U.S. food watchdog defends plastic linked to health risks
WASHINGTON: With scientists at odds about the risks of a chemical found in plastic baby bottles, metal cans and other food packaging, the government on Tuesday gave consumers some tips on how to reduce their exposure to BPA even as it said the substance is safe.
A Food and Drug Administration advisory committee met as a major study linked bisphenol A to possible risks of heart disease and diabetes. The scientific debate could drag on for years.
"Right now, our tentative conclusion is that it's safe, so we're not recommending any change in habits," said Laura Tarantino, head of the FDA's office of food additive safety. But she acknowledged, "there are a number of things people can do to lower their exposure."
For example, consumers can avoid plastic containers imprinted with the recycling number '7,' as many of those contain BPA. Or, Tarantino said, they can avoid warming food in such containers, as heat helps to release the chemical.
More than 90 percent of Americans have traces of BPA in their bodies, but the FDA says the levels of exposure are too low to pose a health risk, even for infants and children. Other scientists, however, say BPA has been shown to affect the human body even at very low levels
And Tuesday a study released by the Journal of the American Medical Association suggested a new concern about BPA. Using a health survey of nearly 1,500 adults, the study found that those exposed to higher amounts of BPA were more likely to report having heart disease and diabetes. Because of the possible public health implications, the results "deserve scientific follow-up," its authors said.
The study is preliminary, far from proof that the chemical caused the health problems. Two Dartmouth College analysts of medical research said it raises questions but provides no answers about whether the ubiquitous chemical is harmful.
FDA officials said they are not dismissing such findings. "We recognize the need to resolve the concerning questions that have been raised," said Tarantino, acknowledging that more research is needed. But the FDA is also arguing that the studies with rats and mice it relied on for its assessment are more thorough than some of the human research that has raised doubts.
The agency has asked an outside scientific panel for a second opinion on BPA's safety, and the medical journal article was released to coincide with the advisers' hearing. The FDA has the power to ban or limit use of BPA in food containers and medical devices.
Past animal studies have suggested reproductive and hormone-related problems from BPA. The JAMA study is the largest to examine possible BPA effects in people and the first suggesting a direct link to heart disease, said scientists Frederick vom Saal and John Peterson Myers, both longtime critics of the chemical.
Still, they said more rigorous studies are needed to confirm the results.
Vom Saal is a biological sciences professor at University of Missouri who has served as an expert witness and consultant on BPA litigation. Myers is chief scientist at Environmental Health Sciences, a Charlottesville, Va., nonprofit group. They wrote an editorial accompanying the JAMA study.
BPA is used in hardened plastics and in a wide range of consumer goods, including the lining of metal cans, eyeglass lenses and compact discs. Many scientists believe it can act like the hormone estrogen, and animal studies have linked it with breast, prostate and reproductive system problems and some cancers.
Researchers from Britain and the University of Iowa examined a U.S. government health survey of 1,455 American adults who gave urine samples in 2003-04 and reported whether they had any of several common diseases.
Participants were divided into four groups based on BPA urine amounts; more than 90 percent had detectable BPA in their urine.
A total of 79 had heart attacks, chest pain or other types of cardiovascular disease and 136 had diabetes. There were more than twice as many people with heart disease or diabetes in the highest BPA group than in the lowest BPA group. The study showed no connection between BPA and other ailments, including cancer.
No one in the study had BPA urine amounts showing higher than recommended exposure levels, said co-author Dr. David Melzer, a University of Exeter researcher.
Drs. Lisa Schwartz and Steven Woloshin of the Dartmouth Institute for Health Policy and Clinical Practice said the study presents no clear information about what might have caused participants' heart disease and diabetes.
"Measuring who has disease and high BPA levels at a single point in time cannot tell you which comes first," Schwartz said.
http://www.iht.com/articles/ap/2008/09/16/america/MED-Bisphenol-Safety.php
U.S. states to put price on emissions, but flaws are seen
Ten U.S. states are about to undertake the nation's most serious effort yet to tackle climate change, putting limits on carbon dioxide emissions from utilities and making them pay for each ton of pollutants.
The program is due to get off the ground before the end of September, but already there are worries that it may fail to reduce pollution substantially in the northeastern United States, undermining a concept that is being watched carefully by the rest of the country, by Congress and by European regulators.
The Regional Greenhouse Gas Initiative, or RGGI, will cap emissions for 233 plants. By putting a price on carbon dioxide emissions, it gives plants a financial incentive to clean themselves up, with the proceeds to be channeled to energy-saving and renewable energy programs in each state.
The states will set their own limits, with each issuing tradable permits, or allowances, for carbon pollution. On Sept. 25, utilities will start bidding at auction for allowances, which they can later sell - mimicking the so-called cap-and-trade programs that effectively reduced acid rain in the 1990s.
The concept has been praised by environmentalists and state officials. But the emissions cap was based on overestimates of carbon dioxide output, which dropped sharply from 2005 to 2006 and is on a lower trajectory than anticipated.
So auction demand may be weak at the start, with millions of allowances the states planned to sell not immediately needed. And with the cap on emissions likely to be higher, at least initially, than the plants' actual carbon-dioxide output, it may be many months before utilities have an incentive to cut pollution.
As traders watched the RGGI dynamic evolve, the already-low price of carbon futures fell by about 40 percent in the last three months in the United States, according to Evolution Markets, a brokerage firm.
"The supply of allowances is more than what the market needs," said Milo Sjardin, head of the North America division of New Carbon Finance, a research and analysis firm. "Prices are not going to be high, not for the foreseeable future."
Sjardin also noted that the market was "not going to produce a lot of emission reductions" as long as the supply of allowances outstrips utilities' need.
The trading of carbon dioxide allowances exists in Europe and, in a small way, in the United States; some companies have taken part in trading on the Chicago Climate Exchange, which opened in 2003. But the market has been voluntary, and participation largely experimental.
Because it makes participation in a pollution-capping scheme mandatory, RGGI is already spurring more trading in anticipation. Both the Chicago exchange and the New York Mercantile Exchange have recently made it possible to trade future RGGI allowances.
The trading scheme would hold carbon emissions to 188 million tons annually through 2014, and scale them back by 2.5 percent each year through 2018. The cap was set in 2004, based on analysis by energy experts and some pressure from the regulated utilities to keep the ceiling at or above the anticipated emissions. The states planned to issue allowances covering that amount.
The cap takes effect on Jan. 1, 2009, in New York, New Jersey, Delaware, Maryland, Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont.
Phil Giudice, the commissioner of the Massachusetts Department of Energy Resources, said: "The 188 million tons estimate was put together a number of years ago from both an analytical aspect and, not surprisingly, a political one."
But in the end, emissions from the 10 states went down instead of up. After growing to 184.5 million tons in 2005 from 176.9 million tons in 2002, they dropped in 2006, the most recent year for which there is complete data, to 164.5 million tons.
Estimated emissions for 2007 are 172.4 million tons, according to Environment Northeast, a research and policy organization.
State officials attribute the regional drop to lower demand because of mild weather, a slowing economy and utilities shifting from higher-carbon fuels to lower-carbon ones like natural gas.
As long as emissions remain below 188 million tons, however, the number of allowances will exceed the companies' need. The states have set a floor price of $1.86 per ton; allowances will not sell below that level.
If buyers do not snap up everything, leftover allowances will be rolled over to future auctions, which take place quarterly. The next auction is in December. In addition to power companies, financial institutions, environmentalists and other groups can also bid.
The auction program is intended to hold pollution steady and eventually reduce it through market mechanisms.
A dirtier plant can buy additional allowances in the secondary market, but it may be expensive - or it can just find a way to cut its pollution. Conversely, a cleaner utility can sell its unneeded allowances.
The carbon market follows a three-year-old European experiment, the first of its kind, that provoked widespread criticism, both because it provided windfall profits for industry and because it did little to control heat-trapping emissions. The question now is whether the northeastern U.S. states can avoid those errors.
"Everyone wants to wait and see what really happens, so there will be far less liquidity right now at the first auction than what you would expect going forward," Sjardin said.
Currently, allowances in Europe sell for about €26, or $37, a ton, far more than the roughly $5 a ton that carbon futures sell for in the United States. The heavy reliance on auctions is one thing that distinguishes the RGGI program from its European predecessor. Another is the decision to dedicate the proceeds to programs that will cut carbon emissions. Each state is designating the money to meet the program's energy-efficiency mandate.
http://www.iht.com/articles/2008/09/16/america/climate.php
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A New York State resort offers insight into climate change
NEW PALTZ, New York: It is probably a good thing that the Mohonk Mountain House, the 19th-century resort, was built on Shawangunk conglomerate, a concrete-hard quartz rock. Otherwise, the path to the National Weather Service's cooperative station here surely would have turned to dust by now.
Every day for the past 112 years, people have trekked up the same gray outcropping to dutifully record temperatures and weather conditions. In the process, they have compiled a remarkable data collection that has become a climatological treasure chest.
The problems that often haunt other weather records - the station is moved, buildings are constructed nearby or observers record data inconsistently - have not arisen here because so much of this place has been frozen in time. The weather has been taken in exactly the same place, in precisely the same way, by just a handful of the same dedicated people since Grover Cleveland was president.
For much of that time, those same weather observers have also made detailed records about recurring natural events, like the appearance of the first spring peeper or the first witch hazel bush to bud in the fall. Together, these two sets of data, meticulously collected in the same area, are beginning to offer up intriguing indicators about climate change - not about what is causing it but rather how it affects the lives of animals, plants, insects and birds.
It all starts with the daily ritual of "doing the weather," which is what people at Mohonk House call the process of recording temperatures. One day in late summer, it was the turn of a gentle 61-year-old botanist turned naturalist named Paul Huth. As he has done most days for the past 34 years, around 4 p.m. Huth scrambled up the conglomerate outcropping in the shadow of Mohonk House, a designated national historic landmark about 90 miles, or 145 kilometers, north of New York that has retained its 19th-century sensibility. Signs along the resort's roads plead: "Slowly and Quietly Please."
Huth opened the weather station, a louvered box about the size of a suitcase, and leaned in. He checked the high and low temperatures of the day on a pair of official Weather Service thermometers and then manually reset them. Besides the thermometers, the box contained a small flashlight, a can of lubricating oil and a plastic magnifying glass. Those thermometers can be hard to read in the rain.
If the procedure seems old-fashioned, that is just as it is intended. The temperatures that Huth recorded that day were the 41,152nd daily readings at this station, each taken exactly the same way. "Sometimes it feels like I've done most of them myself," said Huth, who is one of only five people to have served as official weather observer at this station since the first reading was taken on Jan. 1, 1896.
That extremely limited number of observers greatly enhances the reliability, and therefore the value, of the data. Other weather stations have operated longer, but few match Mohonk's consistency and reliability. "The quality of their observations is second to none on a number of counts," said Raymond O'Keefe, a meteorologist at the National Weather Service office in Albany, New York. "They're very precise, they keep great records and they've done it for a very long time."
Mohonk's data stands apart from that of most other cooperative weather observers in other respects as well. The station has never been moved, and the resort, along with the area immediately surrounding the box, has hardly changed over time. Rain and snow are measured in the original brass rain gauge issued in 1896 by what was then known as the U.S. Weather Bureau. Huth also checks the temperature and acidity of Mohonk Lake daily, and he measures the level of the lake according to its distance from the top of an iron bar that was bolted to the Shawangunk conglomerate in 1896.
The record shows that on this ridge in the Shawangunk Mountains, about 20 miles south of the better-known Catskills, the average annual temperature has risen 2.7 degrees Fahrenheit (1.5 Celsius) in 112 years. Of the top 10 warmest years in that time, seven have come since 1990. Both annual precipitation and annual snowfall have increased, and the growing season has lengthened by 10 days.
But what makes the data truly singular is how it parallels a vast collection of phenological observations taken at this same place, and by many of the same observers, since 1925.
Phenology is the science of natural occurrences, yearly events like the first snow, the first blooming of hepatica and the arrival of the first whippoorwill. Keeping diaries of such occurrences was a hobby of counts and lords in Europe, and there are records in Kyoto of the flowering of cherry blossom trees dating back 900 years. Among the most notable American phenological records were those kept by Thomas Jefferson at Monticello, his home in Virginia, and by Henry David Thoreau at Walden Pond.
Today, phenology is recognized as an important, even critical, approach to understanding climate change. The National Phenology Network, with financing from the National Science Foundation and other agencies, has started a field campaign, called Project BudBurst, in which volunteers record the way 500 native plants are responding to climate change.
The phenology records at Mohonk House are, in many ways, a model for such observations. They were compiled, in large measure, by Huth and the naturalist he succeeded, Daniel Smiley Jr. Smiley, who died in 1989, was a beloved descendant of the two Quaker brothers who founded Mohonk House in 1869. He dedicated much of his life to keeping lists of everything he saw and heard on the mountain, collecting whatever was of interest to him and labeling it carefully for future use.
Smiley kept his phenology records as meticulously as he "did the weather" for more than 50 years, for which he earned the National Weather Service's highest award, named for Thomas Jefferson. He walked the extensive grounds of the resort making notes about every bird call he heard, every animal he saw, every budding flower and flowering tree.
Back in his office, he transcribed those notes onto 3-inch by 5-inch, or 76-millimeter by 127-millimeter, cards (many early ones were written on the reverse side of the hotel's old menu cards). Over time, he amassed more than 14,500 cards.
In 1978, the Smiley family carved out 6,500 of its acres, about 2,630 hectares, around the hotel to form the Mohonk Preserve, the largest nonprofit nature preserve in New York State. In 1980, the preserve created a research center that was named for Smiley after he died in 1989.
Smiley was an old-school amateur naturalist, but his observations have proved to be solid scientific evidence. For instance, when the hotel's chlorination system started acting up in 1931, he began taking water temperature and acidity readings. He was surprised to find that the water was unusually acidic, a pH of around 4.5, but he did not know why and just filed away his notes. Jump ahead 40 years to the early 1970s, when acid rain became a concern. Smiley dug up his old notes and sent them to the Environmental Defense Fund, which used the data as a baseline for extended studies of acid rain.
Similarly, in the 1950s Smiley found on his walks that the use of DDT to control gypsy moths was killing all kinds of insects, and that the peregrine falcon had nearly disappeared from the Shawangunks. He ordered all spraying stopped on Mohonk land. DDT spraying was later banned.
Last year, Benjamin Cook, a climate modeler and postdoctoral fellow at the NASA Goddard Institute for Space Studies, and his father, Edward Cook, a tree-ring specialist at the Lamont-Doherty Earth Observatory who met Smiley in 1971 when he was a military policeman at West Point, published a study in The International Journal of Climatology. They analyzed Mohonk House data to determine how some overwintering birds, insects, animals and 19 species of plants had changed their habits in accord with changes in temperature.
The results showed how sensitive species can be to climate change, even though the climate data itself is mixed. Benjamin Cook said hepatica, bloodroot and red-berried elder tended to show the strongest trends toward earlier flowering. And despite a general warming trend, there was no significant increase in the length of the frost-free season. Nonetheless, there were significantly more days without frost.
"This is more than just a normal January thaw," Cook said. The increase in warmer days in winter sends false signals to plants and animals whose seasonal changes can be set off by the temporary warmth.
As a climate modeler, Cook said he was used to having to correct for inconsistencies in weather records and biases in phenological observations. But he said the Mohonk records were so consistently reliable that there was little need for corrections.
"It was a kind of perfect storm of the Smiley family, with this strong ethos about the land and land preservation, and Dan Smiley himself, with that same ethos but a scientific mind," Cook said. "We just happened to be in the right place at the right time. We were all just incredibly lucky."
http://www.iht.com/articles/2008/09/16/america/warm.php
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Judge rejects plan for more snowmobiles at national parks
HELENA, Montana: A U.S. judge ruled Monday that the Bush administration's plan to allow more than 500 snowmobiles a day into Yellowstone and Grand Teton National Parks was not in keeping with the National Park Service's responsibility to protect the parks.
The judge, Emmet Sullivan of Federal District Court in Washington, said park planners had failed to reconcile their mission to protect the parks' environment with the increase in air pollution, the disturbance to wildlife and the impact on visitors that the snowmobiles would bring.
"The plan clearly elevates use over conservation of park resources and values," Judge Sullivan wrote in his 63-page ruling.
The order vacates the plan, which would have authorized 540 snowmobiles a day into the parks, and orders the park service to prepare another. Environmentalists, who have long argued that the park service ignored science to reach the decision to allow so many snowmobiles into the park, were delighted.
"There have been four studies and $10 million spent, and every study shows the best way to get people in the park and protect it is through snow coach access, not snowmobiles," said Chris Mehl, a spokesman for the Wilderness Society in Bozeman, Montana, one of the parties to the lawsuit. "This upholds the promise and possibility of Yellowstone."
Environmentalists favor access to the park in winter only by snow coach, which is a van or bus on large skis or treads. They say these vehicles have a far less adverse impact on the environment.
Others who filed suit were the Greater Yellowstone Coalition, the National Parks Conservation Association, the Winter Wildlands Alliance, and the Natural Resources Defense Council.
Those who sought more snowmobile access were disappointed. "We are not surprised," said Ed Klim, president of the International Snowmobile Manufacturers Association in Haslett, Michigan. "Judge Sullivan has ruled on this issue before and in this manner."
"This is not the end of the issue," Klim added. "We will be successful in our appeal."
The ruling throws the coming winter season in the parks into some confusion. Al Nash, a spokesman for Yellowstone, said officials there were still reading the document and could not comment on what it meant for this year's snowmobile season. "We'll open as scheduled on Dec. 15 for the winter," Nash said. "But we don't know yet how the judge's decision will impact this."
Environmentalists are encouraging park officials to keep the number of snowmobiles around 260 a day for the coming season — the average number that have used the parks for the past five years — and eventually to phase them out.
Whether snowmobiles should be allowed at all in Yellowstone, the nation's oldest national park — and if so how many — is the most contentious issue facing the National Park Service, based on the volume of public comments during the planning process.
Environmentalists claim that the great appeal of Yellowstone in winter is its solitude, and that studies show that noise, even from the quieter, cleaner snowmobiles now in use violates Yellowstone's standards. They say exhaust from the machines pollutes the park, and that snowmobiles stress wildlife already are under duress because of snow and cold temperatures.
But snowmobilers say the newest generation of machines is far cleaner and quieter, and they note that riders must be accompanied by a guide, reducing the possibility of contact with wildlife.
A separate hearing on snowmobiles is being heard in federal court in Cheyenne, Wyoming, in a different lawsuit brought by the State of Wyoming and Park County, which borders Yellowstone.
Among other things, the plaintiffs want the court to increase the number of snowmobiles the park service plan allows to 720 a day.
http://www.iht.com/articles/2008/09/16/america/16snowmobile.php
LETTER FROM AMERICA
Florida increasingly takes to McCain's view on offshore drilling
CALADESI ISLAND, Florida: The dolphins and pelicans that swim off Caladesi Island's linen-white sands along Florida's western coast help draw almost 80 million visitors and $57 billion to the "Sunshine State" each year.
But energy companies say that an even bigger prize waits to be taken from the seabed just 50 miles, or 80 kilometers, from shore in the Gulf of Mexico: oil and natural gas that might wean the United States off its costly dependence on resources from potentially unfriendly or unstable countries.
After opposing offshore drilling for a quarter of a century on the basis that it would be a threat to their lucrative coastline, a majority of Floridians now favor it, polls show. Gasoline prices of four dollars a gallon, or about a dollar a liter, hit voters' pocketbooks and psyches, even as the U.S. government said that offshore drilling would have a negligible effect on the supply and price of oil.
At a Hess gas station on the mainland near Caladesi, Gerald Walker said he used to be against extracting oil off the Florida coast, until gasoline prices soared. "Drilling? At $3.64 a gallon, I'm all for it," said Walker, a 60-year-old accountant.
"Drill, baby, drill!" is now the rallying cry of the Republican Party, and the party's presidential candidate, Senator John McCain of Arizona, is gaining support with that cry, even in this coastal swing state.
An increasing number of Floridians side with McCain when told that the candidate advocates expanded drilling to drive down prices, said Brad Coker of Mason-Dixon Polling and Research in Washington. According to a Mason-Dixon poll conducted over the summer, at least 6 in 10 Floridians now support drilling.
"It's become a national security issue because of wars in the Mideast and Russia's newfound bravado and aggression," Coker said.
McCain, 72, was seven percentage points ahead of his Democratic rival, Senator Barack Obama of Illinois, 47, in a Florida poll released Sept. 11 by the Quinnipiac University Polling Institute in Hamden, Connecticut.
In the 2004 presidential election, President George W. Bush beat Senator John Kerry of Massachusetts by five percentage points in Florida. Voters in Pinellas County, home to Caladesi and nearby St. Petersburg, Florida, were split 50-50 between the two men.
The United States burns through about 21 million barrels of oil a day. Almost 60 percent of that is imported, mainly from Africa, the Gulf states and Latin America. Some of the oil exporters are openly hostile to the United States; Venezuela expelled the U.S. ambassador just last week. Oil industries in other countries, including Nigeria and Saudi Arabia, have been marred by violence.
McCain is "holding out the promise that the energy crisis is a simple problem with an easy solution," said Paul Roberts, author of "The End of Oil." The "assumption is that we're being kept from doing what we need to do by OPEC, liberals, regulators."
Democratic leaders in Congress, responding to public pressure and to a Republican drumbeat, are considering bills this week that would open larger areas to oil and natural gas drilling, as part of a comprehensive energy package.
Lieutenant Governor Jeff Kottkamp of Florida, a Republican, said that Florida's leaders were "fully cognizant of how beautiful our state is" and that they did not believe drilling would imperil that beauty. "It's got to be much safer technology to protect our beaches, and I think that's entirely possible," he said.
The eastern Gulf of Mexico may be even richer in natural gas than it is in crude oil. Existing wells that were capped because of a moratorium on drilling dating to the mid-1980s might be exploited "in less than two years in an environmentally sensitive way" using modern technology, said David Mica, executive director of the Florida Petroleum Council.
But in Pinellas County's beach communities, the mania for drilling is still met with some skepticism. When Congress began debating the issue last week, the local Tourism Development Council unanimously drafted a letter of opposition. Mayors, hoteliers, restaurateurs and marine scientists from the area said the risk of visual or environmental damage to beaches was too great, for too uncertain a payoff.
"The U.S. has 3 percent of world oil reserves and uses 25 percent of world oil production," reports Senator Bill Nelson, a Florida Democrat. "So common sense tells you we can't drill our way out of the problem."
That logic has not stopped McCain from focusing the economic anxieties of U.S. voters on a perceived bottleneck in oil supply. The speech McCain gave on Sept. 4 to the Republican National Convention drew some of the biggest roars of approval when the candidate pledged to "stop sending $700 billion a year to countries that don't like us very much." The United States, McCain said, will "drill new wells offshore, and we'll drill them now."
http://www.iht.com/articles/2008/09/16/america/letter.php
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BA chief says airline industry in biggest ever crisis
LONDON: British Airways Chief Executive Willie Walsh said on Tuesday the airline industry was going through its biggest ever crisis, and repeated his warning that more carriers would go bust.
"This industry is in crisis -- a deeper, more protracted, more fundamental crisis than 9/11, the Gulf War or any of the previous shocks that have beset the industry since the age of mass air transport began in the 1970s," he said in a speech to the London Chamber of Commerce.
He added carriers would continue to go to the wall in the manner of XL and Zoom Airlines earlier this month. "There will be more to come as we head toward the traditionally poorer returns of the winter travel season," he said.
Walsh used his dire outlook to justify the group's merger talks with Iberia as well as his application for an antitrust alliance with American Airlines and the proposed building of a third runway at Heathrow.
http://www.iht.com/articles/reuters/2008/09/16/business/OUKBS-UK-BRITISHAIRWAYS-WALSH.php
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Iran puts Revolutionary Guards in charge of Gulf defense
TEHRAN: Iran announced on Tuesday that it has put the Revolutionary Guards in charge of defending the country's Gulf waters, in what appeared to be a hardening of its stance in the vital oil route.
U.S. commanders in the Gulf have said in the past that they found Guards ships more confrontational than the regular Iranian Navy, which until the new order was responsible for Iranian defenses in the Gulf.
Iran has warned repeatedly that it would close the narrow Strait of Hormuz at the mouth of the Gulf if the United States or Israel attacked it amid tensions over Iran's nuclear program. About 40 percent of the world's oil passes through the strait. Last winter, Iranian and U.S. ships had a series of small confrontations in the strait that the Americans blamed on provocations by Guards ships.
General Yahya Rahim Safavi, the top military adviser to Iran's supreme leader, Ayatollah Ali Khamenei, announced the change to the state press agency IRNA. He said that "responsibility to defend" the Gulf had been delegated to the Guards' navy, while the regular navy would operate in the Sea of Oman, outside the Gulf and in the landlocked Caspian Sea.
Safavi, who was the head of the Guards until earlier this year, added a warning that all vessels in the Gulf are within the range of Iranian missiles.
"No warship can pass through the waterway without being in our range," he said. "Our armed forces, possessing defensive weapons including missiles, air, sea and torpedoes, are able to control the Strait of Hormuz."
A spokesman for the U.S. Navy in Bahrain said the announcement would not significantly affect the 5th Fleet's patrols of the Gulf, including the Strait of Hormuz waterway. Lieutenant Nathan Christensen said the patrols' task is to keep the strait open to ensure "free flow of trade and commerce in and out of the region."
"We are not interested in a confrontation in the Gulf," Christensen said. He added that the navy expects "responsible and professional maritime behavior" of all vessels in the Gulf, including those of the Iranian Guards.
The U.S. Navy normally keeps about three dozen warships and auxiliary vessels in the area. It currently has one aircraft carrier operating in the Gulf.
Safavi also repeated warnings that Tehran would retaliate against U.S. bases in the Gulf if Israel launched a strike against Iran.
The Revolutionary Guards, with their land, sea and air components, are considered better equipped than the normal military and more ideologically fervent in the task of protecting Iran's Islamic government, which is dominated by hard-line clerics.
http://www.iht.com/articles/2008/09/16/mideast/iran.php
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Photos seen alleging Iran nuclear missile work
VIENNA: The U.N. nuclear watchdog showed documents and photographs on Tuesday suggesting Iran secretly tried to modify a missile cone to fit a nuclear bomb, diplomats said, and Tehran again dismissed the findings as forged.
Iran said an International Atomic Energy Agency inquiry into its nuclear activity was at a dead-end because the IAEA was demanding Tehran reveal conventional military secrets without nuclear dimensions. Iran has denied seeking atom bombs.
The Vienna-based U.N. watchdog said in a report on Monday that Iranian stonewalling had brought an agency inquiry to resolve whether Tehran had covertly researched ways to make a nuclear bomb to a standstill.
Britain has accused Iran of showing contempt for the U.N. watchdog and, with the United States and France, vowed to seek harsher sanctions on Tehran over its defiance of U.N. demands for full disclosure and a suspension of uranium enrichment.
The IAEA wants Iran to clarify intelligence material pointing to links between Iranian projects to process uranium, test high explosives and modify the cone of its long-distance Shahab-3 missile in a way suitable for a nuclear warhead.
The Islamic Republic has denied the allegations but the IAEA says Iran must substantiate its position by granting access to sites, documents and relevant officials for interviews.
Herman Naeckerts, the agency's head of inspections in the Middle East region, briefed its governing board on the report's findings on Tuesday ahead of a meeting by the 35-nation body next week likely to heighten pressure on Iran to cooperate.
Washington's IAEA envoy said Naeckerts presented photos and diagrams of Iranian work on re-designing a Shabab-3 "to carry what would appear to be a nuclear weapon".
"VERY CREDIBLE"
"The (IAEA) Secretariat told us the information they have is in their words, 'very credible', unquote, and they have asked Iran to provide 'substantive responses', unquote," Ambassador Gregory Schulte told reporters.
He said Naeckerts told the closed meeting Iran had refused IAEA requests to interview engineers involved in the work and visit their ostensibly civilian workshops, depicted in photos.
Other diplomats in the meeting said Naeckerts emphasised the information remained unverified. "His presentation was professional and balanced," one said, asking for anonymity.
Another diplomat said some countries on the board questioned the IAEA's mandate to judge intelligence data related to ballistic missiles and high explosives.
Iran repeated that the intelligence was forged or pertained only to conventional arms. It said Iran faced extraordinary and unacceptable pressure to prove unverified allegations were wrong by revealing information vital to its national security.
"No country would give information about its conventional military activities," Iran's IAEA ambassador said.
"I said in this briefing, 'Who in the world would believe there are a series of top secret documents U.S. intelligence found in a laptop regarding a Manhattan Project-type nuclear (bomb programme) in Iran and none of these documents bore seals of 'high confidential' or 'secret'?" Ali Asghar Soltanieh said.
"This matter is over, as far as we are concerned."
Western concern was heightened by a revelation in the IAEA report that Iran may have had "foreign expertise" helping in experiments on a detonator applicable to an implosion-type nuclear blast occurring at high altitude.
Informed diplomats said the expertise appeared not to have been given by a government such as North Korea or any remnants of the ex-A.Q. Khan nuclear smuggling network that supplied Iran in the past, but by other non-state actors.
The IAEA has called for an explanation from Iran.
http://www.iht.com/articles/reuters/2008/09/16/africa/OUKWD-UK-NUCLEAR-IRAN-IAEA.php
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Nigerian militants sabotage oil facilities
PORT HARCOURT, Nigeria: Nigerian militants attacked two oil installations in the heaviest fighting in the Niger Delta in two years, security sources said on Tuesday.
The Movement for the Emancipation of the Niger Delta (MEND), responsible for attacks that have cut a fifth of the OPEC member's output since early 2006, attacked a Royal Dutch Shell oil pipeline and Chevron-operated oilfield.
The oil market, focusing on the impact of the credit crisis on the global economy, has largely ignored the escalation in violence in the world's eighth largest oil exporter. Prices on Tuesday traded at a seven-month low near $92 a barrel.
Shell confirmed one of its pipelines was sabotaged late Monday at Bakana in Rivers state, while Chevron said its idle Idama flow station was also attacked early Tuesday morning.
Militants have bombed pipelines, platforms, gas plants and oilfields, shutting up to 115,000 barrels per day of oil production in the last four days, government officials said.
Senior oil officials estimated Africa's top oil producer was currently pumping around 2.1 million bpd.
"UNDER CONTROL"
Lieutenant Colonel Sagir Musa, spokesman for the military task force in Rivers state, said the situation in the delta was under control.
Some security sources in the oil industry estimate more than 100 people may have been killed in recent clashes, which have spread to at least nine villages in Rivers state.
But the military has repeatedly tried to play down the fighting. "There is nothing extraordinary about this. There is no increase in the military presence in the Niger Delta," said defence spokesman Brigadier-General Mohammed Yusuf.
The army says militants have incurred heavy losses, but not one solider has been killed. MEND says at least 29 people, most of them soldiers, have died in the fighting.
The violence has prompted Shell to reduce the number of employees at some of its Nigerian oilfields. An industry source said nearly 100 staff have been evacuated.
HOSTAGES
Security sources said militants had kidnapped a few people.
MEND, which says it is fighting for more local control of the impoverished region's oil wealth, said it was holding 27 oil workers in an undisclosed camp in the delta.
The hostages, including two Britons, two South Africans and a Ukrainian, were kidnapped after their oil supply vessel was hijacked by gunmen in the delta last Tuesday.
MEND said it had rescued the hostages from their initial captors on Friday and were holding them as leverage for the release of suspected militant leader Henry Okah.
Okah, who was arrested in Angola last year and extradited to Nigeria to face trial for gun-running and treason, still commands loyalty from several armed factions in the delta.
MEND said late Monday it would release the two South African hostages after a personal appeal by Okah's wife.
More than 200 foreigners have been kidnapped in the delta in the last two years. Almost all have been released unharmed.
http://www.iht.com/articles/reuters/2008/09/16/africa/OUKWD-UK-NIGERIA-DELTA.php
French troops storm a yacht and rout Somali pirates
PARIS: French troops stormed a yacht hijacked by Somali pirates, killing one, capturing six and freeing their two French hostages in a raid that President Nicolas Sarkozy said Tuesday was a warning to criminals on the high seas.
Sarkozy urged the world to mobilize against maritime piracy and said the overnight military assault that freed Jean-Yves and Bernadette Delanne - the second such French operation in five months - was a demonstration of France's "unbending determination against piracy."
"The pirates now know that they are taking risks, big risks," Sarkozy said.
The Delanne couple, from French Polynesia, were sailing a friend's boat from Australia to France when they were captured Sept. 2 by pirates in the Gulf of Aden.
About 30 French soldiers took part in what Sarkozy called a meticulously planned assault that he ordered Monday night. The hostages were freed in 10 minutes and the soldiers were unhurt, he said.
Sarkozy said he ordered the rescue when it became clear that the pirates planned to take the hostages to Eyl, a Somali zone that serves as a base for numerous pirates.
"Their captivity could have lasted months," he said.
High winds delayed the assault for two successive nights, he added.
Piracy off Somalia and in the Gulf of Aden has "literally exploded" this year, Sarkozy said, noting that Somali pirates are holding 150 people and at least 15 ships, mainly in Eyl.
The Gulf of Aden has been the scene of most of the 54 pirate attacks this year off Somalia. Sarkozy said that some 48,000 ships pass through the gulf annually.
http://www.iht.com/articles/2008/09/16/africa/pirates.php
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France to tax throwaway cutlery
PARIS: France will tax non-recyclable throwaway plates and cutlery to encourage consumers to buy products that are more environmentally friendly, the environment minister said on Monday.
France has already introduced a similar system for cars, under which an extra tax is imposed on the most heavily polluting vehicles while the least polluting cars get a tax break.
Le Figaro, a daily newspaper, reported that the government had agreed on a list of new products that could be added to the list of products taxed according to their environmental impact. The products include refrigerators, washing machines, televisions, batteries and wooden furniture, although the environment minister, Jean-Louis Borloo, said no final decision had been made.
"We are not completely ready," Borloo told RTL Radio. "It has not been decided on definitively." He said the decisions would be made gradually.
http://www.iht.com/articles/2008/09/16/europe/16france.php
When a pain isn't what you think it is
When people have a heart attack, a classic symptom is shooting pain down the left arm. That symptom, it turns out, has something in common with a far more benign kind of pain: the headache one can get from eating ice cream too fast.
Both are examples of what doctors call referred pain, or pain in an area of the body other than where it originates. Such sensory red herrings include a toothache resulting from a strained upper back, foot soreness caused by a tumor in the uterus, and hip discomfort when the problem is really arthritis in the knee.
Referred pain can make diagnoses difficult and can lead to off-target or wholly unnecessary cortisone injections, tooth extractions and operations. Now, in trying to discover the patterns and causes of the phenomenon, researchers say they are gaining a greater understanding of how the nervous system works and how its signals can go awry.
"The body can really fool you in terms of determining pathology," said Karen Berkley, a professor of neuroscience at Florida State University. Her research has focused on referred pain caused by endometriosis - pain that can be felt as far away as the jaw.
One possible explanation has to do with the way the body's nerve fibers converge on and send signals up the spinal column. Each nerve input carries an astonishing amount of information about the body.
"What we think happens is that the information sometimes loses its specificity as it makes its way up the spinal column to the brain," Berkley said. In the constant dynamic of excitation and inhibition that occurs during the transport of innumerable nerve impulses, she went on, "we can't always discern where a sensory message is coming from."
Usually the mixed signals come from nerves that overlap as they enter the spinal column - from the heart and left arm, for example, or from the gallbladder and right shoulder. This so-called adjacency of neural inputs probably explains why some people report a sensation in their thighs when they need to have a bowel movement or feel a tingling in their toes during an orgasm.
Moreover, when the stimulus emanates from internal organs, the sensation is often perceived as coming from the chest, arms, legs, hands or feet. "The brain is more used to feeling something out there than in the viscera," explained Gerald F. Gebhart, director of the Center for Pain Research at the University of Pittsburgh.
In a study published last year, researchers at Aalborg University in Denmark applied irritating substances like capsaicin (the stuff that makes chili peppers hot) to subjects' small and large intestines. They found increased blood flow and elevated temperatures in referred-pain sites in the trunk and extremities. (The study appeared in The European Journal of Pain.)
Pain can also be referred to areas that do not have overlapping nerves. This most often occurs after an injury, according to Dr. Jon Levine, a neuroscientist at the University of California, San Francisco. This, he said, might be because of "pain memory," which makes the brain more likely to "experience a new sensation as coming from where you were hurt before."
Several studies using functional magnetic resonance imaging have supported this hypothesis. Areas of the brain corresponding to once injured body parts often lit up when another part was poked or prodded.
Widespread and persistent inflammation in response to a current or past injury may cause what doctors call peripheral sensitization, or excitation of nerves elsewhere in the body. These somatic nerves are on high alert and ready to fire pain signals at the least provocation.
Dr. Emeran Mayer, a gastroenterologist at the University of California, Los Angeles, who studies referred pain from the gut, said, "The more pain a person has experienced or is experiencing, the more likely we are to see atypical sites of referral."
Referred pain is also thought to emanate from trigger points - taut nodules that develop within muscle - which were first described in the 1960s by Dr. Janet G. Travell, who treated President John F. Kennedy's back pain. The matrix of trigger points and their predictable pain-referral patterns has "a remarkable correspondence with acupuncture meridians in Chinese medicine," said Dr. Jay P. Shah, a physiatrist in the rehabilitation medicine department at the National Institutes of Health.
Patients report that their referred pain is precipitated or worsened when the corresponding trigger point is pressed, and alleviated through massage or acupuncture at the trigger point. Though some doctors are skeptical about the trigger point hypothesis, Shah published a study last year in The Archives of Physical Medicine and Rehabilitation indicating that inflammatory chemicals exist at both the trigger points and the locations of referred pain.
Researchers say the varied explanations for referred pain may not be contradictory, but rather an indication that several mechanisms are at work. Dr. Lars Arendt-Nielsen, head of research at the Center for Sensory Motor Interaction at Aalborg, said the growing body of evidence supporting each notion "has changed the way we treat pain to a multifaceted approach." Treatments might incorporate not just painkillers but drugs that calm the central nervous system, like anti-epileptics and serotonin reuptake inhibitors.
Acupuncture and trigger point therapy have also gained acceptance, along with psychological approaches that encourage patients to focus on where the pain is actually coming from rather than where it hurts.
Research conducted in 2003 at the University of Bath in England and published in the British journal Rheumatology revealed that patients' referred pain diminished or disappeared if they saw where the pressure was being applied.
http://www.iht.com/articles/2008/09/18/healthscience/snpain.php
At Chocolate Factory Site, a New Kind of Luxury Box
Moscow: Perhaps it was only a matter of time, after the sushi bars and the cappuccino bars and the wine bars and the art spaces: Lofts are coming to Moscow.
Here in the capital of the former workers' state, the first old factory building to be converted into apartments - with soaring ceilings and gritty details that would make any New York real-estate broker tremble - is an icon of Soviet industry, and of Russia's transition to capitalism.
The Krasny Oktyabr chocolate factory - named Red October in honor of the 1917 revolution - sits on an island in the Moscow River, across from the Kremlin's turreted walls and gold-domed churches
But Guta, to the cautious relief of people like David Sarkisyan, director of the Shchusev Museum of Architecture, has decided to market the development to the thinking billionaire.
The developers are betting that Russians who are now at home in New York and London - the tiny group that, in Sarkisyan's words, is "starting to have some taste" - have learned to value architecture that fits into its historical context and physical surroundings. They believe such buyers will pay millions of dollars to live in an urban, post-industrial streetscape with shops and sidewalks open to the public.
Their marketing presentations carefully explain that lofts are unusual residences without interior walls, pioneered by "the king of pop-art, Andy Warhol."
Of course, it was largely penniless artists who reclaimed New York's SoHo and Chelsea factory lofts as bare-bones residences before the wealthy discovered them. Moscow, trend-obsessed and still dominated by top-down urban planning, is skipping that stage.
http://www.iht.com/articles/2008/09/16/news/remos.php
Pakistan promises to fight any foreign incursions
ISLAMABAD: The Pakistani military said Tuesday that its troops would fire on foreign forces if they crossed the country's borders, but denied that this was a change of policy.
The comments came after the United States sent commandos into Pakistan to fight the Taliban and Al Qaeda this month, and as confusion continued to swirl over reports of an incursion Monday by U.S. forces into Pakistani territory along the border with Afghanistan.
Local residents and a Pakistani government official said Monday that two American helicopters had been repulsed in South Waziristan when Pakistani soldiers fired at them.
But the Pakistani and U.S. militaries publicly denied any such incident, and a Pakistani intelligence official said that an American helicopter had mistakenly crossed the border briefly, leading Pakistani ground forces to fire into the air.
On Tuesday, a military spokesman, Major General Athar Abbas, said the Pakistani Army reserved the right to use force to defend the country and its people, but he said there was "no change in policy."
Asked what the Pakistani military would do if there was a future incursion by American troops, he said: "There is a big 'if' involved. We will see to it when such a situation arises."
http://www.iht.com/articles/2008/09/16/asia/pstan.php
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Top Pentagon official in surprise visit to Pakistan
ISLAMABAD, Pakistan: The chairman of the Joint Chiefs of Staff, America's top military official, made a hastily arranged visit to Pakistan on Tuesday for talks about a recent incursion by American commandos based in neighboring Afghanistan.
The visit by the chairman, Admiral Mike Mullen, came as an uproar continued to grow in Pakistan about the incursion on Sept. 3, which severely strained relations between the United States and Pakistan, its top Muslim ally in the war against terrorism. The visit also coincided with conflicting accounts about a possible second American raid on Monday, as well as a warning by the Pakistan military that it would shoot at any foreign forces who crossed the border.
Mullen flew to Islamabad, the Pakistani capital, from Baghdad, where he had attended the change-of-command shifting responsibility for the United States military in Iraq from General David Petraeus to General Ray Odierno.
Mullen's visit to Pakistan — his fifth as chairman of the joint chiefs — was added to his itinerary after he had left Washington, according to an American military official who spoke on condition of anonymity. The American Embassy in Islamabad requested that Mullen personally brief Pakistan's civil and military leadership on the American military's activities along the border, the official said. Mullen was due to meet Wednesday with Prime Minister Yousaf Raza Gilani and Pakistan's military chief, General Ashfaq Parvez Kayani.
"Clearly there are concerns in Pakistan about the American military strikes there and the U.S. Embassy wanted to invite him to get him in to talk to the Pakistani leaders," the official said.
http://www.iht.com/articles/2008/09/16/asia/17islamabad.php
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Pakistan bombs militants
KHAR, Pakistan: Pakistani aircraft bombed militant strongholds on Tuesday killing 14 insurgents and a suicide car-bomber attacked a security force camp killing three soldiers, military officials said.
The violence came as the top U.S. military officer, Admiral Mike Mullen, arrived in Pakistan where stepped up U.S. strikes on militants on the Pakistani side of the Afghan border have angered Islamabad and strained relations between the allies.
http://www.iht.com/articles/reuters/2008/09/16/asia/OUKWD-UK-PAKISTAN-VIOLENCE.php
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Jazeera TV airs video of kidnapped journalists
DUBAI: Al Jazeera television on Tuesday aired a video showing a Canadian and an Australian journalist kidnapped in Somalia last month, and said the pair were appealing to their governments to work for their release.
Canadian Amanda Lindhout, 27, Australian Nigel Brennan and Somali reporter Abdifatah Mohammed Elmi, working as their translator, were seized on August 23 by gunmen near Mogadishu.
The video showed Lindhout, wearing a long robe, and her colleague along with armed men. She was speaking to camera but the audio track was not aired.
The television said the kidnappers, calling themselves Mujahideen of Somalia, had accused Canada and Australia of "taking part in the destruction of Somalia" and demanded that they review their policies.
An official of the group Reporters Without Borders said last week that the kidnappers were seeking $2.5 million (1.4 million pounds) for the return of the captives.
Somalia's Islamist insurgents have denied being behind the kidnapping.
http://www.iht.com/articles/reuters/2008/09/16/asia/OUKWD-UK-SOMALIA-KIDNAPPED-VIDEO.php
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Nearly 9,500 Somalis dead in insurgency
MOGADISHU: Fighting in Somalia has killed 838 people since June, local rights activists said on Tuesday, bringing the total to have died in an insurgency that began early last year to 9,474.
The Mogadishu-based Elman Peace and Human Rights Organisation has been tracking the casualties since Islamist fighters launched an Iraq-style rebellion against the Western-backed interim government and its Ethiopian military allies early in 2007.
"We have recorded 838 civilian deaths between June and today, with 1,329 injured," Elman's vice chairman, Yasin Ali Gedi, told Reuters in an interview.
"Fifty-three people have been abducted in that time, all of them aid workers except for two foreign journalists."
More than 100 women are known to have been raped since June, he said, but the real number is thought to be much higher.
Tens of thousands more families had been added to the 1 million people already uprooted by the fighting.
Aid workers say the violence has cut their access to increasingly desperate communities, and that drought, hyper-inflation and high fuel and food costs are stoking the worst humanitarian crisis in Africa.
Last month, a report for the United Nations said the number of Somalis needing aid had leapt 77 percent since January to more than 3.2 million, or over a third of the population.
It said the Horn of Africa nation was suffering the worst insecurity it had seen since the early 1990s when Somalia collapsed into anarchy following the toppling of a dictator.
A tentative peace deal that was agreed between the government and part of the opposition in June at U.N.-led talks in Djibouti has had little impact on the ground.
A small African Union peacekeeping force of 2,200 Ugandan and Burundian troops has been unable to stem the chaos.
http://www.iht.com/articles/reuters/2008/09/16/africa/OUKWD-UK-SOMALIA-CONFLICT.php
Regulators struggle to keep AIG afloat
NEW YORK: U.S. regulators struggled Tuesday to prevent the collapse of one of the world's largest insurance companies, American International Group, as investors' fears of yet another failure of a Wall Street behemoth prompted another dramatic sell off in its stock.
Federal Reserve officials and two leading investment banks, Goldman Sachs and JPMorgan Chase, were in urgent talks to put together a $75 billion line of credit to stave off a crisis at the company. Without the financing, AIG might be forced to declare bankruptcy, according to two people briefed on the situation.
A failure of AIG would have a broad impact. The company has links to many of the world's financial institutions and plays a major role in the largely unregulated market for a complex financial instrument known as credit default swaps. Never before has a large participant in that opaque market failed, creating great uncertainty about the consequences in global financial markets if that were to indeed happen.
In Singapore, customers of AIG's local life insurance unit lined up outside its city center office to terminate policies, prompting the city-state's central bank to declare the unit had "sufficient assets" to soothe customers, Bloomberg News reported.
http://www.iht.com/articles/2008/09/16/business/aig.php
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McCain acknowledges Wall Street crisis
TAMPA, Florida: Senator John McCain, who was criticized by Democrats for saying that the fundamentals of the economy were strong on the day that the bankruptcy of Lehman Brothers and the sale of Merrill Lynch sent stocks into their worst one-day drop since September 2001, went out of his way Tuesday to make it clear that he understood that Wall Street was in "crisis."
At a rally here, McCain vowed to take aim at what he called the "unbridled corruption and greed that caused the crisis on Wall Street."
McCain, who has said for months that he believes that the fundamentals of the economy are strong, has used the word "crisis" a lot in the last day to describe the financial situation. He did so in a series of television interviews Tuesday, calling for the creation of a commission to study the problem, along the lines of the commission that investigated the Sept. 11 attacks.
His Democratic rival for the presidency, Senator Barack Obama, hit McCain hard on Tuesday for his comment about economic fundamentals.
"We are in the most serious financial crisis in generations," the Illinois senator said in Golden, Colorado, at the start of a Western campaign swing that will focus on economic concerns. "Yet Senator McCain stood up yesterday and said that the fundamentals of the economy are strong."
Obama has sharpened his attacks on McCain, and in his speech he repeatedly criticized the senator by name. Obama reminded listeners that in March he had offered a six-point approach to remaking the country's financial regulatory system, then added:
"Senator McCain's approach was the same as the Bush administration's: Support ideological policies that made the crisis more likely; do nothing as the crisis hits; and then scramble as the whole thing collapses. My approach has been to try to prevent this turmoil."
"This March, in the wake of the Bear Stearns bailout, I called for a new, 21st- century regulatory framework to restore accountability, transparency and trust in our financial markets," Obama said. "Just a few weeks earlier, Senator McCain made it clear where he stands: 'I'm always for less regulation,' he said, and referred to himself as 'fundamentally a deregulator."'
On NBC's "Today" show, the host, Matt Lauer, described Monday's 500-point drop in the Dow average as a "bloodbath" and asked McCain how he could say that "the fundamentals of our economy are strong" while his own campaign was releasing an ad saying that the economy was in crisis.
McCain replied by saying that when he spoke about the fundamentals of the economy, he was referring to the workers - which is different from how he has described the term before.
"Well, it's obviously true that the workers of America are the fundamentals of our economy, and our strength and our future," he said. "And I believe in the American worker, and someone who disagrees with that - it's fine. We are in crisis. We all know that. The excess, the greed and the corruption of Wall Street have caused us to have a situation which is going to affect every American. We are in a total crisis."
Lauer asked if there was something wrong with the fundamentals of the economy that was causing the difficulty.
"There's nothing wrong with the workers of America," McCain said. "I believe that they're the fundamentals."
But then he added, "America is in crisis today."
http://www.iht.com/articles/2008/09/16/america/campaign.php
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TALKING BUSINESS
On Wall St., a problem of denial
How can this be happening?
How can it even be possible that we wake up on a Monday morning to discover that Lehman Brothers, a firm founded in 1850, a firm that has survived the Great Depression and every market trauma before and since, is suddenly bankrupt? That Merrill Lynch, the "Thundering Herd," is sold to Bank of America the same weekend?
Just months ago, Lehman assured investors that it had enough liquidity to weather the crisis, while Merrill raised some $15 billion over the last year to shore up its balance sheet. Now they're both as good as gone.
Last week, it was Fannie Mae and Freddie Mac that needed a government bailout. This week, it looks as though American International Group and Washington Mutual will be on the hot seat. We have actually reached the point where there are now only two independent American investment banks left: Goldman Sachs and Morgan Stanley. It boggles the mind.
But it really shouldn't. Because after you get past the mind-numbing complexity of the derivatives that are at the heart of the current crisis, what's going on is something we are all familiar with: denial.
Indeed, it is not all that different from what is going on in neighborhoods all over the United States. Just as homeowners took out big loans and stretched themselves on the assumption that their chief asset — their home — could only go up, so did Wall Street firms borrow tens of billions of dollars to make subprime mortgage bets on the assumption that they were a sure thing.
But housing prices did drop eventually. And when people tried to sell their homes in this newly depressed market, many of them had a hard time admitting that their home wasn't worth what they had thought it was. Their judgment has been naturally clouded by their love for their house, how much money they put into it and how much more it was worth a year ago. And even when they did drop their selling price, it never quite matched the reality of the marketplace. They've been in denial.
That is exactly what is happening on Wall Street. Ever since the crisis took hold last summer, most of the big firms have been a day late and dollar short in admitting that their once triple-A rated mortgage-backed securities just weren't worth very much. And, one by one, it is killing them.
Take Richard Fuld, the chief executive of Lehman Brothers. Last summer, as the credit crisis first gripped Wall Street, Fuld's firm, which was fundamentally a bond-trading firm, concluded that the problems would be short-lived — and that those firms willing to take big risks would be the ones that would reap the big rewards once things calmed down. So Lehman doubled down on mortgage-backed derivatives — not unlike a Florida condo owner buying a second one to flip 18 months ago.
Big mistake. Ever since then, Lehman has had a terrible time admitting the magnitude of its mistake — or properly pricing its securities. As mortgage derivatives became increasingly toxic, they also became increasingly illiquid. So firms were left to set their own "mark-to-market" price. And just like so many homeowners, they kept pricing their securities higher than they should have.
Earlier this year, for instance, when a hedge fund manager, David Einhorn, was making his public case against Lehman (he now refuses to talk about the firm), he stressed his belief that Lehman was valuing its securities too high. He turned out to be exactly right.
Every time the market was roiled — especially after the Bear Stearns collapse — every firm on Wall Street had to re-mark their securities to reflect the new reality. That's why you saw firms taking billion-dollar write-off after billion-dollar write-off, long after they thought they had taken care of the problem. And it is also why the write-offs will continue now that Lehman is bankrupt.
"Selling begets more selling," said Sean Egan of the independent bond-rating firm Egan-Jones. And yet, even as they lowered the value of their mortgage-backed securities, firms like Lehman had still priced them too high. Back when he was talking publicly about Lehman, Einhorn used to cast Lehman's mark-to-market pricing as an act of dishonesty. I tend to think it was more like wishful thinking. Either way, the result was the same.
A week ago, even as the U.S. government was bailing out Fannie and Freddie, Fuld went off to seek new capital — something Lehman desperately needed to shore up its decimated balance sheet — from the Korea Development Bank. Why did those talks break down? Because Fuld wanted more for Lehman than the Koreans thought it was worth. He simply couldn't face the reality that his firm wasn't worth what he thought it was.
http://www.iht.com/articles/2008/09/16/business/16nocera.php
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Hirst auction breaks sales record at Sotheby's
LONDON: A sale of pickled sharks, butterfly paintings and other pieces by provocative British artist Damien Hirst has raised $198 million, silencing his doubters and defying the global economic gloom.
Sotheby's auction house said the total for the two-day sale was a record for an auction of works by a single artist.
The turmoil engulfing global financial markets did nothing to dampen prices as more than 600 prospective buyers packed the showroom for each of the three auction sessions. Others around the world bid by phone.
"The Kingdom," a tiger shark preserved in formaldehyde, sold for $17 million in the first session Monday evening. "The Golden Calf" — an embalmed calf with golden hooves and horns — fetched $18.5 million.
"Fragments of Paradise," a confection of stainless steel, glass and manufactured diamonds, sold for almost $9.4 million, five times its pre-sale estimate.
Two of Hirst's butterfly paintings were sold for charity, for a total of more than $2.9 million.
All prices include a buyer's premium.
Sotheby's said the total smashed the $20 million record for an auction of works of a single artist set in 1993 for 88 works by Pablo Picasso.
Hirst took a risk by offering more than 200 pieces of new work through Sotheby's rather than a gallery. He said it was a more democratic way to sell art — and it also spared him a gallery's hefty commission. But if buyers had stayed away, Hirst's global brand would have been tarnished.
The most successful of the so-called "Young British Artists" who came to prominence in the 1990s, Hirst is famous for eye-catching works redolent of death and decay — pickled animals, rotting cows' heads, diamond-encrusted skulls. He employs a large staff to help him make his works, and some critics had suggested his prolific output was devaluing the work.
There was little sign of that Monday.
Hirst, 43, said the results of the sale showed "the market is bigger than anyone knows."
"I love art, and this proves I'm not alone and the future looks great for everyone," he said.
The results are all the more startling given the fear spreading through international financial markets and the economic elite who are among modern art's major buyers. The sale came as global markets reeled from the collapse of investment bank Lehman Brothers, the largest bankruptcy in U.S. history.
"Banks fall over, art triumphs," former Royal Academy chief Norman Rosenthal told the Guardian newspaper.
Charles Dupplin, an art expert at specialist insurers Hiscox, said the sale was "another landmark and astounding day for the art market in a year that has seen many long-standing records demolished, despite the gloomy world economy."
But some remained unimpressed.
"Sometime in the future people will be laughing their heads off at all this," said Charles Thomson, one of a group of artists who call themselves the Stuckists and oppose much modern conceptual art. "Actually, quite a lot of people are right now. One of them is Damien Hirst, on his way to the bank."
http://www.iht.com/articles/ap/2008/09/16/europe/EU-Britain-Damien-Hirst.php
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Goldman Sachs posts 70 percent slide in third-quarter earnings
NEW YORK: The investment bank Goldman Sachs, the company that has looked the best throughout the credit crisis, reported a profit Tuesday of $845 million, down 70 percent from the $2.81 billion of a year ago.
The results, while positive, showed that even the strongest on Wall Street are having a tough time making money. Revenue since the second quarter has slumped 23 percent in Goldman's investment banking unit, 52 percent in trading operations and 5 percent in asset management.
Over all, revenue fell 51 percent, to $6.04 billion, from $12.3 billion in the same quarter a year ago.
The results worked out to a profit of $1.81 a share, which beat analysts' projections of $1.71 a share on revenue of $6.23 billion, according to Thomson Reuters.
Goldman executives tried to refute notions that their company's business model might be broken. A day after Merrill Lynch announced that it would be sold to Bank of America, there were doubts in the market about whether Goldman and Morgan Stanley could survive as independent investment banks.
Bear Stearns and Lehman Brothers collapsed because they had taken excessive risks and because they lacked secure funding models. Merrill Lynch is expected to gain some stability by becoming a part of the largest U.S. bank, which has a large deposit base.
"We believe this is not about the model," David Viniar, Goldman's company's chief financial officer, said in an interview. "This is about performance."
"There have been a lot of firms that have suffered," he said. "They have not all been investment banks. They have been across the financial industry, whether they be commercial banks, regional banks, insurers."
In the first half of the year, Goldman and other Wall Street companies could easily explain why their performances looked dismal after the first half of 2007, a period that many in the industry are now calling a bubble.
But Goldman is weaker this quarter than it was in the spring. "This was a challenging quarter, as we saw a marked decrease in client activity and declining asset valuations," said Lloyd Blankfein, the chairman and chief executive.
The third quarter was the most challenging Goldman has experienced as a public company, Viniar said.
Goldman does not have many mortgage assets left, Viniar said. The company sold $4 billion worth of mortgages that were not backed by the finance giants Fannie Mae or Freddie Mac during the quarter. He noted that the sales were at or above where Goldman had marked the assets. Asset prices spiraled downward Monday, particularly in the mortgage area, after Lehman filed for bankruptcy, he said.
"I think time's going to tell whether that's temporary or not," he said.
Goldman cut its compensation expenses in the quarter by a little more than a third from last quarter but slightly increased its head count because of college and business school graduates. The drop in compensation expenses points toward lower bonuses in December.
Viniar said Goldman had not been reluctant to sell assets that are troubled - even ones the company believed would eventually rebound in value. Lehman stumbled in part because its executives did not want to sell investments at prices they believed were too low.
"You will never hear from us that we are reluctant to sell an asset because we are reluctant to take a loss," Viniar said.
http://www.iht.com/articles/2008/09/16/business/goldman.php
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Asian central banks spend billions to prevent crash
Japan, Australia and India flooded money markets with cash on Tuesday and Indonesia cut one interest rate, as central banks tried to prevent the Wall Street upheaval from freezing the global financial system.
The region's banks spent nearly $27 billion, after the $70 billion U.S. Federal Reserve injection into American money markets, which seized up after Lehman Brothers became the latest casualty of a 13-month-old credit crisis.
The Bank of Japan gave the banking system its biggest cash injection in almost six months as the prime minister met top financial policy makers to discuss the fallout of the crisis that led to Lehman's bankruptcy.
http://www.iht.com/articles/2008/09/16/business/cbanks.php
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EDITORIAL
Wall Street's wipeout
Making and enforcing new rules is necessary, but that will not be enough. The nation needs acknowledge the self-destructive bent of unfettered capitalism and its ability, unchecked, to wreak havoc far beyond Wall Street.
http://www.iht.com/articles/2008/09/16/opinion/edwallst.php
COLUMNIST
David Brooks: Experience matters
Philosophical debates arise at the oddest times, and in the heat of this election season, one is now rising in Republican ranks.
The narrow question is this: Is Sarah Palin qualified to be vice president?
Most conservatives say yes, on the grounds that something that feels so good could not possibly be wrong. But a few commentators, like George Will, Charles Krauthammer, David Frum and Ross Douthat demur, suggesting in different ways that she is unready.
The issue starts with an evaluation of Palin, but does not end there. This argument also is over what qualities the country needs in a leader and what are the ultimate sources of wisdom.
There was a time when conservatives did not argue about this.
Conservatism was once a frankly elitist movement. Conservatives stood against radical egalitarianism and the destruction of rigorous standards. They stood up for classical education, hard-earned knowledge, experience and prudence. Wisdom was acquired through immersion in the best that has been thought and said.
But, especially in America, there has always been a separate, populist, strain. For those in this school, book knowledge is suspect but practical knowledge is respected. The city is corrupting and the universities are kindergartens for overeducated fools.
The elitists favor sophistication, but the common-sense folk favor simplicity. The elitists favor deliberation, but the populists favor instinct.
This populist tendency produced the term-limits movement based on the belief that time in government destroys character but contact with grass-roots America gives one grounding in real life. And now it has produced Sarah Palin.
Palin is the ultimate small-town renegade rising from the frontier to do battle with the corrupt establishment. Her followers take pride in the way she has aroused fear, hatred and panic in the minds of the liberal elite. The feminists declare that she's not a real woman because she doesn't hew to their rigid categories. People who've never been in a Wal-Mart think she is parochial because she has never summered in Tuscany.
Look at the condescension and snobbery oozing from elite quarters, her backers say. Look at the endless string of vicious, one-sided attacks in the media. This is what elites produce. This is why regular people need to take control.
And there's a serious argument here. In the current Weekly Standard, Steven Hayward argues that the nation's founders wanted uncertified citizens to hold the highest offices in the land. They did not believe in a separate class of professional executives. They wanted rough and rooted people like Palin.
I would have more sympathy for this view if I hadn't just lived through the last eight years. For if the Bush administration was anything, it was the anti-establishment attitude put into executive practice.
And the problem with this attitude is that, especially in his first term, it made Bush inept at governance. It turns out that governance, the creation and execution of policy, is hard. It requires acquired skills. Most of all, it requires prudence.
What is prudence? It is the ability to grasp the unique pattern of a specific situation. It is the ability to absorb the vast flow of information and still discern the essential current of events - the things that go together and the things that will never go together. It is the ability to engage in complex deliberations and feel which arguments have the most weight.
How is prudence acquired? Through experience. The prudent leader possesses a repertoire of events, through personal involvement or the study of history, and can apply those models to current circumstances to judge what is important and what is not, who can be persuaded and who can't, what has worked and what hasn't.
Experienced leaders can certainly blunder if their minds have rigidified (see: Rumsfeld, Donald), but the records of leaders without long experience and prudence is not good. As George Will pointed out, the founders used the word "experience" 91 times in the Federalist Papers. Democracy is not average people selecting average leaders. It is average people with the wisdom to select the best prepared.
Sarah Palin has many virtues. If you wanted someone to destroy a corrupt establishment, she'd be your woman. But the constructive act of governance is another matter. She has not been engaged in national issues, does not have a repertoire of historic patterns and, like President Bush, she seems to compensate for her lack of experience with brashness and excessive decisiveness.
The idea that "the people" will take on and destroy "the establishment" is a utopian fantasy that corrupted the left before it corrupted the right. Surely the response to the current crisis of authority is not to throw away standards of experience and prudence, but to select leaders who have those qualities but not the smug condescension that has so marked the reaction to the Palin nomination in the first place.
http://www.iht.com/articles/2008/09/16/opinion/edbrooks.php
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BOOK REVIEW
City of Refuge
By Tom Piazza
403 pages. $24.95. Harper/HarperCollins Publishers.
For Americans curious about the mysterious ways in which their current president chooses to govern, the submerging of New Orleans under as much as 15 feet of water was particularly revealing, if only to convey that governing seemed to be the furthest thing from his mind.
Five long days passed before federal troops were sent in with supplies, during which residents too poor to evacuate were corralled into the Superdome (until part of the roof peeled away), and then to the convention center (no food, no water, no electricity) or else the sidewalk outside, while those who stayed with their homes were swimming among their belongings, gasping for air in the few feet between the water line and the ceiling, as corpses drifted by, bloating in the heat.
President George W. Bush appeared ready to travel everywhere but Louisiana, stopping in Arizona to present John McCain with a birthday cake and in California to receive a country singer's gift of an acoustic guitar. The two Michaels (Brown of FEMA, the Federal Emergency Management Agency, and Chertoff of Homeland Security) made reassuring noises that they were on top of the situation, until it became obvious they weren't, at which point they denied ever knowing that Hurricane Katrina could amount to anything more than a lot of rain. In New York, Secretary of State Condoleezza Rice bolstered her end of the united front by taking in a performance of "Spamalot." The musical numbers included "Always Look on the Bright Side of Life," in case she needed reminding.
http://www.iht.com/articles/2008/09/17/arts/bookjeu.php
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In a tight race, independent groups come off the sidelines
WASHINGTON: After largely staying on the sidelines, the types of independent groups that so affected the 2004 presidential campaign are flooding back as players in the final sprint to the election this autumn, financing provocative messages on television, in mailboxes and through the Internet.
MoveOn, the progressive group started 10 years ago to fight President Bill Clinton's impeachment, said it would double its advertising budget to $7 million and start a new campaign this week that ties the Republican presidential nominee, John McCain, to lobbyists.
The Service Employees International Union has begun a $2.1 million advertising campaign that criticizes McCain's economic record, and a smattering of smaller liberal groups are testing more limited television campaigns, including one by two groups - Brave New PAC and Democracy for America - that asserts his experience as a prisoner of war "is not a good prerequisite" to be president.
The Minutemen, a group calling for stricter border security, has indicated it will run mailers against Barack Obama, the Democratic nominee. An anti-abortion group, BornAliveTruth.org, announced Monday that it would begin running an advertisement in New Mexico and Ohio featuring a woman who survived a botched abortion.
Hewing to their reformist themes, the McCain and Obama campaigns initially tried to discourage such activities on their behalf. But as the race has intensified, the campaigns have increasingly turned a blind eye to the activities of these groups, which sometimes operate outside campaign finance rules and with little accountability.
The activities have led aides to both candidates to trade accusations that their opponent is secretly behind new attacks by the independent groups. Campaign monitors are on the lookout for any activities that run afoul of election laws that prohibit coordination between the groups and the campaigns.
Citing changes to the rules that make it easier for outside groups to advertise right up to Election Day, political advertising analysts predicted that the efforts were the start of a crescendo of attacks.
"I think in the next two weeks you are going to see a lot more of these coming out of the woodwork," said Evan Tracey, chief operating officer of the Campaign Media Analysis Group, which monitors expenditures on advertising. "They want to get messages out there that are the most disruptive politically, and, the closer you are to Election Day, the more disruptive you are by definition."
Tracey said he doubted that the efforts would come anywhere near matching the level of activity in 2004. So far this year, the outside groups have spent roughly a tenth of the $75 million that their predecessors did four years ago on television advertising, when most flocked to help the campaign of the Democratic nominee, Senator John Kerry of Massachusetts, which was short of cash.
The leaders of the groups say their donors and members have stepped up their efforts because polls suggest the race has gotten closer and become increasingly dominated by harsh exchanges between the campaigns.
Eli Pariser, executive director of MoveOn, said he decided to step up the group's advertising plans after donations rose significantly when McCain decided to pick as his running mate Governor Sarah Palin of Alaska, a social conservative whose addition to the ticket gave McCain a significant boost in several polls.
"We're just following our members' mandate," Pariser said, "which at this point is to go remind voters that McCain is distorting the truth and doesn't represent change."
MoveOn's membership has grown to 4.2 million from 3.2 million in the past year, largely because of the popularity of Obama's candidacy.
The group is also planning to spend $4 million on voter registration efforts in swing states, focusing on young voters.
Other Democratic strategists said that donors' fears about how the Obama campaign might react to an independent media effort had faded amid what they believed to be more encouraging signals from Obama officials, as well as a growing sense of urgency as the race has tightened.
"There is another set of conversations going on about advertising - and around hard-hitting advertising, frankly," said Steve Phillips, president of PowerPAC.org, an independent group that supported Obama during the Democratic primary. "A lot of people want to hit back hard."
Phillips's group is moving ahead with plans for a $10 million effort focused on turning out black and Latino voters, but he is taking part in other conversations about an outside media effort that attacks McCain.
Among the people at the center of some recent discussions on the left about supporting an outside effort are Mike Lux, a Democratic political consultant, and Stan Greenberg, a Democratic pollster. They convened a conference call last week for potential donors to discuss where they might funnel their money, specifically encouraging a focus on older white women.
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http://www.iht.com/articles/2008/09/16/america/groups.php
Alvaro Vargas Llosa is the editor of "Lessons from the Poor" and the director of the Center on Global Prosperity at the Independent Institute. Distributed by the Washington Post Writers Group.
WASHINGTON:
Gibson Square, a British publishing house, has announced that it will soon release "The Jewel of Medina," a novel by American author Sherry Jones, whose publication in the United States was recently canceled by Random House for fear of triggering violence by Islamic fanatics. Bravo.
The novel fictionalizes the relationship between the Prophet Muhammad and his youngest bride, Aisha. After paying the author a significant advance and making plans for the release of the book, Random House sent copies of the galleys to various scholars, some of whom told the publisher that the content distorted history, would inflame Muslims and could cause much trouble. Security experts were also consulted. Random House decided to cancel publication of Jones' work, invoking reasons of "safety."
Certainly this was not a case of censorship: no one has a "right" to be published by anyone else. But insofar as the business decision of the publisher was dictated by fear of retribution arising from past examples of reprisals against people perceived to have denigrated Islam, the implications went beyond the contractual relationship between Random House and Jones.
Any time, any place in which the threat of violence inhibits the exercise of free expression, the imperfect freedoms of Western civilization that so many people around the world struggle to imitate are in danger. Which is why the implications of the British publisher's audacious decision to print "The Jewel of Medina" also go beyond the contract between Gibson Square.
The book's content - which has been described, promisingly, as being full of sex and violence - is irrelevant to the discussion. It may well be, as one scholar who read it contends, that "The Jewel of Medina" is pure trash. And in any case, a book of historical fiction should never be judged on its accuracy. Great novels such as Tolstoy's "War and Peace," Victor Hugo's "The Hunchback of Notre-Dame" and Marguerite Yourcenar's "Memoirs of Hadrian" are all "inaccurate." So are bad historical novels.
It is true that a naughty novel about Muhammad has the potential to inflame passions. Salman Rushdie's "The Satanic Verses," one of his least interesting creations, earned him a death sentence from the Ayatollah Khomeini in 1989.
I remember asking Rushdie, whom I interviewed in hiding when "The Moor's Last Sigh" came out, if he had reconsidered some of his leftist positions against those who stood firmly for the freedoms of the West. He had. The Indian author added that those values are only "Western" in the sense that the West is where they developed, but that their validity is universal.
Some distributors of "The Satanic Verses" were killed by Muslim fanatics. Dutch filmmaker Theo van Gogh was murdered in 2004 for "Submission," a 10-minute documentary on the oppression of women in Islamic societies. When in 2005 the Danish newspaper Jyllands-Posten published 12 caricatures of Muhammad, Danish embassies were attacked in various countries; dozens of people died in the protests.
Any responsible publishing house would, of course, take all of this into account. And it has the right to do what it pleases with any manuscript that it receives - even the right to change its mind about it.
The problem is not whether Random House was entitled to its decision, but what the decision to go against its own desire to publish the book tells us about the fear that fanaticism has instilled in Western countries through systematic acts of intolerance.
Many people in the West misunderstand what freedom of expression means. They associate it with the restriction on the power of the government to interfere with the freedom to express oneself.
It is really a restriction on the power of anyone to interfere with anyone else's right to free expression, including but not limited to the government. If a business decision is made under extreme fear - directly or indirectly caused by force from a third person rather than the government - freedom of expression also suffers.
I am not interested in the reasons why Gibson Square has decided to publish the book - whether it's opportunism or a belief in the merits of the novel. But the fact that someone, somewhere, is willing to run the risk of not letting the threat of violence inhibit free expression is tremendously comforting.
http://www.iht.com/articles/2008/09/16/opinion/edllosa.php
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LG to sell TV that offers Koran
SEOUL: LG Electronics said Tuesday that it was marketing a new large-screen plasma display television in the Middle East that allowed users to read and listen to the Koran, the Muslim holy book.
LG said the television, which comes in 106-centimeter and 127-centimeter, or 42-inch and 50-inch, versions is the first of its kind in the world. The company began selling it in conjunction with the Islamic holy month of Ramadan, which started at the beginning of September.
Koranic verses can be read on screen and listened to via software embedded in the television. All 114 chapters of the holy book are included, and as many as 10 pages can be bookmarked via remote control, LG said.
LG said it decided to offer the product after learning through a survey that many Muslims listened to the Koran via home theater systems and that ratings for radio broadcasts of the holy book were high.
"The product resulted from noticing that devout Muslims read and listen to the Koran almost every day," Park Jong Seok, an LG vice president, said in the release.
An LG spokesman, Kim Jik Soo, said that the 42-inch TV retails for $1,376 in Dubai, while the 50-inch model sells for $2,160 there.
http://www.iht.com/articles/2008/09/16/business/lg.php
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7 killed in Mexican Independence Day attack
MORELIA, Mexico: Assailants threw two grenades into a huge crowd of Independence Day revelers, killing seven and injuring more than 100 in a brazen attack that escalates the war between Mexico's army and drug gangs.
The military fragmentation grenades shattered a family-friendly gathering of thousands in the cobblestone streets not far from where President Felipe Calderon grew up. He pledged an immediate military response Tuesday and urged Mexicans not to be afraid.
However, in a country increasingly terrified and outraged by both drug violence and common crime, the attack drove home a tragic message: No place is safe.
"These illegal acts were clearly attacking our national security, committed by true traitors who have no respect for others or for the country," Calderon said. "Those who believe they can use fear to hold our society hostage and immobilize us are mistaken. ... They are doomed to fail."
Since taking office in 2006, Calderon has sent more than 25,000 soldiers to confront the cartels that move marijuana and cocaine into the United States, and the gangs have responded with daytime shootouts, assassinations, beheadings and massacres. Michoacan state, which is home to Morelia, has seen more than its share of this violence.
The latest came during the traditional "grito," or shout for independence, late Monday night. Michoacan Gov. Leonel Godoy had just finished shouting "Viva Mexico!" from a balcony, when the two grenades exploded simultaneously in the crowd, blocks apart.
At first, the throngs of families thought the explosions were part of the fireworks display. Then thick, black smoke rose from the crowd, people started screaming and the cathedral's bells fell silent. As the crowd cleared, rescuers attended to the wounded and dead.
Both state emergency officials and state prosecutors said seven were killed, although there were earlier reports that the death toll had risen to eight.
Godoy, who was unhurt, said witnesses saw a heavyset man wearing black throw one of the grenades, then beg forgiveness for what he had done. But he provided no more details, and there were no immediate claims of responsibility. Authorities made no arrests.
"Without a doubt, we believe this was done by organized crime," he said. The governor's office later said he was traveling to Mexico City late Tuesday to meet with Calderon.
The attack targeted a cherished tradition that brings millions of Mexicans together in public plazas each year, and cast an immediate pall over Tuesday's parades, held in cities and towns across the nation to celebrate the 1810 start of Mexico's 10-year war of independence from Spain.
Godoy canceled Tuesday's march in Morelia after his office received threats, "because there are children, women and innocent people who have been hurt." But parades went on elsewhere, including the traditional military show of force in Mexico City.
Eunice Arevalo, 23, attended that parade with 10 other family members, but she said she was fearful for Mexico's future.
"This is not going to stop. This is only going to get worse," said Arevalo, a cooking student whose father is a soldier. "So far the killers have targeted other drug traffickers, but now it seems we're going to see still more violent acts against everyday citizens, just to shock people."
Calderon urged Mexicans to stand up to the cartel threat, appealing to their patriotism.
"The Mexican people, especially on this important date, should remain united in the face of those who want to divide us," the president said.
A week after nationwide marches designed to symbolically retake the streets from criminals, many echoed his defiance.
"Mexico is ours. We won't hide. We are going to go out and take back our streets," said lawyer Juan Enrique Arguijo, 46.
Morelia remained under heavy guard, with soldiers and federal, state and local police manning checkpoints on surrounding highways. Seventy-five injured were hospitalized, civil protection officials said.
Meanwhile, families mourned the dead. Isabel Sanchez said her brother Alfredo Sanchez was about to retire as a metalworker after surviving a stroke. He was killed amid the crowd as his wife parked the car.
"My brother was fighting to live," she said. "We are tired of living like this. ... I don't understand why my brother died."
The attack comes only days after 24 bodies were found bound and killed execution-style in a rural area outside Mexico City in one of the largest massacres in recent history.
http://www.iht.com/articles/ap/2008/09/16/news/LT-Mexico-Explosion.php
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FBI finds slight decrease in violent crime for 2007
Violent crime declined slightly in 2007, reversing a two-year rise, and property crimes declined for a fifth straight year, an annual national survey released on Monday by the Federal Bureau of Investigation found.
The survey, the Uniform Crime Report, compiled crime data from more than 17,700 law enforcement agencies, which reported 1,408,337 violent crimes, a decrease of 0.7 percent from 2007. Violent crimes include murder, manslaughter, rape and assault; all four of those types of crime decreased.
There were 9,843,481 property crimes in 2007, a decrease of 1.4 percent. Each category of property crime — burglary, larceny and theft, motor vehicle theft, and arson — decreased. Among the sharpest decreases was the number of motor vehicle thefts, which dropped 8.1 percent.
Cities with 250,000 people or more saw significant decreases in all categories of crime, while smaller cities and towns experienced increases in homicides and robberies.
There were 16,929 murders in 2007, compared with 17,030 in 2006, and 90,427 rapes in 2007, compared with 94,347 in 2006, although neither number decreased below 2005 levels.
Firearms remained the weapon of choice for most homicides in most states in 2007.
In Alaska, however, there were 43 homicides, and nearly as many homicides were committed using fists and feet (12) as were committed with handguns (13).
http://www.iht.com/articles/2008/09/16/america/16crime.php
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Police shut Toronto high school after shooting
TORONTO: A high school in Canada's biggest city has been locked down by police after a 17-year-old boy was shot in one of its hallways, a Toronto television station reported on Tuesday.
The boy was shot in either the abdomen or the chest at Bendale Business and Technical Institute in Toronto's east end, TV station CP24 reported. The victim was rushed to hospital in serious condition.
Police swarmed the area and are searching for either one or two suspects, CP24 reported. A second nearby school was also locked down.
http://www.iht.com/articles/reuters/2008/09/16/america/OUKWD-UK-TORONTO-SHOOTING.php
Nazi hunter wants US, Austrian, Hungarian suspects
BELGRADE, Serbia: A leading Nazi hunter urged Serbia on Monday to seek the extradition of three World War II war-crimes suspects and blasted Austria and Hungary for failing to help bring two of them to justice.
Efraim Zuroff, head of the Israeli branch of the Simon Wiesenthal Center, said at a news conference with Serbian officials that he was helping them provide evidence against Peter Egner, who lives in the United States, Milivoj Asner, who lives in Austria, and Sandor Kepiro of Hungary.
Egner allegedly served in a Nazi unit that killed 17,000 civilians in Serbia during World War II. Asner is wanted for WWII atrocities against Serbs, Jews and Gypsies in Croatia.
The Simon Wiesenthal Center says Kepiro, 94, was convicted by Hungarian courts but never punished for his alleged role in Hungarian forces' killings of some 800 Jews and 400 Serbs in the wake of the Nazi occupation of Yugoslavia.
Asner caused a stir this summer when he was seen watching a soccer match in the Austrian city of Klagenfurt. Critics contend Austria is sheltering him.
Serbia should seek the extradition of the three "as soon as possible" because it is "a decision of great importance to bring those people to justice," Zuroff said.
Serbia's war crimes prosecutor, Vladimir Vukcevic, said that Serbia will seek the extradition of the three after collecting evidence and launching legal procedures.
"The issue in these cases is not finding the suspects, is not finding the evidence," Zuroff said. "The problem has been the lack of political will by the countries in which these people reside."
"I'm referring primarily to Austria and Hungary, and not the United States where there are serious efforts to bring Nazi war criminals to justice," he said.
Phone calls to the Hungarian and Austrian justice ministries went unanswered Monday evening.
Austria's Justice Ministry said this year that it is reviewing a request from Zuroff to make a fresh assessment of Asner's physical and mental state and prove he is suffering from dementia as experts have ruled in the past.
Without a new evaluation declaring him physically and mentally fit, "our hands are tied," ministry spokesman Thomas Geiblinger said at the time.
This summer, the U.S. Justice Department asked a federal court to revoke Egner's American citizenship, saying he had served as a guard and interpreter with the Nazi-controlled police in Belgrade. Egner, 86, can only be extradited to Serbia if he is stripped of his U.S. citizenship.
http://www.iht.com/articles/ap/2008/09/16/europe/EU-Serbia-Nazi-Hunt.php
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German court rules Nazi-era officer fit for trial
MUNICH, Germany: A 90-year-old former officer in the Nazi army is fit enough to stand trial on charges he ordered the reprisal killings of 14 civilians in Italy during World War II, a Munich court ruled Monday.
Josef Scheungraber has flatly denied the allegations that he ordered the June 1944 killings in Falzano di Cortona, near the Tuscan town of Arezzo, when he was a 25-year-old German Wehrmacht lieutenant in command of a company of engineers.
The indictment says he ordered his soldiers to shoot three Italian men and one woman as retribution for the killing of two German soldiers. It says he then ordered another 11 civilians be herded into a barn, which he had blown up.
One boy, 15 at the time, survived the explosion, and was expected to be among 22 witnesses at the trial. Testimony is to begin Sept. 29, and some may give statements by video link.
Scheungraber is charged with 14 counts of murder. He has already been convicted of the same crimes by an Italian military court and sentenced in absentia in 2006 to life in prison, though he has served no time.
On Monday he wore a traditional Bavarian wool jacket with deer-horn buttons, and sat with an arm resting on his single crutch as his attorney told the court that he denied the charges against him.
Defense attorney Christian Stuenkel said prosecutors had no witnesses who had seen his client at the scene of the massacre, and no written evidence of him giving any order.
He said Scheungraber at the time was in charge of overseeing the reconstruction of a bridge blown up by partisans.
"Mr. Scheungraber had been ordered to repair this bridge — outside of Falzano di Cortona — within 24 hours in order to support the German army withdrawal to northern Italy," Stuenkel said.
"This order had the highest priority for Mr. Scheungraber."
Another of Scheungraber's attorneys, Rainer Thesen, accused prosecutors of going after Scheungraber simply because he was an officer serving in the general vicinity at the time.
"He was neither at the scene of the crime, nor did he order such a crime," he told the court.
His attorneys had argued he was not fit to stand trial, in particular because his hearing is now so bad he would not be able to understand what is going on.
Scheungraber confirmed in court that he could understand his attorneys' arguments, however, and presiding Judge Manfred Goetzl said the trial could go ahead.
Goetzl noted that an expert had declared Scheungraber able to stand trial, though only for a few hours at a time. The judge ordered that Scheungraber's hearing-aid be connected to the court's speaker system so that he could hear better.
Joining the trial as co-prosecutors, as allowed under German law, are 19 relatives of victims of the 1944 massacre.
http://www.iht.com/articles/ap/2008/09/15/europe/EU-Germany-Italy-WWII-Killings.php
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