The U.S.A is at war with Pakistan; it is close to being a failed state itself with the financial meltdown.
As Dexter Filkins trots around Bagdad promoting his book, and speaking of radical improvement since 2006, and as the U.S.A moves troops north for its other war, with another failed state, Iraq is actually teetering on the edge of chaos.
Meanwhile, the money poured into the markets makes aid to Africa insignificant; pirates and kidnappers operate freely in Somalia, Sudan, Yemen and Nigeria, leaving aside the problems of the Congo and Dafur.
Iran operates with impunity, as does Russia, its fleet off Venezuela; India prepares to join the war against Pakistan.
McCain will be elected because America is too racist to elect a black man, a third of whom think Obama is a Muslim, the proxy for racism.
2008 isn't over yet, and I fear the worst is still to come.
Nearly 13,000 in hospital in China milk scandal
BEIJING: The number of Chinese infants sick in hospital after drinking tainted milk formula doubled to nearly 13,000 and the country's top quality regulator resigned on Monday in the latest blight on the "made-in-China" brand.
Four deaths have been blamed on the toxic milk powder, which causes kidney stones and agonising complications, and a string of Asian countries have banned or recalled Chinese milk products.
The official Xinhua news agency said in a brief statement that the country's quality chief, Li Changjiang, had quit in light of the case. "Li was the highest ranking official brought down so far by the dairy product contamination scandal," it said.
The Communist Party chief of Shijiazhuang, home to the Sanlu Group which made the tainted milk powder, has also been fired, Xinhua said, the latest official to loose their job for mishandling the incident.
The Health Ministry said the number of children hospitalised due to the milk powder contaminated with the industrial chemical melamine rose from a previously announced total of 6,244 -- which included many who had left hospital -- to 12,892, including 104 who were in a serious condition.
More than 1,500 had already left hospital and nearly 40,000 with milder symptoms "received clinical treatment and advice" before going home. The ministry did not explain the sharp rise.
The jump to more than 54,000 affected children was announced late on Sunday, escalating a scandal that has again shaken trust in Chinese products after last year's scares over toxic and shoddy goods from toothpaste and drugs to pet food and toys.
Melamine, used in making plastics, has also been found in cartons of milk and some dairy exports, but no illnesses from those sources have been reported.
Medical experts said on Monday that, as well as causing kidney stones, melamine could potentially cause far more serious complications by crystallising and then blocking tiny tubes in the kidneys.
Chinese Premier Wen Jiabao visited hospitals in the national capital in a bid to reassure an anxious public. But he also said the outbreak of poisonings exposed deeper failings.
"Although the ordinary people are very understanding, as the government we feel very guilty," he said, according to Xinhua. "This event is a warning for all food safety."
He also vowed stiff penalties if the problem re-emerges. "If there are fresh problems, they must be even more sternly punished under the law," Wen said.
China's food quality watchdog has said it found melamine in nearly 10 percent of milk and drinking yoghurt samples from three major dairy companies: Mengniu Dairy Co, the Inner Mongolia Yili Industrial Group and the Bright group.
Nitrogen-rich melamine can be added to watered-down milk to fool quality checks, which often use nitrogen levels to measure the amount of protein in milk.
Past product safety scandals have exposed corruption, influence-peddling and lumbering, feuding bureaucracies overwhelmed by fragmented, cost-cutting producers. The milk scandal has shown a government campaign did not end those woes.
China's dairy producers faced a "crisis of confidence" that would need strong official steps to cure, said Lao Bing, manager of a Shanghai-based dairy investment company.
"Consumers will start rebuying in a month or two if they feel sure the government is undertaking a vigorous clean-up," he said. "Exports will take longer. This will have a major impact."
JUMPY EXPORT MARKETS, PANICKED PARENTS
Japan's Marudai Food Co. withdrew buns made with milk supplied by Yili. A spokesman for Japan's Nissin said that group had also recalled products with Chinese dairy ingredients.
The Japanese government has asked 90,000 companies to check if imports have been contaminated with melamine.
Other markets that have banned or recalled Chinese milk products include Brunei, Singapore, Malaysia, Hong Kong and Taiwan. Taiwan banned all mainland dairy products from Sunday.
Dutch dairy group Friesland Foods removed three types of milk products from shelves in Hong Kong, Singapore and Macau as a precaution, a spokesman told the ANP news agency.
The products were made by a Chinese company in which Friesland Foods holds a minority stake. Friesland Foods said less than 1 percent of its products were affected.
Even White Rabbit Creamy Candy, a popular Chinese brand of milk sweet, was contaminated with melamine, Singapore has warned.
At the weekend, a three-year-old Hong Kong girl was found to have a kidney stone after drinking a milk product tainted by melamine, making her the territory's first suspected victim.
But the biggest worry remains in China.
Sanlu, the nation's biggest maker of infant milk powder, knew about the problem but did not disclose it publicly for at least a month throughout August, when Beijing hosted the Olympics, officials have said.
The revelation brought a surge of panicky parents and children to hospitals, and the government has promised free treatment for stricken children. But some parents said they worried about costs and long-term complications.
Zhou Zhijun, from south China's Hunan province, said she took her wailing, increasingly thin daughter to hospitals at least three times from June to late August before doctors diagnosed a kidney stone.
"All those visits and checks cost 20,000 yuan (1,600 pounds), and I still don't know who will pay for that," she said, adding that her 15-month-old baby had drunk Sanlu milk powder. "Also what if there are complications and problems later? Who'll pay for that?"
The Chinese Ministry of Agriculture said despairing farmers were dumping milk and killing cattle after companies stopped buying their supplies. It promised subsidies to help farmers.
EU agency to check health risk of China milk powder
ANNECY, France: Europe's top food safety agency will issue a scientific opinion this week on whether processed items containing milk products coming from China pose a risk to human health, the agency's chief said on Monday.
Speaking on the margins of an informal meeting of EU agriculture ministers in France, the executive director of the European Food Safety Authority (EFSA) said the opinion was likely to be issued on Wednesday or Thursday.
EFSA's opinion had been requested by the European Commission, the EU's executive arm responsible for monitoring food safety and implementation of EU food standards across the bloc's 27 member countries, Catherine Geslain-Laneelle said.
"The Commission would like to know, in case you find melamine in this type of product, would there be a risk for human health," she told Reuters.
"There are so many ingredients that are imported and then used in complex products."
China's top quality regulator has resigned over the scandal, which has found milk powder contaminated with the industrial chemical melamine, used in making plastics.
Four deaths have been blamed on the toxic milk powder, which causes kidney stones and agonising complications, and a string of Asian countries have banned or recalled Chinese milk products. Thousands of Chinese infants are also sick in hospital after drinking tainted milk formula.
While the European Union does not import milk or milk products from China, Commission experts are keen to make absolutely sure that nothing enters EU markets as an ingredient or as part of a processed product that might pose a health risk.
"There's no question of having milk products from China in the European Union ... but in case they (Chinese) have used milk for the production of biscuits, for example," EU Health Commissioner Androulla Vassiliou told reporters.
"My suspicion is that they use melamine to give the impression of high protein in the milk. It's not a coincidence that people are being criminally prosecuted in China," she said.
Melamine is rich in nitrogen, and relatively cheap. Adding it to milk makes watered-down milk's protein level appear higher. Standard quality tests estimate protein levels by measuring nitrogen content.
Redesigning a polluted province in Italy
TERRACINA, Italy: Before Michele Assunto hauled in his fishing net from the banks of a reed-lined canal here, he used a pole to push the garbage out of the way. "They really need to clean this up," he growled.
Where another canal empties into the sea here at the small community of Porto Badino, the only animals that can survive are giant rats, local officials say. Of course, the sea is not fit for swimming for 200 meters on each side of the outlet, they add with a shrug - yet bathers splash in the Mediterranean nearby.
In many parts of this affluent coastal region southeast of Rome and northwest of Naples, canals dumping effluent into the Mediterranean from farms and factories coexist with fishermen and beach-goers. The area would clearly need considerable work to be returned to a more pristine state. For places as far gone as this one, however, a new breed of landscape architects is recommending a radical solution: not so much to restore the environment as to redesign it.
"It is so ecologically out of balance that if it goes on this way, it will kill itself," said Alan Berger, a landscape architect at the Massachusetts Institute of Technology who was excitedly poking around the smelly canals on a recent day and talking to fishermen like Assunto.
"You can't remove the economy and move the people away," he added. "Ecologically speaking, you can't restore it; you have to go forward, to set this place on a new path."
Designing nature might seem to be an oxymoron or an act of hubris. But instead of simply recommending that polluting farms and factories be shut, Berger specializes in creating new ecosystems in severely damaged environments: redirecting water flow, moving hills, building islands and planting new species to absorb pollution, to create natural, though "artificial," landscapes that can ultimately sustain themselves.
Berger, who is the founder of P-Rex, for Project for Reclamation Excellence, based at MIT, signed an agreement with the province of Latina to design a master ecological plan for the most polluting part of this region.
He wants the government to buy a tract of 200 hectares, or nearly 500 acres, in a strategic valley through which the most seriously polluted waters now pass. There, he intends to create a wetland that would serve as a natural cleansing station before the waters flowed on to the sea and residential areas.
Of course, better regulation is also needed, principally to curb the dumping of pollutants into the canal. But a careful mix of the right kinds of plants, dirt, stones and drainage channels would filter the water as it slowly passes through, he said. The land would also function as a new park.
Berger was quick to acknowledge that the approach is vastly different from the kind normally advocated by established environmental groups like the World Wildlife Fund or the Nature Conservancy, which generally seek to restore land or preserve it in its natural state, often by closing down or cleaning up nearby polluters.
In the Florida Everglades, for example, the state is buying and closing a sugar plant to preserve the environment. But that approach may not work in places that are already severely degraded, Berger said.
"The difference between me and WWF," he said, referring to the World Wildlife Fund, "is that when I look at this place, I never think about going back. The solution has to be as artificial as the place. We are trying to invent an ecosystem in the midst of an entirely engineered, polluted landscape."
At first glance, Latina does not look like an environmental disaster zone. Bordered by mountains to the east and the Mediterranean to the west, it is a place of spectacular rural vistas and even a few famous beach resorts, like Sabaudia.
But in many ways, Berger said, it is as damaged and distorted as the area around an abandoned mine in Breckenridge, Colorado, that he is also redesigning, as part of a Superfund cleanup underwritten by the U.S. Environmental Protection Agency.
Indeed, the entire environment here is a manufactured one already - and one that is successful, in economic terms at least.
Two thousand years of "water management" have turned the once malaria-infested Pontine Marshes into a region that is among Italy's most prosperous. Latina is home to industrial parks, resorts filled with weekend homes, and farms, some of which make Italy the world's leading producer of kiwis.
Latina's prosperity is built on drained swampland, kept habitable by six pumps as huge and noisy as airplanes, put in place in 1934 by Mussolini. Each day they pull millions of liters of water - up to 36,000 liters a second - out of the soggy ground, directing it into an elaborate system of cement-lined canals that ultimately dump it into the sea.
The entire province would return to marshland in seven days if the pumps were turned off, said Carlo Cervellin of the Pontine Marsh Consortium.
Roman emperors and popes had tried for centuries to drain the marshes to allow better access to the sea along the famed Appian Way, all with limited success. The draining of the Pontine Marshes with pumps was one of Mussolini's engineering triumphs.
What emerged from the swamp was a triumph of Fascist determination as well as one of Italy's economic powerhouses. Mussolini built the city of Latina on the newly dried-out land, where it became a center of industry and farming.
But prosperous does not necessarily mean sustainable.
Berger came to Rome's American Academy in 2007 on a year's fellowship to study the history of the Pontine Marshes. It was only after he started to collect data on the land and the water that he realized how damaged the area was.
"If there was ever a place to know exactly where your food is produced, it's here," he said. "I would only eat from uphill."
Pristine water enters the Latina plain from high mountain streams in the area of Ninfa; it becomes dirtier and dirtier as it heads toward the sea, picking up the runoff from a succession of factories, farms and houses.
Berger found that half of the water in the system was severely contaminated, he said, with phosphorus and nitrogen levels that get worse as it runs through the canals toward the coast.
"In terms of phosphorus, much of the water is in the raw-sewage range, and in terms of nitrates, it was in the swine effluent range - like being right downstream from a pig farm," Berger said.
By the time the water reaches the sea at some outlets, Berger's aerial photos show, it has become a plume of silt filled with pollutants. Pharmaceutical factories and large farms are along the canals. Farmers also use the water for irrigation.
Presented with his research, even local officials were surprised at the portrait of pollution that emerged, but they were impressed enough with the solution he proposed that they are continuing to work with him now that he is back in the United States.
"He studied the zone from a different point of view than ours," said Carlo Perotto, the planning director for the province. "We had different people concerned with water, industry and agriculture. He opened a new way of thinking."
Relying on Russia: A question of risks
By John Vinocur
PARIS: Late last week, Australia effectively put on hold ratifying a treaty that would turn it into a uranium supplier for Russia. The reason, plus or minus a nuance or two: Russia's invasion of Georgia.
With the world's headlines and crawl lines framing global attention between financial Armageddon and attempts at salvation, the decision got next to no prominence.
And neither did Sweden's move to delay a report on the future of its armed forces because Russia's tactics in Georgia call its military planning and readiness seriously into question. The government also announced it was junking a plan to disband certain units and close installations.
Here were two countries that could easily take a slide away from any kind of pushback to Russian aggression - one a neutral, the other on the far side of the world from Georgia - saying in effect that Vladimir Putin's regime is risky business and no longer worthy of their trust.
Representing a loss of close to a billion dollars a year in revenue for Australia, and an unusual choice by Sweden to rise above caution's parapet, the actions came against a surge of faltering attention and questionable resolve elsewhere in relation to Russia. In the Australian case, the opposition joined with the Labour government in Parliament to back a commission's recommendation that ratification of the uranium treaty be delayed.
Sure, Condoleezza Rice has again offered damning words, describing a "dark turn" in Russia's behavior back toward "a paranoid, aggressive impulse." But the Bush administration has done nothing meaningful or palpable so far to bring substance to its pledge in early August that "Russia cannot be allowed to get away with invading its neighbor."
Since then, Russia has recognized the independence of South Ossetia and Abkhazia, essentially annexing two Georgian provinces, and raised its troop strength in them to 7,600 men.
What did the European Union, which is handling the bargaining to get the Russian military out of Georgia, say about that just last week?
Proving that a financial crisis is a better place to hide news than a late Saturday night in August, José Manuel Barroso, the president of the EU Commission, offered that Russia's withdrawal from "Georgia proper" will be enough to restart the negotiations it postponed on a Strategic Partnership agreement between the EU and Russia.
There goes the EU's meaningful response on Georgia.
NATO argues that Russia leaving additional forces in the new puppet states can't be considered a necessary return to the status quo.
But here you have a traditionally risk-averse EU, tut-tutting about a financial maelstrom centered on speculative strategies and horribly disregarded risks, yet announcing that Georgia should be soon risk-free enough to remove the only bit of opprobrium the EU has piled on Putin's head.
Nota bene: There is little prospect of returning Russian troop levels to previously agreed "peacekeeping" levels in South Ossetia and Abkhazia.
But unlike the United States, NATO or the EU, what Australia and Sweden have done individually is to take uncomfortable, concrete steps to face up to a country they now publicly regard more as a risk than a partner.
Australia and Sweden have something very basic in common. Neither is dependent on Russia for its energy needs. In a sense, that fact sets them free. Absent anything resembling American leadership, it also points in the direction of adequate responses to an unreliable, aggressive state.
If the EU were making a priority of breaking its dependence on Russian energy supply and delivery, it would be liberating itself from Putin's well-practiced skills in energy blackmail, and driving home a point the invader could not ignore.
"Our response must include ... a collective defense to secure our energy supplies," Prime Minister Gordon Brown of Britain has said. "I will encourage our European partners to use our collective bargaining power rather than seek separate deals with Russia."
So? So nothing massive, determined or striking. The need for more energy security, softly worded, is contained in an EU declaration on Georgia.
But those separate deals Brown denounced block anything that would look like a counter-offensive where all members abandon sweetheart arrangements with Russia, stop fussing about national vs. community prerogatives within the EU, take possible financial hits like Australia, or reconsider nuclear power.
Short on action elsewhere, the United States through its ambassador in Stockholm, Michael Wood, put in a reasonable word on the matter. He said in a Swedish newspaper article that the Swedes could be leaders in refusing to allow Russia "to sow differences between European states."
That meant re-examining the South Stream gas pipeline project, whose principal Russian goal, he said, was to cut Ukraine off from the natural gas distribution system. Italy, Greece, and Bulgaria are shareholders.
Sweden, Wood wrote, should also take "a hard look" at the planned Nord Stream gas pipeline, mapped to run through Swedish territorial waters in the Baltic Sea. It represents, Wood said, "a special arrangement between Germany and Russia."
No offense caused in Sweden, which on environmental grounds - read security considerations - has withheld its approval of the pipeline's construction. But in Germany, Quel Scandale! Foreign Minister Frank-Walter Steinmeier ordered an official protest made to the Americans.
Graceless and negative spirits will recall that the pipeline deal with Putin was the last major act of Gerhard Schröder's seven years as chancellor. It came just a few months before Schröder, once out of office, was named by Moscow in 2005 as chairman of the supervisory board of Gazprom's German company.
Now, with Russia still in Georgia and holding, still unchallenged, what Brown refers to as an "energy stranglehold over Europe," the Germans have expressed irritation that an ally should not keep silent on the situation's obvious specifics.
It is part of what's arguably small change relegated to the margins of the news for a time, but who would dare say it can't get worse.
Oil, money and graft on display at trial of Alaska senator
WASHINGTON: Ted Stevens and Bill Allen, who will soon confront each other in a federal courtroom here, were once friends of sorts, thrown together at Alaska's busy intersection of politics and oil money.
For decades, each man played a different but essential role in the story of the state's transformation from a remote frontier into an economic bonanza.
Stevens, 84, the longtime Republican senator from Alaska, is a decorated World War II aviator, a graduate of Harvard Law School and a former federal prosecutor. He was due to go on trial Monday on felony charges that he knowingly failed to disclose about $250,000 worth of gifts and services from Allen.
Allen, 71, who will be the prosecution's main witness, grew up as an itinerant fruit picker and dropped out of high school when he was 15 to enter the energy industry as a welder. After working on some of the state's earliest offshore oil platforms, he eventually made millions of dollars as a freewheeling contractor for oil companies on the North Slope.
Stevens has earned a reputation as a gruff and cantankerous legislative player, but Allen's world in Alaska was far cruder than the relatively genteel ways of Washington.
Allen has pleaded guilty to bribery and conspiracy charges and testified at two trials of Alaska state legislators about his determined efforts to bribe lawmakers. The trials portrayed a raucous, frontier atmosphere in Juneau, the state capital, where Allen and his lobbyists set themselves up in a liquor-stocked hotel suite and summoned legislators to direct their votes on oil issues.
In the indictment of one lawmaker, Pete Kott, the government said that Allen had told him in crass language that he owned him.
At one trial, Allen was asked about reports that he had considered killing his nephew over an attempt to blackmail him over his alleged gifts to Stevens. Allen denied that he had planned to kill his nephew, saying that although he was angry, "I wouldn't have done that because his mother is my sister."
At the height of his influence, Allen created and ran one of Alaska's largest companies, Veco, which until recently employed about 4,000 people (at one time including Ben Stevens, the senator's son). He recently sold most of the closely held oil services company for $146 million, retaining what could be an additional $70 million in assets. Allen, who faces an estimated 11 years in prison, has had his sentencing delayed numerous times, presumably to assure his cooperation with prosecutors as part of a deal in which his children remained untouched by the investigation.
Stevens, who entered the Senate 40 years ago and is the longest-serving Republican in Senate history, is running for re-election this autumn. The trial has been accelerated at his request in hopes of obtaining a verdict before Election Day. Stevens acquired his considerable power over years on the Senate Appropriations Committee, a post from which he has steered millions, perhaps billions, of dollars in federal money to Alaska. For most of that time, he has reigned as the state's dominant political figure.
Despite their differences, Stevens and Allen developed a relationship, Alaskans say, at least in the symbiotic sense of men who recognize in each other someone who could prove helpful.
According to the indictment, Stevens treated Allen as an all-purpose handyman and service desk. He is charged with seven counts of failing to list on his Senate disclosure forms goods and services provided by Allen that were used to refurbish the Stevenses' family home in Girdwood, southeast of Anchorage.
The indictment says that Stevens first asked Allen to help renovate the Girdwood house in 2000. In short order, the indictment charges, Allen and his company arranged to jack up the house on stilts and built a new first floor with two bedrooms and a bathroom. They also added a garage, workshop and wraparound deck.
In ensuing years, they provided new kitchen appliances, repaired the boiler and provided a fancy built-in gas grill, the indictment says. Stevens wanted his daughter to have a better car, the indictment says, so Allen bought a $44,000 Land Rover and provided it to the daughter in exchange for a used Mustang worth less than $20,000, and $5,000 in cash.
It is especially noteworthy that Stevens is charged only with failing to list the gifts on Senate disclosure forms and not with bribery, that is, taking the items in direct exchange for some official favor. But the Justice Department has filled the indictment, nonetheless, with assertions that as a senator, Stevens provided significant help to Veco and Allen in their business ventures in Alaska and overseas. Prosecutors say the assertions are needed to demonstrate that Stevens had a motive to conceal the gifts.
Stevens's lawyers have protested, saying that including those assertions lets the government "smear" him without having either the ability or burden of proving there was any quid pro quo.
Defense lawyers have given notice that they intend to attack Allen, who is expected to testify that Stevens fully understood that he was getting much of Allen's largesse free.
The defense lawyers have asked for records of a 2004 investigation into whether Allen had sex in the 1990s with a girl who was younger than 16. The case was closed at the request of federal prosecutors when the girl, by then an adult, became the chief witness in a federal case involving a sex-and-cocaine ring, according to news reports.
Stevens's lawyers have also asked for Allen's medical records to show that he might be mentally impaired from a motorcycle accident in 2001 in which he was not wearing a helmet and hit his head on the pavement. Allen testified in the previous trials that his thinking and memory remain unaffected, leaving only his speech patterns impaired.
The trial, before Judge Emmet Sullivan, is expected to last at least three weeks. It is unclear whether Stevens will take the stand, but lawyers not involved in the case said that was unlikely because it would expose to an open-ended cross-examination a man who is widely regarded even by his Senate colleagues as ill-tempered and difficult to like. His lawyers also failed to get the trial moved to Alaska, leaving Stevens with a jury in the District of Columbia, which historically has been unsympathetic to officials charged with wrongdoing.
Under Senate rules, Stevens would not have to resign if he is convicted. Now locked in a tight race with his Democratic opponent, Mayor Mark Begich of Anchorage, Stevens would obviously receive a boost and a major talking point if he is acquitted.
Stevens is also getting help from an unexpected source: Governor Sarah Palin. The two have long had a distant relationship, but he has risen in some opinion polls, a benefit some have attributed at least in part to the Republican enthusiasm that Palin has generated as the party's nominee for vice president.
Stevens announced his strong support for Palin the day she was added to the ticket. "I share in the pride of all Alaskans," he declared.
Begich has also made a point of praising Palin - even claiming a kinship with her as a reformer.
Although he supports Senator Barack Obama for president, Begich says Palin's nomination was good for Alaska and for women.
"They sort of represent the next generation of leadership," Julie Hasquet, a spokeswoman for the Begich campaign, said of Palin and her boss.
Palin has spent most of this month campaigning out of state and has endorsed neither Stevens nor Begich. Few people believe Palin would openly support a Democrat, but neither is she expected to endorse Stevens.
Russian warships sail to Venezuela
MOSCOW: A squadron from the Russian Navy's North Sea Fleet sail for Venezuela on Monday, a Russian Navy spokesman said, in a bid by Russia to bolster military links in Latin America as relations with the United States continue to deteriorate.
The convoy - including the nuclear-powered guided missile cruiser Peter the Great and the anti-submarine ship Admiral Chabanenko - left the fleet's base in Severomorsk bound for the Venezuelan coast where it will take part in joint maneuvers with the Venezuelan Navy sometime in November, said Igor Dygalo, a Russian Navy spokesman.
Stung by the West's strong condemnation of Russia's actions in last month's war with Georgia, Moscow appears to have redoubled its efforts to strengthen ties with Venezuela, Cuba and other Latin American countries in moves reminiscent of the Soviet Union's proxy battles with the United States in the region during the Cold War.
Last week, two Russian Tu-160 strategic bombers flew to Venezuela for exercises over the Caribbean Sea, and a Russian delegation led by Igor Sechin, a deputy prime minister and chairman of the Russian oil company Rosneft, visited Caracas, and Havana for talks on expanding economic ties. It was Sechin's second visit to the region in less than two months.
The decision to deploy Russian warships so close to the American coastline could also be linked to the Kremlin's frustration over the presence of NATO and American naval vessels in the Black Sea, a region Moscow considers its sphere of influence. Earlier this month, an American naval ship delivered humanitarian aid to Georgia via one of the country's Black Sea ports.
Russia has denied that the war in Georgia had any connection to the Russian navy's planned exercises with Venezuela. ""These exercises were planned long before the Georgian-Ossetian conflict," Dygalo said. "They are not linked to the conflict."
Meanwhile, Hugo Chavez, Venezuela's president, plans to visit Russia this week, his second visit in two months.
In an interview broadcast by Russia's Vesti 24 television on Saturday, Chavez said Latin America was freeing itself from the "imperial" influence from the United States and needed Russia's friendship.
"Not only Venezuela, but all of Latin America needs friends like Russia," Chavez said. "For economic development, for the support of all Latin America, for the lives of the people of our continent."
Nigerian rebels declare cease-fire in oil region
LAGOS, Nigeria: Nigeria's main militant group declared a unilateral cease-fire in the southern oil region on Sunday. If it holds, it will end the worst spate of militant attacks to afflict the region in years.
The group, the Movement for the Emancipation of the Niger Delta, said it would cease hostilities immediately, in response to appeals from elders and politicians in the region.
The group said, however, that it would retaliate if the Nigerian military struck any of its base camps.
The militant group emerged about three years ago, calling for more oil revenue to go to the southern states where the petroleum is pumped. Three years of attacks have cut Nigeria's oil production from 2.5 million barrels per day to around 1.5 million barrels.
A military operation on Sept. 14 prompted the latest violence. Before that, clashes between the military and the militants were rare, with the two sides avoiding outright confrontation.
"We hope that the military has learnt a bitter lesson," the group said in a statement sent by e-mail. "The next unprovoked attack will start another oil war that will be so ferocious that it will dim the pleas of the elders."
The Nigerian military cautiously welcomed the cease-fire declaration.
"If that is true, I think it is a good development for themselves, the region, the nation and the international community," a military spokesman, Lieutenant Colonel Sagir Musa, told reporters.
France to strengthen its Afghan presence
PARIS: One month after ten French soldiers died in a Taliban ambush in Afghanistan, the government announced Monday that it would reinforce its presence there, sending more troops and better equipment despite the outpouring of anguish over the deaths.
There have been several reports - in the media and from leftist opposition politicians - that French troops were poorly equipped for their deployment in the rugged mountains east of Kabul. But Prime Minister François Fillon said during a debate in Parliament on the Afghan deployment that the government was more determined than ever to stay.
"The president of the republic and government have learned the lesson from this murderous ambush," Fillon said in the National Assembly. "We have decided to strengthen our military means.
"Not acting would leave the Afghans at the mercy of the Taliban and Al Qaeda, would re-expose us to the risk of terrorism and would leave our allies to fight for us alone."
Lawmakers later voted, 343 to 210, to keep the French military operation in place - a reflection of the strong majority held by the conservative bloc of President Nicolas Sarkozy.
There are currently 2,600 French troops on the ground in Afghanistan as part of a NATO mission and an American-led counterterrorism force.
Fillon said that France would send an additional 100 soldiers to Afghanistan "within weeks." The troops would come with Caracal and Gazelle helicopters, drones, surveillance equipment and artillery that is better adapted to mountainous terrain, he said.
The 10 deaths in the mountains east of Kabul on Aug. 18 were the worst military loss for France in 25 years and seemed to heighten popular skepticism about the deployment in Afghanistan.
An opinion poll by the BVA institute published in the weekly L'Express on Sept. 16 suggested that nearly two in three French people wanted their soldiers to come home.
Reinforcing public discontent were the reports about French troops being sent into battle poorly equipped.
On Saturday, the Canadian newspaper The Globe and Mail reported that, according to a NATO document, the ambushed soldiers had run out of ammunition about 90 minutes into the battle and that their only radio had lost contact with their base, leaving them unable to call for reinforcements.
Fillon dismissed the article, saying that there was no such NATO document, only a rushed internal e-mail message. He said the soldiers had not run out of ammunition and that the radio went dead for only "a few instants" after the radio operator was killed. "The reality is cruel enough without adding lies," he said.
The parliamentary vote Monday was aimed at bolstering the legitimacy of an increasingly unpopular mission.
Sarkozy chose to act in accordance with a recent constitutional amendment that obliges the head of state to obtain parliamentary approval for military operations lasting four months or longer. He was not technically required to seek the vote because the French deployment in Afghanistan began before the constitutional measure passed.
Before the amendment, France was the only Western democracy that could send troops on open-ended combat missions without legislative approval.
The three-hour debate preceding the vote laid bare the divisions inside France. The opposition Socialists overwhelmingly argued for a clear timeline for troop withdrawals.
According to Jean-Marc Ayrault, leader of the Socialist parliamentary group, prolonging the military mission indefinitely was counterproductive.
"A sustainable solution in Afghanistan will not be military, it will be political," Ayrault said. "We aren't voting against a military presence in Afghanistan, we are voting against a concept that is leading us into a stalemate."
Sarkozy has long stressed the importance of Afghanistan in the fight against terrorism. He announced the dispatch of 700 additional troops in April; as violence has escalated in the past year, NATO has pleaded for more troops.Afghans seek a joint force
Afghanistan wants to set up a joint military force that would have the power to operate on both sides of the border with Pakistan, The Associated Press reported from Washington.
The Afghan defense minister, Abdul Rahim Wardak, said that such a force was the only way to fight militants in his country - many of whom are coming from the frontier regions of Pakistan.
Wardak said Monday at the Pentagon that he had asked that a joint force be created to include the United States, Afghanistan, coalition forces and Pakistani forces.
As house price woes hit France, could Paris resist?
PARIS: Ewa Filipiak, an economist who's been apartment-hunting in Paris for six months, has decided now is not the time to buy.
"It's a good time to wait and see -- I think chances are getting better for finding something exceptional," said the 29-year-old.
House price falls in Britain, Spain and Ireland have made headlines and now the slide has reached France. But several factors suggest the French market may prove more resilient than some, and Paris could even defy the trend.
People returning from August vacations who had become used to seeing a steady appreciation in the value of their homes were in for a shock when they unpacked their suitcases this year.
A national notary office report earlier this month showed existing home sales fell 25 percent outside the French capital in the first half of the year, and Paris figures show transactions within the city's "peripherique" ringroad dropped 20 percent over the 12 months to June.
Nationally, average prices in France more than doubled in the decade to 2007. Now they're appreciating at their lowest rate in 10 years -- and even falling in some areas -- so buyers are holding back.
While 10 years of boom preceded the slowdown, in France, taxes and stricter banking rules had kept the rally more discreet than in more free-wheeling British and Spanish markets.
And just as the surge was less spectacular, so may be the slump, partly because mortgages are at fixed interest rates and cautious French households have kept debt in check.
Against a backdrop of stalling economic growth, tougher access to credit, record-low confidence and eroding purchasing power, sales data suggest falls could be right ahead.
Economist Alexandre Mirlicourtois from Xerfi consultancy predicts French prices will drop in coming months as the market corrects from years of rapid expansion, and as banks with weaker balance sheets tighten their purse strings.
"Everyone knows French banks were hit by subprime, and now the pressure on their margins is playing out at home... They are lending less, and it's more expensive," he said.
He estimates prices will drop nationally by 15 percent before rising again in 2012. HSBC France sees prices falling at an unspecified rate through 2009 before firming again in 2012.
Though prolonged, that may be less steep than in Spain, where some analysts expect homes could lose 30 percent of their value in real terms over the next few years.
In Britain, data from the country's biggest mortgage lender HBOS showed prices already fell for the seventh month running in August to stand 12.7 percent below year-earlier levels.
RETURN TO REALITY
Realtors are also admitting signs of a shift.
"Prices have been disconnected from the economy, so now they're set to correct and return to reality," said Rene Pallincourt, president of national realtors group Fnaim.
Now, the general mood is one of worry, he said: slowing growth prospects are hitting real estate. Earlier this month, the government cut its 2008 growth forecast to about 1.0 percent, from 1.7 to 2.0 percent.
But several factors suggest price falls in France would be moderate. Mortgages are generally shorter than in Britain or the United States. A high birth rate generates regular, baseline demand. And then there's the debt factor.
OECD data shows the debt of French households amounted to only 89.1 percent of income in 2006. In Britain and the United States that ratio stands at 168.5 percent and 139.7 percent respectively.
"This all points to good potential for a rebound, especially since home ownership is low and still has room to grow," Xerfi's Mirlicourtois said. He added that with 57 percent home ownership, France was 10 points below the euro-zone average.
Fnaim's Pallincourt pointed out that lost value to some means opportunity to others.
"Nowadays, prices are often negotiated down 10 percent, so it's a buyers' market," he said.
PARIS HOLDING UP?
Most agree that Paris, propped up by the monuments, museums and leafy avenues so attractive to high-end buyers, is well positioned to avoid the worst of a market slump.
Wide boulevards and a harmonious design imposed 150 years ago by urban planner Baron Haussmann have been largely enshrined in law, and almost no new building is allowed in the city.
With space so limited, old homes are priced several times above the national average, and demand for housing is robust as students and young professionals see it as a top destination.
And to some, Paris is cheap. It places below the top 10 in global real estate price rankings: a small flat can be rented for roughly the cost of a parking spot in London's financial district.
The French capital is also less exposed to both financial sector earnings and the commodity-fuelled millions that have powered London's more exclusive districts: notaries say foreigners account for just one in 10 purchases.
"Generally as transactions drop, prices do too, but for the moment, it looks like Paris is holding up," said realtor Alexandre Deschamps.
But from his office in the 11th Arrondissement, a former working-class neighbourhood where gentrification and the housing boom drove prices to the city's mid-range, Deschamps said he saw difficulties ahead.
"I hadn't seen a mortgage refusal in five years, and now I've just had my first -- normally when buyers sign a commitment we're almost sure they'll get a loan from the bank."
First-time buyer Filipiak says she will follow the market and test the reach of new negotiating powers with low offers.
"I'll try 10-15 percent below price -- it's worth a shot," she said. "All the realtors say Paris will hold but I think they're just trying to reassure the market."
French court says virginity lie should not annul marriage
PARIS: A court decision to annul a Muslim couple's marriage because the bride lied about being a virgin discriminates against women and should be overturned, state prosecutors argued Monday.
A court in the northern town of Douai annulled the 2006 marriage in April because the husband discovered on his wedding night that his bride had lied about her virginity. The decision caused an uproar, with some in France calling it a sign that the country's secular values are losing ground to the traditions of its fast-growing immigrant communities. There are some 5 million Muslims in France.
The lower court based its decision on an article of the French Civil Code that states that a spouse can seek an annulment if the partner has misrepresented his or her "essential qualities."
Eric Vaillant, a spokesman for the Douai appeals court, said prosecutors told the three-judge tribunal during a nearly two-hour hearing that a woman's virginity is "in no way ... an essential quality," as the lower court had suggested.
Making a wife's virginity a condition of marriage "would be discriminatory because it would harm the principles of equality between men and women, of free use of one's body and the dignity of the human being," Vaillant said by telephone, summarizing the prosecution's argument.
The prosecution said it was not opposed to the idea of annulling the marriage, which neither couple now wants, but the motive must be "legitimate," in conformity with the principles upheld by France.
Vaillant said the court could base an annulment on an "error about the person, with the couple discovering their true respective personalities on the wedding night" instead of basing it on a false virginity claim.
"We are offering an exit door," he said.
Should the appeals court agree to simply scrap the annulment, the couple will remain married and be forced to seek a divorce.
The couple, a man in his 30s and a woman in her 20s, has not been identified by name. Neither was present in court, Vaillant said.
A verdict is expected Nov. 17.
On safer streets in Baghdad, Friction Infiltrates Sunni Patrols
BAGHDAD: In a neighborhood that only a year ago was among the most dangerous in Baghdad, the violence last week seemed almost negligible: A shootout near a checkpoint Sunday left two people dead. Another man was killed Monday by a small bomb placed under a car.
Some residents of Adhamiya hardly noticed.
But the deaths quickly drew the attention of the American officers stationed in the neighborhood. Both involved members of the Awakening Councils, the citizen patrols that have been paid by the Americans to fight the insurgency.
And both were seen as a worrisome sign of the tension and infighting that have rippled through the Sunni-dominated Awakening groups in recent weeks, just as the U.S. military planned to hand control of half the groups over to the Shiite-led Iraqi government.
American soldiers have built up the councils - comprising about 100,000 mostly Sunni Muslims, many of whom are former insurgents - and credit them with helping to reduce violence greatly around the country.
But now in Adhamiya and some other areas, members of the patrols, hailed by many as heroes for making the streets safer, have become increasingly unpredictable and problematic. Commanders quarrel and compete for money and territory. Finger-pointing and threats are common. There have been complaints that the men use their power to intimidate neighborhood residents. Sometimes violence erupts.
"What you have is essentially armed factions, like mini gangs that operate in a certain set of checkpoints in certain territories," said Lieutenant Erick Kuylman, a patrol commander in the First Battalion, 68th Armor regiment, which operates in Adhamiya. The Awakening Councils, he said, "met their intent" when they started, but "they have outlived, I think, their service since then."
The problems have worsened at a critical juncture for the Awakening movement and for American forces: On Oct. 1, 54,000 Awakening members in and around Baghdad, including those in Adhamiya, a Sunni stronghold, will be shifted to the payroll of an Iraqi government dominated by Shiite Muslims.
"It's a very big deal to us to make sure that this goes off well," Brigadier General Robin Swan, a deputy commander for the American forces in Baghdad, said recently. "We are taking it seriously, as is the government of Iraq."
But some American officers have expressed concerns that should the transition go badly, the lure of working for the insurgency might prove too great for some Awakening members, in particular top leaders, who stand to lose lucrative management fees and higher salaries. Such a result could threaten the fragile stability attained in much of the country in recent months.
Ghassan Mutar, an Awakening leader in Adhamiya, said on Monday that if the government does not deliver on its assurances, "People will be absolutely angry."
"If anyone offers them money to plant bombs or attack Americans, some might go back to the insurgency," Mutar said.
Other areas of Iraq, like Diyala and Salahadin Provinces, where local leaders say Awakening groups have carried out kidnappings and killings aimed at other rival councils, may also be fertile recruiting grounds for insurgent groups.
Some Awakening leaders say they have little faith in the promises of Prime Minister Nuri Kamal al-Maliki that about 20 percent of the Awakening members will be incorporated into the Iraqi Army or the police and the rest will be given civilian jobs or job training. More likely, they say, government officials will dissolve the patrols and arrest any former insurgents who are viewed as a threat.
Iraqi Army commanders have repeatedly said there would be no mass arrests after the transfer. But Awakening members in some areas say that their leaders are being driven out.
And the issue of arrests has clearly been a factor in discussions between U.S. and Iraqi officers about the transfer.
Last week, lines of American Humvees moved from checkpoint to checkpoint, the patrol commanders answering Awakening guards' questions and offering assurances: "We're not going to abandon you. We're still going to be here."
The attention has not been a mere formality: Early last week, an already tense situation rapidly grew into a crisis.
As a dust storm settled over Baghdad, the son of a local council leader drove his Mercedes up to a checkpoint manned by Awakening guards in Adhamiya.
The guards, stationed near the line where the territories of two commanders meet, knew the council leader's son, but they stopped his car anyway and searched it. An argument erupted. A few hours later there was a fistfight. Someone shot a Kalashnikov into the air and wild firing began on all sides. Two people were killed, one of them a cousin of a powerful Awakening commander.
News of the shootings spread quickly, and American and Iraqi army officers rushed in to defuse the situation. At 3 a.m., a meeting was held at the house of a tribal leader, with representatives of all sides present. They watched a videotape of the shootings, recorded by a camera at an American base about 975 feet, or 300 meters, away. Soon afterward, 19 men were arrested for questioning, 16 of them Awakening members, according to American officers. The men have since been released.
The next day, a small car bomb went off near the house of a senior Awakening leader who attended the reconciliation session, killing one of his guards.
Last Tuesday, as Awakening leaders met with officers from the Iraqi and American armies to discuss the details of the transfer of the councils, the discussion quickly dissolved into angry complaints and recriminations about the shootings and the arrests.
Lieutenant Colonel Michael Pappal, commander of Kuylman's regiment, began the meeting by explaining the details of the transfer. It was still unknown, he said, whether the commanders would continue to receive higher salaries than the $300 paid to rank and file members. If the Iraqi government would not pay the salaries, he said, the American military was considering topping off the base pay with stipends, but no decision had yet been reached.
"We're trying to make the transfer as transparent as possible, meaning you would never know there was a change," Pappal said. He patiently answered questions and listened to several different accounts of how the shootings had occurred and who was responsible. But his voice sharpened when one Awakening leader badgered him for details of the investigation into the shooting.
"I'm not discussing that," he said. "Everybody was shooting that day.
Pappal pleaded with the assembled leaders for information about who was planting a series of small car bombs in the neighborhood.
He said later that at first he had thought the bombs had been planted by other Awakening members. But new intelligence, he said, indicated they had come from "outside," presumably Al Qaeda in Mesopotamia, the homegrown Sunni extremist group that American intelligence agencies say is foreign-led. In an e-mail message, he added that the frictions among the Awakening leaders made things easier for the insurgents.
Iraq's Mehdi Army at crossroads as U.S. scales down
NAJAF, Iraq: Forced off Iraq's streets and with diminished political clout, what anti-American Shi'ite cleric Moqtada al-Sadr and his Mehdi Army militia do next will be crucial if they are to remain relevant.
The rallying cry of the Mehdi Army and Sadr's political movement since the U.S.-led invasion in 2003 has been to kick American soldiers out of Iraq. With a 2011 deadline for a U.S. troop withdrawal possibly in sight, Sadr must find another cause to give his movement purpose and cohesion.
Sadr has largely frozen the Mehdi Army, which led two uprisings against U.S. forces in 2004, and has shifted to cultivating the cultural wing of his movement.
The cleric has huge support among Iraq's Shi'ite poor, and similar movements in the Middle East have traditionally replaced or bolstered armed struggle with cultural and charitable works that have fed into votes at the ballot box.
But the cleric has decided his movement will not compete in upcoming local elections under the Sadr banner. Sadrists will instead join independent candidate groups.
The move could be a way of keeping a hand in politics without giving legitimacy to elections held while U.S. forces are still in place.
But the move could limit their influence in increasingly powerful provincial councils, where they hold little sway after largely boycotting the last local elections in 2005, and rob them of momentum in national polls due at the end of 2009.
Sadrists took part in the previous parliamentary elections, but control only 10 percent of seats. They withdrew their six cabinet ministers from the government in 2007 in protest at Shi'ite Prime Minister Nuri al-Maliki's refusal to set a timetable for the withdrawal of U.S. forces from Iraq.
Sadr's movement is unlikely to survive as a purely cultural and charitable organisation with no military or political clout, said Toby Dodge, an Iraq specialist at the International Institute for Strategic Studies in London.
"They'd disappear almost overnight if they did that. It would go against every model they're copying ... If they don't run (in elections) and demobilise their militia, what's the point of them? What's the unifying ideology?" he said.
Sadr spokesmen say the cleric froze his militia partly to give Baghdad and Washington space to agree a security deal, now in its final stages of negotiation, that is likely to pave the way for a large-scale U.S. troop withdrawal by the end of 2011.
"If the agreement has positive points and a defined deadline then I'm sure we will support it," chief Sadr spokesman Salah al-Ubaidi said in an interview at the cleric's headquarters in the holy Shi'ite city of Najaf.
Ubaidi last month suggested the Mehdi Army would dissolve if the United States withdrew according to a defined timetable.
With violence in Iraq at four-year lows, the Pentagon will pull 8,000 soldiers out by February, leaving 138,000 troops.
But the Sadr movement will only outline its next move after the U.S. presence ends, not before, Ubaidi said.
Meanwhile, rival political groups are consolidating power, while a series of crackdowns by an increasingly assertive Maliki has forced the Mehdi Army from many of its former bastions.
Attacks on Shi'ites by Sunni militants, which drove many to Sadr's militia for support, have plunged. Criminal elements among the Mehdi Army's ranks have also frustrated Sadr.
"Moqtada may be beginning to feel that the Mehdi Army is becoming more of a liability than an asset," said Reidar Visser, an Iraq expert and editor of the www.historiae.org website.
Luwaa Sumaisem, head of the Sadr parliamentary bloc's political committee, said the movement had future political ambitions and wanted to be central in efforts to rebuild Iraq.
Focus on the Sadrist cultural wing, which defines itself as an "army of cultural and religious doctrine" that wages jihad on the "western and secular tide", could be considered a political move in preparation for the departure of U.S. forces, he said.
"That we don't have political ambitions, that may be for the moment. It's not our priority," he told Reuters.
Greater religious authority could be one way Sadr intends to retain relevance. Widely believed to be studying in Iran, Ubaidi said it would not be long before Sadr would enter the ranks of the Marjaiya, or senior Shi'ite Islamic clergy.
"The next key step for the Sadrist movement may relate to Sadr's religious status, and in particular whether he is going to make an attempt to act as a scholar with the ability to issue his own fatwas (religious edicts)," Visser said.
In Shi'ite-majority Iraq the Marjaiya have huge influence, although frosty ties with Iraq's top Shi'ite clergy mean it is unclear how much weight would be given to Sadr's fatwas.
Often ambiguous and sometimes contradictory, many of Sadr's frequent statements give few clues to his thinking.
Making few public appearances, Sadr may next appear when the U.S.-Iraqi security deal is signed, Ubaidi said. Until then, the support of at least some of Iraq's Shi'ite poor remains strong.
"Of course we hope for no more violence. Look at all these young men," said Abdul-Zahra Darwish, the brother of a slain Mehdi Army fighter as he stood among graves at a Sadrist cemetery in Najaf. "But I am ready to fight and die."
Web site of Iraqi religious leader is attacked
BAGHDAD: The official Web site of the Grand Ayatollah Ali al-Sistani, the most influential and revered Shiite religious leader in Iraq, was defaced and then blocked in what appeared to be a sectarian-motivated cyber attack on Shiite-related sites.
A statement signed "Group XP" was posted on the home page of the ayatollah's Web site, contending that the attack was on behalf of Sunni Muslims. The group said it had carried out similar attacks on other Shiite sites in the Persian Gulf and Iraq. It was not clear whether the attack began Thursday or early Friday, but by late Friday Sistani's Web site was offline.
At least one other site related to one of Sistani's religious organizations, www.al-shia.com, was affected. But an alternative address, www.sistani.com, was still operational.
The Iranian news agency Fars reported that Group XP had blocked access to almost 300 Shiite-related sites on Thursday and Friday.
Neither this claim nor an Iranian assertion that Group XP was based in the United Arab Emirates could be verified independently. Several Iranian news sites said late Friday that many of the Shiite and Iran-related Web sites that had been attacked were running normally again.
"Today we erase your site as we have done with other Rafidha sites," said the statement posted on Sistani's site in the attack.
Rafidha, which means rejecters, is an insult often used by Sunni extremists to describe Shiites. The statement also accused Sistani, who was born in Iran, of promoting sexual deviance and an Iranian agenda in Iraq.
It added that any Web site with material that was contrary to hard-line Sunni teachings would be "punished."
In defacing Sistani's site, the cyber attackers added to it a YouTube video clip of the American comedian Bill Maher ridiculing a religious opinion, known as a fatwa, by Sistani on whether certain positions of sexual intercourse were permitted for married couples.
The ayatollah's office in the holy Shiite city of Najaf declined to comment on the cyber attack. Hamed al-Khaffaf, one of the cleric's closest aides, who is based in Beirut, also declined to comment.
Fars also reported that a counterattack of sorts had been carried out against "two major Wahhabi Web sites," referring to the puritanical strain of Sunni Islam that is dominant in Saudi Arabia.
Several experts said the defacement and blocking of the Shiite sites seemed fairly standard, the kind often committed by rival computer gamers. They said the attacks were smaller and less sophisticated than a cyber attack that accompanied five days of fighting between Russian and Georgian troops last month or a cyber attack that struck Estonian Web sites in 2007 after the authorities moved a bronze statue of a Soviet-era soldier from a park in Tallinn.
"The Web site defacements, this is pretty standard stuff now for state-on-state or any sort of politically motivated attacks," said Bill Woodcock, the research director of the Packet Clearing House, a nonprofit organization that monitors Internet traffic. He also said that tracing the origins of any online attack could be difficult.
But in a region where the rift between Sunnis and Shiites has grown deeper since the start of the Iraq war five years ago, even a cyber clash is likely to fuel tensions and mistrust.
Ali al-Najafi, the son of Grand Ayatollah Bashir al-Najafi, another Shiite cleric based in Najaf, condemned the attacks on the Shiite sites.
"We regret these actions by people who are trying to hide the truth and want only their voices to be heard," Ali al-Najafi, who is also a cleric, said in a telephone interview.
Web sites of several Shiite clerics in Najaf, including Sistani's, have been attacked before. Ayatollah al-Najafi's Web site was briefly blocked six months ago, according to his son.
Sistani, 78 and reclusive, held a rare meeting in August with a group of Iraqi reporters at his home in Najaf to dispel rumors that he was seriously ill.
During Saddam Hussein's rule, the ayatollah did not get involved in politics. But after the U.S. invasion in 2003, he has emerged as one of the country's most powerful figures.
For U.S. military, slow progress in push for foreign languages
WASHINGTON: Three years ago, the Defense Department set out to increase sharply the number of military personnel who speak strategically important languages. Progress has been slow, and the military has not determined how to reach its goal - or what exactly that goal is.
Figures from the department indicate that only 1.2 percent of the military receives the bonus paid to those who can speak languages judged to be of critical importance for the conflicts in Afghanistan and Iraq, as well as for other areas of strategic concern.
John Nagl, a retired lieutenant colonel who is co-author of the U.S. Army's new counterinsurgency field manual, said in an interview that the military had been moving too slowly, and he questioned its assertion that language needs were difficult to assess since they were subject to changing global security conditions.
The military by now should "have a pretty good idea of what countries we're fighting in," he said.
Nagl, a fellow with the Center for a New American Security, said the army understood the value of having more foreign language speakers in its ranks. But, he said, it had not "done the math on what it means" and had yet to "build the programs and provide the leader development to get there."
He noted that after the Soviet Union launched Sputnik in 1957, the United States urgently worked to develop a cadre of Russian speakers and scholars. But after the Sept. 11, 2001, terrorist attacks on the United States, he said, neither the military nor other government agencies executed a similarly ambitious program for Arabic speakers.
The services have adopted a number of programs that have had some success. The army developed a program to recruit native speakers of strategically important languages to serve as translators; so far, more than 600 have graduated.
One of them, Sergeant Mohammed Lamaffar, earned a law degree in his native Morocco and enlisted in the U.S. Army, where he is an Arabic linguist working with an infantry company commanded by Captain Eric Nelson.
"Having a soldier who speaks Arabic is a huge asset," Nelson said in an e-mail message from an outpost near Baghdad. "A patrol with a good interpreter is 10 times as valuable as one with a lousy one."
The need is not just for Arabic speakers. The Defense Language Institute, in Monterey, California, has increased its number of students in Arabic, Chinese and Persian to 2,171, from 1,144 in 2001.
The military has also increased the number of Foreign Area Officers to more than 1,600, from 1,164 in 2001. These officers receive advanced language and cultural training for their designated region.
Because not enough soldiers speak foreign languages, the military has had to rely on more than 10,000 civilian contract linguists, many local Afghans and Iraqis of widely differing abilities. Nelson said that his 120-man infantry company had 11 Iraqi interpreters but that only 9 were capable of doing the work.
But some individual units are taking it upon themselves to generate language capabilities. The 4th Stryker Brigade, based at Fort Lewis in Washington State, has established an intensive, 10-month Arabic course for 125 of its soldiers, said Gail McGinn, a senior language authority at the Department of Defense.
The military has also made efforts to increase the number of cadets and midshipmen enrolled in language programs at the service academies and ROTC programs. Still, the army reports that only 106 of its 24,000 ROTC cadets are majoring in a strategic language.
U.S. negotiators to return to Iraq for security talks
BAGHDAD: U.S. negotiators will return to Baghdad soon for more talks with Iraq on a security deal that has bogged down over the issue of immunity for U.S. troops.
Critically for both sides, a U.N. mandate that governs the presence of U.S. forces in Iraq expires at the end of the year.
"If we do not reach an agreement, and this is a very conceivable possibility -- If there is no agreement then the alternative is to go to the (U.N.) Security Council and ask for an extension of the mandate," Iraqi Foreign Minister Hoshiyar Zebari told al Arabiya television in an interview.
A U.S. embassy spokeswoman in Baghdad said David Satterfield, the State Department's coordinator on Iraq, and Brett McGurk, an official at the National Security Council, would arrive soon in Baghdad. She declined to be more specific.
Iraqi officials have said the government was waiting for the United States to respond to its latest proposals on immunity.
They have said they would be prepared for legal immunity to apply to U.S. troops who were on military bases or on missions. But if there was evidence of intentional wrongdoing by troops, then jurisdiction should be decided by a committee, they say.
Washington wants to protect its soldiers from being tried in Iraqi courts, terms it also requires in many other countries where it has bases.
But even if agreement on the security deal is reached in the coming weeks, it will still need the approval of Iraq's parliament, where reaching consensus in the past on contentious issues has proven difficult.
Prime Minister Nuri al-Maliki has said the United States has agreed all American troops would leave Iraq by the end of 2011 under the pact. U.S. officials have declined to confirm details of the agreement until it is concluded.
Iraqi MPs warned the deal would come under close scrutiny.
"Due to the sensitivity of the issue, the arguments in parliament will be acute," said Dhafer al-Ani, a senior politician with the main Sunni Arab bloc, adding he would be surprised if the deal passed before the year-end.
Hassan al-Sunaid, a legislator from Maliki's Dawa party, said the deal could be passed before the U.N. mandate expired if it did not infringe on Iraqi sovereignty and if there was a clear timetable for U.S. troops to withdraw.
But blanket immunity for U.S. troops would be an obstacle, he added.
Speaking on Iraqi television last week, Maliki said a "critical" situation awaited the United States and Iraq if a deal was not signed before the U.N. mandate expires. He said the U.N. mandate would only be extended on Iraq's terms.
The Pentagon will pull 8,000 more soldiers from Iraq by February, leaving 138,000 troops deployed there. All five extra combat brigades sent to Iraq last year completed their withdrawal in July and have not been replaced.
Despite a drop in overall violence, the Bush administration has taken a cautious approach to troop cuts and any decision on a major withdrawal will be left to the next U.S. president, who takes office in January.
Maliki has vowed that no foreigners will receive "absolute" immunity. There have been a number of high-profile incidents involving American soldiers killing or abusing Iraqis since the U.S.-led invasion that toppled Saddam Hussein in 2003.
Iraqi officials say such incidents have been reflected in the debate over immunity for U.S. troops.
Pakistani leaders narrowly escaped hotel blast, official says
ISLAMABAD: A senior Pakistani official said Monday that the country's top leadership had narrowly escaped the devastating truck bomb on the Marriott Hotel here in the capital the day before, shifting the venue for a dinner just hours before the attack, which killed 53 people.
He did not say why the decision had been taken to change locations, or whether there had been any specific intelligence warning about a bomb attack.
But according to the BBC, the report was disputed by Saddrudin Hashwani, a Pakistani businessman who owns the hotel. Hashwani denied that any government dinner or function had been scheduled at the Marriott that night, the broadcaster reported.
The hotel, a six-story structure, was favored by the new government of President Asif Ali Zardari as a place to do business. The senior Pakistani official, Rehman Malik of the Interior Ministry, said Monday that "the National Assembly speaker had arranged a dinner for the entire leadership, for the president, prime minister and armed services chiefs at the Marriott that day."
Zardari and Prime Minister Yousaf Raza Gilani changed the venue to the prime minister's house just a few hundred meters away, Malik said. They were meeting there after the president's address to Parliament when the bomb went off.
"The function was not held at the Marriott, thus the whole leadership was saved," Malik said.
The bombing was seen as the most brazen yet in a campaign by militants to destabilize Pakistan, and the militants' audacity was apparently underlined again Monday when unknown gunmen kidnapped a senior Afghan diplomat in Peshawar, in the north of the country, the Afghan Foreign Ministry said.
In a separate development in the southwestern Afghan province of Farah, about 156 construction laborers were abducted Sunday afternoon while driving in three buses, officials said. Taliban militants were suspected, they said.
The laborers were working at an Afghan National Army base in the province and were on their way back home for Id al-Fitr, the Muslim holiday marking the end of Ramadan, said a deputy provincial governor of the province, Mohammad Yonus Rasouli.
In Peshawar, the gunmen stopped the car of the senior diplomat, the Afghan consul general in Peshawar, Abdul Khaliq Farahi, and killed his driver. Farahi was one of several candidates to become the next Afghan ambassador to Pakistan.
The car was passing through a wealthy neighborhood, Hayat Abad, in Peshawar, the capital of North-West Frontier Province, when gunmen opened fire, killing the driver. The assailants took Farahi to an unknown location, a spokesman for the Afghan Foreign Ministry said.
"We have expressed our concern to the Pakistani officials for a safe release of our diplomat," the spokesman, Sultan Ahmad Baheen, said. "He was kidnapped by five or six gunmen after killing his driver in Hayat Abad."
There were no immediate claims of responsibility for the kidnapping, although incidents of kidnapping for ransom have increased in the region in recent months. In February the Pakistani Taliban kidnapped Pakistan's ambassador to Afghanistan in the same region; he was released after months of negotiation.
Farahi had been the Afghan consul general in Peshawar since 2001.
British Airways cancels Pakistan flights
LONDON: British Airways canceled flights to Islamabad because of the Saturday bombing of the Marriott Hotel in the Pakistan capital.
Services from London Heathrow airport to Islamabad scheduled for Sunday evening and Tuesday were canceled in "light of the security situation in Pakistan," the London-based company said in an e-mailed statement Monday. British Airways is reviewing its operations for later in the week.
Two days ago, terrorists carried out a truck bombing of the Marriott Hotel in Islamabad that killed more than 50 people. According to Prime Minister Yousuf Raza Gilani, the attackers were aiming to strike at Pakistani leaders meeting nearby. The 290-room hotel, located one kilometer, or a bit more than half a mile, from Parliament, the presidential offices and ministries, had been hit by bombs in 2004 and 2007.
British Airways has operates one flight a day, except Monday, to Islamabad.
India is projecting its military power
MUMBAI: The Mumbai, an Indian warship, was slicing through choppy monsoon seas one morning when a helicopter swooped in overhead. Commandos slithered down a rope, seizing control of the destroyer.
It was a drill, Indian soldiers taking over an Indian ship. But the purpose was to train them to seize other countries' ships in distant oceans, a sign of a new military assertiveness for the world's second most populous nation.
India, which gave the world the idea of Gandhian nonviolence, has long derided the force-projecting ways of the great powers. It focused its own military on self-defense against two neighbors, Pakistan and China.
But in recent years, while world attention has focused on China's military, India has begun to refashion itself as an armed power with global reach: a power willing and able to dispatch troops thousands of kilometers from the subcontinent to protect its oil shipments and trade routes, to defend its large expatriate population in the Middle East and to shoulder international peacekeeping duties.
"India sees itself in a different light - not looking so much inward and looking at Pakistan, but globally," said William Cohen, a secretary of defense in the Clinton administration and now a lobbyist for U.S. firms seeking weapons contracts in India. "It's sending a signal that it's going to be a big player."
India is buying armaments that major powers like the United States use to operate far from home: aircraft carriers, giant C-130J Hercules transport planes and airborne refueling tankers. Meanwhile, India has helped to build a small air base in Tajikistan that it will share with its hosts. It is modern India's first military outpost on foreign soil.
India also appears to be positioning itself as a caretaker and patroller of the Indian Ocean region, which stretches from Africa's coast to Australia's and from the subcontinent southward to Antarctica.
"Ten years from now, India could be a real provider of security to all the ocean islands in the Indian Ocean," said Ashley Tellis, an Indian-born scholar at the Carnegie Endowment for International Peace in Washington. "It could become a provider of security in the Persian Gulf in collaboration with the U.S. I would think of the same being true with the Central Asian states."
"India," he added, "is slowly maturing into a conventional great power."
Middle-aged Indians remember a time when their country would watch thousands of Indians in jeopardy in a foreign land and know that there was nothing their military could do.
But in 2006, when conflict between Israel and Hezbollah threatened Indian expatriates in Lebanon, four Indian warships happened to be in the Mediterranean. The navy rushed the vessels to Lebanon and brought more than 2,000 people on board, not only Indians, but Sri Lankans, Nepalese and Lebanese eager to escape the fighting.
Two years earlier, when a tsunami throttled Asia, including this country's own southern coast, the Indian Navy dispatched 16,000 troops, 32 warships, 41 planes and a floating hospital for rescue operations, according to news accounts.
Such changes bring pride to many Indians. But some also fear that India may become the kind of swaggering power it has opposed since it became independent from Britain in 1947.
"Immediately after independence, true, we had to engage ourselves for developing our country - economically, politically - because we were exploited under colonial rule for more than 200 years," Foreign Minister Pranab Mukherjee said in an interview.
Now, he said, things have changed: "Naturally, a country of this size, a population of this size - we will be required to strengthen our security forces, modernize them, update them, upgrade our technology."
He added: "We are ready to play a more responsible role, but we don't want to impose ourselves on others."
Indian military planning is still heavily focused on China and Pakistan, against both of which it has fought wars. China, whose own military expansion outstrips India's, has not sounded public warnings about India's military modernization. But Pakistan is more critical.
Pakistani officials "are paying attention to Indian plans to project India outside the South Asian region," said Hasan Askari Rizvi, a leading Pakistani expert on that country's military.
India's buildup has several overlapping motivations. It trades vigorously with the world, most critically in oil. It has bought oil fields or engaged in exploration in Iran, Iraq, Libya, Russia, Sudan, Syria, Vietnam and beyond. Not coincidentally, it has demonstrated a new interest in keeping the sea lanes through which that oil and other wares sail free of pirates and militants.
A more robust military is also vital for protecting millions of Indian workers in the Gulf, who are from time to time threatened by political volatility. But the most pressing motivation may be the fast-moving Chinese.
China has sought to develop a powerful air force and navy that can be mobilized far beyond its shores. It has been increasing its military budget rapidly and plans to spend $60 billion on its armed forces in 2008, the government budget indicates. The Pentagon estimates that China's actual military spending is much higher, perhaps twice the officially budgeted amount, as much as seven times India's defense outlay.
Beijing has alarmed Indian commanders by courting allies in India's neighborhood. Indians are particularly upset by what they say are Chinese-built military bases in Gwadar, Pakistan; Chittagong, Bangladesh; and Yangon, Myanmar.
"There seems to be an emerging long-term competition between India and China for pre-eminence in the region," said Jacqueline Newmyer, president of the Long Term Strategy Group, a research institute in Cambridge, Massachusetts, and a security consultant to the U.S. government. "India is preparing slowly to claim its place as a pre-eminent power, and in the meantime China is working to complicate that for India."
India has worked to close the gap with China by spending heavily on modern weapons. Analysts estimate that India could spend as much as $40 billion on military modernization in the next five years.
What is most striking is how many of the weapons are designed for operations far from home. Among the more notable purchases are six IL-78 airborne tankers, which can refuel three jets simultaneously and allow the air force to fly as far as Alaska.
Other armaments recently acquired or in the pipeline include destroyers, nuclear submarines, aircraft carriers and the C-130J transport planes that are a staple of long-range conflicts.
"You don't need C-130s for Pakistan," said Tellis, the U.S. government adviser.
A telling sign of India's plans lies in Tajikistan, a nation between Afghanistan and China in Central Asia. Not far from Dushanbe, the capital, India has worked with the Tajik authorities to build an air base and has stationed helicopters there.
Newmyer, of Long Term Strategy Group, called the arrangement "a big deal," not least because of the change of mindset it reflects.
"Having overseas bases is a marker of an imperial kind of capability," she said. "India is thought of as a power that was colonized, not a power that puts its own boots on the ground in permanent bases in other countries."
In a speech in Parliament this summer, a rising political star spoke of a change in civilian thinking that helped explain the change in military strategy.
"What is important," said Rahul Gandhi, the heir to the family dynasty that controls the governing Congress Party, "is that we stop worrying about how the world will impact us, we stop being scared about how the world will impact us, and we step out and worry about how we will impact the world."
'Running out of time' as Pakistan unravels
Pakistan's military is threatening to shoot U.S. troops if they launch another raid into Pakistan's territory. Whether the threat is real or meant solely for domestic consumption, there is a real danger of miscalculation that would be catastrophic for both countries.
President Bush's decision to authorize Special Operations forces in Afghanistan to go after militants in Pakistan's lawless border region was a desperation move. The chairman of the Joint Chiefs of Staff, Admiral Mike Mullen, admitted earlier this month that America and its allies were "running out of time" to save Afghanistan.
We certainly share his alarm and his clear frustration that the Pakistanis are doing too little to defeat the extremists or stop their attacks into Afghanistan. But Bush and his aides should be just as alarmed about Pakistan's unraveling - the horrific bombing at Islamabad's Marriott Hotel on Saturday is only the latest sign - and working a lot harder to come up with a policy that bolsters Pakistan's fragile civilian government while enlisting its full support in the fight extremists.
If an American raid captured or killed a top Qaeda or Taliban operative, the backlash might be worth it. But if there is any chance of permanently rooting out extremists from the tribal areas, that will have to be done by Pakistan's military, backed up with sustained programs for economic and political development.
For that, Washington must finally persuade Pakistan's leaders that this is not just America's fight but essential to their own security and survival as a democracy. And Pakistan's leaders must persuade their citizens.
We fear that a rising number of civilian casualties, on both sides of the border, is driving more people into the hands of the repressive Taliban and other extremist groups. These attacks are also making Pakistan's new president, Asif Ali Zardari, look weak and irrelevant.
He is an undeniably flawed leader, with little political experience and a history tainted by charges of corruption. But he deserves a chance, and American support, to fulfill his promises to bolster democracy, clean up Pakistan's intelligence services and work with the United States to defeat terrorism.
Zardari made a start, inviting President Hamid Karzai of Afghanistan to his inauguration. In a speech to Parliament on Saturday - hours before the bombing - he said his government would not allow terrorists to launch attacks on any neighbor from Pakistani soil, nor would it tolerate further U.S. military incursions.
Mullen made a fence-mending trip to Pakistan last week and Pentagon officials say they are reviewing the overall strategy. Any revised plan must do a lot more to avoid civilian casualties and support, rather than undermine, Pakistan's civilian leaders. Congress can do its part by approving a $7.5 billion aid package, intended to strengthen Pakistan's democratic institutions and its counterinsurgency capabilities.
The Pentagon also needs to quickly come up with a better strategy in Afghanistan. Commanders warn that Bush's promise to send 4,500 additional troops falls far short. We fear that Mullen is right: there isn't much time left - on either side of the border.
A free-wheeling new Muslim culture grows in Dubai
DUBAI: In his old life in Cairo, Rami Galal knew his place and his fate: to become a maintenance man in a hotel, just like his father. But here, in glittering, manic Dubai, he is confronting the unsettling freedom to make his own choices.
Here Galal, 24, drinks beer almost every night and considers a young Russian prostitute his girlfriend. But he also makes it to work every morning, not something he could say when he lived back in Egypt.
Everything is up to him. Everything: what meals he eats, whether he goes to the mosque or a bar, who his friends are.
"I was more religious in Egypt," Galal said, taking a drag from yet another of his ever-burning Marlboros. "It is moving too fast here. In Egypt there is more time. They have more control over you. It's hard here. I hope to stop drinking beer - I know it's wrong. In Egypt, people keep you in check. Here, no one keeps you in check."
In Egypt, and across much of the Arab world, an Islamic revival is being driven by young people for whom faith and ritual are increasingly the cornerstones of identity. But that is not true in the ethnic mix that is Dubai, where 80 percent of the people are expatriates, with 200 nationalities.
This economically vital, socially freewheeling yet unmistakably Muslim state has had a transforming effect on young men. Religion has become more of a personal choice and Islam less of a common bond than national identity.
Dubai is, in some ways, a vision of what the rest of the Arab world could become - if it offered comparable economic opportunity, insistence on following the law and tolerance for cultural diversity.
In this environment, religion is not something young men turn to because it fills a void or because they are bowing to a collective demand.
That, in turn, creates an atmosphere that is open not only to those inclined to a less observant way of life, but also to those who are more religious. In Egypt, Jordan, Syria and Algeria, a man with a long beard is often treated as an Islamist - and sometimes denied work. Not here in Dubai.
"Here, I can practice my religion in a natural and free way because it is a Muslim country and I can also achieve my ambition at work," said Ahmed Kassab, 30, an electrical engineer from Zagazig in Egypt who wears a long dark beard and has a prayer mark on his forehead. "People here judge the person based on productivity more than what he looks like. It's different in Egypt, of course."
No one can say for sure why Dubai has been spared the kind of religion-fueled extremism that has plagued other countries in the region. There are not even metal detectors at hotel and mall entrances, standard fare from Morocco to Saudi Arabia. Some speculate that Dubai is like Vienna in the Cold War - a playground for all sides.
There is a robust state security system. But there is also a feeling that diversity, tolerance and opportunity help breed moderation.
"There is not going to be somebody who has a grudge against the system," said Tarik Yousef, dean of the Dubai School of Government. "You might have a problem with something, but there's enough to make you happy. You have a job - and the mosque is open 24 hours."
Dubai dazzles, but it also confuses. It appears to offer a straight deal - work hard and make money. It is filled with inequities and exploitation. It is a land of rules: No smoking, no littering, no speeding, no drinking and driving. But it also dares everyone to defy limitations. There is the Burj Al Arab, a glass tower that will be the tallest in the world. There is the Dubai Mall, which will be the biggest in the world. There are man-made islands shaped into a palm tree design (they said it couldn't be done) and an indoor ski slope.
There is talk of a new hotel, the biggest yet in Dubai, that will cool the hot sand for its guests. There is credit, and there are credit cards, for anyone with a job. There aren't any taxes.
"They should give you an introduction when you arrive," said Hamza Abu Zanad, 28, who moved to Dubai from Jordan about 18 months ago and works in real estate. "It is very disorienting. I felt lost. There are fancy cars, but don't speed. You can have prostitutes, but don't get caught with a woman."
Dubai offers a chance to lead a modern life in an Arab Islamic country. Abu Zanad raised his beer high, almost in a toast, and said he liked being able to walk through a mall and still hear the call to prayer.
"We like that it's free and it still has Arab heritage," he said "It's not religion, it's the culture, the Middle Eastern culture."
"The Arabs have a future here," said his best friend, Bilal Hamdan. "Where are we going to go back to? Egypt? Jordan? This is the future."
Galal sees it as his future too, especially when he thinks of what would await him at home, where success is guaranteed only to those with connections and wealth.
Galal, the Egyptian, grew up in Shubra, a busy, crowded neighborhood in Cairo, where the streets are packed with young men who are unemployed or underemployed. He comes from a traditional, observant household where family honor is linked to obeying social norms and respecting religious values.
Galal graduated from college with a degree in social work, but the only job available was as a maintenance man for about $100 a month. He felt that he was treading water and so, at the urging of his family, got engaged to a young woman from his neighborhood. He said that he thought the goal of marriage would give him a purpose, something to work toward.
About a year later, a friend working in Dubai recommended him for a job in construction, and he grabbed the chance. It was a difficult adjustment.
"I didn't feel like anyone understood how I felt," he said. He gained weight and got depressed.
He works at a construction company helping to assemble big air-conditioning units, essential in the withering heat and humidity of Dubai. He reviews blueprints and decides which materials are needed.
His company gave him housing in a dormitory, a three-story, sand-colored building in Jebel Ali, a sprawling desert landscape of big-box warehouses and construction sites.
"When I first arrived it was not what I expected," Galal said. "You hear about the Emirates, but all the people I worked with were Indian. I wanted to leave."
His home, or rather, where he sleeps, is in Labor Camp Number 598655. He shares a room the size of a walk-in closet with two other men on the first floor of the dormitory. The hundreds of men on his floor share a bathroom and a kitchen, where he will not eat because only Indian food is served. There are about 20 Arab men among the 3,000 mostly Indian residents. Most of his meals are at mall food courts or in cheap restaurants serving Arabic cuisine.
"It's not nice. It's normal," Galal said as he closed the flimsy door to his room, stepping over the piles of shoes and sandals in the hall. It was 5:30 p.m. and his roommates were fast asleep after a long hot day at the construction site. In fact, the mix of nationalities has made Galal redefine himself - not predominantly as Muslim but as Egyptian.
Asked if he feels more comfortable with a Pakistani who is Muslim or an Egyptian who is Christian, he replied automatically: "The Egyptian."
His best friend, Ayman Ibrahim, 28, lives in the room next to Galal, also with two other men. Ibrahim is from Alexandria, Egypt, and has been in Dubai for more than two years. He works as a senior safety supervisor in another division of the company.
Ibrahim was waiting outside in a white Toyota Corolla provided by the company. His Egyptian fiancée's picture dangled from his key chain in the ignition.
Dubai has been built along roadways, 6, 12, 14 lanes wide. There was no central urban planning, and the result is a city of oases, each divided from the other by lanes of traffic. The physical distance between people is matched by the distance between nationalities. Dubai has everything money can buy, but it does not have a unifying culture or identity. The only common thread is ambition.
As Galal and Ibrahim headed to town, the traffic was ferocious, another downside of Dubai's full-throttle development. It took two hours to get to Diera, the old part of the city. But the friends didn't seem to mind inching along. Popular Egyptian love songs played from the stereo as the car crawled past The Marina, another exclamation point in a city full of them, with skyscrapers, a Buddha Bar and a marina, a real marina, for boats.
The downtown Rattlesnake Bar and Grill, where he and his friend often go, is cheap by Dubai standards, with a cover charge of about $18.
Inside there is a Wild West theme. A Filipino rock band blasts pop music, and many single women line up like merchandise by the front door. A sign by the bar promised "a new way of life."
This is where Galal met Reem - though he said that was probably not her real name. On a Thursday night - the first night of the weekend - Rattlesnake was packed with single men and prostitutes. Galal seemed jealous when Reem was working the floor, talking to guys. His head was tipped, his shoulders hiked up - he looked a bit like a nervous schoolboy. Reem wore black tights and a black, low-cut top and held a stern gaze as Galal leaned in and talked to her. They chatted a few minutes before Reem went off.
"Look, I'm not a muscleman and I'm not loaded; she must like me," Galal said, sounding a touch unsure of himself. "She's here for business, and I know she has to do this. She tries to make me understand. But I get attached."
A week later, Galal was overloaded. "I am suffocating here," he said as he walked into the coffeehouse. He moved up his vacation to go home to Cairo. He said that he needed to get back on track, to break from the drinking and the women and reconnect with his values.
A few days later, Ibrahim drove him to the airport for the nearly four-hour flight home to spend the holy month of Ramadan with his family. In Dubai, Ibrahim said, "There's work and life and money. There were days when I didn't have a place to stay, no money, nothing. But I made it as opposed to Egypt where you start at zero and stay at zero."
But if Dubai offers opportunity, it also poses risks.
For days after his return to Egypt, Galal could not get hold of Ibrahim on the telephone. He had been arrested, charged by the police with trying to steal tons of scrap metal from his construction site.
Five days after he was taken in, Ibrahim was released, but the police kept his passport.
"I didn't do it," he said. "I am here two and a half years trying to make a life for myself and in two minutes my life is ruined."
In Cairo, Galal reconnected with his family. He fasted for Ramadan, including giving up cigarettes during daylight hours. And he went out looking for his friends on the bustling streets of his neighborhood, which is the antithesis of Dubai. It is filled with people - men, women, children - all night long, shopping, chatting, smoking, enjoying the cool night air, the warmth of the neighborhood and a common culture.
Galal cut and gelled his hair. He got a close shave and bought himself a thick silver link chain to wear around his neck. He looked as if he would fit right in. But he didn't feel that way.
"My friends are all stuck at a certain limit. That's as far as they can go," Galal said after three weeks at home. "Nothing is new here. Nothing is happening. My friends feel like I changed. They say money changed me."
Galal and a cousin went out for a night of fun the day before he was scheduled to return to Dubai. They sat on the sidewalk by the Nile where men were fishing. A woman rented them plastic lawn chairs and brought over sweet tea and a drink made from chickpeas.
"I want to go back," he said. "I was living better there. It's the simple things - sitting at the coffee shop, talking to people. Their mentality is different."
He said he had broken off his engagement. Marriage in Egypt is usually a practical matter, a necessary step to adulthood, to independence. It is often arranged.
A year in Dubai changed his view of marriage. "You are looking for someone to spend your whole future with," Galal said.
"I want to go back and have fun. My future is there, in Dubai."
Nicholas D. Kristof: The push to 'otherize' Obama
Here's a sad monument to the sleaziness of this U.S. presidential campaign: Almost one-third of voters "know" that Barack Obama is a Muslim or believe that he could be.
In short, the political campaign to transform Obama into a Muslim is succeeding. The real loser as that happens isn't just Obama, but America's entire political process.
A Pew Research Center survey released a few days ago found that only half of Americans correctly know that Obama is a Christian. Meanwhile, 13 percent of registered voters say that he is a Muslim, compared with 12 percent in June and 10 percent in March.
More ominously, a rising share - now 16 percent - say they aren't sure about his religion because they've heard "different things" about it.
When I've traveled around the country, particularly to my childhood home in rural Oregon, I've been struck by the number of people who ask something like: That Obama - is he really a Christian? Isn't he a Muslim or something? Didn't he take his oath of office on the Koran?
In conservative Christian circles and on Christian radio stations, there are even widespread theories that Obama just may be the Antichrist. Seriously.
John Green, of the Pew Forum on Religion and Public Life, says that about 10 percent of Americans believe America may be in the Book of Revelation's "end times" and are on the lookout for the Antichrist.
A constant barrage of e-mail and broadcasts suggest that Obama just may be it.
The online Red State Shop sells T-shirts, mugs and stickers exploiting the idea. Some shirts and stickers portray a large "O" with horns, above a caption: "The Anti-Christ."
To his credit, McCain himself has never raised doubts about Obama's religion. But a McCain commercial last month mimicked the words and imagery of the best-selling Christian "Left Behind" book series in ways that would have set off alarm bells among evangelicals nervous about the Antichrist.
McCain himself is not popular with evangelicals. But they will vote for him if they think the other guy may be on Satan's side.
In fact, of course, Obama took his oath on the Bible, not - as the rumors have it - on the Koran. He is far more active in church than McCain is.
(Just imagine for a moment if it were the black candidate in this election, rather than the white candidate, who was born in Central America, was an indifferent churchgoer, had graduated near the bottom of his university class, had dumped his first wife, had regularly displayed an explosive and profane temper, and had referred to the Pakistani-Iraqi border ... .)
What is happening, I think, is this: Religious prejudice is becoming a proxy for racial prejudice. In public at least, it's not acceptable to express reservations about a candidate's skin color, so discomfort about race is sublimated into concerns about whether Obama is sufficiently Christian.
The result is this campaign to "otherize" Obama. Nobody needs to point out that he is black, but there's a persistent effort to exaggerate other differences, to de-Americanize him.
Raising doubts about a candidate based on the religion of his grandfather is toxic and profoundly un-American, cracking the melting pot we Americans emerged from. Someday people will look back at the innuendoes about Obama with the same disgust with which we regard the smears of Al Smith as a Catholic candidate in 1928.
I'm writing in part out of a sense of personal responsibility.
Those who suggest that Obama is a Muslim - as if that in itself were wrong - regularly cite my own columns, especially an interview last year in which I asked him about Islam and his boyhood in Indonesia. In that interview, Obama praised the Arabic call to prayer as "one of the prettiest sounds on earth at sunset," and he repeated the opening of it.
This should surprise no one: The call to prayer blasts from mosque loudspeakers five times a day, and Obama would have had to have been deaf not to learn the words as a child. But critics, like Jerome Corsi, whose book denouncing Obama, "The Obama Nation," is No. 2 on the New York Times best-seller list, quote from that column to argue that Obama has mysterious ties to Islam. I feel a particular obligation not to let my own writing be twisted so as to inflame bigotry and xenophobia.
American journalists need to do more than call the play-by-play this election cycle. We also need to blow the whistle on such egregious fouls calculated to undermine the political process and magnify the ugliest prejudices that the nation has done so much to overcome.
By Uri Avnery
Fly, Tzipora, fly!
The polls were wrong, as usual. And in a big way. As usual.
Instead of winning by a huge margin, as predicted until the very last moment by all the polls, she just squeaked through. Of the 72,000 or so registered Kadima members, only 39,331 troubled themselves to go to the polls, and among these she defeated Shaul Mofaz by just 431 votes.
But a majority is a majority. Tzipi Livni was duly installed as Kadima chairwoman. What does that say about the Israeli public?
First of all: This is the victory of someone without a military background over someone with almost nothing apart from a military background.
On the advice of his American political strategist, Stanley Greenberg, Mofaz emphasized the word "security" on every occasion, almost in every sentence. A popular talk-show turned this into a parody: Security, security, security, security.
Well, it did not work. The general, the chief of staff, the defense minister, was beaten by a mere woman devoid of military experience (even if she did serve for 15 years in the Mossad.)
That does not mean that Tzipi Livni may not turn out to be a warmonger. But fact is fact: The Kadima voters have preferred a non-general to a general.
Moreover, Kadima is a party of the center. The very center of the center. Its members are not fervent about anything, neither on the right or the left; they have no strong convictions of any kind. So their decision can be regarded as a reflection of the general mood.
Mofaz presented himself not only as Mr. Security, but also as a genuine right-winger, a man who opposes both peace with Syria and peace with the Palestinians, a leader prepared to set up a coalition with the right, even with the extreme right. He was the declared exponent of open-ended-war.
Tzipi Livni presented herself as the personification of the peace effort, the woman who conducts the negotiations with the Palestinians, who prefers diplomacy to war, who points the way to the end of the conflict. All this may be sleight of hand. Perhaps there is no difference at all between the two. But even if this is so, the important fact is that the Kadima voters, the most representative group in the country, accorded victory - well, a tiny victory - to the candidate who at least pretended to favor peace.
I remember the elections nine years ago. In May 1999, Ehud Barak won a decisive victory over the incumbent, Benjamin Netanyahu: 56 percent against 44 percent, a difference of 388,546 votes. The public was just fed up with Netanyahu.
The response was overwhelming. Without anybody planning it, masses of people streamed into Tel Aviv's Rabin Square, the place where a prime minister had been assassinated fours years earlier. I was among them. In the square the atmosphere was intoxicating. Delirious people danced, embraced one another, kissed. Barak promised to be a second Rabin, only more so. He promised to make peace with the Palestinians within months.
A year and a half later nothing of all this remained. Ehud Barak, the hero of peace, brought on us the greatest disaster in the annals of the struggle for peace. He came back from the Camp David conference, which had taken place on his express demand, with a declaration that was to become a mantra: "I have turned every stone on the way to peace / I have offered the Palestinians unprecedented generous terms / Arafat has rejected everything / We have no partner for peace." With 20 Hebrew words Barak destroyed the peace camp and brought about a public mood that even Netanyahu could not create: There is no chance for peace, we are condemned to live with an everlasting conflict.
Therefore, no one got excited about Tzipi Livni's victory. The general reaction was a sigh of relief and a shrug of the shoulder. So Kadima has voted. So it has a new chairwoman. So there will be a new prime minister. Let's wait and see.
So what can we expect? There are already jokes circulating about a new rock band, "Tzipi and the Tzipiot" ("tzipiot" means expectations in Hebrew). Nobody really knows what kind of a prime minister she will be. Strong or weak. Tough or compromising. Warmonger or peace-seeker.
One can only point at her background. Her father, Eitan, came to Israel at the age of 6 and joined the Irgun underground in 1938 (the same year as I did), when he was 19. He lived all his life under the influence of Zeev (Vladimir) Jabotinsky and his teachings.
In order to understand Tzipi, one has to go back to Jabotinsky. He was was a nationalist in the 19th century mold. Born in the 19th century in Odessa, he lived for some years as a young man in Italy and his heroes were the leaders of contemporary Italian nationalism: the ideologue Giuseppe Mazzini and the fighter Giuseppe Garibaldi.
Jabotinsky wanted, of course, all of Palestine to become a Jewish state. When he founded his party in the 1920s he named it according to this vision: The demand was for a "revision" of the British decision to separate the land west of the Jordan river from the land east of the river, today's Kingdom of Jordan. In her youth, Tzipi sang Jabotinsky's most famous song: "Two banks has the Jordan - this one belongs to us and that one, too."
But Jabotinsky was also a real liberal and a real democrat. He entered the political arena for the first time when he formulated the "Helsingfors (Helsinki) Plan," which demanded human and national rights for the Jews and the other minorities in czarist Russia.
Years ago, the Revisionists used to tell this joke: Rewarding David Ben-Gurion for founding the state, God promised to grant him one wish. Ben-Gurion asked that every Israeli should be honest, wise and a member of the Labor Party. "That's too much even for me to grant," God replied, "but every Israeli can choose two of the three." So a Labor member can be wise but not honest, a Labor member can be honest but not wise, and somebody who is wise and honest cannot be a Labor member.
Something like this is now happening to the revisionists themselves. They ask for three things: a Jewish state, a state that encompasses all of historic Palestine, and a democratic state. That is too much even for God. So a revisionist must choose two of the three: a Jewish and democratic state in only a part of the country, a Jewish state in all the country that will not be democratic, or a democratic state in all the country that will not be Jewish. This has not changed over the last 41 years.
Tzipi Livni, an honest-to-goodness revisionist, has announced her choice: a Jewish and democratic state that will not encompass the whole of the country (we leave open here the question of whether a "Jewish" state can be democratic).
That may not be an ideal basis for peace (what would be the status of Israel's Arab citizens in this Jewish nation-state?) but it is realistic. If she has the power to implement her ideas, she can make peace. If.
Reacting to the election results, Gideon Levy wrote that the heart wants to hope, but the brain cannot. That is an understandable reaction.
Since Tzipi, short for Tzipora, means bird, one wants to cry out: Fly, Tzipora, fly! Fly to heaven! After your election as prime minister, lose no time! Set up a government coalition with the peace forces, use the first few months of your term to achieve peace with the Palestinians, call new elections and submit yourself and the peace agreement to the public test!
That is what Ehud Barak should have done in 2000. He did not take the chance, and therefore he lost.
Will Tzipora reach these heights? The heart hopes. The brain has its doubts.
Uri Avnery is the founder of the Israeli peace movement Gush Shalom.
15 hurt in Jerusalem attack
JERUSALEM: About 15 people were hurt Monday in an attack at a busy Jerusalem intersection, the Israeli rescue service said.
The rescue service said a driver had driven his car into a group of people at the intersection.
The police said the driver had been shot and killed.
Israel Radio said armed civilians had killed the driver. He was not immediately identified, but the wording of the police statement indicated it was believed he was a Palestinian.
Ambulances and police units raced to the scene. The rescue service said its workers had evacuated one person who had been seriously wounded, two with moderate wounds and seven slightly wounded. Israel Radio said the vehicle had been a car, and it had plowed into a group of pedestrians.
The intersection is near the invisible line between the Jewish and Arab sections of Jerusalem, near the Old City.
Palestinians living in Jerusalem have carried out two attacks recently using heavy construction machinery, killing three people and wounding several others.
Ten to 15 foreign tourists kidnapped in Egypt
CAIRO: A group of 10 to 15 foreign tourists were kidnapped in Aswan in southern Egypt, possibly including two Israelis, Egyptian security sources said on Monday.
The sources said it was possible the group had been taken to Sudan.
'Sarah Connor': A TV series steeped in doomsday literalism
Of all the television series to have had their premieres in the past year, none has had the impact of "Gossip Girl," at least not by any metric tallying up the number of women who have bought headbands and tartan miniskirts and other signifiers, real or imagined, of youthful elitism. "Gossip Girl" has inspired fashion and e-mail vernacular ("Spotted!") and other shows about people who are many rungs of the ladder removed from rinsing their own coffee mugs (the new "90210," "Privileged").
Wealth fantasies now constitute a genre of their own, one that is matched at the other end of the spectrum by a doomsday literalism also prevalent on television. As much as audiences have fed their escapist impulses in recent years, they have also craved narratives of crisis and survivalism - these are bleak times after all - and there is no series on television bleaker, gloomier or more reflective of the depth of a certain kind of collective despondence than "Terminator: The Sarah Connor Chronicles," which has returned for its second season.
The series (on Fox) is an outgrowth of the "Terminator" films, the first of which appeared in 1984 during the twilight of the Cold War and the third and most recent two years after 9/11, with a hiatus during the Clinton years, when annihilation anxieties were relatively out of vogue. Both the movies and the series take it for granted that the world will end in the semi-near future if a computerized mechanism called Skynet achieves its goal of exterminating humanity and replacing it with cyborgs of dubious ambition and character. The story is set up along faith-versus-science paradigms, and the hope is that science will lose.
The eventual burden of preventing this catastrophe falls on John Connor (Thomas Dekker), a teenager feigning normalcy and going to high school. Various machine people have been sent from the future to try to impede his destiny.
The responsibility for keeping him alive lies with his mother, Sarah. The role was Linda Hamilton's in the first two films, and it belongs here to Lena Headey.
Headey tempers animal instinct with a lush, almost somnolent melancholy that suggests Sarah Connor is in some sense every mother who is fearful about how she will protect her child in an increasingly threatened world. In the 11 episodes seen so far, it is hard to recall a single instance of Sarah Connor smiling.
In contrast to "Heroes," another series about pre-empting apocalypse, there is nothing cartoonish about "Sarah Connor." The sense of foreboding is relentless and the mood unbroken by moments of comedy. Even the detours into John's school life add to the sense of peril without boundary. Last season, an alienated classmate committed suicide by jumping out a school window, and John agonized that he had done nothing to stop her.
Although John cannot save everyone, it is hardly coincidence that he shares his initials with another savior. The "Terminator" franchise originated with a messianic bent, but "Sarah Connor" aggressively expands the theology. Like "24," also on Fox, the series plays to both the left and the right, nodding to the humanistic notion that it is in man's power to change fate but offering a Christ figure to alter the course of history. This distinguishes it from the ethos of shows like "Heroes," "Lost" or "Battlestar Gallactica," none of them entirely secular but all of them engaged to varying extents with Eastern philosophies and collectivist ideas of people working together to save themselves. "Sarah Connor" bucks that trend. Surely it is monotheism's favorite one-hour drama?
The sense of evangelicism is ramped up this season. In the premiere, John was essentially born again. On his birthday, he rid himself of his slacker jacket and shaved his head, committing himself more fully to his mission. In the event that we might miss the religious implication, John did this in the rectory of a church, where he and his family were hiding from an Armenian killer.
His good-cyborg bodyguard, Cameron (Summer Glau), stared at a crucifix and asked Sarah if she believed in the resurrection; the assumption here was that only faith can really humanize.
"Sarah Connor" distinguishes itself from most other shows like it in the mood of end-of-days fundamentalism it cultivates. It revels in imagery of Armageddon, retaliation for perceived sin (in the grim future, we're told, the mall in Century City becomes a concentration camp). An FBI agent (Richard T. Jones), who attends Bible group, comes to believe Sarah's seemingly insane destruction prophesies, in some part because the evidence says she is right but largely because he is an ardent student of Revelations.
In its compensatory accommodation to liberal tastes, "Sarah Connor" has put corporate malevolence at the center of the game. An evil chief executive of a technology company, introduced this season - played by Shirley Manson, the lead singer of the rock band Garbage - has purchased what is more or less the brain for Skynet's world-ending operating system through various shady channels. She forms a team to develop her new purchase, and she calls it Babylon. "It's from the Bible," she tells her staff.
Like "Lost," "Sarah Connor" speaks in code, but one that is easier to read. The name of the Skynet brain is not geopolitically neutral: it's called the Turk. So the machine endangering mankind is symbolically Ottoman.
"Sarah Connor" is one of the most resplendently grim hours on television. We can only hope that in the next few years it will feel more like fantasy.
James Carroll: In currency we shouldn't trust
A man walked into the Ritz Bar. The bartender said, "I heard that you lost a lot in the crash." The man replied, "I did. But I lost everything I wanted in the boom." This exchange, from F. Scott Fitzgerald's "Babylon Revisited," a story set early in the Depression, suggests how a time of economic crisis can provoke a reckoning with what matters most.
That is not glibly to say, in the manner of a moralizing preacher, that concern with money is trivial, or that worry tied to last week's financial jolts is only greed. Job loss, pension insecurity, threat of foreclosure, the squeeze of debt, rising cost of living - if these problems are not properly a source of anxiety, nothing is.
But what is money? There is a clue in the reference in Fitzgerald's title. Babylon, the ancient Mesopotamian city on the Euphrates River, lives in memory as a place of license and sensuality. If captive in Babylon, it is important to maintain a spirit of detachment from its excesses. That's the Biblical reference.
But in the mists of time, predating the Bible, civilization was itself born in the alluvial plain between the Tigris and the Euphrates. That occurred when nomads - hunters, gatherers, herders - settled in cities that were built around agriculture. One of the main innovations of the settled life based on farming was the capacity to accumulate more than was needed to live. This surplus was both a boon - it enhanced survival - and a curse - it led to the organized thievery of social class. The management of surplus became a valued skill, the idea of wealth was born, and, even allowing for inequity, the human species made its great evolutionary leap.
But money predates agriculture. Anthropologists speculate that the first form of currency - a symbol whose value is imputed rather than inherent - were the pieces of flesh that hunters tore from a vanquished beast. It was not only that successful hunters could then eat to live, but that they could take morsels of meat back to their social circles, however defined. The meat had value in itself, but soon enough it took on transcendent worth.
Indeed, the tearing of flesh from the bones of the killed animal became ritualized, a possible origin of religious sacrifice. A kind of divinity was attributed to the victim, which, after all, was now the source of sustenance, and vestiges of the victim's body were now considered to be holy.
The torn meat became something to exchange, a way to accommodate new divisions of labor, compensating those whose contributions to community survival was less direct than joining in the hunt. A sacred aura hung over the whole enterprise, which may have made it work. The bull as a symbol of the stock market, a contemporary sacred cow, is thought to be rooted in this ancient phenomenon. (The historian Dennis King Keenan suggests that the Latin word pecunia comes from pecus, meaning cattle. The English word "money" comes from the Roman goddess Juno Moneta, in whose temple bulls were sacrificed.) Money's subliminal connection to divinity is enshrined even in the way communion wafers of the Christian liturgy are shaped like coins. A sacrament exists to point beyond itself to something sacred. It is not too much to say that the first sacrament was money.
Meat as a form of currency makes the meaning of money clear. Nutrition is what humans need to live. Stored nutrition, managed by a system of credit, is what humans need to live without obsessing about the next meal. All that we associate with civilization followed from that freedom - from writing to art to concern with consciousness itself. Civilization erected walls to protect against the contingency of existence on a dangerous planet, and the chief emblem of that protection is money.
Because direct awareness of normal human vulnerability - the beasts are still out there - is so frighteningly immobilizing, it became normal to think that what protects us is absolutely trustworthy. That is why primitive humans began to explicitly regard their money as divine, and it is why, equally, if less explicitly, we do, too.
But, in fact, the money is not what protects us. Nor do the gods. Human inventiveness is our protection, and that remains firmly on display.
Paul Krugman: Cash for trash
PRINCETON, New Jersey: Some skeptics are calling Henry Paulson's $700 billion rescue plan for the U.S. financial system "cash for trash." Others are calling the proposed legislation the Authorization for Use of Financial Force, after the Authorization for Use of Military Force, the infamous bill that gave the Bush administration the green light to invade Iraq.
There's justice in the gibes. Everyone agrees that something major must be done. But Paulson is demanding extraordinary power for himself - and for his successor - to deploy taxpayers' money on behalf of a plan that, as far as I can see, doesn't make sense.
Some are saying that we Americans should simply trust Paulson, because he's a smart guy who knows what he's doing. But that's only half true: He is a smart guy, but what, exactly, in the experience of the past year and a half - a period during which Paulson repeatedly declared the financial crisis "contained," and then offered a series of unsuccessful fixes - justifies the belief that he knows what he's doing? He's making it up as he goes along, just like the rest of us.
So let's try to think this through for ourselves. I have a four-step view of the financial crisis:
1. The bursting of the housing bubble has led to a surge in defaults and foreclosures, which in turn has led to a plunge in the prices of mortgage-backed securities - assets whose value ultimately comes from mortgage payments.
2. These financial losses have left many financial institutions with too little capital - too few assets compared with their debt. This problem is especially severe because everyone took on so much debt during the bubble years.
3. Because financial institutions have too little capital relative to their debt, they haven't been able or willing to provide the credit the economy needs.
4. Financial institutions have been trying to pay down their debt by selling assets, including those mortgage-backed securities, but this drives asset prices down and makes their financial position even worse. This vicious circle is what some call the "paradox of deleveraging."
The Paulson plan calls for the federal government to buy up $700 billion worth of troubled assets, mainly mortgage-backed securities.
How does this resolve the crisis?
Well, it might - might - break the vicious circle of deleveraging, step 4 in my capsule description. Even that isn't clear: The prices of many assets, not just those the Treasury proposes to buy, are under pressure. And even if the vicious circle is limited, the financial system will still be crippled by inadequate capital.
Or rather, it will be crippled by inadequate capital unless the federal government hugely overpays for the assets it buys, giving financial firms - and their stockholders and executives - a giant windfall at taxpayer expense. Did I mention that I'm not happy with this plan?
The logic of the crisis seems to call for an intervention, not at step 4, but at step 2: the financial system needs more capital. And if the government is going to provide capital to financial firms, it should get what people who provide capital are entitled to - a share in ownership, so that all the gains if the rescue plan works don't go to the people who made the mess in the first place.
That's what happened in the savings and loan crisis: The feds took over ownership of the bad banks, not just their bad assets. It's also what happened with Fannie and Freddie. (And by the way, that rescue has done what it was supposed to. Mortgage interest rates have come down sharply since the federal takeover.)
But Paulson insists that he wants a "clean" plan. "Clean," in this context, means a taxpayer-financed bailout with no strings attached - no quid pro quo on the part of those being bailed out. Why is that a good thing? Add to this the fact that Paulson is also demanding dictatorial authority, plus immunity from review "by any court of law or any administrative agency," and this adds up to an unacceptable proposal.
I'm aware that Congress is under enormous pressure to agree to the Paulson plan in the next few days, with at most a few modifications that make it slightly less bad. Basically, after having spent a year and a half telling everyone that things were under control, the Bush administration says that the sky is falling, and that to save the world Americans have to do exactly what it says now now now.
But I'd urge Congress to pause for a minute, take a deep breath, and try to seriously rework the structure of the plan, making it a plan that addresses the real problem. Don't let yourself be railroaded - if this plan goes through in anything like its current form, we'll all be very sorry in the not-too-distant future.
This time, chaos stymies hedge funds
LONDON: Hedge funds usually thrive when markets turn volatile. But even these fast-money investors are struggling to cope with the wild swings in the markets, raising concerns that some may not survive.
Even before the Bush administration proposed its vast bailout for financial institutions, the hedge funds those secretive, sometimes volatile investment vehicles for the rich were on course for their worst year on record. The average fund is down nearly 5 percent so far this year.
One major hedge fund investor said that he had started to buy Morgan Stanley at $23 on Wednesday, convinced that the rumors of its demise were unfounded. But as the stock began to plummet, he canceled his trade and watched with amazement as the stock sank to a low of $12 on Thursday.
And he stayed on the sidelines as the stock more than doubled that day and ended the week at $27 a share.
Volumes were high, fear was higher but conviction, the final and most crucial ingredient, was lacking.
"With this kind of fear you can't do anything," the hedge fund investor said. "You never have heroes when you get these kinds of violent moves. The heroes only come out when the stock is down and stays down."
While it is too early to know for sure, interviews with industry experts and investors suggest that few hedge funds had the foresight, dexterity and most of all the courage to counter conventional wisdom and go long on financial stocks last week.
On the other side of the equation, various large funds no names have yet surfaced appear to have been hit hard by betting against financial stocks. Market participants say it was the frantic covering of the short positions by these funds that propelled stocks up late last week.
Some funds were already down for the year. One of the main funds for Atticus was down 30 percent through August. Other big funds down for the year include GLG Partners, down close to 15 percent so far this year.
In London, some managers have whispered that they may sue the Financial Services Authority, the British regulator, for temporarily outlawing short-selling against financial firms, one of their basic investment tools.
But hedge fund investors also say that with many funds nursing negative returns of as much as 30 percent this year, the appetite for taking bold, risky bets and losing everything has waned.
"Why would you take the risk of not getting paid 2 and 20 percent next year?" asked one fund executive, referring to the lush pay structure of a 2 percent fee on all money invested and 20 percent of all profit that successful hedge funds award themselves.
A hedge fund manager in New York bluntly conveyed the sense of panic that has coursed through Wall Street in recent weeks.
"Essentially, work has been like living through a financial version of 'A Nightmare on Elm Street,' " he said. "There's lots of panic, blood and screaming. You slay the evil monster, and everything is O.K. But then you wake up and there's lots of panic, blood and screaming. Rinse and repeat."
So while many funds may have been hurt badly by the ban on short selling, it is also true that the size of investments and the amount of leverage used have come down markedly in recent months. These steps may well prevent a large-scale implosion, but they are unlikely to stem investor defections as well as a growing notion that the fat times for hedge funds and their investors are coming to an end.
Hedge fund investors are critical of the short-selling ban, saying that it will take liquidity out of the market. Some ask, sarcastically, if a prohibition on buying financial stocks will follow during the next bull market.
But it is also worth asking why so few were in a position to benefit from the recovery last week.
That is partly a result of an increasing propensity of funds to hunt in large packs. The strategy of betting against financial stocks had been a money winner for so long that few funds seem to have made a countermove.
Some point to another factor: The collapses of Bear Stearns and Lehman Brothers cut close to bone. Many hedge funds had been customers and trading partners of the fallen companies. Several had close friends there, too, which overwhelmed their ability to think with the dispassion that characterizes elite investors.
Accepted wisdom in hedge fund enclaves like Greenwich, Connecticut, and the Mayfair district of London contends that hedge fund operators benefit from volatility because they can use their wits, flexibility and access to borrowed money to take advantage of sharp market dislocations.
But what the last week has shown is that some dislocations are too much for even the best minds in finance to capitalize on.
Investors say this is because the most violent moves came in the middle of the week, catching many by surprise and laying ruin to carefully cultivated investment strategies. Indeed, the 30 to 40 percent increases for many financial stocks was evidence that the quick change in sentiment the hint of a bailout fund and the ban on short-selling caught many hedge funds with short positions, forcing them to become instant buyers.
And even many hedge funds that do not short stocks had long ago pared their holdings in financial stocks. They quickly reversed course when they sensed they were moving upward.
It is still uncertain whether the Treasury's bailout plan and the ban on shorting financial stocks will result in a long-term recovery. The financial environment for banks and brokerage firms remains sickly, with past profit generators like trading, underwriting and advising all slumping. A new climate of regulation and increased government participation in the markets will also curtail the freewheeling actions of bankers.
"Anyone who borrows short and lends long does not have a friend these days," said Andy Brown, chief executive of Cedar Rock Capital, a money management firm that does not invest in investment banks because of their use of leverage. "Has that changed? I just don't know."
U.S. joins the sovereign wealth fund crowd
LONDON: Until this weekend, the largest sovereign fund in the world was about $600 billion in size and located in the oil-rich emirate of Abu Dhabi.
The proposed $700 billion Treasury-directed fund may have an immediate mandate to buy depressed mortgage assets, but it also will share many of the characteristics of the burgeoning government sponsored investment pools that have been formed in recent years to channel the surplus riches in countries like Singapore, China, Kuwait and Russia into private companies.
And in so doing, the fund, introduced by a Treasury secretary who spent his earlier professional career in the trenches of Wall Street, endorses, perhaps unintentionally, a form of capitalism in which the most powerful financial entities are not risk-happy investment banks, but more cautious state sponsored investment entities.
While not necessarily a third economic way, this approach presumes that it is the government - in addition to the private sector - that must play a crucial role in deciding how best to deploy a nation's investment capital.
"This gets to the point of state capitalism and defining what the role of the government is in a free market economy," said Douglas Rediker, a former investment banker who studies sovereign funds at The New America Foundation in Washington.
Assuming it is approved by Congress, the new fund - together with the U.S. government's takeover of Fannie Mae and Freddie Mac, the mortgage finance agencies, and American International Group, the giant insurer - takes the sting out an argument that sovereign fund critics have made in the past, Rediker notes.
Until lately, the U.S. government did not hold positions in public companies, so why should sovereign funds be allowed that privilege? "That argument no longer holds," Rediker said.
To be sure there are differences: Sovereign funds are generally investing surplus assets and in many cases they are doing so abroad for the purpose of financial diversification. The Treasury will have to borrow its $700 billion and it will be making no investments overseas.
Most wealth funds claim that their motives are purely commercial and they make investments only with the aim of seeking the best investment return. Yet many of them have done poorly lately, motivated perhaps by other reasons that lured them into premature investments in troubled financial institutions.
The Treasury fund, similarly, is pulled in different directions. While paying lip service to the idea that it will seek the best prices for the assets it buys, it has an openly political and economic mandate: avoiding a broader financial collapse by extending a lifeline to U.S. institutions hobbled by their exposure to toxic mortgage assets.
There are other parallels. Several funds have not been shy about making clear that their goals are also political and aimed at advancing national economic goals.
In Singapore, China and Korea, such a notion is widely accepted - a legacy of countries that evolved economically via industrial policies in which strategic industries were protected until they were ready to compete internationally. And in the more authoritarian Middle East, it has always been the government driving core economic decisions.
The Qatar Investment Authority, for example, is a $60 billion fund managed by the country's foreign minister, Hamad bin Jassim bin Jaber Al Thani. Its investment criteria, among others, is to provide "added value to the state of Qatar" and "economic synergies or benefits for Qatar and its people."
Edwin Truman, a long-time student of global finance at the Peterson Institute for International Economics in Washington, said that many sovereign funds were first established to provide support for their domestic economies. He cites the intervention of the Hong Kong Monetary Authority, Hong Kong's central bank, when it plunged into the local stock market in 1998 and bought $120 billion worth of stock in what turned out to be a successful battle against speculators.
"We have always had this aversion to the government's role in the economy, yet we don't always practice what we preach," he said. "It is not inappropriate to make this analogy."
Indeed, some of the original wealth funds may start looking more like the Treasury plan. As their home markets have wobbled in recent weeks, the pressures have been building for a few funds to come to the rescue.
In Kuwait, the Kuwait Investment Authority, a $250 billion fund founded in 1953, said that it would invest as much as $1 billion to prop up sinking Kuwait stocks - following a request from the government. In Russia, government officials have poured money into investments and have debated using their country's $32 billion fund to support a falling stock market.
As for the U.S. Treasury fund, it has the benefit of starting to buy at what may well be the rock bottom, since its prices are likely to set a floor for mortgage assets. That puts it in a stronger position than the sovereign fund investors who bought their shares in Morgan Stanley, Citigroup and Merrill Lynch, only to see their positions fall.
Could the Treasury's fund become a permanent institution and, perhaps, broaden its mandate to become more flexible in how it deploys its assets - thus joining the march of sovereign funds abroad?
The fund's mandate is supposed to run out after two years, but the next administration in Washington may have different ideas once it has a $1 trillion or more in assets at its disposal.
Three economists' views of a financial rescue plan
The Bush administration is working with Congress to fill in the details of its plan to take the bad mortgage-related debt off the books of banks and financial institutions and stabilize the financial markets.
With Congress scheduled to begin its election-year recess at the end of this week, the administration has little time to pull the plan together. While the negotiations are going on, The New York Times asked three economists to offer their thoughts about the administration's actions.
Steven Schwarcz, professor of law and business, Duke University School of Law:
"The proposal by the Treasury to use government money to purchase mortgage-backed securities held by financial institutions should defuse the financial crisis, but at a cost to taxpayers that unfortunately will be much higher than if the government had acted when markets first began to collapse. It is, however, along with Treasury's Sept. 7 announcement that it will purchase securities issued by Fannie Mae and Freddie Mac, the first serious attempt by government to cure the underlying financial disease and not merely treat its symptoms.
"To cure the disease, government must focus on treating the loss of confidence in the financial markets. The American International Group, Bear Stearns, Lehman and potentially other financial institutions are in trouble, not because of problems with economic fundamentals, but because of falling prices of mortgage-backed and other securities, requiring these institutions to mark their securities down to the collapsed market prices or triggering insurance obligations on these securities. That, in turn, has created a downward death spiral of collapsing prices.
"A market liquidity provider of last resort is needed to correct these market failures by investing directly in securities of panicked financial markets, thereby stabilizing prices and dampening the downward death spiral that can lead to market collapse. This type of targeted market investment should generate minimal costs, and certainly lower costs than those of a lender of last resort to financial institutions the Fed's traditional role.
"Whatever entity the Treasury is contemplating to purchase mortgage-backed securities held by financial institutions, the fact that it will directly purchase securities will set an important precedent for creation of a market liquidity provider that can act proactively, not merely reactively, after the damage is done.
"By acting at the outset of a market panic, a market liquidity provider can profitably invest in securities at a deep discount from the market price and still provide a "floor" to how low the market will drop. Had a market liquidity provider been in existence when the subprime crisis started, the resulting collapse of the credit markets would almost certainly have been restricted in scope and lessened in impact, and we would not now be facing the need to try to save AIG and other institutions."
Douglas Elmendorf, senior fellow at the Brookings Institution in Washington:
"The Treasury's new plan for stabilizing the financial system has already made a sharp impression on financial markets and the public consciousness. Yet little has been revealed about how the plan will work.
"The Resolution Trust Corporation of the early 1990s provides scant guidance on how to proceed. That company was designed to sell assets the government had acquired by honoring deposit insurance at savings and loans. But the objective now is to buy assets. The challenge is picking the best means of doing so. What should the government buy, from whom, in what quantity and at what price?
"The Treasury plans to purchase mortgage-related debt, which lies at the heart of the crisis. Yet this approach has significant disadvantages.
"First, mortgage-backed securities and derivatives of these securities are not all alike. Reverse auctions within broad debt classes would be risky, because current holders would try to unload the lowest-quality securities within each class. Relying on the judgment of hired investment firms to pick prices and quantities has the potential for inefficiency, unfairness and abuse.
"Second, buying troubled debt provides the most help to firms that made the worst investments. Banks that stayed clear of bad debt or cut their losses early would receive little or no gain, while banks with the weakest balance sheets would reap the biggest rewards. Not only is this unfair, it would dampen the impetus for restructuring the financial sector to give a smaller role to institutions and business models that have failed.
"Third, taxpayers would take on significant risk but see limited potential gain in contrast with the rescues of Fannie Mae, Freddie Mac and AIG, where taxpayers got large equity stakes.
"An alternative approach is to make equity investments in a wide range of financial institutions. If the government offered each bank an investment equal to a given percent of its market value in exchange for a corresponding equity stake, the problems I listed above would be avoided. And because the government would be a minority shareholder, it would not directly manage or control these banks. This approach raises its own concerns that would need to be addressed, but it is a more promising starting point."
Vincent Reinhart, resident scholar at the American Enterprise Institute:
"Political leaders recognize that more than improvisation is needed to cope with the collapse of the housing market and the financial market crisis in its wake. Before they turn to the details of draft legislation, however, they had better settle on what they are trying to accomplish.
"Helping households in distress is a retail business, requiring decisions on a mortgage-by-mortgage basis. Similarly, negotiating with individual financial firms about their mortgage holdings takes time and infrastructure. Such negotiations put the government at a decided disadvantage because the other side in the transactions has more information about each asset.
"In both cases, politicians will have trouble establishing boundaries for assistance. While about one in 15 households with mortgages is now late in making payments, many more have suffered wealth losses. Builders, too, are in distress. And there are tens of thousands of financial institutions in the country, almost all of which have some impaired loans on their books.
"The unpleasant reality is that time is short, resources are stretched and many of the nation's urgent needs are unmet. Because government funds are not unlimited, legislation should focus on the immediate problem of the strains in financial markets.
"Providing aid to large financial firms is distasteful, especially when remembering their excesses and the time when their managers were considered masters of the universe. But those firms hold the larger economy hostage. As long as they are unwilling to support market functioning and make new loans, spending will sag and asset prices will slide.
"The Congress should authorize the Treasury to purchase asset-backed securities in the secondary market and mortgages through auctions. For assets where it might not have all the information it needs, the Treasury could demand a slice of equity in the selling firm as well. As has been the case since its inception, the Federal Reserve can act as fiscal agent, making some of the purchases directly and supervising outside managers where special expertise is needed.
"The election calendar narrows the window of action and provides reason to keep the draft legislation simple. The assets acquired this year will certainly not be sold before a new administration and Congress are in power. Thus, it is neither necessary nor appropriate to make decisions on what to do with those mortgage assets."
Goldman and Morgan Stanley to become Fed-backed banks
WASHINGTON/PHILADELPHIA: Goldman Sachs and Morgan Stanley got approval on Sunday to become bank holding companies regulated by the U.S. Federal Reserve, effectively killing off the investment banking model that has dominated Wall Street for more than 20 years.
The move by the only two big U.S. investment banks left standing independently after the failure of Lehman Brothers and the agreed takeover of Merrill Lynch last week, enables them to gain easier access to financing and gives them more flexibility to buy retail banks.
But the change, part of a wrenching transformation of the Wall Street landscape amid financial market turmoil in the past two weeks, means that previously freewheeling Goldman and Morgan Stanley will be subject to much tighter Fed regulation, including tough capital requirements.
In return they get long-term access to the Fed's discount window and access to bank deposits insured by the Federal Deposit Insurance Corp.
"It creates a perception of greater safety and supervision. It really rationalizes the regulatory system. It should be good for both Goldman Sachs and Morgan Stanley," said Chip MacDonald, mergers partner at law firm Jones Day. "It gives them better sources of funds through a commercial bank subsidiary."
The approval by the Fed came at the request of Goldman and Morgan Stanley, according to a source familiar with the application.
If confirmed after a five-day waiting period, the transition could also make it easier for the banks to buy retail banks.
To provide increased liquidity to the companies while they go through the transition, the Fed agreed to lend to the firms' broker-dealer subsidiaries on the same terms as the Fed discount window for banks.
It said it was making the same collateral deals available to the broker-dealer subsidiary of Merrill Lynch , which is being acquired by Bank of America .
While the investment banks had temporary access to the Primary Dealer Credit Facility, this move makes access to the discount window permanent and gives them much more stable funding opportunities.
The arrangement also makes it easier for the firms to acquire retail banks, ending an era of pure-play investment banking by the two elite Wall Street firms.
For much of the past two decades, investment banks such as Morgan Stanley, Goldman and Lehman generated massive profits from trading, providing broking and advisory services and buying and re-packaging assets.
But the model began unravelling a little over a year ago, when complex financial products linked to home loans began plunging in value, forcing the banks to seek more funds to shore up their balance shares.
Goldman Sachs said it would move assets from a number of strategic businesses, including its lending businesses, into an entity called GS Bank USA that would have more than $150 billion (82 billion pounds) in assets. Goldman said it intends to grow its deposit base through both acquisitions and organically.
Similarly, Morgan Stanley, which has been weighing a merger with Wachovia Corp , said the new status would give it "flexibility and stability to pursue new business opportunities."
Bank holding companies, which typically have large pools of retail deposits, have not suffered from the recent difficulties that investment banks have had in securing funds.
(Editing by Lincoln Feast)
Financial crisis casts cloud over U.N. poverty meeting
UNITED NATIONS: Heads of state, private-sector leaders and development agencies will this week assess the global fight against poverty, where progress is threatened by upheaval in global markets and soaring food prices.
The meeting in New York marks the midway point since global leaders first signed on to the Millennium Development Goals (MDGs) in 2000, which aim to halve hunger and poverty by 2015.
The goals have been chosen by U.N. Secretary-General Ban Ki-moon as the keynote theme of this year's annual General Assembly gathering of leaders of the 192 U.N. member states.
Events start on Monday with a look at development needs in Africa, where poverty is still widespread but faster economic growth is opening new investment opportunities. On Thursday, Ban will lead a meeting to gauge overall progress on reaching the goals.
"It is totally unacceptable that in 2008 when we have the knowledge and resources to wipe poverty off the face of the globe, so many children still die of preventable diseases and millions miss a chance to go to school," British Prime Minister Gordon Brown said through a spokesman.
He called the New York meeting "a vital opportunity to get the world back on track in the campaign against poverty, illiteracy and disease, and the beginning of a unique coalition of forces -- government, the private sector, NGOs and faith."
This year sees major efforts from the private sector, including private philanthropic foundations, to support the fight against poverty, with billions of dollars in commitments for malaria, education, health and food projects expected.
On the fringes of the U.N. debate, more than 130 company CEOs and over 50 current and former heads of state, as well as celebrities, will participate in the Clinton Global Initiative led by former U.S. President Bill Clinton.
With this new coalition of forces in the fight against poverty, illiteracy and disease, new lenders like China, India, Brazil and Arab states are playing a greater role.
But there are concerns the financial turmoil rocking Wall Street firms and global markets could undo progress made in tackling poverty and disease, especially if major donors like the United States fall further back on their aid promises to poor countries, already battling higher energy and food costs.
The World Bank has warned that 100 million people could be pushed deeper into poverty unless there is a global response to tackle the rising cost of food and oil. When the MDGs were launched, oil traded around $10 a barrel and is now at over $100 a barrel.
"Leaders must not just reissue empty promises, with their fingers crossed behind their backs," said Alison Woodhead, spokeswoman for development agency Oxfam. "This is a poverty emergency that requires exactly the same attention and response as the financial crisis grabbing the headlines."
Woodhead said an additional $150 billion (82 billion pounds) a year is needed by 2010 to meet all of the poverty goals.
"Given the turmoil in financial markets, rich countries will be tempted to tighten their belts. But we must do more, not less, if we are to prevent the real danger that progress on the MDGs will be wiped out."
A recent U.N. report pointed to strong and sustained progress in reducing extreme poverty, but new estimates by the World Bank show the number of poor in the developing world is larger than previously thought at 1.4 billion people.
The estimates confirm that between 1990 and 2005 the number of poor people living in extreme poverty fell by over 400 million, and the poverty rate is likely to fall by the targeted 50 percent below the 1990 rate by 2015.
Still, the World Bank has also said that while fast-growing countries like China have seen poverty rates drop, progress has been less pronounced in Africa.
MADRID: A soldier was killed early Monday in a car bombing for which the authorities blamed the Basque separatist group ETA. It was the third attack in northern Spain within 24 hours, Interior Ministry officials said.
The bomb exploded around 1 a.m. outside a military residence in the town of Santoña in northern Cantabria Province. The soldier, Luis Conde de la Cruz, 46, was killed as the police evacuated the residence after receiving a phone call in the name of ETA warning of the attack, an Interior Ministry spokesman said.
Six people were wounded, including an army captain and a 70-year-old woman who was passing by the residence. They were reported to be in serious but stable condition.
Less than 24 hours before, a 100-kilogram, or 220-pound, bomb exploded outside the police headquarters in the Basque town of Ondarroa, wounding 10 people, and another outside a savings bank in the Basque city Vitoria, destroying the building's facade.
Parliament and government offices throughout the country observed a moment of silence at noon for the soldier killed.
The rash of attacks followed a recent decision by the Supreme Court to dissolve Basque Nationalist Action, the party known by its Spanish initials, ANV, and considered a political arm of the Basque separatists. The ANV had gained power in some Basque towns during the most recent municipal elections.
The attack Monday was met with a new united face by the two major political forces in Spain.
For the last four years, leaders had been at one another's throats over Prime Minister José Luis Rodríguez Zapatero's failed bid to negotiate the peaceful dissolution of ETA, which the United States and Europe have labeled a terrorist organization. The opposition had accused Zapatero of caving in to the militants and giving them time to regroup after many of their leaders had been jailed, and had also blamed the government for not banning the ANV sooner.
"The terrorists should know that they will never triumph in their will to defeat us," Zapatero said in a televised address, in which he thanked the conservative opposition for its support in a joint pact against ETA. "Together we will ensure the life and liberty of our citizens."
On Monday evening, Parliament was scheduled to hammer out the first details of that pact, including a measure to remove the names of ETA members from town squares and monuments.
And in a show of unity, the opposition leader, Mariano Rajoy, said: "All of us are going to continue working shoulder to shoulder in the fight against terrorism."
De la Cruz was the seventh person killed since December 2006, when peace talks with the Spanish government broke down and ETA ended its most recent truce with a car bombing in a parking garage at the Madrid Barajas airport that killed two men. The other victims included three members of the Spanish Civil Guard and a politician - the typical targets of the armed separatist group.
This past summer, ETA also returned to targeting the Spanish tourist industry, planting at least seven small bombs near beaches and golf courses in the southern Costa del Sol and the northern Cantabria region. The group issued its usual warning calls and hundreds of people were evacuated. Nobody was hurt.
The Interior Ministry spokesman said the police had dismantled the "commando" operation responsible for tourist area attacks with the arrest of 12 suspected ETA members in July.
ETA has killed more than 850 people in its nearly four-decade struggle for an independent Basque state in parts of northern Spain and southern France.
TOKYO: Outspoken nationalist Taro Aso, an advocate of spending and tax cuts to boost the economy, won the race on Monday to become Japan's next prime minister and swiftly set his sights on an election expected within months.
Aso, a former foreign minister, clinched the ruling Liberal Democratic Party leadership vote by a landslide to take over from Yasuo Fukuda, who quit this month just as the economy flirts with recession and faces further damage from turmoil on Wall Street.
"As I travelled around the regions, I became even more convinced that the economy was in a recession," Aso, 68, told a news conference after winning the leadership, adding his priority was to revitalise the economy before tackling a huge public debt.
However, Aso may have little time to revive the world's second-biggest economy if, as media and pundits predict, he calls an early poll for parliament's powerful lower house.
"Standing here, I feel that this is Taro Aso's destiny," Aso, the grandson of a premier, told LDP members after winning 351 of 525 valid votes cast by party lawmakers and chapters.
"But the LDP, as the government party, must resolutely fight the (opposition) Democratic Party in the next election, and only when we have won that election will I have fulfilled my destiny.
Aso, set to be voted prime minister on Wednesday by virtue of the ruling bloc's majority in parliament's powerful lower house, will be Japan's third prime minister in a year. Both his predecessors quit in the face of a deadlocked parliament, where the opposition controls the upper house and can stall bills.
"It's going to be a weak government and there is going to be an election and there will probably be a weak government as a result of the election," said Columbia University professor Gerry Curtis. "Japan will not be in a position to play a more dynamic role in world affairs. It will be more and more inward-looking."
The ruling bloc is expected to lose in the next election the two-thirds lower house majority that allows it to override upper house vetoes, and analysts say a clear victory for either side camp may prove elusive, leaving more policy paralysis.
TAPPING RIVALS, EYEING POLLS
One voter predicted that, with many longing for change, the long-ruling LDP could lose its grip on power altogether.
"The Liberal Democratic Party is already finished regardless of who got elected," said 52-year-old advertising producer Youji Nomura. "The LDP is completely corrupt, and I don't think the new prime minister would last even a year, no matter who it is."
Aso, who wants tax cuts for businesses and stock investors, has said Japan's goal of balancing its budget by 2012 could be put off, a stance that has alarmed fiscal reformers in his party but charmed local party machines looking toward the election.
Aso won five times the votes of his nearest rival to clinch the top post on his fourth attempt to lead the party.
Economics Minister Kaoru Yosano, a fiscal conservative, was a distant second with 66 votes and former defence minister Yuriko Koike came in third with 46 votes for her bid to become Japan's first female prime minister.
Japanese media said Aso was considering keeping Yosano in a new cabinet to be formed on Wednesday as well as tapping another rival, former defence minister Shigeru Ishiba, in an effort to unify the party, which is suffering from dismal voter ratings.
Though inclined to view China's rising clout with concern, Aso is likely to stick to Fukuda's diplomatic stance that stresses Japan's tight security alliance with the United States and stable ties with China, which have warmed after years of strains due bitter wartime memories and regional rivalry.
He is likely to stay away from Tokyo's Yasukuni Shrine, seen by Beijing as a symbol of Japan's past military aggression, although analysts say his tendency toward verbal gaffes that offend at home and abroad could prove a problem.
Aso, a dapper dresser and fan of manga comic books popular with young people, regularly tops voter surveys for next prime minister, making him the LDP's natural choice to lead it in a general election that must be held by next September.
Japanese media say an election could be called for as early as October 26 to make the most of any bounce in public support, although Aso has said his priority was to pass an extra budget to support the economy.
The new leader would be seeking a mandate to break a deadlock in parliament, but with both sides facing a tough battle, speculation is rife over a possible rejigging of party allegiances, although an attempt by Fukuda and main opposition Democratic Party leader Ichiro Ozawa to form a "grand coalition" flopped last year.
ANKARA: Turkish prosecutors have launched an investigation after 13 newborn babies died within 24 hours in a state hospital in the western city of Izmir, state news agency Anatolian said on Monday.
It was the second case in two months that has raised concern over standards of care for newborn babies in Turkey.
Turkish television stations and websites reported that the deaths were caused by an infection. The reports could not immediately be confirmed and the nature of the infection was not clear.
The Hurriyet newspaper website reported a doctor on a board of experts examining the case as saying the infection was caused by a liquid given intravenously to the babies.
Media reports said the babies, all born prematurely, died over the weekend at Tepecik hospital in Izmir, Turkey's third largest city.
"The number of babies that have died has increased to 13. We are looking into the deaths," Anatolian quoted Mehmet Ozkan, the head of the local health directorate as saying.
The hospital is under quarantine and no more babies are being admitted into the centre, Anatolian said.
In August, more than two dozen babies died in a hospital in Ankara.
After a lawsuit from a Christian anti-abortion group, Google is allowing religious organizations to take out ads using the keyword "abortion," a rare case of the search giant admitting it was wrong.
In March, Google rejected an ad from the Christian Institute, a British organization, that read, in part, "UK abortion law: Key news and views on abortion law from The Christian Institute."
The group, which wanted to advertise because the House of Commons was considering a bill involving abortion issues, filed a lawsuit against Google in April, saying the company was discriminating on religious grounds.
Google has limits on what can and cannot be advertised; it will not allow ads for products derived from endangered species, for example, nor will it allow ads promoting violence. In the past, Google would not sell the "abortion" keyword to religious groups, but did sell it to other groups, including secular groups, doctors offering abortions and resource sites like Our Bodies, Ourselves.
Google's policies are based on a number of factors. "We build out our policies based upon local customs and business practices and, as any sensible business would do, review them from time to time to make sure they are up to date and current," said Ben Novick, a London-based Google spokesman.
Google reviewed its policy, and announced last Wednesday it had reached a settlement with the Christian Institute. Terms of the settlement were not disclosed, but Google immediately began allowing ads linked to abortion from religious groups as long as they were determined to be factual, and not graphic or emotional ads. Google uses a combination of automated and manual processes to detect advertising violations. The change in policy applies worldwide.
"We are pleased with Google's constructive response to this matter," the Christian Institute said in a statement.
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