccia is trying to finish selling units at a downtown Brooklyn condominium project, and is slowly moving ahead on applying for permits for an East Village project.
Blaichman, 54, is keeping busy with four buildings financed before the slowdown. He has found fashion and advertising firms to rent space in his tower at 450 West 14th St. and buyers for two downtown condo buildings. He recently rented a Lower East Side building to the School of Visual Arts as a dorm.
Blaichman had success in Greenwich Village and the meatpacking district, where he developed the private club SoHo House, the restaurant Spice Market and the Theory store. He had similar hopes for the area along the High Line, where he bought properties last year when they were fetching record prices.
An art collector, he considered the area destined for growth because of its many galleries and its proximity to the park being built on elevated railroad tracks that have given the area its name. The park, which extends 1.45 miles from Gansevoort Street to 34th Street, is expected to be completed in the spring.
Other developers have shown that buyers will pay high prices to be in the area. Condo projects designed by well-known architects like Jean Nouvel and Annabelle Selldorf have been eagerly anticipated. In recent months, buyers have paid $2 million for a two-bedroom unit and $3 million for a three-bedroom at Selldorf's project, according to Streeteasy.com, a real estate Web site.
"It's one of the greatest stretches of undeveloped areas," Blaichman said. "I still think it's going to take off."
In August 2007, Blaichman bought the site and air rights of a former Time Warner Cable warehouse. He thought the neighborhood needed its first full-service five-star hotel, in contrast to the many boutique hotels sprouting up downtown. So with his partners, Jay-Z and Abram and Scott Shnay, he envisioned a hotel with a pool, gym, spa and multiple restaurants under a brand called J Hotels. But since his mortgage brokers started shopping in late summer for roughly $200 million in financing, they have only one serious prospect for a lender.
For now, he is seeking an extension on the mortgage — monthly payments are to begin in the coming months — and trying to rent the warehouse. (He currently has no income from the property.)
It is perhaps small comfort that his fellow developers are having as many problems getting loans. Shaya Boymelgreen had banks "pull back" recently on financing for a 107-unit rental tower the developer is building at 500 West 23rd St., according to Sara Mirski, managing director of development for Boymelgreen Developers. The half-finished project looked abandoned on two recent visits, but Mirski said that construction will continue. Banks have "invited" the developer to reapply for a loan next year and have offered interim bridge loans for up to $30 million.
Blaichman cuts a more mellow figure than many other developers do. He avoids the real estate social scene, tries to turn his cellphone off after 6 p.m. and plays folk guitar in his spare time.
For now, Blaichman seems stoic about his plight. At a diner, he polished off a Swiss-cheese omelet and calmly noted that he had no near-term way to pay off his debts. He exercises several times a week and tells his three children to curb their shopping even as he regularly presses his mortgage bankers for answers.
"I sleep pretty well," Blaichman said. "There's nothing you can do in the middle of the night that will help your projects."
But even when the lending market improves — in months, or years — restarting large-scale projects will not be a quick process. A freeze in development, in fact, could continue well after the recession ends.
Blank of the Urban Land Institute said he has taken to giving the following advice to real estate executives: "We told them to take up golf."
*******************
A wish list for U.S. commercial real estate
By Amy Cortese
Sunday, December 28, 2008
BEFORE Christmas this year, as the U.S. government scrambled to fix a recalcitrant economy, some businesses received early holiday gifts. There was $100 billion for the American International Group, the insurance giant; $250 billion for banks; and at least $13 billion for automakers.
President-elect Barack Obama has also signaled that he would spend more than $700 billion on infrastructure projects to help create jobs, while the Treasury Department has an additional $350 billion available from the rescue funds authorized by Congress in September.
Across corporate America, executives are drawing up their wish lists, and the commercial real estate industry is no exception.
Commercial real estate groups have been meeting with members of Congress, the Federal Reserve, the Treasury, the Federal Deposit Insurance Corp. as well as Obama's transition team, to press their case. And they say they have a compelling one. Commercial real estate is a significant industry, accounting for $549 billion in construction-related spending and nearly five million full-time jobs in 2007, according to the National Association of Industrial and Office Properties. It also contributes to state and local coffers.
Although commercial real estate remains in better shaper than some other industries — there is a good balance between supply and demand, vacancy rates are modest and loan default rates have so far hovered at a rock-bottom 1 percent, according to trade groups — industry leaders warn that the sector faces significant problems. In particular, tighter credit policies are making it harder for real estate companies to refinance. An estimated $400 billion in loans are expected to come due in 2009 alone, and more than $1 trillion over the next three years, according to industry estimates based on Federal Reserve data.
"We have profound risk on our hands at the moment," said Bruce Mosler, the president and chief executive of Cushman & Wakefield, a commercial brokerage firm.
Jeffrey DeBoer, the president and chief executive of the Real Estate Roundtable, an industry group based in Washington, agreed. "Commercial real estate debt will be the next major problem that policy makers need to address," he said.
The commercial real estate industry relies on a steady stream of relatively short-term financing; loans are refinanced every several years or so. With the two main sources of commercial funding — bank lending and commercial mortgage-backed securities — effectively shut down, hundreds of billions of dollars worth of loans are in jeopardy of defaulting.
The bulk of the loans coming due, industry executives say, were originated two or more years ago to help finance a rash of deals in office towers, hotels and industrial buildings, many of which are generating healthy cash flow today. "We're talking about performing loans — that's the rub," said Thomas Bisacquino, the president of the National Association of Industrial and Office Properties.
Of course, there were also speculative, highly leveraged deals at the height of the economic bubble, when rents and property values looked as if they would rise indefinitely. As vacancy rates climb and values drop, many of these loans will need to be restructured.
Existing properties are only half the problem. New development has also ground almost to a halt because of a lack of financing.
Getting investment flowing again is the most immediate concern, industry executives say, and they have a number of suggestions. The Real Estate Roundtable, for example, has circulated a five-point plan to both the current and incoming administrations that proposes a mix of lending programs and tax and accounting changes to stimulate commercial real estate investment.
Both the Roundtable and the National Association of Industrial Office Properties want the Term Asset-Backed Securities Loan Facility program, which was initially intended to intended to lubricate the market for securities backed by consumer and small-business loans, to be extended to cover commercial real estate mortgages. When it was announced in late November, Treasury officials said they would spend up to $200 billion on the program.
Alternatively, the groups have suggested that a program be created for commercial real estate debt, perhaps modeled after enterprises like Freddie Mac. They also favor changing tax rules to make it easier to restructure loans (under current regulations, the parties would incur tax penalties), and eliminating what they say are onerous taxes on foreign real estate investment.
Although it would not be a panacea, extending the $200 billion loan program would be a step in the right direction, industry officials said. "The most important thing is that lenders start lending again," DeBoer said.
John B. Hynes III, the president and chief executive of Gale International, a developer based in Boston, knows firsthand about the credit crisis. Gale and its partner, Vornado Realty Trust, recently suspended construction on their planned $700 million redevelopment of their One Franklin project in downtown Boston because of difficulties obtaining credit.
About three-quarters of the 250,000 square feet of retail space has been preleased, half of it to Filene's, the building's original tenant, Hynes said. Also, he said, a buyer was found for a 275-room hotel, and one-quarter of the building's 500,00 square feet of office space has been leased.
The deal was funded with a healthy 40 percent equity stake, and Gale and Vornado were looking for $400 million in financing. But the developers were able to stitch together only $300 million from five banks. The project would create an estimated 3,000 construction jobs for a period of three years, according to Hynes.
What irks him, he said, is that while he was trying to drum up funding the government was injecting billions of dollars into banks. "So I'm sitting here in Boston waiting for coins to fall out of the sky, and nothing's happening," Hynes said. "I thought they were getting the money so that they could lend it out and we could create jobs. It's like giving the automakers $25 billion, and then they don't make any cars."
Real estate executives say Treasury officials the transition team to a new Obama administration have been listening. "There's an openness to serious consideration of all of these things," said Steven Wechsler, the president and chief executive of the National Association of Real Estate Investment Trusts.
The Obama team will have a lot on its plate, but executives were hopeful that measures will be taken early next year.
In the meantime, Hynes and his team have redesigned their One Franklin building, shaving off almost $200 million in costs. They expect to go to the capital markets to try again in January.
By Amy Cortese
Sunday, December 28, 2008
BEFORE Christmas this year, as the U.S. government scrambled to fix a recalcitrant economy, some businesses received early holiday gifts. There was $100 billion for the American International Group, the insurance giant; $250 billion for banks; and at least $13 billion for automakers.
President-elect Barack Obama has also signaled that he would spend more than $700 billion on infrastructure projects to help create jobs, while the Treasury Department has an additional $350 billion available from the rescue funds authorized by Congress in September.
Across corporate America, executives are drawing up their wish lists, and the commercial real estate industry is no exception.
Commercial real estate groups have been meeting with members of Congress, the Federal Reserve, the Treasury, the Federal Deposit Insurance Corp. as well as Obama's transition team, to press their case. And they say they have a compelling one. Commercial real estate is a significant industry, accounting for $549 billion in construction-related spending and nearly five million full-time jobs in 2007, according to the National Association of Industrial and Office Properties. It also contributes to state and local coffers.
Although commercial real estate remains in better shaper than some other industries — there is a good balance between supply and demand, vacancy rates are modest and loan default rates have so far hovered at a rock-bottom 1 percent, according to trade groups — industry leaders warn that the sector faces significant problems. In particular, tighter credit policies are making it harder for real estate companies to refinance. An estimated $400 billion in loans are expected to come due in 2009 alone, and more than $1 trillion over the next three years, according to industry estimates based on Federal Reserve data.
"We have profound risk on our hands at the moment," said Bruce Mosler, the president and chief executive of Cushman & Wakefield, a commercial brokerage firm.
Jeffrey DeBoer, the president and chief executive of the Real Estate Roundtable, an industry group based in Washington, agreed. "Commercial real estate debt will be the next major problem that policy makers need to address," he said.
The commercial real estate industry relies on a steady stream of relatively short-term financing; loans are refinanced every several years or so. With the two main sources of commercial funding — bank lending and commercial mortgage-backed securities — effectively shut down, hundreds of billions of dollars worth of loans are in jeopardy of defaulting.
The bulk of the loans coming due, industry executives say, were originated two or more years ago to help finance a rash of deals in office towers, hotels and industrial buildings, many of which are generating healthy cash flow today. "We're talking about performing loans — that's the rub," said Thomas Bisacquino, the president of the National Association of Industrial and Office Properties.
Of course, there were also speculative, highly leveraged deals at the height of the economic bubble, when rents and property values looked as if they would rise indefinitely. As vacancy rates climb and values drop, many of these loans will need to be restructured.
Existing properties are only half the problem. New development has also ground almost to a halt because of a lack of financing.
Getting investment flowing again is the most immediate concern, industry executives say, and they have a number of suggestions. The Real Estate Roundtable, for example, has circulated a five-point plan to both the current and incoming administrations that proposes a mix of lending programs and tax and accounting changes to stimulate commercial real estate investment.
Both the Roundtable and the National Association of Industrial Office Properties want the Term Asset-Backed Securities Loan Facility program, which was initially intended to intended to lubricate the market for securities backed by consumer and small-business loans, to be extended to cover commercial real estate mortgages. When it was announced in late November, Treasury officials said they would spend up to $200 billion on the program.
Alternatively, the groups have suggested that a program be created for commercial real estate debt, perhaps modeled after enterprises like Freddie Mac. They also favor changing tax rules to make it easier to restructure loans (under current regulations, the parties would incur tax penalties), and eliminating what they say are onerous taxes on foreign real estate investment.
Although it would not be a panacea, extending the $200 billion loan program would be a step in the right direction, industry officials said. "The most important thing is that lenders start lending again," DeBoer said.
John B. Hynes III, the president and chief executive of Gale International, a developer based in Boston, knows firsthand about the credit crisis. Gale and its partner, Vornado Realty Trust, recently suspended construction on their planned $700 million redevelopment of their One Franklin project in downtown Boston because of difficulties obtaining credit.
About three-quarters of the 250,000 square feet of retail space has been preleased, half of it to Filene's, the building's original tenant, Hynes said. Also, he said, a buyer was found for a 275-room hotel, and one-quarter of the building's 500,00 square feet of office space has been leased.
The deal was funded with a healthy 40 percent equity stake, and Gale and Vornado were looking for $400 million in financing. But the developers were able to stitch together only $300 million from five banks. The project would create an estimated 3,000 construction jobs for a period of three years, according to Hynes.
What irks him, he said, is that while he was trying to drum up funding the government was injecting billions of dollars into banks. "So I'm sitting here in Boston waiting for coins to fall out of the sky, and nothing's happening," Hynes said. "I thought they were getting the money so that they could lend it out and we could create jobs. It's like giving the automakers $25 billion, and then they don't make any cars."
Real estate executives say Treasury officials the transition team to a new Obama administration have been listening. "There's an openness to serious consideration of all of these things," said Steven Wechsler, the president and chief executive of the National Association of Real Estate Investment Trusts.
The Obama team will have a lot on its plate, but executives were hopeful that measures will be taken early next year.
In the meantime, Hynes and his team have redesigned their One Franklin building, shaving off almost $200 million in costs. They expect to go to the capital markets to try again in January.
*****************
Former bankers turn to a creative plan B
By Hannah Seligson
Sunday, December 28, 2008
MICHAEL TERRY led a double life for many years.
"During the day I worked at Morgan Stanley as an executive director, overseeing a group that raised money for hedge funds," he said, "and at night I performed in comedy shows."
Then, last February, his company announced a round of layoffs. Terry, motivated to pursue his goal of becoming a "Daily Show" correspondent, raised his hand.
"At the time, I figured the severance package would give me a couple of years to try comedy, something that was getting increasingly hard to balance with my day job."
Since leaving Morgan Stanley, Terry, 37, has shot two pieces as an on-the-scene reporter for the Onion News Network, and his sketch comedy group, Party Central USA, has been given a prime spot at the coming Chicago Sketch Comedy Festival.
With Wall Street hemorrhaging jobs, bonuses disappearing and the financial sector going through a seismic shift, some bankers and lawyers are switching lanes to more creative career paths. They are putting down their Wall Street Journals and picking up Variety as they try their hands at comedy, filmmaking and writing.
Harry Weiner, a partner at On-Ramps, a recruiting and consulting firm that works with financial professionals, says the economic downturn is creating a new psychology of career transition.
"People feel there's nothing to lose in terms of taking a risk and pursuing a new direction, especially when you have a résumé that says 'banking' and no banks are hiring," Weiner said.
That was certainly the calculus for Benjamin Cox, 33. After leaving his job as a vice president at Goldman Sachs in August, he immediately began incubating his plans to work on his screenplay — he calls it a cross between "Swingers" and "Annie Hall" — and start a production company.
Cox said that with the upheaval on Wall Street, he feels relieved to have a backup plan. "I'm seeing a lot of people who never thought of an alternative to banking."
Shaun Gatter, 38, left his position as a vice president and counsel at a large investment bank last year to work on his novel about a Jewish South African family, a story set against the backdrop of apartheid.
Gatter says that the decision has meant a huge financial adjustment, but that the payback — having more mental energy for his book — has been worth it.
"It's been euphoric to be able to think mainly about the book and less about equity derivatives and client risk."
Greg Collett, 37, left his job as a director in the commodity exchange-traded fund business at Deutsche Bank in June to explore a career in stand-up comedy.
"I had this gnawing feeling that things were only going to get worse and that Wall Street was not the place to be," Collett said, adding that it was easier to leave knowing that compensation packages were going to be a fraction of what they were a few years ago.
Richard Florida, author of "Who's Your City?" and director of the Martin Prosperity Institute at the University of Toronto, sees the gravitational pull away from Wall Street and toward more creative industries as part of a necessary economic recalibration.
"The economy couldn't survive on speculation and what really amounted to advanced financial alchemy," he said. "We are now realizing it is our human creativity that is our real capital.
"The economic downturn is going to free up top talent to do other things that are going to change the metabolism of cities like New York in a very good way."
According to a 2005 report by the Center for an Urban Future, the creative work force of New York City comprised 8.1 percent of all those employed in the five boroughs, and has been on one of the strongest areas of economic growth for the city. Between 1998 and 2002, employment in New York's creative core grew by 13.1 percent, adding 32,000 jobs, while the city's overall job totals increased by 6.5 percent.
Carmen Scheidel, director of education, events and multimedia at MediaBistro.com, a Web site for artists and media professionals, says that while most industries are contracting, MediaBistro added 93 online courses in the last year to meet the demands of people who want to take courses in writing, multimedia and design.
Still, Jonathan Bowles, director of the Center for an Urban Future, says that while there is no question that creative fields are not faring as badly as Wall Street right now, they are hardly immune to the economic downturn. The advertising, publishing and newspaper industries are all cutting jobs, he noted.
The bright spot that Bowles sees is for the free agent. "There's a good chance," he said, "that there will be more work for independent contractors and freelancers."
WHILE most bankers and lawyers who pursue careers in comedy, writing and filmmaking say they are somewhat anomalous, the situation could change quickly.
"Things look so bad in finance that if you think the difference in salary multiple isn't as big as it used to be between doing what you are viscerally interested in versus a job that's just about money, it puts a whole different spin on it," Terry said.
Gatter said that many of his colleagues at the bank commended his choice to leave, telling him that they also nursed ambitions to be chefs, photographers, writers and artists.
"Everyone seems to have something else they would rather be doing than their 9-to-5," he said. "I think that people who are losing their jobs are being forced to pursue their dreams and, in a way, are being liberated from the golden handcuffs of Wall Street and venturing into something that might fulfill them."
By Hannah Seligson
Sunday, December 28, 2008
MICHAEL TERRY led a double life for many years.
"During the day I worked at Morgan Stanley as an executive director, overseeing a group that raised money for hedge funds," he said, "and at night I performed in comedy shows."
Then, last February, his company announced a round of layoffs. Terry, motivated to pursue his goal of becoming a "Daily Show" correspondent, raised his hand.
"At the time, I figured the severance package would give me a couple of years to try comedy, something that was getting increasingly hard to balance with my day job."
Since leaving Morgan Stanley, Terry, 37, has shot two pieces as an on-the-scene reporter for the Onion News Network, and his sketch comedy group, Party Central USA, has been given a prime spot at the coming Chicago Sketch Comedy Festival.
With Wall Street hemorrhaging jobs, bonuses disappearing and the financial sector going through a seismic shift, some bankers and lawyers are switching lanes to more creative career paths. They are putting down their Wall Street Journals and picking up Variety as they try their hands at comedy, filmmaking and writing.
Harry Weiner, a partner at On-Ramps, a recruiting and consulting firm that works with financial professionals, says the economic downturn is creating a new psychology of career transition.
"People feel there's nothing to lose in terms of taking a risk and pursuing a new direction, especially when you have a résumé that says 'banking' and no banks are hiring," Weiner said.
That was certainly the calculus for Benjamin Cox, 33. After leaving his job as a vice president at Goldman Sachs in August, he immediately began incubating his plans to work on his screenplay — he calls it a cross between "Swingers" and "Annie Hall" — and start a production company.
Cox said that with the upheaval on Wall Street, he feels relieved to have a backup plan. "I'm seeing a lot of people who never thought of an alternative to banking."
Shaun Gatter, 38, left his position as a vice president and counsel at a large investment bank last year to work on his novel about a Jewish South African family, a story set against the backdrop of apartheid.
Gatter says that the decision has meant a huge financial adjustment, but that the payback — having more mental energy for his book — has been worth it.
"It's been euphoric to be able to think mainly about the book and less about equity derivatives and client risk."
Greg Collett, 37, left his job as a director in the commodity exchange-traded fund business at Deutsche Bank in June to explore a career in stand-up comedy.
"I had this gnawing feeling that things were only going to get worse and that Wall Street was not the place to be," Collett said, adding that it was easier to leave knowing that compensation packages were going to be a fraction of what they were a few years ago.
Richard Florida, author of "Who's Your City?" and director of the Martin Prosperity Institute at the University of Toronto, sees the gravitational pull away from Wall Street and toward more creative industries as part of a necessary economic recalibration.
"The economy couldn't survive on speculation and what really amounted to advanced financial alchemy," he said. "We are now realizing it is our human creativity that is our real capital.
"The economic downturn is going to free up top talent to do other things that are going to change the metabolism of cities like New York in a very good way."
According to a 2005 report by the Center for an Urban Future, the creative work force of New York City comprised 8.1 percent of all those employed in the five boroughs, and has been on one of the strongest areas of economic growth for the city. Between 1998 and 2002, employment in New York's creative core grew by 13.1 percent, adding 32,000 jobs, while the city's overall job totals increased by 6.5 percent.
Carmen Scheidel, director of education, events and multimedia at MediaBistro.com, a Web site for artists and media professionals, says that while most industries are contracting, MediaBistro added 93 online courses in the last year to meet the demands of people who want to take courses in writing, multimedia and design.
Still, Jonathan Bowles, director of the Center for an Urban Future, says that while there is no question that creative fields are not faring as badly as Wall Street right now, they are hardly immune to the economic downturn. The advertising, publishing and newspaper industries are all cutting jobs, he noted.
The bright spot that Bowles sees is for the free agent. "There's a good chance," he said, "that there will be more work for independent contractors and freelancers."
WHILE most bankers and lawyers who pursue careers in comedy, writing and filmmaking say they are somewhat anomalous, the situation could change quickly.
"Things look so bad in finance that if you think the difference in salary multiple isn't as big as it used to be between doing what you are viscerally interested in versus a job that's just about money, it puts a whole different spin on it," Terry said.
Gatter said that many of his colleagues at the bank commended his choice to leave, telling him that they also nursed ambitions to be chefs, photographers, writers and artists.
"Everyone seems to have something else they would rather be doing than their 9-to-5," he said. "I think that people who are losing their jobs are being forced to pursue their dreams and, in a way, are being liberated from the golden handcuffs of Wall Street and venturing into something that might fulfill them."
****************
I'm penniless, but the laugh's on them
By Liz Alderman
Sunday, December 28, 2008
DID you hear the one about the stockbroker who's been sleeping like a baby? Every hour, he wakes up and cries.
That was before he read that Somali pirates were issuing a new ransom-backed security to buy Citigroup. Moody's rated it AAA, Henry Paulson Jr. deemed the pirates "fundamentally sound," and Bernard Madoff will safeguard the returns.
It's not every day that hijackers, the Treasury secretary and disgraced Wall Street moguls are lumped into the same wisecrack. Then again, these aren't ordinary times. Financial jokes that were once mainly the province of pointy-headed economists are flourishing as a popular genre, thanks to the recession and an intense longing for a national catharsis to deal with everyone's miserable personal finances.
Late-night comedians are only the tip of the squawk box. Internet pranksters have mapped out a road trip from Detroit to Washington for the chief executives of the Big Three automakers (instructions include "Go to full-serve gas station, refill, drive away without paying bill" and "Ask government to pay for toll"). YouTubers are writing ballads about Fannie Mae, the mortgage company, and AIG, the much-bailed-out insurance group (the most common refrain: "Where's my bailout?"). Even the nation of Iceland, which went bankrupt this fall, is being kicked around: someone recently put it up for auction on eBay for 50 cents.
Few outlets have lampooned the crisis more mercilessly than The Onion, the satirical paper, whose coverage can serve as a leading indicator of our collective mood. "Financial Planner Advises Shorter Lifespan," was the headline of one recent story, a dark turn from sunnier days when headlines like "Screaming Japanese Schoolgirls Overturn Greenspan's Bus" were the norm.
Across the board, some of the most scathing satire has been reserved for former Masters of the Universe, whose power, money and lawyers can no longer insulate them from the public's schadenfreude. Names that used to appear on lists of the wealthiest and most influential Americans are now being dragged through the mud on Web sites like LolFed.com, where pidgin-English captions are scrawled on the faces of famous bankers and others, the same treatment given to silly cat pictures on Lolcat.com.
Recent victims have included John Thain of Merrill Lynch, whose request for a large bonus prompted the posting of a photo of him with the words, "10 milluyn n unmarkd billz plz." The site's most popular villain is "Vikram Bandit," a k a Vikram Pandit, the head of Citigroup, shown in a robber's mask (with labels like, "Mah bizniss model is no longr relavint"). When Ben Bernanke, the Federal Reserve chairman, was pleading with Congress to pass the $700 billion bailout, LolFed ran a photo of him praying: "oh pls oh pls oh pls let dis work."
The site, introduced last January, is the brainchild of Alyx Kaczuwka, 29, a Web analyst in Orlando, Florida. Traffic began to spike as the meltdown worsened in September. Users from every major bank and brokerage company — including JPMorgan Chase, Goldman Sachs and even the Federal Reserve — now show up in the analytics Kaczuwka uses to track readership.
"The thing people say is we'd rather laugh instead of cry," Kaczuwka said. "But I've picked up on a lot of resentment that people would basically engage in casino bets by leveraging themselves 40-to-1."
Ridicule on a broad scale can be healthy for a society, said Bob Mankoff, the cartoon editor of The New Yorker, especially when its pillars have been shaken by the unwise actions of a powerful few. "Humor exposes the fact that it's not the dumb people who cause problems, it's the smart people who come up with dumb ideas," he said.
The New Yorker recently published its first collection of financial cartoons. One of the selections features a one-way sign on Wall Street — pointing down.
"Human nature is not only a crisis — it's a continuing crisis," Mankoff said. "That's why we'll continue to have jokes about it."
Laughing at well-known people and bad situations can be a good way to channel anxiety and release tension, said Shawn Achor, a business consultant who teaches psychology courses at Harvard. "A lot of Americans feel powerless to change the economy at a macro level, and they hear on CNN the names of people like CEO's and the Treasury secretary," Achor said.
"These are people with power to affect the economy in a way that the individual doesn't have," he said. By poking fun, "you invert that power structure and gain power over those people."
Certainly the present turmoil has served as a blessing to Jay Leno, David Letterman and Conan O'Brien, who might otherwise be flailing for material during a post-election lull. "This year, the Treasury Department is holding its annual holiday party inside something called the Cash Room," Leno recently told his audience. "Of course, these days it's empty, so plenty more room to party."
Vanished cash has also become synonymous with Madoff, who was put under house arrest after confessing to running one of the world's biggest Ponzi schemes. "While Bernie's incarcerated in his penthouse, he's not just goofing around," Letterman said. "Today, he swindled 20 bucks from the Domino's guy."
On "Saturday Night Live," where the outcome of the election knocked the legs out from under the Sarah Palin-mocking franchise, the economy has proved a welcome distraction. In one skit, set at a congressional hearing, an actor playing Representative Barney Frank faced down the heads of the Big Three automakers. "As many of you know, we decided to drive here from Detroit," said the actor playing Rick Wagoner of General Motors. "But we had car trouble."
While television gives a common expression to people's anxieties, the Internet has created a powerful platform for individuals to cut loose. The fake bond offer from Somali pirates has bounced to thousands of in-boxes, as has a parody featuring Paulson as the author of a Nigerian e-mail scam. "I am ministry of the Treasury of the Republic of America," his message begins. "My country has had crisis that has caused the need for large transfer of funds of 800 billion dollars US ..."
On YouTube, there are hundreds of songs that mock the handling of the economy and the people and companies responsible (try coming up with good rhymes for "bailout," "Lehman" and "Federal Reserve"). Some of the authors not only wrote lyrics and music, but also devised complex visual montages featuring fallen titans like Richard Fuld Jr., who led Lehman Brothers to its grave.
The YouTube duet RhettandLink has attracted more than 60,000 hits with their video "Economy Bailout Song," which includes the rap lines: "I used to think that Freddie Mac was a pimp/But now my mutual fund is the one walkin' with a limp." A song by j-liddy denounces the government for "robbin' us blind," as gunfire rattles in the background.
In earlier financial meltdowns, there was also plenty of dark humor, said Robert Wright, a financial historian who is a guest curator at the Museum of American Finance in Lower Manhattan (on Wall Street, actually). In 1720, when the South Sea financial bubble burst, a play called "Exchange Alley" came out quickly, mocking market volatility.
"They didn't have YouTube, so you would either buy the play or go to the theater and see it acted out," Wright said.
HE anticipates that 50 years from now, the museum will have plenty to display from the current crisis.
"We've been saving e-mails of the Somali pirate thing, and video from YouTube, which can always be played back," he said, "though 50 years out, who knows what technology will be there."
But today, when 500-point swings in the Dow are the new norm, most people can only hope to wind up like a boy in a New Yorker cartoon from the 1987 Black Monday crash. "I came out O.K.," he declared. "Everything I had was in baseball cards."
By Liz Alderman
Sunday, December 28, 2008
DID you hear the one about the stockbroker who's been sleeping like a baby? Every hour, he wakes up and cries.
That was before he read that Somali pirates were issuing a new ransom-backed security to buy Citigroup. Moody's rated it AAA, Henry Paulson Jr. deemed the pirates "fundamentally sound," and Bernard Madoff will safeguard the returns.
It's not every day that hijackers, the Treasury secretary and disgraced Wall Street moguls are lumped into the same wisecrack. Then again, these aren't ordinary times. Financial jokes that were once mainly the province of pointy-headed economists are flourishing as a popular genre, thanks to the recession and an intense longing for a national catharsis to deal with everyone's miserable personal finances.
Late-night comedians are only the tip of the squawk box. Internet pranksters have mapped out a road trip from Detroit to Washington for the chief executives of the Big Three automakers (instructions include "Go to full-serve gas station, refill, drive away without paying bill" and "Ask government to pay for toll"). YouTubers are writing ballads about Fannie Mae, the mortgage company, and AIG, the much-bailed-out insurance group (the most common refrain: "Where's my bailout?"). Even the nation of Iceland, which went bankrupt this fall, is being kicked around: someone recently put it up for auction on eBay for 50 cents.
Few outlets have lampooned the crisis more mercilessly than The Onion, the satirical paper, whose coverage can serve as a leading indicator of our collective mood. "Financial Planner Advises Shorter Lifespan," was the headline of one recent story, a dark turn from sunnier days when headlines like "Screaming Japanese Schoolgirls Overturn Greenspan's Bus" were the norm.
Across the board, some of the most scathing satire has been reserved for former Masters of the Universe, whose power, money and lawyers can no longer insulate them from the public's schadenfreude. Names that used to appear on lists of the wealthiest and most influential Americans are now being dragged through the mud on Web sites like LolFed.com, where pidgin-English captions are scrawled on the faces of famous bankers and others, the same treatment given to silly cat pictures on Lolcat.com.
Recent victims have included John Thain of Merrill Lynch, whose request for a large bonus prompted the posting of a photo of him with the words, "10 milluyn n unmarkd billz plz." The site's most popular villain is "Vikram Bandit," a k a Vikram Pandit, the head of Citigroup, shown in a robber's mask (with labels like, "Mah bizniss model is no longr relavint"). When Ben Bernanke, the Federal Reserve chairman, was pleading with Congress to pass the $700 billion bailout, LolFed ran a photo of him praying: "oh pls oh pls oh pls let dis work."
The site, introduced last January, is the brainchild of Alyx Kaczuwka, 29, a Web analyst in Orlando, Florida. Traffic began to spike as the meltdown worsened in September. Users from every major bank and brokerage company — including JPMorgan Chase, Goldman Sachs and even the Federal Reserve — now show up in the analytics Kaczuwka uses to track readership.
"The thing people say is we'd rather laugh instead of cry," Kaczuwka said. "But I've picked up on a lot of resentment that people would basically engage in casino bets by leveraging themselves 40-to-1."
Ridicule on a broad scale can be healthy for a society, said Bob Mankoff, the cartoon editor of The New Yorker, especially when its pillars have been shaken by the unwise actions of a powerful few. "Humor exposes the fact that it's not the dumb people who cause problems, it's the smart people who come up with dumb ideas," he said.
The New Yorker recently published its first collection of financial cartoons. One of the selections features a one-way sign on Wall Street — pointing down.
"Human nature is not only a crisis — it's a continuing crisis," Mankoff said. "That's why we'll continue to have jokes about it."
Laughing at well-known people and bad situations can be a good way to channel anxiety and release tension, said Shawn Achor, a business consultant who teaches psychology courses at Harvard. "A lot of Americans feel powerless to change the economy at a macro level, and they hear on CNN the names of people like CEO's and the Treasury secretary," Achor said.
"These are people with power to affect the economy in a way that the individual doesn't have," he said. By poking fun, "you invert that power structure and gain power over those people."
Certainly the present turmoil has served as a blessing to Jay Leno, David Letterman and Conan O'Brien, who might otherwise be flailing for material during a post-election lull. "This year, the Treasury Department is holding its annual holiday party inside something called the Cash Room," Leno recently told his audience. "Of course, these days it's empty, so plenty more room to party."
Vanished cash has also become synonymous with Madoff, who was put under house arrest after confessing to running one of the world's biggest Ponzi schemes. "While Bernie's incarcerated in his penthouse, he's not just goofing around," Letterman said. "Today, he swindled 20 bucks from the Domino's guy."
On "Saturday Night Live," where the outcome of the election knocked the legs out from under the Sarah Palin-mocking franchise, the economy has proved a welcome distraction. In one skit, set at a congressional hearing, an actor playing Representative Barney Frank faced down the heads of the Big Three automakers. "As many of you know, we decided to drive here from Detroit," said the actor playing Rick Wagoner of General Motors. "But we had car trouble."
While television gives a common expression to people's anxieties, the Internet has created a powerful platform for individuals to cut loose. The fake bond offer from Somali pirates has bounced to thousands of in-boxes, as has a parody featuring Paulson as the author of a Nigerian e-mail scam. "I am ministry of the Treasury of the Republic of America," his message begins. "My country has had crisis that has caused the need for large transfer of funds of 800 billion dollars US ..."
On YouTube, there are hundreds of songs that mock the handling of the economy and the people and companies responsible (try coming up with good rhymes for "bailout," "Lehman" and "Federal Reserve"). Some of the authors not only wrote lyrics and music, but also devised complex visual montages featuring fallen titans like Richard Fuld Jr., who led Lehman Brothers to its grave.
The YouTube duet RhettandLink has attracted more than 60,000 hits with their video "Economy Bailout Song," which includes the rap lines: "I used to think that Freddie Mac was a pimp/But now my mutual fund is the one walkin' with a limp." A song by j-liddy denounces the government for "robbin' us blind," as gunfire rattles in the background.
In earlier financial meltdowns, there was also plenty of dark humor, said Robert Wright, a financial historian who is a guest curator at the Museum of American Finance in Lower Manhattan (on Wall Street, actually). In 1720, when the South Sea financial bubble burst, a play called "Exchange Alley" came out quickly, mocking market volatility.
"They didn't have YouTube, so you would either buy the play or go to the theater and see it acted out," Wright said.
HE anticipates that 50 years from now, the museum will have plenty to display from the current crisis.
"We've been saving e-mails of the Somali pirate thing, and video from YouTube, which can always be played back," he said, "though 50 years out, who knows what technology will be there."
But today, when 500-point swings in the Dow are the new norm, most people can only hope to wind up like a boy in a New Yorker cartoon from the 1987 Black Monday crash. "I came out O.K.," he declared. "Everything I had was in baseball cards."
****************
Castro calls for more work and less handouts
Reuters
Sunday, December 28, 2008
By Jeff Franks
Cuban President Raul Castro called on Saturday for austerity measures including fewer subsidies for workers and stricter management to pull the country out of an economic morass aggravated this year by three hurricanes and the global financial crisis.
He told a year-end meeting of the National Assembly the government would cut official trips abroad by 50 percent and eliminate programs that reward good workers with free vacation trips but cost the government $60 million (£19.3 billion) a year.
"The accounts don't square up," he said. "You have to act with realism and adjust the dreams to the true possibilities," said Castro, who officially replaced his ailing older brother Fidel Castro as president in February.
"Two plus two always equals four, never five," he said.
Castro implemented reforms when he took office, including opening the sale of computers and cell phones to Cubans and allowing them to go to hotels and stores previously reserved for foreigners.
But he said the country's economic problems would postpone some changes, including a planned government restructuring.
Castro lamented the economic effects of hurricanes Gustav, Ike and Paloma, which caused $10 billion in damages, and warned that no one can tell how bad world economic problems will get.
Cuba's import costs have soared while prices for key exports such as nickel have plunged, requiring the communist-run country to impose greater fiscal discipline, said the 77-year-old Castro.
Other government officials told the assembly Cuba's budget deficit had climbed to 6.7 percent of the gross domestic product as the economy grew at a slower-than-expected rate of 4.3 percent in 2008. They forecast 6 percent growth for 2009.
Before his speech, the assembly voted to raise the age at which workers can retire with a government pension by five years, to 65 for men and 60 for women. Officials said the change was needed because Cuba's population was ageing rapidly due to a declining birth rate and immigration.
Castro said Cuban managers need to demand more from their workers, who receive free education and health care and subsidized food rations but on average earn only $20 a month.
"I have arrived at the conclusion that one of our big problems is a lack of systemic demand," said Castro.
He expressed dissatisfaction with the system of subsidies for those who can work, but do not, saying government handouts discourage Cubans from being more productive.
As Cuba prepares to mark the 50th anniversary of the revolution that put Fidel Castro in power on Thursday, Raul Castro paid tribute to him as the person "who has led us yesterday, today and always to victory and victory."
Fidel Castro, 82, has not been seen in public since undergoing intestinal surgery in July 2006.
(Editing by Todd Eastham)
Reuters
Sunday, December 28, 2008
By Jeff Franks
Cuban President Raul Castro called on Saturday for austerity measures including fewer subsidies for workers and stricter management to pull the country out of an economic morass aggravated this year by three hurricanes and the global financial crisis.
He told a year-end meeting of the National Assembly the government would cut official trips abroad by 50 percent and eliminate programs that reward good workers with free vacation trips but cost the government $60 million (£19.3 billion) a year.
"The accounts don't square up," he said. "You have to act with realism and adjust the dreams to the true possibilities," said Castro, who officially replaced his ailing older brother Fidel Castro as president in February.
"Two plus two always equals four, never five," he said.
Castro implemented reforms when he took office, including opening the sale of computers and cell phones to Cubans and allowing them to go to hotels and stores previously reserved for foreigners.
But he said the country's economic problems would postpone some changes, including a planned government restructuring.
Castro lamented the economic effects of hurricanes Gustav, Ike and Paloma, which caused $10 billion in damages, and warned that no one can tell how bad world economic problems will get.
Cuba's import costs have soared while prices for key exports such as nickel have plunged, requiring the communist-run country to impose greater fiscal discipline, said the 77-year-old Castro.
Other government officials told the assembly Cuba's budget deficit had climbed to 6.7 percent of the gross domestic product as the economy grew at a slower-than-expected rate of 4.3 percent in 2008. They forecast 6 percent growth for 2009.
Before his speech, the assembly voted to raise the age at which workers can retire with a government pension by five years, to 65 for men and 60 for women. Officials said the change was needed because Cuba's population was ageing rapidly due to a declining birth rate and immigration.
Castro said Cuban managers need to demand more from their workers, who receive free education and health care and subsidized food rations but on average earn only $20 a month.
"I have arrived at the conclusion that one of our big problems is a lack of systemic demand," said Castro.
He expressed dissatisfaction with the system of subsidies for those who can work, but do not, saying government handouts discourage Cubans from being more productive.
As Cuba prepares to mark the 50th anniversary of the revolution that put Fidel Castro in power on Thursday, Raul Castro paid tribute to him as the person "who has led us yesterday, today and always to victory and victory."
Fidel Castro, 82, has not been seen in public since undergoing intestinal surgery in July 2006.
(Editing by Todd Eastham)
****************
So far so good, with just three trading days left in 2008, but what's ahead?
By Emily KaiserReuters
Sunday, December 28, 2008
WASHINGTON: Central bankers around the globe seem to have dumped enough money on financial markets to avoid a repeat of the year-end funding scramble that caused chaos a year ago.
Next comes what may be an agonizingly long wait until companies and consumers feel like spending enough to end the recession and banks feel confident enough to resume normal lending.
It may not be evident yet in the ailing global economy, but there are signs that the U.S. Federal Reserve and its partners abroad have made progress in bringing down borrowing costs, particularly on loans between banks.
Last December, the interest rate on short-term interbank loans spiked as companies frantically searched for cash to meet year-end requirements. The Federal Reserve, European Central Bank and Swiss National Bank tried to ease the strain by providing an extra $64 billion worth of term lending.
This year, the United States alone has offered more than 10 times that amount in year-end funding and set up unlimited foreign exchange swap lines with European central banks to make sure there would be enough dollars available.
"The banking system has plenty of liquidity," economists at Global Insight wrote in a note to clients. "If this strategy has worked, we should see minimal pressure on short-term rates at the end of the year."
So far so good, with just three trading days left in 2008.
The overnight London interbank offered rate, known as Libor, has barely budged since Dec. 10, hovering around 0.14 percent and in line with the Federal Reserve's current short-term lending rate target of zero to 0.25 percent.
Last December, the overnight Libor rate shot up about 10 percent in the final week of 2007, closing out the year just above 4.8 percent when the U.S. federal funds rate was at 4.25 percent.
The president of the European central bank, Jean-Claude Trichet, recently pointed to the drop in interbank lending rates as evidence of progress in easing market strains. He chided investors for underestimating the importance of steps taken by central banks and governments.
But he also acknowledged that a lack of consumer confidence was blunting recession-fighting efforts, and that increased government spending would do little to restore growth until confidence was restored.
That may take a while.
Data to be released this week are expected to show that global manufacturers remain firmly in recession mode, cutting production and jobs so they will not be stuck with too much inventory in a sinking economy.
Economists are looking for reports Friday from the euro zone, Britain, China and the United States to confirm that factory activity slowed further in December after the global manufacturing index hit a record low in November.
Early reports on U.S. holiday spending do not look reassuring. Data compiled by MasterCard Advisors showed that retail sales fell as much as 4 percent during the holiday season, which did not bode well for quarterly growth.
Without healthy consumer spending, there is little hope for a strong economic recovery. A weakening economy means more job losses and even greater consumer unease.
So how do you break the cycle?
Bob Eisenbeis, chief monetary economist at Cumberland Advisors and former director of research at the Federal Reserve Bank of Atlanta, said psychology was partly responsible for low consumer confidence and spending.
"I have been doing a lot of work the last few days trying to compare various" U.S. economic data series "with previous recession periods. This one is right in the middle of the pack. It is not - so far - the next coming of the Great Depression," he said.
"All the rhetoric has scared people," he added. "If people just shut up a bit, it would go a long way to help bring consumer confidence back."
Do not expect peace and quiet any time soon.
The manufacturing reports will contain two vital clues to how the economic data is likely to look in the coming weeks. Big declines in the measures of employment and new orders would signal more bad news ahead.
By Emily KaiserReuters
Sunday, December 28, 2008
WASHINGTON: Central bankers around the globe seem to have dumped enough money on financial markets to avoid a repeat of the year-end funding scramble that caused chaos a year ago.
Next comes what may be an agonizingly long wait until companies and consumers feel like spending enough to end the recession and banks feel confident enough to resume normal lending.
It may not be evident yet in the ailing global economy, but there are signs that the U.S. Federal Reserve and its partners abroad have made progress in bringing down borrowing costs, particularly on loans between banks.
Last December, the interest rate on short-term interbank loans spiked as companies frantically searched for cash to meet year-end requirements. The Federal Reserve, European Central Bank and Swiss National Bank tried to ease the strain by providing an extra $64 billion worth of term lending.
This year, the United States alone has offered more than 10 times that amount in year-end funding and set up unlimited foreign exchange swap lines with European central banks to make sure there would be enough dollars available.
"The banking system has plenty of liquidity," economists at Global Insight wrote in a note to clients. "If this strategy has worked, we should see minimal pressure on short-term rates at the end of the year."
So far so good, with just three trading days left in 2008.
The overnight London interbank offered rate, known as Libor, has barely budged since Dec. 10, hovering around 0.14 percent and in line with the Federal Reserve's current short-term lending rate target of zero to 0.25 percent.
Last December, the overnight Libor rate shot up about 10 percent in the final week of 2007, closing out the year just above 4.8 percent when the U.S. federal funds rate was at 4.25 percent.
The president of the European central bank, Jean-Claude Trichet, recently pointed to the drop in interbank lending rates as evidence of progress in easing market strains. He chided investors for underestimating the importance of steps taken by central banks and governments.
But he also acknowledged that a lack of consumer confidence was blunting recession-fighting efforts, and that increased government spending would do little to restore growth until confidence was restored.
That may take a while.
Data to be released this week are expected to show that global manufacturers remain firmly in recession mode, cutting production and jobs so they will not be stuck with too much inventory in a sinking economy.
Economists are looking for reports Friday from the euro zone, Britain, China and the United States to confirm that factory activity slowed further in December after the global manufacturing index hit a record low in November.
Early reports on U.S. holiday spending do not look reassuring. Data compiled by MasterCard Advisors showed that retail sales fell as much as 4 percent during the holiday season, which did not bode well for quarterly growth.
Without healthy consumer spending, there is little hope for a strong economic recovery. A weakening economy means more job losses and even greater consumer unease.
So how do you break the cycle?
Bob Eisenbeis, chief monetary economist at Cumberland Advisors and former director of research at the Federal Reserve Bank of Atlanta, said psychology was partly responsible for low consumer confidence and spending.
"I have been doing a lot of work the last few days trying to compare various" U.S. economic data series "with previous recession periods. This one is right in the middle of the pack. It is not - so far - the next coming of the Great Depression," he said.
"All the rhetoric has scared people," he added. "If people just shut up a bit, it would go a long way to help bring consumer confidence back."
Do not expect peace and quiet any time soon.
The manufacturing reports will contain two vital clues to how the economic data is likely to look in the coming weeks. Big declines in the measures of employment and new orders would signal more bad news ahead.
*********************
Asian Airlines brace for turbulent times
House prices fall 8.7 percent in 2008
Kuwait cancels $17 billion deal with Dow Chemical
Japan steelmakers likely to cut profit forecasts
Asian Airlines brace for turbulent times
House prices fall 8.7 percent in 2008
Kuwait cancels $17 billion deal with Dow Chemical
Japan steelmakers likely to cut profit forecasts
*********************
OPINION
Comfort in numbers
By Sonja Lyubomirsky
Sunday, December 28, 2008
RIVERSIDE, California: These days, bad news about the economy is everywhere. So why aren't we panicking? Why aren't we spending our days dejected about the markets? How is it that we manage to remain mostly preoccupied with the quotidian tasks and concerns of life? Traffic, dinner, homework, deadlines, sharp words, flirtatious glances. Because the news these days affects everyone.
Research in psychology and economics suggests that when only your salary is cut, or when only you make a foolish investment, or when only you lose your job, you become considerably less satisfied with your life. But when everyone from autoworkers to Wall Street financiers becomes worse off, your life satisfaction remains pretty much the same.
Indeed, humans are remarkably attuned to relative position and status. As the economists David Hemenway and Sara Solnick demonstrated in a study at Harvard, many people would prefer to receive an annual salary of $50,000 when others are making $25,000 than to earn $100,000 a year when others are making $200,000.
Similarly, Daniel Zizzo and Andrew Oswald, economists in Britain, conducted a study that showed that people would give up money if doing so would cause someone else to give up a slightly larger sum. That is, we will make ourselves poorer in order to make someone else poorer, too.
Findings like these reveal an all-too-human truth. We care more about social comparison, status and rank than about the absolute value of our bank accounts or reputations.
For example, Andrew Clark, an economist in France, has recently shown that being laid off hurts less if you live in a community with a high unemployment rate. What's more, if you are unemployed, you will, on average, be happier if your spouse is unemployed, too.
So in a world in which just about all of us have seen our retirement savings and home values plummet, it's no wonder that we all feel surprisingly O.K.
Sonja Lyubomirsky, a professor of psychology at the University of California, Riverside, is the author of "The How of Happiness: A Scientific Approach to Getting the Life You Want."
By Sonja Lyubomirsky
Sunday, December 28, 2008
RIVERSIDE, California: These days, bad news about the economy is everywhere. So why aren't we panicking? Why aren't we spending our days dejected about the markets? How is it that we manage to remain mostly preoccupied with the quotidian tasks and concerns of life? Traffic, dinner, homework, deadlines, sharp words, flirtatious glances. Because the news these days affects everyone.
Research in psychology and economics suggests that when only your salary is cut, or when only you make a foolish investment, or when only you lose your job, you become considerably less satisfied with your life. But when everyone from autoworkers to Wall Street financiers becomes worse off, your life satisfaction remains pretty much the same.
Indeed, humans are remarkably attuned to relative position and status. As the economists David Hemenway and Sara Solnick demonstrated in a study at Harvard, many people would prefer to receive an annual salary of $50,000 when others are making $25,000 than to earn $100,000 a year when others are making $200,000.
Similarly, Daniel Zizzo and Andrew Oswald, economists in Britain, conducted a study that showed that people would give up money if doing so would cause someone else to give up a slightly larger sum. That is, we will make ourselves poorer in order to make someone else poorer, too.
Findings like these reveal an all-too-human truth. We care more about social comparison, status and rank than about the absolute value of our bank accounts or reputations.
For example, Andrew Clark, an economist in France, has recently shown that being laid off hurts less if you live in a community with a high unemployment rate. What's more, if you are unemployed, you will, on average, be happier if your spouse is unemployed, too.
So in a world in which just about all of us have seen our retirement savings and home values plummet, it's no wonder that we all feel surprisingly O.K.
Sonja Lyubomirsky, a professor of psychology at the University of California, Riverside, is the author of "The How of Happiness: A Scientific Approach to Getting the Life You Want."
Obama adviser defends inaugural invitation to anti-gay preacher
The Associated Press
Sunday, December 28, 2008
WASHINGTON: A top adviser to President-elect Barack Obama on Sunday defended plans for a conservative, anti-gay rights preacher to deliver the inaugural invocation while promising that Obama's campaign pledges for middle-income taxes cuts will be kept.
David Axelrod, Obama's senior adviser, also said that President George W. Bush's tax cuts for the wealthy would be revoked or allowed to expire.
With 23 days remaining until Obama takes office in the midst of the deepest economic downturn in decades as the country is still fighting wars in Iraq and Afghanistan, Axelrod said the incoming president's invitation to the Reverend Rick Warren was important because it underlined the inclusiveness Obama wants to institute in his administration.
"The important point here is you have a conservative evangelical pastor coming to take part in the inauguration of a progressive president," Axelrod said of Warren, a prominent preacher who opposes homosexuality and who backed a ballot measure that banned same-sex marriage in his home state of California.
Warren has likened gay marriage to legitimizing incest, child abuse and polygamy. His stance has sparked outrage among gays and many of Obama's supporters.
More important for most Americans, Axelrod said, is the economic situation in the United States and globally.
Obama won the election, in part, because voters believed he was better equipped than John McCain, the Republican candidate, to deal with the economic meltdown. Part of Obama's campaign pledge was to cut taxes for middle- and low-income earners while increasing them for wealthier Americans.
Axelrod said the tax cut was at the top of Obama's agenda, and declared that higher taxes for more wealthy Americans also were in the cards, though less immediately. Axelrod said the quick move to cut taxes was "vital."
"People need money in their pockets," he said on NBC. "That'll get our economy going again."
He reiterated that higher taxes for the wealthy would come about through the revocation of a measure on tax cuts passed during the Bush administration or by allowing it to expire in 2010.
"Whether it expires or we repeal it a little bit early we'll determine later," Axelrod said, "but it's going to go. It has to go."
Obama says a revocation would not represent a tax increase but would return the assessment on the wealthy to the level it was during President Bill Clinton's administration in the 1990s.
"We feel it's important that middle class people get some relief now," Axelrod said.
Those cuts will be part of the new administration's stimulus plan, Axelrod said. "This package will include a portion of that tax cut that will become part of the permanent tax cut that he'll have in his upcoming budget."
The incoming administration is considering tax cuts of $1,000 for couples and $500 for individuals that will be delivered by reducing the tax withheld from paychecks. That plan, which would cost about $140 billion over 2009-2010, would put more money in paychecks.
Laura Bush stands by her man
First Lady Laura Bush disagrees with critics who call the presidency of George W. Bush a failure, The Associated Press reported from Washington.
"I know it's not, and so I don't really feel like I need to respond to people that view it that way," she said in a television interview that was broadcast on "Fox News Sunday." "I think history will judge and we'll see later."
Laura Bush called the shoe-throwing incident in Baghdad an "assault." She rebuffed administration critics who contend the United States turned its military might and resources to the war in Iraq before finishing the job in Afghanistan.
She noted that under her husband's watch, the United States toppled Saddam Hussein and liberated millions of people in Afghanistan and Iraq from oppressive governments. She also highlighted the president's work to provide treatment for diseases like AIDS and malaria to millions of people in sub-Saharan Africa. She said her husband responded to the Sept. 11, 2001, terrorist attacks in a way that has kept the nation safe. "I think that's very, very important," she said.
The Associated Press
Sunday, December 28, 2008
WASHINGTON: A top adviser to President-elect Barack Obama on Sunday defended plans for a conservative, anti-gay rights preacher to deliver the inaugural invocation while promising that Obama's campaign pledges for middle-income taxes cuts will be kept.
David Axelrod, Obama's senior adviser, also said that President George W. Bush's tax cuts for the wealthy would be revoked or allowed to expire.
With 23 days remaining until Obama takes office in the midst of the deepest economic downturn in decades as the country is still fighting wars in Iraq and Afghanistan, Axelrod said the incoming president's invitation to the Reverend Rick Warren was important because it underlined the inclusiveness Obama wants to institute in his administration.
"The important point here is you have a conservative evangelical pastor coming to take part in the inauguration of a progressive president," Axelrod said of Warren, a prominent preacher who opposes homosexuality and who backed a ballot measure that banned same-sex marriage in his home state of California.
Warren has likened gay marriage to legitimizing incest, child abuse and polygamy. His stance has sparked outrage among gays and many of Obama's supporters.
More important for most Americans, Axelrod said, is the economic situation in the United States and globally.
Obama won the election, in part, because voters believed he was better equipped than John McCain, the Republican candidate, to deal with the economic meltdown. Part of Obama's campaign pledge was to cut taxes for middle- and low-income earners while increasing them for wealthier Americans.
Axelrod said the tax cut was at the top of Obama's agenda, and declared that higher taxes for more wealthy Americans also were in the cards, though less immediately. Axelrod said the quick move to cut taxes was "vital."
"People need money in their pockets," he said on NBC. "That'll get our economy going again."
He reiterated that higher taxes for the wealthy would come about through the revocation of a measure on tax cuts passed during the Bush administration or by allowing it to expire in 2010.
"Whether it expires or we repeal it a little bit early we'll determine later," Axelrod said, "but it's going to go. It has to go."
Obama says a revocation would not represent a tax increase but would return the assessment on the wealthy to the level it was during President Bill Clinton's administration in the 1990s.
"We feel it's important that middle class people get some relief now," Axelrod said.
Those cuts will be part of the new administration's stimulus plan, Axelrod said. "This package will include a portion of that tax cut that will become part of the permanent tax cut that he'll have in his upcoming budget."
The incoming administration is considering tax cuts of $1,000 for couples and $500 for individuals that will be delivered by reducing the tax withheld from paychecks. That plan, which would cost about $140 billion over 2009-2010, would put more money in paychecks.
Laura Bush stands by her man
First Lady Laura Bush disagrees with critics who call the presidency of George W. Bush a failure, The Associated Press reported from Washington.
"I know it's not, and so I don't really feel like I need to respond to people that view it that way," she said in a television interview that was broadcast on "Fox News Sunday." "I think history will judge and we'll see later."
Laura Bush called the shoe-throwing incident in Baghdad an "assault." She rebuffed administration critics who contend the United States turned its military might and resources to the war in Iraq before finishing the job in Afghanistan.
She noted that under her husband's watch, the United States toppled Saddam Hussein and liberated millions of people in Afghanistan and Iraq from oppressive governments. She also highlighted the president's work to provide treatment for diseases like AIDS and malaria to millions of people in sub-Saharan Africa. She said her husband responded to the Sept. 11, 2001, terrorist attacks in a way that has kept the nation safe. "I think that's very, very important," she said.
*******************
Obama parody hits the wrong note
Sunday, December 28, 2008
WASHINGTON: Adding to the issues that divide the Republican Party, here comes one more. Some Republicans find humor in the song "Barack the Magic Negro." Some most definitely do not.
The debate began last week after a candidate for the Republican Party chairman, Chip Saltsman, distributed the parody, which was initially broadcast on the Rush Limbaugh radio show last year and questions President-elect Barack Obama's racial authenticity.
Speaking to The Hill newspaper on Friday, Saltsman, a longtime Republican operative from Tennessee, described it as a "light-hearted" gift that would be received in "good humor" by members of the Republican National Committee.
In a party that had big losses this year among minority voters, not everyone took it that way.
"I am shocked and appalled," Mike Duncan, the current party chairman, said in a statement released Saturday. Duncan is competing for a second term against Saltsman and four others.
"This is so inappropriate that it should disqualify any Republican National Committee candidate who would use it," Newt Gingrich, a Republican former House speaker, said in an e-mail message. Referring to Obama, Gingrich said, "There are no grounds for demeaning him or for using racist descriptions."
Saul Anuzis, the chairman of the Michigan Republican Party and another candidate for party chairman, said, "This isn't funny, and it's in bad taste."
There are two black candidates for the post, J. Kenneth Blackwell, a former Ohio secretary of state, and Michael Steele, a former lieutenant governor of Maryland. On Saturday, Blackwell dismissed the fuss as "hypersensitivity."
"All competitors for this leadership position are fine people," he said in an e-mail message.
The dispute illustrates a larger Republican challenge in the months ahead: how to oppose the first black president without seeming antiblack. There are no black Republicans in Congress, and a party spokesman could name only two blacks among the 168 members of the national committee.
Katon Dawson, the chairman of the South Carolina Republican Party, resigned from an all-white country club in preparing for his campaign to be party chairman.
The parody is sung to the tune of "Puff the Magic Dragon" by a character meant to be the Reverend Al Sharpton, the civil rights advocate and sometime political candidate. The character laments that white liberals vote for Obama while shunning his brand of more confrontational racial politics.
"Barack the Magic Negro," the character sings, "made guilty whites feel good/They'll vote for him and not for me/Cause he's not from the 'hood."
The song was written by a parodist, Paul Shanklin, whose work frequently airs on Limbaugh's show, and Limbaugh has defended it against critics who called it racist. Limbaugh said that it was inspired by "Obama the Magic Negro," an opinion column in The Los Angeles Times by a black writer, David Ehrenstein, who likened Obama to "warm and unthreatening" black figures like the actors Sidney Poitier and Morgan Freeman.
Saltsman distributed the song in a compilation of works by Shanklin, whom he described to The Hill as "a longtime friend." Saltsman did not return phone calls on Saturday.
A spokesman for Obama declined to comment on the matter.
"Barack the Magic Negro" calls into question Obama's racial identity. Born to a black father and white mother, he was raised primarily by his white grandparents.
"The 2008 election was a wake-up call for Republicans to reach out and bring more people into our party," Duncan said in a statement. "I am shocked and appalled that anyone would think this is appropriate as it clearly does not move us in the right direction."
In a statement that followed Duncan's, Saltsman said: "Liberal Democrats and their allies in the media didn't utter a word about David Ehrenstein's irresponsible column in the Los Angeles Times last March. But now, of course, they're shocked and appalled by its parody on the 'Rush Limbaugh Show.'
"I firmly believe that we must welcome all Americans into our party and that the road to Republican resurgence begins with unity, not division. But I know that our party leaders should stand up against the media's double standards and refuse to pander to their desire for scandal," he said.
The Hill, the Washington newspaper that published a story about the CD on Friday, reported that Saltsman said that members of the Republican committee had "the good humor and good sense" to see Shanklin's tunes as "lighthearted political parodies."
Sunday, December 28, 2008
WASHINGTON: Adding to the issues that divide the Republican Party, here comes one more. Some Republicans find humor in the song "Barack the Magic Negro." Some most definitely do not.
The debate began last week after a candidate for the Republican Party chairman, Chip Saltsman, distributed the parody, which was initially broadcast on the Rush Limbaugh radio show last year and questions President-elect Barack Obama's racial authenticity.
Speaking to The Hill newspaper on Friday, Saltsman, a longtime Republican operative from Tennessee, described it as a "light-hearted" gift that would be received in "good humor" by members of the Republican National Committee.
In a party that had big losses this year among minority voters, not everyone took it that way.
"I am shocked and appalled," Mike Duncan, the current party chairman, said in a statement released Saturday. Duncan is competing for a second term against Saltsman and four others.
"This is so inappropriate that it should disqualify any Republican National Committee candidate who would use it," Newt Gingrich, a Republican former House speaker, said in an e-mail message. Referring to Obama, Gingrich said, "There are no grounds for demeaning him or for using racist descriptions."
Saul Anuzis, the chairman of the Michigan Republican Party and another candidate for party chairman, said, "This isn't funny, and it's in bad taste."
There are two black candidates for the post, J. Kenneth Blackwell, a former Ohio secretary of state, and Michael Steele, a former lieutenant governor of Maryland. On Saturday, Blackwell dismissed the fuss as "hypersensitivity."
"All competitors for this leadership position are fine people," he said in an e-mail message.
The dispute illustrates a larger Republican challenge in the months ahead: how to oppose the first black president without seeming antiblack. There are no black Republicans in Congress, and a party spokesman could name only two blacks among the 168 members of the national committee.
Katon Dawson, the chairman of the South Carolina Republican Party, resigned from an all-white country club in preparing for his campaign to be party chairman.
The parody is sung to the tune of "Puff the Magic Dragon" by a character meant to be the Reverend Al Sharpton, the civil rights advocate and sometime political candidate. The character laments that white liberals vote for Obama while shunning his brand of more confrontational racial politics.
"Barack the Magic Negro," the character sings, "made guilty whites feel good/They'll vote for him and not for me/Cause he's not from the 'hood."
The song was written by a parodist, Paul Shanklin, whose work frequently airs on Limbaugh's show, and Limbaugh has defended it against critics who called it racist. Limbaugh said that it was inspired by "Obama the Magic Negro," an opinion column in The Los Angeles Times by a black writer, David Ehrenstein, who likened Obama to "warm and unthreatening" black figures like the actors Sidney Poitier and Morgan Freeman.
Saltsman distributed the song in a compilation of works by Shanklin, whom he described to The Hill as "a longtime friend." Saltsman did not return phone calls on Saturday.
A spokesman for Obama declined to comment on the matter.
"Barack the Magic Negro" calls into question Obama's racial identity. Born to a black father and white mother, he was raised primarily by his white grandparents.
"The 2008 election was a wake-up call for Republicans to reach out and bring more people into our party," Duncan said in a statement. "I am shocked and appalled that anyone would think this is appropriate as it clearly does not move us in the right direction."
In a statement that followed Duncan's, Saltsman said: "Liberal Democrats and their allies in the media didn't utter a word about David Ehrenstein's irresponsible column in the Los Angeles Times last March. But now, of course, they're shocked and appalled by its parody on the 'Rush Limbaugh Show.'
"I firmly believe that we must welcome all Americans into our party and that the road to Republican resurgence begins with unity, not division. But I know that our party leaders should stand up against the media's double standards and refuse to pander to their desire for scandal," he said.
The Hill, the Washington newspaper that published a story about the CD on Friday, reported that Saltsman said that members of the Republican committee had "the good humor and good sense" to see Shanklin's tunes as "lighthearted political parodies."
*******************
With Pope Benedict's encouragement, Spanish rally promotes family values
The Associated Press
Sunday, December 28, 2008
MADRID: Hundreds of thousands of people attended a Mass in central Madrid on Sunday designed to promote traditional family values in a predominantly Roman Catholic country that has legalized gay marriage and made it easier for people to divorce.
The service started with a message from Pope Benedict XVI, who urged Spanish Catholics to keep their families strong.
"Dear families, do not let love, openness to life and the incomparable links that join your homes weaken," the pope said in a message read out in Madrid. "The pope is by your side," he added.
The archbishop of Madrid, Antonio María Rouco Varela, added: "The future of humanity depends on the family, the Christian family."
"It is possible to conceive, organize and live marriage and family in a very different way from what is in fashion in so many areas of our society," he said in a homily.
Neither the police nor city officials would give an estimate of how many people attended, but the crowd appeared to number in the hundreds of thousands. In chilly, overcast weather, the faithful packed central Plaza de Colón and spilled out into streets running off from it in four directions.
María Rosa de la Cierva, leader of a church association representing Catholics in Madrid province, predicted before the Mass began that up to a million people would attend.
Spain's Socialist government has angered the church by legalizing gay marriage, making it easy for people to divorce and instituting a public school course in which children learn about homosexuality and same-sex marriages. It is also considering easing Spain's restrictive abortion law.
Rouco Varela called abortion one of the worst "scourges" of modern times.
He concelebrated the Mass along with 5 other archbishops, 22 bishops and more than 300 priests.
A similar Mass and rally were held at this time last year in the same square, and organizers put attendance at well over a million. Then, bishops criticized the Spanish government over its social policies but this time there were no such remarks.
The Associated Press
Sunday, December 28, 2008
MADRID: Hundreds of thousands of people attended a Mass in central Madrid on Sunday designed to promote traditional family values in a predominantly Roman Catholic country that has legalized gay marriage and made it easier for people to divorce.
The service started with a message from Pope Benedict XVI, who urged Spanish Catholics to keep their families strong.
"Dear families, do not let love, openness to life and the incomparable links that join your homes weaken," the pope said in a message read out in Madrid. "The pope is by your side," he added.
The archbishop of Madrid, Antonio María Rouco Varela, added: "The future of humanity depends on the family, the Christian family."
"It is possible to conceive, organize and live marriage and family in a very different way from what is in fashion in so many areas of our society," he said in a homily.
Neither the police nor city officials would give an estimate of how many people attended, but the crowd appeared to number in the hundreds of thousands. In chilly, overcast weather, the faithful packed central Plaza de Colón and spilled out into streets running off from it in four directions.
María Rosa de la Cierva, leader of a church association representing Catholics in Madrid province, predicted before the Mass began that up to a million people would attend.
Spain's Socialist government has angered the church by legalizing gay marriage, making it easy for people to divorce and instituting a public school course in which children learn about homosexuality and same-sex marriages. It is also considering easing Spain's restrictive abortion law.
Rouco Varela called abortion one of the worst "scourges" of modern times.
He concelebrated the Mass along with 5 other archbishops, 22 bishops and more than 300 priests.
A similar Mass and rally were held at this time last year in the same square, and organizers put attendance at well over a million. Then, bishops criticized the Spanish government over its social policies but this time there were no such remarks.
*******************
Importing priests for U.S. Catholics
By Laurie Goodstein
Sunday, December 28, 2008
OWENSBORO, Kentucky: Sixteen of the Reverend Darrell Venters's fellow priests are running themselves ragged here, each serving three parishes simultaneously. One priest admits he stood at an altar once and forgot exactly which church he was in.
So Venters, lean and leathery as the Marlboro man, a cigarette in one hand and a cellphone with a ringtone like a churchbell in the other, spends most of his days recruiting priests from overseas to serve in the small towns, rolling hills and farmland that make up the Roman Catholic diocese of Owensboro.
He sorts through e-mail and letters from foreign priests soliciting jobs in America, many written in formal, stilted English. He is looking, he said, for something that shouts: "This priest is just meant for Kentucky!"
"If we didn't get international priests," he said, "some of our guys would have had five parishes. If one of our guys were to leave, or, God forbid, have a heart attack and die, we didn't have anyone to fill in."
In the last six years, he has brought 12 priests from Africa, Asia and Latin America who are serving in this diocese covering the western third of Kentucky, where a vast majority of residents are white. His experiences offer a close look at the church's drive to import foreign priests to compensate for a dearth of Americans, and the ways in which this trend is reshaping the Roman Catholic experience in America.
One of six diocesan priests now serving in the United States came from abroad, according to "International Priests in America," a large study published in 2006. About 300 international priests arrive to work here each year. Even in American seminaries, about one in three of those studying for the priesthood are foreign-born.
Venters has seen lows. Some foreign priests had to be sent home. One became romantically entangled with a female co-worker. One isolated himself in the rectory. Still another would not learn to drive. A priest from the Philippines left after two weeks because he could not stand the cold. A Peruvian priest was hostile toward Hispanics who were not from Peru.
"From a strictly personnel perspective," Venters said, "the international priests are easier to work with than the local priests. If they mess up, you just say, 'See you.' You withdraw your permission for them to stay."
But there have been victories as well, when Kentucky Catholics who once did not know Nigeria from Uganda opened their eyes to the conditions in the countries their foreign priests came from - even raising $6,000 to install wells in the home village of a Nigerian priest serving in Owensboro.
In earlier eras, the Catholic church in the United States depended on foreign priests from places like Ireland, Italy, Germany, Poland and Belgium. But they had usually accompanied their immigrant flocks, and ministered to their own people in their native language.
Nowadays, however, the missionary priests have little in common with the Americans who often come to them for advice and solace in times of crisis. In Owensboro, it falls to Venters, who grew up on a farm in Illinois and has barely traveled outside the country, to find ways to bridge the often large cultural divides. One foreign priest had never seen a microwave. Another thought the frost on his car one morning was the work of vandals.
"There's this assumption that a priest is a priest," said Venters, who, as the vicar for clergy, is essentially the bishop's assistant on personnel issues. "On the church side of it, that's correct. We are a universal church and the rituals are the same, so he knows how to be a priest. The challenge is, he does not know how to be a priest in the United States."
To succeed, Venters has also had to learn to navigate the immigration system, which has become so restrictive since the attacks of Sept. 11, 2001, that even priests with invitations to work have trouble getting into the country.
At one point, he sent so many FedEx letters to Nigeria that the Department of Homeland Security suspended his account until he proved he worked for a legitimate church.
In 2002, when Venters began his recruitment drive, he was looking at a diocese that, like many in the United States, had growing needs and fewer priests to serve them.
Hispanic Catholic immigrants were pouring into Kentucky, drawn by jobs in poultry plants and construction. The diocese estimates that its Catholic population of 60,000 includes 10,000 Spanish-speaking parishioners who arrived in the last 10 years.
But the pool of priests was shrinking, from retirements, deaths and a handful who were removed from the ministry after accusations of sexual abuse of young people. They were also growing elderly: Eight were older than 70.
Many dioceses faced with shortages were shutting or consolidating parishes, but that was not an option for Owensboro. "Because we're so rural," Venters said, "closing parishes doesn't make sense. Some of our counties just have one Catholic church."
At first, Venters felt discouraged by the stilted English and obsequious tone of the letters that foreign priests sent. Then an e-mail message caught his attention. The English was clear, the tone humble. "I welcome your assistance and advice," said the message from a Kenyan priest, Chrispin Oneko, who was serving five impoverished parishes in Jamaica.
Venters asked him for an "audition tape" of his preaching, and found the homily thoughtful - the accent pronounced, but clear enough. He invited the priest to fly to Owensboro to meet Bishop John McRaith.
The foreign priests in Owensboro earn the same amount as their American counterparts: a base salary of $1,350 a month, plus $60 for each year since ordination. (The pay scale varies among dioceses, and many pay foreign priests significantly less than Americans.) They can also earn as much as $130 a month in Mass intentions, or special requests, plus $50 for weddings and $25 for baptisms. For the African priests, it is a windfall.
Venters knows that many of the foreign priests send part of their income home, to help with school fees, food and medicine for their families. And yet, he said, he did not believe money, though a benefit, was the reason the priests were willing to come to America.
"A lot of them, they know we need priests," he said. "And after getting to know them, I believe they truly have a missionary spirit."
The notion of having to go out and recruit priests was foreign to Venters. He had converted to Catholicism as a young adult, had a college degree in agribusiness and was trying to figure out his next step when he heard a priest give a homily about being of service to others.
He phoned the Diocese of Owensboro and signed up for seminary. His class at St. Meinrad School of Theology had 48 students, and in 1989, he was one of seven new priests ordained by McRaith.
But within 10 years, the vocations dried up. It has been five years since a new priest was ordained in Owensboro. The next ordination, of two priests, is expected next year.
Most of the priests serving in Owensboro support Venters's recruiting drive, but some voice doubts. The Reverend Dennis Holly, with the Glenmary Home Missioners, an American order dedicated to serving regions that are not predominantly Catholic, like Western Kentucky, believes America is spending money to attract priests from countries that have even greater shortages.
"We experience the priest shortage, and rather than ask the question, 'Why do we have a priest shortage?' we just import some and act like we don't have a priest shortage," Holly said. "Until we face the issue of mandatory celibacy and the ordination of women, we can't deal with the lack of response to the invitation to priesthood."
But Venters is a pragmatist. Those were good questions, he said, "But, in the meantime, you have to respond to the needs of people."
By Laurie Goodstein
Sunday, December 28, 2008
OWENSBORO, Kentucky: Sixteen of the Reverend Darrell Venters's fellow priests are running themselves ragged here, each serving three parishes simultaneously. One priest admits he stood at an altar once and forgot exactly which church he was in.
So Venters, lean and leathery as the Marlboro man, a cigarette in one hand and a cellphone with a ringtone like a churchbell in the other, spends most of his days recruiting priests from overseas to serve in the small towns, rolling hills and farmland that make up the Roman Catholic diocese of Owensboro.
He sorts through e-mail and letters from foreign priests soliciting jobs in America, many written in formal, stilted English. He is looking, he said, for something that shouts: "This priest is just meant for Kentucky!"
"If we didn't get international priests," he said, "some of our guys would have had five parishes. If one of our guys were to leave, or, God forbid, have a heart attack and die, we didn't have anyone to fill in."
In the last six years, he has brought 12 priests from Africa, Asia and Latin America who are serving in this diocese covering the western third of Kentucky, where a vast majority of residents are white. His experiences offer a close look at the church's drive to import foreign priests to compensate for a dearth of Americans, and the ways in which this trend is reshaping the Roman Catholic experience in America.
One of six diocesan priests now serving in the United States came from abroad, according to "International Priests in America," a large study published in 2006. About 300 international priests arrive to work here each year. Even in American seminaries, about one in three of those studying for the priesthood are foreign-born.
Venters has seen lows. Some foreign priests had to be sent home. One became romantically entangled with a female co-worker. One isolated himself in the rectory. Still another would not learn to drive. A priest from the Philippines left after two weeks because he could not stand the cold. A Peruvian priest was hostile toward Hispanics who were not from Peru.
"From a strictly personnel perspective," Venters said, "the international priests are easier to work with than the local priests. If they mess up, you just say, 'See you.' You withdraw your permission for them to stay."
But there have been victories as well, when Kentucky Catholics who once did not know Nigeria from Uganda opened their eyes to the conditions in the countries their foreign priests came from - even raising $6,000 to install wells in the home village of a Nigerian priest serving in Owensboro.
In earlier eras, the Catholic church in the United States depended on foreign priests from places like Ireland, Italy, Germany, Poland and Belgium. But they had usually accompanied their immigrant flocks, and ministered to their own people in their native language.
Nowadays, however, the missionary priests have little in common with the Americans who often come to them for advice and solace in times of crisis. In Owensboro, it falls to Venters, who grew up on a farm in Illinois and has barely traveled outside the country, to find ways to bridge the often large cultural divides. One foreign priest had never seen a microwave. Another thought the frost on his car one morning was the work of vandals.
"There's this assumption that a priest is a priest," said Venters, who, as the vicar for clergy, is essentially the bishop's assistant on personnel issues. "On the church side of it, that's correct. We are a universal church and the rituals are the same, so he knows how to be a priest. The challenge is, he does not know how to be a priest in the United States."
To succeed, Venters has also had to learn to navigate the immigration system, which has become so restrictive since the attacks of Sept. 11, 2001, that even priests with invitations to work have trouble getting into the country.
At one point, he sent so many FedEx letters to Nigeria that the Department of Homeland Security suspended his account until he proved he worked for a legitimate church.
In 2002, when Venters began his recruitment drive, he was looking at a diocese that, like many in the United States, had growing needs and fewer priests to serve them.
Hispanic Catholic immigrants were pouring into Kentucky, drawn by jobs in poultry plants and construction. The diocese estimates that its Catholic population of 60,000 includes 10,000 Spanish-speaking parishioners who arrived in the last 10 years.
But the pool of priests was shrinking, from retirements, deaths and a handful who were removed from the ministry after accusations of sexual abuse of young people. They were also growing elderly: Eight were older than 70.
Many dioceses faced with shortages were shutting or consolidating parishes, but that was not an option for Owensboro. "Because we're so rural," Venters said, "closing parishes doesn't make sense. Some of our counties just have one Catholic church."
At first, Venters felt discouraged by the stilted English and obsequious tone of the letters that foreign priests sent. Then an e-mail message caught his attention. The English was clear, the tone humble. "I welcome your assistance and advice," said the message from a Kenyan priest, Chrispin Oneko, who was serving five impoverished parishes in Jamaica.
Venters asked him for an "audition tape" of his preaching, and found the homily thoughtful - the accent pronounced, but clear enough. He invited the priest to fly to Owensboro to meet Bishop John McRaith.
The foreign priests in Owensboro earn the same amount as their American counterparts: a base salary of $1,350 a month, plus $60 for each year since ordination. (The pay scale varies among dioceses, and many pay foreign priests significantly less than Americans.) They can also earn as much as $130 a month in Mass intentions, or special requests, plus $50 for weddings and $25 for baptisms. For the African priests, it is a windfall.
Venters knows that many of the foreign priests send part of their income home, to help with school fees, food and medicine for their families. And yet, he said, he did not believe money, though a benefit, was the reason the priests were willing to come to America.
"A lot of them, they know we need priests," he said. "And after getting to know them, I believe they truly have a missionary spirit."
The notion of having to go out and recruit priests was foreign to Venters. He had converted to Catholicism as a young adult, had a college degree in agribusiness and was trying to figure out his next step when he heard a priest give a homily about being of service to others.
He phoned the Diocese of Owensboro and signed up for seminary. His class at St. Meinrad School of Theology had 48 students, and in 1989, he was one of seven new priests ordained by McRaith.
But within 10 years, the vocations dried up. It has been five years since a new priest was ordained in Owensboro. The next ordination, of two priests, is expected next year.
Most of the priests serving in Owensboro support Venters's recruiting drive, but some voice doubts. The Reverend Dennis Holly, with the Glenmary Home Missioners, an American order dedicated to serving regions that are not predominantly Catholic, like Western Kentucky, believes America is spending money to attract priests from countries that have even greater shortages.
"We experience the priest shortage, and rather than ask the question, 'Why do we have a priest shortage?' we just import some and act like we don't have a priest shortage," Holly said. "Until we face the issue of mandatory celibacy and the ordination of women, we can't deal with the lack of response to the invitation to priesthood."
But Venters is a pragmatist. Those were good questions, he said, "But, in the meantime, you have to respond to the needs of people."
Samuel Huntington, 81, political scientist, dies
The Associated Press
Sunday, December 28, 2008
BOSTON: Samuel Huntington, a political scientist best known for his theory of a clash of civilizations, died Wednesday of congestive heart failure and complications from diabetes, on Martha's Vineyard in Massachusetts, Harvard University announced over the weekend. He was 81.
Huntington had retired from active teaching in 2007 after 58 years at Harvard. His research and teaching focused on American government, democratization, military politics, strategy and civil-military relations.
He argued that in a post-Cold War world, violent conflict would come not from ideological friction between nations, but from cultural and religious differences among major civilizations.
He identified those civilizations as Western (including the United States and Europe), Latin American, Islamic, African, Orthodox (with Russia as a core state), and Hindu, Japanese and "Sinic" (including China, Korea and Vietnam).
He made the argument in a 1993 article in the journal Foreign Affairs, and then expanded the thesis into a book, "The Clash of Civilizations and the Remaking of World Order," which was published in 1996. The book has been translated into 39 languages.
His focus on religion rather than ideology as a source of conflict in the post-Cold War world triggered broad debate about relations between the Western and Islamic worlds, especially in the aftermath of the Sept. 11, 2001, attacks.
Despite criticism that his thesis was simplistic - or in the words of the Middle East scholar Edward Said, that promoted the idea of "West versus the rest" - Huntington told Islamica magazine in 2007, "My argument remains that cultural identities, antagonisms and affiliations will not only play a role, but play a major role in relations between states."
Huntington's book in 2004, "Who Are We? The Challenges to America's National Identity," also provoked heated debate by arguing that the massive influx of Mexican immigrants to the United States threatened traditional American identity and national unity.
In all, Huntington wrote 17 books, including "The Soldier and the State: The Theory and Politics of Civil-Military Relations" in 1957, which was inspired by President Harry S. Truman's firing of General Douglas MacArthur, and "Political Power: USA-USSR," a study of Cold War dynamics written in 1964 with Zbigniew Brzezinski.
His 1969 book, "Political Order in Changing Societies," analyzed political and economic development in the Third World.
"Sam was the kind of scholar that made Harvard a great university," Huntington's friend of nearly six decades, the economist Henry Rosovsky, said in a statement released by the university.
Huntington was born in New York on April 18, 1927. He was graduated from Yale in 1946, served in the U.S. Army, earned a master's degree from the University of Chicago in 1948, and a doctorate from Harvard in 1951.
The Associated Press
Sunday, December 28, 2008
BOSTON: Samuel Huntington, a political scientist best known for his theory of a clash of civilizations, died Wednesday of congestive heart failure and complications from diabetes, on Martha's Vineyard in Massachusetts, Harvard University announced over the weekend. He was 81.
Huntington had retired from active teaching in 2007 after 58 years at Harvard. His research and teaching focused on American government, democratization, military politics, strategy and civil-military relations.
He argued that in a post-Cold War world, violent conflict would come not from ideological friction between nations, but from cultural and religious differences among major civilizations.
He identified those civilizations as Western (including the United States and Europe), Latin American, Islamic, African, Orthodox (with Russia as a core state), and Hindu, Japanese and "Sinic" (including China, Korea and Vietnam).
He made the argument in a 1993 article in the journal Foreign Affairs, and then expanded the thesis into a book, "The Clash of Civilizations and the Remaking of World Order," which was published in 1996. The book has been translated into 39 languages.
His focus on religion rather than ideology as a source of conflict in the post-Cold War world triggered broad debate about relations between the Western and Islamic worlds, especially in the aftermath of the Sept. 11, 2001, attacks.
Despite criticism that his thesis was simplistic - or in the words of the Middle East scholar Edward Said, that promoted the idea of "West versus the rest" - Huntington told Islamica magazine in 2007, "My argument remains that cultural identities, antagonisms and affiliations will not only play a role, but play a major role in relations between states."
Huntington's book in 2004, "Who Are We? The Challenges to America's National Identity," also provoked heated debate by arguing that the massive influx of Mexican immigrants to the United States threatened traditional American identity and national unity.
In all, Huntington wrote 17 books, including "The Soldier and the State: The Theory and Politics of Civil-Military Relations" in 1957, which was inspired by President Harry S. Truman's firing of General Douglas MacArthur, and "Political Power: USA-USSR," a study of Cold War dynamics written in 1964 with Zbigniew Brzezinski.
His 1969 book, "Political Order in Changing Societies," analyzed political and economic development in the Third World.
"Sam was the kind of scholar that made Harvard a great university," Huntington's friend of nearly six decades, the economist Henry Rosovsky, said in a statement released by the university.
Huntington was born in New York on April 18, 1927. He was graduated from Yale in 1946, served in the U.S. Army, earned a master's degree from the University of Chicago in 1948, and a doctorate from Harvard in 1951.
********************
Israeli Foreign Minister says Hamas is to blame
By Sharon Otterman
Monday, December 29, 2008
Israeli Foreign Minister Tzipi Livni defended the Israeli assault in Gaza, saying on America's Sunday morning talk shows that Hamas, not Israel, "is the one who needs to be condemned by the international community."
Reacting to anger from the Arab world, as well a call by the United Nations to cease hosilities, Livni said on "Fox News Sunday" that the assault "is needed in order to change the realities on the ground, and to give peace and quiet to the citizens in southern Israel."
Speaking from Jerusalem in taped interviews, Livni said that until Hamas recognized Israel's right to exist and ceased rocket attacks against Israel, they remained terrorists who needed to be acted against. The Israeli air assault has killed at least 280 Palestinians since it began Saturday.
She said army was seeking to avoid unnecessary deaths in the assault against Hamas headquarters in Gaza. Palestinian hospitals have reported numerous civilians among the dead and wounded.
"We are targeting Hamas, we are not looking for civilians to kill more than that," she said in a second interview, on NBC's "Meet the Press."
She added that the Israelis had warned Palestinian civilians to leave places where Hamas officials and fighters were known to be located.
"The one who needs to be condemned by the international community is Hamas," she continued on "Meet the Press." "Israel is a state that implements its right to defend itself and its citizens."
Livni said that she had been in "close connection" Secretary of State Condoleezza Rice, and that she had spoken with her Saturday night. The Bush administration has been supportive of the assault, condemning Hamas for its repeated rocket and mortar attacks against Israel in recent weeks. Rice, in a statement issued Saturday, said that she "holds Hamas responsible for breaking the cease-fire and for the renewal of violence in Gaza."
The army has not ruled out a ground assault, Livni added, and has called up thousands of reservists. "We will make these decisions according to the situation on the ground," she said. "All the options are open."
By Sharon Otterman
Monday, December 29, 2008
Israeli Foreign Minister Tzipi Livni defended the Israeli assault in Gaza, saying on America's Sunday morning talk shows that Hamas, not Israel, "is the one who needs to be condemned by the international community."
Reacting to anger from the Arab world, as well a call by the United Nations to cease hosilities, Livni said on "Fox News Sunday" that the assault "is needed in order to change the realities on the ground, and to give peace and quiet to the citizens in southern Israel."
Speaking from Jerusalem in taped interviews, Livni said that until Hamas recognized Israel's right to exist and ceased rocket attacks against Israel, they remained terrorists who needed to be acted against. The Israeli air assault has killed at least 280 Palestinians since it began Saturday.
She said army was seeking to avoid unnecessary deaths in the assault against Hamas headquarters in Gaza. Palestinian hospitals have reported numerous civilians among the dead and wounded.
"We are targeting Hamas, we are not looking for civilians to kill more than that," she said in a second interview, on NBC's "Meet the Press."
She added that the Israelis had warned Palestinian civilians to leave places where Hamas officials and fighters were known to be located.
"The one who needs to be condemned by the international community is Hamas," she continued on "Meet the Press." "Israel is a state that implements its right to defend itself and its citizens."
Livni said that she had been in "close connection" Secretary of State Condoleezza Rice, and that she had spoken with her Saturday night. The Bush administration has been supportive of the assault, condemning Hamas for its repeated rocket and mortar attacks against Israel in recent weeks. Rice, in a statement issued Saturday, said that she "holds Hamas responsible for breaking the cease-fire and for the renewal of violence in Gaza."
The army has not ruled out a ground assault, Livni added, and has called up thousands of reservists. "We will make these decisions according to the situation on the ground," she said. "All the options are open."
*********************
After Israeli airstrikes, Bush administration calls Hamas "thugs"
By Robert Pear
Sunday, December 28, 2008
CRAWFORD, Texas: The Bush administration has issued blistering criticism of Hamas, saying the group provoked Israel's airstrikes on Gaza by firing rockets into southern Israel.
Gordon Johndroe, a White House spokesman, said Saturday that Hamas, the group that controls Gaza, was responsible for the outbreak of violence and called its rocket attacks "completely unacceptable."
"These people are nothing but thugs," he said. "Israel is going to defend its people against terrorists like Hamas."
In Washington, Secretary of State Condoleezza Rice issued a statement that said: "The United States strongly condemns the repeated rocket and mortar attacks against Israel and holds Hamas responsible for breaking the cease-fire and for the renewal of violence in Gaza. The cease-fire should be restored immediately. The United States calls on all concerned to address the urgent humanitarian needs of the innocent people of Gaza."
An aide to President-elect Barack Obama said he had discussed events in Gaza with Rice in an eight-minute telephone call initiated by Obama.
Brooke Anderson, a spokeswoman for Obama, said that while Obama was monitoring global events, "There is one president at a time."
In the campaign, Obama made statements that sounded similar to those issued by the Bush administration on Saturday. "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," Obama said in July. "And I would expect Israelis to do the same thing."
Johndroe said that King Abdullah of Saudi Arabia called Bush at his ranch in Crawford, Texas, on Saturday, and they discussed the situation.
Asked whether the United States had given any green light for the airstrikes by Israel, Johndroe said: "The Israeli cabinet authorized this a few days ago, as you're all aware. So we were aware of that authorization by the Israeli cabinet." He added: "Hamas has done nothing for the people of Gaza. They need to stop. They have a choice to make. You can't have one foot in politics and one foot in terror."
By Robert Pear
Sunday, December 28, 2008
CRAWFORD, Texas: The Bush administration has issued blistering criticism of Hamas, saying the group provoked Israel's airstrikes on Gaza by firing rockets into southern Israel.
Gordon Johndroe, a White House spokesman, said Saturday that Hamas, the group that controls Gaza, was responsible for the outbreak of violence and called its rocket attacks "completely unacceptable."
"These people are nothing but thugs," he said. "Israel is going to defend its people against terrorists like Hamas."
In Washington, Secretary of State Condoleezza Rice issued a statement that said: "The United States strongly condemns the repeated rocket and mortar attacks against Israel and holds Hamas responsible for breaking the cease-fire and for the renewal of violence in Gaza. The cease-fire should be restored immediately. The United States calls on all concerned to address the urgent humanitarian needs of the innocent people of Gaza."
An aide to President-elect Barack Obama said he had discussed events in Gaza with Rice in an eight-minute telephone call initiated by Obama.
Brooke Anderson, a spokeswoman for Obama, said that while Obama was monitoring global events, "There is one president at a time."
In the campaign, Obama made statements that sounded similar to those issued by the Bush administration on Saturday. "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," Obama said in July. "And I would expect Israelis to do the same thing."
Johndroe said that King Abdullah of Saudi Arabia called Bush at his ranch in Crawford, Texas, on Saturday, and they discussed the situation.
Asked whether the United States had given any green light for the airstrikes by Israel, Johndroe said: "The Israeli cabinet authorized this a few days ago, as you're all aware. So we were aware of that authorization by the Israeli cabinet." He added: "Hamas has done nothing for the people of Gaza. They need to stop. They have a choice to make. You can't have one foot in politics and one foot in terror."
********************
U.N. Security Council calls for end to Gaza violence
Reuters
Sunday, December 28, 2008
UNITED NATIONS: The U.N. Security Council called early on Sunday for an immediate halt to all violence in Gaza after a day of Israeli air strikes in response to rocket and mortar fire by Gaza militants against Israel.
"The members of the Security Council expressed serious concern at the escalation of the situation in Gaza and called for an immediate halt to all violence," said a statement read to reporters by Croatian Ambassador Neven Jurica, president of the council.
"The members called on the parties to stop immediately all military activities."
Palestinian medical officials said on Sunday that 271 Palestinians had been killed in 24 hours of Israeli attacks in the Hamas-ruled Gaza Strip. Since the operation began, one Israeli had been killed by Palestinian rocket fire.
Diplomats said the Security Council meeting had been convened at the request of Libya, the only Arab country on the council.
The statement, agreed upon after four hours of closed-door council discussions, called on all parties to address "the serious humanitarian and economic needs in Gaza."
It urged them to take necessary measures, including the opening of border crossings, to ensure Gaza's people were supplied with food, fuel and medical treatment.
Council members "stressed the need for the restoration of calm in full" to open the way for a Palestinian-Israeli political solution.
(Reporting by Patrick Worsnip; editing by Todd Eastham)
Reuters
Sunday, December 28, 2008
UNITED NATIONS: The U.N. Security Council called early on Sunday for an immediate halt to all violence in Gaza after a day of Israeli air strikes in response to rocket and mortar fire by Gaza militants against Israel.
"The members of the Security Council expressed serious concern at the escalation of the situation in Gaza and called for an immediate halt to all violence," said a statement read to reporters by Croatian Ambassador Neven Jurica, president of the council.
"The members called on the parties to stop immediately all military activities."
Palestinian medical officials said on Sunday that 271 Palestinians had been killed in 24 hours of Israeli attacks in the Hamas-ruled Gaza Strip. Since the operation began, one Israeli had been killed by Palestinian rocket fire.
Diplomats said the Security Council meeting had been convened at the request of Libya, the only Arab country on the council.
The statement, agreed upon after four hours of closed-door council discussions, called on all parties to address "the serious humanitarian and economic needs in Gaza."
It urged them to take necessary measures, including the opening of border crossings, to ensure Gaza's people were supplied with food, fuel and medical treatment.
Council members "stressed the need for the restoration of calm in full" to open the way for a Palestinian-Israeli political solution.
(Reporting by Patrick Worsnip; editing by Todd Eastham)
********************
Gaza attacks bring protests in Mideast streets
The Associated Press
Sunday, December 28, 2008
BEIRUT: Crowds of thousands swept into the streets of cities around the Middle East on Sunday to voice their outrage over Israeli airstrikes on the Gaza Strip.
From Lebanon to Iran, Israel's adversaries used the attacks to marshal crowds out onto the streets for noisy demonstrations. Among regional allies there was also discontent: Turkey's prime minister, Recep Tayyip Erdogan, called the attacks a "crime against humanity."
Several of the protests Sunday turned violent. In Lebanon, the police fired tear gas to stop dozens of demonstrators from reaching the Egyptian Embassy. Some in the crowd hurled stones at the embassy compound. It was unclear if anyone was hurt.
Egypt has been criticized for not doing enough to allow aid to pass through its border with Gaza.
Earlier in the Lebanese capital, a Hamas official roused a crowd of about 1,000 people topped by fluttering Lebanese and Palestinian flags, promising victory and resistance, and ruling out surrender. His speech was met with cries of "death to Israel" from the crowd.
The demonstrators gathered outside the United Nations office in downtown Beirut. After an all-night emergency session in New York, the UN Security Council expressed serious concern about the escalating situation in Gaza and called on Israel and the Palestinians to immediately halt all violence.
A Hamas representative, Osama Hamdan, told the crowd that the militant group had no choice but to fight. Gaza militants have been lobbing dozens of rockets and mortars into southern Israel since a six-month truce expired over a week ago, prompting Israel's fierce retaliation.
"We in the Hamas group and other resistance factions in Gaza know that we don't have many alternatives," Hamdan said. "We have one alternative, which is to be steadfast and resist and then we will be victorious."
In the capital of neighboring Syria, more than 5,000 people marched toward the central Youssef al-Azmeh Square, where they burned an Israeli and an American flag. One demonstrator carried a banner reading, "The aggression against Gaza is an aggression against the whole Arab nation."
"Down with America, the mother of terrorism," read another.
In Amman, about 5,000 lawyers marched toward Parliament to demand the expulsion of the Israeli ambassador and the closure of the embassy. "No for peace, yes to the rifle," they chanted.
In the Baqaa camp for Palestinian refugees and their descendants in Jordan, one protester, Yassin Abu Taha, 32, blamed America and Israel for the Middle East's problems.
"The Israelis kill our people in Gaza and the West Bank. The Americans kill our people in Iraq. We're refugees, kicked out of our home in Tulkarem in 1967 and we're still displaced," he said, bemoaning his family's flight in the 1967 Mideast war.
The U.S. Embassy in Jordan warned Americans to avoid areas of demonstrations.
Thousands of Egyptians - many of them students - demonstrated at campuses in Cairo, Alexandria and elsewhere and accused President Hosni Mubarak and other Arab leaders of not doing enough to support the Palestinians.
President Mahmoud Ahmadinejad of Iran, who has said Israel should be "wiped off the map," denounced the Israeli strikes.
In the normally politically placid streets of Dubai, hundreds of demonstrators, some draped in Palestinian flags, gathered at the Palestinian consulate.
"This is a time for the Palestinians and Arabs to unite to fight against a common enemy," said Majdei Mansour, a 30-year-old Palestinian resident of Dubai. Mansour has family still in Gaza but said he had been unable to contact them since the latest fighting.
The Associated Press
Sunday, December 28, 2008
BEIRUT: Crowds of thousands swept into the streets of cities around the Middle East on Sunday to voice their outrage over Israeli airstrikes on the Gaza Strip.
From Lebanon to Iran, Israel's adversaries used the attacks to marshal crowds out onto the streets for noisy demonstrations. Among regional allies there was also discontent: Turkey's prime minister, Recep Tayyip Erdogan, called the attacks a "crime against humanity."
Several of the protests Sunday turned violent. In Lebanon, the police fired tear gas to stop dozens of demonstrators from reaching the Egyptian Embassy. Some in the crowd hurled stones at the embassy compound. It was unclear if anyone was hurt.
Egypt has been criticized for not doing enough to allow aid to pass through its border with Gaza.
Earlier in the Lebanese capital, a Hamas official roused a crowd of about 1,000 people topped by fluttering Lebanese and Palestinian flags, promising victory and resistance, and ruling out surrender. His speech was met with cries of "death to Israel" from the crowd.
The demonstrators gathered outside the United Nations office in downtown Beirut. After an all-night emergency session in New York, the UN Security Council expressed serious concern about the escalating situation in Gaza and called on Israel and the Palestinians to immediately halt all violence.
A Hamas representative, Osama Hamdan, told the crowd that the militant group had no choice but to fight. Gaza militants have been lobbing dozens of rockets and mortars into southern Israel since a six-month truce expired over a week ago, prompting Israel's fierce retaliation.
"We in the Hamas group and other resistance factions in Gaza know that we don't have many alternatives," Hamdan said. "We have one alternative, which is to be steadfast and resist and then we will be victorious."
In the capital of neighboring Syria, more than 5,000 people marched toward the central Youssef al-Azmeh Square, where they burned an Israeli and an American flag. One demonstrator carried a banner reading, "The aggression against Gaza is an aggression against the whole Arab nation."
"Down with America, the mother of terrorism," read another.
In Amman, about 5,000 lawyers marched toward Parliament to demand the expulsion of the Israeli ambassador and the closure of the embassy. "No for peace, yes to the rifle," they chanted.
In the Baqaa camp for Palestinian refugees and their descendants in Jordan, one protester, Yassin Abu Taha, 32, blamed America and Israel for the Middle East's problems.
"The Israelis kill our people in Gaza and the West Bank. The Americans kill our people in Iraq. We're refugees, kicked out of our home in Tulkarem in 1967 and we're still displaced," he said, bemoaning his family's flight in the 1967 Mideast war.
The U.S. Embassy in Jordan warned Americans to avoid areas of demonstrations.
Thousands of Egyptians - many of them students - demonstrated at campuses in Cairo, Alexandria and elsewhere and accused President Hosni Mubarak and other Arab leaders of not doing enough to support the Palestinians.
President Mahmoud Ahmadinejad of Iran, who has said Israel should be "wiped off the map," denounced the Israeli strikes.
In the normally politically placid streets of Dubai, hundreds of demonstrators, some draped in Palestinian flags, gathered at the Palestinian consulate.
"This is a time for the Palestinians and Arabs to unite to fight against a common enemy," said Majdei Mansour, a 30-year-old Palestinian resident of Dubai. Mansour has family still in Gaza but said he had been unable to contact them since the latest fighting.
*********************
Photographers capture images of terror in Mumbai
By Thomas Fuller
Sunday, December 28, 2008
MUMBAI: When the gunfire started at Mumbai's main train station last month, Sebastian D'souza was well placed to respond. From his office directly across the street, D'souza, the photo editor of The Mumbai Mirror newspaper, grabbed his Nikon and two lenses and headed out into the blood-soaked night of Nov. 26. Peering from behind pillars and running in and out of empty train cars, he emerged with the singular iconic image of the attacks: a clear shot of one of the gunmen.
"I was shaking, but I kept shooting," D'souza said as he scrolled through his pictures of the attacks in a recent interview at his office.
D'souza's photo of Muhammad Ajmal Kasab confidently striding through Chhatrapati Shivaji Terminus carrying an assault rife with one hand, finger extended toward the trigger, has been printed and reprinted in newspapers here and flashed daily on television screens.
Four weeks after the terrorist rampage that left more than 160 people dead, the memories of victims are blurring. Some witness accounts remain contradictory. But D'souza and another newspaper photographer, Vasant Prabhu, have millions of pixels of evidence that will remain part of the indelible record.
Their photos, some of them yet unpublished, provide detail and precision that is lacking from other witness accounts. They show brave attempts by police officers to stop the attackers. But they also highlight the woeful inadequacy of the police officers' weapons, and thus help to explain how just 10 terrorists managed to hold a city hostage for three days.
Surprising in an era of camera phones and point-and-shoot pocket-sized cameras, there are very few other images from the attacks aside from those taken by D'souza and Prabhu, except for some grainy security camera footage at the luxury hotels and one blurry photo of an attacker walking outside - taken from a newspaper office window by a Times of India photographer who was shot at but unharmed.
Prabhu, who is a photographer at The Indian Express, followed two police officers into the Taj Mahal hotel and documented the room-by-room discovery of the destruction and killing there. He captured images of restaurant tables abandoned; there are half-eaten meals on plates and shattered glass is everywhere. By the swimming pool, a Western couple clad in white are sprawled out lifelessly near an ice bucket and some wine glasses.
Both D'souza and Prabhu, who are in their 50s, took their pictures at great risk to themselves. Several police officers whom they photographed were subsequently killed. Prabhu said he invoked the name of Ganesh, the Hindu deity, for protection when he had to use a flash and risked being spotted by the gunmen.
Both photographers were tormented by the passivity of their jobs - recording the bloodshed without any power to stop it. "I wanted to get rid of my camera, get hold of a gun and go after the terrorists," Prabhu said. If they had been looking through rifle scopes instead of camera viewfinders some of the attackers might have been killed early on. D'souza, who tracked the gunmen for about 40 minutes until they left the train station, had managed to find a better vantage point on the attackers than any of the police stationed there.
Witnesses have offered various accounts on the timing and duration of the attacks. D'souza's pictures help resolve the issue. Some images show the train station clock, down to the second. A police officer is seen shooting his rifle at the attackers at 22:07:05. Another photo shows the same clock 20 minutes later. His camera also recorded the times that the photos were taken.
A photo of Kasab that has not yet been published gives a slightly more detailed look at the attacker. Kasab's assault rifle appears to have two ammunition cartridges bound together with tape, allowing for longer intervals between reloads. He has the appearance of a college student, with a slightly floppy haircut, cargo pants and what appears to be a sweatshirt.
D'souza described the two attackers as cool and unflappable. "They never ran, just walked," he said. "They were very accurate and didn't waste any bullets."
Kasab is in police custody as the lone surviving gunman. The other nine were killed by the police.
Both photographers' images of the police show a stark mismatch with the attackers' arsenal. D'souza photographed a police officer awkwardly firing his outdated rifle; he and all the other officers missed, D'souza said. Neither attacker appears to have been wounded at the train station during what was at least a half-hour rampage there.
Prabhu's photos show two police officers in pressed khaki uniforms wearing formal, wing-tip style shoes. Their pistols are drawn and Prabhu says he saw one officer fire three rounds in the direction of the attackers. But they were up against terrorists with assault weapons, grenades and other explosives.
In the train station, D'souza captured some of the surreal aspects of the attacks. He recounted how despite the near constant sound of approaching gunfire, a shopkeeper at a small bookshop spent minutes trying to close his metal shutter instead of just running away. The attackers shot the merchant; one of D'souza's pictures show the man slumped, dying in front of his shop.
D'souza also tells of a woman in a sari who walked nonchalantly in front of the attackers but was spared. "They didn't even look at her," D'souza said.
A man, possibly homeless, D'souza guesses, watched the attacks with his arms folded as if he were admiring a street performance. It is still not clear why the attackers let some people live while others were killed on the spot.
"They were like angels of death," D'souza said. "When they hit someone they didn't even look back. They were so sure."
By Thomas Fuller
Sunday, December 28, 2008
MUMBAI: When the gunfire started at Mumbai's main train station last month, Sebastian D'souza was well placed to respond. From his office directly across the street, D'souza, the photo editor of The Mumbai Mirror newspaper, grabbed his Nikon and two lenses and headed out into the blood-soaked night of Nov. 26. Peering from behind pillars and running in and out of empty train cars, he emerged with the singular iconic image of the attacks: a clear shot of one of the gunmen.
"I was shaking, but I kept shooting," D'souza said as he scrolled through his pictures of the attacks in a recent interview at his office.
D'souza's photo of Muhammad Ajmal Kasab confidently striding through Chhatrapati Shivaji Terminus carrying an assault rife with one hand, finger extended toward the trigger, has been printed and reprinted in newspapers here and flashed daily on television screens.
Four weeks after the terrorist rampage that left more than 160 people dead, the memories of victims are blurring. Some witness accounts remain contradictory. But D'souza and another newspaper photographer, Vasant Prabhu, have millions of pixels of evidence that will remain part of the indelible record.
Their photos, some of them yet unpublished, provide detail and precision that is lacking from other witness accounts. They show brave attempts by police officers to stop the attackers. But they also highlight the woeful inadequacy of the police officers' weapons, and thus help to explain how just 10 terrorists managed to hold a city hostage for three days.
Surprising in an era of camera phones and point-and-shoot pocket-sized cameras, there are very few other images from the attacks aside from those taken by D'souza and Prabhu, except for some grainy security camera footage at the luxury hotels and one blurry photo of an attacker walking outside - taken from a newspaper office window by a Times of India photographer who was shot at but unharmed.
Prabhu, who is a photographer at The Indian Express, followed two police officers into the Taj Mahal hotel and documented the room-by-room discovery of the destruction and killing there. He captured images of restaurant tables abandoned; there are half-eaten meals on plates and shattered glass is everywhere. By the swimming pool, a Western couple clad in white are sprawled out lifelessly near an ice bucket and some wine glasses.
Both D'souza and Prabhu, who are in their 50s, took their pictures at great risk to themselves. Several police officers whom they photographed were subsequently killed. Prabhu said he invoked the name of Ganesh, the Hindu deity, for protection when he had to use a flash and risked being spotted by the gunmen.
Both photographers were tormented by the passivity of their jobs - recording the bloodshed without any power to stop it. "I wanted to get rid of my camera, get hold of a gun and go after the terrorists," Prabhu said. If they had been looking through rifle scopes instead of camera viewfinders some of the attackers might have been killed early on. D'souza, who tracked the gunmen for about 40 minutes until they left the train station, had managed to find a better vantage point on the attackers than any of the police stationed there.
Witnesses have offered various accounts on the timing and duration of the attacks. D'souza's pictures help resolve the issue. Some images show the train station clock, down to the second. A police officer is seen shooting his rifle at the attackers at 22:07:05. Another photo shows the same clock 20 minutes later. His camera also recorded the times that the photos were taken.
A photo of Kasab that has not yet been published gives a slightly more detailed look at the attacker. Kasab's assault rifle appears to have two ammunition cartridges bound together with tape, allowing for longer intervals between reloads. He has the appearance of a college student, with a slightly floppy haircut, cargo pants and what appears to be a sweatshirt.
D'souza described the two attackers as cool and unflappable. "They never ran, just walked," he said. "They were very accurate and didn't waste any bullets."
Kasab is in police custody as the lone surviving gunman. The other nine were killed by the police.
Both photographers' images of the police show a stark mismatch with the attackers' arsenal. D'souza photographed a police officer awkwardly firing his outdated rifle; he and all the other officers missed, D'souza said. Neither attacker appears to have been wounded at the train station during what was at least a half-hour rampage there.
Prabhu's photos show two police officers in pressed khaki uniforms wearing formal, wing-tip style shoes. Their pistols are drawn and Prabhu says he saw one officer fire three rounds in the direction of the attackers. But they were up against terrorists with assault weapons, grenades and other explosives.
In the train station, D'souza captured some of the surreal aspects of the attacks. He recounted how despite the near constant sound of approaching gunfire, a shopkeeper at a small bookshop spent minutes trying to close his metal shutter instead of just running away. The attackers shot the merchant; one of D'souza's pictures show the man slumped, dying in front of his shop.
D'souza also tells of a woman in a sari who walked nonchalantly in front of the attackers but was spared. "They didn't even look at her," D'souza said.
A man, possibly homeless, D'souza guesses, watched the attacks with his arms folded as if he were admiring a street performance. It is still not clear why the attackers let some people live while others were killed on the spot.
"They were like angels of death," D'souza said. "When they hit someone they didn't even look back. They were so sure."
********************
Marriott in Pakistan reopens after deadly bombing
The Associated Press
Sunday, December 28, 2008
ISLAMABAD, Pakistan: The Marriott Hotel in Pakistan's capital partially reopened Sunday with a giant bombproof wall and revamped security, three months after a massive suicide truck bombing devastated the building and killed more than 50 people.
The September attack on the luxury Islamabad hotel, a site popular with expatriates and the Pakistani elite, demonstrated the reach of militants in Pakistan extends well beyond the lawless regions bordering Afghanistan where al-Qaida and the Taliban have flourished.
The hotel's owner said Sunday the reopening was a message that Pakistan would not be cowed by the threat of terrorism.
"We have expressed our resolve that we will not bow before the enemies of Pakistan," said Saddaruddin Hashwani.
Several foreigners, including at least three Americans and the Czech ambassador, were killed in the attack, prompting embassies, non-governmental organizations and other groups to tighten security and even send some people home.
To guard against a future assault, the hotel has constructed a 14-foot, or four meter, bombproof wall and installed additional security cameras, reinforced glass and a new alarm system, said Hashwani.
He hopes the added security will help the hotel regain its former clientele.
"We have built this like a fortress," he said at a recent event heralding the reopening. "I think time is a healer. Slowly, gradually, I think things are going to improve."
The hotel's three restaurants were up and running Sunday, and 70 rooms will be available Jan. 1, said Sufia Shahid, a senior communications official at the group that owns the hotel. The hotel hopes to have all of its nearly 300 rooms ready by March, she added.
Zafran Hafeez, whose father worked as a security guard at the hotel and was killed in the attack, said the reopening could not heal the loss felt by victims' families.
"Marriott can rebuild, but the people like my father can never come back," Hafeez said.
Pakistan has arrested three people allegedly connected to the truck bombing, but no one has been formally charged.
The Pakistani government recently claimed Lashkar-e-Jhangvi, a militant group believed to be based in the Pakistani province of Punjab, was involved in the bombing. But it has not ruled out connections to al-Qaida and other militants based in the northwest.
Lashkar-e-Jhangvi is a Sunni Muslim extremist group blamed for killing scores of minority Shiite Muslims across Pakistan. Its members have also been accused of attacks against Westerners in Karachi and the slaying of Daniel Pearl, a U.S journalist, in 2002.
The Associated Press
Sunday, December 28, 2008
ISLAMABAD, Pakistan: The Marriott Hotel in Pakistan's capital partially reopened Sunday with a giant bombproof wall and revamped security, three months after a massive suicide truck bombing devastated the building and killed more than 50 people.
The September attack on the luxury Islamabad hotel, a site popular with expatriates and the Pakistani elite, demonstrated the reach of militants in Pakistan extends well beyond the lawless regions bordering Afghanistan where al-Qaida and the Taliban have flourished.
The hotel's owner said Sunday the reopening was a message that Pakistan would not be cowed by the threat of terrorism.
"We have expressed our resolve that we will not bow before the enemies of Pakistan," said Saddaruddin Hashwani.
Several foreigners, including at least three Americans and the Czech ambassador, were killed in the attack, prompting embassies, non-governmental organizations and other groups to tighten security and even send some people home.
To guard against a future assault, the hotel has constructed a 14-foot, or four meter, bombproof wall and installed additional security cameras, reinforced glass and a new alarm system, said Hashwani.
He hopes the added security will help the hotel regain its former clientele.
"We have built this like a fortress," he said at a recent event heralding the reopening. "I think time is a healer. Slowly, gradually, I think things are going to improve."
The hotel's three restaurants were up and running Sunday, and 70 rooms will be available Jan. 1, said Sufia Shahid, a senior communications official at the group that owns the hotel. The hotel hopes to have all of its nearly 300 rooms ready by March, she added.
Zafran Hafeez, whose father worked as a security guard at the hotel and was killed in the attack, said the reopening could not heal the loss felt by victims' families.
"Marriott can rebuild, but the people like my father can never come back," Hafeez said.
Pakistan has arrested three people allegedly connected to the truck bombing, but no one has been formally charged.
The Pakistani government recently claimed Lashkar-e-Jhangvi, a militant group believed to be based in the Pakistani province of Punjab, was involved in the bombing. But it has not ruled out connections to al-Qaida and other militants based in the northwest.
Lashkar-e-Jhangvi is a Sunni Muslim extremist group blamed for killing scores of minority Shiite Muslims across Pakistan. Its members have also been accused of attacks against Westerners in Karachi and the slaying of Daniel Pearl, a U.S journalist, in 2002.
********************
Taliban attacks Pakistani village that resisted
By Richard A. Oppel Jr. and Pir Zubair Shah
Sunday, December 28, 2008
ISLAMABAD: Four months ago, the people of the Pakistani mountain village of Shalbandi gained national repute after a village posse hunted down and killed six Taliban fighters who had tied up and killed eight local policemen.
On Sunday morning the Taliban struck back.
A suicide bomber exploded a car at a school in Shalbandi that was serving as a polling place, as voters lined up to elect a representative to the national assembly. More than 30 people were killed and more than two dozen wounded, according to local political and security officials.
The blast was the latest demonstration of the Taliban's bloody encroachment from lawless tribal areas on the western border eastward and deeper into Pakistan. Shalbandi is less than 160 kilometers, or 100 miles, northwest of Islamabad, the capital, and lies just south of the lush Swat Valley, which has been largely taken over by the Taliban despite large-scale army operations.
In the frenzied aftermath of the car bombing, survivors and witnesses described two versions of the attack, said Mian Iftikhar Hussain, Information Minister for the North-West Frontier Province.
In one account, he said, the bomber sped his car toward the school but plowed into adjacent shops. The explosion was so large that it destroyed part of the school and killed many people waiting to vote. In the other version, he said, the killer parked near the school and told people he was having car trouble. As people gathered, he detonated the bomb inside.
A Taliban spokesman claimed responsibility for the attack as retribution for the deaths of its fighters, according to a Pakistani news channel. The Pakistani military claimed over the weekend it had killed 34 militants in Swat.
But to people in the region there was no doubt why militants picked Shalbandi for such a gruesome attack.
"They singled out this village because it had clearly resisted and had expelled the Taliban by force," said Afrasiab Khattak, leader of the Awami National Party, which won control of the provincial government in February by defeating incumbent religious parties with ties to militants. "They want to topple the system and turn this country into a failed state."
Shalbandi had received constant threats after the posse hunted down the Taliban. "Disrupting elections is a general strategy for these elements," Khattak said, "but there was a reason for choosing this specific village."
The bombing on Sunday was not the first act of retaliation. The son of a village elder who had been a leader of the August posse was recently kidnapped by militants in Swat, Hussain said. The village elder responded by kidnapping the son of a well-known Taliban spokesman in Swat.
"These people cannot frighten us," said Hussain, who added that voting for the legislative seat continued Sunday at other polling places. "We are ready for a dialogue, but if they continue with the violence we will take strong action against them even at the cost of our lives."
Yet the efforts of villagers in northwest Pakistan have proved little deterrent to the Taliban, who continue to take over more territory despite major Pakistani military campaigns. In the latest sign of Taliban domination of Swat, militants announced that by Jan. 15 no girls would allowed to attend school in the valley.
The blast Sunday also underscored one risk of moving Pakistani troops out of Taliban-controlled western tribal areas toward the eastern border with India. At least several thousand troops are believed to have been redeployed in recent days, following elevated tensions with India after the Mumbai terror attacks last month, which India blames on Pakistani militants.
One of Pakistan's leading newspapers, Dawn, editorialized on 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." "Isn't that the area where the world's best intelligence says the extremist militants are holed up in significant numbers and planning to strike targets everywhere?" the editorial asked.On the other hand, there is some angst within the Pakistani defense and intelligence communities that the military's scorched-earth approach in the west, including leveling villages as refugees huddle in camps miles away, may not gain the government much security in the long run. "What do they gain if they destroy everything?" said one Pakistani official familiar with the military campaigns.
By Richard A. Oppel Jr. and Pir Zubair Shah
Sunday, December 28, 2008
ISLAMABAD: Four months ago, the people of the Pakistani mountain village of Shalbandi gained national repute after a village posse hunted down and killed six Taliban fighters who had tied up and killed eight local policemen.
On Sunday morning the Taliban struck back.
A suicide bomber exploded a car at a school in Shalbandi that was serving as a polling place, as voters lined up to elect a representative to the national assembly. More than 30 people were killed and more than two dozen wounded, according to local political and security officials.
The blast was the latest demonstration of the Taliban's bloody encroachment from lawless tribal areas on the western border eastward and deeper into Pakistan. Shalbandi is less than 160 kilometers, or 100 miles, northwest of Islamabad, the capital, and lies just south of the lush Swat Valley, which has been largely taken over by the Taliban despite large-scale army operations.
In the frenzied aftermath of the car bombing, survivors and witnesses described two versions of the attack, said Mian Iftikhar Hussain, Information Minister for the North-West Frontier Province.
In one account, he said, the bomber sped his car toward the school but plowed into adjacent shops. The explosion was so large that it destroyed part of the school and killed many people waiting to vote. In the other version, he said, the killer parked near the school and told people he was having car trouble. As people gathered, he detonated the bomb inside.
A Taliban spokesman claimed responsibility for the attack as retribution for the deaths of its fighters, according to a Pakistani news channel. The Pakistani military claimed over the weekend it had killed 34 militants in Swat.
But to people in the region there was no doubt why militants picked Shalbandi for such a gruesome attack.
"They singled out this village because it had clearly resisted and had expelled the Taliban by force," said Afrasiab Khattak, leader of the Awami National Party, which won control of the provincial government in February by defeating incumbent religious parties with ties to militants. "They want to topple the system and turn this country into a failed state."
Shalbandi had received constant threats after the posse hunted down the Taliban. "Disrupting elections is a general strategy for these elements," Khattak said, "but there was a reason for choosing this specific village."
The bombing on Sunday was not the first act of retaliation. The son of a village elder who had been a leader of the August posse was recently kidnapped by militants in Swat, Hussain said. The village elder responded by kidnapping the son of a well-known Taliban spokesman in Swat.
"These people cannot frighten us," said Hussain, who added that voting for the legislative seat continued Sunday at other polling places. "We are ready for a dialogue, but if they continue with the violence we will take strong action against them even at the cost of our lives."
Yet the efforts of villagers in northwest Pakistan have proved little deterrent to the Taliban, who continue to take over more territory despite major Pakistani military campaigns. In the latest sign of Taliban domination of Swat, militants announced that by Jan. 15 no girls would allowed to attend school in the valley.
The blast Sunday also underscored one risk of moving Pakistani troops out of Taliban-controlled western tribal areas toward the eastern border with India. At least several thousand troops are believed to have been redeployed in recent days, following elevated tensions with India after the Mumbai terror attacks last month, which India blames on Pakistani militants.
One of Pakistan's leading newspapers, Dawn, editorialized on 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." "Isn't that the area where the world's best intelligence says the extremist militants are holed up in significant numbers and planning to strike targets everywhere?" the editorial asked.On the other hand, there is some angst within the Pakistani defense and intelligence communities that the military's scorched-earth approach in the west, including leveling villages as refugees huddle in camps miles away, may not gain the government much security in the long run. "What do they gain if they destroy everything?" said one Pakistani official familiar with the military campaigns.
********************
Suicide blast kills 6 and wounds 36 Afghans
Reuters
Sunday, December 28, 2008
KHOST, Afghanistan: A suicide bomber killed six people, including four children, and wounded 36 others in the southeastern Afghan province of Khost on Sunday, a provincial official said.
The Taliban claimed responsibility for the attack, part of the worst spate of violence in Afghanistan this year, itself the bloodiest period since the militants were overthrown in 2001.
Two of the six killed in the attack on Ismail Kheil's district headquarters were members of the security forces, district chief Dawlat Qayoumi told reporters.
U.S. forces were also in the building during the attack, but suffered no losses, Qayoumi said. "The attack has also caused damage to the building," he added.
A doctor in the main hospital in Khost said 36 people, many of them civilians, were wounded in the attack. Some were in critical condition.
The escalation of violence in Afghanistan has raised concerns the country may slide back into anarchy despite increased deployments of foreign troops.
U.S.-led troops with the backing of some Afghan armed factions overthrew the Taliban government after it refused to hand over al Qaeda leaders accused by Washington of masterminding the September 11 attacks on the United States.
The Taliban, who are largely active in southern and eastern regions near the border with Pakistan, have regrouped since 2005 and mostly rely on suicide attacks and roadside bomb raids against Afghan and foreign troops.
(Writing by Sayed Salahuddin; Editing by Giles Elgood)
Reuters
Sunday, December 28, 2008
KHOST, Afghanistan: A suicide bomber killed six people, including four children, and wounded 36 others in the southeastern Afghan province of Khost on Sunday, a provincial official said.
The Taliban claimed responsibility for the attack, part of the worst spate of violence in Afghanistan this year, itself the bloodiest period since the militants were overthrown in 2001.
Two of the six killed in the attack on Ismail Kheil's district headquarters were members of the security forces, district chief Dawlat Qayoumi told reporters.
U.S. forces were also in the building during the attack, but suffered no losses, Qayoumi said. "The attack has also caused damage to the building," he added.
A doctor in the main hospital in Khost said 36 people, many of them civilians, were wounded in the attack. Some were in critical condition.
The escalation of violence in Afghanistan has raised concerns the country may slide back into anarchy despite increased deployments of foreign troops.
U.S.-led troops with the backing of some Afghan armed factions overthrew the Taliban government after it refused to hand over al Qaeda leaders accused by Washington of masterminding the September 11 attacks on the United States.
The Taliban, who are largely active in southern and eastern regions near the border with Pakistan, have regrouped since 2005 and mostly rely on suicide attacks and roadside bomb raids against Afghan and foreign troops.
(Writing by Sayed Salahuddin; Editing by Giles Elgood)
********************
Kurds herald launch of Turkey's first official Kurdish language station
Reuters
Sunday, December 28, 2008
ISTANBUL: The launch of Turkey's first Kurdish language channel by the state broadcaster Jan. 1 is being heralded as a long overdue step toward improving the rights of the country's minority Kurds.
But skepticism among many about its state-sponsored message will mean it faces a battle to earn acceptance among Kurds in impoverished southeast Turkey, which has been scarred by a quarter of a century of separatist conflict.
The latest move, among cultural reforms inspired by Ankara's campaign for European Union membership, follows decades of repression of Kurdish identity and analysts said solving the Kurdish problem required more fundamental political reforms.
"It is significant that a language whose use was previously forbidden and its speakers punished will have 24-hour broadcasts on state television, but I think this is not enough," said Sezgin Tanrikulu, chairman of the Diyarbakir Bar Association.
A test broadcast for the channel, TRT 6, on Dec. 25 began with the Turkish national anthem. The channel will be launched Thursday with a ceremony that Prime Minister Tayyip Erdogan is expected to attend.
Turkey lifted bans on broadcasts in Kurdish in 2002, but bureaucratic resistance has delayed implementation of the reform and the creation of private channels is still blocked, said Tanrikulu. The authorities hope TRT 6 will draw viewers away from popular Danish-based ROJ TV, which they say is a mouthpiece of the outlawed Kurdistan Workers Party, or PKK.
In the mainly Kurdish southeast, there is still widespread scepticism about the commitment of the state to address the needs of a region associated in people's minds with a separatist conflict which has killed about 40,000 people.
The government has pledged to invest $12 billion in the region in the next five years as it looks to drain PKK support.
There was scepticism among analysts about the channel's impact on attitudes in the southeast.
"In terms of having a political impact, it will be very minimal," said Cengiz Candar, a leading Turkish political commentator.
Turkey's estimated 12 million Kurds, a sixth of the population, already have access to Kurdish-language channels broadcast from mainly Kurdish northern Iraq and popular Roj TV.
In a report by the TESEV think tank released on Tuesday, leading figures in southeast Turkey called for the government to take measures ranging from constitutional reform to economic and educational initiatives to solve the Kurdish problem.
The PKK launched its armed bid for a Kurdish homeland in 1984 and still commands widespread sympathy in the southeast. The EU and the United States, like Turkey, describe the PKK as a terrorist group.
The ruling AK Party said TRT 6 would not be a "propaganda channel" and would sincerely try to meet the needs of Turkey's Kurds, who complain of decades of discrimination.
"The opening of this channel is one of the steps in the democratization of Turkey," said Nihat Ergun, deputy head of the AK Party's parliamentary group.
The channel is being billed as a Kurdish version of the main Turkish language channel TRT 1, with films, soap operas and talk shows. It will not initially carry advertising.
In the largest city of southeast Turkey, Diyarbakir, locals welcomed the benefits it would bring in terms of raising levels of Kurdish, which is not taught in schools. The channel will feature programs in three Kurdish dialects.
"Kurdish television is something for which I've been longing for years," said the shopkeeper Ibrahim Ceylan, 35. "This will be good for our children. At least they will be able to learn Kurdish better."
Reuters
Sunday, December 28, 2008
ISTANBUL: The launch of Turkey's first Kurdish language channel by the state broadcaster Jan. 1 is being heralded as a long overdue step toward improving the rights of the country's minority Kurds.
But skepticism among many about its state-sponsored message will mean it faces a battle to earn acceptance among Kurds in impoverished southeast Turkey, which has been scarred by a quarter of a century of separatist conflict.
The latest move, among cultural reforms inspired by Ankara's campaign for European Union membership, follows decades of repression of Kurdish identity and analysts said solving the Kurdish problem required more fundamental political reforms.
"It is significant that a language whose use was previously forbidden and its speakers punished will have 24-hour broadcasts on state television, but I think this is not enough," said Sezgin Tanrikulu, chairman of the Diyarbakir Bar Association.
A test broadcast for the channel, TRT 6, on Dec. 25 began with the Turkish national anthem. The channel will be launched Thursday with a ceremony that Prime Minister Tayyip Erdogan is expected to attend.
Turkey lifted bans on broadcasts in Kurdish in 2002, but bureaucratic resistance has delayed implementation of the reform and the creation of private channels is still blocked, said Tanrikulu. The authorities hope TRT 6 will draw viewers away from popular Danish-based ROJ TV, which they say is a mouthpiece of the outlawed Kurdistan Workers Party, or PKK.
In the mainly Kurdish southeast, there is still widespread scepticism about the commitment of the state to address the needs of a region associated in people's minds with a separatist conflict which has killed about 40,000 people.
The government has pledged to invest $12 billion in the region in the next five years as it looks to drain PKK support.
There was scepticism among analysts about the channel's impact on attitudes in the southeast.
"In terms of having a political impact, it will be very minimal," said Cengiz Candar, a leading Turkish political commentator.
Turkey's estimated 12 million Kurds, a sixth of the population, already have access to Kurdish-language channels broadcast from mainly Kurdish northern Iraq and popular Roj TV.
In a report by the TESEV think tank released on Tuesday, leading figures in southeast Turkey called for the government to take measures ranging from constitutional reform to economic and educational initiatives to solve the Kurdish problem.
The PKK launched its armed bid for a Kurdish homeland in 1984 and still commands widespread sympathy in the southeast. The EU and the United States, like Turkey, describe the PKK as a terrorist group.
The ruling AK Party said TRT 6 would not be a "propaganda channel" and would sincerely try to meet the needs of Turkey's Kurds, who complain of decades of discrimination.
"The opening of this channel is one of the steps in the democratization of Turkey," said Nihat Ergun, deputy head of the AK Party's parliamentary group.
The channel is being billed as a Kurdish version of the main Turkish language channel TRT 1, with films, soap operas and talk shows. It will not initially carry advertising.
In the largest city of southeast Turkey, Diyarbakir, locals welcomed the benefits it would bring in terms of raising levels of Kurdish, which is not taught in schools. The channel will feature programs in three Kurdish dialects.
"Kurdish television is something for which I've been longing for years," said the shopkeeper Ibrahim Ceylan, 35. "This will be good for our children. At least they will be able to learn Kurdish better."
********************
Kurdish guerrillas bombed
Turkish Army sources said Sunday that Turkish warplanes bombed Kurdish guerrilla targets in northern Iraq on Saturday and Sunday, The Associated Press reported from Ankara.
Kurdistan Workers Party, or PKK, targets in the Hakurke region of northern Iraq were hit on Saturday night and several other targets near the Iraqi-Turkish border were bombed Sunday afternoon, the sources said.
The strikes in a mountainous border area claimed no civilian casualties, said Lieutenant Colonel Ihsan Kamal, commander of the border guards' operation room in Iraq's largely autonomous Kurdistan region.
"This is becoming routine, Turkish warplanes targeting the border area," he said. "We are not worried about civilian casualties because these areas are deserted."
But he added that he had no idea of PKK casualties.
Turkish Army sources said the army was also carrying out operations against mobile PKK groups spotted inside Turkey near the Iraqi border.
Turkish Army sources said Sunday that Turkish warplanes bombed Kurdish guerrilla targets in northern Iraq on Saturday and Sunday, The Associated Press reported from Ankara.
Kurdistan Workers Party, or PKK, targets in the Hakurke region of northern Iraq were hit on Saturday night and several other targets near the Iraqi-Turkish border were bombed Sunday afternoon, the sources said.
The strikes in a mountainous border area claimed no civilian casualties, said Lieutenant Colonel Ihsan Kamal, commander of the border guards' operation room in Iraq's largely autonomous Kurdistan region.
"This is becoming routine, Turkish warplanes targeting the border area," he said. "We are not worried about civilian casualties because these areas are deserted."
But he added that he had no idea of PKK casualties.
Turkish Army sources said the army was also carrying out operations against mobile PKK groups spotted inside Turkey near the Iraqi border.
Turkish jets hit PKK targets in northern Iraq
Reuters
Sunday, December 28, 2008
Ankara: Turkish warplanes bombed Kurdish guerrilla targets in northern Iraq in operations carried out on Saturday and Sunday, Turkish Army sources told Reuters. They said that Kurdistan Workers Party, or PKK, targets in the Hakurke region in northern Iraq were hit Saturday night and several other targets near the Iraqi-Turkish border were bombed Sunday afternoon. They said the Turkish Army was also carrying out operations against mobile PKK groups spotted inside Turkey near the Iraqi border. There was no mention of casualties caused by the strikes. Ankara has stepped up military action against the PKK in recent months, as casualties on both sides have risen. Turkey, the European Union and United States label the PKK a terrorist organisation. Around 40,000 people have been killed in fighting between the PKK and the military since 1984, when the PKK took up arms with the aim of establishing an ethnic homeland in southeast Turkey.
Reuters
Sunday, December 28, 2008
Ankara: Turkish warplanes bombed Kurdish guerrilla targets in northern Iraq in operations carried out on Saturday and Sunday, Turkish Army sources told Reuters. They said that Kurdistan Workers Party, or PKK, targets in the Hakurke region in northern Iraq were hit Saturday night and several other targets near the Iraqi-Turkish border were bombed Sunday afternoon. They said the Turkish Army was also carrying out operations against mobile PKK groups spotted inside Turkey near the Iraqi border. There was no mention of casualties caused by the strikes. Ankara has stepped up military action against the PKK in recent months, as casualties on both sides have risen. Turkey, the European Union and United States label the PKK a terrorist organisation. Around 40,000 people have been killed in fighting between the PKK and the military since 1984, when the PKK took up arms with the aim of establishing an ethnic homeland in southeast Turkey.
*********************
Iraq bomber targets Gaza airstrike protest
The Associated Press
Sunday, December 28, 2008
BAGHDAD: A roadside bomb killed a U.S. soldier in the Shiite slum of Sadr City here Sunday, and an Iraqi died when a suicide bomber on a bicycle blew himself up at a mass rally against Israeli airstrikes on Gaza.
The two attacks were demonstrations of the violence that still flares up in Iraq as the government prepares to take responsibility for security from the U.S. military in a few days.
A spokesman for the U.S. Army, Captain Charles Calio, said the soldier was killed by a roadside bomb that targeted an U.S. convoy. He said there were no other casualties and the name of the soldier was being withheld pending notification of family.
In the northern city of Mosul, 16 people in the crowd of about 1,300 protesters were wounded in the attack, a police officer said on condition of anonymity, because he was not authorized to speak with news media.
U.S. and Iraqi forces continue to battle Al Qaeda and other insurgents in Mosul, the third-largest city in Iraq after Baghdad and Basra, where economic and political problems persist. The issues are complicated by Kurdish-Arab tensions in the city.
There has been no claim of responsibility for the attack on the Mosul demonstration, the local police officer said. The rally was one of several throughout Iraq on Sunday to protest the Israeli attacks and demand a strong response from Arab governments in the region.
The demonstration was organized by the Sunni Iraqi Islamic Party. The party spokesman in Mosul, Yahiya Abid Mahjoub, complained that the police and the Iraqi Army had not taken security precautions for the demonstration.
Also Sunday, the police in Falluja said a bomb had exploded on the outskirts of the city, killing two civilians and wounding four.
A police officer, also speaking on condition of anonymity, said the bomb exploded in a parking lot where farmers and other merchants gather to buy and sell goods. Calio, the U.S. military spokesman, confirmed the casualty toll but added that the bomb had been aimed at a police patrol.
Delivery trucks and other vehicles that do not have access permits for Falluja are not allowed to drive into the city, which is west of Baghdad.
The Iraqi government condemned the airstrikes on Gaza, which began Saturday.
The top Shiite cleric in Iraq, Grand Ayatollah Ali al-Sistani, said condemnation did not go far enough.
"Expressing condemnation and denunciation for what is going on against our brothers in Gaza and expressing solidarity with them by words only doesn't mean anything in the face of the big tragedy they are facing," he said in a statement released by his office in Najaf.
"Now more than at any other time, both Arab and Islamic nations are required to take a practical stance for the sake of stopping this repeated aggression and to break the unfair besieging of these brave people," the statement said, without giving details of the proposed stance.
About 100 people took to the streets in the largest Palestinian neighborhood in Baghdad, a complex of 16 apartment blocks surrounded by Shiite areas, carrying signs denouncing Israel.
On Saturday, a car bomb killed at least 24 people, many of them Shiite pilgrims, and wounded 46 others when it exploded on a busy road in Baghdad that leads to the revered shrine of Kadhimiya, the Interior Ministry reported.
That bombing, along with several others in recent weeks, was a stark reminder that even as violence has sharply fallen, insurgents still have the power to carry out deadly strikes in the heart of the capital.
The attack's timing and location appeared to be intended to reignite sectarian passions. Millions of Shiites are preparing to commemorate the martyrdom of Imam Hussein, grandson of the Prophet Muhammad. The observance falls during Muharram, the holiest month of the Shiite calendar, which begins Monday. Families from across Iraq traditionally visit the shrine on Saturdays.
The explosion occurred at midday about 100 meters, or 330 feet, from Bab al-Dirwaza, one of the main gates to the shrine and the Kadhimiya district's bustling market.
According to several witnesses, the car that exploded was parked outside the fence of one of the nearby parking lots.
A report released Saturday by the nongovernmental group Iraq Body Count said 8,955 civilians have died in Iraqi violence so far in 2008. The figures, while far below those of 2006 and 2007, when well over 20,000 civilians were killed annually, were only slightly below those for 2003 and 2004, according to the report.
The Associated Press
Sunday, December 28, 2008
BAGHDAD: A roadside bomb killed a U.S. soldier in the Shiite slum of Sadr City here Sunday, and an Iraqi died when a suicide bomber on a bicycle blew himself up at a mass rally against Israeli airstrikes on Gaza.
The two attacks were demonstrations of the violence that still flares up in Iraq as the government prepares to take responsibility for security from the U.S. military in a few days.
A spokesman for the U.S. Army, Captain Charles Calio, said the soldier was killed by a roadside bomb that targeted an U.S. convoy. He said there were no other casualties and the name of the soldier was being withheld pending notification of family.
In the northern city of Mosul, 16 people in the crowd of about 1,300 protesters were wounded in the attack, a police officer said on condition of anonymity, because he was not authorized to speak with news media.
U.S. and Iraqi forces continue to battle Al Qaeda and other insurgents in Mosul, the third-largest city in Iraq after Baghdad and Basra, where economic and political problems persist. The issues are complicated by Kurdish-Arab tensions in the city.
There has been no claim of responsibility for the attack on the Mosul demonstration, the local police officer said. The rally was one of several throughout Iraq on Sunday to protest the Israeli attacks and demand a strong response from Arab governments in the region.
The demonstration was organized by the Sunni Iraqi Islamic Party. The party spokesman in Mosul, Yahiya Abid Mahjoub, complained that the police and the Iraqi Army had not taken security precautions for the demonstration.
Also Sunday, the police in Falluja said a bomb had exploded on the outskirts of the city, killing two civilians and wounding four.
A police officer, also speaking on condition of anonymity, said the bomb exploded in a parking lot where farmers and other merchants gather to buy and sell goods. Calio, the U.S. military spokesman, confirmed the casualty toll but added that the bomb had been aimed at a police patrol.
Delivery trucks and other vehicles that do not have access permits for Falluja are not allowed to drive into the city, which is west of Baghdad.
The Iraqi government condemned the airstrikes on Gaza, which began Saturday.
The top Shiite cleric in Iraq, Grand Ayatollah Ali al-Sistani, said condemnation did not go far enough.
"Expressing condemnation and denunciation for what is going on against our brothers in Gaza and expressing solidarity with them by words only doesn't mean anything in the face of the big tragedy they are facing," he said in a statement released by his office in Najaf.
"Now more than at any other time, both Arab and Islamic nations are required to take a practical stance for the sake of stopping this repeated aggression and to break the unfair besieging of these brave people," the statement said, without giving details of the proposed stance.
About 100 people took to the streets in the largest Palestinian neighborhood in Baghdad, a complex of 16 apartment blocks surrounded by Shiite areas, carrying signs denouncing Israel.
On Saturday, a car bomb killed at least 24 people, many of them Shiite pilgrims, and wounded 46 others when it exploded on a busy road in Baghdad that leads to the revered shrine of Kadhimiya, the Interior Ministry reported.
That bombing, along with several others in recent weeks, was a stark reminder that even as violence has sharply fallen, insurgents still have the power to carry out deadly strikes in the heart of the capital.
The attack's timing and location appeared to be intended to reignite sectarian passions. Millions of Shiites are preparing to commemorate the martyrdom of Imam Hussein, grandson of the Prophet Muhammad. The observance falls during Muharram, the holiest month of the Shiite calendar, which begins Monday. Families from across Iraq traditionally visit the shrine on Saturdays.
The explosion occurred at midday about 100 meters, or 330 feet, from Bab al-Dirwaza, one of the main gates to the shrine and the Kadhimiya district's bustling market.
According to several witnesses, the car that exploded was parked outside the fence of one of the nearby parking lots.
A report released Saturday by the nongovernmental group Iraq Body Count said 8,955 civilians have died in Iraqi violence so far in 2008. The figures, while far below those of 2006 and 2007, when well over 20,000 civilians were killed annually, were only slightly below those for 2003 and 2004, according to the report.
**********************
Suicide bomber kills 8 in Sri Lanka
Reuters
Sunday, December 28, 2008
By Ranga Sirilal
A suspected Tamil Tiger suicide bomber killed eight people including six paramilitary guards in Sri Lanka's capital Colombo on Sunday while air force jets bombed rebel positions in the far north.
Military spokesman Brigadier Udaya Nanayakkara said the Tamil Tiger rebel targeted a security checkpoint near a crowded market in the northern suburb of Wattala.
"The death toll has gone up to eight people including six civil defence force personnel, one army officer and a civilian," Nanayakkara said. He said 17 others were injured and being treated at two hospitals.
A Reuters witness said the site of the blast had been cordoned off.
While Sri Lanka's military blamed the rebels for the blast, the Liberation Tigers of Tamil Eelam (LTTE) did not immediately comment on the attack and has in the past denied responsibility for such attacks.
Military officials said air force fighter jets had bombed rebel positions in the far north of the country, hours after the suicide attack.
Earlier, the Sri Lankan navy said it had killed four rebels and destroyed a rebel boat in the north.
The military said heavy fighting continued around the rebels' self-proclaimed capital Kilinochchi in the northern war zone.
Sri Lanka's military has been closing in on Kilinochchi since September and in the past two weeks has been assaulting heavy defences encircling the town's outskirts.
The LTTE had no immediate comment on the fighting but pro-rebel website www.tamilnet.com quoted unnamed Tamil Tiger rebel officials saying at least 50 Sri Lankan army soldiers were killed and 90 wounded in the northern district of Mullaitivu in fighting on Saturday.
It said LTTE officials recovered 16 dead bodies of army soldiers in the clearing mission that followed.
The military admitted the fighting took place but said the rebels had overblown the figures.
It is nearly impossible to verify battlefield claims since both the government and the LTTE block independent media access to the war zone, and have repeatedly distorted figures to their advantage.
The LTTE started fighting the government in 1983. It says it is battling for the rights of minority Tamils in the face of mistreatment by successive governments led by the Sinhalese majority since Sri Lanka won independence from Britain in 1948.
(Additional reporting by Shihar Aneez; Editing by Valerie Lee)
Reuters
Sunday, December 28, 2008
By Ranga Sirilal
A suspected Tamil Tiger suicide bomber killed eight people including six paramilitary guards in Sri Lanka's capital Colombo on Sunday while air force jets bombed rebel positions in the far north.
Military spokesman Brigadier Udaya Nanayakkara said the Tamil Tiger rebel targeted a security checkpoint near a crowded market in the northern suburb of Wattala.
"The death toll has gone up to eight people including six civil defence force personnel, one army officer and a civilian," Nanayakkara said. He said 17 others were injured and being treated at two hospitals.
A Reuters witness said the site of the blast had been cordoned off.
While Sri Lanka's military blamed the rebels for the blast, the Liberation Tigers of Tamil Eelam (LTTE) did not immediately comment on the attack and has in the past denied responsibility for such attacks.
Military officials said air force fighter jets had bombed rebel positions in the far north of the country, hours after the suicide attack.
Earlier, the Sri Lankan navy said it had killed four rebels and destroyed a rebel boat in the north.
The military said heavy fighting continued around the rebels' self-proclaimed capital Kilinochchi in the northern war zone.
Sri Lanka's military has been closing in on Kilinochchi since September and in the past two weeks has been assaulting heavy defences encircling the town's outskirts.
The LTTE had no immediate comment on the fighting but pro-rebel website www.tamilnet.com quoted unnamed Tamil Tiger rebel officials saying at least 50 Sri Lankan army soldiers were killed and 90 wounded in the northern district of Mullaitivu in fighting on Saturday.
It said LTTE officials recovered 16 dead bodies of army soldiers in the clearing mission that followed.
The military admitted the fighting took place but said the rebels had overblown the figures.
It is nearly impossible to verify battlefield claims since both the government and the LTTE block independent media access to the war zone, and have repeatedly distorted figures to their advantage.
The LTTE started fighting the government in 1983. It says it is battling for the rights of minority Tamils in the face of mistreatment by successive governments led by the Sinhalese majority since Sri Lanka won independence from Britain in 1948.
(Additional reporting by Shihar Aneez; Editing by Valerie Lee)
**********************
COLUMNIST
Nicholas D. Kristof: A new chance for Darfur
Sunday, December 28, 2008
If Barack Obama wants to help end the genocide in Darfur, he doesn't have to look far for ideas of how to accomplish that.
President Bush and his top aides have been given, and ignored, a menu of options for tough steps to squeeze Sudan - even destroy its air force - and those will soon be on the new president's desk.
The State Department's policy planning staff prepared the first set of possible responses back in 2004 (never pursued), and this year Ambassador Richard Williamson has privately pushed the White House to squeeze Sudan until it stops the killing.
Williamson, who is President Bush's special envoy to Sudan, wrote a tough memo to Bush this fall outlining three particular steps the United States could take to press Sudan's leader, President Omar Hassan al-Bashir:
- The United States could jam all communications in Khartoum, the Sudanese capital. This would include all telephone calls, all cellular service, all Internet access. After two days, having demonstrated Sudan's vulnerability, the United States could halt the jamming.
- The United States could apply progressive pressure to Port Sudan, from which Sudan exports oil and thus earns revenue. The first step would be to send naval vessels near the port. The next step would be to search or turn back some ships, and the final step would be to impose a quarantine and halt Sudan's oil exports.
- The United States could target Sudanese military aircraft that defy a United Nations ban on offensive military flights in Darfur. The first step would be to destroy a helicopter gunship on the ground at night.
A tougher approach would be to warn Sudan that unless it complies with international demands (by handing over suspects indicted by the International Criminal Court, for example), it will lose its air force - and then if it does not comply, to destroy all its military aircraft on the ground.
Officials frustrated by the administration's passivity shared these possible steps with me, partly to make clear that Obama can do more if he has the political will.
Williamson has been one of the unsung heroes of the Bush administration, fighting tenaciously and secretly - even twice threatening to resign - to redeem American honor by confronting genocide. Bush himself seemed open to tougher action, officials say, but Secretary of State Condoleezza Rice and Stephen Hadley, the national security adviser, always resisted, backed by the Pentagon.
Rice and Hadley tarnished their own honor and the honor of the United States by advocating, in effect, acquiescence in genocide.
The naysayers' objection was simple: Those are incredibly serious steps, with grave repercussions.
They're right. But then again, genocide is pretty serious, too.
That's something that Obama and his aides understand. Partly for that reason, Sudan fears the Obama administration, and now for the first time in years, there's a real chance of ousting Bashir and ending the rule of his murderous regime.
Several factors are coming together. The leaders in Khartoum feel their government wobbling, particularly after rebels clashed with government soldiers on the outskirts of Khartoum earlier this year.
They know that the International Criminal Court is expected to issue an arrest warrant for Bashir, probably in February, but that no other top leader will be indicted after Bashir.
China, which for years has been Bashir's most important international supporter, now seems to be backing away - just as it eventually abandoned genocidal friends like Slobodan Milosevic and the Khmer Rouge. And an Arab state, Qatar, is now leading a serious diplomatic initiative to try to end the slaughter.
Thus there are growing whispers that key figures in the Sudanese regime may throw Bashir overboard in the coming months.
The other leaders are ruthless and have blood on their hands as well, but some of them have in the past proved more willing to negotiate deals than Bashir has.
Hovering in the background is the risk that the north-south war in Sudan will resume, leading to a slaughter even worse than Darfur. One ominous sign is that Sudan is now stockpiling cash and weapons, apparently so that it can wage war on the south even if Port Sudan is blocked.
Williamson has suggested providing surface-to-air missiles to the separate government of South Sudan. Such weaponry would reduce the chance that Sudan would attack the south.
If Obama and his aides can work with Europe, China and Qatar to keep the heat on - and to make clear that Sudan has no choice but to hand over Bashir once the court issues the arrest warrant - then we just might avert a new war and end the first genocide of the 21st century in the new year.
Sunday, December 28, 2008
If Barack Obama wants to help end the genocide in Darfur, he doesn't have to look far for ideas of how to accomplish that.
President Bush and his top aides have been given, and ignored, a menu of options for tough steps to squeeze Sudan - even destroy its air force - and those will soon be on the new president's desk.
The State Department's policy planning staff prepared the first set of possible responses back in 2004 (never pursued), and this year Ambassador Richard Williamson has privately pushed the White House to squeeze Sudan until it stops the killing.
Williamson, who is President Bush's special envoy to Sudan, wrote a tough memo to Bush this fall outlining three particular steps the United States could take to press Sudan's leader, President Omar Hassan al-Bashir:
- The United States could jam all communications in Khartoum, the Sudanese capital. This would include all telephone calls, all cellular service, all Internet access. After two days, having demonstrated Sudan's vulnerability, the United States could halt the jamming.
- The United States could apply progressive pressure to Port Sudan, from which Sudan exports oil and thus earns revenue. The first step would be to send naval vessels near the port. The next step would be to search or turn back some ships, and the final step would be to impose a quarantine and halt Sudan's oil exports.
- The United States could target Sudanese military aircraft that defy a United Nations ban on offensive military flights in Darfur. The first step would be to destroy a helicopter gunship on the ground at night.
A tougher approach would be to warn Sudan that unless it complies with international demands (by handing over suspects indicted by the International Criminal Court, for example), it will lose its air force - and then if it does not comply, to destroy all its military aircraft on the ground.
Officials frustrated by the administration's passivity shared these possible steps with me, partly to make clear that Obama can do more if he has the political will.
Williamson has been one of the unsung heroes of the Bush administration, fighting tenaciously and secretly - even twice threatening to resign - to redeem American honor by confronting genocide. Bush himself seemed open to tougher action, officials say, but Secretary of State Condoleezza Rice and Stephen Hadley, the national security adviser, always resisted, backed by the Pentagon.
Rice and Hadley tarnished their own honor and the honor of the United States by advocating, in effect, acquiescence in genocide.
The naysayers' objection was simple: Those are incredibly serious steps, with grave repercussions.
They're right. But then again, genocide is pretty serious, too.
That's something that Obama and his aides understand. Partly for that reason, Sudan fears the Obama administration, and now for the first time in years, there's a real chance of ousting Bashir and ending the rule of his murderous regime.
Several factors are coming together. The leaders in Khartoum feel their government wobbling, particularly after rebels clashed with government soldiers on the outskirts of Khartoum earlier this year.
They know that the International Criminal Court is expected to issue an arrest warrant for Bashir, probably in February, but that no other top leader will be indicted after Bashir.
China, which for years has been Bashir's most important international supporter, now seems to be backing away - just as it eventually abandoned genocidal friends like Slobodan Milosevic and the Khmer Rouge. And an Arab state, Qatar, is now leading a serious diplomatic initiative to try to end the slaughter.
Thus there are growing whispers that key figures in the Sudanese regime may throw Bashir overboard in the coming months.
The other leaders are ruthless and have blood on their hands as well, but some of them have in the past proved more willing to negotiate deals than Bashir has.
Hovering in the background is the risk that the north-south war in Sudan will resume, leading to a slaughter even worse than Darfur. One ominous sign is that Sudan is now stockpiling cash and weapons, apparently so that it can wage war on the south even if Port Sudan is blocked.
Williamson has suggested providing surface-to-air missiles to the separate government of South Sudan. Such weaponry would reduce the chance that Sudan would attack the south.
If Obama and his aides can work with Europe, China and Qatar to keep the heat on - and to make clear that Sudan has no choice but to hand over Bashir once the court issues the arrest warrant - then we just might avert a new war and end the first genocide of the 21st century in the new year.
********************
Moderate Islamists seize two central Somali towns
Reuters
Sunday, December 28, 2008
By Abdi Sheikh
A moderate Islamist group captured two towns in central Somalia on Sunday from al Shabaab, a hardline militia on the U.S. list of terrorist groups, residents and Islamists said.
The Ahlu Sunna Waljamaca, a government-allied Sunni Islamist group, vowed on Saturday to seize towns controlled by al Shabaab after retaking Gurael, a trading town north of the capital Mogadishu.
Most of the south and centre of Somalia except Mogadishu and Baidoa is controlled by various Islamist factions opposed to the Western-backed transitional government and to its Ethiopian military allies.
Somalia has been without an effective central government for 17 years, and the Ethiopian troops that have been propping up a feeble transitional government since 2006 are due to withdraw within days.
But fears that this will create fresh anarchy are countered by some diplomats who say the withdrawal and the current turmoil within the administration could be a chance to bring Islamists into peace talks and create a broader-based government.
President Abdullahi Yusuf, who has been accused by Western nations and regional leaders of being an obstacle to a peace, is widely expected to announce his resignation on Monday.
"WAR ON AL SHABAAB"
A two-year Islamist insurgency has killed more than 10,000 civilians, uprooted 1 million people and caused one of the worst humanitarian crises in the world.
The Ahlu Sunna Waljamaca have declared war on al Shabaab, accusing them of killing religious leaders and desecrating graves, acts that they say are against Islamic teachings.
"We have swept al Shabaab from Gelinsoor and most of Dusamareeb is under our control," Sheikh Abdullahi Sheikh Abu Yusuf, spokesman for Ahlu Sunna Waljamaca, told Reuters.
"We are determined to oust them from the entire country."
Residents said nine people were killed in Gelinsoor, in central Somalia, and 12 died in Dusamareeb, in the same region.
"Fierce fighting between the Sunni group and al Shabaab killed nine people including an old man hit by a stray bullet in Gelinsoor on Sunday," resident Ahmed Hassan told Reuters.
"The two groups exchanged machinegun fire and rocket-propelled grenades for eight hours. Most of the residents have fled into the woods, except for a few like me who couldn't get out of the house," Dusamareeb resident Halima Osman said.
Residents in Baidoa say Yusuf's relatives, the families of some of his presidential guards and legislators allied to the president have fled to Puntland, a semi-autonomous enclave north of Somalia, fearing they may be targeted after he resigns.
"Two flights came and 18 legislators closely related to President Yusuf flew to Puntland today," Hassan Abukar, a worker at Baidoa airport, told Reuters.
A worker at Mogadishu's airport said about 130 women and children from the presidential palace had flown to Puntland.
Yusuf's spokesman and the speaker of parliament declined to comment.
(Additional reporting by Abdi Guled and Ibrahim Mohamed in Mogadishu, Mohamed Ahmed in Baidoa; Writing by Wangui Kanina; Editing by David Clarke and Kevin Liffey)
Reuters
Sunday, December 28, 2008
By Abdi Sheikh
A moderate Islamist group captured two towns in central Somalia on Sunday from al Shabaab, a hardline militia on the U.S. list of terrorist groups, residents and Islamists said.
The Ahlu Sunna Waljamaca, a government-allied Sunni Islamist group, vowed on Saturday to seize towns controlled by al Shabaab after retaking Gurael, a trading town north of the capital Mogadishu.
Most of the south and centre of Somalia except Mogadishu and Baidoa is controlled by various Islamist factions opposed to the Western-backed transitional government and to its Ethiopian military allies.
Somalia has been without an effective central government for 17 years, and the Ethiopian troops that have been propping up a feeble transitional government since 2006 are due to withdraw within days.
But fears that this will create fresh anarchy are countered by some diplomats who say the withdrawal and the current turmoil within the administration could be a chance to bring Islamists into peace talks and create a broader-based government.
President Abdullahi Yusuf, who has been accused by Western nations and regional leaders of being an obstacle to a peace, is widely expected to announce his resignation on Monday.
"WAR ON AL SHABAAB"
A two-year Islamist insurgency has killed more than 10,000 civilians, uprooted 1 million people and caused one of the worst humanitarian crises in the world.
The Ahlu Sunna Waljamaca have declared war on al Shabaab, accusing them of killing religious leaders and desecrating graves, acts that they say are against Islamic teachings.
"We have swept al Shabaab from Gelinsoor and most of Dusamareeb is under our control," Sheikh Abdullahi Sheikh Abu Yusuf, spokesman for Ahlu Sunna Waljamaca, told Reuters.
"We are determined to oust them from the entire country."
Residents said nine people were killed in Gelinsoor, in central Somalia, and 12 died in Dusamareeb, in the same region.
"Fierce fighting between the Sunni group and al Shabaab killed nine people including an old man hit by a stray bullet in Gelinsoor on Sunday," resident Ahmed Hassan told Reuters.
"The two groups exchanged machinegun fire and rocket-propelled grenades for eight hours. Most of the residents have fled into the woods, except for a few like me who couldn't get out of the house," Dusamareeb resident Halima Osman said.
Residents in Baidoa say Yusuf's relatives, the families of some of his presidential guards and legislators allied to the president have fled to Puntland, a semi-autonomous enclave north of Somalia, fearing they may be targeted after he resigns.
"Two flights came and 18 legislators closely related to President Yusuf flew to Puntland today," Hassan Abukar, a worker at Baidoa airport, told Reuters.
A worker at Mogadishu's airport said about 130 women and children from the presidential palace had flown to Puntland.
Yusuf's spokesman and the speaker of parliament declined to comment.
(Additional reporting by Abdi Guled and Ibrahim Mohamed in Mogadishu, Mohamed Ahmed in Baidoa; Writing by Wangui Kanina; Editing by David Clarke and Kevin Liffey)
********************
OPINION
China's gunboat diplomacy
By Rory Medcalf
Sunday, December 28, 2008
SYDNEY: On Friday, two destroyers and a supply vessel departed on China's first long-range naval expedition since 1433. The decision to join the global armada in the pirate-plagued waters off Somalia is a momentous step in China's rise as a world power.
It is also a precious chance for others - especially the United States and India - to build maritime security cooperation with China before Beijing forms any risky habit of solo military forays.
China has long been a free rider on the ocean highways. It has enjoyed the benefits of maritime trade and energy routes, so vital to its economic boom, while other countries' navies have kept them open.
Yet with growing wealth, pride and ambition come expectations that Beijing will contribute to the safety of an interdependent world. It was only a matter of time before China, along with the other awakening giant India, joined the club of maritime security providers, using their fleets simultaneously for self-interest and the common good, whether fighting piracy, interdicting smuggling or delivering disaster relief.
That day was hastened when the sea-brigands of Somalia caught Chinese vessels, cargoes and sailors in the net of their brazen raids. Press photos of Chinese mariners squatting at gunpoint on their hijacked trawler provided an incentive that was hard to resist. New Delhi's idea that the Indian Ocean was India's Ocean, plus its assertive policing, was another.
The Somali piracy crisis makes the ideal platform for China's debut on the high seas. It gives Beijing every justification for easing its doctrine of non-intervention: Chinese lives and interests are in danger, the United Nations has blessed action in Somali waters, most everyone else is in the game, and what passes for the Somali government has invited China in. And in times of economic pain, a show of military strength can be a politically smart distraction.
There is also a deeper logic to China's experiment in gunboat diplomacy. China's strategists worry at the vulnerability of their economy to maritime corridors, such as the Strait of Malacca, which they think America's superior navy could choke at will.
The primary mission of the People's Liberation Army Navy remains stopping Taiwan from declaring independence, as well as keeping U.S. forces at bay in any ensuing war. But some new or projected capabilities are meant to give Beijing wider options, whether thwarting energy blockades, deterring other powers, or protecting Chinese nationals and interests far away. Large amphibious assault ships, nuclear submarines, refueling vessels, a huge hospital ship and proposed aircraft carriers all fit ocean-going or "blue-water" roles.
After decades in which China had just a rusty coastal force, the expansion of Beijing's seafaring clout since the 1990s is vexing the United States, Japan, India, Australia and others. After all, even if there is no reason to doubt China's claims that it wants to be a harmonious society in a harmonious world, nobody knows how a formidable China might one day behave.
Yet prudence about the China of 2030 is no reason to neglect trying to engage today's Chinese military in providing for the global good.
China has as much right as any trading nation to guard itself in the lawless waters off the Horn of Africa. Warships from European Union nations, the United States, India, Russia and even Malaysia are already on patrol; there is talk of South Korea and Japan joining in. It was inconceivable that China would forever outsource its maritime security to the United States or India.
The challenge now is to forge operational cohesion in a motley multinational flotilla. The Chinese presence is a critical opportunity for China, the U.S., India and others to shape the rules and habits of cooperation and communication at sea that could be crucial to future peace. As things stand, these navies lack even a basic agreement to stop accidental clashes, like the treaty that helped keep the Cold War cold.
The Chinese role off Somalia could help Washington persuade Beijing that confidence-building military dialogue is too important to be suspended at every diplomatic spat over Tibet or Taiwan. India could prove that it is not paranoid about China, by offering rest and fuel stops for the Chinese ships as they steam west. By saying yes, Beijing would weaken theories that it wants to ring India with bases and client states.
It took the pirates of Wall Street to compel international cooperation in finance. If China's naval excursion can raise trust among the sea powers of the Asian century, the world may yet thank the pirates of Somalia.
Rory Medcalf directs the international security program at the Lowy Institute for International Policy in Sydney.
By Rory Medcalf
Sunday, December 28, 2008
SYDNEY: On Friday, two destroyers and a supply vessel departed on China's first long-range naval expedition since 1433. The decision to join the global armada in the pirate-plagued waters off Somalia is a momentous step in China's rise as a world power.
It is also a precious chance for others - especially the United States and India - to build maritime security cooperation with China before Beijing forms any risky habit of solo military forays.
China has long been a free rider on the ocean highways. It has enjoyed the benefits of maritime trade and energy routes, so vital to its economic boom, while other countries' navies have kept them open.
Yet with growing wealth, pride and ambition come expectations that Beijing will contribute to the safety of an interdependent world. It was only a matter of time before China, along with the other awakening giant India, joined the club of maritime security providers, using their fleets simultaneously for self-interest and the common good, whether fighting piracy, interdicting smuggling or delivering disaster relief.
That day was hastened when the sea-brigands of Somalia caught Chinese vessels, cargoes and sailors in the net of their brazen raids. Press photos of Chinese mariners squatting at gunpoint on their hijacked trawler provided an incentive that was hard to resist. New Delhi's idea that the Indian Ocean was India's Ocean, plus its assertive policing, was another.
The Somali piracy crisis makes the ideal platform for China's debut on the high seas. It gives Beijing every justification for easing its doctrine of non-intervention: Chinese lives and interests are in danger, the United Nations has blessed action in Somali waters, most everyone else is in the game, and what passes for the Somali government has invited China in. And in times of economic pain, a show of military strength can be a politically smart distraction.
There is also a deeper logic to China's experiment in gunboat diplomacy. China's strategists worry at the vulnerability of their economy to maritime corridors, such as the Strait of Malacca, which they think America's superior navy could choke at will.
The primary mission of the People's Liberation Army Navy remains stopping Taiwan from declaring independence, as well as keeping U.S. forces at bay in any ensuing war. But some new or projected capabilities are meant to give Beijing wider options, whether thwarting energy blockades, deterring other powers, or protecting Chinese nationals and interests far away. Large amphibious assault ships, nuclear submarines, refueling vessels, a huge hospital ship and proposed aircraft carriers all fit ocean-going or "blue-water" roles.
After decades in which China had just a rusty coastal force, the expansion of Beijing's seafaring clout since the 1990s is vexing the United States, Japan, India, Australia and others. After all, even if there is no reason to doubt China's claims that it wants to be a harmonious society in a harmonious world, nobody knows how a formidable China might one day behave.
Yet prudence about the China of 2030 is no reason to neglect trying to engage today's Chinese military in providing for the global good.
China has as much right as any trading nation to guard itself in the lawless waters off the Horn of Africa. Warships from European Union nations, the United States, India, Russia and even Malaysia are already on patrol; there is talk of South Korea and Japan joining in. It was inconceivable that China would forever outsource its maritime security to the United States or India.
The challenge now is to forge operational cohesion in a motley multinational flotilla. The Chinese presence is a critical opportunity for China, the U.S., India and others to shape the rules and habits of cooperation and communication at sea that could be crucial to future peace. As things stand, these navies lack even a basic agreement to stop accidental clashes, like the treaty that helped keep the Cold War cold.
The Chinese role off Somalia could help Washington persuade Beijing that confidence-building military dialogue is too important to be suspended at every diplomatic spat over Tibet or Taiwan. India could prove that it is not paranoid about China, by offering rest and fuel stops for the Chinese ships as they steam west. By saying yes, Beijing would weaken theories that it wants to ring India with bases and client states.
It took the pirates of Wall Street to compel international cooperation in finance. If China's naval excursion can raise trust among the sea powers of the Asian century, the world may yet thank the pirates of Somalia.
Rory Medcalf directs the international security program at the Lowy Institute for International Policy in Sydney.
*******************
EDITORIAL
Obama and Putin: How to improve relations
Sunday, December 28, 2008
Given all he faces, Barack Obama may be tempted to put Russia on a back burner. We hope he does not.
Russian-American relations have disintegrated to a dangerous low, with the Kremlin increasingly acting to antagonize the United States.
And America's European allies have been in no mood to take their cue on Russia from Washington. A majority have resisted U.S. efforts to quickly bring Georgia and Ukraine into NATO. The alliance, which cut formal ties with Russia after the Georgian-Russia war last August, has begun a "conditional and graduated re-engagement" with Moscow.
Given NATO's declaration that there would not be "business as usual" until Russia withdrew all its troops from Georgia and canceled its annexation of two Georgian provinces, the re-engagement looks a lot like pandering to an energy supplier. But it also reflects the erosion of European trust in President Bush's leadership.
America's leverage over Russia's behavior has been limited further by the widespread conviction among Russians that so long as they appeared to be weak, the United States took advantage of them. The war with Georgia was one result; the recent announcement of $140 billion in military procurement is another.
Obama does have a few advantages in dealing with Russia: He is new, and the Russians are no less intrigued by him than the rest of the world. Neither he nor his foreign-policy team can have any illusions about Vladimir Putin's Kremlin. And Russia is deep in economic crisis.
Putin's popularity and power have been based largely on Russia's windfall profits from soaring energy prices. Now the Russian stock market is in free fall and factories are closing, while Putin's ratings slip.
Obama should signal to the Russians that he wants better relations. That would mean cutting back on belligerent talk and inviting the Russians to high-level consultations on areas in which the two countries can achieve cooperation quickly - say, on combating piracy.
Obama should consider renewing the Start 1 treaty on reducing strategic nuclear forces, which expires in December 2009. He also could tone down demands for NATO membership for Georgia and Ukraine, especially since neither country is ready, and review plans to station defensive missiles in Poland and the Czech Republic.
For every gesture, the United States would make clear that it expects a tangible response, starting with help in ending Iran's nuclear program and continuing with cooperation against international terrorism and a withdrawal of Russian troops from Georgia.
Sunday, December 28, 2008
Given all he faces, Barack Obama may be tempted to put Russia on a back burner. We hope he does not.
Russian-American relations have disintegrated to a dangerous low, with the Kremlin increasingly acting to antagonize the United States.
And America's European allies have been in no mood to take their cue on Russia from Washington. A majority have resisted U.S. efforts to quickly bring Georgia and Ukraine into NATO. The alliance, which cut formal ties with Russia after the Georgian-Russia war last August, has begun a "conditional and graduated re-engagement" with Moscow.
Given NATO's declaration that there would not be "business as usual" until Russia withdrew all its troops from Georgia and canceled its annexation of two Georgian provinces, the re-engagement looks a lot like pandering to an energy supplier. But it also reflects the erosion of European trust in President Bush's leadership.
America's leverage over Russia's behavior has been limited further by the widespread conviction among Russians that so long as they appeared to be weak, the United States took advantage of them. The war with Georgia was one result; the recent announcement of $140 billion in military procurement is another.
Obama does have a few advantages in dealing with Russia: He is new, and the Russians are no less intrigued by him than the rest of the world. Neither he nor his foreign-policy team can have any illusions about Vladimir Putin's Kremlin. And Russia is deep in economic crisis.
Putin's popularity and power have been based largely on Russia's windfall profits from soaring energy prices. Now the Russian stock market is in free fall and factories are closing, while Putin's ratings slip.
Obama should signal to the Russians that he wants better relations. That would mean cutting back on belligerent talk and inviting the Russians to high-level consultations on areas in which the two countries can achieve cooperation quickly - say, on combating piracy.
Obama should consider renewing the Start 1 treaty on reducing strategic nuclear forces, which expires in December 2009. He also could tone down demands for NATO membership for Georgia and Ukraine, especially since neither country is ready, and review plans to station defensive missiles in Poland and the Czech Republic.
For every gesture, the United States would make clear that it expects a tangible response, starting with help in ending Iran's nuclear program and continuing with cooperation against international terrorism and a withdrawal of Russian troops from Georgia.
********************
Dictator Stalin voted third most popular Russian
Reuters
Sunday, December 28, 2008
By Dmitry Solovyov
Soviet dictator Josef Stalin was voted Russia's third most popular historical figure in a nationwide poll that ended on Sunday, despite the famine and purges that marked his rule.
The "Name of Russia" contest run by Rossiya state television channel over more than six months closed on Sunday night with a final vote via the Internet and mobile phones. It drew more than 50 million votes in a nation of 143 million.
Millions of Soviet citizens perished from famine during forced collectivisation, were executed as "enemies of the people" or died in Gulag hard labour camps during Stalin's rule which lasted for almost 30 years until his death in 1953.
"We now have to think very seriously, why the nation chooses to put Josef Vissarionovich Stalin in third place," prominent actor and film director Nikita Mikhalkov, one of the contest's judges, said after the results of the vote flashed on a screen.
"We may find ourselves in a situation where absolute power and voluntarism that ignores people's opinions may prevail in our country, if a fairly large part of the nation wants it."
At the top of the list was 13th century prince Alexander Nevsky, who defeated German invaders, followed by Pyotr Stolypin, a prime minister in the early 20th century known for agrarian reforms and a clampdown on leftist revolutionaries.
The project was launched in mid-June with a list of 50 historical figures selected from some 500 original ones.
YEARNING FOR AN IRON FIST?
Support for the Georgian-born Stalin came alongside widespread grief at the death of Soviet-era dissident Alexander Solzhenitsyn in August as the project was gaining pace.
Solzhenitsyn, himself a former political prisoner, told the world the gruesome truth about Stalin's camps in his book "The Gulag Archipelago."
"The younger generation is fed with myths about Stalin. It knows nothing about the millions who died in Gulag camps but well knows he was a strong leader who defeated (Nazi) Germany," human rights activist Lev Ponomaryov told Reuters.
He said a whiff of Stalinism was felt in Russia's harsh tone with the West which has accused Moscow of backtracking on democratic reforms and keeping a tight lid on dissent.
"Again, foreign enemies are to blame for all internal problems, so you need to rule with an iron fist -- it's a purely Stalinist method."
Stalin's nostalgic supporters like to repeat that he defeated Nazi Germany, industrialised the Soviet Union and achieved total literacy across a backward peasant nation.
"Of course, there were also dark pages...and coming along with his genius there were also destructive moments, but in general he is remembered mostly as a great leader," Viktor Ilyukhin, a leading member of the Communist party, told Reuters.
"We have been living under capitalism for 20 years now and so what? We are now a rank-and-file country, no longer a superpower. Our voice is weak both in economics and politics, and key decisions are sometimes taken without us."
(Reporting by Dmitry Solovyov; editing by Philippa Fletcher)
Reuters
Sunday, December 28, 2008
By Dmitry Solovyov
Soviet dictator Josef Stalin was voted Russia's third most popular historical figure in a nationwide poll that ended on Sunday, despite the famine and purges that marked his rule.
The "Name of Russia" contest run by Rossiya state television channel over more than six months closed on Sunday night with a final vote via the Internet and mobile phones. It drew more than 50 million votes in a nation of 143 million.
Millions of Soviet citizens perished from famine during forced collectivisation, were executed as "enemies of the people" or died in Gulag hard labour camps during Stalin's rule which lasted for almost 30 years until his death in 1953.
"We now have to think very seriously, why the nation chooses to put Josef Vissarionovich Stalin in third place," prominent actor and film director Nikita Mikhalkov, one of the contest's judges, said after the results of the vote flashed on a screen.
"We may find ourselves in a situation where absolute power and voluntarism that ignores people's opinions may prevail in our country, if a fairly large part of the nation wants it."
At the top of the list was 13th century prince Alexander Nevsky, who defeated German invaders, followed by Pyotr Stolypin, a prime minister in the early 20th century known for agrarian reforms and a clampdown on leftist revolutionaries.
The project was launched in mid-June with a list of 50 historical figures selected from some 500 original ones.
YEARNING FOR AN IRON FIST?
Support for the Georgian-born Stalin came alongside widespread grief at the death of Soviet-era dissident Alexander Solzhenitsyn in August as the project was gaining pace.
Solzhenitsyn, himself a former political prisoner, told the world the gruesome truth about Stalin's camps in his book "The Gulag Archipelago."
"The younger generation is fed with myths about Stalin. It knows nothing about the millions who died in Gulag camps but well knows he was a strong leader who defeated (Nazi) Germany," human rights activist Lev Ponomaryov told Reuters.
He said a whiff of Stalinism was felt in Russia's harsh tone with the West which has accused Moscow of backtracking on democratic reforms and keeping a tight lid on dissent.
"Again, foreign enemies are to blame for all internal problems, so you need to rule with an iron fist -- it's a purely Stalinist method."
Stalin's nostalgic supporters like to repeat that he defeated Nazi Germany, industrialised the Soviet Union and achieved total literacy across a backward peasant nation.
"Of course, there were also dark pages...and coming along with his genius there were also destructive moments, but in general he is remembered mostly as a great leader," Viktor Ilyukhin, a leading member of the Communist party, told Reuters.
"We have been living under capitalism for 20 years now and so what? We are now a rank-and-file country, no longer a superpower. Our voice is weak both in economics and politics, and key decisions are sometimes taken without us."
(Reporting by Dmitry Solovyov; editing by Philippa Fletcher)
********************
EDITORIAL
The wrong role for Bill Clinton
The Boston Globe
Sunday, December 28, 2008
Despite formidable political skills and an enduring popularity overseas, former President Bill Clinton would be an awkward choice for a foreign policy assignment in an Obama administration. There has been speculation that the ex-president could be made a special envoy for the Mideast, the Indian-Pakistani dispute over Kashmir, or some other area of conflict.
This would be a mistake for several reasons - most notably that he should not serve in a position that reports to his wife, Hillary Clinton, the likely secretary of state.
The difficulty of such an arrangement should be self-evident. It would violate the Beltway bromide that you should never hire someone you can't fire. But there are other reasons not to appoint Clinton as a special envoy for a diplomatic mission.
During the presidential primary campaign, Bill Clinton pursued lines of attack on President-elect Barack Obama that harmed, or complicated, Hillary Clinton's pursuit of the presidency. It was unclear then whether he was following her agenda or acting on his own. There should be no doubt that a U.S. envoy on a peacemaking mission is acting only for the American president and secretary of state.
Yet another complication would come from the foreign donors to Clinton's charitable foundation. Earlier this month, Clinton disclosed that his foundation raised millions of dollars from foreign governments including Saudi Arabia, Australia, Kuwait, and Qatar. He had to disclose this list as a condition for Obama to pick Hillary Clinton as secretary of state, even though donors were originally led to believe their donations would not be public. But this disclosure does not eliminate the potential for conflicts of interest.
Furthermore, the former president would come to any negotiating table burdened with specific policy failures during his two terms in the White House. India and Pakistan both tested nuclear weapons on Clinton's watch. The Taliban seized power in Afghanistan, with backing from Pakistan's intelligence agency. And when Clinton broke his own promise not to blame either side for failure at Camp David by casting all blame on Palestinian Authority president Yasser Arafat, he ruined whatever reputation he had among Palestinians as an honest broker. The new administration can't get tangled up in what should or shouldn't have happened in the 1990s. U.S. diplomacy needs a fresh start.
Bill Clinton could serve many domestic causes well. Or he could directly take on the fight against poverty and disease in Africa that his Global Initiative has pursued. But former presidents do not make the best diplomats. And the downside is even greater for one who would report to his own spouse.
The Boston Globe
Sunday, December 28, 2008
Despite formidable political skills and an enduring popularity overseas, former President Bill Clinton would be an awkward choice for a foreign policy assignment in an Obama administration. There has been speculation that the ex-president could be made a special envoy for the Mideast, the Indian-Pakistani dispute over Kashmir, or some other area of conflict.
This would be a mistake for several reasons - most notably that he should not serve in a position that reports to his wife, Hillary Clinton, the likely secretary of state.
The difficulty of such an arrangement should be self-evident. It would violate the Beltway bromide that you should never hire someone you can't fire. But there are other reasons not to appoint Clinton as a special envoy for a diplomatic mission.
During the presidential primary campaign, Bill Clinton pursued lines of attack on President-elect Barack Obama that harmed, or complicated, Hillary Clinton's pursuit of the presidency. It was unclear then whether he was following her agenda or acting on his own. There should be no doubt that a U.S. envoy on a peacemaking mission is acting only for the American president and secretary of state.
Yet another complication would come from the foreign donors to Clinton's charitable foundation. Earlier this month, Clinton disclosed that his foundation raised millions of dollars from foreign governments including Saudi Arabia, Australia, Kuwait, and Qatar. He had to disclose this list as a condition for Obama to pick Hillary Clinton as secretary of state, even though donors were originally led to believe their donations would not be public. But this disclosure does not eliminate the potential for conflicts of interest.
Furthermore, the former president would come to any negotiating table burdened with specific policy failures during his two terms in the White House. India and Pakistan both tested nuclear weapons on Clinton's watch. The Taliban seized power in Afghanistan, with backing from Pakistan's intelligence agency. And when Clinton broke his own promise not to blame either side for failure at Camp David by casting all blame on Palestinian Authority president Yasser Arafat, he ruined whatever reputation he had among Palestinians as an honest broker. The new administration can't get tangled up in what should or shouldn't have happened in the 1990s. U.S. diplomacy needs a fresh start.
Bill Clinton could serve many domestic causes well. Or he could directly take on the fight against poverty and disease in Africa that his Global Initiative has pursued. But former presidents do not make the best diplomats. And the downside is even greater for one who would report to his own spouse.
Keepers of Bush data face system overload as electronic records snowball
By Robert Pear and Scott Shane
Sunday, December 28, 2008
WASHINGTON: The National Archives has put into effect an emergency plan to handle electronic records from the Bush White House amid growing doubts about whether its new $144 million computer system can cope with the vast quantities of digital data it will receive when President George W. Bush leaves office on Jan. 20.
The technical challenge was an inevitable result of the explosion in cybercommunications, which archives officials estimated will make the electronic record of the Bush years about 50 times as large as that left by the Clinton White House in 2001.
The collection will include top-secret e-mail tracing plans for the Iraq war as well as scenes from Barney Cam 2008, a White House video featuring the first pet.
Under federal law, the government has "complete ownership, possession and control" of presidential and vice-presidential records. The moment Bush leaves office, the National Archives becomes legally responsible for "the custody, control and preservation" of the records.
Archives officials who disclosed the emergency plan said it would mean that the agency would initially take over parts of the White House storage system, freezing the contents on Jan. 20. Only later, after further study, will archivists try to move the records into the computer system they have devised as a repository for digital data.
Questions about the archives' capacity have added a new element to the uneasiness felt by open-government advocates and historians, who already fear that departing White House officials, particularly Vice President Dick Cheney, may not turn over everything. Cheney asserted this month in a court case that he had absolute discretion to decide which of his records were official and which were personal, and so do not have to be transferred to the archives,
The National Archives has already begun trucking boxes of paper records from the White House to a warehouse it is leasing in Lewisville, Texas, not a great distance from where Bush's presidential library is to be built, at Southern Methodist University in Dallas.
The archives invoked its emergency plan to deal with problems in transferring two types of electronic files: a huge collection of digital photographs and the "records management system," which provides an index to most of the textual records generated by Bush and his staff members over eight years.
Archivists said it could be weeks or months before those files could be indexed and searched.
In their plan, archives officials wrote, the transition poses "unique challenges" because of the huge volume of electronic records, some of them in unfamiliar formats.
Although archivists have been working with the White House to survey the documents, "there is always a possibility that some electronic records may be overlooked," the officials wrote.
If the electronic records of the Bush White House total 100 terabytes of information, as archives officials estimate, that would be about 50 times the volume of electronic records left behind by the Clinton White House in 2001 and about five times the contents of all 20 million catalogued books in the Library of Congress.
"It's a monstrous volume of material, and some people wonder if the system can absorb it," said Lee White, executive director of the National Coalition for History, a collection of 60 archival and historical groups.
Sam Watkins, a transition liaison officer at the archives, said his agency was expecting to receive 20 to 24 terabytes of e-mail alone from the Bush White House. By contrast, Watkins said, the volume of e-mail from the Clinton White House was less than one terabyte.
While some routine messages may be of little interest to historians, the law does not generally permit White House officials to pick which messages to preserve. And for an administration not documented by the tapes that captured the inside story of the Johnson and Nixon White Houses, e-mail may provide a substitute, historians said.
The archives said it had "a high level of confidence" that it could bring the e-mail into its electronic record-keeping system and retrieve messages in response to requests from Congress and the courts.
But Thomas Blanton, director of the nonprofit National Security Archive, a plaintiff in several lawsuits seeking Bush administration records, said the National Archives' track record did not justify such a claim. "Their confidence is inexplicable," he said.
Archives officials said they might have been better prepared for the transition if the White House had cooperated earlier.
Millions of White House e-mails created from 2003 to 2005 appear to be missing and may not be recoverable. And in September 2007, the top lawyer at the National Archives wrote in a memorandum that he had "made almost zero progress" planning the transition because the White House had ignored repeated requests for infor-mation about the volume and formats of electronic records.
In May of this year, the Government Accountability Office, the investigative arm of Congress, found that "the administration had not yet provided specific information on the volume and types of data to be transferred" to the archives. Linda Koontz of the accountability office warned in May and again in September that the National Archives might not be ready for the torrent of electronic records on Jan. 20.
Even if the technology were perfect, some historians, librarians and watchdog groups said they did not trust this administration to preserve its records.
By Robert Pear and Scott Shane
Sunday, December 28, 2008
WASHINGTON: The National Archives has put into effect an emergency plan to handle electronic records from the Bush White House amid growing doubts about whether its new $144 million computer system can cope with the vast quantities of digital data it will receive when President George W. Bush leaves office on Jan. 20.
The technical challenge was an inevitable result of the explosion in cybercommunications, which archives officials estimated will make the electronic record of the Bush years about 50 times as large as that left by the Clinton White House in 2001.
The collection will include top-secret e-mail tracing plans for the Iraq war as well as scenes from Barney Cam 2008, a White House video featuring the first pet.
Under federal law, the government has "complete ownership, possession and control" of presidential and vice-presidential records. The moment Bush leaves office, the National Archives becomes legally responsible for "the custody, control and preservation" of the records.
Archives officials who disclosed the emergency plan said it would mean that the agency would initially take over parts of the White House storage system, freezing the contents on Jan. 20. Only later, after further study, will archivists try to move the records into the computer system they have devised as a repository for digital data.
Questions about the archives' capacity have added a new element to the uneasiness felt by open-government advocates and historians, who already fear that departing White House officials, particularly Vice President Dick Cheney, may not turn over everything. Cheney asserted this month in a court case that he had absolute discretion to decide which of his records were official and which were personal, and so do not have to be transferred to the archives,
The National Archives has already begun trucking boxes of paper records from the White House to a warehouse it is leasing in Lewisville, Texas, not a great distance from where Bush's presidential library is to be built, at Southern Methodist University in Dallas.
The archives invoked its emergency plan to deal with problems in transferring two types of electronic files: a huge collection of digital photographs and the "records management system," which provides an index to most of the textual records generated by Bush and his staff members over eight years.
Archivists said it could be weeks or months before those files could be indexed and searched.
In their plan, archives officials wrote, the transition poses "unique challenges" because of the huge volume of electronic records, some of them in unfamiliar formats.
Although archivists have been working with the White House to survey the documents, "there is always a possibility that some electronic records may be overlooked," the officials wrote.
If the electronic records of the Bush White House total 100 terabytes of information, as archives officials estimate, that would be about 50 times the volume of electronic records left behind by the Clinton White House in 2001 and about five times the contents of all 20 million catalogued books in the Library of Congress.
"It's a monstrous volume of material, and some people wonder if the system can absorb it," said Lee White, executive director of the National Coalition for History, a collection of 60 archival and historical groups.
Sam Watkins, a transition liaison officer at the archives, said his agency was expecting to receive 20 to 24 terabytes of e-mail alone from the Bush White House. By contrast, Watkins said, the volume of e-mail from the Clinton White House was less than one terabyte.
While some routine messages may be of little interest to historians, the law does not generally permit White House officials to pick which messages to preserve. And for an administration not documented by the tapes that captured the inside story of the Johnson and Nixon White Houses, e-mail may provide a substitute, historians said.
The archives said it had "a high level of confidence" that it could bring the e-mail into its electronic record-keeping system and retrieve messages in response to requests from Congress and the courts.
But Thomas Blanton, director of the nonprofit National Security Archive, a plaintiff in several lawsuits seeking Bush administration records, said the National Archives' track record did not justify such a claim. "Their confidence is inexplicable," he said.
Archives officials said they might have been better prepared for the transition if the White House had cooperated earlier.
Millions of White House e-mails created from 2003 to 2005 appear to be missing and may not be recoverable. And in September 2007, the top lawyer at the National Archives wrote in a memorandum that he had "made almost zero progress" planning the transition because the White House had ignored repeated requests for infor-mation about the volume and formats of electronic records.
In May of this year, the Government Accountability Office, the investigative arm of Congress, found that "the administration had not yet provided specific information on the volume and types of data to be transferred" to the archives. Linda Koontz of the accountability office warned in May and again in September that the National Archives might not be ready for the torrent of electronic records on Jan. 20.
Even if the technology were perfect, some historians, librarians and watchdog groups said they did not trust this administration to preserve its records.
***************
OPINION
A deadly wave, a lucky star
By John Bemelmans Marciano
Sunday, December 28, 2008
One hundred years ago this past Sunday, the life of my grandfather Lorenzo took a tragic and extraordinary turn.
Dec. 28 marks the Feast of the Slaughter of the Innocents on the Roman Catholic calendar. Once the final day of the Christmas season, it instead signaled, by 1908, a return to normal life, as children were headed back to school and parents to work for the first time in weeks.
Alarm clocks were set the night before, at the end of a Sunday that had been uncommonly cold and gloomy across southern Italy, so much so that people forsook the traditional visits to friends and family and stayed home.
My grandfather's family would not have ventured out in any event, because that night they welcomed a new addition, another sister for 10-year-old Lorenzo - his sixth - to go along with his little brother, Giuseppe.
My grandfather lived in Pellaro, a small town just south of Reggio di Calabria on the Strait of Messina. His family lived alongside that of his uncle, aunt and five cousins in the Via Madonella, a road that dead-ended into a sandy beach. His childhood was idyllic: the sea right outside his door to play in, Mount Etna rising fantastically across the blue-black waters.
That late-December morning, Pellaro smelled strongly of perfume; it was harvest time for the bergamot, the small citrus fruit that is the principal ingredient in all manner of cologne and grown only on this narrow strip of the Calabrian coast.
Lorenzo was awakened shortly before the dawn, not by his alarm but by the loud low rumble of the earth and the awful crashing that followed. Living in an area recently wracked by earthquakes, most people immediately knew what was happening. During seismic events the majority of deaths are caused by people's homes collapsing in on them - a fate suffered by few in Pellaro, which was a sparsely built farming community.
People gathered near the water, thinking it the safest place to be, but 10 minutes after the main shock the sea began to recede from shore. Boats at anchor tottered and hit bottom. There were two words in Italian to describe what was happening, one native (maremoto) the other borrowed from Japanese (tsunami).
There was no time to outrun the water, but someone pushed my grandfather up into an olive tree along with his little brother, whom Lorenzo held onto with all his strength. The roar of the sea was deafening - the tidal wave crested at more than 40 feet - and fight though Lorenzo did, the impact broke his clutch on Giuseppe.
No one will ever know how long my grandfather wandered the ruined coast, calling out the names of his brother, of his family. Everything Lorenzo had ever known was destroyed. The land beneath his neighborhood collapsed and fell, Atlantis-like, into the sea. The Church of the Madonella was open to the sky, a boat docked in its altar. Farther up the beach, a crack in the earth revealed ancient Greco-Roman tombs, still intact.
Across the straits, Messina - one of the most ancient cities in Europe - had been annihilated. More than 50,000 were dead. It took only a few hours for civilization to break down among the survivors.
Looting ran rampant; thieves cut fingers from the dead rather than waste time prying their rings off. Marconi's new radio transmitter at the mouth of the strait had gone silent, and many believed themselves to be the only people left alive, anywhere.
The 1908 earthquake stands as the most lethal natural disaster in recorded European history. (And only the Indian Ocean tsunami of 2004 has dwarfed it recently.) Nearly 100,000 people perished, including all 16 of my grandfather's relatives in Via Madonella.
The response of the royal Italian government makes FEMA's effort in New Orleans look like a model of efficiency. Most disgracefully, the shacks built as temporary shelter for the homeless would remain occupied for 30 years while the reconstruction dragged on. My grandfather himself was shuffled among relatives in Calabria before boarding the steamer Europa in 1921 to seek a better life in America.
Grampa, who died in 1990, always said he had been born under a lucky star. I assumed this belief was the sign of an earlier, more stoic generation. In fact, it was not. People went insane with grief over the events of Dec. 28, 1908. But a few survivors came away from the experience with the knowledge that they had stared apocalypse in the face and found the strength to come through it. And, having done so, they could endure anything - including arriving in America with little money and even less English, and raising eight children through a Depression and a war against their home country.
Grampa's lucky star was in fact mine, and my brothers', and all our cousins'.John Bemelmans Marciano is the author and illustrator of "Madeline and the Cats of Rome."
By John Bemelmans Marciano
Sunday, December 28, 2008
One hundred years ago this past Sunday, the life of my grandfather Lorenzo took a tragic and extraordinary turn.
Dec. 28 marks the Feast of the Slaughter of the Innocents on the Roman Catholic calendar. Once the final day of the Christmas season, it instead signaled, by 1908, a return to normal life, as children were headed back to school and parents to work for the first time in weeks.
Alarm clocks were set the night before, at the end of a Sunday that had been uncommonly cold and gloomy across southern Italy, so much so that people forsook the traditional visits to friends and family and stayed home.
My grandfather's family would not have ventured out in any event, because that night they welcomed a new addition, another sister for 10-year-old Lorenzo - his sixth - to go along with his little brother, Giuseppe.
My grandfather lived in Pellaro, a small town just south of Reggio di Calabria on the Strait of Messina. His family lived alongside that of his uncle, aunt and five cousins in the Via Madonella, a road that dead-ended into a sandy beach. His childhood was idyllic: the sea right outside his door to play in, Mount Etna rising fantastically across the blue-black waters.
That late-December morning, Pellaro smelled strongly of perfume; it was harvest time for the bergamot, the small citrus fruit that is the principal ingredient in all manner of cologne and grown only on this narrow strip of the Calabrian coast.
Lorenzo was awakened shortly before the dawn, not by his alarm but by the loud low rumble of the earth and the awful crashing that followed. Living in an area recently wracked by earthquakes, most people immediately knew what was happening. During seismic events the majority of deaths are caused by people's homes collapsing in on them - a fate suffered by few in Pellaro, which was a sparsely built farming community.
People gathered near the water, thinking it the safest place to be, but 10 minutes after the main shock the sea began to recede from shore. Boats at anchor tottered and hit bottom. There were two words in Italian to describe what was happening, one native (maremoto) the other borrowed from Japanese (tsunami).
There was no time to outrun the water, but someone pushed my grandfather up into an olive tree along with his little brother, whom Lorenzo held onto with all his strength. The roar of the sea was deafening - the tidal wave crested at more than 40 feet - and fight though Lorenzo did, the impact broke his clutch on Giuseppe.
No one will ever know how long my grandfather wandered the ruined coast, calling out the names of his brother, of his family. Everything Lorenzo had ever known was destroyed. The land beneath his neighborhood collapsed and fell, Atlantis-like, into the sea. The Church of the Madonella was open to the sky, a boat docked in its altar. Farther up the beach, a crack in the earth revealed ancient Greco-Roman tombs, still intact.
Across the straits, Messina - one of the most ancient cities in Europe - had been annihilated. More than 50,000 were dead. It took only a few hours for civilization to break down among the survivors.
Looting ran rampant; thieves cut fingers from the dead rather than waste time prying their rings off. Marconi's new radio transmitter at the mouth of the strait had gone silent, and many believed themselves to be the only people left alive, anywhere.
The 1908 earthquake stands as the most lethal natural disaster in recorded European history. (And only the Indian Ocean tsunami of 2004 has dwarfed it recently.) Nearly 100,000 people perished, including all 16 of my grandfather's relatives in Via Madonella.
The response of the royal Italian government makes FEMA's effort in New Orleans look like a model of efficiency. Most disgracefully, the shacks built as temporary shelter for the homeless would remain occupied for 30 years while the reconstruction dragged on. My grandfather himself was shuffled among relatives in Calabria before boarding the steamer Europa in 1921 to seek a better life in America.
Grampa, who died in 1990, always said he had been born under a lucky star. I assumed this belief was the sign of an earlier, more stoic generation. In fact, it was not. People went insane with grief over the events of Dec. 28, 1908. But a few survivors came away from the experience with the knowledge that they had stared apocalypse in the face and found the strength to come through it. And, having done so, they could endure anything - including arriving in America with little money and even less English, and raising eight children through a Depression and a war against their home country.
Grampa's lucky star was in fact mine, and my brothers', and all our cousins'.John Bemelmans Marciano is the author and illustrator of "Madeline and the Cats of Rome."
OPINION
Questioning the cost of text messaging
By Randall Stross
Sunday, December 28, 2008
Text messaging is a wonderful business to be in: about 2.5 trillion messages will have been sent from cellphones worldwide this year. The public assumes that the wireless carriers' costs are far higher than they actually are, and profit margins are concealed by a heavy curtain.
Senator Herb Kohl, Democrat of Wisconsin and chairman of the U.S. Senate antitrust subcommittee, wanted to look behind the curtain. He was curious about the doubling of prices for text messages charged by the major American carriers from 2005 to 2008, during a time when the industry consolidated from six major companies to four.
So in September, Kohl sent a letter to Verizon Wireless, AT&T, Sprint and T-Mobile, inviting them to answer some basic questions about their text messaging costs and pricing.
All four of the major carriers decided during the past three years to increase the pay-per-use price for messages to 20 cents from 10 cents. The decision could not have come from a dearth of business: the total of 2.5 trillion sent messages this year, as estimated by the Gartner Group, is up 32 percent from 2007. Gartner expects 3.3 trillion messages to be sent in 2009.
The written responses to Kohl from AT&T, Sprint and T-Mobile speak at length about pricing plans without getting around to the costs of conveying text messages.
Attempts to speak with representatives of all three about their costs and pricing were unsuccessful.
The carriers will have other opportunities to tell us more about their pricing decisions: Twenty class-action lawsuits have been filed around the United States against AT&T and the other carriers, alleging price-fixing for text messaging services.
T-Mobile and AT&T contended in their responses to Kohl that the pay-per-use price of a message was relatively unimportant because most messaging was done as part of a package. With a $10 or $15 monthly plan for text messaging, customers of T-Mobile, AT&T and Sprint can effectively reduce the per-message price to a penny, if they fully use their monthly allotment.
T-Mobile called Kohl's attention to the fact that its "average revenue per text message, which takes into account the revenue for all text messages, has declined by more than 50 percent since 2005."
This statement seems like good news for customers. But consider what is left out: In the past three years, the volume of text messaging in the United States has grown tenfold, according to CTIA - the Wireless Association, a trade group based in Washington. If T-Mobile enjoyed growth that was typical, its text messaging revenue grew fivefold, even with the steep drop in per-message revenue.
The lucrative nature of that revenue increase cannot be appreciated without doing something that T-Mobile chose not to do, which is to talk about whether its costs rose as the industry's messaging volume grew tenfold. Kohl's letter of inquiry noted that "text messaging files are very small, as the size of text messages are generally limited to 160 characters per message, and therefore cost carriers very little to transmit."
A better description might be "cost carriers very, very, very little to transmit." A text message initially travels wirelessly from a handset to the closest base-station tower and is then transferred through wired links to the digital pipes of the telephone network. Then, near its destination, it is converted back into a wireless signal to traverse the final leg, from tower to handset. In the wired portion of its journey, a file of such infinitesimal size is inconsequential.
Srinivasan Keshav, a professor of computer science at the University of Waterloo, in Ontario, said: "Messages are small. Even though a trillion seems like a lot to carry, it isn't."
Perhaps the costs for the wireless portion at either end are high - spectrum is finite, after all, and carriers pay dearly for the rights to use it. But text messages are not just tiny; they are also free riders, tucked into what's called a control channel, space reserved for operation of the wireless network. That's why a message is so limited in length: it must not exceed the length of the message used for internal communication between tower and handset to set up a call. The channel uses space whether or not a text message is inserted.
Until Kohl began his inquiries, the public had no reason to think of the text-messaging business as anything but an ordinary one, whose operational costs rose in tandem with message volume. The carriers had no reason to correct such an impression.
Randall Stross is an author based in Silicon Valley and a professor of business at San Jose State University.
By Randall Stross
Sunday, December 28, 2008
Text messaging is a wonderful business to be in: about 2.5 trillion messages will have been sent from cellphones worldwide this year. The public assumes that the wireless carriers' costs are far higher than they actually are, and profit margins are concealed by a heavy curtain.
Senator Herb Kohl, Democrat of Wisconsin and chairman of the U.S. Senate antitrust subcommittee, wanted to look behind the curtain. He was curious about the doubling of prices for text messages charged by the major American carriers from 2005 to 2008, during a time when the industry consolidated from six major companies to four.
So in September, Kohl sent a letter to Verizon Wireless, AT&T, Sprint and T-Mobile, inviting them to answer some basic questions about their text messaging costs and pricing.
All four of the major carriers decided during the past three years to increase the pay-per-use price for messages to 20 cents from 10 cents. The decision could not have come from a dearth of business: the total of 2.5 trillion sent messages this year, as estimated by the Gartner Group, is up 32 percent from 2007. Gartner expects 3.3 trillion messages to be sent in 2009.
The written responses to Kohl from AT&T, Sprint and T-Mobile speak at length about pricing plans without getting around to the costs of conveying text messages.
Attempts to speak with representatives of all three about their costs and pricing were unsuccessful.
The carriers will have other opportunities to tell us more about their pricing decisions: Twenty class-action lawsuits have been filed around the United States against AT&T and the other carriers, alleging price-fixing for text messaging services.
T-Mobile and AT&T contended in their responses to Kohl that the pay-per-use price of a message was relatively unimportant because most messaging was done as part of a package. With a $10 or $15 monthly plan for text messaging, customers of T-Mobile, AT&T and Sprint can effectively reduce the per-message price to a penny, if they fully use their monthly allotment.
T-Mobile called Kohl's attention to the fact that its "average revenue per text message, which takes into account the revenue for all text messages, has declined by more than 50 percent since 2005."
This statement seems like good news for customers. But consider what is left out: In the past three years, the volume of text messaging in the United States has grown tenfold, according to CTIA - the Wireless Association, a trade group based in Washington. If T-Mobile enjoyed growth that was typical, its text messaging revenue grew fivefold, even with the steep drop in per-message revenue.
The lucrative nature of that revenue increase cannot be appreciated without doing something that T-Mobile chose not to do, which is to talk about whether its costs rose as the industry's messaging volume grew tenfold. Kohl's letter of inquiry noted that "text messaging files are very small, as the size of text messages are generally limited to 160 characters per message, and therefore cost carriers very little to transmit."
A better description might be "cost carriers very, very, very little to transmit." A text message initially travels wirelessly from a handset to the closest base-station tower and is then transferred through wired links to the digital pipes of the telephone network. Then, near its destination, it is converted back into a wireless signal to traverse the final leg, from tower to handset. In the wired portion of its journey, a file of such infinitesimal size is inconsequential.
Srinivasan Keshav, a professor of computer science at the University of Waterloo, in Ontario, said: "Messages are small. Even though a trillion seems like a lot to carry, it isn't."
Perhaps the costs for the wireless portion at either end are high - spectrum is finite, after all, and carriers pay dearly for the rights to use it. But text messages are not just tiny; they are also free riders, tucked into what's called a control channel, space reserved for operation of the wireless network. That's why a message is so limited in length: it must not exceed the length of the message used for internal communication between tower and handset to set up a call. The channel uses space whether or not a text message is inserted.
Until Kohl began his inquiries, the public had no reason to think of the text-messaging business as anything but an ordinary one, whose operational costs rose in tandem with message volume. The carriers had no reason to correct such an impression.
Randall Stross is an author based in Silicon Valley and a professor of business at San Jose State University.
***************
CS clients reported may have lost 627 million pounds on Madoff
Reuters
Sunday, December 28, 2008
ZURICH: Credit Suisse clients may have lost up to 1 billion Swiss francs (627.3 million pounds) on investments connected to accused swindler Bernard Madoff, newspaper Sonntag reported on Sunday.
Without giving details of its sources, Sonntag reported that internal forecasts at Credit Suisse showed that customers of Switzerland's second-largest bank could have lost 0.9-1.0 billion francs in the Madoff case.
Credit Suisse spokesman Jan Vonder Muehll said: "Credit Suisse did not actively recommend or sell products invested with Bernard Madoff.
"Furthermore, none of the funds of hedge funds offered by Credit Suisse contained holdings in Madoff funds."
Authorities say Wall Street fund manager Madoff has confessed to running a $50 billion fraud that ensnared investors and charities around the world.
Funds managed by Swiss banks have been prominent victims of Madoff, who is accused of running a global Ponzi scheme in which earlier investors are paid off with investments from newer clients.
($1=1.080 Swiss Franc)
Reuters
Sunday, December 28, 2008
ZURICH: Credit Suisse clients may have lost up to 1 billion Swiss francs (627.3 million pounds) on investments connected to accused swindler Bernard Madoff, newspaper Sonntag reported on Sunday.
Without giving details of its sources, Sonntag reported that internal forecasts at Credit Suisse showed that customers of Switzerland's second-largest bank could have lost 0.9-1.0 billion francs in the Madoff case.
Credit Suisse spokesman Jan Vonder Muehll said: "Credit Suisse did not actively recommend or sell products invested with Bernard Madoff.
"Furthermore, none of the funds of hedge funds offered by Credit Suisse contained holdings in Madoff funds."
Authorities say Wall Street fund manager Madoff has confessed to running a $50 billion fraud that ensnared investors and charities around the world.
Funds managed by Swiss banks have been prominent victims of Madoff, who is accused of running a global Ponzi scheme in which earlier investors are paid off with investments from newer clients.
($1=1.080 Swiss Franc)
***************
OPINION
Ponzi schemes never change
By Eduardo Porter
Sunday, December 28, 2008
One hears anguished commentary about how Bernard Madoff's gargantuan fraud epitomizes the self-defeating excess of high-tech finance - his fall the embodiment of the fall of modern capitalism.
But while $50 billion is a lot of money to defraud, there's nothing particularly modern about Madoff's ethics or technique.
Ponzi schemes are among the oldest in the books, long preceding the stamp arbitrage scam engineered in the 1920s by Charles Ponzi, who gave the fraud its name. They have been practiced by hundreds of scammers across the world. And they usually end badly.
The oldest documented case dates back to 1719, when John Law, a Scot, offered investors stock in a French company trading up the Mississippi River, promising returns of more than 40 percent a year.
More recently, from Romania to Russia, Ponzi schemes became de rigeur as former Communist countries embraced capitalism. In Albania, half the population invested an amount equivalent to the nation's entire gross domestic product in an enormous Ponzi scheme before it collapsed.
In April last year, authorities in Wazirabad, Pakistan, arrested a former high school teacher who reportedly took nearly $1 billion from starry-eyed investors. And a few weeks ago, the Colombian government declared a state of emergency because of rioting over some closed Ponzi funds.
Some say that Madoff's fraud is a harbinger of the downfall of the 21st-century's frenetic variant of capitalism. I would suggest that it underscores how stable the strategies and the institutions of finance truly are. What changes are the scale and the technology. The ethical shortcomings remain.
Madoff's strategy doesn't just recall that of snake-oil peddlers of yore. It is strikingly similar to that of the brokers and the financiers who built lucrative legal businesses convincing investors that something - Internet stocks, American homes, Dutch tulips - would appreciate forever for some superspecial reason.
What's a Ponzi scheme but an illegal ruse to entice the gullible with the promise of too-good-to-be-true returns in arcane investments using an intimidating cloud of abstruse financial lingo? Ponzi frauds have the defining characteristic that returns to the first batch of innocents are paid from the money invested by the second batch. That sounds a lot like today's American real estate market.
And Ponzi frauds often have similar ends to our increasingly frequent bubbles. Not only do they both usually collapse, but so many rich and influential French investors were taken by John Law's fraud in the 18th century that the government felt compelled to bail them out. According to Utpal Bhattacharya, a professor of finance at Indiana University, it exchanged the investors' worthless stock for bonds secured by Paris's municipal revenues.
There are, of course, important differences between fraud and standard financial practice. Crucially, bubbles are powered by fools of increasing gullibility, who will be willing to pay an even greater price to buy an asset from the fool that bought it in the preceding round. Ponzi schemes only require that their investors be foolish.
Yet these details do not negate the larger paradigm of finance, old or new: getting investors' money requires a story. It doesn't have to be true.
Eduardo Porter is a member of the New York Times editorial board.
By Eduardo Porter
Sunday, December 28, 2008
One hears anguished commentary about how Bernard Madoff's gargantuan fraud epitomizes the self-defeating excess of high-tech finance - his fall the embodiment of the fall of modern capitalism.
But while $50 billion is a lot of money to defraud, there's nothing particularly modern about Madoff's ethics or technique.
Ponzi schemes are among the oldest in the books, long preceding the stamp arbitrage scam engineered in the 1920s by Charles Ponzi, who gave the fraud its name. They have been practiced by hundreds of scammers across the world. And they usually end badly.
The oldest documented case dates back to 1719, when John Law, a Scot, offered investors stock in a French company trading up the Mississippi River, promising returns of more than 40 percent a year.
More recently, from Romania to Russia, Ponzi schemes became de rigeur as former Communist countries embraced capitalism. In Albania, half the population invested an amount equivalent to the nation's entire gross domestic product in an enormous Ponzi scheme before it collapsed.
In April last year, authorities in Wazirabad, Pakistan, arrested a former high school teacher who reportedly took nearly $1 billion from starry-eyed investors. And a few weeks ago, the Colombian government declared a state of emergency because of rioting over some closed Ponzi funds.
Some say that Madoff's fraud is a harbinger of the downfall of the 21st-century's frenetic variant of capitalism. I would suggest that it underscores how stable the strategies and the institutions of finance truly are. What changes are the scale and the technology. The ethical shortcomings remain.
Madoff's strategy doesn't just recall that of snake-oil peddlers of yore. It is strikingly similar to that of the brokers and the financiers who built lucrative legal businesses convincing investors that something - Internet stocks, American homes, Dutch tulips - would appreciate forever for some superspecial reason.
What's a Ponzi scheme but an illegal ruse to entice the gullible with the promise of too-good-to-be-true returns in arcane investments using an intimidating cloud of abstruse financial lingo? Ponzi frauds have the defining characteristic that returns to the first batch of innocents are paid from the money invested by the second batch. That sounds a lot like today's American real estate market.
And Ponzi frauds often have similar ends to our increasingly frequent bubbles. Not only do they both usually collapse, but so many rich and influential French investors were taken by John Law's fraud in the 18th century that the government felt compelled to bail them out. According to Utpal Bhattacharya, a professor of finance at Indiana University, it exchanged the investors' worthless stock for bonds secured by Paris's municipal revenues.
There are, of course, important differences between fraud and standard financial practice. Crucially, bubbles are powered by fools of increasing gullibility, who will be willing to pay an even greater price to buy an asset from the fool that bought it in the preceding round. Ponzi schemes only require that their investors be foolish.
Yet these details do not negate the larger paradigm of finance, old or new: getting investors' money requires a story. It doesn't have to be true.
Eduardo Porter is a member of the New York Times editorial board.
***************
John Lewis posts record sales on 1st clearance day
Reuters
Monday, December 29, 2008
LONDON: John Lewis, the employee-owned group viewed as a bellwether of British retailing, said on Sunday the first day of its post-Christmas clearance sale produced record takings at its department stores.
Department store sales on Saturday were up 7 percent on the same day last year at 21.3 million pounds, led by demand for home technology products and womenswear, it said.
"This is a remarkable result at any time and particularly so in this challenging economic climate," department stores Managing Director Andy Street said in a statement.
(Reporting by Mark Potter)
Reuters
Monday, December 29, 2008
LONDON: John Lewis, the employee-owned group viewed as a bellwether of British retailing, said on Sunday the first day of its post-Christmas clearance sale produced record takings at its department stores.
Department store sales on Saturday were up 7 percent on the same day last year at 21.3 million pounds, led by demand for home technology products and womenswear, it said.
"This is a remarkable result at any time and particularly so in this challenging economic climate," department stores Managing Director Andy Street said in a statement.
(Reporting by Mark Potter)
***************
OPINION
Contemplating our cluelessness
By Peter Applebome
Sunday, December 28, 2008
Yes, it has been a miserable year.
Had Time waited a few days it might have decided to go with Bernard Madoff, the ultimate face of this annus horribilis, as its Person of the Year instead of Barack Obama.
But, when it comes to money, hope springs eternal. Just ask the financial magazines which are already full of advice about the better year to come. "Your Comeback Year — 2009," announces Kiplinger's Personal Finance. In Money it's: "Get Your Money Back — A Six-Step Plan to Rebuild Your Savings." BusinessWeek's Investment Outlook promises: "Yes, Things Are Grim. But Here's Your New Plan to Emerge Stronger."
Maybe next year will be better. It can't be much worse. But before we toss the latest unopened 401(k) statement into the trash, a year-end toast to us all — the boobs and easy marks who from time immemorial have mastered the art of buying high and selling low, investing in bubbles as transparent as an open window, making crashes and swindles as much a part of the human experience as love, vanity and bad breath.
"Insofar as there is a lesson in history," said James Grant, editor of Grant's Interest Rate Observer, "it's that human beings are not very good with large sums of money, anything over $136."
As we await a better 2009 we ask: Are we doomed forever to be the fleeced or is there anything we can learn form this latest round of financial catastrophe? In fact, there are plenty of lessons to be learned. So here's a revolutionary idea: Maybe it's time we even start thinking about ways to teach them.
All financial collapses have their own brand of pain. But this one cuts particularly deep because over the past few decades, without even quite knowing it, we went from a nation with a few financial choices to one with thousands, and we're making decisions previous generations never faced — in Individual Retirement Accounts, 401(k)'s, 529 plans and elsewhere. What's the right asset allocation? Regular IRA or Roth? When is it best to retire and when to begin withdrawing funds from retirement plans? Tell me again how that annuity is supposed to work? What's the catch in that cheap adjustable-rate mortgage?
Back in 1972, Money magazine was a revolutionary idea, a money magazine for people who didn't have much of it. Now the marketplace is full of people and publications offering advice, much of it self serving, some smart, some dumb. Were you lucky enough you might have happened upon David Lereah's invaluable primer, "Why the Real Estate Boom Will Not Bust — And How You Can Profit From It" or Robert Zuccaro's prescient book, "Dow, 30,000 by 2008 — Why It's Different This Time." There was plenty more where those came from.
Not all that long ago financial wisdom for the masses was Louis Rukeyser on "Wall Street Week" trading puns and market insight with buttoned-down Wall Street savants in that sedate living room on PBS. Now it's Jim Cramer shouting, sweating and making loud animal noises in his financial carnival on CNBC. We're all part of a 24/7 financial noise machine even if most of us don't know the first thing about it.
Surely, there are different levels of financial ignorance and folly. People who took out loans they had no ability to pay based on the quaint notion that housing prices only went up didn't make the same mistakes as Madoff's investors, who had at least some reason to think they were doing something prudent and wise.
But can anyone doubt that the demands on people to make reasonably intelligent choices with their money has so far exceeded their wisdom to do it, that maybe we should at least try to figure out some way to close the gap? If many presumably sophisticated Madoff investors were ruined, what chance do the rest of us have?
Frederick Rowe Jr., a Dallas money manager, has a framed quote attributed to financier and investor Bernard Baruch near his desk.
It reads: "If you are ready and able to give up everything else, to study the whole history and background of the market and all the principal companies whose stocks are on the board as carefully as a medical student studies anatomy, to glue your nose at the tape at the opening of every day of the year and never take it off till night. If you can do all that and in addition you have the cool nerves of a great gambler, the sixth sense of a kind of clairvoyant, and the courage of a lion," then you've got a chance.
That level of commitment may be a bit beyond most of us. But shouldn't we be teaching more of this in high school and college? Shouldn't every high school graduate at least know what compound interest can do for you as a saver and what it does to you as a borrower? Any college kid at some point gets lectures and required readings on the importance of diversity, academia's favorite subject. Shouldn't they graduate with a modicum of financial literacy as well?
"We're taught that money is the root of all evil and that money can't buy you love, but the nature of compound interest, that you have to have more money coming in than going out, is almost never taught," Rowe said. "Students have to take math and foreign language and history, but you can graduate from every good school in the country without any exposure at all to how money works."
One lesson of this year is that these days, no one, even the most financially secure, can afford to be stupid. Another might be that investing for the long term, can mean for a very, very long term.
It's ugly out there. Better luck next year.
By Peter Applebome
Sunday, December 28, 2008
Yes, it has been a miserable year.
Had Time waited a few days it might have decided to go with Bernard Madoff, the ultimate face of this annus horribilis, as its Person of the Year instead of Barack Obama.
But, when it comes to money, hope springs eternal. Just ask the financial magazines which are already full of advice about the better year to come. "Your Comeback Year — 2009," announces Kiplinger's Personal Finance. In Money it's: "Get Your Money Back — A Six-Step Plan to Rebuild Your Savings." BusinessWeek's Investment Outlook promises: "Yes, Things Are Grim. But Here's Your New Plan to Emerge Stronger."
Maybe next year will be better. It can't be much worse. But before we toss the latest unopened 401(k) statement into the trash, a year-end toast to us all — the boobs and easy marks who from time immemorial have mastered the art of buying high and selling low, investing in bubbles as transparent as an open window, making crashes and swindles as much a part of the human experience as love, vanity and bad breath.
"Insofar as there is a lesson in history," said James Grant, editor of Grant's Interest Rate Observer, "it's that human beings are not very good with large sums of money, anything over $136."
As we await a better 2009 we ask: Are we doomed forever to be the fleeced or is there anything we can learn form this latest round of financial catastrophe? In fact, there are plenty of lessons to be learned. So here's a revolutionary idea: Maybe it's time we even start thinking about ways to teach them.
All financial collapses have their own brand of pain. But this one cuts particularly deep because over the past few decades, without even quite knowing it, we went from a nation with a few financial choices to one with thousands, and we're making decisions previous generations never faced — in Individual Retirement Accounts, 401(k)'s, 529 plans and elsewhere. What's the right asset allocation? Regular IRA or Roth? When is it best to retire and when to begin withdrawing funds from retirement plans? Tell me again how that annuity is supposed to work? What's the catch in that cheap adjustable-rate mortgage?
Back in 1972, Money magazine was a revolutionary idea, a money magazine for people who didn't have much of it. Now the marketplace is full of people and publications offering advice, much of it self serving, some smart, some dumb. Were you lucky enough you might have happened upon David Lereah's invaluable primer, "Why the Real Estate Boom Will Not Bust — And How You Can Profit From It" or Robert Zuccaro's prescient book, "Dow, 30,000 by 2008 — Why It's Different This Time." There was plenty more where those came from.
Not all that long ago financial wisdom for the masses was Louis Rukeyser on "Wall Street Week" trading puns and market insight with buttoned-down Wall Street savants in that sedate living room on PBS. Now it's Jim Cramer shouting, sweating and making loud animal noises in his financial carnival on CNBC. We're all part of a 24/7 financial noise machine even if most of us don't know the first thing about it.
Surely, there are different levels of financial ignorance and folly. People who took out loans they had no ability to pay based on the quaint notion that housing prices only went up didn't make the same mistakes as Madoff's investors, who had at least some reason to think they were doing something prudent and wise.
But can anyone doubt that the demands on people to make reasonably intelligent choices with their money has so far exceeded their wisdom to do it, that maybe we should at least try to figure out some way to close the gap? If many presumably sophisticated Madoff investors were ruined, what chance do the rest of us have?
Frederick Rowe Jr., a Dallas money manager, has a framed quote attributed to financier and investor Bernard Baruch near his desk.
It reads: "If you are ready and able to give up everything else, to study the whole history and background of the market and all the principal companies whose stocks are on the board as carefully as a medical student studies anatomy, to glue your nose at the tape at the opening of every day of the year and never take it off till night. If you can do all that and in addition you have the cool nerves of a great gambler, the sixth sense of a kind of clairvoyant, and the courage of a lion," then you've got a chance.
That level of commitment may be a bit beyond most of us. But shouldn't we be teaching more of this in high school and college? Shouldn't every high school graduate at least know what compound interest can do for you as a saver and what it does to you as a borrower? Any college kid at some point gets lectures and required readings on the importance of diversity, academia's favorite subject. Shouldn't they graduate with a modicum of financial literacy as well?
"We're taught that money is the root of all evil and that money can't buy you love, but the nature of compound interest, that you have to have more money coming in than going out, is almost never taught," Rowe said. "Students have to take math and foreign language and history, but you can graduate from every good school in the country without any exposure at all to how money works."
One lesson of this year is that these days, no one, even the most financially secure, can afford to be stupid. Another might be that investing for the long term, can mean for a very, very long term.
It's ugly out there. Better luck next year.
*****************
As a candidate, Kennedy is forceful but remains elusive
By Nicholas Confessore and David M. Halbfinger
Sunday, December 28, 2008
Caroline Kennedy, the woman who would be New York's next senator, is sure of one thing. Among all the hopefuls seeking to succeed Senator Hillary Rodham Clinton, she said on Saturday, there is no better choice.
"I wouldn't be here if I didn't think I would be the best," Kennedy said, sitting in the back room of an Upper East Side diner around the corner from her home.
After weeks of criticism that she had not opened up to the public or the press, Kennedy has embarked on a series of interviews. But in an extensive sit-down discussion Saturday morning with The New York Times, she still seemed less like a candidate than an idea of one: forceful but vague, largely undefined and seemingly determined to remain that way.
Facing a somewhat delicate task, where she is not running for office but seeking an appointment to an impending vacancy, Kennedy avoided questions about the other possible contenders, saying she did not want to criticize them. She praised Clinton, but said it was too soon to say how she could improve on Clinton's performance as a senator. She said she had been personally affected by the economic crisis but sidestepped questions about her wealth, declining to say how much money she lived on each year.
She provided only the broadest of rationales for her candidacy for the Senate, saying her experience as a mother, author and school fund-raiser, her commitment to public service and her deep political connections had prepared her for the job.
Kennedy, 51, has had only a few weeks to think through a platform and a message, and she has already taken positions on issues like same-sex marriage, which she supports, and school vouchers, which she opposes. She spoke knowledgeably about education issues and said that, if appointed, she hoped to be particularly involved in the debate over the reauthorization of the federal legislation known as No Child Left Behind, of which her uncle Senator Edward Kennedy of Massachusetts was a lead author.
But in the interview on Saturday, she said she hoped to be a consensus-builder, and declined to describe her positions on other pressing public issues — even in education, where she has some expertise. Kennedy would not say, for example, whether she supported proposals to abolish tenure for teachers and offer them merit pay instead.
"To pick out the most controversial one as a stand-alone thing, I don't think that's really the way to go about this," Kennedy said. "People can vote; it'll be really interesting to see what happens. There's a lot of experimentation going on in the country that we should pay attention to."
The interview underscored the aura of mystery that still surrounds Kennedy nearly a month after she told Governor David Paterson that she was interested in filling Clinton's seat.
New Yorkers appear to have a favorable view of Kennedy and fond memories of her family. But they know little about her positions or what has driven her to seek office after years spent mostly avoiding the spotlight.
With several weeks to go before Paterson makes his decision, she is doling out glimpses of her political beliefs and private life. But when asked Saturday morning to describe the moment she decided to seek the Senate seat, Kennedy seemed irritated by the question and said she couldn't recall.
"Have you guys ever thought about writing for, like, a woman's magazine or something?" she asked the reporters. "I thought you were the crack political team."
On an appearance Friday night on NY1, Kennedy was more lighthearted, and also more personal. She talked about her family's political legacy, about how much she missed her brother, and about how much her mother had loved campaigning.
But on Saturday morning, Kennedy was all business and seemed in a more lawyerly frame of mind. At one point, she said that it might have been preferable to seek the seat in an election, noting that "it would give me a chance to explain exactly what I'm doing, why I would want to do this, and, you know, to get people to know me better and to understand exactly what my plans would be, how hard I would work."
But she would not say whether she thought Paterson should appoint a caretaker candidate to fill out Clinton's term, which would allow Kennedy and others interested in the seat an equal and unfettered chance to campaign for it in 2010.
"This is the opportunity that's presenting itself right now, and I'm interested if the governor thinks that I could do a good job and help New York and help him," Kennedy said.
Kennedy said she had spoken "throughout this process" with Andrew Cuomo, the attorney general, who is a contender for the job himself and is divorced from Kennedy's cousin Kerry Kennedy. There are at least a half dozen other serious contenders for the job, including Thomas Suozzi, the Nassau County executive, and Representatives Carolyn Maloney and Kirsten Gillibrand.
"I'm not a conventional choice," Kennedy said. "I haven't followed the traditional path, but I do think I'd bring a kind of a lifetime of experience that is relevant to this job."
One of the main assets she could bring to the Senate, Kennedy suggested, was her celebrity itself. It would be useful, she said, in bringing attention to New York's needs and fighting for a bigger share of federal stimulus money.
"We are losing a very visible, very strong, very powerful advocate in Hillary Clinton," Kennedy said. "This is not about me, this is about what I can do to help New York get its fair share, help working families, travel the state, bring attention to what is going on up there. So that's why I think I would be good."
Kennedy said she was very close to Senator Kennedy, and was inspired by his example, but felt no family duty to follow in her uncle's footsteps.
Asked how much of a role her husband, Edwin Schlossberg, might take in her political career — on the hustings in Watertown, New York, say, or other political way stations in the north country — she hinted that he might be busy elsewhere, given his own career as the head of a prominent design firm. But she said no one could have a more supportive husband.
"The more time I spend with him, the happier I am," she said.
Kennedy said she had spent some time in the Catskills and the Adirondacks; when asked her favorite place in the state outside of the city and Long Island, she said, "I like visiting historical sites. I loved visiting the battlefields of Saratoga."
Kennedy said her finances had been affected by the economic crisis, though "not as badly as a lot of people's. I'm lucky that I'm not afraid of losing my home, and my husband still has a job."
But she declined to discuss details. "If I'm chosen for this I'm going to comply with every kind of disclosure; if the governor has questions about my finances, I'll talk to him."
She said she employed one household worker as well as a personal assistant — though she said she had far more experience managing people at the Department of Education. "Building a staff is something that I would have no trouble doing," she said.
And she said she would have no trouble relating to New Yorkers of more modest means. "I have lived a very advantaged life, and I am very fortunate," she said. "But our family tradition has been always to work for, as I said, for working people."
Though Kennedy's own children have attended private schools, she said her experience working with city schools had given her ample understanding of what students and their parents are facing.
"Many of those families are headed by women who are poor, and the kids are poor," she said. "So I think that I've seen firsthand, and extensively across the city, the need that there is, the disadvantage that those kids are at when they enter school without the kind of support that kids from more fortunate backgrounds have, and the long-term impact of that on our city."
Asked to name an issue on which she would depart from Democratic Party orthodoxy, Kennedy seemed to have trouble identifying one.
"If we're not comparing it to anybody specifically, it's hard to say where I disagree," she said.
But when asked how she might differ with Mayor Michael Bloomberg or with Governor Paterson, who has sole authority to make the Senate appointment, she demurred.
"I'm not going to talk about my disagreements with him," she said. "You'll find out over time."
Indeed, Kennedy, like Barack Obama, the presidential candidate she endorsed, returned repeatedly to the idea of bipartisanship and unity.
"What I think people are really looking for is for people to work together," she said finally. "It's something that I take really seriously. We need Republicans and Democrats, all Democrats — people need to look at what we have in common.
"Health care is a perfect example," she added. "All the stakeholders are at the table. Barack Obama and Hillary Clinton had different plans, but I think the goal now is to get quality affordable health care. The point now is to find something that's going to work, to reduce costs and get more people covered. Now is the time for people to come together and focus on compromise. I think that's one of the things I have going for me."
Kennedy came to the interview with two aides, who had reserved the back room of the Lenox Hill Diner, on Lexington Avenue near 78th Street, for several interviews scheduled on Saturday.
As things wrapped up, a reporter tried to pose another question, but she interrupted him.
"I think we're done," she said.
By Nicholas Confessore and David M. Halbfinger
Sunday, December 28, 2008
Caroline Kennedy, the woman who would be New York's next senator, is sure of one thing. Among all the hopefuls seeking to succeed Senator Hillary Rodham Clinton, she said on Saturday, there is no better choice.
"I wouldn't be here if I didn't think I would be the best," Kennedy said, sitting in the back room of an Upper East Side diner around the corner from her home.
After weeks of criticism that she had not opened up to the public or the press, Kennedy has embarked on a series of interviews. But in an extensive sit-down discussion Saturday morning with The New York Times, she still seemed less like a candidate than an idea of one: forceful but vague, largely undefined and seemingly determined to remain that way.
Facing a somewhat delicate task, where she is not running for office but seeking an appointment to an impending vacancy, Kennedy avoided questions about the other possible contenders, saying she did not want to criticize them. She praised Clinton, but said it was too soon to say how she could improve on Clinton's performance as a senator. She said she had been personally affected by the economic crisis but sidestepped questions about her wealth, declining to say how much money she lived on each year.
She provided only the broadest of rationales for her candidacy for the Senate, saying her experience as a mother, author and school fund-raiser, her commitment to public service and her deep political connections had prepared her for the job.
Kennedy, 51, has had only a few weeks to think through a platform and a message, and she has already taken positions on issues like same-sex marriage, which she supports, and school vouchers, which she opposes. She spoke knowledgeably about education issues and said that, if appointed, she hoped to be particularly involved in the debate over the reauthorization of the federal legislation known as No Child Left Behind, of which her uncle Senator Edward Kennedy of Massachusetts was a lead author.
But in the interview on Saturday, she said she hoped to be a consensus-builder, and declined to describe her positions on other pressing public issues — even in education, where she has some expertise. Kennedy would not say, for example, whether she supported proposals to abolish tenure for teachers and offer them merit pay instead.
"To pick out the most controversial one as a stand-alone thing, I don't think that's really the way to go about this," Kennedy said. "People can vote; it'll be really interesting to see what happens. There's a lot of experimentation going on in the country that we should pay attention to."
The interview underscored the aura of mystery that still surrounds Kennedy nearly a month after she told Governor David Paterson that she was interested in filling Clinton's seat.
New Yorkers appear to have a favorable view of Kennedy and fond memories of her family. But they know little about her positions or what has driven her to seek office after years spent mostly avoiding the spotlight.
With several weeks to go before Paterson makes his decision, she is doling out glimpses of her political beliefs and private life. But when asked Saturday morning to describe the moment she decided to seek the Senate seat, Kennedy seemed irritated by the question and said she couldn't recall.
"Have you guys ever thought about writing for, like, a woman's magazine or something?" she asked the reporters. "I thought you were the crack political team."
On an appearance Friday night on NY1, Kennedy was more lighthearted, and also more personal. She talked about her family's political legacy, about how much she missed her brother, and about how much her mother had loved campaigning.
But on Saturday morning, Kennedy was all business and seemed in a more lawyerly frame of mind. At one point, she said that it might have been preferable to seek the seat in an election, noting that "it would give me a chance to explain exactly what I'm doing, why I would want to do this, and, you know, to get people to know me better and to understand exactly what my plans would be, how hard I would work."
But she would not say whether she thought Paterson should appoint a caretaker candidate to fill out Clinton's term, which would allow Kennedy and others interested in the seat an equal and unfettered chance to campaign for it in 2010.
"This is the opportunity that's presenting itself right now, and I'm interested if the governor thinks that I could do a good job and help New York and help him," Kennedy said.
Kennedy said she had spoken "throughout this process" with Andrew Cuomo, the attorney general, who is a contender for the job himself and is divorced from Kennedy's cousin Kerry Kennedy. There are at least a half dozen other serious contenders for the job, including Thomas Suozzi, the Nassau County executive, and Representatives Carolyn Maloney and Kirsten Gillibrand.
"I'm not a conventional choice," Kennedy said. "I haven't followed the traditional path, but I do think I'd bring a kind of a lifetime of experience that is relevant to this job."
One of the main assets she could bring to the Senate, Kennedy suggested, was her celebrity itself. It would be useful, she said, in bringing attention to New York's needs and fighting for a bigger share of federal stimulus money.
"We are losing a very visible, very strong, very powerful advocate in Hillary Clinton," Kennedy said. "This is not about me, this is about what I can do to help New York get its fair share, help working families, travel the state, bring attention to what is going on up there. So that's why I think I would be good."
Kennedy said she was very close to Senator Kennedy, and was inspired by his example, but felt no family duty to follow in her uncle's footsteps.
Asked how much of a role her husband, Edwin Schlossberg, might take in her political career — on the hustings in Watertown, New York, say, or other political way stations in the north country — she hinted that he might be busy elsewhere, given his own career as the head of a prominent design firm. But she said no one could have a more supportive husband.
"The more time I spend with him, the happier I am," she said.
Kennedy said she had spent some time in the Catskills and the Adirondacks; when asked her favorite place in the state outside of the city and Long Island, she said, "I like visiting historical sites. I loved visiting the battlefields of Saratoga."
Kennedy said her finances had been affected by the economic crisis, though "not as badly as a lot of people's. I'm lucky that I'm not afraid of losing my home, and my husband still has a job."
But she declined to discuss details. "If I'm chosen for this I'm going to comply with every kind of disclosure; if the governor has questions about my finances, I'll talk to him."
She said she employed one household worker as well as a personal assistant — though she said she had far more experience managing people at the Department of Education. "Building a staff is something that I would have no trouble doing," she said.
And she said she would have no trouble relating to New Yorkers of more modest means. "I have lived a very advantaged life, and I am very fortunate," she said. "But our family tradition has been always to work for, as I said, for working people."
Though Kennedy's own children have attended private schools, she said her experience working with city schools had given her ample understanding of what students and their parents are facing.
"Many of those families are headed by women who are poor, and the kids are poor," she said. "So I think that I've seen firsthand, and extensively across the city, the need that there is, the disadvantage that those kids are at when they enter school without the kind of support that kids from more fortunate backgrounds have, and the long-term impact of that on our city."
Asked to name an issue on which she would depart from Democratic Party orthodoxy, Kennedy seemed to have trouble identifying one.
"If we're not comparing it to anybody specifically, it's hard to say where I disagree," she said.
But when asked how she might differ with Mayor Michael Bloomberg or with Governor Paterson, who has sole authority to make the Senate appointment, she demurred.
"I'm not going to talk about my disagreements with him," she said. "You'll find out over time."
Indeed, Kennedy, like Barack Obama, the presidential candidate she endorsed, returned repeatedly to the idea of bipartisanship and unity.
"What I think people are really looking for is for people to work together," she said finally. "It's something that I take really seriously. We need Republicans and Democrats, all Democrats — people need to look at what we have in common.
"Health care is a perfect example," she added. "All the stakeholders are at the table. Barack Obama and Hillary Clinton had different plans, but I think the goal now is to get quality affordable health care. The point now is to find something that's going to work, to reduce costs and get more people covered. Now is the time for people to come together and focus on compromise. I think that's one of the things I have going for me."
Kennedy came to the interview with two aides, who had reserved the back room of the Lenox Hill Diner, on Lexington Avenue near 78th Street, for several interviews scheduled on Saturday.
As things wrapped up, a reporter tried to pose another question, but she interrupted him.
"I think we're done," she said.
Wild Oats XI wins Sydney to Hobart race
The Associated Press
Sunday, December 28, 2008
HOBART, Australia: The discovery of a shark tangled in its aft rudder helped the Australian yacht Wild Oats XI surge to an unprecedented fourth successive first-place finish in the Sydney to Hobart race on Sunday.
The 30-meter, or about 100-foot, carbon-fiber yacht, which had been trailing rival Skandia, was forced to stop after it collided with a two-meter shark Saturday evening.
Mark Richards, the captain, said the collision had a positive outcome. Having to stop and reverse the yacht to clear the shark from the rudder also removed some debris from its keel that had slowed the boat since the start.
"It might have been something off a spectator boat," he said of the debris. "I mean it was just a washing machine, a nightmare, you never know what could have happened."
Richards said he thought about sending a crew member over the side to inspect the keel, but the tight race with Skandia never gave him the opportunity.
"We just never stopped, he said, adding that when a yacht is sailing at 20-25 knots per hour, or 37-46 kilometers per hour, "it's a hard thing to work out what to actually do. So we were sort of waiting for the opportunity but in the end we didn't have one. We had to do it anyway."
Freeing the shark, Richards said at Constitution Dock in Hobart, "was a godsend in the end because the second we got him off, the boat was back to its old self."
Wild Oats XI surged ahead of Skandia, the winner in 2003, and crossed the finish line in the island state of Tasmania at 9:34 a.m. local time on Sunday, 1 day 20 hours 34 minutes 14 seconds after leaving Sydney. Skandia finished an hour later.
The time was about two hours slower than the record Wild Oats set in 2005 for the 628-nautical mile, or about 1,160-kilometer, race.
Wild Oats XI last year equaled the record for three successive victories achieved by Claude Plowman's Morna from 1946-48.
Richards said this year's victory was the toughest "by a country mile."
Fickle conditions overnight ended hopes of breaking the record after the leading yachts appeared on course to eclipse it when favorable northerly winds propelled them down the east coast of Australia.
Ichi Ban was third for the second year in a row, about 45 minutes behind Skandia, followed by ASM Shockwave 5, Limit and Black Jack.
Grant Wharington, the Skandia skipper, said his team enjoyed the challenge of staying close to a superior yacht.
"We did all we could to spring an upset but that thing is just so fast," Wharington said of Wild Oats.
"We always knew that once we turned the corner and started reaching and going up wind they were going to be pretty quick. We knew we would have needed probably 10 miles on them at Tasman Island to even have a chance."
Still to be decided was the handicap winner, which was won last year by American entry Rosebud after finishing fourth overall.
Ragtime, the only American entry this year, was the lone yacht of 11 international boats likely to finish in the top 20.
Three of the 100 yachts that started in Sydney on Friday had retired by late Sunday, including Georgia, a New Zealand-built Farr 52.
It broke a rudder, took on water and sank. Its 14 crew were rescued by two passing race boats and taken safely to land by police launch late Friday.
Sanyo Maris and Inner Circle retired after gear failure.
The Associated Press
Sunday, December 28, 2008
HOBART, Australia: The discovery of a shark tangled in its aft rudder helped the Australian yacht Wild Oats XI surge to an unprecedented fourth successive first-place finish in the Sydney to Hobart race on Sunday.
The 30-meter, or about 100-foot, carbon-fiber yacht, which had been trailing rival Skandia, was forced to stop after it collided with a two-meter shark Saturday evening.
Mark Richards, the captain, said the collision had a positive outcome. Having to stop and reverse the yacht to clear the shark from the rudder also removed some debris from its keel that had slowed the boat since the start.
"It might have been something off a spectator boat," he said of the debris. "I mean it was just a washing machine, a nightmare, you never know what could have happened."
Richards said he thought about sending a crew member over the side to inspect the keel, but the tight race with Skandia never gave him the opportunity.
"We just never stopped, he said, adding that when a yacht is sailing at 20-25 knots per hour, or 37-46 kilometers per hour, "it's a hard thing to work out what to actually do. So we were sort of waiting for the opportunity but in the end we didn't have one. We had to do it anyway."
Freeing the shark, Richards said at Constitution Dock in Hobart, "was a godsend in the end because the second we got him off, the boat was back to its old self."
Wild Oats XI surged ahead of Skandia, the winner in 2003, and crossed the finish line in the island state of Tasmania at 9:34 a.m. local time on Sunday, 1 day 20 hours 34 minutes 14 seconds after leaving Sydney. Skandia finished an hour later.
The time was about two hours slower than the record Wild Oats set in 2005 for the 628-nautical mile, or about 1,160-kilometer, race.
Wild Oats XI last year equaled the record for three successive victories achieved by Claude Plowman's Morna from 1946-48.
Richards said this year's victory was the toughest "by a country mile."
Fickle conditions overnight ended hopes of breaking the record after the leading yachts appeared on course to eclipse it when favorable northerly winds propelled them down the east coast of Australia.
Ichi Ban was third for the second year in a row, about 45 minutes behind Skandia, followed by ASM Shockwave 5, Limit and Black Jack.
Grant Wharington, the Skandia skipper, said his team enjoyed the challenge of staying close to a superior yacht.
"We did all we could to spring an upset but that thing is just so fast," Wharington said of Wild Oats.
"We always knew that once we turned the corner and started reaching and going up wind they were going to be pretty quick. We knew we would have needed probably 10 miles on them at Tasman Island to even have a chance."
Still to be decided was the handicap winner, which was won last year by American entry Rosebud after finishing fourth overall.
Ragtime, the only American entry this year, was the lone yacht of 11 international boats likely to finish in the top 20.
Three of the 100 yachts that started in Sydney on Friday had retired by late Sunday, including Georgia, a New Zealand-built Farr 52.
It broke a rudder, took on water and sank. Its 14 crew were rescued by two passing race boats and taken safely to land by police launch late Friday.
Sanyo Maris and Inner Circle retired after gear failure.
The comics are feeling the pain of print
By Leslie Berlin
Sunday, December 28, 2008
IN many ways, Stephan Pastis is living his dream. In 2002, after years of frustration, he quit his job as a lawyer to pursue cartooning. Today his daily strip, "Pearls Before Swine," appears in more than 500 newspapers. He says he answers his fan mail "in groups of 100."
Nevertheless, he can't help worrying.
"Newspapers are declining," he says. "For a syndicated cartoonist, that's like finally making it to the major leagues and being told the stadiums are all closing, so there's no place to play."
Lisa Wilson, senior vice president of syndication for United Media, which distributes "Pearls Before Swine" through its United Feature Syndicate, says simply: "The newspapers' economic challenges become ours."
What do you do when the distribution method you have relied on for more than a century begins to falter? In the last two months, two syndicates have revealed their hands.
In November, United Feature Syndicate, which distributes 50 comics, including "Peanuts," "Dilbert" and "Get Fuzzy," made its full archives and portfolio available free on its Comics.com Web site. The company also added social networking features for tagging and rating comics. Visitors can have comics sent to them via e-mail or RSS feed.
The point is to attract more and, ideally, younger readers to the syndicate's comics.
In the past, Comics.com displayed the current day's strips and a 30-day archive free. Anyone wishing to see older comics or receive comics via e-mail had to pay a subscription fee of less than $20 a year, according to Wilson.
The syndicate decided that the subscription model "was limiting the audience for comics," she says. It appears to have been right. After the change, traffic to the site increased 48 percent, to 571,000 unique visitors in the United States in November, according to comScore Media Metrix.
Today, Comics.com serves more as a marketing tool than a significant source of revenue. Wilson says the site does bring in money from advertisers, which include cellphone companies and Netflix. But its primary function is to build a fan base — and to provide links to sites where fans can buy books, calendars and other items featuring characters from the comics. No one expects Comics.com to fully compensate for what Wilson calls "declines on the print side." The site, she says, is "a platform for what comes next."
Douglas Edwards thinks he knows what comes next: comics on mobile devices. Edwards is chief executive of Uclick, the digital arm of the media company Andrews McMeel Universal. Another division of the company is Universal Press Syndicate, which distributes "Garfield," "Calvin and Hobbes" and "Doonesbury," among others.
In the last two months, Uclick has placed several bets on the iPhone, which Edwards says is a good platform for comics because it has a relatively large screen that makes text easier to read. Uclick sells comics-themed wallpaper and animations for cellphones. In November, the company began selling graphic novels on iTunes.
Last week, Andrews McMeel Universal introduced a new version of its free GoComics Web site, optimized for the iPhone. GoComics has many of the same features as Comics.com, as well as a pay-to-post area for emerging cartoonists called Comics Sherpa. Edwards says GoComics is profitable but declines to give specific figures.
Cartoonists are not waiting for the syndicates to develop new business models. They are posting to free sites like Comic Genesis and Webcomics Nation. Some Web comics, like "The Argyle Sweater" by Scott Hilburn, have been picked up for syndication, but that is unusual. Even more rarely, a Web comic might attract a large following at a stand-alone site; such is the case with "Penny Arcade," a video gaming strip.
Cartoonists are also experimenting with color, animation, sound and novel distribution methods.
Garfield.com allows fans of Jim Davis's strip to send cards via e-mail, play online games and download screen savers. Visitors to Dilbert.com can download widgets for their Web pages or replace the punch lines of the strip's creator, Scott Adams, with their own. The site also features 30-second animated strips produced by RingTales, based in Santa Monica, California, which animates and distributes New Yorker cartoons. "Peanuts" motion comics — essentially, short cartoons based on comic strips — are available on iTunes.
The creators of the comic strip "Zits," which is syndicated by King Features, are working with Jantze Studios in San Anselmo, California , to develop "audio comics," in which a camera pans over a strip while actors read the text.
Pastis, who recently created a Facebook page for "Pearls Before Swine" and is in talks about animating the strip, says it is challenging to appear simultaneously in newspaper comics pages, which have what he calls a "1950s sensibility," and in a media universe where the younger readers he wants to attract can download episodes of "South Park" to their iPods.
Pastis says he must embrace the balancing act. "Being known now means being known in a number of different formats," he says, adding that one has to go where the readers are.
But Brian Walker, a member of the creative team behind the comics "Beetle Bailey" and "Hi and Lois" — both syndicated by King Features and created by Walker's father, Mort Walker — warns that too much exposure "can take away from the strip itself." If a comic's characters are everywhere, he asks, why bother reading the newspaper strip?
And Brian Walker, who is also a comics historian, believes that comics are best appreciated on paper. He likens reading a comic on a screen to watching a movie on an iPod: the general idea comes through, but some of the essential artistry is lost.
In print, the comics are as much a part of many people's morning routines as a cup of coffee. The question now is whether daily comics can make a jump to mass electronic distribution and a younger readership — or whether they will be tossed aside like yesterday's news.
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By Leslie Berlin
Sunday, December 28, 2008
IN many ways, Stephan Pastis is living his dream. In 2002, after years of frustration, he quit his job as a lawyer to pursue cartooning. Today his daily strip, "Pearls Before Swine," appears in more than 500 newspapers. He says he answers his fan mail "in groups of 100."
Nevertheless, he can't help worrying.
"Newspapers are declining," he says. "For a syndicated cartoonist, that's like finally making it to the major leagues and being told the stadiums are all closing, so there's no place to play."
Lisa Wilson, senior vice president of syndication for United Media, which distributes "Pearls Before Swine" through its United Feature Syndicate, says simply: "The newspapers' economic challenges become ours."
What do you do when the distribution method you have relied on for more than a century begins to falter? In the last two months, two syndicates have revealed their hands.
In November, United Feature Syndicate, which distributes 50 comics, including "Peanuts," "Dilbert" and "Get Fuzzy," made its full archives and portfolio available free on its Comics.com Web site. The company also added social networking features for tagging and rating comics. Visitors can have comics sent to them via e-mail or RSS feed.
The point is to attract more and, ideally, younger readers to the syndicate's comics.
In the past, Comics.com displayed the current day's strips and a 30-day archive free. Anyone wishing to see older comics or receive comics via e-mail had to pay a subscription fee of less than $20 a year, according to Wilson.
The syndicate decided that the subscription model "was limiting the audience for comics," she says. It appears to have been right. After the change, traffic to the site increased 48 percent, to 571,000 unique visitors in the United States in November, according to comScore Media Metrix.
Today, Comics.com serves more as a marketing tool than a significant source of revenue. Wilson says the site does bring in money from advertisers, which include cellphone companies and Netflix. But its primary function is to build a fan base — and to provide links to sites where fans can buy books, calendars and other items featuring characters from the comics. No one expects Comics.com to fully compensate for what Wilson calls "declines on the print side." The site, she says, is "a platform for what comes next."
Douglas Edwards thinks he knows what comes next: comics on mobile devices. Edwards is chief executive of Uclick, the digital arm of the media company Andrews McMeel Universal. Another division of the company is Universal Press Syndicate, which distributes "Garfield," "Calvin and Hobbes" and "Doonesbury," among others.
In the last two months, Uclick has placed several bets on the iPhone, which Edwards says is a good platform for comics because it has a relatively large screen that makes text easier to read. Uclick sells comics-themed wallpaper and animations for cellphones. In November, the company began selling graphic novels on iTunes.
Last week, Andrews McMeel Universal introduced a new version of its free GoComics Web site, optimized for the iPhone. GoComics has many of the same features as Comics.com, as well as a pay-to-post area for emerging cartoonists called Comics Sherpa. Edwards says GoComics is profitable but declines to give specific figures.
Cartoonists are not waiting for the syndicates to develop new business models. They are posting to free sites like Comic Genesis and Webcomics Nation. Some Web comics, like "The Argyle Sweater" by Scott Hilburn, have been picked up for syndication, but that is unusual. Even more rarely, a Web comic might attract a large following at a stand-alone site; such is the case with "Penny Arcade," a video gaming strip.
Cartoonists are also experimenting with color, animation, sound and novel distribution methods.
Garfield.com allows fans of Jim Davis's strip to send cards via e-mail, play online games and download screen savers. Visitors to Dilbert.com can download widgets for their Web pages or replace the punch lines of the strip's creator, Scott Adams, with their own. The site also features 30-second animated strips produced by RingTales, based in Santa Monica, California, which animates and distributes New Yorker cartoons. "Peanuts" motion comics — essentially, short cartoons based on comic strips — are available on iTunes.
The creators of the comic strip "Zits," which is syndicated by King Features, are working with Jantze Studios in San Anselmo, California , to develop "audio comics," in which a camera pans over a strip while actors read the text.
Pastis, who recently created a Facebook page for "Pearls Before Swine" and is in talks about animating the strip, says it is challenging to appear simultaneously in newspaper comics pages, which have what he calls a "1950s sensibility," and in a media universe where the younger readers he wants to attract can download episodes of "South Park" to their iPods.
Pastis says he must embrace the balancing act. "Being known now means being known in a number of different formats," he says, adding that one has to go where the readers are.
But Brian Walker, a member of the creative team behind the comics "Beetle Bailey" and "Hi and Lois" — both syndicated by King Features and created by Walker's father, Mort Walker — warns that too much exposure "can take away from the strip itself." If a comic's characters are everywhere, he asks, why bother reading the newspaper strip?
And Brian Walker, who is also a comics historian, believes that comics are best appreciated on paper. He likens reading a comic on a screen to watching a movie on an iPod: the general idea comes through, but some of the essential artistry is lost.
In print, the comics are as much a part of many people's morning routines as a cup of coffee. The question now is whether daily comics can make a jump to mass electronic distribution and a younger readership — or whether they will be tossed aside like yesterday's news.
Gordon Brown pledges alliance for change with Obama
Reuters
Sunday, December 28, 2008
LONDON: Prime Minister Gordon Brown will use his New Year address to call for a "coalition for change" with President-elect Barack Obama in a speech intended as a rallying call to Britons.
Brown, who frequently uses the comparison of World War II to describe the current global financial crisis, will tell Britons they have the strength of resolve to tackle a recession.
"Today the issues may be different, more complex, more global," Brown says in excerpts of the speech released Sunday by his office. "And yet the qualities we need to meet them the British people have demonstrated in abundance before.
"So that we will eventually look back on the winter of 2008 as another great challenge that was thrown Britain's way, and that Britain met. Because we had the right values, the right policies, the right character to meet it."
Brown identifies the economy, climate change and security as the main challenges facing the world in 2009 and pledges to work with the United States to tackle them, positioning the alliance beyond a traditional focus on military cooperation.
"I look forward to working with President-elect Obama in creating a trans-Atlantic, and then a global coalition for change," Brown will say. "We can demonstrate this in 2009 not just in how we address global economic challenges but in how we tackle climate change at the Copenhagen summit."
World leaders are working to find a successor to the Kyoto Protocol, the United Nations pact on limiting greenhouse gas emissions, with talks due to end at a conference in Copenhagen next year.
Brown identifies the economy as the single biggest challenge for 2009 and defends plans for a massive spending program to prevent a recession spiraling into a slump.
"The failure of British governments in previous downturns was to succumb to political expediency and to cut back investment across the board, thereby stunting our ability to grow and strangling hope during the upturn," he will say.
"This will not happen on my watch. The threat that will come of doing too little is greater than the threat of attempting too much. We will direct the next stage of our strategy at creating jobs and making the investments our economy needs."
The remarks are a swipe at the opposition Conservative Party, which has said that if they won the next election, due by mid-2010, they would not match Labour's spending plans.
Labour trails the Conservatives in opinion polls ahead of elections due in the next 18 months, but the opposition's lead has shrunk since the summer as they struggle to convince voters about their ability to handle the economy.
The Sunday Times reported that the Conservative Party was preparing to unveil three tax-cut proposals in an effort to show how they would help those hit by the economic downturn.
But George Osborne, the Conservative Party's spokesman on economic issues, told the paper in an interview that the Conservatives wanted to target those most affected by the tax rises Labour will need to fund the billions of pounds the government is borrowing to revive Britain's economy.
"I am not writing my 2010 budget now, but my priority is to try to reverse the increase in National Insurance because it is a tax that affects the vast majority of people in Britain," Osborne said.
Alistair Darling, chancellor of the Exchequer, announced in his November pre-budget report a planned rise in National Insurance contributions from 2011, which would raise £5.4 billion, or $7.9 billion, for the Treasury and hit all but the lowest-paid.
"It is a tax on jobs at a time of high unemployment," Osborne said. "It is a tax on incomes at a time when people will be under severe strain."
Osborne, who made headlines earlier this year over reports he used a visit to the yacht of a Russian billionaire to solicit donations for the Conservative Party, also wants to introduce measures to help savers and pensioners, who have been hurt by recent interest rate cuts.
The Sunday Times said Osborne did not go into the details of his plans, but the paper understood that proposals being considered include the abolition of the basic rate of tax on savings, which would cost £2.4 billion or more, and an increase in tax allowances for those over 65 years old.
Each increase of £100 in the threshold would cost the Treasury £75 million.
Labour argues that future tax rises are necessary to help fund the cost of a fiscal stimulus package to bolster the country's ailing economy, which is expected to shrink faster next year than at any time since the 1940s.
Reuters
Sunday, December 28, 2008
LONDON: Prime Minister Gordon Brown will use his New Year address to call for a "coalition for change" with President-elect Barack Obama in a speech intended as a rallying call to Britons.
Brown, who frequently uses the comparison of World War II to describe the current global financial crisis, will tell Britons they have the strength of resolve to tackle a recession.
"Today the issues may be different, more complex, more global," Brown says in excerpts of the speech released Sunday by his office. "And yet the qualities we need to meet them the British people have demonstrated in abundance before.
"So that we will eventually look back on the winter of 2008 as another great challenge that was thrown Britain's way, and that Britain met. Because we had the right values, the right policies, the right character to meet it."
Brown identifies the economy, climate change and security as the main challenges facing the world in 2009 and pledges to work with the United States to tackle them, positioning the alliance beyond a traditional focus on military cooperation.
"I look forward to working with President-elect Obama in creating a trans-Atlantic, and then a global coalition for change," Brown will say. "We can demonstrate this in 2009 not just in how we address global economic challenges but in how we tackle climate change at the Copenhagen summit."
World leaders are working to find a successor to the Kyoto Protocol, the United Nations pact on limiting greenhouse gas emissions, with talks due to end at a conference in Copenhagen next year.
Brown identifies the economy as the single biggest challenge for 2009 and defends plans for a massive spending program to prevent a recession spiraling into a slump.
"The failure of British governments in previous downturns was to succumb to political expediency and to cut back investment across the board, thereby stunting our ability to grow and strangling hope during the upturn," he will say.
"This will not happen on my watch. The threat that will come of doing too little is greater than the threat of attempting too much. We will direct the next stage of our strategy at creating jobs and making the investments our economy needs."
The remarks are a swipe at the opposition Conservative Party, which has said that if they won the next election, due by mid-2010, they would not match Labour's spending plans.
Labour trails the Conservatives in opinion polls ahead of elections due in the next 18 months, but the opposition's lead has shrunk since the summer as they struggle to convince voters about their ability to handle the economy.
The Sunday Times reported that the Conservative Party was preparing to unveil three tax-cut proposals in an effort to show how they would help those hit by the economic downturn.
But George Osborne, the Conservative Party's spokesman on economic issues, told the paper in an interview that the Conservatives wanted to target those most affected by the tax rises Labour will need to fund the billions of pounds the government is borrowing to revive Britain's economy.
"I am not writing my 2010 budget now, but my priority is to try to reverse the increase in National Insurance because it is a tax that affects the vast majority of people in Britain," Osborne said.
Alistair Darling, chancellor of the Exchequer, announced in his November pre-budget report a planned rise in National Insurance contributions from 2011, which would raise £5.4 billion, or $7.9 billion, for the Treasury and hit all but the lowest-paid.
"It is a tax on jobs at a time of high unemployment," Osborne said. "It is a tax on incomes at a time when people will be under severe strain."
Osborne, who made headlines earlier this year over reports he used a visit to the yacht of a Russian billionaire to solicit donations for the Conservative Party, also wants to introduce measures to help savers and pensioners, who have been hurt by recent interest rate cuts.
The Sunday Times said Osborne did not go into the details of his plans, but the paper understood that proposals being considered include the abolition of the basic rate of tax on savings, which would cost £2.4 billion or more, and an increase in tax allowances for those over 65 years old.
Each increase of £100 in the threshold would cost the Treasury £75 million.
Labour argues that future tax rises are necessary to help fund the cost of a fiscal stimulus package to bolster the country's ailing economy, which is expected to shrink faster next year than at any time since the 1940s.
ALL PHOTOGRAPHS COPYRIGHT IAN WALTHEW 2008
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