The landline telephone isn't working, but the mobile is.
Meanwhile, Mahmoud Ahmadinejad isn't getting any sleep. Maybe, in the run up to the American elections, he's got something else on his mind other than the price of oil.
The boys and I, we sleep fine.
Hong Kong finds more tainted eggs from China
By David Barboza
Wednesday, October 29, 2008
SHANGHAI: Hong Kong officials said that for the second time in a week they had found a batch of eggs imported from China that contain high levels of melamine, the same industrial chemical that has been blamed for contaminating China's milk supplies.
The announcement, which came late Tuesday from the territory's food safety agency, is adding to concerns that melamine contamination may be more widespread in China's food supplies.
While Hong Kong officials cautioned that children and adults would have to eat a large number of tainted eggs in a single day to fall ill, the report is another blow to China's agriculture industry.
China is already struggling to cope with a milk scandal that has sickened over 50,000 children and caused the deaths of at least four infants this year after they consumed melamine-tainted baby milk formula. That case triggered a global recall of foods made with Chinese dairy products.
The Chinese government has tried to move boldly to deal with the crisis, promising to overhaul the nation's food safety system, announcing dozens of arrests and sacking high-ranking government officials, including the head of the nation's top quality inspection agency.
The government has attributed the dairy scandal to organized groups of scam artists who regulators say were intentionally adding melamine to watered-down milk to artificially boost its protein reading in quality tests.
Chinese regulators say they are now investigating how melamine got into eggs. The government is also doing spot checks in supermarkets in some cities, like Shanghai.
Zhang Zhongjun, an official in Beijing with the United Nations Food and Agriculture Organization, said he met Wednesday with officials from China's Agriculture Ministry and was told they believed the problem eggs in Hong Kong were probably contaminated by melamine-tainted animal feed.
But Zhang said the government told him the source of the contamination was not yet known. "It's not clear whether the melamine was added by humans or by pollution," he said.
Some food safety officials say that if chicken feed is contaminated, it is possible hog and fish feed could be also.
The chemical, which is used to produce some plastics and fertilizer, was blamed last year for contaminating Chinese feed ingredients that were exported to the United States and eventually sickened dogs and cats. The case led to a major pet food recall.
On Monday, Wal-Mart Stores said some of its stores had pulled the Hanwei brand of eggs from shelves in China as a precaution after the Hong Kong government finding.
The first batch of eggs that tested positive for high melamine levels by the Hong Kong Center for Food Safety came from a company in Dalian, in northeast China. Officials from the region told Xinhua, the government news agency, that the contamination may have come from local poultry farms.
According to a notice posted on the web site of the Dalian Hanwei Food Co., regulators learned on Sept. 27 that some eggs were contaminated. The company said it was ordered to recall eggs, and exports to Hong Kong were halted by regulators in early October.
The second batch of tainted eggs found in Hong Kong was from the Jingshan Agriproducts Company in Hubei Province. Pan Fengxia, the company's general manager, confirmed by telephone Wednesday that eggs tested in Hong Kong were found to have higher levels of melamine than permitted, but she did not know why. "I never heard that melamine was added into feed or my products," she said. "Never."
Israeli troops kill armed Palestinian shepherd
Wednesday, October 29, 2008
By Wael al-Ahmed
Israeli troops in the occupied West Bank killed a 68-year-old Palestinian shepherd on Wednesday who was carrying a shotgun as protection against rustlers.
The Israeli army said Mohammed Abahereh opened fire at soldiers on routine patrol and they shot back, killing him.
Abahereh's son, Taher, who was helping him herd the sheep in the early morning darkness in al-Yamoun village, said rustlers had tried in the past to steal the animals.
"He was locking the gate and he heard something around us. He thought that it was thieves, so he went out with his shotgun and was shot immediately," Taher said.
The son said he had not seen the shooting but had heard the gunfire. He voiced doubts his father had shot at the soldiers.
"My father has never used his gun," he said, accusing the troops of leaving the shepherd to bleed to death and preventing an ambulance from reaching the area quickly.
An Israeli military spokesman denied the allegation.
"The troops did not prevent the evacuation and even guided the Red Crescent ambulance to the area so that it could get there as soon as possible," the spokesman said.
Israeli forces maintain a network of checkpoints and roadblocks in the West Bank and carry out patrols and raids against Palestinian militants.
The Palestinian Authority, engaged in peace talks with Israel, says Israeli military activity hampers its own efforts to exert security control in West Bank towns and villages.
(Additional reporting by Wafa Amr in Ramallah and Ori Lewis in Jerusalem; Writing by Jeffrey Heller; Editing by Angus MacSwan)
Pakistan quake rescuers recover 175 bodies
Wednesday, October 29, 2008
By Saeed Ali Achakzai
About 175 people were killed when a powerful earthquake hit the southwestern Pakistani province of Baluchistan on Wednesday, flattening about 1,500 mud-walled homes and triggering landslides, officials said.
The epicentre of Wednesday's quake was in Ziarat district, a scenic valley and one of the main tourist spots in Baluchistan.
Chief district administrator Dilawar Khan said 170 people had been killed in that district and 350 injured.
"The rescue operation is over. We've retrieved all bodies and the injured. Now the problem is relief as there's a shortage of tents, blankets and food while the weather is getting cold," Khan told Reuters.
The U.S. Geological Survey said the 6.4 magnitude quake struck 60 km (40 miles) northeast of the provincial capital, Quetta.
Pakistan's Meteorological Department put the magnitude at 6.5 and said the quake, at the shallow depth of about 10 km (six miles), struck at 5.10 a.m. (11:10 p.m. British time on Tuesday).
About 20 aftershocks, the biggest of 6.2 magnitude, caused more damage and rattled the nerves of survivors as they scoured the rubble for loved ones.
"The village has been flattened. You can't see a house still standing. There's destruction everywhere," said Abdul Rahim Ziyawal, a rescue worker in Wam, one of the worst-hit villages where authorities were using excavators to dig mass graves.
Pakistan is no stranger to natural disasters. In October 2005, about 73,000 people were killed when a 7.6 magnitude quake hit northern mountains. Last year, the worst floods on record in Baluchistan killed hundreds.
Khan said most people in the hilly Ziarat district, which has a population of about 50,000, were sleeping out, either because their homes were destroyed or damaged, or because aftershocks left them too sacred to sleep inside.
The quake triggered landslides that destroyed some houses and blocked roads, complicating search and relief operations.
The army had sent helicopters and a medical team and paramilitary troops had joined the search for survivors.
The International Committee of the Red Cross (ICRC) sent two teams to the area. "Aftershocks have continued which we think will force the population to stay outside, and the weather is cold," said ICRC spokeswoman Carla Haddad.
Another five people were killed in neighbouring Pishin district, to the north of Quetta, district government officials said.
The World Health Organisation (WHO) said it was sending two truckloads of essential medicines and supplies for 50,000 people for three months to Ziarat and Pishin.
"Accessibility to health services, exposure to cold weather and access to safe food and water are major health concerns facing the at least 20,000 people displaced by today's magnitude 6.4 earthquake," it said in a statement.
In Wam, villager Mohammad Aleem said his two brothers and a sister-in-law had been killed and he was looking for other relatives.
"I don't know who's survived and who's died. I'm still searching," said Aleem as he clawed through rubble with bare hands.
The head of a national disaster management team, Farooq Ahmed Khan, said about 300 rescue workers had reached Ziarat. Tents, blankets and clothing were being flown in.
The Meteorological Department said two tremors had struck before dawn, with the second, bigger one coming about 35 minutes after the first.
"There were two jolts. The first was mild but I made my family get out and then the roof of my house caved in with the strong one," said Khadija, a 50-year-old woman in Wam, still quivering with shock.
In 1935, about 30,000 people were killed and Quetta was largely destroyed by a severe earthquake.
Large parts of south Asia are seismically active because a tectonic plate, known as the Indian plate, is pushing north into the Eurasian plate.
Baluchistan is Pakistan's largest province but its most thinly populated. It has the country's biggest reserves of natural gas but there were no reports of damage to gas facilities.
(Additional reporting by Gul Yousafzai, Zeeshan Haider, Kamran Haider, Augustine Anthony and Aftab Borka and Jonathan Lynn in Geneva; Writing by Robert Birsel; Editing by Sanjeev Miglani)
Mexico pays fishermen to help save a species
By Elisabeth Malkin
Wednesday, October 29, 2008
MEXICO CITY: About 800 fishermen in the northernmost crook of the Gulf of California have taken up the government's offer of payments to stop fishing with nets and, in some cases, to stop fishing altogether, Mexican conservationists have said.
The offer, first made two years ago, was intended to save a small porpoise that is threatened with extinction as an unintended byproduct of commercial fishing. The porpoise, called a vaquita, is often trapped and killed in the gill nets that fishermen use to catch shrimp, mackerel and sharks.
Probably no more than 150 vaquitas survive, conservationists say. The population could fall to 100 in a couple of years. If that occurred, there would be too few sexually mature adults left for the species to recover.
"We have one or two years," said Omar Vidal, the director of the World Wildlife Fund in Mexico and a biologist who has studied the vaquita for 25 years. "We're on the brink."
The Mexican government agrees. It has spent about $20 million over the last two years on conservation measures, primarily to persuade 800 of the 4,000 registered fishermen in the area to accept its offer to stop using nets or to cease fishing entirely, according to the environment minister, Juan Elvira Quesada. Next year, officials hope to spend an additional $13 million to continue the plan.
Many of the fishermen who have accepted the offer will use the money to start businesses. For those fishermen reluctant to give up their livelihood, there is a new net, developed with the help of the World Wildlife Fund, that does not trap the vaquita.
The vaquita, which has dark doe eyes and pale skin, inhabits the shallower waters of the Gulf of California.
The conservationists' sense of urgency is driven by a very practical concern. Last year, a cousin of the vaquita, the Chinese river dolphin, was declared extinct.
"I see this as our last opportunity," Vidal said.
Energy firms told to invest to avoid another price spike
By Julia Werdigier
Wednesday, October 29, 2008
LONDON: Energy companies must continue to invest despite the downturn to avoid another spike in oil prices once the economy recovers, the chief executive of the French oil company Total said Wednesday.
"Supply will remain short, and if we don't pay attention, the recovery will come and supply will be less and the price will climb again," Christophe de Margerie said during a speech at the Oil & Money 2008 conference in London. "It is our responsibility to continue to invest. We will continue to invest for the medium to long term."
The comments echoed warnings by oil ministers on Tuesday that the tightening of credit might lead energy companies to abandon or postpone necessary oil projects, which could threaten supply in the future.
Oil prices rose Wednesday for the first time in four days but they are still at less than half the level of their July peak of $147.27, amid concerns that slower economic growth would hurt demand and make some investments less lucrative for energy companies.
Robert Dudley, chief executive of the Russian oil venture TNK-BP, said energy companies needed to overcome their instincts to postpone or cancel investments as demand for oil slowed and avoid past mistakes. "This is a natural response but should the industry go too far, as it did in the past two decades, we won't be in a position to respond to global demand when it recovers," Dudley said at the conference.
Dudley will stand down from his role at TNK-BP at the beginning of December as part of a settlement to end a power struggle with the company's Russian shareholders.
Dudley also said that oil output in Russia would decline next year as new areas of supply were "remote and the climate harsh," calling for higher investments at a time "when it is difficult for even the most prudent borrowers" to get financing.
Investments are needed, analysts said, to make up for the natural decline of output at existing oil fields, including the aging Russian fields of West Siberia.
The International Energy Agency is due to publish its annual World Energy Outlook report next month and will give updated estimates for how much the industry should invest over the next two decades to meet rising demand, especially from China and India.
The shares of the large oil companies like BP dropped in the third quarter on concerns that they would struggle to maintain the pace of earnings growth without the help of record oil prices. BP, which reported a 83 percent increase in third-quarter profit Tuesday, said the company was "well positioned" to cope with the volatility in oil prices.
De Margerie of Total also urged the energy industry, its stakeholders and politicians not to let the current economic crisis distract them from important commitments and investments in renewable energy technologies. Any delay in dealing with the problems of climate change would only increase the costs, he said.
The world needs $45 trillion in energy investments to develop technologies that would allow annual emissions of those gases blamed for climate change to be cut by half before 2050, according to estimates by the IEA.
Pain of oil-rich states could be felt across Middle East
By Michael Slackman
Wednesday, October 29, 2008
CAIRO: For many of the financially strapped nations of the Middle East, the oil-rich countries of the Gulf have served for years as an economic lifeline, providing jobs for their citizens, who in turn sent millions of dollars back home; tourists, who filled their hotels when Westerners were reluctant to visit; direct investment; and the kind of checkbook diplomacy that has helped stabilize an often volatile region.
Suddenly, that lifeline appears frayed, dangerously so for countries like Egypt and Jordan, as the energy-rich nations find themselves pulled into the global financial crisis and undermined by dropping oil prices. Across the Gulf, stock markets are down, causing panic among investors. Even in the boomtown of Dubai, United Arab Emirates, the once-mighty real estate market has cooled as access to credit has tightened.
Governments across the region have had to intervene.
The United Arab Emirates injected $32 billion into its banking system and guaranteed bank deposits. Saudi Arabia has offered billions of dollars to make loans available to its citizens. And Kuwait, which had already cut its benchmark rate, this week moved to prop up its second-largest bank.
But the era of sky-high oil prices, while now a memory, left most of the region's capitals with enough cash reserves to cushion the blow, economists and financial experts in the region said. And as long as oil sells for more than $55 a barrel, most of the governments will take in more than they have allocated in their budgets, regional analysts said.
"We are not calling for a recession in the Gulf," said Marios Maratheftis, regional head of research for Standard Chartered Bank in Dubai. "We are looking at a slowdown." A slowdown in the Gulf might feel like a crash landing in places like Egypt, Jordan and Syria, where Gulf money has helped prop up strained economies.
"When there is growth in the Gulf, there will be growth in the whole Arab world," said Rashad Abdou, a professor of economics and international finance at Cairo University. "There would be more tourism, more money in the stock market, more investments. And the opposite is true. With a shrinking or recession, they will not come for tourism, they will not put their money in the stock market, they will not invest and they will not be able to hire Egyptian workers."
Egypt receives about half of its $6 billion in annual remittances from more than two million of its citizens living and working in the Gulf area, while about 60 percent of its tourists come from that region, Egyptian economists estimated. Syria has benefited from Gulf investments in large real-estate projects, helping offset some of the economic isolation imposed by U.S. sanctions. Jordan sends a quarter of its annual exports to the Gulf, receives about $2 billion annually in remittances from workers there and takes in about $500 million in financial aid from Saudi Arabia alone.
"I expect investments from the Gulf to slow down or stop because they have to deal with their own problems before they invest in other countries," said Nabil Samman, an economist who runs the Center for Research and Documentation, based in Damascus. "Syria will be affected in terms of the Syrian people who send money from the Gulf, in case there is a slowdown in employment or firing from Gulf states. There are close to a million Syrians in the Gulf area."
Extravagant oil wealth has helped transform not just the Gulf nations on which it was bestowed but the greater Arab world as well. Egypt, once the cultural and political capital of a region that stretched from Morocco to Iraq, has taken a back seat to the petro-fueled economies and politics of places like Qatar and Saudi Arabia.
The Gulf states took on an aura of invincibility, especially as oil prices crested this summer near $150 a barrel and as the tiny nation of Qatar negotiated a settlement to Lebanon's political crisis. And even as the financial crisis spread from the United States to Europe and into Asia, there was a feeling in the Middle East that oil-rich nations would be spared. But then the price of oil began to drop precipitously, revealing a financial anatomy in many nations that was far from invincible.
Sparkling Dubai, with its larger-than-anything-else-in-the-world ethos, was powered by the greatest construction boom in Middle Eastern history. But it was a dream built on a promissory note. Debt increased 49 percent from 2007 to 2008, so when the credit crisis came it hit Dubai hard, financial experts there said.
Dubai had to turn to the government of the United Arab Emirates for an injection of capital to keep its banks afloat. Optimists are hoping that the cooling of Dubai's overheated real estate market will ultimately have a positive effect on the emirate, though they recognized it would not be without pain.
"The subprime crisis, which started in the U.S. in 2007, has developed into a full-blown international crisis with potentially severe consequences for the GCC countries and their growth models," Eckart Woertz, an economist at the Gulf Research Center, wrote in a report issued this month. The GCC, or Gulf Cooperation Council, is a regional association that includes Saudi Arabia, the United Arab Emirates, Qatar, Oman, Kuwait and Bahrain.
While the GCC wrestles with its growing problems, its neighbors, already harmed by the financial troubles in the United States and Europe, anxiously await the potential fallout from next door. There are signs that the pain is spreading. In Cairo, Karim Hussein, 27, has worked for the last three years in offices that arrange work visas for Egyptians looking for employment in the Emirates. He said in the past they would get requests for up to 70 visas a month. Now, if lucky, they get 10, he said, "if we get anything at all."
In Amman, Jordan, Manal Saleh, 35, has worked for five years at Al Hadaf, an employment company that sends skilled workers to the Gulf. She said that opportunities there have dropped by about half since the start of the year. "In light of the financial situation, demand has shrunk," she said.
Mona el-Naggar contributed reporting.
Accidents and uncertain rules harm nuclear power's image in Europe
By Patricia Brett
Wednesday, October 29, 2008
PARIS: Eight nuclear incidents reported since May 24 in Europe, including the inadvertent contamination of 100 workers and an off-site release of radioactive uranium in France, are reminders that the industry is a source of routine and accidental radioactive pollution.
Areva, the world's largest nuclear group, was responsible for three out of six accidents in France, which generates 80 percent of its electricity at nuclear plants. Of the six French events, four were reported at a 600-hectare, or 1,480-acre, complex at Tricastin, in southeastern France. The two other European accidents were reported in Slovenia and Belgium.
Responding to critics of the off-site release, in which 75 kilograms, or 165 pounds, of uranium was spilled on July 7, Areva's chief executive, Anne Lauvergeon, said nuclear installations were subject to "the most draconian international norms" and deplored public "confusion" about the event.
Areva declined requests for an interview with Lauvergeon for this article and no other Areva executive was available for comment.
Critics say public confusion reflects a lack of transparency in the industry and a lack of binding international radiation safety standards.
National regulators follow an ill-defined rule - As Low As Reasonably Achievable, or Alara - to set permitted dose limits for each radioactive element.
The rule is one source of confusion. Many believe that exposure to permitted levels is safe, but that is not the case, said Jean-René Jourdain, head of internal dosimetry at the Institut de Radioprotection et de Sûreté Nucléaire, or IRSN, which provides technical support for the French nuclear regulator, the Autorité de Sûreté Nucléaire.
Low doses of radiation may be less likely to damage health than high doses, but the type of damage they do is the same; and how much less likely is unknown, Jourdain said, because "what we know about low-level radiation was extrapolated from studies on atom bomb victims that were flawed" in methodology and type of exposure studied.
The nuclear accident at Chernobyl, Ukraine, in 1986 highlighted the lack of understanding of the effects of cumulative low-dose exposure.
"We expected leukemia in children," Jourdain said. "Instead we found that infants were more prone to thyroid cancer - and much sooner than we'd expected, only 5 years after the accident, rather than 10 to 15 years as we'd thought."
Socatri, a uranium recovery and treatment subsidiary of Areva, which was responsible for the loss of uranium into local waterways at Tricastin, contributed to confusion around that incident by providing conflicting information and failing to inform the safety regulator in a timely manner. The regulatory authority compounded the problem by classifying the leakage as a level-one risk on its eight-level risk scale, although its own Web site ranks unauthorized off-site releases at level three.
The authority then waited two days before sending a team to the site, a delay that Jean-Luc Lachaume, its deputy director, said was "normal procedure based on the information given by the operator." Nuclear authorities worldwide rely almost exclusively on operator-supplied data.
Even if the release had been as high as 360 kilograms of radioactive uranium - the amount initially reported - it would still have been just "one of a hundred such incidents in France each year," he added.
For Roland Desbordes, the president of an independent nuclear analysis laboratory, the Commission de Recherche et d'Information Indépendantes sur la Radioactivité, that is worrying, because "360 kilograms of uranium is equivalent to at least 9,000 megabequerels, or more than 100 times Socatri's annual limit.
"Brought down to 'only' 75 kilograms the annual limit is overshot by 27 times," Desbordes said.
After the spill, the IRSN monitored radioactivity in neighboring surface and groundwater. On Sept. 4 it reported radiation levels three times higher than the national average in aquatic life and surface water sediments.
Another study that it released on Sept. 15, covering all French nuclear installations, found downstream pollution and groundwater contamination at nearly all sites, with Tricastin again registering some of the highest levels.
The study pointed to old waste storage sites as a source of leakage and pollution. Asked what the regulatory authority would do about a mound of waste buried at Tricastin since the 1970s, Lachaume said it was a military issue, outside the regulator's control.
With 104 reactors, the United States has the most nuclear power plants in the world. The Union of Concerned Scientists and others petitioned the Nuclear Regulatory Commission in 2006 to take action on a similar issue, documenting chronic leaks, some decades-old. The NRC responded that an industry voluntary initiative to report the leaks would suffice, said Paul Gunter of Beyond Nuclear, an anti-nuclear activist group.
Radiation levels around Tricastin have been above normal for over a decade, a fact that the IRSN, in its Sept. 4 report, highlighted to put the spillage in perspective, taking as reference values measurements it made in 1991 that found radiation levels far higher than at present, at five times above the national average. But it did not mention that the 1991 measurements were made during an investigation of an earlier spill.
All nuclear installations routinely release radioactive liquids or gases, raising nearby background radiation to higher than normal, naturally occurring levels, said Jourdain, the IRSN official. The degree to which local background levels differ from the naturally occurring level depends on how much radioactivity is released and stays in the environment. Such releases are authorized by national regulators on a site-specific basis, which varies from plant to plant and country to country.
In an example of how these limits are set, Socatri, the Areva subsidiary, began a new waste-reconditioning activity in 2006 and requested authorization to release 85 megabequerels a year of Carbon 14, a low-level radioactive gas. In 2006 and 2007, it exceeded its authorized levels by 40 times, at around 3,400 megabequerels, and requested the regulator to raise its authorization to that level. The request was granted, Lachaume said, because "we didn't know how much would be released at first so we set the levels very low." But when it turned out that these were unrealistic," he said, "they were slightly revised."
By June this year, the annual limit had been breached, and in August the reconditioning plant was shut down. Lachaume said the Carbon 14 limit would not be raised again. How the plant should deal with the problem was "their business," he said.
In a 2006 review, the International Atomic Energy Agency, an arm of the United Nations, found that "some states may encounter difficulties in separating the regulatory control from the promotion and operation of facilities and activities."
The review had been requested by the French regulatory agency, which had just been granted a new, nominally independent, status. Until 2006, the regulator was directly controlled by the government, which was also the majority shareholder in Areva and EDF, the main nuclear electricity utility in France.
In the United States, the Nuclear Regulatory Commission is headed by five presidentially appointed commissioners, a structure designed to ensure a separation of interests; even so, financial arguments from operators have on occasion been allowed to override safety concerns.
In 2002, the Davis-Besse plant, in Ohio, came within three-eighths of an inch, or 9.5 millimeters, of a nuclear disaster, commission records show. In 2001, the commission, suspecting serious corrosion problems at the plant, had ordered a shutdown by the end of the year to allow for visual checks and repair of any damage.
The plant's operator, FirstEnergy Nuclear Operating, requested an extension, citing the economic costs of an early shutdown and, despite opposition from some commission staff, a six-week delay was granted. A later report by the commission's inspector general found that the decision to grant the delay had been taken on the ground that absolute proof of corrosion - available only from the requested checks - was lacking and that the financial burden of the shutdown was therefore unjustified.
When workers finally carried out repairs, they found that boric acid had carved a cavity 7 inches deep and 5 inches wide through the entire outer layer of the reactor lid, leaving only three-eighth of an inch of inner lining to retain the primary coolant inside the vessel. Loss of coolant can lead to reactor meltdown and a huge release of high-level radiation.
Laurent Foucher, IRSN's head of equipment and structural analysis, said that plants were aging faster than expected and that finding replacement parts was becoming difficult. Tony Pietrangelo, vice president for regulatory affairs at the Nuclear Energy Institute, an industry lobby group, agreed, saying, "There's a supply chain issue with ultraheavy equipment."
Asked whether deteriorating plants were leading to more near misses, Scott Burnell, a press officer at the Nuclear Regulatory Commission, said no. But, he added, "we're having to deal with more complex situations."
Natural gas price links to oil market frustrate regulators' efforts to develop competition
By Michael J. Strauss
Wednesday, October 29, 2008
PARIS: With once-regional natural gas markets now turning global, consumers are increasingly exposed to gas exporters who link their prices to oil, overriding the play of supply and demand in the local market and frustrating regulators who fret that they can only counter the link indirectly.
"Gas producing countries have benefited from this, because prices have been going up for reasons that had nothing to do with the gas," a European Commission spokesman said, referring to the surge in oil prices to record levels this year before they receded amid the current global financial woes.
Mark Wiltsher, a spokesman for the British energy regulatory agency Ofgem, said, "There's no logic why oil and gas should be priced together."
Wiltsher cited "historic reasons" for the link. "When it was found economic to use gas, it was pegged to the oil price. They didn't know how else to price it. But the reason it's not a good idea is that it's two different fuels," he said.
Natural gas is used mainly in power plants, factories and residential heating. It is often found where oil exists, and was routinely flared off as worthless until after World War II. In recent decades pipeline networks have increasingly been built to bring such associated gas to market; but flaring remains a widespread and controversial practice at remote fields in such countries as Russia and Nigeria.
By linking gas prices to oil prices, producers were able to prevent gas sales being undercut when crude prices fell; and since the long-term trend in oil prices has been upward, the link delivered rising profit margins, a particularly attractive feature when combined with long-term supply contracts.
"When you have a long-term contract, you don't just have the gas, you have the infrastructure that comes with it," said a spokeswoman at the French utility GDF Suez who declined to be identified, citing company policy. "You need to make these huge investments in plants, in production wells, in building pipelines, et cetera, so you need to be able to count on a long-term return."
Some production costs, too, are linked. "The cost of the tools you need to use to develop more oil resources tends to go up when you have an increase in the price of oil," said Chris McGill, managing director of policy analysis at the American Gas Association. "Those same tools are what you need to drill and develop natural gas."
European Union requirements aimed at fostering competition in the internal EU gas market have made a dent in the price-pegging within Europe. Market forces have had the most impact in Britain, which gets much of its gas from domestic North Sea fields and which has had a relatively strong commitment to open market competition policies. Except for "a few old legacy contracts," the link between oil and gas prices nearly ended for a time in Britain, Wiltsher said.
In contrast, a recent EU inquiry found that Dutch and Norwegian producers of North Sea gas still peg prices mainly to oil. And with the EU increasingly reliant on gas from external suppliers that have kept the link intact, even Britain is feeling the effects again as its North Sea output falls. "As we've become more and more dependent on gas imports, that link has come back," Wiltsher said.
Since price-pegging is done routinely by major suppliers in such countries as Russia and Algeria, regulators in Europe have little power to ease its impact other than indirectly, by trying to foster competition and diversification of energy supplies.
"This linkage results in wholesale prices that fail to react to changes in the supply and demand for gas, which is damaging to security of supply," the EU inquiry warned. "No clear trend toward more market-based pricing mechanisms can be observed in long-term import contracts," it added, calling for efforts to develop a more liquid European gas market.
"The policy we are applying is for diversification of supply and more competition in the internal market," The European Commission's energy spokesman, Ferran Tarradellas Espuny, said. "What we believe is that if the market is as open as possible, people buying gas will look for the supplier that has the best price."
Economists say the relationship between gas and oil prices can be complex. A study issued by the U.S. Department of Energy in 2006 said higher oil prices can spur more demand for gas, causing gas prices to rise; but they can also lead to higher gas output if oil production is stepped up because the two are often found together, and this can put downward pressure on gas prices.
Higher oil prices can also spur more production from pure gas fields, which can also dampen gas prices - a pattern now being seen in the United States, where oil production peaked several decades ago.
"In America the resource base now tends to be natural gas-prone, and about 80 percent of the drilling activity today is for natural gas," McGill, of the American Gas Association, said.
This may be having an impact. The Energy Department study said, "Periods when natural gas prices have appeared to decouple from crude oil prices have been occurring with increasing frequency."
Still, economists say decoupling could take years to become the norm because the prevalence of long-term supply contracts militates against rapid changes in purchasing practices by major users. In Europe, the rationale for linkage may be diminishing "but this does not mean that such indexation will disappear," concluded Jonathan Stern, director of gas research at the Oxford Institute for Energy Studies, in an analysis published last year.
California points the way, in the United States, to an energy-efficient future
By Erica Gies
Wednesday, October 29, 2008
SAN FRANCISCO: California, in the 1970s, passed a law to prioritize energy efficiency. Since then, annual average per capita consumption in the United States has risen to 12,000 kilowatt hours from 8,000 kilowatt hours, but consumption in California has remained flat, at 7,000 kilowatt hours. Among the 50 states, California now tops the ranking for per capita energy efficiency, up from 28th place in 1976.
Energy efficiency isn't sexy, but it's effective. "Efficiency is always the cheapest, cleanest, safest, quickest way to cut down on both global warming and pollution," said Tim Greeff, deputy legislative director of the League of Conservation Voters, a U.S. nonprofit group.
California's success reflects a multifaceted strategy. In 1975 it introduced new regulations on appliances and buildings; and in 1982 it decoupled utility profits from electricity sales, instead offering incentives for conservation. For more than 30 years, the state's commitment to these policies has remained firm, and it regularly tightens standards.
"Energy efficiency is a renewable resource because once you make some change, the technology continues to evolve, the costs continue to change, you can find new materials that you can substitute," said Jim McMahon, head of the Energy Analysis Department at Lawrence Berkeley Lab in Berkeley, California. "If you come back every few years and look again, there's another opportunity."
The energy commissioner of California, Art Rosenfeld, attributes one-third of the state's edge over the rest of the United States to these policies. For another third he credits the state's relatively high energy prices, which result from its lack of cheap coal and its investment in renewable energy over the years - it has a target of 20 percent renewables by 2020. The final third he attributes to the location of most of the population along the coast, where heating and cooling buildings is not necessary.
When California decoupled profits from electricity sales, it required utilities to conduct energy efficiency programs and tied profits to their effectiveness. "The utility will emulate efficient market outcomes and do the cheapest thing first," said Amory Lovins, chairman and chief scientist of Rocky Mountain Institute, an organization in Colorado that researches and promotes market-based energy solutions. "It works extremely well."
Most governments around the world still regulate retail electricity tariffs using a price cap, rather than a revenue cap. This effectively encourages power utilities to try to expand sales and discourages consumption efficiency. "This is just as dumb as a possum and we need to stop doing it," Lovins said. Both U.S. presidential candidates support some form of decoupling.
After California introduced efficiency standards for appliances in the 1970s, it rapidly found itself setting benchmarks for the whole country. Because it is expensive to maintain two distinct product lines, manufacturers often "apply the California standard to all appliances sold in the United States," said Adam Gottlieb, spokesman for the California Energy Commission.
The impact can be seen clearly in refrigerator design and technology. In response to Californian standards, technology improvements from 1972 to 2002 cut the average energy consumption of refrigerators on the U.S. market by 75 percent - saving energy equivalent to the output of 40 one-gigawatt power plants, according to a report by Rosenfeld last year. At the same time refrigerator prices have declined in constant dollar terms and their size has increased.
In 1991, the U.S. government started to adopt California's appliance standards and, like the state, has continued to tighten them.
The state also in some cases offers incentives to consumers to motivate them to upgrade to more energy efficient products.
When debating whether to invest in an energy-saving appliance, "typically consumers want their money back in two years or they don't do it," said Rosenfeld: so the state finances rebates through the retail and energy supply chain to shorten the payback time.
In the United States, 40 percent of all energy goes to heating, lighting and cooling buildings, according to Ed Mazria, an architect who founded the nonprofit group Architecture 2030 to encourage industry and government to reduce building emissions. The energy footprints of buildings in developed countries worldwide are probably comparable, he said.
California has the toughest building standards in the United States. By 2030, all new commercial buildings must consume zero net energy. The deadline for new residential buildings is 2020.
A new single-family home built in the state today uses about one-fourth the energy of a new house built in the 1970s, Lovins said. Still, room for improvement remains. In 1992, he and Rosenfeld helped guide an ongoing project called ACT2 at Pacific Gas & Electric, one of the main utilities in the state. They showed that at no extra or even a lower cost, houses could be comfortable with no air conditioning when outside temperatures were 115 degrees Fahrenheit (46 Celsius).
For Lovins, this was no mere academic exercise. His own house, built in 1983, is perched at 7,100 feet, or 2,200 meters, in the Rocky Mountains in Colorado, where outside temperatures can drop as low as minus 47 degrees Fahrenheit (minus 43.8 Celsius). The 4,000 square foot, or 372 meter, house has no heating system. Yet, "In the middle of the house I've harvested 28 banana crops so far, with no furnace," Lovins said. "And it was cheaper to build that way."
"We can do a lot better now," he added, noting that technologies used in the project have not yet been included in the California building code which, by law, it is supposed to include everything that is cost effective.
Although the state updates the code every two years, it is "always fighting with building lobbies that don't want to innovate as much as they could, to their own economic advantage," he said.
Retrofitting old buildings has not received the same level of attention as new construction, but that is set to change. The energy commission is beginning to inventory all commercial buildings in the state, looking at their utility bills per square foot. It will give awards to the best 10 percent, and the worst 20 percent will get attention.
Rosenfeld said: "We plan to have enough buildings audited so we can tell building owner A, 'Did you realize that you're in the worst 20 percent of buildings that are the same age, with the same sort of energy use, in the same ZIP code, with the same weather?'." The commission will provide these owners with lists of energy service companies in their areas and of incentives for which they are eligible. If persuasion fails, the state may impose standards.
One simple improvement that has been garnering buzz in efficiency circles is to put white roofs on buildings. Several states, including Florida and Georgia, give incentives for building owners to install white or light-colored roofs and, since 2005, California has mandated white materials for all flat roofs.
White roofs reduce the need for air conditioning, and scientists have recently discovered that they "actually cool the world directly," Rosenfeld said. Solar radiation bounces off a white roof back into space, while a dark roof traps heat and warms the planet. "Every 1,000 square feet of white roof instead of colored roof is equivalent to avoiding the emissions of 10 tons of CO2 annually," he said.
McMahon, at Lawrence Berkeley, said: "We've done some studies for Los Angeles showing that having white roofs and white pavement could have enormous benefits" in energy savings, smog reduction and general health improvement.
Rosenfeld said that, between roof replacements and new construction, it would be feasible to whiten most roofs worldwide over the next quarter century, with a saving in energy - and CO2 emissions from energy production - comparable to taking a third of the billion cars in the world off the road for 18 years.
Another new idea is to save water to save energy. A 2004 study by the energy commission found that the state could save energy by conserving cold water - using low-flow toilets or irrigation systems to decrease the amount of energy required to move and treat water and wastewater.
"The cost of saving water, in terms of the amount of energy you save, is lower than the things we're already doing to save energy directly," McMahon said.
Additionally, promoting solar hot water heaters could have a major impact. "Water heating is the largest use of energy that's related to water," McMahon said.
Solar heaters, popular in many countries around the world, have yet to take off in the United States because natural gas had been widely available and cheap. But as it grows more expensive, solar hot water becomes more attractive. "Every new house in Southern California should have solar hot water," Rosenfeld said.
Lovins, whose organization works in 50 countries, said that a quarter of global development capital goes to make and deliver electricity. Spending on energy saving, rather than electricity production, costs a thousand times less in capital investment, with a 10 times faster return. "That 10,000-fold capital leverage is the biggest macroeconomic opportunity in the world to free up money for other development needs," he said.
Solar power's bright future in China
By Ted Plafker
Wednesday, October 29, 2008
BEIJING: China gets nearly 70 percent of its energy from coal, according to the National Bureau of Statistics, and more than 23 percent from oil and natural gas. Nuclear and renewables furnish 7 percent: somewhere in there is solar.
Yet this year the Hurun Report, a ranking of the 1,000 wealthiest individuals in China, released Oct. 7, included 22 solar energy entrepreneurs, up from nine last year. Two made it into the top 10.
With personal wealth pegged at $4 billion, Peng Xiaofeng, chief executive of LDK Solar, came in fourth place. Shi Zhengrong, the founder of Suntech Power, was ranked seventh.
These fortunes were built on exports. China ranks second to Japan as a global supplier of photovoltaic cells, and may have already taken the top spot. Producers hope soon to be selling in China too.
China "will become the world's biggest market in five to 10 years," said Charlie Lin, an executive in Beijing with the photovoltaic division of DuPont. With manufacturing facilities in three different provinces, the division exports 95 percent of its Chinese production, much of it to Spain.
Against a background of soaring power consumption, horrendous pollution and deep energy security concerns, the potential for solar in China is "huge," said Frank Haugwitz, renewable energy manager with the European Union delegation in Beijing.
"If it were to cover 10 percent of the Gobi Desert, China could have unlimited energy forever."
But China is likely to make significant use of solar power only when its unit cost draws at least close to the lower prices of power derived from burning low-cost and dirty coal. For now it remains vastly more expensive and therefore, according to Haugwitz, understandably hard to sell. "From the government's perspective, it is difficult to politically justify why the public should pay 10 to 12 times more for electricity generated from photovoltaic compared to electricity generated from coal," he said. The Chinese government passed a renewable energy law in 2006 and set a target of raising the share of renewables in the nation's energy mix to 15 percent by 2020. But officials have kept things vague when it comes to the specific role of solar power and critics say the law neither grants subsidies for renewables nor allows power providers to pass their higher costs on to consumers. Until that changes, China's solar windfall will continue to come from equipment sales. And according to Lin, at DuPont, China will long continue to enjoy its advantage over high-wage Japan in the labor-intensive business of cell manufacturing. But according to Haugwitz, inexpensive labor is not China's only competitive advantage. Among the hundreds of Chinese photovoltaic equipment manufacturers, he said, many are well-managed companies that have caught up to Western quality standards, learned to innovate, and mastered all but a few of the most technically challenging processes. "It is just a matter of time before China covers the entire chain," Haugwitz said.
Watchdog warns on declining oilfield output
Wednesday, October 29, 2008
LONDON: Output from the world's oilfields is declining faster than previously thought, the Financial Times reported on Wednesday, quoting from a draft International Energy Agency report it had obtained.
The newspaper said the watchdog's annual World Energy Outlook report, which studied the biggest fields, showed that without extra investment to raise production, the natural annual rate of output decline was 9.1 percent.
The findings suggested the world would struggle to produce enough oil to make up for steep declines in existing fields, such as those in the North Sea, Russia and Alaska, and to meet long-term demand, said the Financial Times.
It said the issue would become even more acute as prices fell and investment decisions were delayed.
The International Energy Agency (IEA) acts as policy adviser to 28 member countries, including the United States, Japan, Canada and leading European nations.
The IEA forecast China, India and other developing countries' demand would require investments of $360 billion (224.5 billion pounds) each year until 2030, said the newspaper.
"The future rate of decline in output from producing oilfields as they mature is the single most important determinant of the amount of new capacity that will need to be built globally to meet demand," the IEA was quoted as saying.
The watchdog said the world needed to make a "significant increase in future investments just to maintain the current level of production."
The battle to replace mature oilfields' output could even offset the decline in demand growth, which had given the industry a reprieve in the past few months, it said.
The Financial Times said the IEA predicted in its report, due to be published next month, that demand would be damped, "reflecting the impact of much higher oil prices and slightly slower economic growth."
The IEA expected oil consumption in 2030 to reach 106.4 million barrels a day, down from last year's forecast of 116.3 million, said the newspaper.
It said the projections could yet be revised lower because the draft report was written a month ago, before the global financial crisis deepened after the collapse of Lehman Brothers.
(Reporting by Ralph Gowling, editing by Bernard Orr)
U.S. court told Chevron paid forces in Nigeria clash
Wednesday, October 29, 2008
By Jennifer Martinez
Chevron Corp fed, housed and paid Nigerian military forces involved in a deadly clash with local residents occupying an oil platform more than a decade ago, a jury was told on Tuesday at a federal trial in which the oil company is accused of human rights abuses.
The accusations stem from May 1998, when about 100 people occupied Chevron's Parabe platform off the coast of West Africa for three days.
The case in San Francisco District Court was brought against Chevron by Larry Bowoto, one of the occupiers of the platform, under the Alien Tort Claims Act. The act, dating back to 1789, allows foreigners to sue over human rights abuses committed in their countries by a U.S. organisation or someone acting on behalf of a U.S. organisation.
In opening arguments, lawyer Dan Stormer, speaking for the plaintiffs, said the forces that landed on Parabe to retake the platform were on Chevron's payroll and supervised by the company.
Parabe, nine miles (15 km) off the coast, accounted for a fifth of Chevron's daily crude oil output of 400,000 barrels.
Hostage-taking and ransom demands are a regular hazard for oil companies working in the impoverished Niger Delta, where residents say they do not benefit from the industry.
Stormer said two men died and many were injured in the clash between the protestors and armed forces.
The trial will decide if Chevron, based in San Ramon, California, is responsible for injuries suffered by villagers and one of the deaths.
People who occupied Parabe called it a peaceful protest by unarmed villagers who accused Chevron of polluting their water, causing the supply of fish, one of their main food sources, and vegetation to dwindle, and turning the village's soil to acid.
Chevron's lawyer Bob Mittelstaedt told jurors the case was "about the right and duty of a company to protect its workers" and that the protest was not a peaceful but a "hostile" one that put its workers' lives at risk.
Chevron employees said the protesters were armed with long knives and "poured diesel on the barge and threatened to set it on fire," Mittelstaedt said.
Stormer countered that a Chevron employee sent a fax to the U.S. embassy during the conflict saying "the villagers were unarmed."
Mittelstaedt, while expressing sympathy for the families of those who were harmed, said the use of military support to break up the protest was "a decision any employee would want their company to make."
The trial is due to resume on Wednesday.
(Writing by Braden Reddall; Editing by Toni Reinhold)
French court allows Sarkozy voodoo doll
Wednesday, October 29, 2008
PARIS: A French court on Wednesday rejected President Nicolas Sarkozy's demand for a ban on a Sarkozy doll and voodoo manual that encourages readers to stick pins in it.
The doll is emblazoned with some of Sarkozy's most famous quotes, such as "Get lost you pathetic arsehole" -- his words to a bystander who refused to shake his hand at an agricultural exhibition in 2007. The manual recommends planting pins in that quote and others.
The court said the voodoo doll was "within the authorised boundaries of freedom of expression and the right to humour." It rejected Sarkozy's argument that the doll violated his right to his own image.
Publishing company K&B, which has issued 20,000 copies of the manual and doll, will be allowed to continue selling the items.
Voodoo is a religion rooted in West Africa that is practised in parts of the Caribbean and the southern United States.
According to widespread belief, voodoo worshippers plant pins in dolls representing their enemies to curse them. However, voodoo experts say outsiders have misunderstood the practice.
(Reporting by Thierry Leveque; Writing by Tamora Vidaillet; Editing by Catherine Bosley)
Crisis skills boost Sarkozy's popularity
Wednesday, October 29, 2008
PARIS: French President Nicolas Sarkozy's response to the global financial crisis has boosted his popularity at home, according to a new opinion poll released on Wednesday.
The number of people expressing confidence in Sarkozy's ability to solve problems facing the country rose to 39 percent from 36 percent a month earlier, according to a poll by TNS Sofres for the Figaro magazine.
The number of those who said they did not have confidence in Sarkozy dropped to 57 percent from 61 percent previously.
Sarkozy's popularity has suffered since he came to power last year due to concerns over his flashy lifestyle, his whirlwind romance with pop star Carla Bruni and what many observers have referred to as his hyperactive personal style.
But it was Sarkozy's "activism" that had bolstered his popularity, according to the survey.
Since the credit crunch hit crisis point in September, Sarkozy, current chairman of the 27-nation European Union, has pushed for active response, convened European leaders for high-level meetings in Paris twice this month.
At the last of those two meetings, on October 12, nations that use the euro as their currency agreed commitments to provide capital for their endangered banks.
(Reporting by Tamora Vidaillet; Editing by Sami Aboudi)
Pakistan protests U.S. missile attacks
By Jane Perlez
Wednesday, October 29, 2008
PESHAWAR, Pakistan: The Pakistani government lodged a formal protest Wednesday against U.S. missile attacks on the Taliban and Al Qaeda in the nation's tribal area, and the U.S. ambassador was told that the strikes should be "stopped immediately," the Foreign Office said.
Ambassador Anne Patterson was summoned to the Foreign Office two days after a missile strike from a drone aircraft targeted a compound in South Waziristan, killing 20 people, including several well-known local Taliban commanders.
Last Friday, a similar strike hit a religious school in North Waziristan, killing eight people, all of them militant fighters, according to local residents. There have been at least 19 U.S. strikes against the militants in the tribal region since August.
The escalation of the missile attacks has angered the Pakistani public, and the new government, led by President Asif Ali Zardari, has been under pressure to distance itself from what is perceived as an U.S.-led war on terror inside Pakistan.
Many Pakistanis, including political parties in the government coalition, say they believe the increase in suicide attacks, including the bombing of the Marriott Hotel in Islamabad last month, is being carried out as retaliation for the U.S. strikes.
In response to the opposition to the U.S. missile strikes, the Pakistani government has taken several steps in the past week to show its sensitivity to the public hostility.
A two-week, on-and-off parliamentary debate on how to tackle terrorism resulted in a broad resolution last Thursday that called for talks with militants who renounce violence. The resolution also said that the Pakistani Army, which is fighting the militants in the Bajaur region of the tribal area, should withdraw as soon as possible, and be replaced by civilian law enforcement agencies.
On Tuesday, a two-day session in Islamabad between Afghan and Pakistani tribal and political leaders pledged to seek talks with Taliban representatives who lay down their weapons.
In contrast to the calls for talks, the Bush administration has stepped up the missile strikes from pilotless Predator aircraft after Taliban forces in the Pakistani tribal belt conducted increasingly lethal attacks against U.S. and coalition forces fighting in Afghanistan.
The Bush administration has also expressed concern that Al Qaeda is using the ungoverned tribal areas to prepare terror attacks against the United States and Europe.
A spokesman for the Foreign Office, Mohammed Sadiq, said that Patterson was told that the missile strikes were "counterproductive" to Pakistan's efforts to win the allegiance of the residents of the tribal areas and to reduce their support of the militants.
"The drone attacks have negative repercussions when the Pakistani government tries to get the support of the people in the tribal area," Sadiq said. "They are not helping meet the objectives of the war on terror."
After the U.S. ambassador left the Foreign Office, the Pakistanis said in a statement: "It was emphasized that such attacks were a violation of Pakistan's sovereignty and should be stopped immediately."
The ambassador was last called to the Foreign Office to receive a protest after U.S. Special Operations forces conducted a ground raid into South Waziristan on Sept. 3. The Pakistanis said the raid resulted in the deaths of civilians, including women and children.
The chief of staff of the Pakistani Army, General Ashfaq Parvez Kayani, rebuffed the Americans after the ground attack, saying that Pakistan would defend its border "at all costs." Since then, there has been no known ground assault by the U.S. military.
Iraq seeks to ban U.S. attacks on neighbors
The Associated Press
Wednesday, October 29, 2008
BAGHDAD: Iraq wants a security agreement with the United States to include a clear ban on U.S. troops using Iraqi territory to attack the country's neighbors, the government spokesman said Wednesday, three days after a U.S. raid on Syria.
Also Wednesday, Grand Ayatollah Ali al-Sistani, the country's most influential Shiite cleric, expressed concern whether Iraqi sovereignty would be protected in the pact. Analysts say that explicit opposition on the part of Sistani could scuttle the deal.
The government spokesman, Ali al-Dabbagh, said the ban on attacks was among four proposed amendments to the draft agreement approved by the cabinet this week and forwarded to the United States. He said the Iraqis want the right to declare the agreement void if the United States unilaterally attacks one of Iraq's neighbors.
President George W. Bush said Wednesday he was confident that the security pact with Iraq would be approved despite the changes Baghdad wants, The Associated Press reported from Washington. The deal will govern U.S. presence in Iraq after this year.
"We obviously want to be helpful and constructive without undermining basic principles," Bush said in the Oval Office during a meeting with Massoud Barzani, president of the semiautonomous Kurdish region in northern Iraq. "I remain very open and confident that the SOFA will get passed," he added, using the acronym for Status of Forces Agreement.
The agreement must be approved by the end of the year when the current United Nations mandate expires or the U.S. military would have to suspend all operations in Iraq, including security patrols and infrastructure work.
Dabbagh said other amendments sought by the Iraqis include a clear definition of "off-duty" when cases arise involving crimes committed away from U.S. bases. The Iraqis also want to inspect all U.S. military shipments entering or leaving Iraq.
The U.S. military, meanwhile, handed over security responsibilities for the southern province of Wasit to the Iraqi authorities. Wasit was the 13th of Iraq's 18 provinces to revert to Iraqi security control.
U.S. and Iraqi forces have been jointly seeking to close arms smuggling routes from Iran that use Wasit as a transit point. The weapons are thought to be going to Shiite militant groups.
The handover was made while much of Iraq has seen a dramatic drop in violence, although attacks persist.
On Wednesday, at least 12 people were killed and dozens wounded in separate attacks.
A roadside bomb killed five people and wounded 17 others when it exploded outside an ice cream shop in central Baghdad's Palestine Street on Wednesday, police said. Three policemen were amongst the wounded, although police said they thought civilians were the main target of the bomb.
Three people died when gunmen stormed the house of Miteb Hassan Jaddua, leader of a U.S.-backed Sunni group in Diyala Province, killing him, 2 relatives and wounding 14, according to the Diyala Operations Command.
Elsewhere, gunmen in speeding cars opened fire on crowds in central Hilla, 100 kilometers, or 60 miles, south of Baghdad, killing two people, including a policeman, and wounding five, the police said.
Bombs killed a 5-year-old girl and wounded 10 people in Diyala's capital, Baquba, the police said. A roadside bomb killed one civilian and wounded eight in Baghdad, including two policemen, the authorities said.
A car bomb killed a policeman and wounded five people in the northern city of Mosul, the police there said.
In Syria, a short-sighted attack
Wednesday, October 29, 2008
The weekend attack inside Syria by U.S. Special Operations Forces hunting for an alleged smuggler of Al Qaeda recruits into Iraq may have a fleeting tactical benefit, at best. In all other ways, it runs counter to the interests of the United States and its allies.
If this operation was not authorized at the highest level, there is something wrong with the administration's chain of command. And if President Bush and Vice President Cheney did authorize an action that risks sabotaging Israeli-Syrian peace talks, reversing the trend of Syrian cooperation in Iraq and Lebanon, and playing into the hands of Iran, then Bush and Cheney have learned nothing from their previous mistakes and misdeeds.
The attack came shortly after U.S. commanders praised Syria for reducing the flow of guerrillas into Iraq from 100 per month to 20. The helicopter assault - in which Syria claims seven civilians were killed - also coincided with Syria's establishing, for the first time, full diplomatic relations with Lebanon. This was a sign that Syria's ruler, Bashar Assad, is serious about ending his pariah status in the West. It was also a signal to Egypt, Saudi Arabia, and Jordan that Assad, whose alliance with Iran they abhor, is now eager to return to the Arab fold.
The timing of the cross-border assault could not have been worse. And the justification given - that Syria sacrificed the inviolability of its territory by failing to eliminate the infiltration of would-be fighters and suicide bombers - exhibits disdain for the principles of international law.
The next president will have to bring U.S. policy back in compliance with those norms and restore a diplomacy that balances the interests of different powers in the region. We hope the latest Syria operation does not reflect a deliberate effort by Bush and Cheney to foil such efforts.
Thomas L. Friedman: Sleepless in Tehran
Wednesday, October 29, 2008
I've always been dubious about Barack Obama's offer to negotiate with Iran - not because I didn't believe that it was the right strategy, but because I didn't believe we Americans had enough leverage to succeed. And negotiating in the Middle East without leverage is like playing baseball without a bat.
Well, if Obama does win the presidency, my gut tells me that he's going to get a chance to negotiate with the Iranians - with a bat in his hand.
Have you seen the reports that Iran's president, Mahmoud Ahmadinejad, is suffering from exhaustion? It's probably because he is not sleeping at night. I know why. Watching oil prices fall from $147 a barrel to $57 is not like counting sheep. It's the kind of thing that gives an Iranian autocrat bad dreams.
After all, it was the collapse of global oil prices in the early 1990s that brought down the Soviet Union. And Iran today is looking very Soviet to me.
As Vladimir Mau, president of Russia's Academy of National Economy, pointed out to me, it was the long period of high oil prices followed by sharply lower oil prices that killed the Soviet Union. The spike in oil prices in the 1970s deluded the Kremlin into overextending subsidies at home and invading Afghanistan abroad - and then the collapse in prices in the '80s helped bring down that overextended empire.
(Incidentally, this was exactly what happened to the shah of Iran: 1) Sudden surge in oil prices. 2) Delusions of grandeur. 3) Sudden contraction of oil prices. 4) Dramatic downfall. 5) You're toast.)
Under Ahmadinejad, Iran's mullahs have gone on a domestic subsidy binge - using oil money to cushion the prices of food, gasoline, mortgages and to create jobs - to buy off the Iranian people. But the one thing Ahmadinejad couldn't buy was real economic growth. Iran today has 30 percent inflation, 11 percent unemployment and huge underemployment with thousands of young college grads, engineers and architects selling pizzas and driving taxis. And now with oil prices falling, Iran - just like the Soviet Union - is going to have to pull back spending across the board. Fasten your seat belts.
The UN has imposed three rounds of sanctions against Iran since Ahmadinejad took office in 2005 because of Iran's refusal to halt uranium enrichment. But high oil prices minimized those sanctions; collapsing oil prices will now magnify those sanctions. If prices stay low, there is a good chance Iran will be open to negotiating over its nuclear program with the next U.S. president.
That is a good thing because Iran also funds Hezbollah, Hamas, Syria and the anti-U.S. Shiites in Iraq. If America wants to get out of Iraq and leave behind a decent outcome, plus break the deadlocks in Lebanon and Israel-Palestine, it needs to end the Cold War with Iran. Possible? I don't know, but the collapse of oil prices should give America a shot.
But let's use U.S. leverage smartly and not exaggerate Iran's strength. Just as I believe that America should drop the reward for the capture of Osama bin Laden - from $50 million to one penny, plus an autographed picture of Dick Cheney - we need to deflate the Iranian mullahs as well. Let them chase us.
Karim Sadjadpour, an Iran expert at the Carnegie Endowment for International Peace, compares it to bargaining for a Persian carpet in Tehran. "When you go inside the carpet shop, the first thing you are supposed to do is feign disinterest," he explains. "The last thing you want to suggest is 'We are not leaving without that carpet.' 'Well,' the dealer will say, 'if you feel so strongly about it ..."'
The other lesson from the carpet bazaar, says Sadjadpour, "is that there is never a price tag on any carpet. The dealer is not looking for a fixed price, but the highest price he can get - and the Iran price is constantly fluctuating depending on the price of oil." Let's now use that to our advantage.
Barack Hussein Obama would present another challenge for Iran's mullahs. Their whole rationale for being is that they are resisting a hegemonic American power that wants to keep everyone down. Suddenly, next week, Iranians may look up and see that the country their leaders call "The Great Satan" has just elected "a guy whose middle name is the central figure in Shiite Islam - Hussein - and whose last name - Obama - when transliterated into Farsi, means 'He is with us,"' said Sadjadpour.
Iran is ripe for deflating. Its power was inflated by the price of oil and the popularity of its leader, who was cheered simply because he was willing to poke America with a stick. But as a real nation-building enterprise, the Islamic Revolution in Iran has been an abject failure.
"When you ask young Arabs which leaders in the region they most admire," said Sadjadpour, they will usually answer the leaders of Hamas, Hezbollah and Iran. "When you ask them where in the Middle East would you most like to live," he added, "the answer is usually socially open places like Dubai or Beirut. The Islamic Republic of Iran is never in the top 10."
India struggles to find ethnic and religious tolerance
By Somini Sengupta
Wednesday, October 29, 2008
NEW DELHI: With national elections only months away, India is reeling from a rash of spiteful religious and ethnic clashes, prompting many in this country to ask why their vibrant, pluralistic democracy tends to encourage, rather than avert, the cruelty of neighbor against neighbor.
Tensions are growing in several corners of the country. The latest dispute was set off in Mumbai last week, when an upstart nativist party claiming to represent Marathas, the dominant ethnic group in the state, pounced on Indians who had come from elsewhere to apply for jobs at Indian Railways.
The party, which calls itself Maharashtra Navnirman Sena (roughly, the Army for the Reconstruction of Maharashtra) and has in recent months attacked northern migrants to Mumbai, wants those jobs to be set aside for local residents. On Oct. 21, the police arrested the party leader, Raj Thackeray, on a charge of inciting riots, after which his supporters went on a rampage across the city and its suburbs. Much of Mumbai was shut down.
A day later, a local court released Thackeray on bail, setting off a rampage in the northern state of Bihar, the source of the migrants attacked by Thackeray's disciples. Protesters blocked trains, wrecked railroad stations and stranded passengers there and in several other parts of northern India.
Meanwhile, violence between Hindus and Muslims erupted elsewhere in Thackeray's home state, Maharashtra, and spread south to the state of Andhra Pradesh, where a Muslim family of six was burned to death in their home in mid-October.
Clashes between Hindus and Christians continued to sweep through eastern Orissa State. In northeastern Assam State, indigenous Bodos fought with Bengali-speaking Muslims, leaving more than 50 people dead.
All the while, Indian cities remained skittish after a spate of terrorist attacks attributed largely to Islamic militants. Other factors include the longstanding Kashmir insurgency in the north and Maoist guerrillas across central India.
The Hindustan Times recently carried a map of India, splattered with red stains to mark current trouble spots. Many more would have to be added in the two weeks since the map was published. In mid-October, speaking to the wishfully named National Integration Council, Prime Minister Manmohan Singh called the rash of violence "an assault on our composite culture."
He added: "An atmosphere of hatred and violence is being artificially generated."
How can the world's largest democracy fail to prevent such a fury of intolerance?
Ashis Nandy, a political psychologist and social critic, said that India is a democracy in a far more limited sense than many Indians care to recognize. In spite of its lively and largely transparent elections, he said, some of the other basic pillars of democracy, including tolerance and respect for the rule of law, are fragile at best.
Perhaps, he went on to suggest, India is gradually becoming less democratic, as a variety of small, factionalized political parties compete to mobilize their caste and ethnic constituencies. National elections are expected to be held next spring, and five state elections are scheduled for November.
"Some amount of virulent, strident rhetoric, as well as violence, is becoming a deepening part of the democratic culture," Nandy said. He described it as an inevitable danger of all large, pluralistic democracies. Look at the increasingly aggressive campaign messages in the American presidential race, Nandy said.
Amartya Sen, the Indian-born Nobel Prize-winning economist who argued convincingly for the ability of democracies to prevent famine, acknowledges that those same states, including India, are far less effective at preventing sectarian strife.
In the case of hunger, a lively public debate can quickly generate enough political capital to prevent famine. Stopping demagogues from fanning hostility is another matter, he says. Just having a democratically elected government, he says, is insufficient.
"The role of democracy in preventing community-based violence depends on the ability of universalist political processes to subdue the poisonous fanaticism of divisive communal thinking," Sen wrote in an e-mail message. "Much will depend on the vigor of democratic politics, not just the existence of democratic institutions."
Dipankar Gupta, a sociologist at Jawaharlal Nehru University in New Delhi, said India's leaders had become so focused on wooing votes for the next elections that they were losing sight of how to protect citizens, regardless of which caste or community they belonged to. "Religion is important," he said. "Caste is important. Of course it's important, but so long as it does not offend the basic principle of citizenship. In India, we have forgotten it."
The unrest has cast a pall over October, a holy month for Hindus and Muslims alike.
As Tuesday's observance of Diwali, the Hindu festival of lights and gift-giving, approached in recent days, markets and temples were guarded by a phalanx of police officers and metal detectors. Islam's holiest festival, Id al-Fitr, passed somberly earlier this month, after a spate of terrorist attacks across India for which Islamic militants were largely blamed. Then, in mid-October, closed-circuit cameras kept a watchful eye over Ramlila, the epic play of good and evil re-enacted every year from the pages of Hindu mythology.
One of the most celebrated Ramlila pageants happens each year in the 15th-century walled city of Delhi, on lawns pressed hard against the Mughal era Red Fort. This year, attendance was visibly lighter and the organizers, for the first time, had arranged for a live Webcast of the play for those who were nervous about coming to a crowded fairground.
Unfolding over 10 days, Ramlila pits the clever demon Ravana - so smart that he has 10 heads - against the virtuous Ram. This evening, even Ram, played by a professional model named Honey Sawhney, 20, had to walk through a metal detector at the gates.
Vivek Gautam, this evening's Ravana, ruminated over the troubles of the times, saying it was in keeping with what Hindu legend called the Kali Yuga, or the dark age.
"It is just the start of the Kali Yuga," he warned. "Once it reaches its climax you cannot imagine what it will be like. There will be no friendships, no relationships, not even between fathers and sons, only crime."
Death toll from Somalia suicide bombs rises to 28
Wednesday, October 29, 2008
HARGEISA, Somalia: Suicide bombings across north Somalia killed at least 28 people, most at Ethiopia's embassy in the Somaliland region, witnesses said.
Five blasts rocked Hargeisa, the capital of Somaliland, and Bosasso, a port in another northern region Puntland, on Wednesday, even as heads-of-state met in Kenya to discuss the long-running conflict in Somalia.
(Editing by Jon Boyle)
Colombia killings cast doubt on war against insurgents
By Simon Romero
Wednesday, October 29, 2008
SOACHA, Colombia: Julian Oviedo, a 19-year-old construction worker in this gritty patchwork of slums, told his mother on March 2 that he was going to talk to a man about a job offer. A day later, Oviedo was shot and killed by army troops about 560 kilometers to the north. He was classified as a subversive and registered as a combat kill.
Colombia's government, the Bush administration's top ally in Latin America, has been buffeted by the disappearance of Oviedo and dozens of other young, impoverished men and women whose cases have come to light. Some were vagrants, some were street vendors or manual laborers. But their fates were often the same: They were catalogued as insurgents or criminal gang members and killed by the armed forces.
Prosecutors and human rights researchers are investigating hundreds of such deaths and disappearances, contending that the Colombian security forces are murdering civilians and making it look as if they were killed in combat, often by planting weapons on or near their bodies or dressing the corpses in guerrilla fatigues.
With soldiers under intense pressure in recent years to register combat kills to earn promotions and benefits like time off and extra pay, reports of civilian killings are climbing, prosecutors and researchers said, pointing to a grisly facet of this country's long internal war against leftist insurgencies.
The deaths have called into question the depth of Colombia's recent strides against the Revolutionary Armed Forces of Colombia, or FARC, and have begun to haunt the military hierarchy.
On Wednesday, President Álvaro Uribe's government announced that it had fired 25 officers and soldiers - including three generals and four colonels - in connection with the deaths of Oviedo and 10 other young men from Soacha, whose bodies were discovered in unmarked graves in a distant combat zone. The purge came after an initial shakeup last Friday, when the army command relieved three colonels.
At a news conference Wednesday, Uribe said that an internal military investigation appeared to have uncovered "crimes that in some regions had the goal of killing innocents, to make it seem as if criminals were being confronted."
The wave of killings has heightened focus on the U.S. Embassy here, which is responsible for vetting Colombian military units for human rights abuses before they can receive aid. A study of civilian killings by the Fellowship of Reconciliation and Amnesty International, two rights groups, found that 47 percent of the cases reported in 2007 involved Colombian units financed by the United States.
"If the responsibility of the army is to protect us from harm, how could they have killed my son this way?" Blanca Monroy, 49, Oviedo's mother, asked in an interview in her cinderblock home here. "The official explanation is absurd, if he was here just a day earlier living a normal life," she said. "The irony of it all is that my son dreamed of being a soldier" for the government.
Even before the most recent disappearances and killings, prosecutors and human rights groups were examining a steady increase in the reports of civilian killings since 2002, when commanders intensified a counterinsurgency financed in no small part by more than $500 million a year in U.S. aid.
But more than 100 claims of civilian deaths at the hands of the security forces have emerged in recent weeks alone, from nine different parts of Colombia. Cases have included the killing of a homeless man, a young man who suffered epileptic seizures and a veteran who had left the army after his left arm was amputated.
In some cases, victims' families spoke of middlemen who recruited poor men and women with vague promises of jobs elsewhere, only to deliver them hours or days later to war zones where they were killed by soldiers.
"We are witnessing a method of social cleansing in which rogue military units operate beyond the law," said Monica Sánchez, a lawyer at the Judicial Freedom Corporation, a human rights group in Medellín. The group says it has documented more than 60 cases of "false positives" - a subset of the civilian killings in which individuals were killed and then presented as guerrillas in the province of Antioquia.
Researchers also have obtained thorough descriptions of some killings in the small number of cases - less than 50 - that have resulted in convictions this decade.
One April morning in 2004, for instance, soldiers approached the home of Juan de Jesús Rendón, a 33-year-old peasant farmer in Antioquia, and shot him in front of his son, Juan Estéban, who was 10 at the time. The soldiers placed a two-way radio and a gun near Rendón's body, court records show, and told his son that his siblings would suffer the same fate unless he said his father had fired at the soldiers.
"I still fear this can happen again," Vilma Garcia, 35, Rendón's wife, said in an interview in Medellín, where she and her children fled after her husband was killed. The five soldiers involved were recently convicted on charges of homicide and torture, in connection with the threats to her son. "The soldiers think we are poor and worthless," she said, "so nobody will care how we are killed."
The civilian killings have opened the United States to increased criticism because it is required to make sure Colombian military units have not engaged in human rights violations before supplying them with aid.
"If we are receiving aid and vetting from a government in Washington that validates torture, then what kind of results can one expect?" asked Liliana Uribe, a human rights lawyer in Medellín who represents victims' families.
A senior official at the U.S. Embassy in Bogotá said the reports of civilian killings, both in past years and in recent months, were a matter of concern. "If the facts in some cases do show that parts of the armed forces were taking part in murder, then there should be mechanisms to prevent this from happening and mechanisms to ensure that perpetrators are brought to justice," said the official, who was not authorized to speak publicly on the matter.
The official said the units involved in the most recent killings - the 11 men from Soacha - had not received aid because they had been deemed not credible to receive it.
But the official did not confirm or deny the contention that almost half of the reports of civilian killings in 2007 involved units that had received U.S. aid, explaining that a case-by-case review of the episodes had not been carried out by two American contractors hired by the State Department to help vet Colombian military units for human rights abuses.
Reports of civilian killings rose to 287 for the 12-month period from mid-2006 to mid-2007. That is an increase over the 267 reported in same period from 2005 to 2006 and the 218 reported from 2004 to 2005, according to the Colombian Commission of Jurists, a human rights group in Bogotá.
Altogether, the attorney general's office in Bogotá said it was investigating the killings of 1,015 civilians by security forces in 558 episodes unrelated to combat. Prosecutors said the number of new cases under investigation climbed to 245 in 2007 from 122 a year earlier.
The increase in reports of civilian killings spurred the Defense Ministry to issue a directive last year explicitly prioritizing the capture of rebels above combat kills.
In an interview, General Freddy Padilla, the commander of Colombia's armed forces, said the policy shift, while largely intended to prevent human rights abuses, also had strategic objectives.
"A terrorist captured alive is a treasure, while a dead terrorist is just one-day news," Padilla said, citing the example of Nelly Ávila, a FARC commander who surrendered this year and began collaborating with her captors. "A terrorist converted into an informant is useful as long as he or she lives."
Until the latest wave of killings, it appeared that the new policy was starting to work. The Center for Research and Popular Education, a Jesuit-led group in Bogotá that maintains a database on human rights violations, documented 87 reports of false positives in the second half of 2007, a 34 percent drop from the first six months of that year.
But the cases in Soacha and elsewhere suggest that the problem may be more systemic than once thought.
Some human rights researchers contend that the killings are tolerated by some senior officers in the army who chafe at greater scrutiny at a time when security forces have made significant gains against guerrillas, including the killing or capture of several top FARC commanders this year.
Jenny Carolina González contributed reporting from Bogotá.
Amnesty says Manila and Muslim rebels to blame for abuses
Wednesday, October 29, 2008
MANILA: Amnesty International urged the Philippines and the country's largest Muslim rebel group on Wednesday to respect the rights of non-combatants, holding them responsible for deaths and destruction in the troubled south.
The rights group said it had documented hundreds of cases of human rights abuses on the southern island of Mindanao in which almost 100 civilians were killed and hundreds of homes and farms destroyed.
Donna Guest, deputy director of Amnesty International in Asia Pacific, said soldiers and guerrillas were behind the killings and burnings of houses and farms in the south, according to victims the group had interviewed.
"The Moro Islamic Liberation Front (MILF) and local groups opposing the peace talks have used violence as a negotiating strategy and hundreds of thousands of people are paying the price," Guest said in a statement.
Some of those interviewed at temporary shelters in late August and early September also blamed soldiers for some of the atrocities, said Aurora Parong, head of the local chapter of Amnesty International.
"In most cases, the Philippine government failed to provide non-combatants adequate protection," Parong told Reuters. "Some of the victims said the government has also done some abuses."
In a 39-page fact-finding report, Amnesty International urged both the government and MILF to abide by the protocols of the Geneva Convention in the conduct of war and to take action against rights abuses in the conflict areas.
It also recommended that the government indemnify victims of violations of international laws based on global standards, including compensation and rehabilitation of homes and farms.
The group also criticised the arming of civilians and warned against imposing food blockades and preventing aid agencies from delivering food, medicines and supplies to displaced people.
Nearly 300 people have been killed in more than two months of fighting between security forces and rebels from the largest Muslim rebel group in the south of the mainly Roman Catholic state. The fighting has displaced more than 650,000 people. Violence erupted in mid-August after the country's high court halted the signing of an agreement between the government and the MILF that would have expanded an existing Muslim autonomous region, giving it wider political, social and economic powers.
The 11,000-member MILF has been fighting for nearly 40 years to achieve self-determination in a conflict that has killed more than 120,000 people and stunted growth in a region believed to be sitting on rich deposits of metals, oil and natural gas.
(Reporting by Manny Mogato; Editing by Rosemarie Francisco and Paul Tait)
The Associated Press
Wednesday, October 29, 2008
GOMA, Congo: Rebels in eastern Congo declared a cease-fire Wednesday after their push toward the city of Goma threatened to overwhelm a 17,000-strong United Nations force that is trying to halt a return to all-out war.
The UN secretary general, Ban Ki Moon, said the rebel offensive was "creating a humanitarian crisis of catastrophic dimensions and threatens dire consequences on a regional scale."
Thousands of civilians and hundreds of government soldiers poured into Goma from the north, where the army clashed with rebels led by Laurent Nkunda, a former general.
Fighting since the Tutsi rebels began their offensive Sunday has displaced tens of thousands of people in North Kivu Province, which has been convulsed by continuous violence despite the end of Congo's regional war in 2003.
The UN force has backed Congolese troops against the rebels but its head said Wednesday that it was "stretched to the limit." The UN Security Council has not met a request for reinforcements.
France, which holds the rotating European Union presidency, said that it was discussing sending an EU force of a few hundred men to Congo, but that several countries had opposed the idea.
"We have discussed a group that is called the tactical group," Foreign Minister Bernard Kouchner of France said at a news conference in Paris. "This tactical group is a military guard that on a rotating basis can offer between 400 and 1,500 men whom we could deploy in the name of Europe within 8 to 10 days."
"Is it possible?" he added. "For the moment a certain number of countries have refused."
The rebels said in a statement Wednesday that they were just outside Goma, where gunfire and occasional booms from heavy artillery could be heard.
A UN spokesman, Madnodje Mounoubai, welcomed the cease-fire announcement, but said it was not clear whether it was being followed up. He said that Goma was in a state of panic but that the rebels were not in the city. He said peacekeepers were still at the airport and other strategic points.
The advance on Goma, provincial capital on the border with Rwanda, also sparked accusations that the UN force was not doing enough to fight off the rebels. Those complaints intensified after Congolese Army troops abandoned the town of Rutshuru, 70 kilometers, or 45 miles, north of Goma, to the rebels.
Angry crowds attacked a convoy evacuating UN staff members from their headquarters near Goma airport on. "It was pretty horrible," said a UN staff member in the convoy. "Angry youths threw large stones. Windscreens and windows were broken, but I don't think anyone was hurt."
The Congolese Army said Wednesday that it had been attacked from Rwandan soil. Rwanda, whose 1994 genocide is intricately tied up with years of ethnic bloodshed in eastern Congo, accused Congolese forces of shooting across the nearby border.
"We have no evidence that Rwanda is fighting directly in the conflict in east Congo," the U.S. assistant secretary of state for African affairs, Jendayi Frazer, said Wednesday. "We do believe that Rwandan territory is being used to support" the rebels.
Nkunda's rebels accuse the army of collaborating with an anti-Rwandan group that includes Hutu militiamen and others who took part in the Rwanda genocide.
By Carter Dougherty
Wednesday, October 29, 2008
FRANKFURT: Volkswagen stock shoots up into the stratosphere one day, then back down the next. Porsche, its main shareholder, is making big money, while hedge funds in London and New York lose it.
It may be a sideshow to the global market turmoil, but the gyrations this week in the German market are riveting the country, with some unease but a fair dose as well of schadenfreude among the many Germans who have little sympathy for speculators.
The moves, which have triggered an investigation by financial regulators, also marked the latest chapter in a long-running corporate takeover saga that has turned into an abject lesson in financial market volatility as well.
On Wednesday, Porsche said it would dump up to 5 percent of its VW shares - presumably at a great profit - to ease what had become a massive squeeze on those who had placed bets that the stock price would go down, along with general prospects for the auto industry. Their scramble for suddenly scarce shares on Monday and Tuesday had briefly made Volkswagen, Europe's largest automaker, the most valuable company in the world.
Porsche said it was acting "to avoid further market distortions and the resulting consequences for those involved." Volkswagen stock, which rose above €1,000, or $1,284, at one point on Tuesday, plummeting €401 on Wednesday, or 44 percent, to close at €517. That is still well above its close Friday of €210.85.
While many Germans were happy to see a local favorite score against foreign hedge funds, howls of protest rose from other quarters as the repercussions spread.
Fund managers had to furiously buy other companies in Germany's benchmark DAX to keep investments that track the index in their proper proportion. That sent the shares of blue chips like Siemens, Daimler and BASF soaring Wednesday.
Deutsche Börse, the keeper of the DAX, had reduced the suddenly inflated VW's weighting late Tuesday, after many funds had already locked in losses.
"I think this is a serious dent in the reputation for one of the important stock markets of the world," said Christian Strenger, a board member at DWS, Germany's largest mutual fund. "They did not act quickly enough to stop a market distortion."
Deutsche Börse said that VW's share price did not rise sharply enough to justify the change earlier.
The prospect of Porsche reaping windfall profit from the turbulence it had created was apparently too much for BaFin, the German financial supervisor. It announced plans for a formal investigation into VW's stock gyrations on Wednesday.
"We need to take a closer look if there was market manipulation," the BaFin spokeswoman, Anja Engelland, said.
Porsche flatly denied any wrongdoing. "Porsche has not been active in the market during these share price movements," it said. "Allegations of price manipulation by Porsche are therefore without foundation whatsoever."
Porsche unleashed a punishing market dynamic on short-sellers, who borrow stock in the hopes of buying it back later at a lower price, by announcing Sunday that it had acquired control of nearly 75 percent of Volkswagen shares, up from a stake of 42.6 percent.
Since the German state of Lower Saxony has roughly 20 percent, that left less than 6 percent of VW stock tradable in the market.
Short-sellers thus had to scramble to acquire enough shares to cover their bets and cut their losses, sending the share price skyrocketing.
Porsche, whose sports cars are favored by high-flying investment bankers and hedge fund managers, thus beat both at their own game.
By acquiring options before Sunday to buy VW shares at a certain price, Porsche was in the position Wednesday to exercise them - and then sell at elevated prices for a colossal profit.
"Presumably they are doing this to earn money, and not to help the hedge funds," said Jens Schattner, an auto analyst at Sal. Oppenheim in Frankfurt, said of the decision to sell.
Porsche shares took off on Wednesday as well, rising 31.6 percent to close up €15.15 at €63.05.
The size of Porsche's profit is likely to remain a mystery until next year, analysts said.
Stock option transactions earned Porsche €3.6 billion in the fiscal year that ended June 30, 2007, or 62 percent of its pretax profit. It has yet to reveal results for the 2007-2008 financial year, and the current transactions will not register until its report in late 2009.
Porsche has revealed no details of the price at which it bought the options, or the strike price at which they can be exercised, the two main variables in the profit calculation.
Porsche's financial strategy of securing control over Volkswagen has been the brainchild of its chief financial officer, Holger Härter, who sits on the larger company's board. The Schaeffler Group, a maker of roller bearings, used a similar approach to seize control of Continental, an auto parts maker and DAX stalwart, this summer.
The German Finance Ministry is now examining whether to broaden disclosure rules to include complex financial derivatives that can be used to circumvent normal disclosure rules on shareholdings.
Porsche and Schaeffler are family-controlled companies, a fact that appears to have limited the political fallout from the rough-and-tumble tactics. Porsche is often held up by German critics of American-style capitalism as a company that makes enviable profits while paying its workers a premium wage.
Ulrich Hocker, director of DSW, a German shareholder protection group, said Deutsche Bank, for example, would have run into a thicket of criticism for using such tactics, being widely held and much more American in its outlook.
"If Deutsche had done this we would have a terrible uproar," Hocker said. "But Porsche is a family company that has the reputation of doing well for their people, and they are using that reputation to the fullest."
Indeed, far from fretting about what Porsche hath wrought, German commentators were of a mind to revel in the losses incurred by speculators who hoped to see Volkswagen's shares fall as Porsche seized control.
"As opposed to previous speculative bubbles that cost a lot of small investors their money in the stock exchange casino, the chaos around VW shares overwhelmingly hits professional gamblers," Die Tageszeitung, a leftist paper in Berlin, wrote. "Sympathy does not seem appropriate."
However, with its use of financial derivatives, surprise pronouncements and calculated opacity, Porsche did appear to be acting a bit like one of the hedge funds that a German politician famously called "locusts" who prey on unsuspecting companies. Analysts said it could very well repeat the performance of last year when financial wizardry earns it more than selling cars.
But Albrecht Denninghoff, an analyst at BHF Bank in Frankfurt, said the comparison stopped there since Porsche did far less borrowing - also known as leveraging - than hedge funds do when they speculate.
Porsche said Wednesday that it would continue to accumulate VW shares "at prices which are economically justifiable."
"Management has done the right thing on the product side," Denninghoff said. "And in their financial planning they have done quite well, too.
In the auto industry, that is unusual."
U.S. stocks fall as investors debate effects of rate cut
Chinese central bank trims its interest rates
U.S. said to be discussing plan to aid homeowners
EU prepares tight rules on credit rating agencies
Euro could fall to parity with dollar
Sony is latest to report profit drop as shares take beating
Russian companies face serious liquidity risks, German agency warns
By David Leonhardt
Wednesday, October 29, 2008
NEW YORK: Some of the most famous American investors, including Warren Buffett and John Bogle, have started to make the case that it's time to dive back into the stock market.
They are usually careful to add that they don't know what stocks will do in the short term. Yet their basic message is clear enough: Stocks are now cheap, irrational fears have been driving the market down lately, and people who buy today will be glad that they did.
After a day like Tuesday, when the Dow Jones industrial average rose 10.9 percent, it's easy to see the merits of the argument.
But there is another argument that deserves more attention than it has gotten so far. It's the bearish argument that is based neither on fears that the country may be sliding into another depression nor on gut-level worries about the unknown. It is based on numbers and history, and it has at least as much claim on reason as the bullish argument does.
It goes something like this: Stocks are truly cheap only relative to their values over the past 20 years, a period that will go down as one of the great bubbles in history. If you take a longer view, you see that the ratio of stock prices to corporate earnings is only slightly below its long-term average. And in past economic crises - during the 1930s and 1970s - stocks fell well below their long-run average before they turned around.
To make matters worse, corporate earnings have now started to plunge, too. Assuming that they keep dropping, stocks would also need to fall to keep the price/earnings ratio at its current level.
As stocks were soaring on Tuesday afternoon, I called James Melcher to hear a dose of fact-based bearishness. Melcher is a hedge fund manager at Balestra Capital in New York. He wrote an essay for his clients two years ago that predicted the broad outlines of the financial crisis (and then arranged Balestra's portfolio accordingly).
Like the bulls, he said that no one could know what the market would do in the short term. "But to think stocks are cheap now," he added, "is not rational."
He went on: "In the last 20 years - and particularly in the last six or seven - you had the most massive creation of liquidity the world has ever known." Consumers went ever deeper into debt, thanks to loose lending standards, and a shadow banking system, made up of hedge funds and investment banks, allowed Wall Street to do the same.
All that debt lifted economic growth and stock returns.
"It was a nice party," Melcher said. "The problem is that all the bills are coming due at the same time." He thinks stocks could easily fall an additional 15 percent and maybe another 25 percent before hitting bottom.
So who's right - the bears or the bulls? The smartest people in both camps, like Melcher, Buffett and Bogle, have a healthy dose of humility about their own conclusions. And when you dig into their arguments, you find that they are not quite as different as they first sound. But they are different, and it's worth taking a minute to dig into the numbers.
There are any number of ways to measure the valuation of the stock market. Some examine prices relative to earnings, others are based on cash flow, a company's underlying assets or the total value of the market. But they tell a pretty consistent story right now. Stocks, which were fabulously expensive for much of the 1990s and this decade, no longer are.
My favorite measure is the one recommended by Benjamin Graham and David Dodd, in their classic 1934 textbook, "Security Analysis." They urged investors to use a price/earnings ratio - stock prices divided by average annual corporate earnings - based on at least five years of earnings and, ideally, closer to 10. Corporate profits may rise or fall in any given year, but a share of stock is a claim on a company's long-term earnings and should be evaluated as such.
(Why not use a forecast of future earnings? Because they tend toward the fictional, as we are now seeing once again.)
The 10-year price/earnings ratio tells an incredibly consistent story over the past century. It has averaged about 16 over that time.
There have been long periods when it stayed above 16 and even shot above 20, like the 1920s, 1960s and recent years. As recently as October 2007, when other measures suggested the market was reasonably valued, the Graham-Dodd version of the ratio was a disturbing 27. But periods in which the ratio has jumped above 20 have always been followed by steep declines and at least a decade of poor returns.
By 1932, the ratio had fallen to 6. In 1982, it was only 7. Then, of course, the market began to self-correct in the other direction, and stocks took off.
After the big rally Tuesday, the ratio was just a shade below 16, or almost equal to its long-run average. This is a little difficult to swallow, I realize. Stocks are down 40 percent since last October, and every experience from the past 25 years suggests they now have to bounce back.
But that's precisely the problem. Since the 1980s, stocks have always bounced back from a loss, usually reaching a high in relatively short order. As a result, the market has become enormously overvalued.
As Robert Shiller, the economist who specializes in bubbles, points out, human beings tend to put too much weight on recent experiences.
We think the market snapbacks of 1987 and the current decade are more meaningful and more predictive than the long slumps of the 1930s, 1940s and 1970s. Of course, anyone who made the same assumption in 1930 or 1975 - this just has to turn around soon - would have had to wait years and years until the investment paid off.
Now, Buffett, Bogle and their fellow bulls know all this history, and they are still bullish. (Though I'd be more bullish, too, if I could get the favorable terms that Buffett did. In exchange for his money and his good name, Goldman Sachs and General Electric each guaranteed him an annual return of at least 10 percent.)
So on Tuesday afternoon, I also called Bogle, the legendary founder of the Vanguard Group, the investment firm whose low-cost index funds have made a lot for a lot of people.
He, too, prefers the 10-year price/earnings ratio, he said, but he did not think that it necessarily had to fall to the same bargain-basement levels it reached in the 1930s and 1970s. You can certainly see why that would be the case. Investors are well aware that the market fell to irrationally low levels during past crises, and they may not allow it to become so cheap this time around.
Bogle also thinks that corporate profits will rebound nicely within a couple of years and likes the fact that interest rates are low. Low rates have often - though not always - accompanied bull markets.
But it is his last argument that I think is the main one for most investors to focus on. "I'm not looking for a great bull market," he explained. There are some reasons to be optimistic about stocks, he said, "and I also look at the alternative."
And, really, how attractive are the alternatives? Savings accounts and money market funds will struggle to keep pace with inflation.
Bonds may, as well. Stocks, on the other hand, are paying an average dividend of about 3 percent, which is better than the interest on many savings accounts, and stocks are also almost certain to rise over the next couple of decades.
If that is your time frame - decades, rather than months or years - this will probably turn out to be a perfectly good buying opportunity.
In the shorter term, though, it's a much tougher call, and it involves a lot more risk.
Wednesday, October 29, 2008
NEW YORK: Of the countless words Barack Obama has uttered since he opened his campaign for president on an icy Illinois morning in February, 2007, a handful have kept reverberating in my mind:
"For as long as I live, I will never forget that in no other country on earth is my story even possible."
Perhaps the words echo because I'm a naturalized American and I came here, like many others, seeking relief from Britain's subtle barriers of religion and class, and possibility broader than in Europe's confines.
Perhaps they resonate because, having South African parents, I spent part of my childhood in the land of apartheid, and so absorbed as an infant the humiliation of racial segregation, the fear and anger that are the harvest of hurt - just as they are, in Obama's words, "the brutal legacy of slavery and Jim Crow."
Perhaps they speak to me because I live in New York and watch every day a miracle of civility emerge from the struggles and fatigue of people drawn from every corner of the globe to the glimmer of possibility at the tapering edge of the city's ruler-straight canyons.
Perhaps they move me because the possibility of stories has animated my life; and no nation offers a blanker page on which to write than America.
Or perhaps it's simply because those 22 words cleave the air with the sharp blade of truth.
Nowhere else could a 47-year-old man, born, as he has written, of a father "black as pitch" and a mother "white as milk," a generation distant from the mud shacks of western Kenya, raised for a time as Barry Soetoro (his stepfather's family name) in Muslim Indonesia, then entrusted to his grandparents in Hawaii - nowhere else could this Barrack Hussein Obama rise so far and so fast.
It's for this sense of possibility, and not for grim-faced dread, that people look to America, which is why the Obama campaign has stirred such global passions.
Americans are decent people. They're not interested in where you came from. They're interested in who you are. That has not changed.
But much has in the last 8 years. This is a moment of anguish. The Bush presidency has engineered the unlikely double whammy of undermining free-market capitalism and essential freedoms, the nation's twin badges.
American luster is gone. The American idea has, in Joyce Carol Oates' words, become a "cruel joke." Americans are worrying and hurting.
So it is important to step back, from the last machinations of this endless campaign, and think again about what America is.
It is renewal, the place where impossible stories get written.
It is the overcoming of history, the leaving behind of war and barriers, in the name of a future freed from the cruel gyre of memory.
It is reinvention, the absorption of one identity in something larger - the notion that "out of many, we are truly one."
It is a place better than Bush's land of shadows where a leader entrusted with the hopes of the earth cannot find within himself a solitary phrase to uplift the soul.
Multiple polls now show Obama with a clear lead. But nobody can know the outcome and nobody should underestimate the immense psychological leap that sending a black couple to the White House would represent.
What I am sure of is this: An ever more interconnected world, where financial chain reactions spread with the virulence of plagues, thirsts for American renewal and a form of American leadership sensitive to humanity's tied fate.
I also know that this biracial politician, the Harvard graduate who gets whites because he was raised by them, the Kenyan's son who gets blacks because it was among them that mixed race placed him, is an emblematic figure of the border-hopping 21st century. He is the providential mestizo whose name - O-Ba-Ma - has the three-syllable universality of some child's lullaby.
And what has he done? What does his experience amount to? Does his record not demonstrate he's a radical? The interrogation continues. It's true that his experience is limited.
But Americans seem to be trusting what their eyes tell them: Temperament trumps experience and every instinct of this man, whose very identity represents an act of reconciliation, hones toward building change from the center.
Earlier this year, at the end of a road of reddish earth in western Kenya, I found Obama's half-sister Auma. "He can be trusted," she said, "to be in dialogue with the world."
Dialogue, between Americans and beyond America, has been a constant theme. Last year, I spoke to Obama, who told me: "Part of our capacity to lead is linked to our capacity to show restraint."
Watching the way he has allowed his opponents' weaknesses to reveal themselves, the way he has enticed them into self-defeating exhaustion pounding against the wall of his equanimity, I have come to understand better what he meant.
Stories require restraint, too. Restraint engages the imagination, which has always been stirred by the American idea, and can be once again.
By Susan Saulny
Wednesday, October 29, 2008
JACKSONVILLE, Florida: For weeks now, James Jones has been extra courteous in traffic and at the gas station because he has an Obama sticker on the back of his truck.
"Something like that might make a difference for Barack Obama," Jones explained. "I'm not taking a chance."
Jones, a black warehouse worker, bought campaign signs for his yard and made sure his family had valid voter registration cards. He and his wife cast their votes 10 days early to avoid last-minute problems at the polls.
So imagine Jones's disappointment this week when he got word of a rumor making its way around his humble part of town: that early voting was nothing more than a new disenfranchisement scam, that early votes would probably be lost and never counted.
"I went to the library where I voted and I said, 'Ma'am, I heard rumors that early voting is dangerous. Is that true?"' Jones, 47, said he had asked an election worker. "She said, 'It's pretty well safe. I wouldn't worry about it."'
But conversations with about a dozen Jacksonville residents in cafés, outside churches and at their homes over three days showed that Jones and many of his black neighbors worry anyway, unable to put aside the nagging feeling that somehow their votes will not be counted.
Wounds have not healed here in Duval County since the mangled presidential election of 2000, when more than 26,000 ballots were discarded as invalid for being improperly punched. Nearly 40 percent of the votes were thrown out in the predominantly Democratic-leaning black communities around Jacksonville, a reality that has caused suspicions of racial bias to linger, even though intentional disenfranchisement was never proved.
Now, in a show of early election enthusiasm, more than 84,200 people have already voted in Duval County, surpassing the number of early votes cast in the last presidential election. Added to 33,800 absentee ballots collected so far, the numbers show that 22 percent of registered voters had cast their ballots as of Monday, county election officials said.
But amid the excitement over Obama's historic candidacy and the chance that the country might choose a black American president in a matter of days, there is an unmistakable sense of anxiety among blacks here that something will go wrong, that victory will slip away.
"They're going to throw out votes," said Larone Wesley, 53, a veteran of the Vietnam War. "I can't say exactly how, but they are going to accomplish that quite naturally. I'm so afraid for my friend Obama. I look at this through the eyes of the '60s and I feel there ain't no way they're going to let him make it."
Wesley refuses to vote early. "I don't believe the machines work properly in general," he said, "and they really don't work properly when they think you're voting for Obama."
Wesley's wife, Paris, disagrees and thinks the best thing she can do is get to her polling place before Nov. 4. "I want to go early so that if I see and hear anything that's not in keeping with the rules and regulations, I can make a call," she said. "As far as faith in the system, I don't have faith in the system. I just pray we have people in the polls who will be honest and watchful."
Some things have not changed since 2000: Florida is still a battleground. Obama and Senator John McCain, the Republican nominee, are in hot pursuit of the state's 27 electoral votes, which could prove crucial for victory.
Other important things have changed. In 2004, there were only minor glitches. Duval has done away with its old confusing ballot and upgraded its scanning machinery. It also has a new elections supervisor, Jerry Holland, who has reached out to blacks and earned their respect.
The skepticism about early voting is confounding to many officials, because it is intended to make voting more accessible, and was recently promoted in Jacksonville by Obama's wife, Michelle.
Holland said that the number of people, including blacks, who have turned out to vote early showed that misgivings were not widespread. Of the 84,273 residents who had voted as of Sunday, more than 30,900 were black.
"Obviously we've come a long way since 2000," Holland said. "For some people, it may have taken eight years to rebuild confidence. For others, it might take another election cycle. The goal is to keep building confidence one voter at a time." He added, "We will have record numbers. It may be feasible to get 50 percent of our voters before the election."
Still, suspicions linger that something - faulty machines, misread ballots, mysteriously lost votes - will deny Obama some of the support that he has earned.
"I vote in a predominantly minority area," said Monica Albertie, 27, a health care executive. "I worry about getting there and all of a sudden the electricity doesn't work. Anything can happen. I know that sounds silly, but these are real concerns. We have a record of getting excited, then being disappointed. You get paranoid: What if the bus system shuts down that day?"
Albertie said she was "on the fence" about early voting, because "I don't want my early vote to get lost."
Her friend Susan Burroughs, also a health care executive, said she planned to vote early but feels "queasy."
"You know, you don't want to get too excited, because it could go in just the opposite direction," Burroughs said. "You read the papers here and you know, there was something wrong with the machine over here, they lost the votes over there, they had to recount votes. That makes a lot of people leery."
"My queasiness is that we shouldn't become too comfortable with the polls showing he's ahead," she said. "It means nothing until you cast your vote and the tally is in."
Jones, the warehouse worker, also expressed unease. "I feel good and I don't feel good," he said. "I'm thankful to God that this is happening in my lifetime, that I get to see it. But I'm not ready to celebrate anything. This could be a very tricky time for us. I don't trust the polls. And the state of Florida in the past has had a lot of crooked things going on."
By Janet NovackForbes.com
Wednesday, October 29, 2008
WASHINGTON: A new study based on unpublished Internal Revenue Service data shows the rich are different when it comes to paying taxes: They hide more of their income.In Pictures: Who cheats the most on their taxes?
The previously unreported study estimates that taxpayers whose true income was between $500,000 and $1 million a year understated their adjusted gross incomes by 21 percent overall in 2001, compared to an 8 percent underreporting rate for those earning $50,000 to $100,000 and even lower rates for those earning less. (The "net misreporting rate" as the IRS calls it, includes both underreported income and inflated deductions.)
In all, because of their higher noncompliance rates, those with true incomes of $200,000 or more received 25 percent of all income, but accounted for 40 percent of net underreported income and 42 percent of underreported tax in 2001, the new analysis finds.
The study was written by Joel Slemrod, an economics professor and director of the Office of Tax Policy Research at the University of Michigan's business school and IRS economist Andrew Johns. It has not been officially endorsed or even released by the IRS and seems sure to add fuel to the election season debate over whether those earning $250,000 or more should pay higher tax rates, as Senator Barack Obama, the Democratic presidential nominee, has proposed.
The Slemrod/Johns analysis uses unpublished data from special research audits the IRS conducted on a sample of 45,000 individual returns filed for 2001. It was the IRS' first such research effort since 1988, and it led the agency to estimate the 2001 gross "tax gap" at $345 billion.
The main reason for the income-related cheating disparity: Higher income folks receive more of their income from sources that are easier to hide, including self-employment earnings; income from rents, partnerships and S corporations; and capital gains.
"The distribution of noncompliance lines up pretty closely with who gets income that's hard (for the IRS) to keep track of," Slemrod says. Still, he notes, the distribution of income by source doesn't explain all the increased noncompliance at higher income levels.
In its 2001 tax gap study, the IRS estimated that individuals underreported business income by 43 percent overall. Sole proprietors, who report self-employment income on schedule C of their tax returns, underreported their income a stunning 57 percent.
By contrast, the IRS found, 99 percent of all wages were reported by individual tax filers. The obvious explanation is that workers have no choice - their employers report their earnings to the IRS and withhold taxes on them.
Meanwhile, net capital gains for 2001 were underreported by 12 percent, the IRS estimated. The IRS receives reports from brokers of taxpayers' gross sales of stocks and bonds, but not of their initial costs or profits - therefore it has no way to easily check their reported capital gains. (Last month, as part of the $700 billion bailout bill, Congress mandated that brokers report the basis of any stocks bought in 2011 or later.)
The new study seems to show that the really rich are more tax compliant than the merely well-off, although not nearly as compliant as middle- and working-class wage slaves. Those earning $2 million plus had an 11 percent underreporting rate. But Slemrod told Forbes that he was "less comfortable" with that finding, noting that the very rich may have made use of techniques that IRS research audits didn't detect.
"I just don't know whether these audits were able to track down really sophisticated noncompliance or Swiss bank accounts. They may underestimate it (noncompliance) at the top," he says.In Pictures: Who cheats the most on their taxes?
Indeed, in the past several years, the IRS has collected billions in back taxes from wealthy taxpayers who used dicey tax shelters to manufacture huge phony losses in the late 1990s, 2000 and 2001. But the IRS didn't get a handle on the nature or extent of these shelters until years later and relied on tax shelter promoters' customer lists and special self-disclosure programs, not audits, to find most of the taxpayers involved.
Currently, the government is suing UBS for the names of 18,000 wealthy Americans it believes may have had unreported Swiss bank accounts.
By Julia Preston
Wednesday, October 29, 2008
On the stump, Senator Barack Obama and Senator John McCain rarely talk about immigration, and it was never raised in their three debates.
Yet as this thorny issue has receded from the presidential campaign, the two candidates continue to refine their approach to it - especially in regard to illegal immigration, the most politically sensitive piece of the equation.
Obama, the Democratic nominee, has hardened his tone on how to deal with illegal immigrants, while McCain, the Republican nominee, has made immigration enforcement a priority, a position in line with the Bush administration's. Both candidates are responding to the anger many Americans feel about uncontrolled illegal immigration, including working-class voters whom McCain and Obama are trying to attract in the final days of the campaign.
Because of persisting political rifts and a crush of priorities related to reviving the economy and unwinding the Iraq war, advisers to the campaigns say it is increasingly unlikely that either candidate would propose to Congress an overhaul of the immigration system during the first year in office, something both McCain and Obama had pledged to do.
On the assumption that immigration legislation "is not likely to be the first thing out of the box" for the new president, Doris Meissner, who was commissioner of the U.S. Immigration and Naturalization Service under President Bill Clinton, said she was working with a bipartisan group of experts to identify changes that the new president could make without Congress.
"The reforms we need to put in place are so sweeping and the political environment is so hostile to consensus, I think we will be in a phase of longer-term building of public understanding," said Meissner, a senior fellow at the Migration Policy Institute, a research group in Washington.
Both Obama and McCain continue to support legislation that would include a path to legal status for the estimated 12 million illegal immigrants in the United States.
As a result, groups that oppose legal status for illegal immigrants, who mobilized a movement of largely Republican voters against a comprehensive immigration bill last year, are sitting out the presidential race. Instead, they are focusing on Senate and House races, where they hope to stop the Democrats from winning large majorities.
"We're going to have an incredibly bad White House, so we're in for some tough defensive battles," said Roy Beck, president of NumbersUSA, which favors reduced immigration.
Seeking to broaden support for legalization, Obama embraces new law-and-order language adopted in the Democratic Party platform at the party's national convention. Although Americans are "welcoming and generous," the platform states, "those who enter our country's borders illegally, and those who employ them, disrespect the rule of law." Instead of the Democrats' emphasis, as recently as last year, on integrating illegal immigrants into society, the platform says, "We must require them to come out of the shadows and get right with the law."
Heather Higginbottom, the Obama campaign's director for policy, said Obama had not altered his basic views. If elected, Obama would insist that illegal immigrants pay back taxes and fines, learn English and go to the back of the immigration line to become legal.
For McCain, there has been a sharper turn from the past. He was unable to stop the Republican Party from adopting a platform at its national convention that directly rejected his support for legalization.
"We oppose amnesty," the platform states, describing "the American people's rejection of en masse legalizations" as "especially appropriate."
Some Republicans have not forgiven McCain for joining Senator Edward Kennedy, Democrat of Massachusetts, to write a bill, known as comprehensive immigration reform, that passed the Senate in 2006. McCain stayed on the sidelines last year as a version of that bill stalled in Congress.
Then, under pressure from rivals in the Republican primaries, McCain said early this year that he would not vote for that bill if it came up again.
He has supported the Bush administration's aggressive enforcement campaign against illegal immigration, calling it a necessary first step to persuading Americans to accept any legalization program.
In recent weeks his campaign has avoided the term "path to citizenship" to describe the option that McCain would offer illegal immigrants, saying only that he would deal with them in a humane way.
Who made Bulgaria's mafia?
Violence, lawlessness and corruption are indeed rampant in Bulgaria, but the news article "The most corrupt state in Europe?" (Oct. 16) overlooked the culpability of Western governments and transnational corporations in making this mess.
The article fails to recognize that Bulgaria was also the victim of imposed free-market policies, which helped to create the mafia in the first place.
Bulgaria's elites certainly embezzled millions from state coffers, but there are also legions of Western businessmen who have benefited by working closely with corrupt politicians and oligarchs.
Bulgaria was the first post-Communist country to democratically re-elect its socialist party after 1989, and this post-socialist state attempted a gradual retreat from the market. But Western governments and international financial institutions pressured Bulgaria to adopt "shock therapy" economic policies to help eradicate any last vestiges of Communism.
Much like disbanding the Baath Army before a new Iraqi Army was ready to take its place, Bulgarian markets were prematurely liberalized and state budgets slashed before the rule of law could be guaranteed.
With no functioning justice system, racketeering, extortion and murder went unpunished. The Bulgarian mafia was born.
Simultaneously, Western corporations jostled for the choicest bits of the Bulgarian economy, buying up utility companies and other state monopolies for a pittance.
While living in Bulgaria between 1998 and 2000, I saw numerous examples of crooked politicians rigging competitive deals. Foreign investors had no problem doing business with mafia bosses, and this was all justified by saying that every young capitalist country passes through the era of the "robber baron."
Thus, although local corruption is one part of the story, the essential role played by market fundamentalist ideologies and Western greed should not be ignored.
Kristen Ghodsee Brunswick, Maine
The Associated Press
Wednesday, October 29, 2008
LONDON: Every entertainer knows there's a fine line between offbeat and offensive. Russell Brand has built a career walking it but now he may have stumbled.
The wild-haired, motor-mouthed British comedian is renowned for risque routines, wrote a memoir recounting his drug and sex addiction and called U.S. President George W. Bush "that retarded cowboy fellow" while hosting MTV's Video Music Awards.
On Wednesday, Brand quit his BBC radio show after he and fellow performer Jonathan Ross were suspended indefinitely for leaving lewd messages on the voicemail of a 78-year-old actor. Also under threat is the reputation of Britain's state-funded national broadcaster, which allowed Brand's routine to make it to air.
The calls by Brand and Ross to actor Andrew Sachs best known for playing Spanish waiter Manuel in the 1970s Britcom "Fawlty Towers" have drawn more than 18,000 complaints. Prime Minister Gordon Brown called the comments "inappropriate and unacceptable."
In the ad-libbed messages, the pair claimed Brand had slept with Sachs' granddaughter Georgina Baillie, and joked that Sachs might hang himself as a result of the news. Baillie, a 23-year-old burlesque performer, acknowledged she had a sexual relationship with Brand but said the calls to her grandfather were "cruel."
The duo made further calls to Sachs in which they tried to apologize but continued to blurt out lewd messages. The calls were recorded Oct. 16 and aired on Brand's radio show two days later.
Both Brand and Ross apologized.
"I am sorry that I upset Mr. Sachs," Brand, 33, told reporters outside his London home Wednesday. Ross, 47, said he was sorry for his "stupid error of judgment."
BBC director general Mark Thompson made a "personal and unreserved apology" for the "gross lapse of taste by the performers and the production team."
He said the pair would be suspended pending a full report into the affair.
Brand later said he had decided to resign from his BBC radio program, which attracted 2 million listeners a week.
"As I only do the radio show to make people laugh, I've decided that given the subsequent coverage I will stop doing the show," he said in a statement. "I got a bit caught up in the moment and forgot that at the core of the rude comments and silly songs were the real feelings of a beloved and brilliant comic actor and a very sweet and big-hearted young woman."
Several politicians have called on the BBC to fire the pair. Telecommunications regulator Ofcom said it would investigate whether the calls breached the broadcasting code, which sets standards for fairness and privacy.
The case is reminiscent of the antics of American "shock jocks" such as Howard Stern who paid repeated obscenity fines before jumping to the unregulated haven of satellite radio or Don Imus, who was fired from MSNBC and CBS Radio for making racist and sexist comments about a women's basketball team. There have been numerous incidents of DJ-inspired outrage in the U.S. In 2002, DJ team Opie and Anthony were fired by CBS Radio after broadcasting a live account of two listeners having sex in New York City's St. Patrick's Cathedral.
Sachs said he did not plan to complain to the police or other authorities.
"I respect his decision," he said about Brand. "I hope he moves forward, I really hope he does."
Ross, a voluble Cockney with a degree in modern history, is one of the BBC's most popular presenters. His three-year contract is reportedly worth 18 million pounds (US$29 million).
Brand, an edgy performer with an image as a quick-witted hedonist, also has a growing U.S. profile thanks to film appearances and a job hosting last month's MTV Video Music Awards. He offended some viewers by joking about Bush and mocking clean-cut pop act the Jonas Brothers.
The British case is especially explosive because the salaries of Brand and Ross are paid by taxpayers. The BBC receives most of its funding through a license fee of almost 140 pounds ($220) a year levied on every British household with a TV.
The BBC is under pressure from some politicians and other broadcasters, who feel the license fee gives it an unfair advantage over its rivals.
Trust in the BBC also has been undermined by recent scandals. Last year, a senior BBC executive resigned over the editing of footage that wrongly implied Queen Elizabeth II had walked out of a portrait sitting with photographer Annie Leibovitz. That episode followed other cases of audience deception, in which contest results were faked or prerecorded programs were presented as though they were live.
Living in France