A Place in the Auvergne, Tuesday, 23rd December 2008

The flaws in the China theory of 8

breakingviews.com
Tuesday, December 23, 2008
Eight is an important number in China. Its association with good fortune makes it a big hit for license plates and cellphone numbers. It is no accident that the Olympic Games in Beijing opened on the eighth day of the eighth month of 2008. But the number has another meaning. If economic growth falls below 8 percent, some say the Chinese masses will turn the country into a simmering cauldron of unrest.
That thesis has been bandied about by politicians and economists for years. It could soon be put to the test. In 2009, Chinese economic growth is expected to fall to 7.8 percent, according to HSBC, from almost 12 percent in 2007, driven down by the collapse in Chinese exports to the crisis-wracked developed world.
Social unrest is a rising threat in China. Recorded incidents increased almost eightfold between 1994 and 2005, after which the government stopped giving comparable data. When economic growth fell from 11 percent to 4 percent in 1989, ugly protests erupted. While the state has tolerated recent peaceful sit-ins by factory workers, coordinated action might leave two options: impose order the hard way or renegotiate the terms of government.
Fortunately, the "theory of eight" is probably wrong. What really matters is not how much Chinese economic growth slows, but what happens to unemployment. The two are not perfectly linked. A collapse in capital-intensive industries, for example, would have less effect on jobs than a more modest decline in lower-value, labor-intensive work. Besides, unemployment is not the only reason the masses complain. As people become more prosperous, they are more likely to protest about noneconomic issues like pollution and corruption.
What is certain is that unemployment is rising. Urban joblessness is already at 9.4 percent, according to the Chinese Academy of Social Sciences. The real figure may be higher, and the official national unemployment figure of 4 percent is almost certainly too low. Export sectors alone account for about 50 million employees, and about 4 million have been laid off this year.
Meanwhile, economic volatility, which may have more impact on the lives of Chinese people than any single number, is rising. A stable economy rests on two pillars: consumer and government spending, which tend to move slowly - say, one or two percent a year. But 51 percent of Chinese economic growth comes from investment and exports, which can fluctuate by tens of percentage points a year. Huge declines in the equity and housing markets add to a sense of rapid, uncomfortable change.
Can China manage this tricky period? Its almost miraculous economic achievement until now suggests it can. The government's plans to spend 4 trillion yuan will help.
If just 40 percent of that is new money, it should lift gross domestic product growth by about 3 percentage points in 2008 and 2009, though that is already factored into the 7.8 percent growth estimate.
The question is what happens after the stimulus. At best, China will use the giant spending spree as a prophylactic against discontent while managing the transition to a broader, consumption-led economy, in which widespread, stable employment means the risk of unrest is systemically reduced. At worst, it will be no more than a stopgap until U.S. demand picks up again. Finding the better path will be China's big challenge in 2009, and it has nothing to do with luck. - John Foley

0330

Oxford-educated PM riles rural Thais
Reuters
Tuesday, December 23, 2008
By Nopporn Wong-Anan
New Prime Minister Abhisit Vejjajiva has promised to reach out to all Thais to heal the country's deep political rifts, but he faces an uphill task winning over people like Kwanchai Sarakam.
From the "cowboy country" of Udon Thani, 560 km (350 miles) northeast of Bangkok, the 56-year-old radio host has become the standard bearer of Abhisit's exiled political nemesis, Thaksin Shinawatra, who still looms large more than two years after his removal in a military coup.
Kwanchai's past as a travelling comedian then country music DJ is a world away from Abhisit's schooling at Britain's elite Eton College and Oxford University, but his hard-hitting and aggressive radio show has made him a powerful political force.
For 20 hours a day, his show berates Abhisit, the army and the royalist People's Alliance for Democracy (PAD) that seized Bangkok's airports, accusing them of being an unholy alliance set up to rub Thaksin off the political map.
Callers frequently use foul language on air, demonstrating the depth of feeling in an impoverished province where most voters say they benefited from Thaksin policies such as cheap public health care and credit for farmers.
"Please come and put a curse on this person and send him to hell because he is not the one we voted for," Kwanchai said on air, urging people to attend the burning of an Abhisit effigy.
Ominously, he also claims to be rallying thousands of people to travel to Bangkok next week to blockade parliament ahead of Abhisit's maiden address -- just as the PAD did to his predecessor Somchai Wongsawat, Thaksin's brother-in-law.
"When we fight for a radical change, there will be losses," said Kwanchai, a stocky, swarthy character whose dark complexion and jeans stand in stark contrast to Abhisit's light skin and tailored western suits.
Somchai was forced to step down this month when the courts found his People Power Party (PPP) guilty of vote fraud in the election it won a year ago.
The verdict incensed people like Kwanchai, who demonstrate their political allegiance by wearing red, a symbolic gesture to the PAD to "stop" interfering in politics. The PAD wears yellow in honour of King Bhumibol Adulyadej.
NO RECONCILIATION
The reds' anger is heightened by a perceived anti-Thaksin bias in the judiciary, which has convicted Thaksin of graft and sacked two sympathetic prime ministers, and a belief that Abhisit's Democrat-led coalition will not prosecute any PAD leaders for the airport blockade.
One core PAD leader is a Democrat party MP and Abhisit's new foreign minister was a regular speaker at PAD rallies.
"As long as those yellow-clad lawbreakers are not prosecuted, the new government can't expect reconciliation," said Ratchanee Seewongsa, a 57-year-old laundry worker.
No PAD leader has been arrested for the airport blockade while they are all out on bail for the three-month occupation of Government House, but police did arrest one Thaksin supporter who attacked the cars of Democrat MPs leaving parliament last week.
"We want the masterminds to order their players to stop all their games and start following law and order," Ratchanee said.
Thaksin supporters in Udon, a major U.S. airbase during the Vietnam War, also resent charges by the PAD and Bangkok elite that they are ignorant hicks duped by Thaksin's political populism and alleged vote-buying. "In the past, politicians came with empty pledges and 30 baht ($1) for each vote during campaigns," veteran canvasser Nuanpan Chomson said. "But unlike other politicians and parties, Thaksin actually delivered on his promises."
(Editing by Ed Cropley, Editing by Dean Yates)

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

Nubians push for a return to their drowned homeland
By Daniel WilliamsBloomberg News
Tuesday, December 23, 2008
ASWAN, Egypt: Singing songs and chatting in an ancient language, hundreds of cheerful Nubian travelers gathered at the Alexandria railway station for a long pilgrimage to a lost homeland.
Exiles in their own country, they journeyed 18 hours to celebrate a Muslim holiday in the Nile Valley of southern Egypt, a region their ancestors once dominated from a loose confederation of villages along the river banks.
In 1964, their shoreline was inundated when the Aswan High Dam created Lake Nasser, the largest reservoir in the world. Now the Egyptian government has floated plans to develop and populate land surrounding the lake - without reserving space for Nubians. But ethnic minority activists want terrain set aside for new villages so their brethren can live again on the Nile, returning from a northern Egypt diaspora and arid settlements established 44 years ago for displaced families.
"The settlements are false Nubia," said Haggag Oddoul, an author who has become an outspoken advocate for resettlement. "To restore our character and community, we need to be rerooted. We need to return."
Nubians ruled Egypt in pharaonic times, their armies having ousted Libyan invaders. They speak their own, non-Arabic language and sing songs to drum beats. The river was their economic lifeblood and fountain of memory, identity and lore. Central to old beliefs, it held the spirits of angels and holy men.
"The Nile is our mother," said Fikri el-Kashef, a Nubian singer who built a home atop a ridge above his flooded boyhood village of Abu Simbel.
Giant statues of Pharaoh Ramses II once gazed down on his backyard. The monuments were moved to high ground nearby when the Soviet allies of Egypt were building the dam, which currently provides 14 percent of the country's electrical energy.
The project displaced 60,000 Nubians. They left with hope for a better life and anxiety about what they were leaving behind.
"The government promised us paradise, but we thought we were leaving the Garden of Eden," said Oddoul, 64, author of "Nights of Musk," a collection of short stories about old Nubia.
Paradise turned out to be a string of 30 hastily built villages eight kilometers, or five miles, east of the Nile to the north of Aswan city, each named for a drowned hamlet. Some of the one-story houses soon cracked or collapsed from faulty masonry. And the Nubians did not see sugar cane and cotton crops as adequate replacements for the fruit, dates and fish of their original homeland.
Longing for place after protracted dislocation is a feature of much controversy and conflict in the Middle East. Kurds in Iraq seek to claim the city of Kirkuk, an oil hub they regard as their capital and from which tens of thousands were expelled by Saddam Hussein.
Kurdish citizens of Syria and Turkey are arguing that they should be allowed to return to places from where they were removed because of what the authorities called security reasons stemming from civil strife. Palestinians want at least a token "right of return" to places of origin inside Israel from which they fled during that nation's 1948 war for independence.
Recent conflicts in Iraq, Yemen, Algeria and Lebanon have driven millions from their homes, according to an April report by the Internal Displacement Monitoring Center, a group based in Geneva that tracks refugee movements.
Nubians, about 3 million of Egypt's 73 million people, have been leaving their stretch of the Nile Valley for more than a century - some because of poverty, some because of efforts to tame the river's annual floods.
The first dam near Aswan was built in 1902; subsequent ones obliterated settlements farther and farther south until all of Egyptian Nubia was under water.
Khabairi Gamal, 70, unfurled a hand-drawn map of old Nubia for visitors earlier this month in Aniba, one of the transplanted villages. Young Nubians are forgetting their past, he said. He turns to Islam Fathi and asks where the 23-year-old is from originally.
"Well..." Fathi stammered with a smile.
"Go home and ask about your grandfather. Ask about it!" stormed Gamal, the village leader. "And do you know Nubian?"
"A few - "
"Learn it," Gamal ordered. "You see, we have to move back. Otherwise, there will be no Nubia and no Nubians."
The organized campaign to return to the banks of the Nile is recent. Oddoul started the debate when, in 2005, he spoke to a group of Egyptian Christians in Washington and compared treatment of the Nubians to ethnic cleansing. Newspapers in Egypt called him a traitor.
Nubians have darker skin than Egyptians from the north. In the country's films, they are portrayed as house servants, porters - and stupid.
"It's a stereotype based on us being black," said Tarek Agha, 40, a restaurant owner in Aswan.
Oddoul said he spoke sharply because of government plans to settle northern Egyptians along Lake Nasser without reserving space for Nubians. More recently, newspapers reported plans for agricultural and tourist developments on about 121,400 hectares, or 300,000 acres. Some space would be designated for foreign investors, the rest would be for domestic developers - with nothing for Nubians.
Oddoul and a committee of Nubian leaders are lobbying the governor of Aswan Province for 100,000 acres to be divided between 5,000 recent Nubian college graduates and 5,000 families who he says never received the homes they were promised in 1964. The governor's press office said that the request has been sent to the central government but that no decision has been made yet.
"We want new old Nubia," Oddoul said. "We're not against other Egyptians settling on the lake or development. We don't suggest all Nubians should go back. It's unrealistic. But why should we be left out?"


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

Ancient water source vital for Australia
Reuters
Wednesday, December 24, 2008
By Michael Perry
An ancient underground water basin the size of Libya holds the key to Australia avoiding a water crisis as climate change bites the drought-hit nation.
Australia's Great Artesian Basin is one of the largest artesian groundwater basins in the world, covering 1.7 million sq kms (656,370 sq miles) and lying beneath one-fifth of Australia.
The basin holds 65 million gigalitres of water, about 820 times the amount of surface water in Australia, and enough to cover the Earth's land mass under half a metre of water, says the Great Artesian Basin Coordinating Committee.
And it is slowly topped up with 1 million megalitres a year as rain filters through porous sandstone rock, becoming trapped in the underground basin.
"There is probably enough water in there to last Australia's needs for 1,500 years, if we wanted to use it all," says John Hillier, a hydrogeologist who has just completed the Great Artesian Basin Resource Study.
But he and other experts warn that access to the basin's water supply is under threat from declining artesian pressure, which forces the water to the surface via bores and springs.
If artesian pressure falls too far, due to excessive extraction of water, the ancient water source will be unreachable, except through costly pumping.
Lying as much as two kms (1.2 miles) below ground, some parts of the basin are 3 km deep (1.8 miles) from top to bottom.
The basin was formed between 100 and 250 million years ago and consists of alternating layers of waterbearing sandstone aquifers and non-waterbearing siltstones and mudstones.
Basin water is extracted through bores and is the only source of water for mining, tourism and grazing in Queensland, New South Wales and South Australia states, and the Northern Territory.
The underground water spawns A$3.5 billion (1.62 billion pounds) worth of production a year from farming, mining and tourism, says the Great Artesian Basin Coordinating Committee.
The mining and petroleum industry extracts 31,000 megalitres of basin water a year, which is used in production or pumped out as a by-product of mining, and is vital for future expansion.
Mining giant BHP-Billiton draws about 11,680 megalitres a year from the basin to operate its Olympic Dam gold, copper and uranium mine in South Australia. It would treble water usage under a plan to double production, with the extra water drawn from the basin and a new desalination plant.
Swiss-based miner Xstrata Plc is looking at the basin as a water source for what would be Australia's biggest open cut thermal coal mine, at Wandoan in Queensland, which would supply 20 million tonnes a year, with a mine life of 30 years.
But the pastoral industry is by far the biggest user, taking 500,000 megalitres a year to water some of Australia's most productive farmlands.
Angus Emmott runs a cattle property called Moonbah in central Queensland and relies on basin water in times of drought.
"The bores underpin the social and economic value of this huge inland area of Australia where there wasn't permanent fresh water," said Emmott.
"With climate change, we will be more reliant on the Great Artesian Basin, so we're morally obliged to make the best use of that water...so we don't waste it."
BASIN WATER THREATENED
Since it was first tapped in 1878, an estimated 87 million megalitres has been extracted and up to 90 percent of it wasted.
As a result of falling water pressure, more than 1,000 natural springs have been lost and one-third of the original artesian bores have ceased flowing.
The extraction of ancient basin water into the atmosphere also contributes to Australia's greenhouse gas emissions, releasing 330,000 tonnes of CO2 annually.
A 15-year Great Artesian Basin Sustainability project started in 1990 aims to protect the water supply and the hydraulic pressure necessary to access it.
Today, there are still some 3,000 bores which pour water into 34,000 kms (21,130 miles) of open bore drains, with 90 percent of the water evaporating in the outback heat.
But more than 1,052 bores have now been controlled and tens of thousands of kilometres (miles) of open drains removed and pipelines laid, saving 272 gigalitres of water a year.
Farmers are now fencing off bores and using mobile telephone, satellite and computer imaging technology to control livestock access to bores and control bore flows.
"Bores and springs that had previously ceased to flow have begun to flow again. It's a huge change to land management and has allowed better pasture and stock management," said Emmott.
"With the capping and piping programme you don't get the bogging of domestic animals, you don't get the maintenance cost of drains and you don't get soil salination," he said.
SUSTAINABLE USAGE
Farmers and scientists say it is crucial that more work is done to avoid a water crisis in the Great Artesian Basin as there will be greater demand on basin water in the future.
"It is absolutely crucial for the existence of communities that it is looked after," said Emmott.
"We realise there is a lot there, but we need to look after it very carefully because it needs such a huge time for recharge that if we lose it now it will not recharge in human lifetimes."
A A$17 million long-term sustainability report on the Great Artesian Basin announced this month will look at how to ensure water for future mining, pastoral and environmental development.
The global commodities boom in recent years has seen mining activity over the basin increase dramatically and authorities expect the mining industry's extraction will continue to rise.
"An expansion in exploration and mining activities in the area will place increased demands on securing groundwater allocations for economic development," said Andy Love, from Flinders University in Adelaide, who will lead the study.
"Clearly a balance between development and environmental protection needs to be achieved. However, this is not possible without increased knowledge about the amount of groundwater that can be safely extracted," said Love.
(Editing by Megan Goldin)





OPINION
Losing paradise
By Mohamed Nasheed
Tuesday, December 23, 2008
MALÉ, Maldive Islands:
Any sensible head of state will tell you that the priority of high office is the defense of the realm. When I was elected president of the Maldives last month, my advisers gave me similar counsel. Like any other nation state, at any point in history, the Maldives must protect itself from the menace of foreign invasion, terrorism and espionage. Still, to be honest, I really don't see any one wanting to invade or attack us.
For the first time in the country's history, however, the Maldives face a new threat. This new danger is of apocalyptic, existential proportions, and it looms silently, invisibly and menacingly over our azure horizon. I am talking about climate change and rising sea levels.
Looking out from my office window, it is difficult to believe that this view may someday disappear. And what a vista it is: Crusoe islands of swaying palms and snow-soft sand, encircled by turquoise lagoons and coral reefs teeming with all the exuberance of life. I can't help but be reminded of the words of the great Mughal Emperor Jahangir: "If there is a Paradise on earth; it is this, it is this, it is this."
I assume that it is a series of ecological accidents that creates such wondrous beauty. The nature of our ecosystem, however, makes us particularly vulnerable to climate change. The average height of our islands is just 1.5 meters above sea level. The Intergovernmental Panel on Climate Change warns that sea levels could rise over half a meter by the end of the 21st century, unless urgent steps are taken to halt greenhouse gas emissions. Less optimistic scientists, however, predict sea rises of nearly two meters. Low-lying island states such as the Maldives are living on borrowed time.
Some people shrug their shoulders at climate change. The cost of taking urgent action, they say, is too great. If the world has to lose the odd low-lying island state for the sake of unrestrained economic growth, so be it.
Such an attitude is as delusional as it is disingenuous. Scientists at the recent UN Climate Change Conference in Poznan suggested likely global temperatures rises of two-to-three degrees, unless the world makes rapid and deep cuts in CO² emissions.
This sort of warming will inundate the Maldives. But it also brings us to a potential tipping point, after which climate change moves beyond man's control.
If we are unable to save countries like the Maldives, it might be too late to save the rest of the world from the apocalyptic effects of self-reinforcing, runaway global warming. The Maldives is the canary in the world's carbon coal mine.
As the West's unforgiving winter starts to bite, you might be forgiven for thinking that a warmer world sounds rather nice. You would be mistaken. Any climate skeptic should read Mark Lynas' book "Six Degrees."
Like Virgil leading Dante through the circles of hell, each one more appalling than the next, Lynas guides us through a warming world, one degree at a time. By six degrees, the inferno of global warming truly roars. Vast swathes of the globe are uninhabitable, as higher temperatures fuel super-hurricanes and widespread winter flooding, while severe summer droughts spark raging wildfires and famine. Temperate northern Europe is on the receiving end of climate refugees in their hundreds of millions.
Last month, the international press reported the previously unthinkable measures the Maldives is taking to insure itself from catastrophic climate change. In the next couple of years I hope to start investing the proceeds of tourism in a sovereign wealth fund. This trust fund will act as a national insurance policy to help pay for a new homeland, should future presidents have to evacuate a country disappearing under the waves.
For the sake of the Maldives and the rest of the world, I hope this fund never needs to be used for its ultimate purpose. I hope instead, that it will pay for future mitigation measures such as reinforcing seawalls and boosting coral reef protection, in a world that has stabilized temperatures to tolerable levels.
But time is running out. The IPCC suggests the world has one, possibly two, decades to stabilize and then drastically cut emissions if we are to avoid runaway climate change. The task will not be easy - particularly if countries fall into a self-defeating game of refusing to cutback first.
But I remain optimistic. If man can walk on the moon, we can take the arduous but surmountable steps needed to decarbonize the world economy. Not to do so would be collective suicide of lemming-like proportions. The time for action is now. For from these paradise islands, I foresee the gates of hell.
Mohamed Nasheed, a former journalist and political prisoner, was elected president of the Republic of Maldives last month.


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

Nubians push for a return to their drowned homeland
By Daniel WilliamsBloomberg News
Tuesday, December 23, 2008
ASWAN, Egypt: Singing songs and chatting in an ancient language, hundreds of cheerful Nubian travelers gathered at the Alexandria railway station for a long pilgrimage to a lost homeland.
Exiles in their own country, they journeyed 18 hours to celebrate a Muslim holiday in the Nile Valley of southern Egypt, a region their ancestors once dominated from a loose confederation of villages along the river banks.
In 1964, their shoreline was inundated when the Aswan High Dam created Lake Nasser, the largest reservoir in the world. Now the Egyptian government has floated plans to develop and populate land surrounding the lake - without reserving space for Nubians. But ethnic minority activists want terrain set aside for new villages so their brethren can live again on the Nile, returning from a northern Egypt diaspora and arid settlements established 44 years ago for displaced families.
"The settlements are false Nubia," said Haggag Oddoul, an author who has become an outspoken advocate for resettlement. "To restore our character and community, we need to be rerooted. We need to return."
Nubians ruled Egypt in pharaonic times, their armies having ousted Libyan invaders. They speak their own, non-Arabic language and sing songs to drum beats. The river was their economic lifeblood and fountain of memory, identity and lore. Central to old beliefs, it held the spirits of angels and holy men.
"The Nile is our mother," said Fikri el-Kashef, a Nubian singer who built a home atop a ridge above his flooded boyhood village of Abu Simbel.
Giant statues of Pharaoh Ramses II once gazed down on his backyard. The monuments were moved to high ground nearby when the Soviet allies of Egypt were building the dam, which currently provides 14 percent of the country's electrical energy.
The project displaced 60,000 Nubians. They left with hope for a better life and anxiety about what they were leaving behind.
"The government promised us paradise, but we thought we were leaving the Garden of Eden," said Oddoul, 64, author of "Nights of Musk," a collection of short stories about old Nubia.
Paradise turned out to be a string of 30 hastily built villages eight kilometers, or five miles, east of the Nile to the north of Aswan city, each named for a drowned hamlet. Some of the one-story houses soon cracked or collapsed from faulty masonry. And the Nubians did not see sugar cane and cotton crops as adequate replacements for the fruit, dates and fish of their original homeland.
Longing for place after protracted dislocation is a feature of much controversy and conflict in the Middle East. Kurds in Iraq seek to claim the city of Kirkuk, an oil hub they regard as their capital and from which tens of thousands were expelled by Saddam Hussein.
Kurdish citizens of Syria and Turkey are arguing that they should be allowed to return to places from where they were removed because of what the authorities called security reasons stemming from civil strife. Palestinians want at least a token "right of return" to places of origin inside Israel from which they fled during that nation's 1948 war for independence.
Recent conflicts in Iraq, Yemen, Algeria and Lebanon have driven millions from their homes, according to an April report by the Internal Displacement Monitoring Center, a group based in Geneva that tracks refugee movements.
Nubians, about 3 million of Egypt's 73 million people, have been leaving their stretch of the Nile Valley for more than a century - some because of poverty, some because of efforts to tame the river's annual floods.
The first dam near Aswan was built in 1902; subsequent ones obliterated settlements farther and farther south until all of Egyptian Nubia was under water.
Khabairi Gamal, 70, unfurled a hand-drawn map of old Nubia for visitors earlier this month in Aniba, one of the transplanted villages. Young Nubians are forgetting their past, he said. He turns to Islam Fathi and asks where the 23-year-old is from originally.
"Well..." Fathi stammered with a smile.
"Go home and ask about your grandfather. Ask about it!" stormed Gamal, the village leader. "And do you know Nubian?"
"A few - "
"Learn it," Gamal ordered. "You see, we have to move back. Otherwise, there will be no Nubia and no Nubians."
The organized campaign to return to the banks of the Nile is recent. Oddoul started the debate when, in 2005, he spoke to a group of Egyptian Christians in Washington and compared treatment of the Nubians to ethnic cleansing. Newspapers in Egypt called him a traitor.
Nubians have darker skin than Egyptians from the north. In the country's films, they are portrayed as house servants, porters - and stupid.
"It's a stereotype based on us being black," said Tarek Agha, 40, a restaurant owner in Aswan.
Oddoul said he spoke sharply because of government plans to settle northern Egyptians along Lake Nasser without reserving space for Nubians. More recently, newspapers reported plans for agricultural and tourist developments on about 121,400 hectares, or 300,000 acres. Some space would be designated for foreign investors, the rest would be for domestic developers - with nothing for Nubians.
Oddoul and a committee of Nubian leaders are lobbying the governor of Aswan Province for 100,000 acres to be divided between 5,000 recent Nubian college graduates and 5,000 families who he says never received the homes they were promised in 1964. The governor's press office said that the request has been sent to the central government but that no decision has been made yet.
"We want new old Nubia," Oddoul said. "We're not against other Egyptians settling on the lake or development. We don't suggest all Nubians should go back. It's unrealistic. But why should we be left out?"

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

Coup attempt in Guinea after strongman dies
By Alan Cowell
Wednesday, December 24, 2008
LONDON: The 24-year reign of Guinea's president, one of Africa's longest-ruling strongmen, ended in confusion and chaos on Tuesday as a group of soldiers seized on his death to proclaim a coup that was immediately challenged by government officials.
Troops in armored personnel carriers took to the streets of Conakry, the capital of Guinea, an impoverished West African state, but there were no immediate reports of bloodshed, according to news agencies. Rather, the "putsch," as one lawmaker called it, began to unfold in time-honored fashion with a group of officers taking control of the airwaves to announce that the Constitution and the government had been suspended.
Soon afterward, the government denied the claim. Prime Minister Ahmed Tidiane Souaré said in a state broadcast that he was speaking from his office and that his government "continues to function as it should," The Associated Press reported.
The prime minister was responding to statements by a uniformed army officer on state television and radio that a group calling itself the National Council for Democracy and Development was "taking charge of the destiny of the Guinean people," news agencies reported.
"The Constitution is dissolved," the officer was quoted as saying. "The government is dissolved. The institutions of the republic are dissolved."
President Lansana Conté, 74, whose death on Monday after a long, unspecified illness was announced in the early hours of Tuesday, belonged to a generation of African leaders — the so-called Big Men — who seized power through the gun and ruled ruthlessly.
The claimed coup attempt mirrored Conté's own rise to power in a military takeover in 1984, after the death of his predecessor, Ahmed Sékou Touré. Touré ruled with an iron fist when the country became independent from France in 1958.
Underpinned by the army, each man ran the country as a personal domain, crushing dissent while Guinea's 10 million people slipped ever deeper into grinding poverty. Despite potential riches from agriculture and minerals — in particular, the world's largest deposits of bauxite, used to make aluminum — Guinea ranks among the world's poorest countries.
Conté faced at least two attempts by military elements to eject him from office. He formed a political party to win elections in 1993, 1998 and 2003, but the ballots were widely depicted by independent monitors as fraudulent.
Conté's ill health was an open secret among his people for many months, but he did not groom a successor, leaving a power vacuum that some officers and soldiers apparently sought to fill.
There was some doubt about the military's appetite for a takeover.
"It's a minority of soldiers and officers," the president of the National Assembly, Aboubacar Somparé, told a French television station, France 24. "Guinea is now lawless and going through a restless transition," he said, calling the claimed mutiny a "putsch."
"We have heard that officers are negotiating among themselves," he added. "We are waiting for the results."
Guinea's chaos underscored concern about the future of multiparty rule in Africa only a few years after the continent seemed to be enjoying a steady blossoming of democracy. In the last two years, the setbacks have included rigged ballots in Nigeria and violence after disputed elections in Kenya and Zimbabwe.
The African Union, the continent's biggest representative group, expressed concern about the military's action in Guinea.
Agence France-Presse said the takeover was announced by a military captain called Moussa Dadis Camara, who said a "consultative council" of civilian and military personnel would run the country to combat "deep despair," revive the economy and fight corruption.
The military broadcast, starting around 7:30 a.m. local time, followed a night of confusion. According to news reports, Conté's death was announced at 2 a.m. at a news conference of civilian and military leaders. Somparé, the president of the National Assembly, urged the Supreme Court to follow the Constitution and name him president.
Conté's stewardship of Guinea drew widespread accusations of abuse from human rights monitors. In August, Human Rights Watch said in an assessment that Guinea had "been rocked by civil unrest that has typically been met with brutal and excessive use of force by government security forces."
"In January and February 2007, security forces violently repressed a nationwide strike called to protest corruption, bad governance and deteriorating economic conditions, resulting in the deaths of more than 130 protesters," the assessment said. Human Rights Watch also cited evidence of police torture of detainees to extract confessions, among other abuses.
The reported coup attempt on Tuesday followed signs of a profound malaise in the country, verging on mass unrest.
Last month, frustrated youths took to the crumbling streets of Conakry for three days, throwing stones and setting tires on fire in escalating protests over high gas prices. Witnesses said that at least one person was killed when government troops shot at demonstrators.
The threat of a coup emerged long before Tuesday. In May, soldiers took the army's second in command as a hostage to protest poor pay and living conditions.

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

Congo sees EU sending equipment but not full force
Reuters
Tuesday, December 23, 2008
By Francois Murphy
The Democratic Republic of Congo said Tuesday it expects the European Union to send equipment to help bolster a U.N. peacekeeping mission in Congo rather than its own additional peacekeeping force.
The European Union has so far failed to agree on a response to a request by U.N. Secretary General Ban Ki-moon for a "bridging force" to help a 17,000-strong U.N. mission in Congo, known by its French acronym MONUC.
EU member states have expressed opinions on the plan ranging from enthusiasm to opposition, but Congolese Foreign Minister Alexis Thambe Mwamba said a consensus seemed to be emerging behind a plan that involved sending equipment.
"I think we are moving towards an intermediate formula," Mwamba told reporters at a news conference in Paris.
Asked what that intermediate solution was, he said: "We are moving towards plans, notably where Europe could probably provide support in equipment to the African (U.N.) troops that are not well equipped."
The U.N. force has been unable to contain increased violence in eastern Congo between the forces of renegade General Laurent Nkunda and pro-government militias. Hundreds of thousands of people have been displaced by the violence.
The U.N. Security Council last month decided to send a further 3,000 peacekeepers for the U.N. force, and Ban had hoped an EU contingent would serve as a stopgap until those reinforcements arrive, which could take a few months.
President Nicolas Sarkozy of France, which holds the rotating EU presidency until the end of the month, has questioned whether it would be useful to send EU troops, saying not all the U.N.'s blue helmets were deployed.
"When there are already 17,000 soldiers and I am told that only 800 of them are serving, I wonder if it is necessary to send another 3,000," Sarkozy said in Brussels on December 12.
Mwamba said there was progress among the divided EU on making some kind of contribution where before there was stronger resistance to the idea.
"A short time ago, there was a total refusal," he said.
"There was a sort of unanimity on the issue that they weren't going to intervene. But today there are countries saying 'Yes, let's study the modalities'," he said.
Sarkozy said earlier in the month that Angola was ready to send its own forces into Congo under a U.N. mandate. Mwamba said his country was in talks on the issue but declined to provide details of what Angola was offering.
"We are negotiating for the moment with Angola. What I can tell you is that Angola is an extremely positive country and stands behind the Democratic Republic of Congo," Mwamba said.
(Editing by Michael Roddy)

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Earthquake strikes northern Italy
Reuters
Tuesday, December 23, 2008
ROME: An earthquake of 5.2 magnitude struck northern Italy Tuesday near the city of Parma, but no damage or injuries were initially reported, Italy's civil protection agency said.
The earthquake was felt across northern Italy, from financial capital Milan to Florence to Trieste, local media reported.
The U.S. Geological Survey, which estimated the earthquake's magnitude at a slightly higher 5.3, said it struck at a depth of 28.9 km (18 miles). It ranks quakes in this range as moderate.
"The area (near the quake's epicentre) is well constructed, so there shouldn't be serious problems," said Enzo Boschi, president of Italy's national institute of geophysics.
He added the quake was "nothing catastrophic" but told Italian media that there could be other quakes of smaller magnitudes in the coming hours.
He said the quake was felt in a radius of 100 to 150 km from its epicentre southeast of Parma.
(Reporting by Phil Stewart and Gavin Jones; Editing by Jon Boyle)





Natural-gas producers set charter
By Andrew E. Kramer
Tuesday, December 23, 2008
MOSCOW: With Russian support, a dozen countries that are large producers of natural gas founded an organization Tuesday to study methods of influencing global prices for the fuel, much as the Organization of Petroleum Exporting Countries does for crude oil.
The development seems likely to further unnerve European Union countries, already wary over their growing dependence on Russian energy and what critics say are efforts by Moscow to use oil and natural gas exports as leverage to reassert sway over former East Bloc nations.
Initially, the officials from members of the Gas Exporting Countries Forum say, the group will focus on coordinating investment plans to dissuade nations from flooding the market in the future.
But if its longer-term goals are realized, the group holds the potential to apply an OPEC-like model of price modulation to another of the world's most basic commodities, even as natural gas is projected to play a larger role in global energy supplies in coming decades.
The group is not expected to have much influence over prices in the short term. The forum "will represent the interests of producers and exporters on the international market," the Russian prime minister, Vladimir Putin, told the gathering of energy ministers. "The time of cheap energy resources and cheap gas is surely coming to an end."
Still, the meeting came at a bad time for Russian energy diplomacy.
Most countries in the Russian-backed forum are also members of OPEC, which has been at odds with Russia this autumn over the country's reluctance to reduce oil output in coordination with OPEC to support prices.
The top Libyan energy official, Shokri Ghanem, told the group that Russia should first reduce oil output if it wanted to support natural gas prices, which are linked to crude oil prices. "We are still waiting for a declaration from the Russian Federation that they are cutting their production," he said.
The 16 nations in the forum have been meeting since 2001 as an ad hoc gathering. What was new Tuesday was the group's adoption of a charter that would establish a permanent secretariat.
The Russian government, said falling energy prices had impelled the members to formalize their organization.
As in OPEC, the ministers in the new group espoused an ideology of defiance to the more industrialized countries that are the primary consumers of energy exports and stated the rights of commodity-exporting nations to coordinate efforts to improve the terms of trade.
Russia, which also belongs to the Group of 8 industrialized nations and sees itself generally belonging to the club of economically developed countries, has denied the group constitutes a new cartel, like OPEC.
A deputy chairman of the Russian gas monopoly Gazprom, Aleksander Medvedev, said flatly, "This is a gas non-OPEC."
But the energy minister of Venezuela, the country that initiated the formation of the original OPEC in 1960 at a meeting in Baghdad, was not coy about his hopes for the new group as liquefied natural gas is projected to become a more important fuel in global markets in coming decades.
"We see this organization as OPEC," Rafael Ramírez said on the sidelines of the meeting. "We are producer countries and we have to defend our interests."
"In the long-term, we see this organization as an OPEC organization, as the gas market is developed worldwide, we will have more instruments to influence the market and preserve the value of this natural resource," he said.
Natural gas prices are typically linked to the global price of oil, as power plants and other big users often have the capability to switch to fuel oil as an alternative to natural gas. A study the group commissioned said this would likely remain the practice.
However, the study noted that the environmental benefits of natural gas, including lower releases of greenhouse gases and greater efficiency, was not now priced into the fuel in international trade, offering room to negotiate the price of natural gas upward.
The study also concluded that the market for ship-borne natural gas was transforming the fuel into a global commodity, suggesting the industry would change from one modeled as a utility serving pipeline customers to one built around commodity trading.
The forum members are: Algeria, Bolivia, Brunei, Venezuela, Egypt, Indonesia, Iran, Qatar, Libya, Malaysia, Nigeria, the United Arab Emirates, Russia and Trinidad and Tobago, and, as observers, Equatorial Guinea and Norway.

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Iraq's oil revenues fall 25%
The Associated Press
Tuesday, December 23, 2008
BAGHDAD: Iraq's oil revenues dropped sharply in November even as exports remained steady at 52.8 million barrels, the Iraqi Oil Ministry said Tuesday.
Revenue fell more than 25 percent - to $2.3 billion from $3.11 billion in October - because of the steep fall in world oil prices, the ministry announced.
Iraq's oil was sold at an average price of $43.542 a barrel, down from $58.902 a barrel. It was purchased by 29 international oil companies.
The data also showed that 43.5 million barrels were exported through the Persian Gulf, while 9.3 million barrels were exported via Turkey's port of Ceyhan.
Also Tuesday, the ministry set Dec. 31 as the date to open its second licensing round for developing oil and gas fields.
Its statement added that Oil Minster Hussain al-Shahristani would kick off the bidding round at a conference in Baghdad. The statement did not divulge the number of fields.
Iraq recently opened a first round of bidding for contracts to develop six major oil fields and two gas fields, choosing 34 of 120 companies that applied to participate.
The ministry plans to sign these contracts in mid-2009.
Iraq sits on more than 115 billion barrels of oil and an estimated 112 trillion cubic feet of natural gas reserves but decades of wars, UN sanctions, violence and sabotage have battered its oil industry.
The drop in oil prices to under $50 per barrel from a summertime high of about $148 has hit Iraq hard since it depends on oil revenues for about 95 percent of its budget.
Its government was forced to slash next year's spending plan from $80 billion to $67 billion due to the crisis and now it is mulling more cuts.
Early this month, al-Sharistani appealed for help from international oil companies to triple the current daily production of 2.4 million barrels per day to 6 million barrels per day by 2018. In return, he promised "full cooperation and a transparent and competitive environment for fair business."

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East Timor seen still on brink of anarchy
Reuters
Tuesday, December 23, 2008
CANBERRA: East Timor remains on the brink of anarchy and could easily slide back into the violence that fractured the country in 2006, a U.N. peacekeeping report was quoted as saying Tuesday.
It said a "precipitous fall" in oil revenue also threatened to bring more social unrest in a country where three-in-four households were struggling to find enough food and chronic malnutrition hit one-in-two children under 5 in many areas.
East Timor's economy relies on off-shore oil and gas reserves shared with Australia, and which pump around $40 million (27 million pounds) a year into government coffers.
The security report, completed earlier this month for the U.N.'s Department of Peacekeeping Operations, said international peacekeepers must stay in the country despite mounting local pressure for them to leave, the Australian newspaper reported.
"With regard to the security institutions, there will be no easy choices, and donors should be prepared to provide new reinvigorated assistance in the security area while the government continues to be under pressure to redeem on its social promises," it said.
The leaked security assessment warned that nine years after Indonesia's occupation ended and independence in 2002, Asia's youngest nation remained vulnerable to rapid political collapse.
After a split among the military and police in early 2006, violence flared between Timorese from the country's east and west, killing 37 people and driving 150,000 from their homes.
In February this year, rebel soldiers carried out an unsuccessful attempt to kill President Jose Ramos Horta, who was wounded and flown to Australia for surgery. Prime Minister Xanana Gusmao escaped injury in the attack.
The U.N. report said East Timor's police force and courts were largely dysfunctional and required urgent international intervention to strengthen their ability.
Local police were struggling to cope with no operational budget and "troubling" tensions were rising with U.N. police due to unrealistic Timorese demands for a stronger role, it said.
A U.N. spokeswoman in Dili was not immediately available for comment.
More than 2,500 foreign troops and police remain in East Timor to help local security forces maintain stability, the bulk from Australia, New Zealand and former colonial ruler Portugal.
The report, prepared as part of the U.N.'s evaluations on the future of its peacekeeping operations in the country, said East Timor's senior political leadership was bitterly divided.
Gusmao was facing a difficult political balancing act, with Timor's economic outlook weakening because of the collapse of oil prices sparked by the global financial crisis, while needing to improve social conditions, it said.
(Reporting by Rob Taylor; Editing by Jeremy Laurence)



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Emirates claims world's first cross-polar green flight
By Joe Sharkey
Tuesday, December 23, 2008
SAN FRANCISCO: Granted, the environmental credentials of a man whose airline features in-flight showers are subject to question.
Nevertheless, Sheik Ahmed bin Saeed al-Maktoum, the chairman of Emirates, said his airline had demonstrated that smarter preparation and flight-routing could help reduce carbon emissions in air travel.
"The whole world is going in this direction" in at least giving consideration to the effects of air travel on the environment, Ahmed said last week as Emirates introduced nonstop service between Dubai and San Francisco. "And everybody should be doing more."
The first Emirates airplane flying the route to San Francisco from Dubai was a Boeing 777-200LR, which landed after an 8,100-mile flight that took 15 hours and 20 minutes.
Emirates said it was the "world's first cross-polar green flight." By that, Emirates meant that the aircraft, already known for having better fuel efficiency than older long-range planes, had been routed near the North Pole to save about 2,000 gallons, or 7,500 liters, of carbon-emitting fuel. Making the trip required special clearances from Canada, Iceland, Russia and the United States and from the Emirates home state of Dubai, where the plane received priority clearance for departure.
There is nothing particularly innovative about airlines tracking near the North Pole to save time and fuel on long-haul flights, though the routes can be tricky because communications and navigation technology are not yet as extensive as they are for standard transoceanic flights.
For decades, the North Pole routes were scarcely used, partly because of the Cold War, when the Soviet Union was suspicious about aircraft of any type that flew over its far northern airspace.
With the end of the Cold War, tension abated just as long-haul aircraft became available to serve the growing demand for nonstop travel between cities half a world apart. United Airlines, for example, had more than 1,400 flights on the polar route last year, up from a dozen in 1999.
Emirates is not alone among the world's airlines in promoting better environmental thinking. Continental Airlines, for example, plans a demonstration flight in Houston on Jan. 7 using a 737-800 equipped with engines designed to be powered by a special fuel blend that includes some components derived from plants. (The flight will not carry passengers.)
Emirates, which depends on long-haul Boeing and Airbus jets and heavily promotes its luxurious business-class and first-class cabins on the 12- to 16-hour flights it is known for, clearly wants to position itself as a leader in the industry's incipient environmental initiatives.
But what about those showers? I'm referring to the latest over-the-top innovation, the recent introduction of two showers for use by first-class passengers on Emirates A380 superjumbo jets. The showers are obviously not an environmental step forward, given the additional fuel needed to carry enough water to let all 14 first-class passengers have two showers, if they want.
In fact, said Andrew Parker, an Emirates senior vice president whose duties include the carrier's environmental affairs, first-class passengers have not been using the showers to the extent Emirates originally anticipated when it allotted 500 kilograms (more than half a ton) of weight for the additional water.
Usually, he said, the first-class cabins have been full. But passengers "are using half the allotment" of water. Emirates still carries the full load, but Parker said that the airline was re-evaluating the requirements and looking into ways to "reprocess water" on board to cut down on the weight and the extra fuel required.
Emirates has three A380s in service and another 55 on order from Airbus. Ahmed said that the airline intended to fly them configured into three classes, with no more than 500 passengers.
(The A380 is certified to carry almost 900 passengers in an all-coach configuration, but none of the airlines that have ordered the plane have indicated they were considering doing that.)
Meanwhile, it isn't clear whether the first-class A380 passengers have cut back on showers because of environmental concerns, or merely because they don't want to take themselves out of their private compartments and away from the free Champagne. Nor is it clear whether they might object to showering in the future with recycled water on that long flight to the other side of the world.
But hey, everybody has to sacrifice.

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PTT PCL to spend $6.6 billion on energy businesses
Reuters
Tuesday, December 23, 2008
BANGKOK: PTT PCL, the biggest listed firm in Thailand, announced a five-year plan on Tuesday to spend $6.6 billion on its core oil and gas businesses despite a gloomy economic outlook and falling energy prices.
However, the 2009-2013 investment plan could be revised "as necessary in view of material change in the market environment," the energy group said in a statement.
Some 58 percent of the 229 billion baht budget is earmarked for the natural gas business, which generates more than a third of PTT's annual core earnings.
PTT runs Thailand's gas pipeline monopoly and controls more than 30 petroleum gas exploration, petrochemical and refinery businesses.
Under the plan, more than 70 billion baht will be spent in 2009, rising to 82.5 billion baht in 2010.
Some funds would be invested in the pipeline system, which mainly delivers gas from the Gulf of Thailand to PTT plants and other power producers on land.
It also set aside money for the construction of a sixth gas separation plant and an ethane plant. PTT also planned to add more stations serving natural gas vehicles.
PTT, which is majority-owned by the government, said it would monitor the economic situation in Thailand and globally and make adjustments to its investment plan as needed.
Last week, the company said it was reviewing a plan to invest in three natural gas pipelines worth a combined 50 billion baht due to the poor economic outlook.
At midday, PTT shares were down 0.6 percent at 167 baht, in line with the overall Thai stock market.

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NASA gives space cargo contracts to start-up firms
Reuters
Tuesday, December 23, 2008
By Irene Klotz
NASA, rejecting aerospace giants Lockheed and Boeing, awarded $3.5 billion (2.37 billion pounds) in contracts to start-up companies on Tuesday to deliver cargo to the International Space Station after the U.S. space shuttles are retired.
Space Exploration Technologies (SpaceX), a Hawthorne, California-based company headed by PayPal founder Elon Musk, and Dulles, Virginia-based Orbital Sciences Corp are due to start cargo shipments to and from the space station beginning in 2010.
The $100-billion orbital outpost -- being assembled in stages with modules for living and research -- is a joint project by the United States, Russia, Canada, Japan and European nations.
NASA decided to use a commercial contractor for deliveries rather than relying on the Russian Progress cargo vehicles, which help deliver supplies to the space station.
Russia will transport U.S. astronauts to and from the station on its Soyuz capsules after the shuttles are retired in 2010. The proposed shuttle replacement will not be ready to fly until about 2015.
"These commercial carriers will carry about 40 to 70 percent of our cargo to (the) space station," NASA's associate administrator for space flight, Bill Gerstenmaier, told reporters on a conference call.
SpaceX and Orbital Sciences beat out a Chicago-based consortium called PlanetSpace that included three of the U.S. space agency's prime contractors -- Lockheed Martin Corp, Boeing Co and Alliant Techsystems Inc.
SpaceX's contract is for 12 flights for $1.6 billion, while Orbital will make up to eight flights for $1.9 billion.
Both companies had previously been awarded NASA contracts, worth a combined $500 million, to develop their orbital cargo delivery systems.
SpaceX plans to launch from a complex it built at Cape Canaveral Air Force Station, beside the Kennedy Space Centre in Florida. Orbital plans to fly from NASA's Wallops Island facility in Virginia.
(Editing by Jim Loney and John O'Callaghan)

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Last day of work at two GM factories
The Associated Press
Tuesday, December 23, 2008
MORAINE, Ohio: Employees at the General Motors sport utility vehicle factory here put in their final day at work on Tuesday.
The shutdown, after 27 years of production, will eliminate the jobs of 1,080 hourly workers who assembled Chevrolet Trailbalzers.
"They're nostalgic," a GM spokeswoman, Courtney Strickler, said of the workers. "They're taking pictures. They are giving each other hugs."
GM said in June that it would close the factory because its sport utility vehicles were being shunned by consumers as a result of high gasoline prices.
In Janesville, Wisconsin, GM also stopped making SUVs on Tuesday, putting 1,200 people out of work. The factory there will stay open until June to make trucks with Isuzu, but only about 50 people will be needed for that operation.

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Investors bet that cash won't save GM

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In Paris, the wish list for Christmas? Just a home
By Katrin Bennhold
Tuesday, December 23, 2008
PARIS: Julie Lacoste has her own definition of the perfect Christmas present: It has to be a surprise, it has to be useful - but most important, it has to be light. "Portable," as she puts it.
Lacoste, 31, and her two sons, Jules, 6, and Orphée, 2, are homeless. Every few weeks they pack one big duffel bag with their belongings, heave it onto a bicycle and move to another apartment. They crash on the floor of a friend's house and rely on the charity of parents at the boys' schools.
If they have avoided sleeping on the street so far, it is also because of the publicity Lacoste has reaped with a weekly blog she started in September.
This "diary of a homeless mother," recounting the daily routine of juggling her job at a public library, the care for her children and the battle to find a place to stay, has resulted in dozens of offers of temporary accommodation.
It has also drawn some skepticism.
"There are other cities and villages in France where life is sweet, rents are cheaper and there is work," Sylvaine P. wrote on the blog on Dec. 10. "One gets the feeling that you haven't necessarily always made the right decisions."
Lacoste's response is categorical: "Paris is home. I have a job here and friends. All I need is an apartment."
"Sometimes it's a little overwhelming," she said one recent morning, drinking herbal tea at a café near their latest address in northern Paris. "Someone even offered me a book contract. But how can I write a book without an ending? I need to get an apartment first."
Lacoste, well-dressed and employed, may be an unlikely face of the homeless. But her tale has a growing resonance in France: As the global economic crisis eats into incomes and prices more struggling people out of the housing market, national pride in egalitarian values and a generous welfare system is being punctured.
Add a cold spell in the run-up to Christmas, and the plight of those without a stable roof over their heads has once again become a national debate.
Seven people have died in the cold in the Paris area since November, most of them in makeshift homeless camps in the forests bordering some of the wealthiest neighborhoods.
That brought the countrywide toll so far this year to 343 homeless deaths, compared with a little more than 210 in 2007, according to according to the Abbé Pierre Foundation, a charity dealing with housing issues.
"Shame" was the title of a recent editorial in Le Monde, in which the center-left newspaper called on the government to tackle the longstanding housing shortage that has raised rents and pushed up the number of eligible people waiting for subsidized housing.
Politicians "would be well-advised to seize the occasion and put into place a real housing policy," the editorial read, "if only to spare this country the shame of seeing the unfortunate die at the gates of Paris."
The weekly magazine Le Nouvel Économiste lamented what it called the "seasonal compassion" of the media and the political class that tends to ebb in the warmer months.
The issue has embarrassed President Nicolas Sarkozy, who pledged on the campaign trail in 2006 that "two years from now, no one will be obliged to sleep on the sidewalk anymore and die of the cold."
The president's office argues that there is enough emergency shelter to protect the homeless from the cold, pointing out that many decline offers for such shelter, including some of those who have recently died.
Housing charities say, however, that the argument is dishonest and that the real policy challenge lies in the persistent shortage of affordable housing.
The recent suggestion by Sarkozy's housing minister, Christine Boutin, to take the homeless into temporary emergency shelters every time temperatures go below minus-6 degrees Celsius (21 degrees Fahrenheit) has only fueled a public outcry.
"At minus-5 degrees you leave people outside and at minus-6 degrees you force them into a temporary shelter?" scoffed Patrick Doutreligne, head of the Abbé Pierre Foundation. "This is not policy making; this is a public relations exercise."
But housing problems go well beyond the poverty and existential dangers facing some 100,000 homeless nationwide.
One million people have no stable home here, often despite holding a job, Doutreligne's foundation estimates. Nine out of 10 migrate from one temporary solution to another - like Lacoste.
Originally from a village near Bordeaux, in southwestern France, she left behind an apprenticeship on a horse farm and moved to Paris 10 years ago, dreaming of becoming an actress.
With her part-time job at a law library south of the Paris city limits, she earns €750 a month, or about $1,050. Divorced from the father of her sons, a Senegalese musician who is also homeless, Lacoste had to give up her 50-square-meter, or about 540-square-foot, apartment in the north of Paris last January when her housemate left. All attempts to find a new one failed and she could no longer afford the monthly rent of €950.
She took her sons and moved in with two friends and their children, thinking it would take a few weeks either to find a small place in the private sector or finally get the social housing she first applied for more than four years ago.
It has not worked out.
"Even when I see an apartment advertised that I can afford, the landlords refuse to schedule a visit when they hear about my situation," she said. "And I still haven't heard back about the subsidized housing."
Seven months into her odyssey, she decided to share the experience on a blog.
On the welcome page she explains why: "So that everyone understands what it is like, concretely, to be homeless in Paris today."
In weekly entries on her brother's old laptop, Lacoste describes the logistical juggling act of living out of one bag and having everything else stored away in three different basements across Paris.
Not without humor, she talks about the awkwardness of hiring a baby sitter who is baffled to learn that the place where she would care for the children was yet to be determined.
At times she is defensive.
"I am homeless, not a tramp," she wrote Sept. 12, venting her anger at those who equate homelessness with poor hygiene and are indifferent to all but the most glaring poverty.
One recurrent theme is anxiety: the anxiety of breaking anything in the places they stay; the anxiety of not knowing where next; the anxiety of watching her children cope.
For all the moving around, Lacoste says she has endeavored to create some stability for the boys, keeping them in the same kindergarten and school throughout.
Thousands of readers from as far away as Angola have been following Lacoste's life - in which so far every episode has the same ending: no home.
For Christmas, she has taken her boys to the house of her mother, a retired electricity worker who still lives near Bordeaux.
They will get a Christmas tree and presents like other children. But they will not get what they most want.
"A house," Jules said.






Germany calls for international piracy court
Reuters
Tuesday, December 23, 2008
DJIBOUTI: Germany called Tuesday for an international court to be set up to prosecute Somali pirates who have attacked scores of vessels this year, threatening global trade in one of the world's busiest shipping lanes.
A sharp rise in piracy in the waters off Somalia has pushed up insurance costs, earned pirate gangs tens of millions of dollars in ransoms and prompted foreign navies to rush to the area to protect merchant shipping.
In October, French forces captured nine suspected pirates at sea and handed them over to Somali security forces.
Defense Minister Franz Josef Jung of Germany said suspected pirates should face an international court.
"It needs to be an international authority. No one wants a 'Guantánamo on the sea,"' Jung said in Djibouti, where he saw off 220 German troops joining a European Union anti-piracy mission.
German lawmakers agreed last week to send up to 1,400 soldiers and a frigate - the Karlsruhe - to the Gulf of Aden as part of the EU mission.
Jung said the German soldiers, who will provide protection to ships delivering food aid to Somalia would have a "robust" mandate. "Obviously there will be combat situations," he said.
Analysts say the piracy problem stems from the chaos onshore and must be tackled on land as well, but the fractured Somali government says it does not have the resources to tackle it.
The Horn of Africa nation has been in virtual anarchy since a military dictator, Muhammad Siad Barre, was ousted in 1991. Islamist insurgents control most of the south and feuding clan militias hold sway elsewhere.
The Islamists have enforced a strict form of Shariah law in the areas they control and on Tuesday a man accused of murder was executed before a crowd of 4,000 people in Baladwayne, a small rebel-held town near the Ethiopian border.

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Chinese warships to leave Friday for Somalia
The Associated Press
Tuesday, December 23, 2008
BEIJING: Chinese warships on a mission to protect their country's vessels and crews from pirate attacks off Somalia will depart Friday, armed with special forces, helicopters and plans to share information with other countries working in the area.
The operation, China's first major naval mission abroad, will include the destroyers Haikou and Wuhan as well as a large supply ship, said Rear Admiral Xiao Xinnian, deputy chief of staff of the People's Liberation Army Navy. On board will be two helicopters and traditional weapons like missiles and cannons.
"In light of the peculiarity of this operation, we have also dispatched some special forces," Xiao said at a news conference Tuesday, adding, "These special forces will also carry some light weapons that correspond with the specific features and needs of this operation."
Though the purpose of the mission was to protect Chinese ships and crews, Beijing has called for stepped up cooperation in anti-piracy efforts. China announced it was sending warships to the area after the United Nations Security Council authorized nations to conduct land and air attacks on pirate bases.
"During the escort operation, Chinese ships are ready and willing to strengthen information and intelligence sharing as well as humanitarian rescue operations with vessels of relevant countries according to the situation on the ground," said Senior Colonel Huang Xueping, a spokesman for the Ministry of National Defense.
A Communist Party newspaper has said the mission would initially last three months, but Huang did not give an exact length, saying the duration would depend on the UN mandate and conditions in the area. The ships will depart Friday from the island province of Hainan in southern China.
Piracy has taken an increasing toll on international shipping, especially in the Gulf of Aden, one of the world's busiest sea lanes. Pirates have made an estimated $30 million hijacking ships for ransom this year, seizing more than 40 vessels off Somalia's 3,000-kilometer, or 1,900-mile, coastline.

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US awards GD and Northrop submarine deal

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China signals further interest in aircraft carrier
By Edward Wong
Tuesday, December 23, 2008
BEIJING: In the clearest indication yet that China could soon begin building its first aircraft carrier, a military Ministry spokesman said Tuesday that the country was seriously considering "relevant issues" in making its decision about whether to move ahead with the project, according to Xinhua, the state news agency.
The spokesman, Huang Xueping, said at a news conference in Beijing that aircraft carriers were "a reflection of a nation's comprehensive power," indicating that Chinese government officials saw value in adding a carrier to the country's fleet. Huang said that China would use any aircraft carrier built in the future to safeguard its shores and defend "sovereignty over coastal areas and territorial seas," Xinhua reported.
If China does decide to build the carrier, it will no doubt increase tensions with the United States, Taiwan and Japan, among other governments. China has been expanding its navy at a fast pace. The government has built at least 60 warships since 2000, and its fleet of 860 vessels includes about 60 submarines.
Last month, a senior Chinese military official hinted in an interview with The Financial Times that China would like to build an aircraft carrier. The official, Major General Quan Lihua, said having a carrier was the dream of any great military power and suggested that the United States had nothing to fear if China did build a carrier.
The United States has 11 aircraft carriers, but only a handful of other nations — including Britain, France, Italy and Russia — have carriers and of those, none have more than a few.
The Ministry of National Defense had called the news conference on Tuesday to give details about the deployment of Chinese naval ships off the coast of Somalia, where an increase in piracy has made the shipping lanes the most dangerous in the world. Three Chinese ships are scheduled to head to the area on Friday.
The buildup of the Chinese military could change the balance of power across the Taiwan Strait. The Communist Party views Taiwan as a rebel province that must be reunited with the mainland, by force if necessary. But the United States government has said it may come to Taiwan's defense in the event of hostilities with China.
In October, the Pentagon announced the sale of $6 billion of advanced weapons to Taiwan, a move that prompted criticism from China. The United States regularly sells arms to Taiwan, and China has long denounced the sales. More Articles in World »


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In West Bank, glimmers of an economic revival
By Isabel Kershner and Ethan Bronner
Tuesday, December 23, 2008
BETHLEHEM, West Bank: They are lining up once again by the hundreds, candle in hand - Spaniards, Russians, Sri Lankans - to descend into the ancient grotto where tradition says Jesus was born. Outside in Manger Square, a municipal tree shines with decorations and telephone wires bear glittery stars in seasonal spirit.
It might seem obvious that in the days leading up to Christmas, this city, which lives in the hearts of Christians worldwide, would become a tourist magnet. But only six years ago the Church of the Nativity was the site of a five-week standoff between Israeli troops and armed Palestinian militants. Even today, to get into Bethlehem requires passing through an Israeli checkpoint under the shadow of the enormous Israeli separation wall.
Yet there are more tourists in Bethlehem this year than at any time in a decade, and their presence signals something beyond the Christmas spirit: life for West Bank Palestinians, oppressive and challenging though it remains, seems to be making substantial, if fragile, improvement.
Israeli and Palestinian officials each report economic growth for the occupied areas of 4 to 5 percent and a drop in the unemployment rate of at least three percentage points. The Israelis report that in 2008 wages here are up more than 20 percent and trade by 35 percent. The improved climate has nearly doubled the number of tourists in Bethlehem and increased them by half in Jericho.
It is not just tourists. The Bethlehem Small Enterprise Center, financed with German aid, has been open for eight months and busy, helping printers improve their software and olive wood craftsmen their marketing.
"It has been the best year since 1999," noted Victor Batarseh, mayor of Bethlehem. "Our hotels are full, whereas three years ago there was almost nobody. Unemployment is below 20 percent. But we are still under occupation."
And all this in a year when the global economy has been sinking at an alarming rate.
Politically, as the mayor notes, there is little real change. A year of negotiations with Israel is drawing to a close without an agreement on Palestinian statehood.
The president of the Palestinian Authority, Mahmoud Abbas, whose term ends Jan. 9, has said he will call new elections in the coming months. Hamas says it will name a competing president if he does not step down Jan. 9, raising concerns of further instability. Israel has its own elections in February, adding to the uncertainty.
For the Palestinian Authority, the balance between heralding achievements and keeping up criticism of Israeli policies is delicate - especially with the conservative Israeli opposition leader, Benjamin Netanyahu, leading in polls for the elections, advocating emphasis on an "economic peace."
The Palestinians say that a sound economy alone will not bring peace, that the conflict requires a political solution.
Still, Palestinian forces are guarding major West Bank cities, Israeli troops have stepped back - although they continue nighttime raids on those suspected of being militants - and Israel says it is about to significantly ease some restrictions on Palestinian movement in the West Bank, a prerequisite for further economic growth.
A senior Israeli official in the northern West Bank said that 4,000 Israeli Arab citizens were driving in to shop in the area every weekend and that 115 new stores had opened in Tulkarm in the past four months.
In addition, the government of Prime Minister Salam Fayyad has secured $1.7 billion in international aid this year, allowing it to resume the payment of salaries to tens of thousands of government employees.
Even in Nablus, a volatile city of 200,000 that has been subject to a particularly suffocating Israeli security regime, the atmosphere is beginning to change. A gleaming mall owned by the municipality, under construction since 1999, finally opened this year.
Ahmed Ayed, 22, manages a women's clothing store there. Sporting long hair and a goatee, he said the outlet, the sixth in Nablus of a chain owned by his father, opened half a year ago; a seventh has since opened nearby.
Ziad Anabtawi, chairman of the Anabtawi Group, which includes import, distribution and investment companies, has recently expanded into the production of premium Palestinian olive oil with an eye abroad. He says the Palestinian economy is much healthier today than it was in the 1990s, when it was based on laborers working in Israel, their entry dependent on Israeli good will. Today, it involves large Palestinian investment companies and bankers.
Old Town in Nablus was until recently a danger zone where Palestinian gunmen frequently clashed with Israeli forces. On a recent afternoon, groups of women relaxed, smoking and sharing picnics at a historic bathhouse, the Shefa Hammam.
The manager, Muhammad Amer, said the 700-year-old hammam had been hit by Israeli rockets and raided seven times by troops looking for wanted militants during the second intifada, from 2000 to 2005. It was renovated and reopened two years ago.
A bastion of Fatah, Abbas's movement, Nablus has also become a stronghold of Hamas, its main rival. A list widely associated with the Islamic group swept local council elections here in 2005, winning 13 council seats out of 15.
After the Hamas takeover of the Gaza Strip in June 2007, Fatah vigilantes roamed Nablus torching offices and institutions associated with the rival group.
Set on ending the chaos, the Palestinian Authority began a law-and-order campaign there a few months later, deploying hundreds of extra police officers. Israel went along with an amnesty program for wanted men loyal to Abbas.
But prosperity, businesspeople there say, depends on Israel's removing the major checkpoints in place since 2002, when at the height of the Palestinian uprising the Israeli Army invaded the cities of the West Bank and set them up, a step it said was necessary to prevent the movement of suicide bombers.
For six years, Palestinians have not been able to drive private cars in or out of Nablus without special permission. The Israeli military says that is about to change. Within a few weeks the army is planning to allow Palestinians from the northern West Bank districts of Nablus and Jenin to drive to the south in their own cars, without special permits and with only random inspections.
"We as a command are willing to take more risks as hostile terrorist activity goes down," said Colonel Benny Shik, a senior Israeli military official in the West Bank.
Mayor Adly Yaish of Nablus said he had heard about the proposed changes and called them "a good start."
The way ahead, though, is dotted with pitfalls. The Israeli military emphasizes that all changes can be reversed. And the Israeli measures to suppress Hamas can sometimes be clumsy and counterproductive. Anabtawi and Yaish have each spent time in Israeli detention in the past year on suspicion of having financial links with Hamas. Israeli judges ordered them released.
In the West Bank, Hamas is currently subdued, with its armed men deep underground, its political leaders in Israeli jails and those representatives still at large in the local authorities diligently playing by Palestinian Authority rules.
The governor of Bethlehem, Salah Tamari, a Palestinian activist and coexistence advocate for decades, said Hamas was weakening in the West Bank as people saw how hard life was under its rule in the Gaza Strip. What he really worried about was a future with Israel, despite his years of Israeli friendships. In his office, the curtains to his right were drawn shut to keep out the view of the opposite hill of Har Homa, a huge Jewish suburb that he had worked against being built in the 1990s.
"Israelis are paranoid because of their past, while Palestinians are paranoid because of their present," he said. "But we are doomed to live together or blessed to live together, depending on your point of view.
"It is true that the economy is improving slightly. But beyond that, I'm afraid very little is getting easier."

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Iraqi Parliament speaker resigns
By Sam Dagher and Graham Bowley
Tuesday, December 23, 2008
BAGHDAD: The Iraqi Parliament accepted the resignation of the Parliament speaker, Mahmoud al-Mashhadani, on Tuesday and immediately authorized the government to approve a resolution to allow British, Australian and other non-American troops to stay in Iraq after the end of the year.
After a rowdy session of Parliament last week at which he was accused of hurling serious insults during a debate on the foreign troops bill, Mashhadani resigned but later rescinded his resignation. He offered his resignation again in a special session of Parliament on Tuesday and lawmakers overwhelmingly voted to approve it.
"We want to do good, but sometimes we choose the wrong path," Mashhadani said in his resignation speech.
It was not immediately clear who would replace Mashhadani, a Sunni, although under Iraq's sectarian quota system the next speaker will also be a Sunni.
Over the past week, Shiite and Kurdish lawmakers pressed for his resignation, threatening to boycott Parliament if he did not step down. They complained that Mashhadani was considered a histrionic man who was often brusque with those with whom he disagreed.
The uncertainty over Mashhadani's status had held up the vote on the resolution to allow foreign troops from countries other than the United States to stay in Iraq after a United Nations mandate expires on Dec. 31. But the Parliament said the government could now strike an agreement on the troops, as long as any non-American foreign presence was finished by the end of July 2009. Britain, the main ally of the United States in the invasion in Iraq in 2003, has already announced that most of its troops would leave Iraq by around May next year.
Mashhadani became speaker about two years ago, taking up one of the most prominent positions in the government to be held by a Sunni. But his time in office was controversial. A year ago he refused to resign after his guards were accused of beating up a member of Parliament. In 2006, Mashhadani, a devout Muslim, was accused of insulting secular female lawmakers.
And last week, during the uproarious debate on foreign troops, he refused demands to allow discussion of the fate of Muntader al-Zaidi, an Iraqi television reporter who was arrested for throwing his shoes at President George W. Bush at a news conference in Baghdad this month.
Graham Bowley reported from New York.

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COLUMNIST
H.D.S. Greenway: Out with Bush
Tuesday, December 23, 2008
The image of shoes being thrown at George W. Bush during his tarnished legacy tour of Iraq has already entered legend. That a Saudi offered to pay $10 million for just one of the shoes attests to the power of symbolism. The Turkish cobbler who made the shoes is being inundated with new orders from around the world.
It was outrageous, and the Iraqi government may have been embarrassed, but you can count on a substantial number of Arab boys born this month being named Muntader, after Muntader al Zaidi, the thrower. He is in deep trouble in Iraq, but for much of the world he is goody-two-shoes.
In Bush's last pathetic days, with the world going broke and his administration in a moral Chapter 11, he continues to misrepresent his culpability in the calamities that have befallen the country on his watch.
The most egregious was his statement, when asked if he had any regrets, that he wished the intelligence on Saddam Hussein's weapons of mass destruction could have been better.
Bush blithely ignored the efforts his administration went to in order to twist the intelligence to his liking. The march to war was one of the greatest frauds of our time.
Bush's legacy includes an unnecessary war in Iraq and a mismanaged war in Afghanistan. Meanwhile, a congressional report warns that the United States is to be attacked by nuclear or biological weapons within the next few years.
Bush's legacy is one of great carelessness. Bush was careless about the way he went to war in Iraq, with no clear plan on what to do with the country once the troops reached Baghdad. There was a carelessness about Afghanistan, letting Osama bin Laden escape, and drawing away assets to fight in Iraq before Afghanistan was stabilized.
To this day there is no clear policy for Afghanistan, other than more troops and more war. "That's not a policy," said the former ambassador to India, Frank Wisner, "that's a delivery system."
There was carelessness about how Bush handled the Israeli-Palestine issue, uttering noble thoughts but with no follow-up, allowing his underlings to first undermine Secretary of State Colin Powell, and then Condoleezza Rice. There was carelessness in the delegation of power to Vice President Cheney, allowing Cheney to undermine negotiations with North Korea.
There was carelessness in the way the administration handled even natural disaster, the "Brownie, you're doing a heck of a job" quote being the lasting footnote on how Hurricane Katrina was met.
There was carelessness during the Bush years about the entire oversight of America's financial system, with regulators, as President-elect Barack Obama put it, "asleep at the switch" while the financial train went off the rails. The Security and Exchange Commission looked the other way while Bernard Madoff pulled off what may be the biggest Wall Street heist in history. There was "not a lot of adult supervision," said Obama.
"At least Bush kept us safe," I have heard it said, because no terrorist attack on U.S. soil has come since 2001. But there is no escaping that 9/11 happened on Bush's watch, and there was a great carelessness in the way Bush's people refused to consider the danger from Al Qaeda, while terrorism experts, such as Richard Clarke, with his "hair on fire" from anxiety, tried to warn them.
There was more than carelessness involved in the erosion of civil liberties and unlawful activities perpetuated by the Bush administration.
Nothing has so hurt America's standing in the world as the decision to allow torture. We now know that the worst of the scandals of Abu Ghraib and Guantánamo can be traced up to the highest levels of Bush's administration.
A weary world would like to see the back of the Bush administration, not the least the Republican party to which Bush has done so much damage.
With a legacy of wars, water-boarding, and a cesspit of scandal and financial collapse, the Bush legacy has at least one defender. "Mr. Bush served some good purpose to the economy before he left," said the newly prosperous Turkish shoe maker.
As for al-Zaidi's pair, they've been destroyed - perhaps to prevent idolatry.

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Iraq parliament allows British troops to stay
Reuters
Tuesday, December 23, 2008
By Waleed Ibrahim
Iraq's parliament approved a measure on Tuesday that clears the way for troops from Britain, Australia and a handful of other nations to stay in Iraq after a U.N. mandate expires at year's end, a senior lawmaker said.
A vote on the measure was delayed for several days by squabbling in the parliament, whose speaker resigned just before Tuesday's vote after angering some politicians with his brash style and insults in a session last week.
"We authorise the government to take all necessary steps regarding foreign forces other than U.S. forces," said deputy parliamentary speaker Khalid al-Attiya. He said the measure approved would allow the troops to stay in Iraq through the end of July 2009.
Forces from Britain, Australia, El Salvador, Romania and Estonia and NATO have been awaiting a new arrangement to legalise their presence in Iraq after the U.N. mandate expires in little over a week.
Lawmakers said the resolution empowered the government of Prime Minister Nuri al-Maliki to strike a deal with these countries permitting their troops to stay, without that deal having to go back to parliament for further scrutiny.
"What happened today is parliament giving its authorisation to the government to make such a deal," legislator Jaber Habeeb Jaber told Reuters.
He added parliament could do this because the likely agreement sought by the government would be a memorandum of understanding rather than a full blown pact or treaty.
POLITICAL STORM
On Saturday, parliament on technical grounds rejected a draft law that would have allowed Britain, Australia and other nations to carry out combat operations through May next year and to stay in Iraq through July.
Deputies argued that, rather than legislation, a treaty or agreement was needed, similar in format to a U.S.-Iraqi deal that allows the 140,000 troops in Iraq to remain until 2011.
The vote was then sidelined by the political storm that resulted in the resignation of parliamentary speaker Mahmoud al-Mashhadani, a Sunni Arab physician who emerged out of nowhere to lead the young Iraqi parliament in 2006.
Shi'ite and Kurd lawmakers had demanded that Mashhadani, a member of Iraq's largest Sunni bloc, resign. It remains to be seen who will replace him.
Officials from Britain, the main U.S. ally in the 2003 invasion, were making contingency plans in case lawmakers were unable to pass a proposal permitting them to stay.
Britain's 4,100 troops are posted mostly around the southern oil port city of Basra which, like most of Iraq, has become a much safer place in the past year as violence drops sharply.
Prime Minister Gordon Brown confirmed last week that his country would start pulling troops out by the end of May.
(Writing by Tim Cocks and Missy Ryan)

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Iranian resistance group criticizes Iraq's efforts to expel it
By Sam Dagher
Tuesday, December 23, 2008
BAGHDAD: An Iranian resistance group on Monday condemned a renewed push by the Iraqi government to deport its members as a result of undue Iranian influence.
Some 3,800 members of the group, the People's Mujahedeen, live in a fenced-off camp north of Baghdad, where they have enjoyed the protection of the American military since 2003. The Iraqi government notified the group on Sunday of plans to shut the camp and evict its residents as Iraqi forces take control of the area from the United States.
"This reflects the hysterical pressure being applied by the regime of the mullahs on the Iraqi government after it signed the security agreement with America," said a statement by the Paris-based National Council of Resistance of Iran, an umbrella group of which the People's Mujahedeen is the largest component.
Analysts and Iraqi opposition politicians said that the Iraqi government's determination to expel the group may be an effort to appease Iran, which had initially expressed strong opposition to the security agreement concluded last month between Iraq and the United States.
The group, which began as part of the Iranian resistance to Shah Mohammed Reza Pahlavi's rule in the mid-1960s, was driven into exile after Iran's 1979 revolution and re-formed in Iraq, where it was nurtured by Saddam Hussein. After the American invasion, it was disarmed and its members recognized as refugees by the United Nations.
On Sunday, the Iraqi government's national security adviser, Mowaffak al-Rubaie, met with the group's leaders at their base, Camp Ashraf in Diyala Province.
"They were told that the government has plans to close the camp and deport its inhabitants to their native country, or voluntarily to a third country, and that staying in Iraq was not an option," said a statement issued by Rubaie on Monday.
He said the transfer of security responsibilities for the camp from the American military to Iraqi forces was already under way. He said the group was a "terrorist organization" and was "no longer permitted to engage in any political, media, cultural, religious or social activity in Iraq."
The group was listed as a terrorist organization by the United States in 1997 and by the European Union in 2002. But in May, Britain's Court of Appeal ruled that the British government was wrong to include the group on its list of banned terrorist groups.
In 2002, it provided intelligence on Iran's secret efforts to enrich uranium, which led to United Nations sanctions against Iran and a confrontation with the West that continues today.
Since 2003, the group has been thrown into the middle of Washington's foreign policy dilemmas over what to do about Iran. Despite being officially labeled a terrorist group, it has been protected by American soldiers in Iraq since 2003.
The State Department declined to comment Monday on the planned eviction.
The camp, a sprawling and self-contained gated community, is a virtual oasis in an arid patch of Diyala. During a visit in 2007, this reporter saw American soldiers from an adjacent military base securing the perimeter.
Past the gate, members of the group, many of them women in tan uniforms, drove jeeps past manicured parks, artificial lakes and giant sculptures. One sculpture depicts a dove being released by an extended hand. The compound houses clinics, schools and workshops.
Since 2003 the People's Mujahedeen, who are mostly Shiite, have been assiduously courting Sunni politicians and tribal leaders in the area. In June, they held a large gathering at their camp attended by several prominent Sunni Arab members of Parliament who are openly hostile to the Iranian government. This meeting set off a political storm in Baghdad, with Shiite parties close to Iran calling for the censure of the members.
Ali Ansari, director of the Institute for Iranian Studies at the University of St. Andrews in Scotland, said the group was "rapidly becoming a political football in the purest sense." He said the Iraqi government saw ridding itself of the group as way to improve relations with Iran, which remains fearful that the group may rearm.
Muhammad al-Daini, a Sunni member of Parliament, says the government is making a mistake by bowing to Iranian pressure to expel the People's Mujahedeen before getting firm commitments from Tehran that it will no longer arm and finance militias in Iraq. "We cannot blindly accept Iran's dictates," he said.
During his visit to Baghdad in March, President Mahmoud Ahmadinejad of Iran was promised that the People's Mujahedeen would be expelled.
"We will strive to get rid of them," the Iraqi president, Jalal Talabani, said at a news conference with Ahmadinejad.

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UN extends its shield of Iraqi assets for a year
By Neil MacFarquhar
Tuesday, December 23, 2008
UNITED NATIONS, New York: The Security Council has unanimously passed a resolution extending UN protection over Iraq's assets through 2009, effectively shielding it from billions of dollars in international claims stemming from the era of Saddam Hussein.
"We need the assurances that Iraq's resources and financial assets are available for the country's recovery program," Hoshyar Zebari, the Iraqi foreign minister, told the Council on Monday. "Without such assurances, the functioning of the Iraqi government and the current stability could be seriously in danger."
A UN mandate since 2003 has covered Iraq's financial assets, along with U.S. and other foreign forces in the country. But given the newly concluded status-of-forces agreement between Washington and Baghdad, that authorization will end Dec. 31.
Iraq has sought to extend UN protection for its financial assets to maintain immunity from all those seeking compensation.
Zalmay Khalilzad, the U.S. ambassador, called the resolution "vital" to guaranteeing Iraq's development. The resolution was introduced by the United States and Britain.
Iraq had been hoping for an omnibus resolution that would not only protect its assets from lawsuits for several years but also include a review process to cancel some 50 resolutions on Iraq passed by the Security Council since Saddam invaded Kuwait in 1990, Zebari said in an interview. Once they are all dealt with, he said, Iraq's full sovereignty will be restored.
Initially it seemed that members of the Security Council itself would engage in the review process. But after extended discussions with Zebari over the past week, Council members agreed to allow Iraq to conduct the review with the UN Secretariat, which would then report to the Council for action.
The resolution passed Monday did not specify a timetable, but Zebari said he expected the review to begin within six months. Some of the resolutions, for example, deal with the era when the United Nations was punishing Iraq for its invasion of Kuwait and trying to curb any weapons development.
There was general sympathy among Security Council members for extending the protection over Iraq's assets while it was getting back on its feet, but the members objected to extending the protection for more than a year at a time, diplomats familiar with the discussions said.
Zebari said that the Iraqi Finance Ministry estimated outstanding claims at some $1 trillion and that settlements would have to be reached eventually, but not while the country was rebuilding in the midst of collapsing oil prices.


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Drug rehabilitation or revolving door?
By Benedict Carey
Tuesday, December 23, 2008
ROSEBURG, Oregon: Their first love might be the rum or vodka or gin and juice that is going around the bonfire. Or maybe the smoke, the potent marijuana that grows in the misted hills here like moss on a wet stone.
But it hardly matters. Here as elsewhere in the country, some users start early, fall fast and in their reckless prime can swallow, snort, inject or smoke anything available, from crystal meth to prescription pills to heroin and ecstasy. And treatment, if they get it at all, can seem like a joke.
"After the first couple of times I went through, they basically told me that there was nothing they could do," said Angella, a 17-year-old from the central Oregon city of Bend, who by freshman year in high school was drinking hard liquor every day, smoking pot and sampling a variety of harder drugs. "They were like, 'Uh, I don't think so.' "
She tried residential programs twice, living away from home for three months each time. In those, she learned how dangerous her habit was, how much pain it was causing others in her life. She worked on strengthening her relationship with her grandparents, with whom she lived. For two months or so afterward she stayed clean.
"Then I went right back," Angella said in an interview. "After a while, you know, you just start missing your friends."
Every year, state and federal governments spend more than $15 billion, and insurers at least $5 billion more, on substance-abuse treatment services for some four million people. That amount may soon increase sharply: last year, Congress passed the mental health parity law, which for the first time includes addiction treatment under a federal law requiring that insurers cover mental and physical ailments at equal levels.
Many clinics across the county have waiting lists, and researchers estimate that some 20 million Americans who could benefit from treatment do not get it.
Yet very few rehabilitation programs have the evidence to show that they are effective. The resort-and-spa private clinics generally do not allow outside researchers to verify their published success rates. The publicly supported programs spend their scarce resources on patient care, not costly studies.
And the field has no standard guidelines. Each program has its own philosophy; so, for that matter, do individual counselors. No one knows which approach is best for which patient, because these programs rarely if ever track clients closely after they graduate. Even Alcoholics Anonymous, the best known of all the substance-abuse programs, does not publish data on its participants' success rate.
"What we have in this country is a washing-machine model of addiction treatment," said A. Thomas McClellan, chief executive of the nonprofit Treatment Research Institute, based in Philadelphia. "You go to Shady Acres for 30 days, or to some clinic for 60 visits or 60 doses, whatever it is. And then you're discharged and everyone's crying and hugging and feeling proud — and you're supposed to be cured."
He added: "It doesn't really matter if you're a movie star going to some resort by the sea or a homeless person. The system doesn't work well for what for many people is a chronic, recurring problem."
In recent years state governments, which cover most of the bill for addiction services, have become increasingly concerned, and some, including Delaware, North Carolina, and Oregon, have sought ways to make the programs more accountable. The experience of Oregon, which has taken the most direct and aggressive action, illustrates both the promise and perils of trying to inject science into addiction treatment.
Evidence-based treatments
In 2003 the Oregon Legislature mandated that rehabilitation programs receiving state funds use evidence-based practices — techniques that have proved effective in studies. The law, phased in over several years, was aimed at improving services so that addicts like Angella would not be doomed to a lifetime of rehab, repeating the same kinds of counseling that had failed them in the past — or landing in worse trouble.
"You can get through a lot of programs just by faking it," said Jennifer Hatton, 25, of Myrtle Creek, Oregon, a longtime drinker and drug user who quit two years ago, but only after going to jail and facing the prospect of losing her children. "That's what did it for me — my kids — and I wish it didn't have to come to that."
When practiced faithfully, evidence-based therapies give users their best chance to break a habit. Among the therapies are prescription drugs like naltrexone, for alcohol dependence, and buprenorphine, for addiction to narcotics, which studies find can help people kick their habits.
Another is called the motivational interview, a method intended to harden clients' commitment upon entering treatment. In MI, as it is known, the counselor, through skilled questioning, has the addict explain why he or she has a problem, and why it is important to quit, and set goals. Studies find that when clients mark their path in this way — instead of hearing the lecture from a counselor, as in many traditional programs — they stay in treatment longer.
Psychotherapy techniques in which people learn to expect and tolerate restless or low moods are also on the list. So is cognitive behavior therapy, in which addicts learn to question assumptions that reinforce their habits (like "I'll never make friends who don't do drugs") and to engage their nondrug activities and creative interests.
For Angella, this kind of counseling made a difference. She spent several months in a program run by Adapt, an addiction treatment center here in Roseburg, a small city about 175 miles south of Portland.
In treatment, she said, she learned how to "just be with, and feel" bad moods without turning to drink or drugs; and to throw herself into creative projects like collage and painting. The program has helped her reconnect with her father and to enroll in college beginning in January.
"I want to be a teacher, and someone at the program is advising me on that," she said in an interview. "That's the plan, to just move out and away from my old life."
A friend of hers in the program, Alex, a 16-year-old from Roseburg, said that the therapy helped him monitor his own emotional ups and downs, without being swept away by them. The counselors "are always asking about our stress level, our anger, so you become more aware and have a better idea what to do with it," he said.
Almost 54 percent of Oregon's $94 million budget for addiction treatment services now goes to programs that deploy evidence-based techniques, according to a state report completed last month. The estimated rate before the mandate was 25 to 30 percent. The state has not yet analyzed the impact of this change on clients.
"Before the mandate, most programs had some evidence-based practices, and since then there has been a lot more interest and awareness of them," said Dr. Traci Rieckmann, a public health researcher at Oregon Health and Science University, who is following the policy implementation with support from the Robert Wood Johnson Foundation and the National Institutes of Health.
Culture clash
Yet interest and awareness may not translate into good practice, and Rieckmann says it is not at all clear how many rehabilitation programs claiming to use evidence-based techniques actually do so faithfully. About 400 programs receive state money, and most of them are small, rural outfits that are already stretched to provide counseling, to say nothing of paying for extensive training.
"You're talking about therapies, like cognitive behavior therapy, that take time to learn," said John Gardin, the behavioral health and research director at Adapt in Roseburg, who travels the country to teach the skills. "Most places don't have a person like me to do that training, so they're getting two to three days of training, if that; and that's just not enough time to get it."
In studies looking at hundreds of programs nationwide, researchers have found a similar gap between what programs may want to do and what they're able to do. "For instance, most programs don't have an MD on staff," said Aaron Johnson, a sociologist at the University of Georgia who has led many of the studies. "Without that, of course, you can't prescribe any medications."
Tim Hartnett, the executive director of a Portland treatment program called CODA Inc., which does its own research on patient outcomes, said that the mandate had raised the level of conversation statewide, but that true reform would mean "an integrated system that tracks clients as they move from residential to outpatient treatment, and that defines clear targets" for what a person should expect from each kind of program.
"Our goal at CODA is to create a system of care that uses evidence-based practices at just the right dose and just the right time," Hartnett said. "As with many chronic diseases, figuring out dosage and timing are critical."
For some addicts, a standard program may not help at all, according to Anne Fletcher, who for her book "Sober For Good" interviewed 222 men and women who had been clean for at least five years. "A lot of these people overcame an alcohol problem on their own, or with the help of an individual therapist," Fletcher said.
To complicate matters in Oregon, the state mandate has stirred a kind of culture clash between those who want reform — academic researchers, state officials — and veteran counselors working in the trenches, many of whom have beaten addictions of their own and do not appreciate outsiders telling them how to do their jobs.
"I'm a counselor, and I'd be defensive, too: 'What do you mean, all this stuff I've been doing my entire life is wrong?' " said Brian Serna, director of outpatient services at Adapt, who has traveled the state to monitor the use of scientific practices. "So the challenge is to build a bridge between what the science says is effective and what people are already doing."
One way to do that, some experts now believe, is to combine evidence-based practice with "practice-based evidence" — the results that programs and counselors themselves can document, based on their own work. In 2001 the Delaware Division of Substance Abuse and Mental Health began giving treatment programs incentives, or bonuses, if they met certain benchmarks. The clinics could earn a bonus of up to 5 percent, for instance, if they kept a high percentage of addicts coming in at least weekly and ensured that those clients met their own goals, as measured both by clean urine tests and how well they functioned in everyday life, in school, at work, at home.
By 2006, the state's rehabilitation programs were operating at 95 percent capacity, up from 50 percent in 2001; and 70 percent of patients were attending regular treatment sessions, up from 53 percent, according to an analysis of the policy published last summer in the journal Health Policy.
"We basically gave them a list of evidence-based practices and told them to pick the ones they wanted to use," said Jack Kemp, former director of substance abuse services for Delaware, in an interview. "It was up to them to decide what to use."
For those who are trying not to use, it doesn't much matter how rehab services are improved — only that it happens in time. "Honestly, you just don't care how or why something works for you," said Hatton, the 25-year-old from Myrtle Creek, Oregon. "Just that it does."

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Obstacle seen in bid to curb Afghan trade in narcotics
By Thom Shanker
Tuesday, December 23, 2008
KANDAHAR, Afghanistan: A drive by the NATO alliance to disrupt Afghanistan's drug trade has been hobbled by new objections from member nations that say their laws do not permit soldiers to carry out such operations, according to senior commanders here.
The objections are being raised despite an agreement two months ago that the alliance's campaign in Afghanistan would be broadened to include attacks on narcotics facilities, traffickers, middlemen and drug lords whose profits help to finance insurgent groups.
During a recent visit here, General John Craddock, NATO's supreme allied commander, expressed surprise upon learning of what he described as a gap between the decision by alliance defense ministers to authorize aggressive counternarcotics missions and the lack of follow-through because of objections from several of the countries that make up the NATO force in Afghanistan.
As the United States and its allies strive to devise a better strategy to stabilize and rebuild Afghanistan, American policy makers and military officers say it is critical to choke off the drug money that sustains the insurgency, much as they are working with Pakistan to halt the use of its tribal areas as a haven by the Taliban and other antigovernment forces just across the border from Afghanistan.
Seven years after the rout of Al Qaeda and the fall of the Taliban in Afghanistan, disagreements over how aggressively NATO forces should go after the insurgency's chief source of revenue are only the latest hurdle in a campaign that has been troubled by disputes between the United States and some of its allies about what role NATO soldiers should play in a mission cast as "security assistance."
The disagreements also present a major challenge for President-elect Barack Obama as he tries to fulfill a campaign pledge to shift the focus of the American military toward Afghanistan, where the United States remains much more dependent on foreign nations than it does in the Iraq war, which is largely an American conflict.
The counternarcotics debate is a reminder of how unwieldy the alliance's military operations can be. United Nations figures show that Afghan insurgents reap at least $100 million a year from the drug trade, although some estimates put the figure at five times as much.
In an interview, Craddock said profit from the narcotics trade "buys the bomb makers and the bombs, the bullets and the trigger-pullers that are killing our soldiers and marines and airmen, and we have to stop them."
NATO officials in Brussels declined to list the nations that have opposed widening the alliance mandate to include attacks on drug networks, and no nation has volunteered that it has legal objections.
But a number of NATO members have in broad terms described their reluctance publicly, including Germany, Italy, Poland and Spain. Their leaders have cited domestic policies that make counternarcotics a law enforcement matter — not a job for their militaries — and expressed concern that domestic lawsuits could be filed if their soldiers carried out attacks to kill noncombatants, even if the victims were involved in the drug industry in Afghanistan.
As has been the case in a whole range of combat operations mounted by NATO forces in Afghanistan, each country is allowed to state its reservations and opt out of missions that are viewed as too risky, either politically or militarily. Those "caveats" have been a source of enormous frustration to American commanders.
That system of caveats was never intended to halt NATO operations; missions objectionable to one nation can be taken over by another nation's forces. But commanders say that legal objections to counternarcotics operations have prevented the international mix of troops across poppy-rich regions of southern Afghanistan from carrying out the new responsibilities.
The NATO-led mission in Afghanistan has more than 51,000 troops, including 14,000 Americans. In a parallel mission, the United States has deployed 17,000 additional troops for a separate combat, counterterrorism and training operation.
During a meeting of NATO defense ministers in Budapest in October, Defense Secretary Robert Gates and Craddock successfully lobbied the alliance to give troops operating in Afghanistan official permission to mount attacks on narcotics "facilities and facilitators supporting the insurgency."
General David McKiernan, the senior American commander in Afghanistan, acknowledged that "some of the precise language still needs to be worked out" with allies that objected to taking on counternarcotics missions.
In an interview, McKiernan stressed that the goal remained to approve rules of engagement that "give us greater freedom of action to treat narco-figures and facilities as military objectives."
Halting the flow of drug money to the insurgency is just one of the challenges facing the Obama administration. Others include the 30 percent increase in insurgent violence over the past year, and the painfully slow growth and continued incompetence of the Afghan police.
But Craddock cited bright spots in the mission of NATO's International Security Assistance Force, including a growing number of people from other United States government agencies who are stepping in to help with economic and political development. He also noted the increasing size and professionalism of the Afghan National Army, which Afghans trust more than they do the office of the presidency.
McKiernan was put in charge of both the NATO and American operations this year, in an effort to provide more unity of command over the two missions. During a visit to Afghanistan last weekend, Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, said the Pentagon expected to provide 20,000 to 30,000 more troops to McKiernan, with a significant portion of that increase arriving by next summer.
Including the debate on how to battle the drug trade, much of the discussion about the way ahead in Afghanistan is similar to policy debates over the past seven years: the need to generate economic growth and build democratic institutions to inspire confidence among Afghans in their government.
Although combat power alone will not defeat the insurgency and its allies in the drug trade in Afghanistan, military analysts say, a problem for years has been that Afghanistan has had too few resources because of the war in Iraq.
"What we need are more troops in Afghanistan because we need security, and eventually we will get a strategy," said Roger Carstens, a former Army Special Forces officer who now is a senior fellow at the Center for a New American Security in Washington, which has provided a number of its analysts to the Obama transition team at the Pentagon.
"If the military cannot secure the population, then political development, economic growth and good government will not take place," Carstens added.

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Slain soldiers honored in Mexico
The Associated Press
Tuesday, December 23, 2008
At a ceremony on Monday, the government honored the victims of the most gruesome attack yet against the Mexican Army in its half-century battle against drug gangs.
Authorities found 12 decapitated bodies in and near Chilpancingo, the capital of Guerrero State, on Sunday and have identified seven of them as soldiers.
President Felipe Calderón said the attack showed that his crackdown was putting pressure on drug cartels, and he promised "firm action" in response.
The bodies were found on a major boulevard, accompanied by a sign: "For every one of mine that you kill, I will kill 10."


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India arrests 3 suspects in Kashmir
The Associated Press
Tuesday, December 23, 2008
JAMMU, Kashmir: The Indian police said Tuesday that they had arrested three men suspected of being Islamic militants, including a Pakistani soldier, believed to have been planning a suicide attack in the Indian-controlled part of Kashmir.
The suspects are members of Jaish-e-Muhammad, one of more than a dozen groups that have been fighting since 1989 to remove Indian control from Kashmir, said Kuldeep Khoda, director general of the police in the Indian part of the area.
The arrests come amid rising tensions and increasing pressure from India on Pakistan to crack down on militant groups operating from Pakistani territory in the wake of terrorist attacks on Mumbai.
Another Pakistan-based Kashmiri group, Lashkar-e-Taiba, has been blamed for the Mumbai attacks, in which 163 victims, as well as nine of the 10 accused gunmen, were killed.
On Monday, India gave Pakistan a letter purportedly written by Muhammad Ajmal Kasab, the only gunman captured after the Mumbai rampage. Kasab wrote that all the gunmen involved in the Nov. 26 attack came from Pakistan, the Indian Foreign Ministry said. He also requested a meeting with Pakistani envoys, the ministry said.
Islamabad has not acknowledged that Kasab is Pakistani and has said it is waiting for proof of his citizenship before answering India's demands that it turn over wanted Lashkar leaders.
Khoda said that the police did not yet know the intended target of the foiled attack, but he said the three men "had received specialized training in suicide attacks and driving explosive-laden vehicles." One of the men was identified as Ghulam Farid, a Pakistani soldier serving in the Azad Kashmir, or Free Kashmir, regiment, said Khoda, who provided his army service number.
There was no immediate response from the Pakistani Army.
The men were detained Sunday after checking into a hotel in Jammu, a predominantly Hindu city in Jammu-Kashmir, India's only Muslim-majority state. They were waiting to receive arms and explosives when they were arrested, Khoda said.
He said the men apparently had illegally entered India from Bangladesh and were detained after the police received a tip about their location.
If Farid is proved to be an active Pakistani soldier, it would be a blow for Pakistan, which denies funding and training the Kashmiri militant groups and says it only provides them with moral support.
Pakistan has moved against both Lashkar-e-Taiba and Jamaat-ud-Dawa, a charity that both India and the international community say is a front for Lashkar, while also calling repeatedly on India to provide more evidence related to the Mumbai attacks. Pakistan has also said that if its citizens are found to be involved, they will be tried in Pakistan.


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U.S. seeks to ease Pakistan tensions
Reuters
Tuesday, December 23, 2008
By Kamran Haider and Bappa Majumdar
The top U.S. military officer has sought to defuse tension between Pakistan and India while New Delhi asked Islamabad on Tuesday to avoid "war hysteria" and act to dismantle terrorist infrastructure.
India and the United States have blamed Pakistan-based militant group Lashkar-e-Taiba (LeT) for last month's attacks in Mumbai that killed 179 people and which have triggered a sharp rise in tension between the nuclear-armed neighbours.
Admiral Mike Mullen, chairman of the U.S. Joint Chiefs of Staff, arrived in Pakistan on Monday on his second visit since the attacks and met army chief General Ashfaq Kayani and the head of the military's Inter-Services Intelligence (ISI) agency, Lieutenant-General Ahmed Shujaa Pasha, the U.S. embassy said.
"Mullen encouraged the Pakistani leaders to use this tragic event as an opportunity to forge more productive ties with India and to seek ways in which both nations can combat the common threat of extremism together," the U.S. embassy said in a statement on Tuesday.
Pakistan denies any links to the assault, blaming "non-state actors," and has promised to cooperate in investigations into the assault. At the same time, it has warned that its desire for peaceful coexistence should not be taken as weakness.
The two countries have fought three wars since 1947 and Pakistani Prime Minister Yousaf Raza Gilani said on Monday the armed forces could defend the nation in the event of another.
India urged Pakistan to avoid "war hysteria" and focus on dismantling terrorist infrastructure.
"The issue is not war, the issue is terror and territory in Pakistan being used to promote, aid and abet this terror," Prime Minister Manmohan Singh said in New Delhi. "Nobody wants war."
Indian Foreign Minister Pranab Mukherjee said Pakistan should not create "war hysteria" or raise an accusing finger at others.
"(The) question is there has been a sinister, heinous terrorist attack on Mumbai from the elements in Pakistan. India has requested Pakistan to take action against the perpetrators," he told reporters.
"NO INFORMATION"
India has put on hold a five-year old peace process that had brought better ties.
While promising to help investigate the attacks, Pakistan has complained that India has yet to share any evidence and the details it has got have come through the media. Indian officials have said they have passed on information.
The head of Interpol said India had yet to give it any information about the attacks, adding facts passed to the media by investigators should be shared if accurate.
"What is not acceptable internationally is for information to be put in the media and that information, if it's accurate, not to be placed in police databases," Interpol Secretary General Ronald Noble told a news conference in Islamabad.
Until Indian authorities shared information, police around the world would be unable to make any determination about the identity of the attackers, he said.
Pakistan has detained scores of militants, including several top leaders, and shut offices and frozen the assets of the Jamaat-ud-Dawa (JuD) group, which the United Nations says is a front for the LeT.
The LeT was set up to fight Indian rule in Kashmir and has been linked by U.S. officials and analysts to Pakistan's ISI who they say use it as a tool to destabilise India.
Mullen thanked the Pakistani officials for efforts to arrest members of LeT and other groups involved in the attacks, the U.S. embassy said.
The Indian foreign ministry on Monday handed a letter it said was written by the lone surviving gunman from the Mumbai attacks, Ajmal Amir Kasab, to Pakistan's mission in New Delhi.
Kasab said he and the nine gunmen killed in the siege were from Pakistan, the ministry said. Pakistan confirmed its mission had received a letter and that it was being examined.
(Writing by Robert Birsel, Editing by Dean Yates)

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Inquiry on bungled case questions Australia's terror laws
The Associated Press
Tuesday, December 23, 2008
SYDNEY: An inquiry into the bungled case of an Indian doctor wrongly linked to terrorism plots in Britain recommended on Tuesday tougher oversight of Australia's laws.
In its 310-page report, the government-ordered inquiry found that the Australian Federal Police had no intelligence to justify the arrest of Mohamad Haneef, who became a test case for tough counterterrorism laws introduced after the Sept. 11, 2001 attacks in the United States.
Haneef, 29, was working in Queensland State as a doctor when he was arrested by the federal police as he tried to board a one-way flight to India. The arrest came days after one of his cousins allegedly drove an explosive-laden SUV into Scotland's Glasgow airport in a suspected terrorist attack.
The police said they thought it was suspicious that Haneef had bought a one-way ticket. Haneef told the police he was rushing to see his sick newborn daughter in Bangalore and planned to return.
He was held without charge for 12 days under anti-terror laws before being charged with providing support to a terrorist organization. The charges were later dropped, but his visa was still revoked.
Haneef's ordeal triggered a political storm about whether the former conservative government and the federal police were deliberately fueling terrorism fears.
"I could find no evidence that he was associated with or had foreknowledge of the terrorist events," a former New South Wales State Supreme Court judge, John Clarke, wrote in the report released Tuesday.
The terrorism charge was based on Haneef's giving his cellphone SIM card to his cousin Sabeel Ahmed, one of the men accused in the attempted bomb attacks. The charge was dropped when it was revealed that Haneef's SIM card had not been found in the Glasgow attack vehicle, as a prosecutor had claimed.
But with elections looming, Kevin Andrews, who was then the immigration minister, revoked Haneef's visa, saying he was not of good character. Critics said Andrews was making Haneef a scapegoat to burnish the government's security credentials.
The court eventually ruled that Haneef's visa should be reinstated. After winning the election, Prime Minister Kevin Rudd's government ordered Clarke's inquiry.
Andrews defended his actions on Tuesday, saying that Australians expected him to act in the case.
Clarke recommended that Australia's anti-terrorism laws be independently reviewed and that a case management system for major police investigations be developed.
Attorney General Robert McClelland said the government would adopt all of the report's recommendations.
In a conference call from the United Arab Emirates, where he now lives, Haneef told reporters that he was pleased with the findings.
"It is a very clear finding that I am totally innocent of the matters alleged against me last year," said Haneef, who is considering pursuing compensation from the government.


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3 militants to die for attack on British envoy
The Associated Press
Tuesday, December 23, 2008
SYLHET, Bangladesh: A court in northeast Bangladesh on Tuesday sentenced three Islamic militants to death and two others to life in prison for a 2004 grenade attack that wounded a British diplomat and killed three other people, a government lawyer said.
Judge Shamim Mohammad Afzal sentenced Mufti Hannan and two of his associates to death for the attack at a Muslim shrine in Sylhet city, 192 kilometers, or 120 miles, northeast of the capital of Dhaka.
Hannan's brother and another person were given life terms, Public Prosecutor Fakhruddin Ahmed said.
Lawyers for the defendants — who were all present in court Tuesday — said they would appeal the verdict.
Hannan was leader of the banned radical group Harkatul Jihad Al-Islami.
The militant outfit wanted to establish strict Islamic rule in Bangladesh, a Muslim-majority nation governed by secular laws. It also sought to avenge the killings of Muslims in Iraq and Afghanistan in the U.S.-led campaign against terrorism.
Investigators said the attack targeted then-British High Commissioner Anwar Chowdhury.
A hand grenade was hurled at the Bangladeshi-born envoy as he left the shrine of Hazrat Shah Jalal after Friday prayers on May 21, 2004. A policeman and two bystanders were killed, and 50 others were wounded.
Hannan, a radical cleric who is believed to have trained with Islamic fighters in Afghanistan in the 1980s, was arrested in October 2005.
Hannan is also accused of planning a deadly grenade attack on an opposition rally in Dhaka that killed 22 people and wounded 300 others on Aug. 21, 2004.
Harkatul Jihad is also believed to be behind a spate of bombings at cultural events and movie theaters across Bangladesh in recent years.

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Clinton moves to widen role of State Department
By Mark Landler and Helene Cooper
Tuesday, December 23, 2008
WASHINGTON: Even before taking office, Hillary Rodham Clinton is seeking to build a more powerful State Department, with a bigger budget, high-profile special envoys to trouble spots and an expanded role in dealing with global economic issues at a time of crisis.
Clinton is recruiting Jacob Lew, the budget director under President Bill Clinton, as one of two deputies, according to people close to the Obama transition team. Lew's focus, they said, would be on increasing the share of financing that goes to the diplomatic corps.
He and James Steinberg, a deputy national security adviser in the Clinton administration, are to be Hillary Clinton's chief lieutenants.
Nominations of deputy secretaries, like Clinton's, would be subject to confirmation by the Senate.
The incoming administration is also likely to name several envoys, officials said, reviving a practice of the Clinton administration, when Richard Holbrooke, Dennis Ross and other diplomats played a central role in mediating disputes in the Balkans and the Middle East.
As Clinton puts together her senior team, officials said, she is also trying to carve out a bigger role for the State Department in economic affairs, where the Treasury has dominated during the Bush years. She has sought advice from Laura D'Andrea Tyson, an economist who headed Bill Clinton's Council of Economic Advisers.
The steps seem intended to strengthen the role of diplomacy after a long stretch, particularly under Secretary of State Colin Powell, in which the Pentagon, the vice president's office and even the intelligence agencies held considerable sway over U.S. foreign policy.
Given Hillary Clinton's prominence, expanding the department's portfolio could bring on conflict with other powerful cabinet members.
Clinton and President-elect Barack Obama have not settled on specific envoys or missions, although Ross's name has been mentioned as a possible Middle East envoy, as have those of Holbrooke and Martin Indyk, a former U.S. ambassador to Israel.
The Bush administration has made relatively little use of special envoys. Secretary of State Condoleezza Rice has personally handled most peacemaking initiatives, which has meant a punishing schedule of Middle East missions, often with meager results.
"There's no question that there is a reinvention of the wheel here," said Aaron David Miller, a public policy analyst at the Woodrow Wilson International Center for Scholars. "But it's geared not so much as a reaction to Bush as to a fairly astute analysis of what's going to work in foreign policy."
With so many problems, including Pakistan, Iran and Afghanistan, Miller said it made sense for the White House to farm out some of the diplomatic heavy lifting.
In addition to the Middle East, one Democratic foreign policy adviser said, Holbrooke might be considered for an appointment as special envoy to Afghanistan and Pakistan, and possibly Iran. The adviser said the decision had not been made.
A transition official dismissed as "speculation" reports in Indian newspapers that Obama was considering appointing Bill Clinton as a special envoy to deal with Kashmir issues.
But another transition official confirmed that Obama's foreign policy advisers were discussing the possibility of appointing a special envoy to India. Steinberg, who is the dean of the Lyndon B. Johnson School of Public Affairs at the University of Texas, would probably coordinate the work of any special envoys, the official said.
The recruitment of Lew - for a position that was not filled in the Bush administration - suggests that Hillary Clinton is determined to win a larger share of financial resources for the department. Lew, a well-connected figure who was once an aide to the House speaker Thomas O'Neill, now works for Citigroup in a unit that oversees hedge funds.
"If we're going to re-establish diplomacy as the critical tool in America's arsenal," a senior transition official said, "you need someone who can work both the budget and management side. He has very strong relations on the Hill; he knows the inner workings of how to manage a big enterprise."
The official, who spoke on condition of anonymity because the discussions were private, said Clinton was being supported in her push for more resources by Defense Secretary Robert Gates and by Obama's incoming national security adviser, General James Jones Jr.
For years, some Pentagon officials have complained that jobs like the economic reconstruction in Afghanistan and Iraq have been added to the military's burden when they could have been handled by a robust foreign service.
"The Pentagon would like to turn functionality over to civilian resources, but the resources are not there," the official said. "We're looking to have a State Department that has what it needs."
Clinton's push for a more vigorous economic team, one of her advisers said, stems from her conviction that the State Department needs to play a part in the recovery from the global financial crisis.
Economic issues also underpin some of the most important diplomatic relationships, notably with China.
In recent years, the Treasury Department, led by Henry Paulson Jr., has dominated policy toward China. Paulson leads a "strategic economic dialogue" with China that involves several agencies. It is not yet clear who will pick up that role in the Obama administration, although Vice President-elect Joseph Biden Jr. is frequently mentioned as a possibility.

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Hillary Clinton writes off $13 million she lent campaign
By Michael Falcone
Tuesday, December 23, 2008
Senator won't recoup money for campaign
Having spent more than a year on a failed effort to win the Democratic presidential nomination, Senator Hillary Rodham Clinton has officially recognized the multimillion-dollar toll that the campaign took on her personal assets.
Clinton filed papers with the Federal Election Commission over the weekend formally writing off all of the $13.2 million she lent the campaign, plus $77,900 in interest on the loan.
Her giving up any hope of reclaiming the money, a step signaled in September when the statutory deadline passed for recouping all but a small piece of it, confirms the financial strain that the fund-raising juggernaut of the Obama campaign placed on Clinton personally.
And in addition to the personal loan, the same weekend filing showed that she still owed millions of dollars to dozens of vendors as of Nov. 30. She did manage to chip away at that debt in November, reducing by roughly $1.1 million the $7.5 million she owed at the end of October. The single biggest debt as of the end of November was $5.4 million, to the firm of Mark Penn, her former chief strategist.
The shadow of her debt has hung over Clinton ever since she ended her campaign for the nomination in June. The Clintons have held a series of fund-raisers to try to pay it off, and President-elect Barack Obama has been urging his supporters to help with contributions.
Clinton even recruited her mother, Dorothy Rodham, to the cause. In early December, Rodham sent an e-mail message to supporters urging contributions to help retire her daughter's campaign debt and offering an autographed children's book about Clinton in exchange for a donation of $250 or more.
Now, nominated to be secretary of state, Clinton has been dealing with additional finance-related complications. Former President Bill Clinton has already disclosed a long list of donors to his charitable organizations, making his international dealings more transparent and thus meeting a condition set by Obama for his selection of Clinton.
And Congress has removed another stumbling block by adopting a measure to reduce the secretary of state's salary, satisfying an obscure constitutional provision that forbids appointment of a lawmaker to a federal position that was either created or given a pay increase during the legislator's concurrent term.
But if Clinton is confirmed as secretary, her ability to raise money to pay off her campaign debt will be sharply restricted. Provisions in federal law could keep her from personally soliciting contributions at all, leaving the job to her presidential campaign committee.
Kenneth Gross, a campaign finance lawyer, said that although Clinton could not simply walk away from the remaining debt, she was not under a strict deadline for paying it off. Still, he said, carrying the multimillion-dollar burden with her as she begins her new job would be unpalatable, at the very least.
"It weighs on you," Gross said. "It's not going to debilitate her in any way from functioning as secretary of state, but it's a cloud that she would like to make go away."

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Theatre project has dramatic effect on Lebanon jail
Reuters
Wednesday, December 24, 2008
By Alistair Lyon, Special Correspondent
Cigarette smoke wafts through a hall in Lebanon's biggest jail where an all-male jury is arguing over whether an accused murderer should be hanged.
The 12 men, all prisoners themselves, strive for a unanimous verdict. Tempers rise, insults flow, blows are threatened.
Then someone forgets his lines. Laughter erupts. They start again. Occasionally the frustration leads to a real quarrel until the firm voice of director Zeina Daccache restores order.
In jeans and a black sweater, she castigates, coaxes and cajoles her novice actors, who sulk, talk back and then perform with renewed gusto, just like their counterparts in any theatre.
Some tell their own stories in monologues. Hawilo acts out a comical prison visit with his mother who unwittingly got him convicted of dealing drugs instead of just possession. "Good news son, I told the judge you never smoke hashish, you only sell it!" Hawilo mimics her saying, before he pretends to faint.
For a few hours each week, these forgotten men taste a world beyond the bars of Roumiyeh, a crowded prison near Beirut that houses Islamist militants as well as 4,000 ordinary criminals.
Since she launched her drama therapy project in February, Daccache has won the respect and affection of the convicts, who call her "Abu Ali," reckoning her to be as tough as any man.
Anwar, a tall, shaven-headed Iraqi in combat pants and boots, who is serving a 15-year sentence for murder, said she was "like a sister" who had unlocked a door.
"It's a kind of freedom for all of us," he said. "It's given me courage to be with others. Before, it was as if we were all wearing masks, but I have discovered a new person in myself.
"I was very nervous, jumping on any mistakes, I was impatient and dangerous, but now I take my time, count to 10."
Anwar, who has not seen his family in Baghdad for 11 years, said the theatre project, in which he plays the jury foreman, had channelled his anger and saved him from fatal despair.
"I was going to commit suicide in the new year, but I have changed my mind," he said. "Before I felt like a criminal, like garbage, but now I feel respected, even by the prison officers.
MISSION IMPOSSIBLE
Daccache's venture, sponsored by a local human rights group, funded by the European Union and managed by the Ministry of State for Administrative Reform, is unusual in the Arab world.
"I thought: Lebanon? No, it's mission impossible," said the 30-year-old actress and drama therapist, who was inspired by visiting a similar project in an Italian prison in 2002.
It took her a year to get the money and another to win the go-ahead from wary authorities, but the prisoners are now set to stage their play for guests at the jail in February and March.
Prison authorities posted no guards inside the makeshift theatre where Daccache rehearsed her 45 charges.
"She's like a window of hope for us," said Hussein, a lank-haired graphic designer serving a five-year drug term who plays guitar in the play's interludes of music and song. "Zeina will become a legend. She really did something for all of us."
The boisterous group, chosen from an initial 150 volunteers, is mostly Lebanese, but also includes Egyptians, Palestinians, Syrians and an Iraqi, plus two Nigerians and a Bangladeshi.
Daccache adapted the play "12 Angry Men" by U.S. author Reginald Rose, for local conditions and her own purposes. She has two sets of jurors to give more prisoners a chance to act.
The death penalty, at the heart of the drama made into a film in 1957 by director Sidney Lumet, is still on the books in Lebanon. Executions are rare, however. The last three were in 2004.
Several of Daccache's actors are convicted murderers -- one of the "jurors," a soft-spoken middle-aged Egyptian, has spent 14 years in Lebanon on death row.
In Roumiyeh, scene of a prison riot in April, the guards have noticed a change among the drama group.
"We have seen more motivation. Prisoners feel someone is paying attention to them," said the supervisor of the wing that contains the theatre. "It has lowered the pressure 70 percent."
Daccache has enlisted a psychologist to do independent tests on members of her troupe and a control group of other prisoners. "We haven't finished the study, but we already see a huge difference between where they were and where they are," she said.
The project takes up all her time. Two rehearsals a week have become five. So why sacrifice those extra hours, and then more to haggle with donors, bureaucrats and prison officials?
"I am happiest when I am inside the prison," Daccache says with a grin. "There you are dealing with really authentic people. If a guy is angry, he is really angry. Outside we fake so many things.
"Here they don't, maybe because they already lost everything they are ready to restart from zero. We go easy on ourselves, but they don't. They want to prove something, there is something they want to say, and this is the beautiful thing."
(Editing by Andrew Dobbie)



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COLUMNIST
James Carroll: Jesus and the promise of Christmas
Tuesday, December 23, 2008
When the Christian holiday dominates the culture, sometimes oppressively, a newspaper column may not seem the most appropriate venue for personal reflections on the meaning of Jesus.
Yet even as Western civilization has been nourished by religious and philosophical traditions that have nothing to do with Jesus, it has also been profoundly influenced by the memory of this man. It can be more than merely sectarian to ask, Who was he?
The stories told about the nativity - Caesar's census order, Bethlehem, Herod's threat, three kings, star, no-room-at-the-inn, manger, angels, slaughter, flight - do not aim to be historical, yet in its deeper meaning, the beloved Christmas narrative gives us a portrait of a person that squares with the most important features of the actual Jesus.
He was a counter-force to the Roman emperor. He was of the poor and powerless. He conveyed his message by indirection - more by poetry than doctrine. At heart, his story is tragic. Yet it is a source of hope and joy, which is why his friends clung to his memory. The problem he addressed was violence.
Violence was overwhelmingly the normal condition of the world into which Jesus was born. Jerusalem and its environs had long been what the scholar John Dominic Crossan calls the "cockpit of empire," a crossroads region that had been the scene of brutal imperial conflicts going back 1,000 years.
The Jewish people had mostly lived as vassals of one foreign sovereign or another, with oppressive violence a steady note of the Hebrew situation. Survival of Jewish nationhood in this milieu was a marvel, and key to that survival was a conscientious wrestling with the problem of violence, the record of which is the Bible.
Rome, when it came, was the most brutal imperial force of all, and its violence peaked several times during the century of Jesus and his movement, beginning with the savaging of the region around Nazareth not long before Jesus was born, and ending with the final destruction of Jerusalem as the story of Jesus was assuming the form we know.
But Jesus was not a mere victim of this violence. Acting in his Jewish tradition, he confronted it, rejected it and proposed a new way to think of it. His followers knew at the outset, and ever after, that they failed to live up to the standard he set, but that very knowledge shows that the myth of what Crossan calls the normalcy of violence is broken.
Humans have an inbuilt tendency to find the solution of violence in yet more violence, with the result that it spirals on forever. The victory of coercive force is inevitably the cause of the next outbreak of coercive force.
Jesus proposed that the answer to violence is not more violence, but is forgiveness and righteousness - or, as we would put it, peace and justice. For 2,000 years, this program has been able to be dismissed as piety's dream.
But something new is afoot. Since 1945, the normalcy of violence is armed with weapons that will surely render the human species extinct unless a different way of thinking of violence is found.
That is the promise of Christmas.
A different way of thinking of violence has already lodged itself in human consciousness. This is not just a Christian phenomenon. The great religions of the world - Judaism, Islam, Buddhism, Hinduism, Confucianism - and the no-religion of rationalism have all countered the normalcy of violence with assertions of compassion and loving kindness.
In the history of Western civilization, no figure has represented that ideal more resolutely than Jesus. His story offers a masterpiece expression of the possibility of forgiveness and righteousness not only as a saving program, but as the basis of an intensely personal relationship.
Because Jesus is understood by those who believe in him as offering not only a sign of what is needed, but a way to achieve it - "I am the way," he said - he has survived even for those who regard him in purely worldly terms as an image of a hope that cannot be fully articulated, and that can never be exclusively claimed by any group, including Christians.
In that sense, the observances of this week can belong to everyone who chooses to enjoy them.
Peace.

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Taliban's Omar rejects reports of peace formula
Reuters
Tuesday, December 23, 2008
By Sayed Salahuddin
The Taliban's supreme leader rejected on Tuesday reports he had sent a letter to the Saudi king involving a formula for ending the war in Afghanistan and conditions for talks with the Afghan government.
Mullah Mohammad Omar, who carries a bounty of $10 million (6.7 million pounds) by the United States for his capture, also denied reports saying members of the Taliban's resurgent movement had held talks with pro-Afghan government officials on ending the conflict.
"The fact is that the Islamic Emirates has neither held any negotiations in Saudi Arabia or in the United Arab Emirates and neither anywhere else," the Taliban's Website quoted Omar as saying in a statement.
"I neither have sent any letter addressed to Saudi... King Abdullah bin Abdul-Aziz, or to the opposite side (Afghan government) and neither have (I) received any message from them."
The statement added that whatever was being said on this issue was false and part of a propaganda campaign by vested interests.
An Iranian press report had initially said Omar had sent a peace formula to the Saudi king.
Other media also spoke about a formula, which included the replacement of tens of thousands of NATO-led troops in Afghanistan by soldiers from Islamic nations, and power sharing with President Hamid Karzai, who has been leading the Afghanistan government since the Taliban's removal in 2001.
In the statement, Omar did not repeat the Taliban's past line that the Islamist movement would fight to the last to expel NATO-led troops from Afghanistan, nor mention under what terms the Taliban might engage in talks.
A tentative first step towards talks was taken in September when pro-government Afghan officials and former Taliban members met in Saudi Arabia. A second round was expected too.
Then the Taliban derided the talks and said they would not enter negotiations as long as foreign troops remained in Afghanistan.
Nevertheless, the September meeting offered a glimmer of hope of ending an intensifying Taliban insurgency that has raised fears for Afghanistan's prospects and Western efforts to establish peace and build a stable state.
With the spread of the Taliban insurgency more than seven years since their overthrow, and no sight of an end to the conflict, the possibility of talks with the insurgents, or at least some elements, is being considered by Karzai's government and Western allies.
They hope to draw moderate Taliban, or perhaps opportunistic commanders, into talks to isolate al Qaeda and its hard-line supporters, analysts say.
Violence this year in Afghanistan has been the bloodiest since the Taliban's ouster. About 70,000 foreign troops, 32,000 of them American, are struggling against the Taliban, whose influence and attacks are spreading in the south, east and west.
The United States plans to send between 20,000 to 30,000 extra soldiers by next summer.
(Editing by Jerry Norton)







In Madoff scandal, Jews feel an acute betrayal
By Robin Pogrebin
Wednesday, December 24, 2008
There is a teaching in the Talmud that says an individual who comes before God after death will be asked a series of questions, the first one of which is, "Were you honest in your business dealings?" But it is the Ten Commandments that have weighed most heavily on the mind of Rabbi David Wolpe of Sinai Temple in Los Angeles in light of the sins for which Bernard Madoff stands accused.
"You shouldn't steal," Rabbi Wolpe said. "And this is theft on a global scale."
The full scope of the misdeeds to which Madoff has confessed in swindling individuals and charitable groups has yet to be calculated, and he is far from being convicted. But Jews all over the country are already sending up something of a communal cry over a cost they say goes beyond the financial to the theological and the personal.
Here is a Jew accused of cheating Jewish organizations trying to help other Jews, they say, and of betraying the trust of Jews and violating the basic tenets of Jewish law. A Jew, they say, who seemed to exemplify the worst anti-Semitic stereotypes of the thieving Jewish banker.
So in synagogues and community centers, on blogs and in countless conversations, many Jews are beating their chests — not out of contrition, as they do on Yom Kippur, the Day of Atonement, but because they say Madoff has brought shame on their people in addition to financial ruin and shaken the bonds of trust that bind Jewish communities.
"Jews have these familial ties," Rabbi Wolpe said. "It's not solely a shared belief; it's a sense of close communal bonds, and in the same way that your family can embarrass you as no one else can, when a Jew does this, Jews feel ashamed by proxy. I'd like to believe someone raised in our community, imbued with Jewish values, would be better than this."
Among the apparent victims of Madoff were many Jewish educational institutions and charitable causes that lost fortunes in his investments; they include Yeshiva University, Hadassah, the Jewish Community Centers Association of North America and the Elie Wiesel Foundation for Humanity. The Chais Family Foundation, which worked on educational projects in Israel, was recently forced to shut down because of losses in Madoff investments. Many of Madoff's individual investors were Jewish and supported Jewish causes, apparently drawn to him precisely because of his own communal involvement and because he radiated the comfortable sense of being one of them.
"The Jewish world is not going to be the same for a while," said Rabbi Jeremy Kalmanofsky of Congregation Ansche Chesed in New York.
Jews are also grappling with the implications of Madoff's deeds for their public image, what one rabbi referred to as the "shanda factor," using the Yiddish term for an embarrassing shame or disgrace. As Bradley Burston, a columnist for haaretz.com, the English-language Web site of the Israeli newspaper Haaretz, wrote on Dec. 17: "The anti-Semite's new Santa is Bernard Madoff. The answer to every Jew-hater's wish list. The Aryan Nation at its most delusional couldn't have come up with anything to rival this."
The Anti-Defamation League said in a statement that Madoff's arrest had prompted an outpouring of anti-Semitic comments on Web sites around the world, most repeating familiar tropes about Jews and money. Abraham Foxman, the group's national director, said that canard went back hundreds of years, but he noted that anti-Semites did not need facts to be anti-Semitic.
"We're not immune from having thieves and people who engage in fraud," Foxman said in an interview, disputing any notion that Madoff should be seen as emblematic. "Why, because he happens to be Jewish, he should have a conscience?"
He added that Madoff's victims extended well beyond the Jewish community.
In addition to theft, the Torah discusses another kind of stealing, geneivat da'at, the Hebrew term for deception or stealing someone's mind. "In the rabbinic mind-set, he's guilty of two sins: one is theft, and the other is deception," said Burton Visotzky, a professor at the Jewish Theological Seminary.
"The fact that he stole from Jewish charities puts him in a special circle of hell," Rabbi Visotzky added. "He really undermined the fabric of the Jewish community, because it's built on trust. There is a wonderful rabbinic saying — often misapplied — that all Jews are sureties for one another, which means, for instance, that if a Jew takes a loan out, in some ways the whole Jewish community guarantees it."
Several rabbis said they were reminded of Esau, a figure of mistrust in the Bible. According to a rabbinic interpretation, Esau, upon embracing his brother Jacob after 20 years apart, was actually frisking him to see what he could steal. "The saying goes that, when Esau kisses you," Rabbi Visotzky said, "check to make sure your teeth are still there."
Rabbi Kalmanofsky said he was struck by reports that Madoff had tried to give bonus payments to his employees just before he was arrested, that he was moved to do something right even as he was about to be charged with doing so much wrong. "The small-scale thought for people who work for him amidst this large-scale fraud — what is the dissonance between that sense of responsibility and the gross sense of irresponsibility?" he said.
In a recent sermon, Rabbi Kalmanofsky described Madoff as the antithesis of true piety.
"I said, what it means to be a religious person is to be terrified of the possibility that you're going to harm someone else," he said.
Rabbi Kalmanofsky said Judaism had highly developed mechanisms for not letting people control money without ample checks and balances. When tzedakah, or charity, is collected, it must be done so in pairs. "These things are supposed to be done in the public eye," Rabbi Kalmanofsky said, "so there is a high degree of confidence that people are behaving in honorable ways."
While the Madoff affair has resonated powerfully among Jews, some say it actually stands for a broader dysfunction in the business world. "The Bernie Madoff story has become a Jewish story," said Rabbi Jennifer Krause, the author of "The Answer: Making Sense of Life, One Question at a Time," "but I do see it in the much greater context of a human drama that is playing out in sensationally terrible ways in America right now."
"The Talmud teaches that a person who only looks out for himself and his own interests will eventually be brought to poverty," Rabbi Krause added. "Unfortunately, this is the metadrama of what's happening in our country right now. When you have too many people who are only looking out for themselves and they forget the other piece, which is to look out for others, we're brought to poverty."
According to Jewish tradition, the last question people are asked when they meet God after dying is, "Did you hope for redemption?"
Rabbi Wolpe said he did not believe Madoff could ever make amends.
"It is not possible for him to atone for all the damage he did," the rabbi said, "and I don't even think that there is a punishment that is commensurate with the crime, for the wreckage of lives that he's left behind. The only thing he could do, for the rest of his life, is work for redemption that he would never achieve."

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Madoff investor commits suicide
The Associated Press
Tuesday, December 23, 2008
NEW YORK: The founder of an investment fund that lost $1.4 billion with Bernard Madoff was discovered dead Tuesday after committing suicide at his Madison Avenue office, marking a grim turn in a scandal that has left investors around the world in financial ruin.
René-Thierry Magon de la Villehuchet was found sitting at his desk at about 8 a.m. with both wrists slashed, Paul Browne, the New York Police Department spokesman, said. A box cutter was found on the floor along with a bottle of sleeping pills on his desk. No suicide note was found.
Villehuchet was one of several fund managers to be hit hard in Madoff's alleged $50 billion Ponzi scheme. Investment funds that lost big to Madoff are also facing backlash and investor lawsuits for not protecting their clients from the alleged fraud.
It is not immediately known what kind of scrutiny Villehuchet was facing over his Madoff losses through his Access International Advisors, located a couple of blocks from Rockefeller Center.
But Monday night, he told cleaning crews in his building that he wanted them out of his office by 7 p.m. because he was going to be working late.
Workers returned Tuesday morning and found the door locked. He was later discovered dead at his desk, with a garbage can placed near his body to apparently catch the blood, Browne said.
Villehuchet was a prominent investor who came from a long line of French aristocrats, with the Magon part of his name referring to one of the most powerful families in France.
His fund enlisted intermediaries with links to the cream of Europe's high society to garner clients. Among them was Philippe Junot, a French businessman and friend who is the former husband of Princess Caroline of Monaco.
Villehuchet, the former chairman and chief executive of Credit Lyonnais Securities U.S.A., was also known as an ardent sailor who regularly participated in regattas and was a member of the New York Yacht Club.
He lived in an affluent suburb in Westchester County with his wife. They have no children. There was no answer Tuesday at the family's two-story house.
"He's irreproachable," said Bill Rapavy, who was Access International's chief operating officer before founding his own firm in 2007.

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Irregularity uncovered at IndyMac
By Edmund L. Andrews
Tuesday, December 23, 2008
WASHINGTON: Two months before IndyMac Bancorp collapsed in July, at a cost of $8.9 billion to taxpayers, a top U.S. government banking regulator allowed the bank to backdate a capital infusion and gloss over its deepening problems, the U.S. Treasury Department's independent investigator said Monday.
In what industry analysts said was an example of the excessively cozy relations between high-flying subprime lenders and U.S. government bank regulators, the Office of Thrift Supervision's West Coast director allowed IndyMac's parent company to backdate an $18 million contribution to preserve its status as a "well-capitalized" institution.
Investigators reported that similar officially approved backdating appears to have occurred at other financial institutions, though they did not name them.
IndyMac, based in Pasadena, California, was one of the nation's biggest subprime mortgage lenders at the time. But analysts said it was already in trouble when the maneuver occurred, because of rising default rates and a big stockpile of subprime loans on its books that investors abruptly refused to buy.
The Office of Thrift Supervision's western regional director, Darrel Dochow, allowed IndyMac Bank to receive $18 million from its parent company on May 9 but to book the money as having arrived on March 31, according to the Treasury Department's inspector general, Eric Thorson. The backdated capital infusion allowed IndyMac to plug a hole that its auditors had belatedly found in the bank's financial results for the first quarter. If IndyMac had not been able to plug that hole retroactively, its reserves would have slipped below the minimum level that regulators require for classifying banks as well capitalized.
Though the $18 million transaction was minuscule in comparison to IndyMac's $32 billion in assets, it had tremendous significance. If IndyMac had lost its well-capitalized status it would not have been allowed to accept "brokered deposits" from other financial institutions. Brokered deposits are typically high-yielding certificates of deposit arranged by brokers and sold to savings and loans. IndyMac relied heavily on brokered deposits, which amounted to $6.8 billion or 37 percent of its total deposits last spring.
"This is very significant in terms of whether IndyMac was over or under the OTS's thresholds for capital," said Bert Ely, a veteran banking analysts in Alexandria, Virginia. "But what's really troubling is that it seems to have been going on elsewhere."
The episode had a link to the savings-and-loan scandals of the late 1980s, which cost the U.S. government more than $100 billion.
Dochow played a central role in the savings-and-loan scandal of the 1980s, overriding a recommendation by federal bank examiners in San Francisco to seize Lincoln Savings, the giant savings and loan owned by Charles Keating. Lincoln became one of the biggest institutions to collapse. Keating served four and a half years in prison before his fraud and racketeering convictions were overturned. He later pleaded guilty to more limited charges, and was sentenced to the time already served.
Senator Charles Grassley, Republican of Iowa and the ranking member of the Senate Finance Committee, said the regulator's behavior raised new doubts about the Office of Thrift Supervision, which has long had a reputation for being the most permissive of all the U.S. bank regulators.
"The role of the Office of Thrift Supervision, as the name says, is to supervise these banks, not conspire with them," Grassley said in a statement. "If the Office of Thrift Supervision is turning a blind eye to capitalization requirements, Congress needs to know."
John Reich, director of the Office of Thrift Supervision, said the $18 million maneuver was "a relatively small factor" in the collapse of IndyMac. But he said he had removed Dochow from his job as the agency's western director pending the results of a separate inquiry.
Thorson, the Treasury's inspector general, described an intricate process by which the Office of Thrift Supervision, or at least Dochow, had quietly helped IndyMac paper over its difficulties.
In a letter to Grassley, Thorson said that IndyMac's auditor, Ernst & Young, had discovered several issues in early May that required IndyMac to retroactively adjust its financial results for the three months that ended on March 31.
Those adjustments would have reduced IndyMac's capital to a level that would have deprived it of its classification as a well-capitalized institution.
IndyMac executives did not dispute the adjustments, according to Thorson. But they did meet with Dochow on May 9 to ask if they could backdate the $18 million capital injection by retroactively listing it as a "receivable" on IndyMac's books as of March 31, Thorson said.
Dochow agreed, and IndyMac filed an amended report for its first quarter that showed a higher capital ratio, Thorson said. To investors, there was no sign that IndyMac's capital had ever dipped below what was required to qualify for well-capitalized status. In fact, the amended report slightly increased the capital ratio above what the bank had originally reported.
William Black, a senior bank regulator during the savings and loan crisis and the author of "The Best Way to Rob a Bank is to Own One," said Dochow's lenience highlighted the longstanding unwillingness of the Office of Thrift Supervision to take charge.
"The OTS did nothing effective to regulate any of the specialized large nonprime lenders," Black said. "So what you got was what the FBI accurately described as early as 2004 as an epidemic of mortgage fraud."
Black said that the Office of Thrift Supervision had never put IndyMac on its watch list of troubled institutions before the Federal Deposit Insurance Corp. took it over in July and booked a loss of $8.9 billion to its insurance fund.

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LATIN AMERICA: Debt legitimacy comes under scrutiny
Oxford Analytica
Tuesday, December 23, 2008
Some Latin American governments are increasingly questioning the 'legitimacy' of their public debt. Questioning the need to service and repay debt incurred by previous governments, despite having ability to pay, is an innovative strategy that aims to elevate the needs of domestic citizens by making additional resources available to them, at least in the short term. However, it runs contrary to the rules and expectations underpinning the global financial architecture.
The government of Ecuador on December 12 declared the first debt default in Latin America since Argentina in 2001:
•The government decided not to make a 30.6 million dollar interest payment on its Global 2012 bond, having allowed a 30-day grace period to lapse.
•A similar payment, of 30.47 million dollars on its Global 2015 bond, looks like it may also be missed when its 30-day grace period ends on January 14, 2009.
'Strategic default'. Ecuador's current default is extremely unusual in that it is the result of a strategic decision by the government, rather than of the inability to pay. It is this strategic nature that makes the playing out of the case of Ecuador extremely important from the perspective of the international financial system:
•'Success'. If Correa's gamble appears to pay off initially, by seeming likely to succeed in substantially reducing his county's debt burden without a significant economic deterioration, this could embolden other governments in the region and elsewhere to make similar moves.
•'Failure'. However, if it soon becomes apparent that the cost of Ecuador's default is too high, in terms of a virtual elimination of (already reduced) access to international credit markets -- including companies' access to trade finance -- and an ensuing worsening of fiscal problems (probably including an inability to meet accelerated debt obligations even if it wished to), then this would be likely to discourage other countries from taking similarly belligerent approaches.
Failure is more likely than success, which is the main reason why such 'strategic defaults' have generally not been tried in the past. Nonetheless, there is a risk that a small number of countries -- including Argentina, Bolivia, Paraguay and Venezuela -- might follow Ecuador's lead in the near future in classifying some of their external debt as 'illegitimate'.
Wider reaction. There is certainly a significant degree of truth to the argument that debts incurred by previous authoritarian and/or corrupt governments in developing countries have not ultimately had the domestic social benefits expected. Some non-governmental organizations, such as the Jubilee Debt Campaign, have long sought to bring to wider debate issues surrounding the 'legitimacy' of developing countries' debt burdens and appear generally sympathetic to the idea of strategic default if the social burden of continuing debt servicing and repayment is very onerous.
In a worst-case scenario, the actions being taken by Quito and being contemplated by some other regional governments could embolden countries all over the world to engage in strategic defaults on their debts. Though unlikely, this could lead to the unraveling of parts of the global sovereign debt system, with dire long-term consequences. More likely is that Ecuador and any other countries pursuing strategic defaults will suffer severe economic collapses in the short-to-medium term, deterring other countries from doing so.

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Drugs trade threatens to corrode Ghana's image
Reuters
Tuesday, December 23, 2008
By Alistair Thomson
Hopes of future oil prosperity have given a lift to Ghana's presidential election race, but drug trafficking threatens to spoil the West African country's image with the stain of corruption.
During the heated election contest, to be decided in a December 28 run-off, lurid headlines in the partisan press accused both main rival parties of collusion in trafficking or of using drug dollars to win votes.
Hard evidence was lacking, but the allegations are indicative of Ghana's failure to tackle an illicit trade experts fear is turning West Africa into a "Coke Coast" and of corruption that threatens to cloud a bright future.
After years of military rule and economic instability, Ghana has been seen as a success story since President John Kufor was elected in 2000, attracting foreign donors and investors eager for a safe haven in a restive region.
Yet tonnes of cocaine vanishing from police surveillance, a parliamentarian jailed in the United States for trafficking heroin, and the sabotage of efforts to combat smuggling or graft are more reminiscent of the region's failed or failing states.
"I think it's an extremely serious threat," said Patrick Smith, editor of newsletter Africa Confidential.
"It's not just the transhipment, it's the criminalisation of the economy and of institutions. There is growing hard drug use among Ghanaians. They are all mutually reinforcing factors, and yet the government has not come down hard on them," Smith said.
Yao Gede, a lecturer in international relations at the University of Ghana, said the record of Kufuor's administration in attracting investment and extending health and education services was undermined by widespread suspicions of graft.
"There is that perception of corruption in the country, there is the belief that resources have not been shared equitably," he said.
Increased investment in Ghana, encouraged by the start-up of offshore oil production scheduled for late 2010, raises the stakes for both the criminal networks and those fighting them.
"We hear of ... people being approached with huge cash offers to sell their houses to Colombians and Venezuelans, and it's clearly (money) laundering," said Smith.
BUYING INFLUENCE
Nigerian gangs began smuggling heroin through the country in the 1980s, said Antonio Mazzitelli, regional head of the U.N. Office on Drugs and Crime. The U.S. Drug Enforcement Agency describes Ghana as a common transit country for heroin.
Eric Amoateng, a member of parliament for Kufuor's ruling New Patriotic Party (NPP), was arrested in 2005 for smuggling 136 pounds (62 kg) of heroin into New York's Newark airport.
Amoateng was jailed last year by a U.S. court after quitting his seat, but enjoyed significant support from parliamentarians and constituents who regarded him as a philanthropist.
"There is a perception on the ground that it has got worse under the current regime ... That is one of the major issues of the campaign," said Sebastian Spio-Garbrah, an analyst at U.S. risk consultancy Eurasia Group.
The NPP's chosen successor to Kufuor, Nana Akufo-Addo, is counting on the party's record after eight years in power to defeat opposition chief John Atta Mills, of the National Democratic Congress (NDC) in next Sunday's run-off.
Neither party's record is unblemished. Under former coup-leader turned president Jerry Rawlings, the NDC ruled Ghana throughout much of the 1980s and 1990s when heroin smuggling networks became entrenched.
DISAPPEARING DRUGS
In recent years, cocaine trafficking has been spread across West Africa by rich, well-armed Latin American gangs who have used the impoverished region as a transhipment route to smuggle drugs into Europe.
"Although Ghana is mainly a transit point for drugs, there is an increasingly organised framework within which these transactions take place," Kwesi Aning, head of conflict prevention at the Kofi Annan International Peacekeeping Training Centre in Ghana, wrote in a 2007 report on criminal networks.
The sums involved can be devastating for law enforcement in a country where anti-drugs officers are paid $90 a month.
In 2006, around 2 tonnes of cocaine smuggled into Ghana on board a merchant ship simply vanished after it was seized by police. The case rocked the establishment.
Operation Westbridge, a British-backed programme, has helped counter trafficking by "mules" who carry or swallow small bags of cocaine to smuggle it on flights to Europe. But Ghana's land and sea borders remain vulnerable to bigger shipments.
"Judging by the number of scandals ... traffickers and drug money have infiltrated law enforcement agencies at all levels," UNODC's Mazzitelli said.
"It's certainly a threat, and drug money -- criminal money -- can become an obstacle, or a competitor, to licit investment. Ghana wishes to be a financial hub in West Africa, and it has all the qualities for becoming it, but certainly it has to protect its banking system," he said.


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The world according to Dick Cheney
Tuesday, December 23, 2008
Vice President Dick Cheney has a parting message for Americans: They should quit whining about all the things he and President Bush did to undermine the rule of law, erode the balance of powers between the White House and Congress, abuse prisoners and spy illegally on Americans. After all, he said, Franklin D. Roosevelt and Abraham Lincoln did worse than that.
So Cheney and Bush managed to stop short of repeating two of the most outrageous abuses of power in American history - Roosevelt's decision to force Japanese-Americans into camps and Lincoln's declaration of martial law to silence his critics? That's not exactly a lofty standard of behavior.
Then again, it must be exhausting to rewrite history as much as Cheney has done in a series of exit interviews where he has made those comments. It seems as if everything went just great in the Bush years.
The invasion of Iraq was exactly the right thing to do, not an unnecessary war that required misleading Americans. The post-invasion period was not bungled to the point where Americans got shot up by an insurgency that the Bush team failed to see building.
The horrors at Abu Ghraib were not the result of the Pentagon's decision to authorize abusive and illegal interrogation techniques, which Cheney endorsed. And only three men were subjected to waterboarding. (Future truth commissions take note.)
In Cheney's reality, the crippling budget deficit was caused mainly by fighting two wars and by essential programs like "enhancing the security of our shipping container business."
Well, no. The Bush team's program to scan cargo for nuclear materials at air, land and sea ports has been mired in delays, cost overruns and questions about effectiveness. As for the deficit, the Congressional Budget Office has said the Bush-Cheney tax cuts for the wealthy were the biggest reason that the budget went into the red.
Some of Cheney's comments were self-serving spin (as when The Washington Times helpfully prodded him to reveal that even though the world might have seen Bush as insensitive to the casualties of war, Cheney himself made a "secret" mission to comfort the families of the dead.)
Cheney was simply dishonest about Bush's decision to authorize spying on Americans' international calls without a warrant. He claimed the White House kept the Democratic and Republican congressional leadership fully briefed on the program starting in late 2001. He said he personally ran a meeting at which "they were unanimous, Republican and Democrat alike" that the program was essential and did not require further congressional involvement.
But in a July 17, 2003, letter to Cheney, Senator Jay Rockefeller, then vice chairman of the Senate Intelligence Committee, said he wanted to "reiterate" the concerns he expressed in "the meeting today." He said "the activities we discussed raise profound oversight issues."
Cheney mocked Vice President-elect Joseph Biden for saying that he does not intend to have his own "shadow government" in the White House. Cheney said it was up to Biden to decide if he wants "to diminish the office of vice president."
Based on Cheney's record and his standards for measuring these things, we're certain a little diminishing of that office would be good for the country.




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No improper contact with governor, says Obama report
By Jeff Zeleny
Tuesday, December 23, 2008
HONOLULU: An internal report issued on Tuesday by lawyers for President-elect Barack Obama found that his top advisers had numerous contacts with the office of Governor Rod Blagojevich and attempted to guide his choice to fill a vacant Illinois Senate seat, but none of the talks suggested an attempt to play along with the governor's alleged attempts to sell the seat.
Rahm Emanuel, the new White House chief of staff, had two conversations with Blagojevich and four calls with John Harris, the governor's chief of staff, about the Senate seat. He provided a list of six names of Illinois Democrats whom Obama favored to fill his Senate seat.
"At no time in the discussion of the Senate seat or of possible replacements did the president-elect hear of a suggestion that the governor expected a personal benefit in return for making this appointment to the Senate," said the report, which was written by Gregory Craig, the new White House counsel.
In a question-answer session just after the report's release, Craig described the contacts between Emanuel and the governor's chief of staff as "totally appropriate and acceptable" as well as "predictable." In his conversations with the governor in the days immediately after the election, the report said, Emanuel was pushing Valerie Jarrett for the Senate seat. Emanuel said he made the recommendation before he knew that Obama "had ruled out communicating a preference for any one candidate."
Jarrett, a close friend of the Obama family and a senior adviser to the campaign, removed her name from consideration for the Senate seat so she could work in the White House as a senior adviser to Obama.
Jarrett had a conversation with a union official, who told her that Blagojevich had expressed interest in becoming health and human services secretary in the Obama cabinet, Craig said. At the time of the conversation, on Nov. 7, Jarrett was still being mentioned as a candidate for Obama's Senate seat.
However, Craig said, the union official was not acting as an emissary for the governor, and Jarrett told the union official it was "ridiculous" for the governor to even think of getting such a post, given the investigations swirling around him long before the latest controversy erupted.
The report, which was made public on Tuesday afternoon in the form of a five-page memorandum to the president-elect from Craig, showed more involvement from Emanuel in filling the Senate seat than had previously been known.
But Craig said there was no evidence of wrongdoing or suggestions that Emanuel was asked to provide favors to the governor in exchange for the Senate seat.
The report said that Emanuel "discussed the merits of potential candidates and the strategic benefit that each candidate would bring to the Senate seat."
Emanuel gave the names of four Democrats from Illinois whom Obama "considered to be highly qualified," including Dan Hynes, Tammy Duckworth, Representative Jan Schakowsky and Representative Jesse Jackson, Jr. In later telephone calls, Emanuel also mentioned the names of Illinois Attorney General Lisa Madigan and Cheryle Jackson.
" Harris did not make any effort to extract a personal benefit for the Governor in any of these conversations," Craig wrote in the report. "There was no discussion of a cabinet position, of 501c(4), of a private sector position or of any other personal benefit to the governor in exchange for the Senate appointment."
Obama, who is on vacation with his family here in Hawaii, is not planning to answer questions or speak publicly about the report.
The report, and the timing of its release, was a product of cooperation from the office of Patrick Fitzgerald, the United States attorney for the Northern District of Illinois, who is leading the U.S. government investigation into Blagojevich. But according to people familiar with the report, lawyers who compiled the Obama review did not have access to wiretapped telephone conversations between Obama aides and the governor's office.
Last week, Fitzgerald asked the Obama transition team to delay the release of its report so prosecutors could interview witnesses in the Blagojevich investigation. The office had yet to complete its interviews late last week, people familiar with the case said, and asked the Obama team not to release its report on Monday.
At a news conference three days after the election, Obama said he was staying out of the matter. "There are going to be a lot of good choices out there," he said, "but it is the governor's decision to make, not mine."
Craig has worked with the United States attorney's office, which has repeatedly suggested that Obama's staff is not suspected of any wrongdoing.
The Obama report may not be the final word on the case. The review was compiled from memory by Obama's aides, rather than from recordings of any phone calls.
The taped conversations, which were picked up through the court-approved wiretapping of Blagojevich and his chief of staff, Harris, will not become public until the case moves through the courts or goes to trial.
Asked whether he thought the prosecutor should release the tapes, Craig declined to answer, declaring that the matter was the prosecutor's business. As for whether any new guidelines might be necessary for Obama staff members regarding whom they talk to, Craig dismissed the idea, saying no new rules were needed because the few conversations that occurred with the governor's people were "completely innocent, completely appropriate." More Articles in US »

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Impeachment panel hears of Blagojevich fund-raising
By Christopher Maag
Tuesday, December 23, 2008
SPRINGFIELD, Illinois: Even in a state infamous for pay-to-play politics, Governor Rod Blagojevich of Illinois created a "sea change" in campaign fund-raising chicanery, aggressively courting state contractors for big contributions that helped him collect an "astonishing" $58 million in the last eight years, according to testimony on Monday before the state legislative committee that is considering whether to impeach him.
The description came from the director of the Illinois Campaign for Political Reform, Cindi Canary, who said her group's research showed that the governor's fund-raising had recently appeared to go into overdrive, as he apparently tried to collect as much money as possible before new restrictions on contributions took effect.
Giving the governor extra time to raise money was "like handing an arsonist the keys to a gas station and a box of matches," Canary said.
One supporter whose four affiliated companies gave a total of $650,000 in apparently coordinated campaign donations was later appointed to the Illinois Gaming Board, she said.
Canary also said that the governor had taken in far more in donations than his predecessors, for a total $58.3 million over eight years, and that he had relied much more heavily on donations of $25,000 or more.
The 21-member committee is considering whether to impeach Blagojevich, who was arrested on Dec. 9 on charges of widespread corruption, including scheming to sell the United States Senate seat vacated by President-elect Barack Obama. Blagojevich has adamantly proclaimed his innocence.
The United States attorney in the case, Patrick Fitzgerald, did not respond on Monday to the committee's request for information. Nor did Barry Maram, director of the Illinois Department of Health Care and Family Services, respond to many of the committee's questions regarding the governor's expansion of health care benefits in defiance of the Legislature.
"I find that appalling," Representative Lou Lang, a Democrat from Skokie, said of Maram's refusal to appear.
Ed Bedore, a member of the State Procurement Policy Board, which reviews state contracts, raised questions about $6 million worth of questionable spending by the Blagojevich administration.
One lease involved 215 parking spaces for state employees near Blagojevich's office in downtown Chicago, Bedore said. Another lease would have paid $2.6 million extra to one of Blagojevich's campaign contributors.
"The people of Illinois are suffering," Bedore said.
Edward Genson, Blagojevich's lawyer, told the committee that the Blagojevich administration had eventually withdrawn the questionable contracts. Later, Genson questioned Canary about campaign donations.
"The fact of the matter is that campaigns cost a lot more money now than they used to, isn't that correct?" Genson said. Canary agreed.
The committee agreed to a request from Genson to adjourn for a week, to give him time to find witnesses to testify on Blagojevich's behalf.

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

Mugabe dismisses U.S. stand on power-sharing pact
Reuters
Tuesday, December 23, 2008
By MacDonald Dzirutwe
Zimbabwean President Robert Mugabe described U.S. President George W. Bush on Tuesday as a "dying horse" after the United States said it could no longer support a Harare government that includes him.
U.S. Assistant Secretary of State Jendayi Frazer said on Sunday Mugabe reneged on a power-sharing deal and he was "completely out of touch" and was responsible for turning the once prosperous country into a "failed state."
Mugabe and opposition leader Morgan Tsvangirai agreed on September 15 to form a unity government, a pact supported at the time by the United States. But that agreement has unravelled due to a fight over control of important ministries.
"The inclusive government does not include Mr Bush and his administration. It doesn't even know him. It has no relationship with him, so let him keep his comments, they are undesired, irrelevant, quite stupid and foolish," Mugabe said at a burial ceremony for a ruling party official.
"We realise these are the last kicks of a dying horse. We obviously are not going to pay attention."
Zimbabwe has sunk deeper into crisis while the stalemate drags on.
Hyper-inflation means prices double every day, a cholera epidemic has killed more than 1,100 people and the opposition has accused the ruling party of abducting its supporters, a charge it denies.
Western countries including the United States blame Mugabe for Zimbabwe's woes and have intensified calls for him to step down.
There is little Western powers can do to force Mugabe out. Sanctions have failed to weaken him and analysts say his Western foes would not contemplate military intervention because Zimbabwe is not seen as a strategic country with key resources such as oil.
Mugabe has also remained defiant in the face of tough criticism from regional leaders.
Most African leaders, including neighbour South Africa, Africa's biggest economy, have stopped short of calling on him to quit.








U.S. house sales fall sharply
By Jack Healy
Tuesday, December 23, 2008
NEW YORK: Home sales declined dramatically last month and housing prices posted their sharpest decline in four decades as a rapidly slowing economy discouraged many potential buyers from tip-toeing into the market.
Sales of existing homes declined 8.6 percent last month, to a seasonally adjusted rate of 4.49 million, according to the National Association of Realtors, a trade association. The median price of a home fell 13 percent in November, to $181,300 from $208,000 a year ago. That was the lowest price since February 2004.
"They're about as god-awful as they can get," said Robert Barbera, chief economist at ITG. "This is pretty breathtaking stuff."
The troubles plaguing the housing market, which is at the heart of America's financial crisis, are only multiplying as the broader economy deteriorates. Even though mortgage rates dropped after the Federal Reserve slashed interest rates to record lows near zero percent, economists said that housing would continue to lag as unemployment increases and the spiral of slumping consumer spending and waning industrial growth continues.
"Housing dragged down the markets this summer," said Nariman Behravesh, chief economist at Global Insight. "Now it's the economy and financial markets that are dragging down housing."
The economy was shrinking over the summer and corporate profits were falling even before the financial crisis struck with full force. On Tuesday, the U.S. Commerce Department reported that the gross domestic product, the broadest measure of the economy, declined at an annual rate of 0.5 percent in the third quarter as corporate profit fell 1.2 percent.
Analysts are forecasting that those declines will be followed by much larger decreases this quarter as the longest recession in a quarter century gains intensity.
Stock markets dived into negative territory as investors took in the economic news. Just before the market closed, the Dow Jones industrial average was down about 100 points or 1.25 percent while the wider Standard & Poor's 500-stock index was down 0.8 percent.
Shares of major homebuilders such as Toll Brothers and Pulte Homes were trading lower. Sales of single-family homes dropped 8 percent from October to November while the sales of condominiums and co-ops fell an even sharper 13 percent, the Realtors association reported.
The pool of unsold homes grew slightly to 4.2 million last month. At the current sales rate, it would take 11.2 months to burn off the excess inventory, which is up from a 10.3-month supply in October.
The U.S. Commerce Department also reported that new home sales dropped to a seasonally adjusted annual rate of 407,000 in November, from a downwardly revised rate of 419,000 in October. The median price of a new home sold in November was $220,400, down 11.5 percent from the period a year ago. It was the biggest year-over-year price decline since a 12.7 percent drop in March. Investors on Wall Street seemed to take the economic news in stride.
Housing values have plummeted since the peak of the market in July 2006, when the median home price was $230,200. But the housing bubble burst, sales declined, credit dried up and a flood of foreclosed homes hit the market, a combination of events that pulled median prices down 21 percent to their November levels.
Still, some economists said that home prices will fall even farther before they dip low enough to entice potential home buyers. Joshua Shapiro, chief United States economist at MFR, said that some parts of the country may only be halfway through such a retrenchment.
"You need to have a correction, you need to have an adjustment," Shapiro said. "The faster it happens, the better."
Lawrence Yun, chief economist of the National Association of Realtors, said that 45 percent of all home sales in November were so-called "distressed sales," meaning that the sellers faced foreclosure, or they were forced to sell their home for less than the value of the mortgage. That was slightly higher than the previous month.
"It's probably the largest price drop since the Great Depression," Yun said. "There needs to be some measure to counter this pessimism. Without housing market stabilization, it'll be very difficult for the economy to recover."
That trend is especially pronounced in regions of the country hit hardest by housing's boom and bust. In parts of Southern California, more than half of all houses sold in November had gone through foreclosure at some point in the last 12 months, according to MDA DataQuick, a real-estate research firm.
"Outside of distressed properties, the market is nonexistent almost," Frederick Cannon, an analyst at Keefe, Bruyette & Woods, said of the California market. "You don't want to sell into it. Most people are saying, 'I'll just stay in this house.' "
In California's Riverside County, real-estate agent Gary Crutchley said that he had sold six homes in the last four months. Three were foreclosure sales, two were "short sales" in which homeowners sold to avoid a foreclosure, and one was a traditional sale — a couple who had saved their money, and were now looking to buy into a distressed market.
"They're few and far between," Crutchley said.
GDP falls 1.2 percent in U.S.
The U.S. Commerce Department said Tuesday that the U.S. gross domestic product, the broadest measure of economic activity, declined at an annual rate of 0.5 percent in the July-September quarter, The Associated Press reported from Washington.
Corporate profits fell 1.2 percent in the quarter, the department said. The fall in GDP was unchanged from an estimate made a month ago. The decline in corporate profits was slightly larger than the 0.9 percent fall estimated a month ago.

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

U.S. house sales fall sharply
By Jack Healy
Tuesday, December 23, 2008
NEW YORK: Home sales declined dramatically last month and housing prices posted their sharpest decline in four decades as a rapidly slowing economy discouraged many potential buyers from tip-toeing into the market.
Sales of existing homes declined 8.6 percent last month, to a seasonally adjusted rate of 4.49 million, according to the National Association of Realtors, a trade association. The median price of a home fell 13 percent in November, to $181,300 from $208,000 a year ago. That was the lowest price since February 2004.
"They're about as god-awful as they can get," said Robert Barbera, chief economist at ITG. "This is pretty breathtaking stuff."
The troubles plaguing the housing market, which is at the heart of America's financial crisis, are only multiplying as the broader economy deteriorates. Even though mortgage rates dropped after the Federal Reserve slashed interest rates to record lows near zero percent, economists said that housing would continue to lag as unemployment increases and the spiral of slumping consumer spending and waning industrial growth continues.
"Housing dragged down the markets this summer," said Nariman Behravesh, chief economist at Global Insight. "Now it's the economy and financial markets that are dragging down housing."
The economy was shrinking over the summer and corporate profits were falling even before the financial crisis struck with full force. On Tuesday, the U.S. Commerce Department reported that the gross domestic product, the broadest measure of the economy, declined at an annual rate of 0.5 percent in the third quarter as corporate profit fell 1.2 percent.
Analysts are forecasting that those declines will be followed by much larger decreases this quarter as the longest recession in a quarter century gains intensity.
Stock markets dived into negative territory as investors took in the economic news. Just before the market closed, the Dow Jones industrial average was down about 100 points or 1.25 percent while the wider Standard & Poor's 500-stock index was down 0.8 percent.
Shares of major homebuilders such as Toll Brothers and Pulte Homes were trading lower. Sales of single-family homes dropped 8 percent from October to November while the sales of condominiums and co-ops fell an even sharper 13 percent, the Realtors association reported.
The pool of unsold homes grew slightly to 4.2 million last month. At the current sales rate, it would take 11.2 months to burn off the excess inventory, which is up from a 10.3-month supply in October.
The U.S. Commerce Department also reported that new home sales dropped to a seasonally adjusted annual rate of 407,000 in November, from a downwardly revised rate of 419,000 in October. The median price of a new home sold in November was $220,400, down 11.5 percent from the period a year ago. It was the biggest year-over-year price decline since a 12.7 percent drop in March. Investors on Wall Street seemed to take the economic news in stride.
Housing values have plummeted since the peak of the market in July 2006, when the median home price was $230,200. But the housing bubble burst, sales declined, credit dried up and a flood of foreclosed homes hit the market, a combination of events that pulled median prices down 21 percent to their November levels.
Still, some economists said that home prices will fall even farther before they dip low enough to entice potential home buyers. Joshua Shapiro, chief United States economist at MFR, said that some parts of the country may only be halfway through such a retrenchment.
"You need to have a correction, you need to have an adjustment," Shapiro said. "The faster it happens, the better."
Lawrence Yun, chief economist of the National Association of Realtors, said that 45 percent of all home sales in November were so-called "distressed sales," meaning that the sellers faced foreclosure, or they were forced to sell their home for less than the value of the mortgage. That was slightly higher than the previous month.
"It's probably the largest price drop since the Great Depression," Yun said. "There needs to be some measure to counter this pessimism. Without housing market stabilization, it'll be very difficult for the economy to recover."
That trend is especially pronounced in regions of the country hit hardest by housing's boom and bust. In parts of Southern California, more than half of all houses sold in November had gone through foreclosure at some point in the last 12 months, according to MDA DataQuick, a real-estate research firm.
"Outside of distressed properties, the market is nonexistent almost," Frederick Cannon, an analyst at Keefe, Bruyette & Woods, said of the California market. "You don't want to sell into it. Most people are saying, 'I'll just stay in this house.' "
In California's Riverside County, real-estate agent Gary Crutchley said that he had sold six homes in the last four months. Three were foreclosure sales, two were "short sales" in which homeowners sold to avoid a foreclosure, and one was a traditional sale — a couple who had saved their money, and were now looking to buy into a distressed market.
"They're few and far between," Crutchley said.
GDP falls 1.2 percent in U.S.
The U.S. Commerce Department said Tuesday that the U.S. gross domestic product, the broadest measure of economic activity, declined at an annual rate of 0.5 percent in the July-September quarter, The Associated Press reported from Washington.
Corporate profits fell 1.2 percent in the quarter, the department said. The fall in GDP was unchanged from an estimate made a month ago. The decline in corporate profits was slightly larger than the 0.9 percent fall estimated a month ago.

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

Foreign automakers in the U.S. cut back
Oil expected to remain below $60 a barrel in 2009

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

Expected bad news doesn't scare Wall Street
Reuters
Tuesday, December 23, 2008
NEW YORK: Investors were relieved Tuesday after a government report on the U.S. economy met expectations and eased their concerns that the recession is deepening.
The Commerce Department reported third-quarter gross domestic product, a measure of the economy that tallies the value of goods and services, fell at an annual rate of 0.5 percent. That was in line with analysts' expectations and matched the government's estimate of a month ago.
While the readings show further weakness, investors have likely already priced in very low expectations. The concern, however, is that the current quarter will be much worse.
That also helped investors get past a report that showed sales of new homes fell in November to the slowest pace in nearly 18 years, while new home prices dropped by the biggest amount in eight months.
New home sales fell by 2.9 percent to a seasonally adjusted annual sales pace of 407,000 units, a weaker performance than economists had expected and was the slowest sales pace since January 1991. The median price of a new home sold in November was $220,400, a drop of 11.5 percent from the sales price a year ago.
In midmorning trading, the Dow Jones industrial average rose 11.79, or 0.14 percent, to 8,531.56.
Broader indexes were also higher. The Standard & Poor's 500 index rose 2.00, or 0.23 percent, to 873.63. The Nasdaq composite index added 5.11, or 0.33 percent, to 1,537.46.
On Monday, stocks fell moderately as investors pulled back on discouraging news from Toyota Motor Corp. and drugstore operator Walgreen Co. - two companies that have been viewed as better-positioned than many of their peers. The announcements provided fresh evidence that even stronger companies are not immune to a severe drop in consumer spending.
Bond prices were little changed Tuesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.15 percent from 2.17 percent late Monday. The yield on the three-month T-bill, considered one of the safest investments, was unchanged at 0.02 percent from late Monday.
In corporate news, greeting-card company American Greetings Corp. said it swung to a third-quarter loss, hurt by hefty charges and a decline in sales. Shares fell $3.00, or 30 percent, to $6.82.
Trading volume was light, and is expected to remain so the rest of this week as investors head into the holidays. Analysts are mindful that light volume tends to skew the market's movements, and warned that this week may not suggest any long-term trends.

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

ECB head says markets underestimating crisis response
Reuters
Tuesday, December 23, 2008
PARIS: Markets are underestimating the importance of steps central banks and governments have taken in response to the financial crisis, Jean-Claude Trichet, the head of the European Central Bank, said on Tuesday.
Interbank lending rates have eased in the past weeks following massive government stimulus plans in Europe and a series of interest rate cuts by major central banks, but strong tensions remained, Trichet, the ECB president, said in a speech at a Paris-based think-tank.
"There is an underestimation in the financial sphere of the very great importance of the decisions that were taken," said Trichet, adding that banks were still "very influenced" by mistrust that had set in from mid-September.
Confidence, which Trichet said would remain a watchword going into 2009, had shown some signs of picking up,
Trichet urged all leaders to assume their responsibilities in the difficult months ahead, and urged European countries that still have budgetary room for manoeuvre to use it to stimulate growth.
The European Union's stability pact caps public deficits in member states but includes provisions giving governments greater leeway in times of economic downturn.
Trichet said some countries still had some leeway under the pact's rules and urged them to make the most of it, while cautioning others that observers believed their policies were untenable in the medium-term.
The ECB was "absolutely in agreement with the use of the room for manoeuvre offered by the stability pact in current circumstances, which are abnormal," he said.
MUM ON RATES
Trichet said agreement was growing among many nations over how to prevent a recurrence of the current crisis and improve the regulatory landscape of the global financial system.
"There is a large consensus on a much higher level of transparency for financial instruments, markets and much more transparency for financial institutions," he said.
But Trichet gave little away on future monetary policy decisions.
"I have nothing to add or to withdraw from what I have already said," he said, referring to an ECB news conference held earlier this month.
"We will do what is necessary to maintain price stability."
The ECB lowered rates by three quarters of a percentage point to 2.5 percent this month, its largest cut ever, and some analysts have been expecting it to pause after the recent series of cuts and leave rates on hold in January.
Recent data from the euro zone, however, has underscored the depth of the economic downturn and fuelled speculation that the ECB may need to act again soon.
Turning to the euro, Trichet said the currency had proven its credibility since its inception almost a decade ago and had helped shield Europe from the ravages of the global financial crisis.
More countries in Europe would adopt the euro going forward, Trichet said, adding that if Britain decided to do so one day, he would support it.
"Britain knows that it is welcome to join the euro. That has always been said by all the governments and the ECB, and as you know, it is a decision which lies with the people of Britain themselves."
(Reporting by Tamora Vidaillet, Francois Murphy and Veronique Tison; Editing by Leslie Adler)


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

Investors lose faith in the bankers of HSBC
By Landon Thomas Jr. and Julia Werdigier
Tuesday, December 23, 2008
LONDON: Through more than a year of giant bailouts and bankruptcies, HSBC was one of the few big banks to emerge with its reputation largely intact.
HSBC, the global financial giant, did bet on subprime mortgages — and lost. But it nonetheless managed to maintain a robust market value compared with its diminished peers, lending it an aura of unrivaled durability.
So much so that during a recent parliamentary debate in Britain, where HSBC is based, an opposition politician scorned the government's borrowing policies by asserting that Britain's creditworthiness had fallen behind that of HSBC.
Now, as the bank faces a sharp slowdown in the emerging markets where it earns the bulk of its profit, many investors are questioning HSBC's ability to maintain this exalted standing.
Last week, HSBC shares listed in London sank more than 17 percent, hit by several analysts' reports contending that the bank would be required to raise money or to cut its dividend sharply. On Monday, HSBC shares in Hong Kong fell 3.3 percent, after falling more than 9 percent late last week. In addition, there was the acknowledgment that HSBC might have lost the $1 billion it had invested with Bernard Madoff, the New York money manager who authorities say has confessed to running a $50 billion Ponzi scheme.
As banks throughout the world face uncertain futures amid the worst financial crisis since the Depression, HSBC — which spans the globe from its original home in Hong Kong to the Middle East, Latin America and North America — offered a vivid counterpoint.
Its share price outpaced the main indexes and still trades near its book value. Its assets are growing, with the $2.3 trillion on its books expected to grow by almost 20 percent this year.
Not only has the bank spurned government money, it has been — at least so far — one of the few financial institutions of size not to be required to raise capital.
But with the recent drop in its shares, HSBC's critics are raising questions about the bank's globe-girdling strategy, particularly its insistence on sticking with its struggling consumer finance unit in the United States.
HSBC gets three-quarters of its profit from emerging markets, which have underpinned its recent success. But three-quarters of its loans are still exposed to the stricken markets of the United States and Britain, which some investors argue will hold it back, after the global economy recovers.
HSBC became the world's top subprime lender when it bought Household International in the United States in 2003. According to Knight Vinke, a small asset manager in Monaco that owns less than 1 percent of the bank's shares, the parent group has injected $60 billion into HSBC Finance — including the purchase price of $15 billion — in a so far fruitless bid to turn around this flagging business. According to its research, the money would be better deployed in faster-growing emerging markets.
A spokesman for HSBC disputed the figure, saying the total amount was about $20 billion.
Knight Vinke argues that HSBC should leave this business and focus on its core area of expertise in Asia.
"There are steps to be taken, but if all else fails, you may have to walk away from it," said Glen Suarez, an executive at Knight Vinke.
"We see HSBC's comparative advantage being in developing its business in Asia," he said. "We have always felt that subprime and Household International was a problem."
In a report produced this year, Knight Vinke said that HSBC had been overly optimistic in assessing the risk of its subprime exposure and that if the bank were to take a write-down reflecting the full reality of its potential losses, it could total as much as $30 billion — a number that would require the company to raise cash.
HSBC declined to address Knight Vinke's assertions publicly, saying the firm's small investment position undermined its credibility.
Still, bank executives and board members have met with Knight Vinke as it pressed its position.
HSBC's position is that its subprime loans, while substantial, are different from those of most other banks because they are not bundled into complex — and at this point nearly worthless — securities like those that forced Merrill Lynch, Citigroup and others to take large losses. As a result, management argues, HSBC is not obliged to write down these assets as long as they produce a cash flow.
The bank has also said that it is a global institution, with a need to be in markets from Shanghai to St. Louis, and that it considers the United States housing market to be a crucial part of its strategy. It also said that writing off its investment in HSBC Finance would do lasting damage to its reputation.
As its rivals took their lumps, HSBC maintained a healthy cushion against losses of about 8 percent, a conservative position compared with the greater leverage of other banks. But now that troubled institutions like Barclays, the Royal Bank of Scotland and Citigroup have raised large sums of equity to bolster their balance sheets and enjoy the explicit or implicit support of national governments, HSBC no longer looks so secure.
What is more, the advancing slowdown in HSBC's core emerging markets franchise is putting additional pressure on its earnings.
HSBC has said that its capital position was strong, but declined to comment on the recent reports predicting that it would seek a capital increase, which would dilute the value of existing shares. It has been careful to leave open the possibility of raising new funds in conjunction with a deal, or a major investment in a business.
For all the new questions, Julian Chillingworth, chief investment officer at Rathbones in London, said HSBC remained a refreshing contrast to an industry that seemed to lose its head in the housing bubble.
"It may well be that they have to raise capital, but there's a much better chance for them to get support," he said. "They didn't commit the sins of others of relying on the wholesale markets, and they've been quite prudent."
HSBC executives are by and large an austere, conservative lot, compared with their more expansive counterparts. Their attitude toward the banking excesses has been one of polite disdain as they turned down opportunity after opportunity to buy into the American investment banking market.
It is an approach that conveys a degree of rectitude not often seen in bankers these days. The self-denying tone flowed from the top, conveyed by the bank's former chairman, John Bond.
His successor, Stephen Green, spare and unobtrusive, carries on this tradition, serving as an ordained priest in the Church of England.
He is also the author of a book titled "Serving God? Serving Mammon?" that wrestles with the idea of being a man of faith in the City of London.
Still, the bank has not been immune to temptation — witness the $1 billion it is likely to have lost from extending loans to funds that invested with Madoff's firm.
There are signs, too, that the bank may be on the verge of some major decisions — particularly with regard to its troubled American business.
John Thornton, the former president of Goldman Sachs and a man known for his aggressive strategic thinking, joined the group board this month. He will also serve as nonexecutive chairman of HSBC North America — a position that will require him to work two days each week and will pay him $1.5 million a year.
It is not clear what, if any decision will be taken. Even with its recent troubles, the firm's position is strong enough to support a midsize deal, especially for a bank with a strong position in the American Hispanic market, an area that has long been of interest for HSBC.
And analysts say that even HSBC cannot stay above the troubles around it.
"I'm surprised the shares have done so well in relative terms," said Daniel Tabbush, an analyst at Crédit Lyonnais Securities, who wrote one of the reports that precipitated the stock sell-off.
"Now, we're looking at the exposure to commercial U.K. real estate, the unsecured loan book, credit cards. Many banks around the world said they don't have to raise capital, and then they do."

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

Blindsided by crisis, economists rethink profession along with theories
By Drake BennettThe Boston Globe
Tuesday, December 23, 2008
BOSTON: The deepening global economic downturn has been hard on a lot of people, but it has been hard in a particular way for U.S. economists.
For most people, pain and apprehension have been mixed with amazement at the complexity of what has unfolded: the dense, invisible lattice connecting home prices to insurance companies to job losses to car sales, the inscrutability of the financial instruments that helped spread the poison, the sense that the ratings agencies and regulatory bodies were overmatched by events, the recent wild gyrations of stock markets.
It is hard enough to understand what is happening, and it seems absurd to think we could have seen it coming beforehand. The vast majority of us, after all, are not experts.
But academic economists are. And with very few exceptions, they did not predict the crisis, either. Some warned of a housing bubble, but almost none foresaw the resulting cataclysm. An entire field of experts dedicated to studying the behavior of markets failed to anticipate what may prove to be the biggest economic collapse of our lifetime. And now that we are in the middle of it, many frankly admit that they are not sure how to prevent things from getting worse.
As a result, there is a sense among some economists that as they try to figure out how to fix the economy, they are also trying to fix their own profession.
The discussion has played out in blog posts and opinion pieces, in U.S. congressional testimony, at conferences and in working papers. A field that has increasingly been defined, at least in the public eye, by quirky studies explaining the economics of our everyday lives has turned decisively, in the past couple months, to more traditional economic turf.
And at U.S. economics powerhouses like Harvard, Massachusetts Institute of Technology and the University of Chicago, faculty lunch discussions that once might have centered on theoretical questions and the finer points of Bayesian analysis are now given over to dissecting bailout plans. Long-held ideas - about the stability of the business cycle, the resilience of markets and the power of monetary policy - are being challenged.
"Everyone that I know in economics, and particularly in the worlds of academic finance and academic macroeconomics, is going back to the drawing board," said David Laibson, a Harvard economist. "There are very, very, very few economists who can be proud."
A few suggest, as well, that there are deeper problems in the discipline. U.S. economists are asking aloud whether the field has grown too specialized, too abstract and too divorced from the way real-world economies actually function. They argue that many models used to predict the dynamics of financial markets or national economies have been scrubbed clean, in the interest of theoretical elegance, of the inevitable erraticism of human behavior.
As a result, the analytical tools of the trade offer little help in a crisis and have little to say about the sort of collapses that led to this one.
"You can't just say, 'I have a model for tremors that works great - I just can't explain earthquakes,"' said Kenneth Rogoff, an economist at Harvard who has studied financial crises.
Historically, periods of severe economic distress have shaken up economics and helped drive its evolution. And amid the current crash, there is an urgent search for approaches and models that might better illuminate ways to speed the recovery, forecast future meltdowns and help better describe the unruly flow of money.
The question of how well economists can model crises takes on an even greater importance because of the central role economic experts will play in the U.S. administration of President-elect Barack Obama - not only at the Federal Reserve, the Council of Economic Advisers and the Treasury Department, but in the Economic Recovery Advisory Board, a newly formed body created by Obama and led by the former Fed chairman Paul Volcker.
Obama has a reputation for placing a great deal of stock in expertise and the power of data. For better or worse, the evolving understanding of economic breakdowns will have ample opportunity to test itself against the real thing.
Along with everything else they have done, the financial meltdown and economic slump have spurred unprecedented political attention and participation by economists.
"In my lifetime as an economist I've never seen economists so engaged by what's going on," said Richard Thaler of the University of Chicago. "At the University of Chicago people always talk economics at lunch, but for the last three months they've all been talking about the crisis and the bailout and writing op-eds."
This is something of a change. The topics economists study often have little to do with the average person's economic life. As in almost any academic field, practical relevance sometimes has little to do with judgments about what questions are most interesting and rewarding.
This divergence was exacerbated, many economists say, during the span of almost uninterrupted economic growth that began in the late 1980s, a period when many practical questions in the making of economic policy came to be seen as having been settled. For years, leading economic figures like Lawrence Summers and Alan Greenspan argued that the United States had more or less brought the business cycle to heel.
Partly as a result, many bright young economists turned to questions that were quirkier, or more purely mathematical. To the wider public, the most visible ramification of this was the boom in papers and books about the economics of everyday life. Economists like Steven Levitt of the University of Chicago, Ray Fisman of Columbia, Edward Miguel of the University of California, Berkeley, and Justin Wolfers of the University of Pennsylvania used economics as a forensic tool to examine family dynamics, speed-dating, parking scofflaws, basketball games and the life choices of street criminals.
For those who stayed on more traditional economic turf, however, the trend was toward narrower and more abstract questions. Financial economists set out to figure out why it was that stocks earned more than bonds or to devise better ways of calculating the correlation between the price of a single asset and the price of the market it was part of.
Wolfers, being an economist, describes these intellectually challenging but less policy-relevant questions as a sort of scholarly luxury good. "During good times we all consume more luxuries," he said, "but during a bad economy, it feels to macroeconomists that what we should be doing is stuff to help today."
Some economists have suggested that this focus may account for the failure of so many to see the warning signs of the financial crisis and to predict the size and scope of its fallout.
Others see a broader problem, in that the sort of behavior that has been seen in everyone from home buyers to investment bankers in recent months is hard to fit into economists' analytical tools. The models used by macroeconomists do a poor job of describing the messiness of an actual market in flux.
As a result, economists end up oversimplifying such situations when they model them - or simply avoid studying them at all.
"We have a very restrictive set of language and tools, and we tend to work on the problems that are easily addressed with those tools," said Jeremy Stein, a financial economist at Harvard. "Sometimes that means we focus on silly questions and ignore greater ones."

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

Recession cocktails may take edge off dark year
Reuters
Wednesday, December 24, 2008
By Martinne Geller
Liquor companies and bartenders are finding inspiration in the financial crisis, devising new recipes and reviving old cocktail standards to keep spirits alive during the holidays.
They hope to lure Americans who are drinking more at home or finding that parties are drying up to cut costs.
The industry has seen a resurgence of drinks that hark back to the prewar eras of Prohibition and the Great Depression, such as the Sidecar, the Old Fashioned and the Manhattan.
Julian Cohen, head of the consumer insights team at Fortune Brands Inc's beverage division, said those "heritage cocktails," traditionally made with heavier-flavoured spirits like bourbon and cognac, mirror a wider preference.
"You're seeing a lot of darker flavours -- honeys, blackberries and raspberries, versus things like pomegranate and papaya," Cohen said. "When times are tough we want to go to things that are comfortable ... that are part of our history."
That may help explain the rush at the Edison, a swank bar in downtown Los Angeles, whose menu boasts vintage drinks like the Singapore Sling and the Vesper Martini, introduced in Ian Fleming's 1953 James Bond novel, Casino Royale.
During "Happy Hour" on Thursdays, the speakeasy-style lounge charges the Depression-era price of 35 cents for libations with names like Bourbon Bailout. Your 401K is a drink served with a postcard soliciting comments on whether patrons' retirement accounts are half-empty or half-full.
"On Fridays, we have massive lines -- about 300 people turn up at the bar," said Greg Rogers, a bar spokesman. "We have seen an uptick in recent months in sales as well as patrons."
On a recent evening, Rebecca Mulligan, a 27-year-old painter, drank a cocktail called The Hemingway instead of her usual glass of merlot.
"I have (become) more adventurous now," she said of the drink, made with champagne and absinthe. "You need to keep your mind off the depressing depression talk."
Stolichnaya, a Russian vodka brand, has been working with bartenders to concoct drinks with names like Rejected Resume, Battered Bull and Welfare Punch, said a spokeswoman. Absolut vodka owner Pernod Ricard is packaging its unflavored vodka in a mirrored bottle holder reminiscent of a disco ball to liven up home parties.
BREAD, MILK, BOOZE
According to a survey conducted in October, about one-fifth of U.S. businesses were choosing not to have office parties this year. Out of those that were having parties, only 71 percent planned to serve alcohol.
On a personal level, declining home values, job losses and drained stock portfolios have forced many Americans to become more frugal in their purchases and leisure time.
Spirits makers therefore have good reason to reconsider their tactics.
"We're having to take a second look at everything we do just to ensure that we're in tune with the consumer out there, aware of what their concerns are and how they're having to adjust their lives," said Monsell Darville, a marketing executive with privately-held Bacardi USA Inc, which sells Bacardi rum, Grey Goose vodka and Bombay Sapphire gin.
Consumers are "cocooning", said Ivan Menezes, president and chief executive of Diageo's North American business. They are still drinking, but if they can no longer afford a Cosmopolitan at their favourite hotspot, they may be making a Sidecar in their kitchen instead.
U.S. sales of spirits at retailers like grocery and liquor stores rose 1.2 percent by volume in the four weeks ended November 15, according to Nielsen data, while sales of table wine rose 0.9 percent.
In both cases, that is an improvement from the 1.1 percent increase for spirits and the 0.3 percent increase for wine in a year earlier.
Such trends mean the maker of Johnnie Walker whisky and Smirnoff vodka is focussing more this year on in-store promotions, rather than events at bars, Menezes said.
COCKTAILS ON THE COUCH
The alcohol business will still benefit from a move to drinking at home.
Diageo, the world's top alcohol company, expects underlying profit growth of 7 to 9 percent for its current fiscal year, which ends in June.
France-based Pernod, the No. 2 drinks group, expects double-digit annual profit growth. Brown-Forman Corp, maker of Jack Daniel's whiskey and Finlandia vodka, posted better-than-expected profit earlier this month and raised its 2009 earnings view.
"While the recession that we're in may keep (people) from going out and buying that $10,000 (6,780 pound) cocktail with the diamond in it on New Years Eve, they are trying different cocktails while they're out, and experimenting with them at home," said Danielle Eddy, a spokeswoman for the U.S. Distilled Spirits Council (DISCUS).
To capitalise on that trend, which is expected to last into the new year, spirits makers are offering ready-mixed cocktails for home consumption, such as Seagram's Gin & Juice, Bacardi Mojitos and Smirnoff Cosmopolitans and Pomegranate Martinis.
David Ozgo, chief economist for DISCUS, a spirits trade group, is expecting U.S. spirits sales to grow about 2 percent by volume this year, and 4 to 5 percent by revenue.
That compares with annual growth rates of about 3 percent by volume and 7 percent by revenue up until 2007, when growth began to slow with the start of a recession.
"We're not exactly like the auto industry or the housing industry, where we completely tank when the economy goes into a recession," Ozgo said. "But at the same time, we do see our ups and downs with the economic cycle."
(Reporting by Martinne Geller; Additional reporting by Syantani Chatterjee in Los Angeles; Editing by Michele Gershberg and Eddie Evans)


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Indonesian banking chief calls stimulus plan crucial
China stimulus plan could help shippers, if they survive
For U.S. craft sales, the recession is a help
A bad year for private buyouts
U.S. economic growth worst since 2001
Spain's budget deficit jumps to $20 billion
IMF says governments must be ready to spend more on stimulus
Asia bankers brace for job cuts



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OPINION
Put your money where your mouth is
By Roy Blount Jr.
Tuesday, December 23, 2008
It is at this special time of the year, and especially of this extra-special year in particular, that we realize how urgent is our need to foster love and faith and brotherhood and... at any rate, faith, and by that I mean consumer confidence.
When Americans, of all people, are afflicted with what the singer-songwriter Roger Miller called "shellout falter" - a reluctance to spend - then the whole world is liable, as Miller put it so well in his song "Dang Me," to "lack $14 having 27 cents."
Are we going to let it be said that all we had this Christmas to cheer was cheer itself? No! Let's put the holly back in shopaholic, let's get jingle-bullish.
We owe it to ourselves, to the world and to future generations. The more presents we spring for now, the lighter the tax burden will be down the line.
You notice how much more merrily that last sentence bounced along because I chose "spring" to express spending, instead of, say, "plunge," and "lighter" instead of, say, "less staggering." Words are important. So let's say "bah, humbug" to b-words like bailout and bankrupt. Let's digress from anything ending in -ession. Let's entertain some new, upbeat holiday words.
Why not wake up tomorrow morning feeling consumptious? Rhymes with scrumptious, and approaches sumptuous. When we're consumptious we've got that fire in the belly that's burning a hole in our pocket. We're going to be pumping bucks today, we're going to open our hearts to goods and services, we're going to take it upon ourselves to help America, and consequently the world, re-conomize. In so doing, we can personalize what is just about the only appealing phrase regarding the economy that has emerged this year: each of us can be his or her own stimulus package.
The season of giving is upon us. Need that sound like such a threat? Let's see if we can spruce up that venerable old word generous, which can be so cringe-inducing when we hear it spoken over the phone by a stranger calling on behalf of a charity. "I hope you will be as generous this year as last" puts us on the spot, so let's spread generous out. I don't think we want to go to heterogenerous, because people might think we're talking about sex, and there will be plenty of time for that after we get our mercantile heat back on. (For this reason, even businesses whose appeal is essentially spicy should resist, for now, the temptation to send their customers illicitations.)
But autogenerous, as in autobiographical, might remind us that giving unto others is also giving unto ourselves, especially if others give back unto us and therefore unto themselves, and we buy our presents at their store and vice versa. Does auto- strike an ominous note? Let me just say that if each of us becomes a cargiver this Christmas, there will be a lot more shining faces this New Year in Detroit. And Japan.
Let's not shrink from taking a look at the word Christmas. It's a fine old word and I for one would be loath to suggest that it has lost its edge entirely. But it doesn't exactly sing. The only thing it rhymes with is isthmus, and that but loosely. How do you like the sound of Jingle Day? Says bells and sunshine, says catchy marketing, says plenty of change. The rhymes sell themselves: mingle, tingle, Kringle, Pringles, bling'll, and hey, sleigh, pray, pay, hooray. We might even go a little more on-the-nose: Ka-chingleday.
And incidentally, when you take your tree down and put your ornaments away for next year (yes, of course there will be a next year, don't even ask such a question), do you know the best way to protect those ornaments? By wrapping them in newspaper. Several sheets per ornament. Maybe a whole newspaper section per ornament. And magazines and books are good to put between wrapped ornaments for further protection.
Not to knock the tissue-paper industry, but what has it ever done for, say, people who support themselves and their families (not to mention the Jingle Day puppies their families have been promised) by thinking up words?
Roy Blount Jr. is the author of "Alphabet Juice: The Energies, Gists and Spirits of Letters, Words and Combinations Thereof; Their Roots, Bones, Innards, Piths, Pips and Secret Parts ... With Examples of Their Usage Foul and Savory."

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Students march as gunman shoots police bus in Greece
Reuters
Tuesday, December 23, 2008
By Daniel Flynn and Lefteris Papadimas
Hundreds of anarchists chanting "cops, pigs, murderers" marched through Athens on Tuesday hours after a gunman opened fire at a riot-police bus in a third week of anti-government protests since police shot dead a teenager.
An unidentified gunman shot at the bus carrying 19 officers when it stopped at traffic lights outside a university campus in eastern Athens at around 5 a.m.
Two bullets hit the bus, bursting a tyre, but no one was injured in the incident, which is being investigated by counter-terrorism police.
It came after a two-day lull in Greece's worst riots in decades, sparked by the shooting of 15-year-old Alexandros Grigoropoulos.
"It's worrying us," police spokesman Panagiotis Stathis told Mega TV. "We collected seven bullet cases from the spot."
A police official, who asked not to be identified, said the shots were believed to come from the campus and were fired from a military weapon. Authorities are investigating a call from a previously unknown group called Public Action to a popular Greek news website claiming responsibility.
Police are forbidden by law from entering the university without permission. It has become the epicentre of disturbances which have caused hundreds of millions of euros (dollars) in damage and lost business for shopkeepers in the capital.
Some 500 anarchist students, including dozens who are occupying the Athens law school, marched through central Athens, many of them chanting "cops, pigs, murderers" and waving red and black flags. They burnt an effigy of a pig's head wearing a police hat outside parliament.
Unlike demonstrations during the previous two weeks, the protests remained largely peaceful. The only incident reported was when a gang of youths who broke away from an earlier student march overturned an empty police car in central Athens.
The fatal police shooting of Grigoropoulos on December 6 unleashed widespread discontent at high youth unemployment, government scandals, right-wing reforms and an economic slowdown due to the global crisis.
The violence has shaken a conservative government that has a fragile one-seat majority and trails the opposition in opinion polls by around 6 percentage points. Some analysts say months of street protests could force early elections next year.
(Reporting by Daniel Flynn; Editing by Michael Roddy)

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Young Muslims build a subculture on an underground book
By Christopher Maag
Tuesday, December 23, 2008
CLEVELAND: Five years ago, young Muslims across the United States began reading and passing along a blurry, photocopied novel called "The Taqwacores," about imaginary punk rock Muslims in Buffalo.
"This book helped me create my identity," said Naina Syed, 14, a high school freshman in Coventry, Connecticut.
A Muslim born in Pakistan, Naina said she spent hours on the phone listening to her older sister read the novel to her. "When I finally read the book for myself," she said, "it was an amazing experience."
The novel is "The Catcher in the Rye" for young Muslims, said Carl Ernst, a professor of Islamic studies at the University of North Carolina at Chapel Hill. Springing from the imagination of Michael Muhammad Knight, it inspired disaffected young Muslims in the United States to form real Muslim punk bands and build their own subculture.
Now the underground success of Muslim punk has resulted in a low-budget independent film based on the book.
A group of punk artists living in a communal house in Cleveland called the Tower of Treason offered the house as the set for the movie. The crumbling streets and boarded-up storefronts of their neighborhood resemble parts of Buffalo. Filming took place in October, and the movie will be released next year, said Eyad Zahra, the director.
"To see these characters that used to live only inside my head out here walking around, and to think of all these kids living out parts of the book, it's totally surreal," Muhammad Knight, 31, said as he roamed the movie set.
As part of the set, a Muslim punk rock musician, Marwan Kamel, 23, painted "Osama McDonald," a figure with Osama bin Laden's face atop Ronald McDonald's body. Kamel said the painting was a protest against imperialism by American corporations and against Wahhabism, the strictest form of Islam.
Noureen DeWulf, 24, an actress who plays a rocker in the movie, defended the film's message.
"I'm a Muslim and I'm 100-percent American," DeWulf said, "so I can criticize my faith and my country. Rebellion? Punk? This is totally American."
The novel's title combines "taqwa," the Arabic word for "piety," with "hardcore," used to describe many genres of angry Western music.
For many young American Muslims, stigmatized by their peers after the Sept. 11 attacks but repelled by both the Bush administration's reaction to the attacks and the rigid conservatism of many Muslim leaders, the novel became a blueprint for their lives.
"Reading the book was totally liberating for me," said Areej Zufari, 34, a Muslim and a humanities professor at Valencia Community College in Orlando, Florida.
Zufari said she had listened to punk music growing up in Arkansas and found "The Taqwacores" four years ago.
"Here was someone as frustrated with Islam as me," she said, "and he expressed it using bands I love, like the Dead Kennedys. It all came together."
The novel's Muslim characters include Rabeya, a riot girl who plays guitar onstage wearing a burqa and leads a group of men and women in prayer. There is also Fasiq, a pot-smoking skater, and Jehangir, a drunk.
Such acts — playing Western music, women leading prayer, men and women praying together, drinking, smoking — are considered haram, or forbidden, by millions of Muslims.
Muhammad Knight was born an Irish Catholic in upstate New York and converted to Islam as a teenager. He studied at a mosque in Pakistan but became disillusioned with Islam after learning about the sectarian battles after the death of Muhammad.
He said he wrote "The Taqwacores" to mend the rift between his being an observant Muslim and an angry American youth. He found validation in the life of Muhammad, who instructed people to ignore their leaders, destroy their petty deities and follow only Allah.
After reading the novel, many Muslims e-mailed Muhammad Knight, asking for directions to the next Muslim punk show. Told that no such bands existed, some of them created their own, with names like Vote Hezbollah and Secret Trial Five.
One band, the Kominas, wrote a song called "Suicide Bomb the Gap," which became Muslim punk rock's first anthem.
"As Muslims, we're not being honest if we criticize the United States without first criticizing ourselves," said Kamel, 23, who grew up in a Syrian family in Chicago. He is lead singer of the band al-Thawra, "the Revolution" in Arabic.
For many young American Muslims, the merger of Islam and rebellion resonated.
Hanan Arzay, 15, is a daughter of Muslim immigrants from Morocco who lives in East Islip, New York. In the months after the Sept. 11 attacks, pedestrians threw eggs and coffee cups at the van that transported her to a Muslim school, she said, and one person threw a wine bottle, shattering the van's window.
At school, her Koran teacher threw chalk at her for requesting literal translations of the holy book, Arzay said. After she was expelled from two Muslim schools, her uncle gave her "The Taqwacores."
"This book is my lifeline," Arzay said. "It saved my faith."

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Huge water main break traps commuters on Md. road
The Associated Press
Tuesday, December 23, 2008
BETHESDA, Md.: A massive, aging water main ruptured Tuesday and sent a wave of water down a suburban Washington road, transforming the street into a raging river and trapping nine motorists who had to be rescued from the frigid deluge by emergency workers in helicopters and boats.
The water gushed down River Road and rocked cars. Two people in a minivan were plucked by helicopter out of the roaring rapids, water crashing and spraying around them as they were lifted to safety in a basket. Other motorists escaped 4-feet deep water by boat.
Montgomery County fire officials said five people were checked for hypothermia; temperatures outside were in the 20s.
"The water tumbled over the car like a wave," said Silvia Saldana, of Springfield, Va., who was traveling to work when she became trapped. "I started to pray."
In a frantic 911 call released by authorities, an unidentified stranded motorist cried and pleaded for help.
"I can't see anything," the woman screamed. "I need help!"
"Stay calm, ma'am. We're coming," the operator says.
It was not immediately clear what caused the pipe to burst. Temperature, age and other factors can contribute to water main breaks.
Fire spokesman Pete Piringer said crews had trouble getting to people because of the swift-moving water. Officials said 150,000 gallons of water per minute were rushing out at one point, spilling rocks, dirt and other debris onto the road.
Trees fell onto a power line and knocked down a utility pole. Schools in the county closed early because of widespread water outages. A hospital where three people rescued were treated and released diverted ambulances and closed its trauma division because of lost water pressure.
Hebert De Rienzo tried to turn his small hatchback around as water began rising in and around his car, splashing on him and his fiancee. Christmas presents were ruined.
"We couldn't open the windows because the water would come through," he said. "We were scared."
A man who lives about 50 feet from the street described the unexpected flood after the pipe, about 5 1/2 feet in diameter, ruptured.
"I thought it might be a minor leak, then suddenly I stepped outside and, 'My God!'" said Raj Bhansaly. "It looked literally like the Potomac River."
From his house, Bhansaly said he saw two cars tied to rescue vehicles with ropes.
Firefighter Anthony Bell was on a fire truck when he saw brown water on the road and realized something wasn't right.
"We were wondering if we could make the rescue," he said. Bell and other firefighters raced through the water and pulled four people from three cars.
"I've been here 20 years," he said, "and I've never seen anything like this."
John White, a Washington Suburban Sanitary Commission spokesman, said it was not yet clear what caused the break.
Because of the water's intensity, fire officials didn't allow utility workers to immediately shut down valves where the break occurred, White said. But crews were able to shut down valves farther down the pipeline, stopping the flow. Authorities said the water went into a nearby creek.
Water pressure was being restored late Tuesday to hundreds of customers, including the National Institutes of Health and the Food and Drug Administration, which are located in the area.
There have been several major water main breaks this year in the wealthy suburb of Montgomery County. In June, a rupture closed more than 800 restaurants and left tens of thousands of people scrambling for clean drinking water.
The sanitation commission has warned its system is aging, overtaxed and underfunded. It serves 1.8 million suburban Maryland customers and has had an increasing number of water main breaks, including 1,357 between January and November this year. Last year, it had a record 2,129 breaks or leaks.
White said the pipe that broke Tuesday was installed in 1964.
The American Water Works Association, a Denver-based nonprofit that works to improve water quality, said billions of dollars are needed to replace aging pipes nationwide.
Spokesman Greg Kail said old pipes continue to be a major factor in water main breaks. Some pipes are 50 to 100 years old, he said.
"We are seeing a higher rate of breaks nationwide," he said. "We expect that rate to increase in the next 10 to 20 years."
___
Associated Press writers Brian Westley and Nafeesa Syeed in Washington and AP photographer Jacquelyn Martin in Bethesda contributed to this story.

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In budget crises, American states reluctantly halt road projects
By Jennifer Steinhauer
Tuesday, December 23, 2008
LOS ANGELES: With cars whizzing behind him along one of Southern California's most congested and detested freeways, Governor Arnold Schwarzenegger warned Monday that the state was "on a track toward disaster" as it ceases highway, school and bridge construction because of budget and credit woes.
California, which has suspended nearly $4 billion in public works projects, is one of a half dozen states delaying or halting projects because of capsizing budgets, an inability to attract investors to the municipal bonds used to bankroll many projects and a reduction in gasoline tax revenues — which underlie a lot of transportation financing.
The American Association of State Highway and Transportation Officials has identified 5,000 transportation projects nationwide that lack the dollars to proceed; many of them, like the $730 million project here to add 10 miles of high-occupancy-vehicle lanes to the 405 Freeway — Schwarzenegger's backdrop on Monday — have been stopped midstream.
"They just haven't been able to find the resources," Tony Dorsey, the spokesman for the association, said of the halted projects.
More than 40 states are struggling with revenue shortfalls, and lawmakers across the country are cutting, taxing and pleading their way toward solvency. Fixing bridges, expanding highways and other infrastructure projects have faced the same fate as government entitlement programs, state jobs and other items.
Jeffrey Caldwell, a spokesman for the Virginia Department of Transportation, said, "Projects not currently under construction or significantly far in the development process were either delayed or completely removed from plans for future construction."
In addition to the weak economy and lower gasoline tax revenues, states are "concerned about the market and cost of debt," said Scott Pattison, the executive director of the National Association of State Budget Officers in Washington
In fact, there has been very little interest among institutional investors in municipal bonds since the financial markets began to collapse this fall, and states have had to rely on individual investors — far less plentiful and reliable than institutional investors — to buy bonds.
Right after Washington cobbled together its plan to bail out banks, California, which uses bonds to pay for projects as well as to cover its short-term cash needs, sold $5 billion in notes, and 80 percent of the buyers, rather than the typical 30 percent, were individuals.
Last month, when the state tried to restructure existing debt with an additional $523 million offering, it had to reduce the offering by two-thirds, said Tom Dresslar, the spokesman for Bill Lockyer, the California treasurer.
"The institutional investor interest was nil," Dresslar said.
Further, the State Legislature's inability, with the governor, to figure out a way to deal with the state's $15 billion budget gap has weakened the market's confidence in California, something other states could face if the fiscal situation deteriorates.
This month, Standard & Poor's downgraded the $5 billion in revenue bonds issued by California last month and put more than $50 billion of debt on watch for a downgrade.
"The bottom line is we are not viewed as a quality investment," Dresslar said, adding that California is not in position to offer the sort of fat interest rates needed to get offerings off the ground.
California and other states are clearly holding out hope that President-elect Barack Obama will pump some federal money into the stalled infrastructure projects, and some may even be delaying work until they have a chance to make the case for federal spending. Obama has proposed a stimulus package intended to create or save three million jobs, largely through financing infrastructure improvements.
"It happens to be that the Obama administration wants to rebuild America," Schwarzenegger, a Republican, said at a news conference here.
Steve Swartz, a spokesman for the Kansas Department of Transportation, said most projects in that state scheduled for December and January had been suspended because of uncertain financing.
"We're hopeful, keeping our fingers crossed like every other state, that a stimulus package will come through," Swartz said. "If it does, we'll be in good shape."
In the meantime, some states might think twice about proclaiming great calamity in the face of crumbling infrastructure, high unemployment and lack of state financing, said Matt Fabian, director of Municipal Market Advisors, an independent consulting firm.
The strategy might attract the attention of the federal government, but it does little to entice investors in municipal bonds.
"We have seen over the last three months that every bridge is about to collapse, every highway is a danger and every hospital is full of anthrax," Fabian said. "By putting out a lot of headlines about those issues, local governments are undermining the only base we have left. There is no institutional demand for municipal bonds, so we are relying completely on individuals, and individuals get scared by those headlines."

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Two dead in Texas freeway shooting spree
Reuters
Tuesday, December 23, 2008
DALLAS: A gunman was still at large on Monday after killing at least two people in a shooting spree on highways in and around Dallas, police and local media said.
Four separate shootings in less than an hour paralyzed traffic during the busy early evening rush hour, police said.
"We are working on the possibility that they may all be related," said Joe Harn, a police spokesman in the city of Garland, near Dallas.
A motorist was killed in Garland as his car was stopped at a traffic light. The gunman, reported to have been in a pick-up truck, then sped away.
Minutes later, there were three shootings on a major freeway leading into Dallas, leaving a truck driver dead.
Television footage showed traffic backed up as police closed off the crime scene around the 18-wheeler truck.
(Reporting by Ed Stoddard; Editing by John O'Callaghan)


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Shoplifting rises in U.S. as economy drops
By Ian Urbina and Sean D. Hamill
Tuesday, December 23, 2008
Richard Johnson is the first to admit it was a bad idea.
Recently laid off from a job building trailers in Elkhart, Indiana, Johnson came up a dollar short at Martin's Supermarket last month when he went to buy a $4.99 bottle of sleep medication. So, "for some stupid reason," he tried to shoplift it and was immediately arrested.
"I was desperate, I guess," said Johnson, 25, who said he had never been arrested before. As the economy has weakened, shoplifting has increased, and retail security experts say the problem has grown worse this holiday season. Shoplifters are taking everything from compact discs and baby formula to gift cards and designer clothing.
Police departments across the United States say that shoplifting arrests are 10 percent to 20 percent higher this year than last. The problem is probably even greater than arrest records indicate since shoplifters are often banned from stores, rather than arrested.
Much of the increase has come from first-time offenders like Johnson making rash decisions in a pinch, the authorities say. But the ease with which stolen goods can be sold on the Internet has meant a bigger role for organized crime rings, which also engage in receipt fraud, fake price tagging and gift card schemes, the police and security experts say.
And as temptation has grown for potential thieves, so too has stores' vulnerability.
"More people are desperate economically, retailers are operating with leaner staffs and police forces are cutting back or being told to deprioritize shoplifting calls," said Paul Jones, the vice president of asset protection for the Retail Industry Leaders Association.
The problem, he said, could be particularly acute this December, "the month of the year when shoplifting always goes way up."
Two of the largest retail associations say that more than 80 percent of their members are reporting sharp increases in shoplifting, according to surveys conducted in the last two months.
Compounding the problem, stores are more reluctant to stop suspicious customers because they fear scaring away much-needed business. And retailers are increasingly trying to save money by hiring seasonal workers who, security experts say, are themselves more likely to commit fraud or theft and are less practiced at catching shoplifters than full-time employees are.
More than $35 million in merchandise is stolen each day nationwide, and about one in 11 people in America have shoplifted, according to the nonprofit National Association for Shoplifting Prevention.
"We used to see more repeat offenders doing it because of drug addiction," said Samyah Jubran, an assistant district attorney in Knoxville, Tennessee, who for 13 years has handled the bulk of shoplifting cases there. "But many of these new offenders may be doing it because of the economic situation. Maybe they're hurting at home, and they're taking a risk they may not take otherwise."
Much of the stolen merchandise is sold online.
Dave Finley, president of the Web company Leadsonline.com, which offers software that helps store owners track stolen goods being sold online and at pawn shops, said his company had seen a 50 percent increase over the past year in the number of shoplifting investigations handled by the company.
Security experts say retail theft is also being facilitated by Web sites that sell fake receipts that thieves can use to obtain cash refunds for stolen merchandise.
Andreas Carthy, the creator of one such site, denied that he was assisting with fraud.
"We provide a no-questions-asked service," he said in an e-mail message, adding that his site was intended for people looking for prank gifts or students seeking to inflate spending to get more generous allowances from their parents.
At about $40 each, the Web site - which insists they are "for novelty use only" - sells about 80 fake receipts a month, Carthy said.
Local law enforcement and retailers have been trying new tactics to battle shoplifting and other forms of retail crime.
In Savannah, Georgia, a local convenience store chain has linked its video surveillance to a police station so officers can help monitor the store for shoplifting and other crimes. In Louisiana, the police have been requiring shoplifters, even first-time offenders, to post $1,000 bail or stay in jail until their court date. On Staten Island, in New York, malls have started posting the mug shots of repeat shoplifters on video screens.
"There are more of them, and they seem more desperate," said a store manager about shoplifters at the nation's largest shopping center, the Mall of America in Bloomington, Minnesota, which has seen a 19 percent increase in shoplifting this year over last.
The manager, who asked not to be identified because she was not permitted to speak to reporters, said stealing gift cards was especially popular during the holidays.
Shoplifters also seem to be getting bolder, according to industry surveys.
Thieves often put stolen items in bags lined with aluminum foil to avoid detection by the storefront alarms. Others work in teams, with a decoy who tries to look suspicious to draw out undercover security agents and attract the attention of security cameras, the police said.
"We're definitely seeing more sprinters," said an undercover security guard at Macy's in Oakland, California, referring to shoplifters who try to make a run for the door.
Bob Driehaus contributed reporting.









Petition over detained Chinese writer goes international
By Edward Wong
Tuesday, December 23, 2008
BEIJING: More than 160 prominent writers, scholars and human rights advocates outside mainland China have signed an open letter to President Hu Jintao asking him to release a well-known intellectual who was detained earlier this month. The letter was posted on the Internet on Tuesday.
The letter to Hu indicates that the case of Liu Xiaobo, the intellectual, is quickly turning into the latest human rights cause célèbre in China and could further embarrass the Communist Party at a time when Chinese leaders are celebrating the 30th anniversary of its policy of "reform and opening up."
Among the writers signing the letter are three Nobel laureates in literature - Nadine Gordimer, Seamus Heaney and Wole Soyinka - as well as other scribes who regularly champion freedom of expression, including Umberto Eco and Salman Rushdie.
Just as notable is the fact that an array of foreign China scholars have signed the petition. Academics specializing in Chinese studies are often cautious about taking stands on political issues deemed sensitive by the Communist Party because the Chinese government has a track record of denying visas to people who publicly oppose the party's views. Some of the scholars who signed the petition are already on the Chinese government's blacklist, while others still have regular access to the country.
The scholars include Geremie Barmé of Australian National University; Richard Baum of the University of California, Los Angeles; and Andrew Nathan of Columbia University.
Well-known scholars in Hong Kong, which is controlled by China but enjoys greater freedoms than the mainland, also signed the letter.
Liu, a 53-year-old literary critic and dissident, was taken by security officers from his home on the night of Dec. 8 and has not been heard from since. Human rights advocates say that Liu has been made a target because he was one of the driving forces behind "Charter 08," a bold manifesto demanding democratic reforms and accountability from the Communist Party that was signed by more than 300 Chinese from various backgrounds and recently posted on the Internet.
Other people who signed the manifesto have also been detained and questioned by the authorities. All except Liu have been released.
The officers who detained Liu also took computers, mobile phones and personal papers from his home. His wife and other family members have received no word of his whereabouts or condition.
The open letter to Hu that was posted on Tuesday says: "For the international community to take seriously China's oft-stated commitment to respect human rights and the rule of law, and for China's own citizens to trust the judicial system to redress legitimate grievances, it is urgent that China's central leadership ensure that no one be arrested or harassed simply for the peaceful expression of his or her views."
The letter notes that although Liu was twice detained for several years, he has never been convicted of any crime.
Baum, the political scientist in Los Angeles, helped popularize the petition by circulating it on Chinapol, a listserv managed by Baum that is read by many scholars of China. Baum said that he usually tried to avoid using the listserv for political causes, but that this case was different.
"While I have always tried to maintain Chinapol's political neutrality, some violations are so egregious that I cannot, as a sentient being, remain neutral," he said in an e-mail exchange.
Bruce Jacobs, a professor of Asian languages and studies at Monash University in Australia, said he signed the petition because "Liu was clearly arrested because of Charter 08."
"That concerned me," he said, "I've been very concerned with human rights in China for a long time, and recently it's gotten worse."
Liu has been a pillar of political dissent in China for years. He supported the Tiananmen Square protests of June 1989 and continued his dissident writings afterward, work that led to detention by the authorities. Starting in 1996, he spent three years in re-education through labor for having "repeatedly stirred up trouble and disrupted public order." Since 1999, he has been allowed to continue his activism, presumably with the permission of the country's leaders, but has been under surveillance.
Nicholas Bequelin, a China researcher for Human Rights Watch, said that if Liu is formally arrested and charged, then that would mean Chinese leaders want to show intellectuals that the Party is hardening the line and unwilling to tolerate any dissent.
"He's been detained before," Bequelin said. "But if they send him to jail, that sends a political signal."

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Enlivening Beijing's Legation Quarter
By Jen Lin-Liu
Tuesday, December 23, 2008
BEIJING: Clad in a pinstripe suit, gold cuff links, and tortoise-shell glasses, Handel Lee's hands shudder in front of him like the vibrating engine of a motorcycle. "It's about escape," he said. "It's the whole feel, the rumbling sound. Certain guys like that - the percussion. You go with the roads. You lose yourself."
Though challenged by tough economic times and other problems, Lee said he wanted to channel the excitement of that winding road into Beijing's new Legation Quarter. He sat in the Italian restaurant Sadler savoring a plate of crudo. As chairman of the Legation Quarter, Lee said he aimed to turn a compound of stately neoclassical buildings adjacent to Tiananmen Square - which once housed the U.S. Embassy - into a destination art and dining hotspot.
After a five-year renovation and many delays, the Legation Quarter is coming alive as chefs in the slate-gray stone and brick buildings serve small streams of diners, and art openings draw Beijing's movers and shakers. The large square lawn, misted by sprinklers for dramatic effect, was recently the site for a Versace fashion show, with the actors Jet Li and Michelle Yeoh in attendance.
Taking time away from his profession as a lawyer, Lee, a 47-year-old Chinese-American, has spearheaded a string of Chinese renovation projects that have turned languishing historic buildings into, as he put it, "gathering places for the most creative people in society."
The chef Daniel Boulud's restaurant, Maison Boulud, is the Legation Quarter's anchor tenant. "He's passionate about wine, architecture, art and food," Boulud said of Lee. He's someone who can dream it and build it."
Lee's Courtyard Gallery and Restaurant became one of Beijing's first established contemporary art galleries and a successful restaurant not long after it opened in 1997.
Lee also headed a Shanghai project called Three on the Bund that pioneered luxury retailing, art and restaurants along that city's riverfront in 2004. The Michael Graves-designed renovation project re-enlivened a historic building with tenants like Giorgio Armani and the restaurateur Jean-Georges Vongerichten.
Lee has had his share of setbacks. Another proposed project in Shanghai, a renovation of the former British Consulate by Zaha Hadid, was indefinitely postponed last year after the developer with whom Lee was working was jailed in connection with a government corruption scandal. A restaurant and nightclub in Beijing set up at the location of an imperial ice warehouse closed in 2007 after a year of poor business. And the Courtyard's gallery is no longer as prominent as it once was after relations soured with the director, who went on to start a rival gallery.
"Handel brought urban sophistication to the Beijing art scene 10 years ahead of the curve," said Phil Tinari, a Beijing-based contributing editor to Artforum. "He is a guy who's driven to complete projects, and he always needs something new on the horizon."
Now Lee is feeling the pressure of the global financial crisis, which is beginning to strain Chinese luxury developments. Aside from the several million dollars of his own money that he said he put into the Legation Quarter, investors include a holding company called Hong Kong Construction and a real estate company, Vantone.
To date, Maison Boulud, which opened just before the Beijing Olympics this summer, has been the most successful of the Legation Quarter's venues. Lee, surveying the half-filled dining room, said the restaurant had attracted a strong local following, illustrating the potential of China's small but growing upper class.
Also on offer are Spanish tapas and sushi at the twin restaurants called Agua and Shiro Matsu. Guests can browse through luxury watches at a Patek Philippe outlet or installations at the Beijing Center for the Arts. Lee said an underground repertory theater will follow by mid-2009.
Numerous setbacks have delayed the opening of the $40 million-plus Legation Quarter. Lee and his partners originally intended the venture to be a mixed-use complex, with a balance of retail shops, galleries and restaurants. When luxury retailers like Chanel opted for other Beijing locations, the plan was revised.
Even that revision met challenges. The chef Vongerichten pulled out, as did several other high-end restaurateurs and the London-based Boujis nightclub. Government bureaucracy held up approvals on renovation work.
For every month that the project has been delayed, Lee said, the costs have increased by almost a million dollars.
Lee's frustration is palpable. He lashed out at luxury retailers, calling them "lemmings" for setting up in "bland, nondistinctive" Beijing shopping malls that offered better lease terms. "All I could offer them was the most elegant, historic setting in China," he said.
Lee's interest in the Legation Quarter project goes beyond the financial. His maternal grandfather, Philip Fugh - a close aide to John Leighton Stuart, the last U.S. ambassador to China before the 1949 Communist takeover - attended meetings in the building that now houses Maison Boulud. Fugh and his family fled with Stuart to Bethesda, Maryland, where Lee was born in 1961. He moved to Beijing in 1991.
Today, Lee's lifestyle is a far cry from a first visit with relatives in Beijing in the early 1980's. "They had two bowls," he said. "I got one of them, my mother got the other, and everyone else ate off of shards of porcelain. I felt like I had to do something."
To Lee, that "something" was to create a level of "elegance and refinement and sophistication" that has not existed in China in the last half century. He scoffs at his critics, who say that only a small percentage of the population can afford to enjoy his ventures. "I could make a lot more money doing low-end or medium-end" development, he said. "But that's not important."

At house party on U.S. health care, the diagnosis is it's broken
By Robert Pear
Tuesday, December 23, 2008
VIENNA, Virginia: When a dozen consumers gathered over the weekend to discuss health care at the behest of President-elect Barack Obama, they quickly agreed on one point: they despise health insurance companies.
They also agreed that health care was a right; that insurance should cover "everything," not just some services; and that coverage should be readily available from the government, as well as from employers.
Those were the conclusions of a house party held here in Northern Virginia at the home of Karima Hijane and Theodore Kolovos, information technology consultants who have been married for seven years. It was one of more than 4,200 such events being held around the country from Dec. 15 to 31, as part of an experiment in grass-roots politics and policy-making, to provide recommendations to the president-elect.
"We have to keep the momentum going," said Hijane, 34, who was a volunteer in the Obama campaign and is active in women's health advocacy. "We are not lobbyists. We are simple citizens. We want to make sure that our voices are heard and that health care is reformed."
One of the people seated around Hijane's dining room table, Bruce Chatman, worked for IBM for 29 years. Corporations, he said, have too much influence in the legislative process and the health care system. He wants to counterbalance their power with the energy and passion of citizens lobbying for themselves.
Chatman, a Chicago native who lives in Fort Washington, Maryland, said he had been inspired by Obama's book "The Audacity of Hope" and started working for his campaign as a volunteer in April 2007.
"I don't believe health care should depend on people making money," Chatman said. "The profit motive has to be tempered, especially on the administrative side of the health care business."
Shiva Makki, an economist, complained that in many cases, insurers did not cover the costs of screening procedures and preventive care.
Dr. Lawrence Nelson, a scientist at the National Institutes of Health who emphasized that he was speaking as a private citizen, said: "The incentives in the current health insurance system are upside down. The less care you provide, the bigger your profits."
Nelson said he liked Obama's proposal to create a new public plan, similar to Medicare, that would compete with private insurance companies.
Alex Lawson, a volunteer in the Obama campaign now trying to build public support for Obama's agenda, said a public plan would give people a choice they do not have.
"A public insurance plan would not take anything away," Lawson said. "It just adds another option."
After one speaker expressed a mild concern about too much involvement by the government, Kolovos said: "Everyone is afraid of government bureaucracy. But what we have now, with the filing and adjudication of insurance claims, is also bureaucratic."
Several people at the health care forum said they were frustrated by the current arrangement under which health insurance is tied closely to the workplace.
Hamudi Almasri, a 35-year-old information technology consultant at a small company that does work for the Labor Department, said that when he changed jobs, he had to change health plans and doctors.
"If I change employers, why should it be such a hassle?" Almasri asked.
His wife, Li Yang, said: "When I move from one doctor to another, my information is lost. In many cases, the doctors don't talk to each other. In a country where information technology is so advanced, there's no system linking all these doctors together. It's a hindrance to treatment."
Li said she and her husband "had a few surprises" when they started shopping for a better health insurance policy on their own.
"If we wanted a baby," Li said, "insurers would not cover the maternity care if conception occurred within six months after we purchased the insurance. We were shocked."
In many cases, the standard individual insurance policy does not cover maternity care, though such coverage can be bought for an additional premium. Even then, some insurers stipulate that maternity benefits will be available only if a woman waits for a certain amount of time before becoming pregnant.
The Obama transition team asked for "particularly poignant stories to highlight the need for health care reform," and such stories were abundant at the round table here.
Almasri said that when his infant daughter had severe eczema, she had to wait several months to see a dermatologist in their HMO network. By then, he said, "the symptoms were all cleared up."
Hijane said she had gone from doctor to doctor for more than a year before she got correct diagnoses for premature ovarian failure and celiac disease, a digestive disorder.
"Instead of being able to focus on my health," Hijane said, "I focused on insurance to cover the tests and treatments. Everything we did was designed to find a job with good health insurance."
The Obama transition team did not ask people how a new health care system should be financed, but several people here said that individuals and businesses should have to pay a small health care tax — some preferred to call it a "contribution" — so that everyone could be covered.
Chatman said he expected insurance companies and others in the health care industry to resist many of Obama's proposals.
"This is warfare for the health care of our country," Chatman said. "The question is, Will money win, or will the people win? If we lose, we'll be a second-class country."

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EDITORIAL

The allies lay down a marker
The Boston Globe
Tuesday, December 23, 2008
Politely yet firmly, America's European allies have rebuffed the Bush administration recently in two major ways. At a summit in Brussels of NATO foreign ministers, the allies were determined to renew dialogue with Russia and delay indefinitely any decision on admitting Georgia and Ukraine as members. This stance creates a welcome opportunity for President-elect Barack Obama, who has a chance to reconfigure relations with NATO allies and with Russia.
The foreign ministers were tactful in rejecting the positions that Secretary of State Condoleezza Rice espoused, but the message was clear. After eight years of tension with the Bush administration, the NATO allies of "old Europe" wanted to assert their interests and lay down a marker for the Obama administration.
The foreign ministers decided to resume talks with Russia in the context of the so-called NATO-Russia Council - talks that had been suspended in the aftermath of Russia's war with Georgia last August. This decision amounted to a negation of the Bush administration's policy of refusing to conduct business as usual with the Kremlin.
The other crucial decision in Brussels was no less a denial of Bush administration requests. At a NATO summit last April, the Europeans turned down a Bush proposal that Georgia and Ukraine be accorded the fast-track application status known as Membership Action Plan, or MAP. In Brussels, Rice sought the alternative of informal Georgia-NATO and Ukraine-NATO councils.
Sensing an end-run around the formal application process and the veto it guaranteed to each of the 26 NATO members, Germany Foreign Minister Frank-Walter Steinmeier said after the summit that the allies "decided today that there will be no shortcut." In other words, Georgia and Ukraine cannot gain entry into NATO until Germany and the other European allies are sure their relations with energy-supplier Russia will not suffer.
This will not be a bad starting point for Obama if he wants to forge sounder, more cooperative relations with Russia as well as the European allies.

OPINION

Do you believe?
By Judith Warner
Tuesday, December 23, 2008
Last Thursday, I put the finishing touches on my column and then, throwing all caution and reason to the wind, I began to bake cookies. For teacher gifts. At 9:30 p.m.
This was a very stupid idea.
I am a terrible baker, under the best of circumstances. I am good for nothing after 10 p.m., when the preventive meds I take for migraines kick in. I should have known that embarking on intricate melting and mixing and measuring at the end of a long day, with an overeager and overtired 8-year-old at my elbow ("Vacation starts tomorrow, Mommy! Who cares about sleep?") was a recipe for disaster.
But it's the season of miracles, and I was not to be deterred.
For I am resolved, this Christmas-and-Hanukkah-time, to be cheery and happy and hopeful. This despite the bad economy. This despite the string of late-night mess-ups (It's not my fault! The dog ate my gifts!) that netted the teachers a mere four cookies apiece, separated by a very generous amount of brightly colored tissue.
And this despite - and, indeed, in large part because of - the steady stream of e-mail news roundups I've been receiving for the past couple of weeks, all sending me the message that for sensitive, thoughtful, decent souls, really, the holidays are no time to be happy at all.
The miserable missives began before Thanksgiving, when the Council on Contemporary Families sent out a helpful list of sources and story ideas on topics like "Not Home for the Holidays" (for parents estranged from their adult children), "How to Keep Your Sex Life Alive During Hard Economic Times and Holiday Stress" (a two-fer), "The Gift that Keeps on Giving: Gender Traps and the Holidays," and, from a person called a "cyberpsychology specialist," "Long-Distance Couples and Happy Holidays: Digital Lifesavers and Land Mines."
More recently, Psych Central, a news consolidator that has the gall to call itself "Your Mental Health Break," sent out an eight-page compilation of holiday-themed links to stories like "Ho-Ho-Ho-Holiday (Office) Parties: Bah Humbug?," "Seasonal Stepfamily Stress," "Managing Children's Expectations" and "Transforming Holiday Angst Into Gratitude."
At first, I greeted the e-mails with a smile. ADDitude magazine kicked off the season with an article on The Holiday Husband ("he can only handle things for so long,") which was accompanied by a picture of a man trying to read his morning newspaper as his wife anxiously stood over him trying to Make Plans. This made me laugh so hard that I spilled coffee all over my desk and immediately forwarded the article to my husband, Max, with the thought that we might send it out instead of a family Christmas card. (I received no response.)
But, after weeks of "coping" tips, "de-stressing" guides and how-to's on "beating the holiday blues," I ended up kind of sad. And vaguely resentful.
It wasn't that I was tempted to make light of people's difficulties, cast doubt upon their mental-health issues or deny that the holidays can be stressful for all the reasons that they're supposed to be fun. It's not as though I am any stranger to "Managing Unhappy Relatives at Holiday Time," as Psych Central puts it. I know that for many people, anticipating happiness as family gatherings loom is an act of faith on a par with expecting Santa Claus to come down the chimney.
But without some belief in the possibility of happiness, without some willful suspension of our attunement to the dreariness of reality, the holiday season really is nothing more than a forced march of shopping wrapped in a laundry list of neuroses.
One of the greatest risks, I think, of living in a secular world - as I, semi-regretfully, do - is something I might call the Woody Allenization of everything. Too much reason. Too much self-awareness. Too much blah-blah. Too little wonder, and marvel and faith - in the largest and vaguest sense of the word.
You have, in this climate, to carve out whatever little islands of belief that you can. My 11-year-old daughter, Julia, resolutely refuses not to believe in Santa Claus. No number of mall Santas, varying in face and demeanor, no amount of presents delivered straight to the door by UPS, can shake her from her faith. This is, I suppose, her way of preserving a sense of mystery and miracle in her otherwise secular world, where chocolate Santas at school have gone the way of the Pledge of Allegiance. And I admire her greatly for it.
I haven't been able to believe in Santa Claus since first grade. But I will, this year, approach our extended family Christmas gathering with an anticipation of joy and peace.
Miracles, after all, can happen, they say. If you believe.Judith Warner writes Domestic Disturbances, a column at nytimes.com.

A generation left behind by Filipino migrant workers
By Carlos H. Conde
Tuesday, December 23, 2008
MANILA: Dolores Gerong's one wish this Christmas is to be back in the Philippines with her three children.
She is driven by more than holiday sentiment. Nearly two years ago, she left her country to work as a maid in Hong Kong, becoming one of the millions of Filipino migrant workers scattered around the globe.
The three teenage daughters she left behind need her, she says. Her husband cannot help: He has been working as a driver in Saudi Arabia for the past 14 years.
"I'm worried each time my sister, who lives with them, tells me they often stay out late at night, spending money that I worked hard to earn on frivolous things, and not performing as well as they used to in school," Gerong, 35, said by telephone from Hong Kong. "I need a serious talk with my children."
Gerong's anguish is a familiar refrain in the Philippines, where nearly nine million people - 10 percent of the country's population - have left to take jobs overseas. These industrious migrants are willing to endure separation, sometimes for years at a time, to help support families back home.
Their contribution is also appreciated by their government. Migrants' remittances, valued by the World Bank at $17 billion last year, are credited for keeping the fragile Philippine economy afloat. In recognition of their value, the government has stepped up vocational training and other programs to enhance Filipino workers' attractiveness on the global market. Concerns have been voiced over how the current financial crisis could affect overseas employment.
But questions are increasingly being raised about the social costs of this heavy dependence on absent workers, especially now that the majority are women, most of whom are mothers who have left their children behind.
According to several recent studies, the "feminization of migration" is exacting a steep toll.
Filipino men have long gone abroad for jobs, mainly in construction and seafaring. But in the past two decades the ever-rising demand in the developed world for English-speaking caretakers - nurses, nannies and domestic servants - has opened the door wide for Filipino women. They are now found in great numbers in the United States, Europe, the Middle East and other parts of Southeast Asia, notably Hong Kong and Singapore.
They are increasingly less likely to be found back home in the Philippines, caring for their own families. An estimated six million Philippine children are growing up now with at least one parent absent because of migration.
That the absent parent is now usually the mother has resulted in "displacement, disruptions and changes in care-giving arrangements," Vanessa Tobin, deputy director for programs at Unicef, said at a conference on migration in Manila in September.
Adolescents seem especially hard hit. A study released this year by the non-profit Asia-Pacific Policy Center in Manila indicated that children between 13 and 16 are the most affected, with many dropping out of school, experimenting with drugs or getting pregnant.
Indeed, one of Gerong's great concerns now is that her eldest daughter has a boyfriend. "It upsets me that I am not there to see her through this," she said.
Rosemarie Edillon, executive director of the Asia-Pacific Policy Center, said, "It is worrisome that children in this age group, which requires the most adult attention, are actually the ones being neglected."
In its study of 120 households in several villages in the northern province of Ilocos Norte, the group's researchers found that children with at least one migrant parent had a higher incidence of common health problems like ear infections or scabies.
"You would expect that they would have the money to buy medicines, but there's only so much a grandmother can do," Edillon said. Many children of migrants are left in the care of a grandparent or other relatives.
Rebecca Lucero, who left her three-month-old son behind 18 years ago to work at a Holiday Inn in Dubai, decided to go home to the Philippines for good in 2000, when the boy was 10. It was a decision that Lucero said nearly erased the guilt she had felt when she left Patrick in her mother's care. (Her husband, Rodrigo, is still working in a hotel in Dubai.)
"I am really glad I returned just when Patrick was entering his teen years," Lucero said. "Now, I can watch him grow up and guide him. I have been playing catch-up since I returned, but it is all worth it."
In Lucero's neighborhood, where 75 percent of the more than 1,000 households have at least one parent working abroad, steps are being taken to address the impact of migration on children.
Few work harder at this than Nimfa Melegrito, who runs Sammaka - a Tagalog-language acronym for the Organization of Migrant Workers and Their Families - from her home in a slum area of Quezon City.
Melegrito, 62, is herself a former migrant worker - she spent 10 years as a dressmaker in Saudi Arabia - and feels that her family paid a price for her absence. Although she was able to send money back, she was less involved in the lives of her children, none of whom finished college as she had hoped. Melegrito is convinced that "things would have been different had I been around to care for them."
Melegrito and her organization are trying to help migrants' families cope with their many problems. "Teenage pregnancy, drug abuse, poor grades - name it, and we've faced it," she said.
They have been cooperating with groups like the private, nonprofit Kanlungan Center for Migrant Workers to provide counseling and other support services to these families. A top goal is to provide training and placement for better-paying jobs in the Philippines, to wean migrants' families from their heavy dependence on remittances from migrant relatives, Melegrito said.
Her group has also enlisted the participation of migrants' teenage children. One of them is Rommel Miñoza, 14, who has been living with his grandmother since he was 2 while his mother works as a beautician in Saudi Arabia.
"He's a good child, and he knows the sacrifices his mother has made just to send home a few hundred dollars a month," said the grandmother, Inocencia Miñoza.
Rommel tends to break down in tears whenever his mother is mentioned. "Even though we constantly communicate through the cellphone, I miss her," Rommel said.
The boy said he honors his mother every time he participates in a project for Melegrito's group, which has been arranging gatherings so these children can socialize. Sometimes, Melegrito's group brings in students from exclusive private schools in the Manila area to coach the migrants' children with their studies and help them to overcome their isolation.
"We need this kind of community support, so these children do not feel abandoned at the very least," Melegrito said.
Scholars like Rhacel Salazar Parreñas, a sociologist at the University of California, Davis, have long advocated the need for the larger community to take a more active role in addressing the impact of migration.
Although Filipinos are known for their extended families - according to Unicef, 63 percent of families with a mother working abroad have a grandparent or other relatives living with them - Parreñas thinks Philippine society has not done enough to recognize the special circumstances of the migrants' families with their missing parents.
"'Family Values' courses in school do not mention such families, but instead textbooks insist on normalizing the nuclear family with a father and mother and children living together," Parreñas wrote in an e-mail message.
The Philippines, she added, "faces the challenge of adjusting to its changing family forms and accordingly recognize the experiences and welfare of kids with migrant parents, so they do not feel like the 'oddball' in society."

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MEANWHILE

When to fly was to soar
By Ann Hood
Tuesday, December 23, 2008
PROVIDENCE, Rhode Island: MEANWHILE
When I stepped off the plane from Miami into the Charlotte, North Carolina, airport for a connecting flight home, I immediately knew something was wrong. Hordes of desperate people crowded the terminal. I quickly learned that flights headed to the Northeast were canceled because of a storm. The earliest they could get us out of Charlotte was Tuesday. It was Friday. A gate agent stood on the counter and shouted: "Don't ask us for help! We cannot help you!"
I joined a mob that ran from terminal to terminal in search of a flight out. Eventually, I found six strangers willing to rent a van with me. We drove through the night to Washington, where I took a train the rest of the way to Providence.
The real problem, of course, is that incidents like this happen every day, to everyone who flies, more and more often. It really gets to me, though, because for eight years I was on the other side, as a flight attendant for TWA.
I know the days are gone when attendants could be written up if we did not put the linen napkins with the TWA logo embossed on them in the lower right-hand corner of the first-class diners' trays. As are the days when there were three dinner options on flights from Boston to Los Angeles - in coach. When, once, stuck on a tarmac in Newark for four hours, a planeload of passengers got McDonald's hamburgers and fries courtesy of the airline.
I have experienced the decline of service along with the rest of the flying public. But I believe I have felt it more acutely, because I remember the days when to fly was to soar. The airlines, and their employees, took pride in how their passengers were treated.
A friend who flew for Pan Am and I share stories about cooking lamb chops and dressing them in foil pantaloons; we debate the beauty of my Ralph Lauren uniform versus her Oleg Cassini. I like to tell her how we would have the children on board serve the after-dinner mints, delicious pale green circles with TWA stamped on them. We remember the service we provided - dare I say cheerfully? Proudly?
Now, passengers aren't served at all. During the meal-less flights, with scowling flight attendants who have snickered when I asked for a blanket and the seat pockets crowded with trash, I cannot help but remember how we passed out magazines, offered playing cards to bored passengers, refilled coffee cups. If we didn't, passengers complained. We had a stack of complaint cards at the ready, right next to the dry-cleaning vouchers we handed out if we spilled anything on someone.
Our names were embroidered on our aprons, and the passengers used them. At TWA, there was a rumor about a flight attendant who had her apron embroidered with the name O. Miss, as in "O. Miss, I need more 7-Up," and "O. Miss, may I have a pillow?" But that was an airborne legend. We couldn't get away with something like that.
I remember the first time I stepped on to a Lockheed L-1011 as a flight attendant in 1979. I marveled at the beauty of that plane. I put on my apron with my name across the top, and I smiled at the people who had saved up their money, put on their Sunday best, and chosen TWA. It was not so long ago that flying had that civility, that glamour, when flying through the sky really felt like something special.
Airlines offer valid excuses for cutting back service. But what are they gaining when passengers leave a flight disgruntled, mistreated and hungry? It is surprising how easy it is to please passengers. Cereal and lots of coffee in the morning can do wonders for someone who had to leave home at 4 a.m.
What works best of all, of course, is a smile. I trained for six weeks to become a flight attendant. Although the main focus was safety, I spent almost as much time learning good service. Airline employees' frustration and exasperation are all too evident to their passengers.
When I was hired, we had a joke that to get the job we had to answer every question with, "I love people and I love to travel." But it was true. I loved bantering with businessmen and talking about books with passengers. I looked forward to them telling me where they had been and where they were going.
I know times are tough for the airlines, but things weren't any better when I was flying. The oil crises of the 70s brought not just long lines at the pump but mandatory unpaid furloughs for us in the air. And then came deregulation; our jobs felt as precarious as airline jobs do today.
Yet even so, we had dignity, passengers and crews alike. We were together up there at 35,000 feet, and for those hours in the clouds and stars, all of our worries stayed on the ground below.Ann Hood is the author of "The Knitting Circle" and "Comfort."

Germany arrests Rwanda genocide suspect
Reuters
Tuesday, December 23, 2008
BERLIN: German police in the city of Frankfurt arrested a 51-year-old Rwandan man suspected of involvement in genocide, federal prosecutors said Tuesday.
The Hutu, identified only as O.R., was mayor of an area in northern Rwanda and is suspected of taking part in the mass killings of Tutsis in 1994.
In particular, he is suspected of involvement in a massacre in Nyarubuye in April 1994 in which several thousand Tutsis were killed, the prosecutors said in a statement.
It is the second high-profile detention in Germany of an individual linked to the Rwandan genocide in the last two months.
In November, German police held Rose Kabuye, an aide to the Rwandan President, for questioning in France over the death of a former president that sparked the mass killings of Tutsis and some moderate Hutus in the central African nation in 1994.
She has since been extradited to France, although the Rwandan government said earlier Tuesday she would be allowed to Rwanda on bail.
The prosecutors' office in the southern city of Karlsruhe said German authorities had been investigating O.R., who was arrested Monday, since March.
Only last week, a U.N. court handed a life sentence to a former army colonel accused of masterminding the slaughter of 800,000 people in Rwanda in 1994.
(Reporting by Madeline Chambers; Editing by Giles Elgood)

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Cyprus files charges over airline disaster
Reuters
Tuesday, December 23, 2008
NICOSIA: Cypriot prosecutors filed charges in court Tuesday against five people for a 2005 plane crash which killed 121 people in Greece's worst air disaster.
The Helios Airways Boeing 737-300 was travelling from Larnaca in Cyprus to Prague when it crashed north of Athens on August 14 2005, killing everyone on board.
In documents submitted to Cyprus courts Tuesday, public prosecutors listed charges of manslaughter and causing death through negligence.
Prosecution officials said five people were named in the documents. Their identities were not publicly disclosed.
"Indictments will be delivered and the date set for the individuals to respond is February 26," Cyprus's deputy attorney-general Akis Papasavvas said. "The charges concern two of the three most serious offences under the Cyprus penal code."
Failure to switch a valve regulating oxygen supply to the aircraft knocked its pilots and most of the passengers unconscious shortly after the plane took off from Larnaca, investigators found.
The aircraft glided on autopilot in Greek air space for two hours before it ran out of fuel and smashed into a hillside.
A flight attendant with a trainee pilot's licence, probably the only person conscious on the plane, took the controls and tried in vain to avert the disaster. He was spotted in the cockpit by Greek pilots of two F-16s scrambled to trail the Boeing.
An inquiry by Greek authorities published in October 2006 cited perceived deficiencies in the safety culture of the airline.
Under Cyprus law, manslaughter carries a maximum jail term of life, and death through negligence or reckless behaviour four years.
Helios, which was renamed after the disaster, has since shut down.
(Writing by Michele Kambas, editing by Richard Williams)

More readers picking up electronic books
By Brad Stone and Motoko Rich
Wednesday, December 24, 2008
Could book lovers finally be willing to switch from pages to pixels?
For a decade, consumers mostly ignored electronic book devices, which were often hard to use and offered few popular items to read. But this year, in part because of the popularity of Amazon.com's wireless Kindle device, the e-book has started to take hold.
The $359 Kindle, which is slim, white and about the size of a trade paperback, was introduced a year ago. Although Amazon will not disclose sales figures, the Kindle has at least lived up to its name by creating broad interest in electronic books. Now it is out of stock and unavailable until February. Analysts credit Oprah Winfrey, who praised the Kindle on her talk show in October.
The shortage is providing an opening for Sony, which embarked on an intense publicity campaign for its Reader device during the gift-buying season. The stepped-up competition may represent a coming of age for the entire idea of reading longer texts on a portable digital device.
"The perception is that e-books have been around for 10 years and haven't done anything," said Steve Haber, president of Sony's digital reading division. "But it's happening now. This is really starting to take off."
Sony's efforts have been overshadowed by Amazon's. But this month it began a promotional blitz in airports, train stations and bookstores, with the ambitious goal of personally demonstrating the Reader to two million people by the end of the year.
The company's latest model, the Reader 700, is a $400 device with a light and a touch screen that allows users to annotate what they are reading. Haber said Sony's sales had tripled this holiday season over last, in part because the device is now available in the Target, Borders and Sam's Club chains. He said Sony had sold more than 300,000 devices since the debut of the original Reader in 2006.
It is difficult to quantify the success of the Kindle, since Amazon will not disclose how many it has sold and analysts' estimates vary widely. Peter Hildick-Smith, president of the Codex Group, a book market research company, said he believed Amazon had sold as many as 260,000 units through the beginning of October, before Winfrey's endorsement. Others say the number could be as high as a million.
Many Kindle buyers appear to be outside the usual gadget-hound demographic. Almost as many women as men are buying it, Hildick-Smith said, and the device is most popular among 55- to 64-year-olds.
So far, publishers like HarperCollins, Random House and Simon & Schuster say that sales of e-books for any device — including simple laptop downloads — constitute less than 1 percent of total book sales. But there are signs of momentum. The publishers say sales of e-books have tripled or quadrupled in the last year.
Amazon's Kindle version of "The Story of Edgar Sawtelle " by David Wroblewski, a best seller recommended by Winfrey's book club, now represents 23 percent of total Amazon sales of the book, according to Brian Murray, chief executive of HarperCollins Publishers Worldwide.
Even authors who were once wary of selling their work in bits and bytes are coming around. After some initial hesitation, authors like Danielle Steel and John Grisham are soon expected to add their titles to the e-book catalogue, their agents say.
"E-books will become the go-to-first format for an ever-expanding group of readers who are newly discovering how much they enjoy reading books on a screen," said Markus Dohle, chief executive of Random House, the world's largest publisher of e-books.
Nobody knows how much consumer habits will shift. Some of the most committed bibliophiles maintain an almost fetishistic devotion to the physical book. But the technology may have more appeal for particular kinds of people, like those who are the heaviest readers.
At Harlequin Enterprises, the Toronto-based publisher of bodice-ripping romances, Malle Vallik, director for digital content and interactivity, said she expected sales of digital versions of the company's books someday to match or potentially outstrip sales in print.
Harlequin, which publishes 120 books a month, makes all of its new titles available digitally, and has even started publishing digital-only short stories that it sells for $2.99 each, including an erotica collection called Spice Briefs.
Perhaps the most overlooked boost to e-books this year — and a challenge to some of the standard thinking about them — came from Apple's do-it-all gadget, the iPhone. Several software programs for reading e-books have been created for the device, and at least two of them, Stanza from LexCycle and the eReader from Fictionwise, have been downloaded more than 600,000 times.
Both of these companies say they are now tailoring their software for other kinds of smartphones, including BlackBerrys. Another company, Scroll Motion, announced this week that it would begin selling e-books for the iPhone from major publishers like Simon & Schuster and Penguin.
Publishers say these iPhone applications are already starting to generate nearly as many digital book sales as the Sony Reader, though they still trail sales of books in the Kindle format.
Meanwhile, the quest to build the perfect e-book reader continues. Amazon and Sony are expected to introduce new versions of their readers in 2009. Adherents expect the new Kindle will have a sleeker design and a better microprocessor, allowing snappier page-turning.
Haber of Sony said future versions of the Reader will have wireless capability, a feature that has helped make the Kindle so appealing. This means that the device does not have to be plugged into a computer to download books, newspapers and magazines.
Other competitors are on the way. Investors have put more than $200 million into Plastic Logic, a company in Mountain View, California, The company says that next year it will begin testing a flexible 8.5-by-11-inch reading device that is thinner and lighter than existing ones. Plastic Logic plans to begin selling it in 2010.
Along the same lines, Polymer Vision, based in the Netherlands, demonstrated a device the size of a BlackBerry that has a five-inch rolled-up screen that can be unfurled for reading. There are also less ambitious but cheaper readers on the market or expected soon, including the eSlick Reader from Foxit Software, arriving next month at an introductory price of $230.
E Ink, the company in Cambridge, Massachusetts, that has developed the screen technology for many of these companies, says it is testing color screens and hopes to introduce them by 2010.
Many book lovers are quite happy with today's devices. MaryAnne van Hengel, 51, a graphic designer in Croton-on-Hudson, New York, once railed against e-readers at a meeting of her book club. But she embraced the Kindle her husband gave her this fall shortly after Winfrey endorsed it.
Van Hengel now has several books on the device, including a Nora Roberts novel and Doris Kearns Goodwin's "Team of Rivals." She said the Kindle had spurred her to buy more books than she normally would in print.
"I may be shy bringing the Kindle to the book club because so many of the women were so against the technology, and I said I was too," Van Hengel said. "And here I am in love with it."

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Julius Fast, 89, writer of both fact and fiction, is dead
By William Grimes
Tuesday, December 23, 2008
Julius Fast, who won the first Edgar Award given by the Mystery Writers of America and went on to publish popular books on body language, the Beatles and human relationships, died on Tuesday in Kingston, New York. He was 89.
His death was confirmed by his daughter Jennifer Fast Gelfand. He had lived in New York until suffering a stroke a year and a half ago.
Fast, the younger brother of the novelist Howard Fast, won instant acclaim as a mystery writer. "Watchful at Night," his first novel, was written while he was still in the Army Medical Corps during World War II. Its cover identified him as Sergeant Julius Fast. The book won the inaugural Edgar Allan Poe Award in 1946 for the best first novel published in 1945.
Fast followed up with several more detective novels, including "Walk in Shadow" (1947) and "A Model for Murder" (1956), before branching out into pop psychology, health and relationships. His most successful book, "Body Language" (1970), which analyzed the unconscious messages sent out by the human body, inspired several sequels, notably "The Body Language of Sex, Power and Aggression" (1976), "Body Politics" (1980) and "The Body Book" (1981).
Fast was born in New York in 1919. After earning a bachelor's degree at New York University, where he was a pre-med student, he spent three years in the army, which assigned him to a blood lab in Boston. While in the army he edited a collection of science fiction stories, "Out of This World" (1944), and then turned his hand to crime fiction.
In 1946 he married Barbara Sher, also a writer, who survives him, and with whom he wrote "Talking Between the Lines: How We Mean More Than We Say" (1979). Besides his daughter Jennifer, of Shady, New York, other survivors are a son, Timothy, of Des Moines; another daughter, Melissa Morgan of Casselberry, Florida; and five grandchildren. Howard Fast died in 2003.
To support his growing family, Fast worked as a writer and editor at several medical magazines. A stint at a podiatric publication provided the raw material for "You and Your Feet" (1970), but his wide-ranging interests account for the variety in titles like "The Beatles: The Real Story" (1968), "The New Sexual Fulfillment" (1972) and "Weather Language" (1979).
In 1988 he published "What Should We Do About Davey?," a semiautobiographical novel about an awkward adolescent employed at a boys' camp in the Catskills that was very much like the one owned by Fast's uncle.
Often he wrote to order for publishers rushing a book into print on a timely subject, like the findings of the sex researchers William Masters and Virginia Johnson. Within months of the publication of "Human Sexual Response" in 1966, Fast produced "What You Should Know About Human Sexual Response." He also wrote books on how to quit smoking, how men and women can overcome their incompatibilities and the meaning of new research on Omega-3 fatty acids.
"Julius is a fast writer," said Tom Dardis, the editor who commissioned his Beatles book. "That's no pun on his name."

Mortgage approvals slump 61 percent
Reuters
Tuesday, December 23, 2008
By David Milliken
The number of mortgages approved for home purchase slumped to a fresh record low in November, with the seasonally-adjusted number falling to 17,773 -- almost 61 percent down on the same time last year.
Mortgage approvals are now barely one third of the average level at the peak of the housing market in 2007, the data from the British Bankers' Association showed.
The news spells further gloom for house prices, which are 15 percent lower than a year ago, and continues a stream of bad data that has led many economists to expect the Bank of England will cut interest rates to a record low of 1 percent next month.
Underlying net mortgage lending showed its weakest monthly change since April 2001, rising by 2.9 billion pounds in November, down from October's 3.3 billion rise.
BBA statistics director David Dooks blamed part of the drop on banks and prospective home-buyers pausing to take stock after the Bank slashed interest rates by 1.5 percentage points in November.
"The 1.5 percentage point November reduction ... caused lenders to re-assess product ranges and borrowers to re-consider future borrowing costs, so consequently there was another drop in market activity," he said.
The average value of a new mortgage for home purchase was 117,000 pounds, 23.7 percent lower than a year ago and greater than the percentage fall in house prices recorded in separate data from major mortgage lenders for last month.
"People remain concerned about the impact of the rapidly slowing economy on their personal finances," Dooks added.
The tumble in approvals for home loans was mirrored in sliding approvals for refinancing deals and other mortgages.
Remortgages were down almost 50 percent on the year at 29,798 and other mortgages were down 44 percent at 22,295.
Howard Archer, chief UK economist for IHS Global Insight, said the data spelt further gloom for the housing market.
"The outlook for the housing market remains bleak. Ongoing very tight credit conditions, still relatively stretched housing affordability on a number of measures (and) faster rising unemployment ... form a powerful set of negative factors weighing down on the housing market," he said.
The BBA data also showed that Britons were continuing to use their credit cards in the run-up to Christmas. Net card borrowing was up 200 million pounds in November, 7.9 percent higher than a year ago.
(Editing by David Stamp/Tony Austin)

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British economy dropped more than previously reported

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The pound under pressure
Reuters
Tuesday, December 23, 2008
LONDON: The pound remained on the defensive on Tuesday, pressured by a gloomy economic outlook and recent comments by Bank of England policymakers which fuelled expectations for more aggressive monetary easing.
Markets will scrutinise final gross domestic product numbers for the third quarter at 9:30 a.m., which are expected to fall 0.5 percent from the previous quarter, unchanged from a preliminary estimate.
At 8:39 a.m., the euro was up 0.1 percent at 94.05 pence, having climbed to a session high of 94.55 pence earlier in the day.
The pound hovered near an all-time low of 95.56 pence hit last week, and many in the market say that is only a matter of time before the pair hits parity.
"We'll probably see a surge towards parity in euro/sterling although the expectations for the Bank of England to adopt quantitative easing are somewhat priced in," said Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi UFJ.
Trade-weighted sterling was at 76.0, a touch above 75.7 hit late on Monday, the lowest level according to daily Bank records going back to 1990.
The pound was slightly higher against the dollar at $1.4890.
Bank Deputy Governor John Gieve said on Monday that the country needed some form of new instrument which would be more effective in managing the economy.
"We need to develop some new instruments, which sit somewhere between interest rates, which affect the whole economy ... and individual supervision and regulation of individual banks," he told the BBC.
The bank rate stands at 2.0 percent, its lowest in 50 years, but economists expect the Bank to cut rates further towards zero. It has already eased by 300 basis points since October.
Gieve's comments raised expectations that the Bank may be ready to take more unconventional steps to keep pumping in liquidity into the banking system even after rates fall to near zero, like in the United States.
"With the pound rapidly becoming a financing currency, the reasons to be long sterling in 2009 appear all but non-existent," said Calyon analysts in a research note.
(Reporting by Tamawa Desai, editing by Mike Peacock)

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