0427
"People are grieving," said Goldsmith, a semiretired psychotherapist who counsels fellow residents of the Gleneagles Country Club, a gated community here. "There was a death. Their money died."
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Aid workers to relocate Congo frontline refugees
Reuters
Thursday, November 13, 2008
By Hereward Holland
Reuters
Thursday, November 13, 2008
By Hereward Holland
Tens of thousands of refugees at a frontline camp in eastern Congo will be urgently moved to prevent them being caught in crossfire between rebels and the army, aid officials said on Thursday.
More than 65,000 civilians who have fled weeks of fighting are camped at Kibati, a few kilometres south of combat lines between Tutsi rebels loyal to renegade General Laurent Nkunda and government troops.
The refugees, squatting in cramped, dirty conditions within sight of a live volcano, are among 250,000 civilians forced from their homes since a resurgence of fighting in late August in Democratic Republic of Congo's North Kivu province.
Artillery and machinegun battles near Kibati have disrupted aid distribution to the refugees and sent thousands streaming south towards the provincial capital Goma, 10 km (6 miles) away.
"We noticed these people might be in serious danger and the humanitarian community decided we should move them from there ... as soon as possible," Ibrahima Coly, head of the U.N. refugee agency (UNHCR) in North Kivu, told Reuters.
Relief agencies planned to truck civilians who agreed to go to a camp at Mugunga, 10 km (6 miles) west of Goma, he said, adding he hoped this could start in a week's time.
Refugees at Kibati said they lived in fear of attack.
"We're not safe in the camp ... we don't know who might come, it could be CNDP (Nkunda's National Congress for the Defence of the People rebels), it could be FARDC (Congolese army), but I also worry about thieves," said Norbert Alimasi Mwamba, carrying a sack filled with possessions on his head.
The U.N. has its largest peacekeeping force in the world, 17,000-strong, in Congo but U.N. peacekeepers have been unable to protect hundreds of thousands of uprooted civilians in North Kivu from killings, lootings and rape. Human rights groups say both rebels and government troops have committed abuses.
"What I heard from (U.N. peacekeepers) is that ... they don't have the capacity to protect people (in Kibati)," one aid worker, who asked not to be named, told Reuters.
Nkunda, who wants President Joseph Kabila to agree to talks on Congo's future, last month pushed an offensive by his battle-hardened guerrillas to the gates of Goma, attracting a wave of international attention to the North Kivu conflict.
He suspended the offensive by declaring a cease-fire.
FEAR OF CHOLERA EPIDEMIC
Aid officials say the fighting has created a "catastrophic" security and humanitarian situation, and the risk of a repeat of the kind of human devastation caused by a 1998-2003 war that killed several million in the former Belgian colony.
The World Health Organisation said it was worried about a wider cholera epidemic developing in the Goma zone, where cases tripled between early October and early November, because of unsafe water, poor sanitation and weak health services.
"Such an increase of cases in a region that is already endemic for cholera is an early warning sign," Eric Laroche, Assistant Director-General for WHO's Health Action in Crises cluster, said in a statement.
The aid worker who requested anonymity said there was a risk Nkunda's fighters may mingle with the refugees at Kibati.
"If clashes happen, displaced (people) will be moving from the camp to Goma. This might facilitate the infiltration of armed people among the displaced running towards Goma," the worker added.
Humanitarian agencies are clamouring for urgent U.N. troop reinforcements for eastern Congo. U.N. Secretary-General Ban Ki-moon has asked the Security Council to approve 3,000 more.
"The major preoccupation for us is security," Marjon Kamara, head of UNHCR's Africa department, told Reuters in Senegal.
But U.N. officials say even if approved, troops could take two months to deploy. Eastern and southern African states have offered peacekeepers, but only under a U.N. or regional mandate.
At Kiwanja, near Rutshuru, 70 km (40 miles) north of Goma in the rebel-held zone, human rights groups accuse Nkunda's rebels and a rival pro-government militia of killing dozens of civilians, mostly adults, in tit-for-tat reprisals last week.
They say these took place despite U.N. troops being nearby.
Commanders of the U.N. force in Congo, known as MONUC, say their force, despite its size, is not enough to cover a country the size of Europe with few roads, where marauding rebel and militia factions are preying on civilians on several fronts.
(For full Reuters Africa coverage and to have your say on the top issues, visit: http://africa.reuters.com/)
(Additional reporting by David Lewis in Kinshasa and Laura MacInnis in Geneva; writing by David Lewis and Pascal Fletcher; editing by Andrew Roche)
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Human Rights Watch warns of Somali refugee crisis
By Nick Cumming-Bruce
Thursday, November 13, 2008
By Nick Cumming-Bruce
Thursday, November 13, 2008
GENEVA: Tens of thousands of refugees flooding into northern Kenya to avoid fighting in Somalia have created a "rapidly developing emergency" that needs urgent action by the Kenyan government, the United Nations and aid donor countries, Human Rights Watch warned Thursday.
The escalating conflict between Somali and Ethiopian government forces against local Islamist insurgents has led to an influx of refugees into Kenya, the group said, estimating that more than 65,000 Somalis will have fled into Kenya by the end of this year, up from 19,000 in 2007.
Kenya closed its border with Somalia in January 2007 but has been unable to stem the flow of refugees brought over by smuggling networks, Gerry Simpson, a Human Rights Watch researcher, said.
Refugees reported being picked up and forced back across the border if they were unable to pay bribes to the police, Simpson said. Others were detained in the camps or in nearby towns, subjected to beatings, and sometimes forced back across the border, he said.
The continuing influx of refugees has caused severe overcrowding in the camps, which were built in 1991 for 90,000 people and now house 250,000, Human Rights Watch said. More than 8,000 people arrived in October alone, it said. With the United Nations unable to keep up with the influx, about 13 percent of the population of the camp is believed to suffer from acute malnutrition.
U.S. food agency detains Chinese imports for testing
By Andrew Martin and Gardiner Harris
Thursday, November 13, 2008
Candy, snacks, cereal and any other products from China that contain milk will be detained at the border until tests prove that they are not contaminated, the U.S. government announced Thursday.
The Food and Drug Administration said that it had issued the alert because of concerns about Chinese products being contaminated with the toxic chemical melamine. Since September, more than 50,000 infants in China have become ill and at least four have died because they tainted infant formula.
Since then, melamine has been found in a range of products, including milk, eggs and fish feed. Companies in the United States have recalled several products, including non-dairy creamer and a type of candy, which are primarily sold in Asian markets, because of melamine concerns but to date the contamination here was not thought to be widespread.
"We're taking this action because it's the right thing to do for the public health," said Dr. Steven Solomon, an FDA deputy associate commissioner.
As a result, Chinese products that contain milk or milk powder will be detained until the manufacturer or its customer has the product tested and found to be free of contamination, or they show documentation indicating that the product does not contain milk or milk-derived ingredients.
"The burden shifts to the importer," Dr. Solomon said.
FDA analyses have detected melamine and cyanuric acid, another toxic chemical, in "a number of products that contain milk or milk-derived ingredients, including candy and beverages," according to an alert that the agency sent to field personnel. The alert also noted that inspectors in 13 other countries had discovered melamine in Chinese products including milk, yogurt, frozen desserts, biscuits, chocolates and cookies.
The FDA routinely blocks imports of individual food products, but it is rare for the agency to block an entire category of foods from a particular country. Last year, the FDA blocked five types of farm-raised seafood as well as vegetable protein from China because of repeated instances of contamination from unapproved animal drugs and food additives.
Unscrupulous food and feed dealers in China add melamine to their products because it fools tests that measure protein levels. Because it dissolves poorly, melamine can block the body's filtering system, potentially leading to kidney failure and death.
Dr. Solomon said that the alert would probably apply mostly to specialty products sold in Asian markets. But Benjamin England, a former lawyer at the FDA, described the latest alert as "massive" and said it could affect "a tremendous amount of goods."
"It's going to jam the ports up all the up the supply chain," said England, who represents food supply companies.
As a result of the earlier alerts on seafood and vegetable protein, most private laboratories that perform product tests for melamine already have long waiting lists, England said. And the FDA takes three to four weeks to review submitted tests, England said.
Chinese producers of shrimp, for instance, recently started breading their product to avoid a controversy over an anti-dumping lawsuit, England said. But breading often contains dairy, and that product could be detained at ports.
The effect of the alert will probably be long-lasting, England said, because importers must prove that each and every shipment is free of contamination.
"It's impossible to get off the alert list," England said.
http://www.iht.com/articles/2008/11/13/business/14fda.php
Reports of distant planets, now on film
By Dennis Overbye
Thursday, November 13, 2008
NEW YORK: In what might amount to an early Christmas present to the universe, two groups of astronomers have taken the first pictures of what they say - and other astronomers agree - are probably planets going around other stars.
The achievement, the result of years of effort on improved observational techniques and better data analysis, presages more such discoveries, the experts said, and will open the door to new investigations and discoveries of what planets are and how they came to be formed.
"It's the tip of iceberg. Now that we know they are there, there is going to be an explosion," said Christian Marois of the Herzberg Institute of Astrophysics in Victoria, British Columbia. Marois is the leader of a team that recorded three planets circling a star - known as HR 8799 - 130 light years away in the constellation Pegasus.
The other team, led by Paul Kalas of the University of California, Berkeley, found a planet orbiting the star Fomalhaut, only 25 light-years from Earth, in the constellation Piscis Austrinus. In an interview by e-mail, Kalas said that when he finally confirmed his discovery last May, "I nearly had a heart attack."
In scratchy telescope pictures released to the world Thursday in Science Express, the online version of the journal Science, the new planets appear as fuzzy dots that move slightly around their star from exposure to exposure. Astronomers who have seen the new images agreed that these look like the real thing.
"I think Kepler himself would recognize these as planets orbiting a star following his laws of orbital motion," Mark Marley, of NASA's Ames Research Center in Mountain View, California, wrote in an e-mail message elaborating on HR 8799.
More than 300 so-called extrasolar planets have been found circling distant stars, making their discovery the hottest and fastest growing field in astronomy. But the observations have been made mostly indirectly, by dips in starlight as planets cross in front of their home star or by wobbles they induce going by it.
Astronomers being astronomers, they want to actually see these worlds, but a few recent claims of direct observations have been clouded by debates about whether the bodies were really planets or failed stars.
"Every extrasolar planet detected so far has been a wobble on a graph. These are the first pictures of an entire system," said Bruce Macintosh, an astrophysicist from Lawrence Livermore National Laboratory in California and a member of Marois's team.
The new planetary systems are anchored by young bright stars more massive than our own Sun and swaddled in large disks of dust, the raw material of worlds. The three planets orbiting HR 8799 are roughly 10, 9 and 6 times the mass of Jupiter, and orbit their star in periods of 450, 180 and 100 years respectively, all counterclockwise.
The Fomalhaut planet is about three times as massive as Jupiter, according to Kalas's calculations, and is on the inner edge of a huge band of dust, taking roughly 872 years to complete a revolution of its star.
Both systems appear to be scaled-up versions of our own solar system, with giant planets in the outer reaches, leaving plenty of room for smaller planets to lurk undetectable in the warmer inner regions. Dust rings lie even farther out, like the Kuiper belt of icy debris extending beyond the orbit of Neptune in our own solar system.
"This is a window into what our own solar system might have looked like when it was 60 million years old," Marois said. Our sun is about 4.5 billion years old.
Sara Seager, a planetary theorist the Massachusetts Institute of Technology, said it was significant that the planets in both cases seemed to be associated with disks of dust, particularly Fomalhaut, one of the brightest and closest stars and one of the "Fabulous Four," known to be host to a massive disk.
"Fomalhaut is like a Hollywood star to astronomers, so we have some personal excitement here," she said. "It feels like finding out that one of your four closest friends just won the lottery big time"
Alan Boss, a planetary theorist at the Carnegie Institution of Washington, said the triple-planet system in Pegasus was particularly convincing, "as we expect planets to form in systems in general, whereas spurious background interlopers will generally appear as single 'planets."' But he and others cautioned that much more study of these objects was necessary.
Being able to see planets directly opens the door to spectroscopic observations that can help determine the composition, temperature and other physical characteristics of planets and allow for comparisons with each other and with their parent stars. Macintosh said that he hoped to train a spectroscope on his new planets as early as Monday.
The new images are the first fruits of a long campaign by astronomers to see more and more of the unseeable. In particular, it is a triumph for the emerging technology of adaptive optics, in which telescope mirrors are jiggled and warped slightly many times a second to compensate for the atmospheric turbulence that blurs star images.
The problem in seeing other planets is picking them out of the glare of their parent stars, which are millions of times brighter, at least in visible light. As a result, planet hunters usually look for infrared, or heat radiation, which is emitted copiously by planets still shedding heat from the process of formation.
For their observations, Marois and his colleagues used the 8-meter diameter, or 26-foot diameter, Gemini North and the 10-meter Keck telescopes on Mauna Kea in Hawaii, both of which had been fitted with adaptive optics. Then they processed the images with a special computer program, which Marois described as "a software coronagraph," for processing the images.
A coronagraph is a telescope for observing things very close to the Sun. It uses a disk to block the Sun's bright surface.
Marois and his team had spent eight years looking for planets around Sun-like stars with no success. So they decided last year to look around younger and thus more massive and hotter stars, like HR 8799, which is estimated to be only 60 million years old, compared with the Sun, which is 4.5 billion years. The planets of such stars would be younger themselves and thus hotter and easier to see. More massive stars would also lead to more widespread disks and planets, making them easier to pick out, Marois explained.
They first spied a pair of dots about four billion miles and six billion miles out from HR 8799 last October. Following up, they discovered a third planet closer in, at about two billion miles. Subsequently, they discovered an old observation from 2004, which also showed the planets and how far they had moved around the star in three years. "Seeing the orbit is one of the coolest things," Macintosh said.
Kalas did his work with the Hubble Space Telescope, which is immune to atmospheric visual turbulence because it is in space. He used a coronagraph to block light from the actual star. He said he had been driven to look for a planet around Fomalhaut after Hubble photographs in October 2004 showed that a dust ring around the star had a suspiciously sharp inner edge, often a clue that the ring is being sculpted by the gravity of some body orbiting nearby.
Fomalhaut is also a young star, about 200 million years old, according to Kalas.
A second set of Hubble observations, in July 2006, revealed a dot moving counterclockwise around the star. "I basically held my breath for three days until I could confirm the existence of Fomalhaut in all of my data," Kalas recalled.
Because the outer edge of Fomalhaut's dust ring, which extends 11 billion to 20 billion miles from its planet, was not disturbed, the planet must be less than three times the mass of Jupiter, Kalas and his collaborators, including Eugene Chiang of the University of California, Berkeley, calculate in a separate paper to be published in the Astrophysical Journal.
In an e-mail message, Kalas pointed out that Fomalhaut was the closest exoplanet yet discovered, "close enough to contemplate sending spacecraft there."
Boss said the fact that Marois's group had found a triple planet system in the first batch of stars they searched meant either that they were lucky or that such systems were common. "Further observations will decide which is the case," he said.
A large consortium of astronomers and institutions, including Macintosh and Kalas, are building the Gemini Planet Imager, to be placed on the Gemini South telescope in Chile, a twin of the one on Mauna Kea, which will increase sensitivities tenfold to a hundredfold, enabling astronomers to see and study giant planets in systems the same size as our own.
It will take a new generation of space-based telescopes like the Terrestrial Planet Finders, now being studied by NASA, before astronomers can hope to discern rocky, Earth-size planets that they might want to examine for habitability and life.
http://www.iht.com/articles/2008/11/13/healthscience/cosmos.php
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Haunting Asia, a brown cloud blots out sun
By Andrew Jacobs
Thursday, November 13, 2008
BEIJING: A noxious cocktail of soot, smog and toxic chemicals is blotting out the sun, fouling the lungs of millions of people and altering weather patterns in large parts of Asia, according to a report released Thursday by the United Nations.
The byproduct of automobiles, slash-and-burn agriculture, wood-burning kitchen stoves and coal-fired power plants, these plumes of carbon dust rise over southern Africa, the Amazon basin and North America but are most pronounced in Asia, where so-called atmospheric brown clouds are dramatically reducing sunlight in many Chinese cities and leading to decreased crop yields in swaths of rural India, says a team of more than a dozen scientists who have been studying the problem since 2002.
Combined with evidence that greenhouse gases are leading to a rise in global temperatures, the report's authors called on governments rich and poor to address carbon emissions.
"The imperative to act has never been clearer," Achim Steiner, executive director of the United Nations Environment Program, said in Beijing, where the report, "Atmospheric Brown Clouds: Regional Assessment Report With Focus on Asia," was released.
The brownish haze, sometimes more than a mile, or 1.6 kilometers, thick and clearly visible from airplanes, stretches from the Arabian Peninsula to the Yellow Sea.
In the spring it sweeps past North and South Korea and Japan. Sometimes the cloud drifts as far west as California. The report identifies 13 cities as brown-cloud hotspots, among them Bangkok, Cairo, New Delhi, Seoul and Tehran. In some Chinese cities, the smog has reduced sunlight by as much as 20 percent since the 1970s, the report says.
Rain can cleanse the skies, but some of the black grime that falls to earth ends up on the surface of the Himalayan glaciers that are the source of water for billions of people in China, India and Pakistan.
The result: The glaciers that feed into the Yangtze, Ganges, Indus and Yellow rivers are absorbing more sunlight and melting quicker, researchers say.
According to the Chinese Academy of Sciences, those glaciers have shrunk 5 percent since the 1950s and at the current rate of retreat could shrink by an additional 75 percent by 2050.
"We used to think of this brown cloud as a regional problem, but now we realize its impact is much greater," said Veerabhadran Ramanathan, who led the UN scientific panel. "When we see the smog one day and not the next, it just means it's blown somewhere else."
Although their overall impact is not entirely understood, Ramanathan, a professor of climate and ocean sciences at the University of California in San Diego, said the clouds might be affecting rainfall in parts of India and Southeast Asia, where monsoon rainfall has been decreasing in recent decades, and central China, where devastating floods have become more frequent.
He said some studies suggested the plumes of soot that block the sun have led to a 5 percent decline in the growth of Asian rice harvests since the 1960s.
For those who breathe the toxic mix, the impact can be deadly. Henning Rodhe, a professor of chemical meteorology at Stockholm University, estimates that 340,000 people in China and India die each year from cardiovascular and respiratory diseases that can be traced to the emissions from coal-burning factories, diesel trucks and kitchen stoves fueled by twigs.
"The impacts on health alone is a reason to reduce these brown clouds," he said, adding that in China about 3.6 percent of the nation's annual gross domestic product, or $82 billion, is lost to the health effects of pollution.
The scientists who worked on the report said the blanket of haze hovering over Asia and other parts of the world might be mitigating the worst effects of greenhouse gases by absorbing solar heat or reflecting it away from the earth. Greenhouse gases, by contrast, tend to trap the warmth of the sun and lead to a rise in ocean temperatures.
Steiner, the head of the UN environment program, said the findings complicated the global-warming narrative. The brown clouds mask the impact of the greenhouse gases, he said: Without the blocking effect of the smog, he said, climate change would be far worse.
"All of this points to an even greater and urgent need to take on emissions across the planet," he said.
http://www.iht.com/articles/2008/11/13/healthscience/cloud.php
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Californians take part in state-wide earthquake drill
The Associated Press
Thursday, November 13, 2008
LOS ANGELES: Californians dropped to the ground, covered their heads and held onto the furniture Thursday for a mock "Big One" - an earthquake drill billed as the largest in U.S. history and aimed at testing everyone from state leaders to students who donned fake blood to play victims.
At exactly 10 a.m., television news programs announced there was an earthquake disaster drill, then cut to cameras in school classrooms showing children ducking under their desks and holding onto them.
After about a minute, the drill moved into aftermath mode, with people portraying quake victims.
The exercise was based on a hypothetical tremblor with a magnitude of 7.8 on the Richter scale that ruptures the southern San Andreas Fault - an event that scientists call the feared "Big One."
Such a quake would cause 1,800 deaths and $200 billion in damage, researchers estimate.
Local governments, emergency responders, schools, hospitals, churches, businesses and residents were taking part. Organizers said about five million people had signed up to participate.
"We're trying to make it a communal event," U.S. Geological Survey seismologist Lucy Jones, who helped create the crisis scenario, said before the event.
The minimum participation calls for people to dive for safety.
Firefighters and other emergency responders are staging full-scale exercises complete with search-and-rescue missions and medical triaging of people posing as casualty victims.
Shortly before the fake quake struck, students at Bishop Alemany High School in the Mission Hills area lined up to receive makeup that would turn them into simulated quake victims.
The San Fernando Valley school is not far from the epicenter of the 1994 Northridge quake that killed 72 people.
Fire Department workers applied fake blood, makeup and wax to create gruesome injuries.
Patricia Esguerra, 17, sported purple cheeks and a simulated gash on her forehead. "It feels nasty but it's for a good cause so I don't mind," said Esguerra, who lived through the 1994 quake but remembers little about it.
The quake drill made her consider the effects of a real temblor.
"If this is what it's going to look like, it's pretty bad," she said, peering around at the fake casualties. "I'm a little scared."
California is the most seismically active state in the Lower 48.
The U.S. Geological Survey calculated this year that the state faces a 46 percent chance of being hit by a 7.5 or larger quake in the next 30 years with the epicenter quite likely to be in Southern California.
Despite the known seismic risks, California has never been as organized as Japan, which holds an annual quake drill to mark the 1923 Great Kanto earthquake, a magnitude-8.3 temblor in Tokyo that killed more than 140,000 people.
Interest in the statewide exercise was initially low, Jones said, but peaked after the state was jolted by a moderate quake this summer. Although a far cry from the "Big One," the July magnitude-5.4 temblor centered in the hills east of Los Angeles was the strongest to rattle a populated area of Southern California since the 1994 Northridge disaster. After the shaking stopped, 400 new people signed up for the drill, Jones said.
If such a quake like the one in the drill hit, scientists say, sections of freeways would collapse, water and gas pipes would burst and certain high-rise buildings and older structures would fall.
The drill coincides with an annual statewide preparedness event put on by the state. Besides rehearsing for natural disasters, the state in the past has responded to simulated terrorist attacks.
It is not all doom and gloom. Scientists plan to follow up the drill with a rally in central Los Angeles on Friday.
http://www.iht.com/articles/2008/11/13/america/quake.php
Air France predicts strike will cost 100 million euros
The Associated Press
Thursday, November 13, 2008
PARIS: Air France Chairman Jean-Cyril Spinetta says a planned four-day pilots' strike set to start Friday will cost the airline around 100 million euros ($125 million) in lost revenues.
The walkout has been called to protest the French parliament's upcoming discussion of a reform bill that could extend the retirement age for pilots from 60 to 65.
Spinetta told RTL radio on Thursday the measure will allow some pilots to keep flying after 60 and leave conditions for others unchanged.
Air France has said it expects nearly half of its 833 scheduled mid- and long-haul flights to be canceled Friday.
http://www.iht.com/articles/ap/2008/11/13/business/EU-France-Air-France-Strike.php
19 killed and dozens wounded in attack on U.S. convoy in Afghan market
By Adam B. Ellick and Abdul Waheed Wafa
Thursday, November 13, 2008
KABUL: A day after a fierce suicide bombing in southern Afghanistan, insurgents struck Thursday in the east of the country when an American military convoy was attacked in a crowded market, killing one soldier and 18 civilians, according to the United States military and Afghan police officials.
One of the dead was a 12-year-old boy, who died when a suicide car bomber in a Toyota Corolla approached an American military convoy and then swerved into a weekly market at around 8 a.m., according to American and Afghan accounts. Dr. Ajmal Pardes, the director of public health in the area, said 74 people were injured.
The strike was in the Bati Kot district of eastern Afghanistan's Nangarhar Province.
An Associated Press photographer said that an American military vehicle, two civilian vehicles and two rickshaws were destroyed.
United States Navy commander Jeff Bender, an American military spokesman in Kabul, said the civilian death count, initially put at 10, had risen to 18.
On Wednesday, a tanker truck packed with explosives detonated outside the provincial council office in Kandahar, Afghanistan's largest southern city, killing the driver and at least six other people and wounding more than 40 others.
The blast shook the entire city, caused at least five houses to fall and left a crater near the council building, which housed an office of a national security service.
"The enemies of Afghanistan and peace once again put us in mourning," General Rahmatullah Roufi, the provincial governor, told reporters. He announced a "purification" operation to arrest insurgents in and near the city.
In a separate incident reported on Thursday, two soldiers from the American-led NATO alliance were killed in an explosion in the south of the country in an explosion on Wednesday, the alliance said, but did not specify the soldiers' nationality.
The Defense Ministry in London later identified the two soldiers as members of Britain's Royal Marines who were taking part in a joint patrol with Afghan soldiers in the Garmsir district of Southern Helmand Province.
The American contingent is the largest foreign force in Afghanistan but Britain has about 8,000 troops there. A survey broadcast Thursday by the BBC said more than two-thirds of those questioned believed Britain should withdraw its soldiers over the next year while less than a quarter favored their continued deployment.This year has been the bloodiest since the American-led invasion of late 2001 that toppled the Taliban regime, whose supporters have revived their campaign to drive out foreign forces.
The latest American fatalities brought to around 148 the number of American military deaths so far this year, compared to 111 in the whole of 2001, the AP reported. Additionally, around 110 soldiers from other coalition forces have died this year.
More than 5,400 people, including almost 1,000 civilians, have died in violence related to the insurgency this year, the news agency said, citing figures provided by Afghan and international officials
By Adam B. Ellick and Abdul Waheed Wafa
Thursday, November 13, 2008
KABUL: A day after a fierce suicide bombing in southern Afghanistan, insurgents struck Thursday in the east of the country when an American military convoy was attacked in a crowded market, killing one soldier and 18 civilians, according to the United States military and Afghan police officials.
One of the dead was a 12-year-old boy, who died when a suicide car bomber in a Toyota Corolla approached an American military convoy and then swerved into a weekly market at around 8 a.m., according to American and Afghan accounts. Dr. Ajmal Pardes, the director of public health in the area, said 74 people were injured.
The strike was in the Bati Kot district of eastern Afghanistan's Nangarhar Province.
An Associated Press photographer said that an American military vehicle, two civilian vehicles and two rickshaws were destroyed.
United States Navy commander Jeff Bender, an American military spokesman in Kabul, said the civilian death count, initially put at 10, had risen to 18.
On Wednesday, a tanker truck packed with explosives detonated outside the provincial council office in Kandahar, Afghanistan's largest southern city, killing the driver and at least six other people and wounding more than 40 others.
The blast shook the entire city, caused at least five houses to fall and left a crater near the council building, which housed an office of a national security service.
"The enemies of Afghanistan and peace once again put us in mourning," General Rahmatullah Roufi, the provincial governor, told reporters. He announced a "purification" operation to arrest insurgents in and near the city.
In a separate incident reported on Thursday, two soldiers from the American-led NATO alliance were killed in an explosion in the south of the country in an explosion on Wednesday, the alliance said, but did not specify the soldiers' nationality.
The Defense Ministry in London later identified the two soldiers as members of Britain's Royal Marines who were taking part in a joint patrol with Afghan soldiers in the Garmsir district of Southern Helmand Province.
The American contingent is the largest foreign force in Afghanistan but Britain has about 8,000 troops there. A survey broadcast Thursday by the BBC said more than two-thirds of those questioned believed Britain should withdraw its soldiers over the next year while less than a quarter favored their continued deployment.This year has been the bloodiest since the American-led invasion of late 2001 that toppled the Taliban regime, whose supporters have revived their campaign to drive out foreign forces.
The latest American fatalities brought to around 148 the number of American military deaths so far this year, compared to 111 in the whole of 2001, the AP reported. Additionally, around 110 soldiers from other coalition forces have died this year.
More than 5,400 people, including almost 1,000 civilians, have died in violence related to the insurgency this year, the news agency said, citing figures provided by Afghan and international officials
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Iranian diplomat abducted in Pakistan
By Jane Perlez
Thursday, November 13, 2008
ISLAMABAD: Gunmen abducted an Iranian diplomat in the chaotic city of Peshawar in Pakistan's northwest on Thursday, a day after the shooting death of an American aid worker there, the police said.
The diplomat, Hesmatollah Atharzadeh, who was the commercial counselor at the Iranian Consulate, was leaving his house in the suburb of Hayatabad when the gunmen attacked, the police said. His driver was killed.
The kidnapping of the Iranian comes after a series of suicide bombings by Taliban militants in Peshawar in recent months.
The police said they suspected that Islamic militants were involved in the killing of the American aid worker, Stephen Vance.
On Tuesday night, a suicide bomber blew himself up in the city's main stadium after the closing ceremony of inter-provincial games, the first such event after a new secular provincial government lifted the ban on sports imposed by a coalition of religious parties.
According to police accounts, Atharzadeh was snatched as he was on his way to work Thursday. The attackers sprayed bullets at the car and dragged the diplomat away, the police said.
An Afghan diplomat, Abdul Khaliq Farahi, was kidnapped from Hayatabad two months ago and is still missing. The suburb of Hayatabad abuts the Khyber region of the Federally Administered Tribal Area and is the first point of entry for militants coming from the tribal area into Peshawar.
Kidnappings in Hayatabad have become so frequent in the past year that many well-to-do Pakistanis who lived in substantial homes there have fled, leaving the area to diplomats and middle-class families.
Iran maintains a sizable consulate in Peshawar to help organize pilgrimages to Iran for Pakistani Shiites from Kurram, in the tribal region. There is also considerable trade between Iran and the northwestern city.
The Taliban and their supporters from Al Qaeda control much of the tribal region adjacent to Peshawar, and the militants have tightened their noose on the city, terrorizing residents but stopping short of attempting a takeover.
Peshawar is the headquarters of the 11th Corps of the Pakistani Army. The provincial police force has been trying to battle the militants in the towns around Peshawar by organizing operations backed by helicopter gunships.
But the Taliban, backed by criminal gangs, appear to have superior intelligence that enables them to track the movements of politicians, diplomats and wealthy Pakistanis.
After Vance's killing on Wednesday, some American aid workers were evacuated from the city and flown back to the United States.
By Jane Perlez
Thursday, November 13, 2008
ISLAMABAD: Gunmen abducted an Iranian diplomat in the chaotic city of Peshawar in Pakistan's northwest on Thursday, a day after the shooting death of an American aid worker there, the police said.
The diplomat, Hesmatollah Atharzadeh, who was the commercial counselor at the Iranian Consulate, was leaving his house in the suburb of Hayatabad when the gunmen attacked, the police said. His driver was killed.
The kidnapping of the Iranian comes after a series of suicide bombings by Taliban militants in Peshawar in recent months.
The police said they suspected that Islamic militants were involved in the killing of the American aid worker, Stephen Vance.
On Tuesday night, a suicide bomber blew himself up in the city's main stadium after the closing ceremony of inter-provincial games, the first such event after a new secular provincial government lifted the ban on sports imposed by a coalition of religious parties.
According to police accounts, Atharzadeh was snatched as he was on his way to work Thursday. The attackers sprayed bullets at the car and dragged the diplomat away, the police said.
An Afghan diplomat, Abdul Khaliq Farahi, was kidnapped from Hayatabad two months ago and is still missing. The suburb of Hayatabad abuts the Khyber region of the Federally Administered Tribal Area and is the first point of entry for militants coming from the tribal area into Peshawar.
Kidnappings in Hayatabad have become so frequent in the past year that many well-to-do Pakistanis who lived in substantial homes there have fled, leaving the area to diplomats and middle-class families.
Iran maintains a sizable consulate in Peshawar to help organize pilgrimages to Iran for Pakistani Shiites from Kurram, in the tribal region. There is also considerable trade between Iran and the northwestern city.
The Taliban and their supporters from Al Qaeda control much of the tribal region adjacent to Peshawar, and the militants have tightened their noose on the city, terrorizing residents but stopping short of attempting a takeover.
Peshawar is the headquarters of the 11th Corps of the Pakistani Army. The provincial police force has been trying to battle the militants in the towns around Peshawar by organizing operations backed by helicopter gunships.
But the Taliban, backed by criminal gangs, appear to have superior intelligence that enables them to track the movements of politicians, diplomats and wealthy Pakistanis.
After Vance's killing on Wednesday, some American aid workers were evacuated from the city and flown back to the United States.
**************
U.S. says Iraqi who shot troops may have been Qaeda
Reuters
Thursday, November 13, 2008
BAGHDAD: An Iraqi soldier who shot dead two U.S. troops and wounded six on a rampage in the northern city of Mosul may have been an al Qaeda infiltrator, the spokesman for U.S. forces in Iraq said on Thursday.
The Iraqi soldier opened fire on the Americans on Wednesday at a joint security station in the volatile city, before being killed by in return fire.
"It appears there was an Iraqi soldier, possibly infiltrated by AQ, who engaged a number of soldiers and killed one of them," Brigadier General David Perkins told Reuters television, using an abbreviation for al Qaeda, the Sunni militant group.
Iraqi police and military sources said the shooting happened after a quarrel broke out between the Iraqi and U.S. soldiers at the station, but the U.S. military has denied there was a fight.
"There were some false news reports that there had been altercations between the American soldiers and Iraqi soldier ... in fact there were no altercations," Perkins said.
The incident was not the first in which an Iraqi soldier has ended up in a gun battle with his U.S. counterparts. In December last year, an Iraqi soldier opened fire on U.S. troops during a joint patrol, also in Mosul, killing two and wounding three.
(Reporting by Tim Cocks in Baghdad and Deborah Lutterbeck in Washington)
Reuters
Thursday, November 13, 2008
BAGHDAD: An Iraqi soldier who shot dead two U.S. troops and wounded six on a rampage in the northern city of Mosul may have been an al Qaeda infiltrator, the spokesman for U.S. forces in Iraq said on Thursday.
The Iraqi soldier opened fire on the Americans on Wednesday at a joint security station in the volatile city, before being killed by in return fire.
"It appears there was an Iraqi soldier, possibly infiltrated by AQ, who engaged a number of soldiers and killed one of them," Brigadier General David Perkins told Reuters television, using an abbreviation for al Qaeda, the Sunni militant group.
Iraqi police and military sources said the shooting happened after a quarrel broke out between the Iraqi and U.S. soldiers at the station, but the U.S. military has denied there was a fight.
"There were some false news reports that there had been altercations between the American soldiers and Iraqi soldier ... in fact there were no altercations," Perkins said.
The incident was not the first in which an Iraqi soldier has ended up in a gun battle with his U.S. counterparts. In December last year, an Iraqi soldier opened fire on U.S. troops during a joint patrol, also in Mosul, killing two and wounding three.
(Reporting by Tim Cocks in Baghdad and Deborah Lutterbeck in Washington)
Obama and a makeover for the 'ugly American'
By Bernd DebusmannReuters
Thursday, November 13, 2008
WASHINGTON: Fifty years ago, a pair of American writers published a novel that trained a critical spotlight on U.S. involvement in Southeast Asia. The book, by William Lederer and Eugene Burdick, became a best seller, and its title, "The Ugly American," turned into an enduring label.
It has been a dual-purpose label, first primarily pasted on inept American officials abroad and later on the kind of traveler who would irritate the natives with boorish manners and garish clothes, feeding anti-American sentiments around the globe.
Will they disappear, or fade, now that the United States has elected as its next president a black man who has described himself as a citizen of the world? The euphoric international reaction to Barack Obama's victory suggests that America's star will shine more brightly, at least temporarily, than it has in decades.
As Obama put it in his victory speech, "A new dawn of American leadership is at hand."
Within minutes of the election results last week, American television viewers were treated to what had become rare images from abroad: large crowds happily waving - rather than burning - American flags.
Cheers for a charismatic young man who said his election showed that "America is a place where all things are possible" came from countries where a similar feat is difficult to imagine. A French president of Algerian extraction? A Turk as German chancellor? A prime minister of Pakistani descent running Britain? A Moluccan in charge of the Netherlands?
"Everywhere I've been this year - from Jerusalem to Japan to Colombia to Italy and back again - I've heard people essentially say that America is an overweight white plutocrat who is not only out of touch with the world but also shows no signs of wanting to grow closer to it," the British writer Pico Iyer wrote in an essay in Time magazine.
The image, he said, was unfair but potent.
What better antidote to the idea of an out-of-touch, overweight white plutocrat than a rake-thin black president who says he wants to "build new bridges across the world" and is seen by many as the incarnation of "cool"?
There are already voices who say that the global good will Obama now enjoys cannot last and that there are limits to what a president can do to change the image of the United States. True enough, but there is no better example than President George W. Bush of a U.S. leader's tremendous power to affect perceptions.
The speed with which he managed to turn almost universal sympathy for the United States after Sept. 11, 2001, into almost universal detestation was remarkable. By 2004, good will had evaporated so completely that a British mass circulation newspaper, The Daily Mirror, marked Bush's re-election with a front page that showed a picture of the president over the headline "How can 59,054,087 people be so DUMB?"
No such rebukes for the American electorate in 2008. What was remarkable in 2008 was how quickly Americans abroad sensed a change of mood. After the Nov. 4 election, American expatriates posted jubilant messages to social networking sites like Facebook saying it was cool to be American again.
Some expressed relief at no longer having to pretend to be Canadian, a longtime ruse to avoid being stereotyped. The tactic is particularly popular among Americans of backpack-travel age and among those traveling in areas where anti-American sentiment runs particularly high.
Numerous opinion polls have tracked the steady decline of America's image. In April, a survey by the BBC and the University of Maryland found that people in 23 countries saw U.S. influence in the world more negatively than that of North Korea. Hello, Washington, you have a problem!
Almost all the surveys point to foreign policy - the war in Iraq, the scandal of the Abu Ghraib prison, the detention camp in Guantánamo Bay, Cuba - as the principal reasons for disenchantment. While improvement on the foreign policy front has remained static, however, private organizations have started various initiatives to tackle the image problem on a more personal level.
The nonprofit organization Business for Diplomatic Action has distributed more than 200,000 copies of its "World Citizen's Guide" to corporate travelers, with 16 tips that are a mirror image of the behavioral patterns that earned Americans a boorish reputation in the first place.
The organization's founder, Keith Reinhard, an advertising executive, is convinced that "our collective personality is one of the causes of anti-Americanism."
"We are seen as loud, arrogant and completely self-absorbed," he added.
Fifty years later, that echoes a passage in "The Ugly American":
"A mysterious change seems to come over Americans when they go to a foreign land... They are loud and ostentatious. Perhaps they are frightened and defensive; or maybe they are not properly trained and make mistakes out of ignorance."
Another job to add to the president-elect's long list of things to change.
By Bernd DebusmannReuters
Thursday, November 13, 2008
WASHINGTON: Fifty years ago, a pair of American writers published a novel that trained a critical spotlight on U.S. involvement in Southeast Asia. The book, by William Lederer and Eugene Burdick, became a best seller, and its title, "The Ugly American," turned into an enduring label.
It has been a dual-purpose label, first primarily pasted on inept American officials abroad and later on the kind of traveler who would irritate the natives with boorish manners and garish clothes, feeding anti-American sentiments around the globe.
Will they disappear, or fade, now that the United States has elected as its next president a black man who has described himself as a citizen of the world? The euphoric international reaction to Barack Obama's victory suggests that America's star will shine more brightly, at least temporarily, than it has in decades.
As Obama put it in his victory speech, "A new dawn of American leadership is at hand."
Within minutes of the election results last week, American television viewers were treated to what had become rare images from abroad: large crowds happily waving - rather than burning - American flags.
Cheers for a charismatic young man who said his election showed that "America is a place where all things are possible" came from countries where a similar feat is difficult to imagine. A French president of Algerian extraction? A Turk as German chancellor? A prime minister of Pakistani descent running Britain? A Moluccan in charge of the Netherlands?
"Everywhere I've been this year - from Jerusalem to Japan to Colombia to Italy and back again - I've heard people essentially say that America is an overweight white plutocrat who is not only out of touch with the world but also shows no signs of wanting to grow closer to it," the British writer Pico Iyer wrote in an essay in Time magazine.
The image, he said, was unfair but potent.
What better antidote to the idea of an out-of-touch, overweight white plutocrat than a rake-thin black president who says he wants to "build new bridges across the world" and is seen by many as the incarnation of "cool"?
There are already voices who say that the global good will Obama now enjoys cannot last and that there are limits to what a president can do to change the image of the United States. True enough, but there is no better example than President George W. Bush of a U.S. leader's tremendous power to affect perceptions.
The speed with which he managed to turn almost universal sympathy for the United States after Sept. 11, 2001, into almost universal detestation was remarkable. By 2004, good will had evaporated so completely that a British mass circulation newspaper, The Daily Mirror, marked Bush's re-election with a front page that showed a picture of the president over the headline "How can 59,054,087 people be so DUMB?"
No such rebukes for the American electorate in 2008. What was remarkable in 2008 was how quickly Americans abroad sensed a change of mood. After the Nov. 4 election, American expatriates posted jubilant messages to social networking sites like Facebook saying it was cool to be American again.
Some expressed relief at no longer having to pretend to be Canadian, a longtime ruse to avoid being stereotyped. The tactic is particularly popular among Americans of backpack-travel age and among those traveling in areas where anti-American sentiment runs particularly high.
Numerous opinion polls have tracked the steady decline of America's image. In April, a survey by the BBC and the University of Maryland found that people in 23 countries saw U.S. influence in the world more negatively than that of North Korea. Hello, Washington, you have a problem!
Almost all the surveys point to foreign policy - the war in Iraq, the scandal of the Abu Ghraib prison, the detention camp in Guantánamo Bay, Cuba - as the principal reasons for disenchantment. While improvement on the foreign policy front has remained static, however, private organizations have started various initiatives to tackle the image problem on a more personal level.
The nonprofit organization Business for Diplomatic Action has distributed more than 200,000 copies of its "World Citizen's Guide" to corporate travelers, with 16 tips that are a mirror image of the behavioral patterns that earned Americans a boorish reputation in the first place.
The organization's founder, Keith Reinhard, an advertising executive, is convinced that "our collective personality is one of the causes of anti-Americanism."
"We are seen as loud, arrogant and completely self-absorbed," he added.
Fifty years later, that echoes a passage in "The Ugly American":
"A mysterious change seems to come over Americans when they go to a foreign land... They are loud and ostentatious. Perhaps they are frightened and defensive; or maybe they are not properly trained and make mistakes out of ignorance."
Another job to add to the president-elect's long list of things to change.
Colombians riot over money lost in pyramid schemes
Reuters
Thursday, November 13, 2008
By Hugh Bronstein
Thousands of Colombians rioted around the country on Wednesday, demanding their money back after being defrauded in a series of pyramid schemes and then mocked in some cases by those who took their cash.
In some of the nine cities where the protests erupted, police used batons and tear gas to subdue angry mobs.
In recent months, a number of phony loan companies have vanished along with millions of dollars in deposits after promising interest rates of up to 150 percent. Regular savings accounts are unpopular in Colombia due to high banking fees.
"Dear investors, thanks for trusting us and depositing your money," read a note posted on the door of a company in the southwestern province of Cauca after its owners disappeared.
"Now, for being stupid and believing in financial witchcraft, you will have to work for your money," it said, prompting depositors to storm the building, wreck the company's offices and loot its computer equipment and furniture.
Some left the scene bloodied after confronting the police.
President Alvaro Uribe called on Congress to pass a law that would penalize the swindlers and Vice President Francisco Santos warned people to avoid the schemes, which have mushroomed on promises of easy money.
"When someone promises to double your money in six months they are trying to trick you," Santos said. "Nothing is free in this world and that is not going to change."
Police arrested a group of loan managers as they tried to flee the central city of Pereira with four suitcases stuffed with cash. They were charged with bribery after offering money to the officers in exchange for their freedom.
Pyramid scams are common in the developing world where many people have little financial sophistication.
The collapse in 1997 of pyramid investment schemes in Albania produced losses of $2 billion (1.34 billion pounds) and led to anarchy until an Italian-led European force restored order.
Many Colombians are feeling squeezed as the world financial crisis weighs on the Andean country's economy, which the central bank says may grow by only 1 percent next year after a boom driven by record foreign direct investment.
Uribe remains popular for driving leftist rebels back into the jungles after decades of fighting that once encroached on the country's urban industrial areas.
(Editing by Eric Beech)
Reuters
Thursday, November 13, 2008
By Hugh Bronstein
Thousands of Colombians rioted around the country on Wednesday, demanding their money back after being defrauded in a series of pyramid schemes and then mocked in some cases by those who took their cash.
In some of the nine cities where the protests erupted, police used batons and tear gas to subdue angry mobs.
In recent months, a number of phony loan companies have vanished along with millions of dollars in deposits after promising interest rates of up to 150 percent. Regular savings accounts are unpopular in Colombia due to high banking fees.
"Dear investors, thanks for trusting us and depositing your money," read a note posted on the door of a company in the southwestern province of Cauca after its owners disappeared.
"Now, for being stupid and believing in financial witchcraft, you will have to work for your money," it said, prompting depositors to storm the building, wreck the company's offices and loot its computer equipment and furniture.
Some left the scene bloodied after confronting the police.
President Alvaro Uribe called on Congress to pass a law that would penalize the swindlers and Vice President Francisco Santos warned people to avoid the schemes, which have mushroomed on promises of easy money.
"When someone promises to double your money in six months they are trying to trick you," Santos said. "Nothing is free in this world and that is not going to change."
Police arrested a group of loan managers as they tried to flee the central city of Pereira with four suitcases stuffed with cash. They were charged with bribery after offering money to the officers in exchange for their freedom.
Pyramid scams are common in the developing world where many people have little financial sophistication.
The collapse in 1997 of pyramid investment schemes in Albania produced losses of $2 billion (1.34 billion pounds) and led to anarchy until an Italian-led European force restored order.
Many Colombians are feeling squeezed as the world financial crisis weighs on the Andean country's economy, which the central bank says may grow by only 1 percent next year after a boom driven by record foreign direct investment.
Uribe remains popular for driving leftist rebels back into the jungles after decades of fighting that once encroached on the country's urban industrial areas.
(Editing by Eric Beech)
************
Banker sentenced in murder of Russian regulator
By Andrew E. Kramer
Thursday, November 13, 2008
MOSCOW: A Moscow banker accused of hiring gunmen to kill a government regulator who had imposed sanctions on his bank was sentenced Thursday to 19 years in prison.
The case is evocative of the coarseness that often marks business and government dealings in Russia, which authorities here like to say is more a phenomenon of the early transition to capitalism in the 1990s than today. It also became an important test of Russia's willingness to prosecute suspected money laundering.
Aleksei Frenkel, an executive at VIP Holding bank, was arrested three months after the first deputy chairman of the central bank, Andrei Kozlov, was shot to death in a parking lot on Sept. 13, 2006. Kozlov's driver was also killed.
The authorities said that Frenkel, angry after the regulator sanctioned his bank, persuaded a colleague to hire three Ukrainian taxi drivers to shoot Kozlov, who was at the time the country's highest-ranking regulator of consumer banks. Frenkel has maintained his innocence through the investigation and trial. Relatives said Thursday that he would appeal the sentencing.
The case was important for Russia's nascent banking system. At the central bank, Kozlov had been responsible for pushing the chaotic banking sector in Russia through a transition from a fragmented and opaque industry serving wealthy businessmen to one able to accommodate retail customers.
Among his actions was the introduction of deposit insurance, which banking analysts say might have helped prevent wholesale runs on banks during the current financial crisis. He was one of the highest-ranking officials to be killed during the eight-year presidency of Vladimir Putin.
The significance of the case rose in the spring of 2007, when prosecutors in Austria disclosed that they had passed an important lead on to their Russian colleagues, but that it was disregarded.
The Austrians revealed that two weeks before the murder they had begun cooperating with Kozlov in investigating a money-laundering plan in which large sums from little-known Russian banks were being routed through Raiffeisen, a bank based in Vienna, sometimes tens of millions of dollars in a single day. Raiffeisen has denied wrongdoing.
The Austrian disclosure suggested a different motive for the murder than the Russians had ascribed to Frenkel: The Austrians had been helping Kozlov roll up the money-laundering plan that originated with a bank to which Frenkel had no ties. The Austrian authorities said a letter sent to the Russian prosecutor general's office went unanswered.
The New Times, an independent magazine in Moscow that first reported the story, suggested that Kozlov was killed as he tried to halt this money-laundering operation, which the magazine suggested was run for corrupt officials in the Russian government.
But the Russian authorities said they had solved the case when they charged Frenkel, who was convicted along with six co-defendants at a jury trial in Moscow.
By Andrew E. Kramer
Thursday, November 13, 2008
MOSCOW: A Moscow banker accused of hiring gunmen to kill a government regulator who had imposed sanctions on his bank was sentenced Thursday to 19 years in prison.
The case is evocative of the coarseness that often marks business and government dealings in Russia, which authorities here like to say is more a phenomenon of the early transition to capitalism in the 1990s than today. It also became an important test of Russia's willingness to prosecute suspected money laundering.
Aleksei Frenkel, an executive at VIP Holding bank, was arrested three months after the first deputy chairman of the central bank, Andrei Kozlov, was shot to death in a parking lot on Sept. 13, 2006. Kozlov's driver was also killed.
The authorities said that Frenkel, angry after the regulator sanctioned his bank, persuaded a colleague to hire three Ukrainian taxi drivers to shoot Kozlov, who was at the time the country's highest-ranking regulator of consumer banks. Frenkel has maintained his innocence through the investigation and trial. Relatives said Thursday that he would appeal the sentencing.
The case was important for Russia's nascent banking system. At the central bank, Kozlov had been responsible for pushing the chaotic banking sector in Russia through a transition from a fragmented and opaque industry serving wealthy businessmen to one able to accommodate retail customers.
Among his actions was the introduction of deposit insurance, which banking analysts say might have helped prevent wholesale runs on banks during the current financial crisis. He was one of the highest-ranking officials to be killed during the eight-year presidency of Vladimir Putin.
The significance of the case rose in the spring of 2007, when prosecutors in Austria disclosed that they had passed an important lead on to their Russian colleagues, but that it was disregarded.
The Austrians revealed that two weeks before the murder they had begun cooperating with Kozlov in investigating a money-laundering plan in which large sums from little-known Russian banks were being routed through Raiffeisen, a bank based in Vienna, sometimes tens of millions of dollars in a single day. Raiffeisen has denied wrongdoing.
The Austrian disclosure suggested a different motive for the murder than the Russians had ascribed to Frenkel: The Austrians had been helping Kozlov roll up the money-laundering plan that originated with a bank to which Frenkel had no ties. The Austrian authorities said a letter sent to the Russian prosecutor general's office went unanswered.
The New Times, an independent magazine in Moscow that first reported the story, suggested that Kozlov was killed as he tried to halt this money-laundering operation, which the magazine suggested was run for corrupt officials in the Russian government.
But the Russian authorities said they had solved the case when they charged Frenkel, who was convicted along with six co-defendants at a jury trial in Moscow.
**************
Former ambassador fined for insider trading
Reuters
Thursday, November 13, 2008
LONDON: Richard Ralph, a former ambassador to Peru, has been fined 118,000 pounds for insider trading last year in a mining company of which he was executive chairman, the financial watchdog said.
The Financial Services Authority said on Thursday that Ralph and a friend, Filip Boyen who was fined 82,000 pounds, had dealt in London-listed Monterrico Metals' shares in January 2007 on the basis of inside information.
FSA director of enforcement Margaret Cole said Boyen and Ralph had co-operated fully with its investigation "by coming forward and providing us with information about market misconduct and as such we were more lenient.
"But for that co-operation, we would have seriously considered taking criminal proceedings."
In January 2007, Monterrico was known to be in takeover talks, whose details were confidential. The FSA said that on about January 28, 2007 Ralph had asked Boyen to buy 30,000 pounds worth of shares in the company.
On February 5 2007, a Chinese mining consortium announced a takeover agreement with Monterrico, and Boyen sold his shares.
The FSA later began an investigation into suspicious trading prior to the takeover announcement, at which point Boyen and Ralph came forward.
The financial penalties for Ralph and Boyen are made up of the disgorgement of their profits and additional penalties of 105,000 pounds and 52,500 pounds respectively, the FSA said.
(Reporting by Dan Lalor; Editing by Hans Peters)
Reuters
Thursday, November 13, 2008
LONDON: Richard Ralph, a former ambassador to Peru, has been fined 118,000 pounds for insider trading last year in a mining company of which he was executive chairman, the financial watchdog said.
The Financial Services Authority said on Thursday that Ralph and a friend, Filip Boyen who was fined 82,000 pounds, had dealt in London-listed Monterrico Metals' shares in January 2007 on the basis of inside information.
FSA director of enforcement Margaret Cole said Boyen and Ralph had co-operated fully with its investigation "by coming forward and providing us with information about market misconduct and as such we were more lenient.
"But for that co-operation, we would have seriously considered taking criminal proceedings."
In January 2007, Monterrico was known to be in takeover talks, whose details were confidential. The FSA said that on about January 28, 2007 Ralph had asked Boyen to buy 30,000 pounds worth of shares in the company.
On February 5 2007, a Chinese mining consortium announced a takeover agreement with Monterrico, and Boyen sold his shares.
The FSA later began an investigation into suspicious trading prior to the takeover announcement, at which point Boyen and Ralph came forward.
The financial penalties for Ralph and Boyen are made up of the disgorgement of their profits and additional penalties of 105,000 pounds and 52,500 pounds respectively, the FSA said.
(Reporting by Dan Lalor; Editing by Hans Peters)
*****************
UBS shares drop after U.S. indicts top banker
Reuters
Thursday, November 13, 2008
By Lisa Jucca
Shares in UBS fell Thursday after U.S. authorities charged the Swiss bank's wealth management boss with helping Americans hide $20 billion (13 billion pounds) from the taxman, putting Swiss bank secrecy laws in the spotlight again.
The indictment of board member Raoul Weil could scarcely have come at a worse time for UBS, which is trying to rebuild client confidence after unloading $60 billion of toxic assets last month in a deal with the Swiss government and central bank.
UBS shares were down 4.7 percent at 15.11 Swiss francs at 2:54 p.m., underperforming a 2 percent fall in the DJ Stoxx European banks sector index.
Analysts said UBS's offshore business in the United States only accounted for about 2 percent of private banking assets, but the bank could ill afford further damage to its reputation.
"The direct implication on earnings is not big," Dirk Becker, an analyst with Kepler Equities said in a research note, but added: "We are worried about the ongoing negative headlines and possible actions of other countries."
Switzerland's bank secrecy rules, which in darker times enabled Nazi Germany to hide assets stolen from Holocaust victims, are also facing renewed pressure from its European neighbours, especially Germany, who say the rules are being abused by dishonest clients.
EU regulators unveiled plans Thursday to toughen up an existing agreement with Switzerland and other tax havens to prevent investors from dodging taxes.
Switzerland is estimated to hold about $2 trillion or 27 percent of global offshore assets.
U.S. authorities launched their probe earlier this year into whether the world's biggest bank to the rich helped U.S. citizens dodge taxes by hiding money in Swiss accounts. The bank was singled out by U.S. President-elect Barack Obama as one of those which helped "tax cheats."
UBS's disastrous foray into the U.S. subprime credit markets has forced the bank to make nearly $49 billion of writedowns, more than any other bank in Europe, and its stock has lost two thirds of its value since the start of 2008.
The run of bad news has scared off wealthy clients, who took out nearly $50 billion from its core wealth management division in the third quarter alone.
"The long-term future of UBS is not dependent on this legal case, nor indeed the fate of Raoul Weil, and the share price is affected by far more serious matters than this," Helvea analyst Peter Thorne said. "But this is not good news for the shares."
Domestic competitor Credit Suisse's shares cut earlier losses and were down 1.13 percent at 2:56 p.m.
BADLY BRUISED
The U.S. indictment said Weil had been charged with concealing the assets of about 17,000 U.S. clients from the Internal Revenue Service. Other unnamed bankers are co-defendants in this case.
An attorney for Weil, who is in Switzerland, said on Wednesday he was innocent and called the charges against him "totally unjustified."
UBS said Wednesday Weil would be handing over his duties to his deputy Marten Hoekstra while he fights the case, adding it was continuing its efforts to cooperate with the probe.
Analysts expect the latest step to lead to a quick settlement that would most likely involve Swiss authorities.
They also noted that the bank had been able to recover from serious past blows, like the prominent $1.25 billion settlement it and Credit Suisse agreed to pay after failing to return to relatives of Holocaust victims' wealth.
"It does not make sense to argue with the United States. If the United States can get a couple of hundred million dollars from UBS they have a template with which they can go after any other foreign bank," said Vontobel analyst Panagiotis Spiliopoulos. "Only time will heal some of UBS' wounds."
UBS decided earlier this year to stop offering offshore Swiss bank accounts to U.S. citizens.
U.S. authorities did not publicly link the Weil case with that of Bradley Birkenfeld, a former UBS banker who pleaded guilty in June to helping a billionaire hide $200 million in assets from U.S. tax authorities.
Birkenfeld is cooperating with investigators.
Switzerland has so far refused to hand over details of Swiss bank accounts held in the name of UBS's U.S. clients but is assessing the situation to see whether it can cooperate.
Under strict Swiss bank privacy laws, bank account details cannot be transferred to foreign authorities unless Berne finds evidence of clear tax fraud.
(Editing by Will Waterman and Jon Loades-Carter)
Reuters
Thursday, November 13, 2008
By Lisa Jucca
Shares in UBS fell Thursday after U.S. authorities charged the Swiss bank's wealth management boss with helping Americans hide $20 billion (13 billion pounds) from the taxman, putting Swiss bank secrecy laws in the spotlight again.
The indictment of board member Raoul Weil could scarcely have come at a worse time for UBS, which is trying to rebuild client confidence after unloading $60 billion of toxic assets last month in a deal with the Swiss government and central bank.
UBS shares were down 4.7 percent at 15.11 Swiss francs at 2:54 p.m., underperforming a 2 percent fall in the DJ Stoxx European banks sector index.
Analysts said UBS's offshore business in the United States only accounted for about 2 percent of private banking assets, but the bank could ill afford further damage to its reputation.
"The direct implication on earnings is not big," Dirk Becker, an analyst with Kepler Equities said in a research note, but added: "We are worried about the ongoing negative headlines and possible actions of other countries."
Switzerland's bank secrecy rules, which in darker times enabled Nazi Germany to hide assets stolen from Holocaust victims, are also facing renewed pressure from its European neighbours, especially Germany, who say the rules are being abused by dishonest clients.
EU regulators unveiled plans Thursday to toughen up an existing agreement with Switzerland and other tax havens to prevent investors from dodging taxes.
Switzerland is estimated to hold about $2 trillion or 27 percent of global offshore assets.
U.S. authorities launched their probe earlier this year into whether the world's biggest bank to the rich helped U.S. citizens dodge taxes by hiding money in Swiss accounts. The bank was singled out by U.S. President-elect Barack Obama as one of those which helped "tax cheats."
UBS's disastrous foray into the U.S. subprime credit markets has forced the bank to make nearly $49 billion of writedowns, more than any other bank in Europe, and its stock has lost two thirds of its value since the start of 2008.
The run of bad news has scared off wealthy clients, who took out nearly $50 billion from its core wealth management division in the third quarter alone.
"The long-term future of UBS is not dependent on this legal case, nor indeed the fate of Raoul Weil, and the share price is affected by far more serious matters than this," Helvea analyst Peter Thorne said. "But this is not good news for the shares."
Domestic competitor Credit Suisse's shares cut earlier losses and were down 1.13 percent at 2:56 p.m.
BADLY BRUISED
The U.S. indictment said Weil had been charged with concealing the assets of about 17,000 U.S. clients from the Internal Revenue Service. Other unnamed bankers are co-defendants in this case.
An attorney for Weil, who is in Switzerland, said on Wednesday he was innocent and called the charges against him "totally unjustified."
UBS said Wednesday Weil would be handing over his duties to his deputy Marten Hoekstra while he fights the case, adding it was continuing its efforts to cooperate with the probe.
Analysts expect the latest step to lead to a quick settlement that would most likely involve Swiss authorities.
They also noted that the bank had been able to recover from serious past blows, like the prominent $1.25 billion settlement it and Credit Suisse agreed to pay after failing to return to relatives of Holocaust victims' wealth.
"It does not make sense to argue with the United States. If the United States can get a couple of hundred million dollars from UBS they have a template with which they can go after any other foreign bank," said Vontobel analyst Panagiotis Spiliopoulos. "Only time will heal some of UBS' wounds."
UBS decided earlier this year to stop offering offshore Swiss bank accounts to U.S. citizens.
U.S. authorities did not publicly link the Weil case with that of Bradley Birkenfeld, a former UBS banker who pleaded guilty in June to helping a billionaire hide $200 million in assets from U.S. tax authorities.
Birkenfeld is cooperating with investigators.
Switzerland has so far refused to hand over details of Swiss bank accounts held in the name of UBS's U.S. clients but is assessing the situation to see whether it can cooperate.
Under strict Swiss bank privacy laws, bank account details cannot be transferred to foreign authorities unless Berne finds evidence of clear tax fraud.
(Editing by Will Waterman and Jon Loades-Carter)
****************
Top hedge funds defend industry
Reuters
Thursday, November 13, 2008
By John Poirier and Svea Herbst-Bayliss
Five of the world's richest hedge fund managers defended their secretive industry to Congress on Thursday but most conceded they will have to disclose more information to satisfy financial regulators.
In a rare public appearance before lawmakers, George Soros, James Simons, John Paulson, Philip Falcone and Kenneth Griffin answered questions about how funds in the $1.7 trillion (1.1 trillion pounds) hedge fund industry use borrowed money, how much their managers earn and about their taste to keep their bets secret.
Rep. Henry Waxman, a California Democrat who heads the House Committee on Oversight and Government Reform, called the hearing at a time when hedge funds have been criticized for accelerating the worst financial crisis since the Depression.
"Currently, hedge funds are virtually unregulated," Waxman said. "They are not required to report information on their holdings, their leverage, or their strategies. Regulators aren't even certain how many hedge funds exist or how much money they control."
Hedge funds, which are delivering their worst-ever returns this year, have been blamed for contributing to the collapse of two major investment banks, Bear Stearns and Lehman Brothers, and for having kicked stock prices lower in recent weeks.
George Soros, a Democrat who left retirement at age 78 to resume running Soros Fund Management, said hedge funds played a role in the financial crisis and will suffer the consequences.
"The bubble has now burst and hedge funds will be decimated," said Soros, who earned $1 billion by betting against the British pound in 1992. "I would guess that the amount of money they manage will shrink by between 50 and 75 percent."
Soros offered a bleak outlook for the global economy.
"A deep recession is now inevitable and the possibility of a depression cannot be ruled out," he said.
MORE DISCLOSURE NEEDED?
Several fund executives, when questioned by lawmakers, acknowledged hedge funds could pose systemic risks to the financial system. But they also said Lehman and banks that used too much leverage played a big role in the crisis and urged regulators to tighten rules there.
Speaking about themselves, some agreed that regulators should be given greater insight into how they make money.
Soros said "yes", Simons said "yup" and Falcone, who runs Harbinger Capital, added "I agree," when lawmakers asked the panel if U.S. regulators should be able to look closely at their trading positions to prevent an unravelling of the whole financial system.
But any trading data "should stay with the Fed" and not surface in the news media, said Simons, a former mathematics professor who now runs Renaissance Technologies.
Kenneth Griffin, who has run Citadel Investment Group for 18 years, was generally opposed to new regulations. "We do not need greater regulation of hedge funds. We've not seen hedge funds as a focal point of the carnage," he said.
David Ruder, a former chairman of the Securities and Exchange Commission which in recent years tried and failed to force hedge funds to register with the agency, said the credit crisis was mostly due to mortgage originators, investment banks, rating agencies and sellers of credit default swaps
(CDS).
"Although hedge funds have been active participants in the financial markets during the past years, they do not seem to have played a major role in the events precipitating the crisis," Ruder testified. He led the SEC during the Reagan administration and is now a Northwestern University professor.
The SEC and the Federal Reserve must share some of the blame for their hands-off approach to highly leveraged banks and the uncontrolled nature of the CDS market, Falcone said.
Falcone also defended short-selling, saying it was a valuable component of financial markets and didn't drive companies out of business. Two months ago, the SEC briefly forbid money managers from shorting some 1,000 financial stocks, or betting the stock price would decline.
Hedge funds are now facing heavy losses and investors demanding their money back. The average hedge fund has lost 15 percent this year, according to Hedge Fund Research.
However, Paulson & Co's John Paulson, one of the first investors to bet housing prices could decline on a national basis last year, is making money this year, even as some of the others who testified are nursing losses.
(Reporting by Svea Herbst-Bayliss and John Poirier; writing by Karey Wutkowski; Editing by Tim Dobbyn)
Reuters
Thursday, November 13, 2008
By John Poirier and Svea Herbst-Bayliss
Five of the world's richest hedge fund managers defended their secretive industry to Congress on Thursday but most conceded they will have to disclose more information to satisfy financial regulators.
In a rare public appearance before lawmakers, George Soros, James Simons, John Paulson, Philip Falcone and Kenneth Griffin answered questions about how funds in the $1.7 trillion (1.1 trillion pounds) hedge fund industry use borrowed money, how much their managers earn and about their taste to keep their bets secret.
Rep. Henry Waxman, a California Democrat who heads the House Committee on Oversight and Government Reform, called the hearing at a time when hedge funds have been criticized for accelerating the worst financial crisis since the Depression.
"Currently, hedge funds are virtually unregulated," Waxman said. "They are not required to report information on their holdings, their leverage, or their strategies. Regulators aren't even certain how many hedge funds exist or how much money they control."
Hedge funds, which are delivering their worst-ever returns this year, have been blamed for contributing to the collapse of two major investment banks, Bear Stearns and Lehman Brothers, and for having kicked stock prices lower in recent weeks.
George Soros, a Democrat who left retirement at age 78 to resume running Soros Fund Management, said hedge funds played a role in the financial crisis and will suffer the consequences.
"The bubble has now burst and hedge funds will be decimated," said Soros, who earned $1 billion by betting against the British pound in 1992. "I would guess that the amount of money they manage will shrink by between 50 and 75 percent."
Soros offered a bleak outlook for the global economy.
"A deep recession is now inevitable and the possibility of a depression cannot be ruled out," he said.
MORE DISCLOSURE NEEDED?
Several fund executives, when questioned by lawmakers, acknowledged hedge funds could pose systemic risks to the financial system. But they also said Lehman and banks that used too much leverage played a big role in the crisis and urged regulators to tighten rules there.
Speaking about themselves, some agreed that regulators should be given greater insight into how they make money.
Soros said "yes", Simons said "yup" and Falcone, who runs Harbinger Capital, added "I agree," when lawmakers asked the panel if U.S. regulators should be able to look closely at their trading positions to prevent an unravelling of the whole financial system.
But any trading data "should stay with the Fed" and not surface in the news media, said Simons, a former mathematics professor who now runs Renaissance Technologies.
Kenneth Griffin, who has run Citadel Investment Group for 18 years, was generally opposed to new regulations. "We do not need greater regulation of hedge funds. We've not seen hedge funds as a focal point of the carnage," he said.
David Ruder, a former chairman of the Securities and Exchange Commission which in recent years tried and failed to force hedge funds to register with the agency, said the credit crisis was mostly due to mortgage originators, investment banks, rating agencies and sellers of credit default swaps
(CDS).
"Although hedge funds have been active participants in the financial markets during the past years, they do not seem to have played a major role in the events precipitating the crisis," Ruder testified. He led the SEC during the Reagan administration and is now a Northwestern University professor.
The SEC and the Federal Reserve must share some of the blame for their hands-off approach to highly leveraged banks and the uncontrolled nature of the CDS market, Falcone said.
Falcone also defended short-selling, saying it was a valuable component of financial markets and didn't drive companies out of business. Two months ago, the SEC briefly forbid money managers from shorting some 1,000 financial stocks, or betting the stock price would decline.
Hedge funds are now facing heavy losses and investors demanding their money back. The average hedge fund has lost 15 percent this year, according to Hedge Fund Research.
However, Paulson & Co's John Paulson, one of the first investors to bet housing prices could decline on a national basis last year, is making money this year, even as some of the others who testified are nursing losses.
(Reporting by Svea Herbst-Bayliss and John Poirier; writing by Karey Wutkowski; Editing by Tim Dobbyn)
***************
Australia acts to ban 'naked' short-selling
Reuters
Thursday, November 13, 2008
CANBERRA: Australia moved Thursday to put a permanent ban on the most controversial form of short-selling and imposed tough new disclosure rules, in a crackdown on hedge funds aimed at restoring confidence in markets.
"Australia will be banning 'naked' short-selling," the corporate law minister, Nick Sherry, said, referring to a practice whereby investors sell shares they neither own nor have borrowed in the hope of quickly buying them back at a lower price and pocketing the difference.
Naked short-selling is considered murkier and more risky than traditional short-selling, in which investors sell borrowed stock. The ban is in line with similar moves made recently in the United States and several European countries.
Australian regulators banned covered and naked short-selling in September in an immediate response to the global market meltdown. But they left it to the government to make long-term rulings.
On Thursday, the government confirmed some of the worst fears of the hedge fund industry, mandating a strict new disclosure regime that could compromise the trading strategies of short-sellers. Beginning Wednesday, the new rules would require short-sellers to declare their positions immediately to their brokers, who would in turn notify the stock exchange before trade opened the next morning.
A daily report on short sales by security and volume, including covered short sales in financial securities, would then be made to the market before trade opened the following day.
The current ban on covered short-selling is due to be lifted in two stages, for nonfinancial stocks on Wednesday and for financial stocks not before Jan. 27.
Sherry said he expected the new laws, which the government wants passed by Parliament by mid-December, to also increase supervision of credit ratings agencies, and to require them to become licensed as financial services providers and report annually to the Australian Securities and Investment Commission.
"It is very important for retail and wholesale investors in Australia that we have robust ratings, and robust research of financial products," Sherry said.
The Australian stock market has fallen by about 41 percent this year and is trading near a four-year low.
Reuters
Thursday, November 13, 2008
CANBERRA: Australia moved Thursday to put a permanent ban on the most controversial form of short-selling and imposed tough new disclosure rules, in a crackdown on hedge funds aimed at restoring confidence in markets.
"Australia will be banning 'naked' short-selling," the corporate law minister, Nick Sherry, said, referring to a practice whereby investors sell shares they neither own nor have borrowed in the hope of quickly buying them back at a lower price and pocketing the difference.
Naked short-selling is considered murkier and more risky than traditional short-selling, in which investors sell borrowed stock. The ban is in line with similar moves made recently in the United States and several European countries.
Australian regulators banned covered and naked short-selling in September in an immediate response to the global market meltdown. But they left it to the government to make long-term rulings.
On Thursday, the government confirmed some of the worst fears of the hedge fund industry, mandating a strict new disclosure regime that could compromise the trading strategies of short-sellers. Beginning Wednesday, the new rules would require short-sellers to declare their positions immediately to their brokers, who would in turn notify the stock exchange before trade opened the next morning.
A daily report on short sales by security and volume, including covered short sales in financial securities, would then be made to the market before trade opened the following day.
The current ban on covered short-selling is due to be lifted in two stages, for nonfinancial stocks on Wednesday and for financial stocks not before Jan. 27.
Sherry said he expected the new laws, which the government wants passed by Parliament by mid-December, to also increase supervision of credit ratings agencies, and to require them to become licensed as financial services providers and report annually to the Australian Securities and Investment Commission.
"It is very important for retail and wholesale investors in Australia that we have robust ratings, and robust research of financial products," Sherry said.
The Australian stock market has fallen by about 41 percent this year and is trading near a four-year low.
***************
Retirees cope with dwindling portfolios
By Clifford Krauss
Thursday, November 13, 2008
DELRAY BEACH, Florida: Since the stock market began to fall, friends have been coming to Barbara Goldsmith to talk about their depression, loss of appetite, insomnia and cravings for hot fudge sundaes.
"People are grieving," said Goldsmith, a semiretired psychotherapist who counsels fellow residents of the Gleneagles Country Club, a gated community here. "There was a death. Their money died."
In communities like Gleneagles and in the homes of retirees across the United States, these are days of fear and uncertainty. In theory, retired people are not supposed to invest much in the stock market; in reality, many millions of them do. With the economy in free fall and American stocks down about 40 percent this year, legions of middle- and upper-class people are suddenly worried about having enough to carry them through.
To be sure, no bread lines are forming at places like Gleneagles. The community remains placid and, on the surface at least, highly prosperous. Retirees play golf, tennis and cards amid peach-colored condominium villas, ornate fountains, and manicured palm trees and violet bougainvillea.
But sustaining that comfortable life for another two or three decades, as many retirees hope to do, requires money. People with investments that were worth $1 million or $2 million a few months ago are suddenly canceling cruises, clipping supermarket coupons, eating at home rather than at restaurants and cutting back on contributions to their grandchildren's college educations.
Like retired people everywhere, residents here knowingly juggled what they saw as competing risks.
They all heard the standard advice to move their assets out of stocks and into supersafe investments as they neared retirement. But, with interest rates so low, the returns on safe investments like government bonds were meager, and many of them saw a risk in not keeping some money in stocks. To finance a long retirement, they figured they needed the gains characteristic of the stock market.
Keeping money in stocks left them exposed, of course, to the risk of a once-in-a-lifetime market meltdown. Now, that day is at hand.
"Every television monitor in the card room and locker room is on CNBC, so we can get aggravated all day," said Jerry Rivkin, 75, a retired appliance store owner. "We're playing for nickels and dimes while we watch ourselves losing tens of thousands."
To cope, some people are selling their homes up north, so they will have the money to stay here. A handful of condominiums in Gleneagles have gone into foreclosure, something that was almost unheard of until recently. Humor is becoming darker as residents tell jokes about their shrinking "301(k)" retirement plans and the sorry inheritances their children will be surprised to receive.
For years, retirement and financial advisers have said that elderly people should be lightly invested in stocks, putting most of their assets in bonds, certificates of deposit and other conservative investments. But even some of the experts acknowledge that such a strategy does not always work for retired people in good health who can live to be 90 or older, unless they have a lot of money or move to a place with a low cost of living.
"With life expectancies being what they are, and medicine getting better and better every year," said Joseph La Scala, a senior financial consultant at GunnAllen Financial, "someone who is entering retirement now needs to be a long-term investor, and that means there needs to be more of an allocation to growth investments such as equities."
According to government statistics, a third of retirees have almost no stock exposure. But those are mostly poor or lower-middle-class people who rely on Social Security for income. Others are shielded by pension benefits, although those have been shrinking in recent years, especially for younger retirees.
Retirement experts say a majority of people in the middle and upper-middle classes have portfolios that are far more weighted with stocks, and therefore are more risky, than is commonly recommended. According to a recent survey by the University of Michigan that was sponsored by the National Institute on Aging, in the wealthiest 40 percent of the population age 75 and older, more than half had at least a third of their accumulated savings in stocks.
"Older middle-class people have made plans based on a set of assumptions of how the world works, and the world has gone crazy," said Alicia Munnell, director of the Center for Retirement Research at Boston College. Those assumptions once included the notions that bank accounts and corporate bonds were secure, and blue-chip stocks were the best long-term investments.
"If you call my mother," said Jason Fichtner, acting deputy commissioner of the Social Security Administration, "her goal was $1 million to retire on in stock equities. She had that for a weekend, and now it's worth $600,000."
At Gleneagles, people still play cards, swing 9-irons and take painting classes. But the anxiety in the community is palpable, and rising.
"I feel terrible," said Harry Pure, 80, retired athletic director at Philadelphia University, who has lost 25 percent of his savings.
While taking a break from a painting class, he said, "It was nice to put your head on the pillow at night and know you felt secure. Now I put my head on the pillow and the brain cells are not going to sleep. All different scenarios are playing in my mind now: What to do? What to do? What to do?"
Even those with relatively large portfolios are feeling the pain.
"This threatens our lifestyle," said Sid Freedman, a 74-year-old former owner of a textile company who divides his time between Gleneagles and Great Neck, on Long Island, New York. With more than $2 million in assets, he said, he thought he and his wife were set for a long, secure retirement.
But he said his portfolio was down 30 to 40 percent. Without a pension, he said he might have to start contemplating his "safety net" if the market keeps falling: the unpleasant thought of selling his house on Long Island, even though that would mean less time with his children and grandchildren up north.
Uppermost on Freedman's mind is his divorced daughter who has two children and a good job, but no support from her former husband, he said. Freedman had put aside enough money in a fund to pay for a year and a half of college for her oldest son, but that investment was down 20 percent, and he was to start school next year.
"We're looking at a totally new ballgame," Freedman said after playing tennis. "My mother lived to be almost 101 and her mother lived to be 90, so what it means is, if conditions get worse, we could outlive our money."
Charles Mailman, 77, a retired zipper manufacturer, said he had accumulated a portfolio worth more than $1 million, 70 percent in stocks, and lost $300,000 in September and October. He said the days of yearly cruises for him and his wife were over for now.
"No more decorating, no more vacations, no more heavy-duty spending," he said with a sigh. "If the market has hit bottom and it's on the way back, I can live with that; the question is, what happens if it hasn't?"
As for his broker, Mailman said, "He still says, 'Sit tight. You have good stuff.' They all say the same thing."
Many people believed in stocks, they said, because the stock market had been good to them for years and represented the best way to keep their portfolios intact or growing.
"We stayed in stocks because they were so wonderful," Jack Leinwohl, 67, who owns a UPS store here to keep up his income, said. "I sold out everything two weeks ago so I can sleep." He said he was looking to return to the market, though, because "I could be out of money in 10 years."
Others say they do not dare to look at their portfolios anymore, or ask their spouses how things are going, for fear of the answer.
"There is no need for George and me to be crazy together," said Goldsmith, 71, the psychotherapist, speaking of her husband. "I sleep, but George doesn't."
As for her three children, Goldsmith added, "I am getting them ready. If they are counting on their inheritance, they are in deep trouble."
By Clifford Krauss
Thursday, November 13, 2008
DELRAY BEACH, Florida: Since the stock market began to fall, friends have been coming to Barbara Goldsmith to talk about their depression, loss of appetite, insomnia and cravings for hot fudge sundaes.
"People are grieving," said Goldsmith, a semiretired psychotherapist who counsels fellow residents of the Gleneagles Country Club, a gated community here. "There was a death. Their money died."
In communities like Gleneagles and in the homes of retirees across the United States, these are days of fear and uncertainty. In theory, retired people are not supposed to invest much in the stock market; in reality, many millions of them do. With the economy in free fall and American stocks down about 40 percent this year, legions of middle- and upper-class people are suddenly worried about having enough to carry them through.
To be sure, no bread lines are forming at places like Gleneagles. The community remains placid and, on the surface at least, highly prosperous. Retirees play golf, tennis and cards amid peach-colored condominium villas, ornate fountains, and manicured palm trees and violet bougainvillea.
But sustaining that comfortable life for another two or three decades, as many retirees hope to do, requires money. People with investments that were worth $1 million or $2 million a few months ago are suddenly canceling cruises, clipping supermarket coupons, eating at home rather than at restaurants and cutting back on contributions to their grandchildren's college educations.
Like retired people everywhere, residents here knowingly juggled what they saw as competing risks.
They all heard the standard advice to move their assets out of stocks and into supersafe investments as they neared retirement. But, with interest rates so low, the returns on safe investments like government bonds were meager, and many of them saw a risk in not keeping some money in stocks. To finance a long retirement, they figured they needed the gains characteristic of the stock market.
Keeping money in stocks left them exposed, of course, to the risk of a once-in-a-lifetime market meltdown. Now, that day is at hand.
"Every television monitor in the card room and locker room is on CNBC, so we can get aggravated all day," said Jerry Rivkin, 75, a retired appliance store owner. "We're playing for nickels and dimes while we watch ourselves losing tens of thousands."
To cope, some people are selling their homes up north, so they will have the money to stay here. A handful of condominiums in Gleneagles have gone into foreclosure, something that was almost unheard of until recently. Humor is becoming darker as residents tell jokes about their shrinking "301(k)" retirement plans and the sorry inheritances their children will be surprised to receive.
For years, retirement and financial advisers have said that elderly people should be lightly invested in stocks, putting most of their assets in bonds, certificates of deposit and other conservative investments. But even some of the experts acknowledge that such a strategy does not always work for retired people in good health who can live to be 90 or older, unless they have a lot of money or move to a place with a low cost of living.
"With life expectancies being what they are, and medicine getting better and better every year," said Joseph La Scala, a senior financial consultant at GunnAllen Financial, "someone who is entering retirement now needs to be a long-term investor, and that means there needs to be more of an allocation to growth investments such as equities."
According to government statistics, a third of retirees have almost no stock exposure. But those are mostly poor or lower-middle-class people who rely on Social Security for income. Others are shielded by pension benefits, although those have been shrinking in recent years, especially for younger retirees.
Retirement experts say a majority of people in the middle and upper-middle classes have portfolios that are far more weighted with stocks, and therefore are more risky, than is commonly recommended. According to a recent survey by the University of Michigan that was sponsored by the National Institute on Aging, in the wealthiest 40 percent of the population age 75 and older, more than half had at least a third of their accumulated savings in stocks.
"Older middle-class people have made plans based on a set of assumptions of how the world works, and the world has gone crazy," said Alicia Munnell, director of the Center for Retirement Research at Boston College. Those assumptions once included the notions that bank accounts and corporate bonds were secure, and blue-chip stocks were the best long-term investments.
"If you call my mother," said Jason Fichtner, acting deputy commissioner of the Social Security Administration, "her goal was $1 million to retire on in stock equities. She had that for a weekend, and now it's worth $600,000."
At Gleneagles, people still play cards, swing 9-irons and take painting classes. But the anxiety in the community is palpable, and rising.
"I feel terrible," said Harry Pure, 80, retired athletic director at Philadelphia University, who has lost 25 percent of his savings.
While taking a break from a painting class, he said, "It was nice to put your head on the pillow at night and know you felt secure. Now I put my head on the pillow and the brain cells are not going to sleep. All different scenarios are playing in my mind now: What to do? What to do? What to do?"
Even those with relatively large portfolios are feeling the pain.
"This threatens our lifestyle," said Sid Freedman, a 74-year-old former owner of a textile company who divides his time between Gleneagles and Great Neck, on Long Island, New York. With more than $2 million in assets, he said, he thought he and his wife were set for a long, secure retirement.
But he said his portfolio was down 30 to 40 percent. Without a pension, he said he might have to start contemplating his "safety net" if the market keeps falling: the unpleasant thought of selling his house on Long Island, even though that would mean less time with his children and grandchildren up north.
Uppermost on Freedman's mind is his divorced daughter who has two children and a good job, but no support from her former husband, he said. Freedman had put aside enough money in a fund to pay for a year and a half of college for her oldest son, but that investment was down 20 percent, and he was to start school next year.
"We're looking at a totally new ballgame," Freedman said after playing tennis. "My mother lived to be almost 101 and her mother lived to be 90, so what it means is, if conditions get worse, we could outlive our money."
Charles Mailman, 77, a retired zipper manufacturer, said he had accumulated a portfolio worth more than $1 million, 70 percent in stocks, and lost $300,000 in September and October. He said the days of yearly cruises for him and his wife were over for now.
"No more decorating, no more vacations, no more heavy-duty spending," he said with a sigh. "If the market has hit bottom and it's on the way back, I can live with that; the question is, what happens if it hasn't?"
As for his broker, Mailman said, "He still says, 'Sit tight. You have good stuff.' They all say the same thing."
Many people believed in stocks, they said, because the stock market had been good to them for years and represented the best way to keep their portfolios intact or growing.
"We stayed in stocks because they were so wonderful," Jack Leinwohl, 67, who owns a UPS store here to keep up his income, said. "I sold out everything two weeks ago so I can sleep." He said he was looking to return to the market, though, because "I could be out of money in 10 years."
Others say they do not dare to look at their portfolios anymore, or ask their spouses how things are going, for fear of the answer.
"There is no need for George and me to be crazy together," said Goldsmith, 71, the psychotherapist, speaking of her husband. "I sleep, but George doesn't."
As for her three children, Goldsmith added, "I am getting them ready. If they are counting on their inheritance, they are in deep trouble."
****************
Fiscal crisis gives Argentines that old sinking feeling
By Alexei Barrionuevo
Thursday, November 13, 2008
BUENOS AIRES: Along the cobblestone streets of the Palermo neighborhood, a mecca for this city's hippest restaurants, the outdoor tables are still full most nights and the red wine flows freely. Signs of the global financial meltdown are not always obvious in a country conditioned by past economic traumas to live for the moment.
But even here in Palermo, where tourists and well-heeled Argentines come to play, Manoj Menghani, the owner of two Indian restaurants, is quietly preparing for the worst.
With summer in South America a month away, Menghani is among a growing number of Argentines who are stockpiling dollars amid worries that their government's economic policies have doomed them to yet another financial crisis.
A steep fall in commodity prices and the global credit crunch are affecting much of Latin America. But Argentina is widely considered among the countries in South America most vulnerable to recession or other financial shock because of its government's stewardship of the economy.
It saved far less than neighbors Chile and Brazil did during the recent commodity boom, and the Peronist government of President Cristina Fernández de Kirchner has lost credibility with international markets for its populist politics, lack of financial discipline and questionable government data on the economy.
Argentines are pulling money out of the country's banking system at a pace that has alarmed some economists, stoking potentially self-fulfilling fears of another crippling default on international debt that could bring Argentina's seven-year economic expansion to a screeching halt.
Six months ago, when the country's farmers were waging a protracted battle with the government over export taxes, Menghani started to convert almost all his money from Argentine pesos to dollars. Today, he keeps just enough in the local currency to pay salaries and cover his other expenses.
"We think the real crisis could hit Argentina in two or three months," said Menghani, 47. "Argentines are very skeptical of the summer. They always seem to have crises in the summer."
After a period of relative prosperity and renewed confidence, Argentines are living another moment of uncertainty. The failed effort to raise taxes on farmers, and now a move by Kirchner to nationalize some 86 billion pesos (nearly $26 billion) in private pension funds, has raised fears that the government is short on cash. Kirchner said the pension takeover was necessary to safeguard retirees' savings from turbulence in the global economy.
But the move, which requires legislative approval, has alarmed international investors, who see it as an admission that the government will grab whatever cash it needs to avoid losing political support before regional elections next year.
Now Argentines are getting that familiar feeling of being let down by their government again. Millions were caught flat-footed in December 2001, when the government tried to limit withdrawals of bank savings. The measure backfired, causing a panic as Argentines rushed to pull out whatever they could. The country then defaulted on billions of dollars of loans, and the government sharply devalued the currency. An economic malaise pushed more than half the country below the poverty line by late 2002, before a strong recovery began.
These days, there are browsers but few buyers at the Innocenza beachwear shop in the garment district. Its orders for bikinis are off by more than 15 percent.
"This is very frustrating, because we prepared hard for the season," said Ariel Fritzler, the company's commercial director. "People are paralyzed with uncertainty; they don't know what to do. There is a definite feeling that 2001 could happen again."
In many ways, Argentina is still living out the consequences of its last economic crisis. The previous government of Néstor Kirchner, Kirchner's husband, complicated matters by keeping utility prices artificially low and, more recently, "fudging" inflation figures to try to maintain popular support and avoid higher debt payments, said Rafael de la Fuente, chief economist for Latin America for BNP Paribas.
"Although you could see the cracks in the edifice, it was going O.K. until we had this credit crunch," de la Fuente said. Now, "people are losing faith in the government's ability to fund itself," he said.
At least $16 billion in private capital left Argentina in the first nine months of this year, economists said. During the farmers' strike, from May to August, $8.4 billion was pulled out, even more than during the same period in 2001, said Dante Sica, the director of abeceb.com, an economic consulting firm here.
When times are tough, Argentines seek refuge in American dollars. Everyone from taxi drivers to airport workers obsesses over potentially counterfeit pesos, holding bills up to the light to check for seals and watermarks.
"Nobody here trusts our currency," said Néstor Coria, a waiter. "If you want to buy a car or a bicycle you try to do it in dollars."
Sica said he believed that the government's decisions were affecting the mood in the country more than global economic woes. When Kirchner announced her plan to take over the pension system last month, car sales in Argentina plummeted by some 30 percent in one week, he said.
The signals the Argentine government is sending stand in stark contrast to Brazil and Chile, where leaders have made almost daily announcements to calm markets and head off recession. Last week, Michelle Bachelet, Chile's president, said her government would spend $1.15 billion in reserves to expand credit for businesses and bolster home sales, adding to $850 million in stimulus spending announced in October.
Brazil says it is spending billions of dollars to help its major export industries and is prepared to spend up to $50 billion more to defend the country's currency.
In Argentina, the Kirchner government has used some reserves to try to limit the peso's decline and has tried to stem the outflow of money. Then on Tuesday, the president announced efforts to bolster fuel production.
But Kirchner may have limited options. Government subsidies on gasoline and electricity have ballooned to about $8 billion this year from about $5 billion last year. And the country will owe $12 billion in minimum debt payments alone next year, economists said.
Beyond that, Argentina's checkered history with lenders has disqualified it, for now, from getting a short-term loan from the International Monetary Fund as part of the global aid package the fund announced last month, according to Dominique Strauss-Kahn, managing director of the IMF Nor is the government likely to ask for one, since it would require the kind of severe changes it has been unwilling to make, economists said.
"It seems that Argentina is in the middle of its own trap, trying to resolve a big dilemma: a recession in the short run, with an IMF adjustment program, or take the risk of default in the medium term," said Alfredo Coutiño, senior economist for Latin America at Moody's Economy.com.
Officials at Argentina's Economy Ministry did not respond to repeated requests for interviews. Government officials have played down the country's fiscal problems in recent months, insisting Argentina will not default.
But with the Senate due to vote on Kirchner's pension plan in the next week, Argentines have filed lawsuits defending their right to the money, while foreign holders of some of the government's defaulted debt have persuaded courts — including in New York — to freeze some of the pension funds' accounts.
Here in Palermo, Menghani said sales at his restaurants had dropped 12 percent in the past month. He has already laid off two employees.
He also knows that he could be contributing to the strain on Argentina's banking system by converting so much of his money into dollars.
"It's a Catch 22 situation," he said. "But the government was sending some wrong signals, and I decided to be cautious. They did not give me much of a choice."
By Alexei Barrionuevo
Thursday, November 13, 2008
BUENOS AIRES: Along the cobblestone streets of the Palermo neighborhood, a mecca for this city's hippest restaurants, the outdoor tables are still full most nights and the red wine flows freely. Signs of the global financial meltdown are not always obvious in a country conditioned by past economic traumas to live for the moment.
But even here in Palermo, where tourists and well-heeled Argentines come to play, Manoj Menghani, the owner of two Indian restaurants, is quietly preparing for the worst.
With summer in South America a month away, Menghani is among a growing number of Argentines who are stockpiling dollars amid worries that their government's economic policies have doomed them to yet another financial crisis.
A steep fall in commodity prices and the global credit crunch are affecting much of Latin America. But Argentina is widely considered among the countries in South America most vulnerable to recession or other financial shock because of its government's stewardship of the economy.
It saved far less than neighbors Chile and Brazil did during the recent commodity boom, and the Peronist government of President Cristina Fernández de Kirchner has lost credibility with international markets for its populist politics, lack of financial discipline and questionable government data on the economy.
Argentines are pulling money out of the country's banking system at a pace that has alarmed some economists, stoking potentially self-fulfilling fears of another crippling default on international debt that could bring Argentina's seven-year economic expansion to a screeching halt.
Six months ago, when the country's farmers were waging a protracted battle with the government over export taxes, Menghani started to convert almost all his money from Argentine pesos to dollars. Today, he keeps just enough in the local currency to pay salaries and cover his other expenses.
"We think the real crisis could hit Argentina in two or three months," said Menghani, 47. "Argentines are very skeptical of the summer. They always seem to have crises in the summer."
After a period of relative prosperity and renewed confidence, Argentines are living another moment of uncertainty. The failed effort to raise taxes on farmers, and now a move by Kirchner to nationalize some 86 billion pesos (nearly $26 billion) in private pension funds, has raised fears that the government is short on cash. Kirchner said the pension takeover was necessary to safeguard retirees' savings from turbulence in the global economy.
But the move, which requires legislative approval, has alarmed international investors, who see it as an admission that the government will grab whatever cash it needs to avoid losing political support before regional elections next year.
Now Argentines are getting that familiar feeling of being let down by their government again. Millions were caught flat-footed in December 2001, when the government tried to limit withdrawals of bank savings. The measure backfired, causing a panic as Argentines rushed to pull out whatever they could. The country then defaulted on billions of dollars of loans, and the government sharply devalued the currency. An economic malaise pushed more than half the country below the poverty line by late 2002, before a strong recovery began.
These days, there are browsers but few buyers at the Innocenza beachwear shop in the garment district. Its orders for bikinis are off by more than 15 percent.
"This is very frustrating, because we prepared hard for the season," said Ariel Fritzler, the company's commercial director. "People are paralyzed with uncertainty; they don't know what to do. There is a definite feeling that 2001 could happen again."
In many ways, Argentina is still living out the consequences of its last economic crisis. The previous government of Néstor Kirchner, Kirchner's husband, complicated matters by keeping utility prices artificially low and, more recently, "fudging" inflation figures to try to maintain popular support and avoid higher debt payments, said Rafael de la Fuente, chief economist for Latin America for BNP Paribas.
"Although you could see the cracks in the edifice, it was going O.K. until we had this credit crunch," de la Fuente said. Now, "people are losing faith in the government's ability to fund itself," he said.
At least $16 billion in private capital left Argentina in the first nine months of this year, economists said. During the farmers' strike, from May to August, $8.4 billion was pulled out, even more than during the same period in 2001, said Dante Sica, the director of abeceb.com, an economic consulting firm here.
When times are tough, Argentines seek refuge in American dollars. Everyone from taxi drivers to airport workers obsesses over potentially counterfeit pesos, holding bills up to the light to check for seals and watermarks.
"Nobody here trusts our currency," said Néstor Coria, a waiter. "If you want to buy a car or a bicycle you try to do it in dollars."
Sica said he believed that the government's decisions were affecting the mood in the country more than global economic woes. When Kirchner announced her plan to take over the pension system last month, car sales in Argentina plummeted by some 30 percent in one week, he said.
The signals the Argentine government is sending stand in stark contrast to Brazil and Chile, where leaders have made almost daily announcements to calm markets and head off recession. Last week, Michelle Bachelet, Chile's president, said her government would spend $1.15 billion in reserves to expand credit for businesses and bolster home sales, adding to $850 million in stimulus spending announced in October.
Brazil says it is spending billions of dollars to help its major export industries and is prepared to spend up to $50 billion more to defend the country's currency.
In Argentina, the Kirchner government has used some reserves to try to limit the peso's decline and has tried to stem the outflow of money. Then on Tuesday, the president announced efforts to bolster fuel production.
But Kirchner may have limited options. Government subsidies on gasoline and electricity have ballooned to about $8 billion this year from about $5 billion last year. And the country will owe $12 billion in minimum debt payments alone next year, economists said.
Beyond that, Argentina's checkered history with lenders has disqualified it, for now, from getting a short-term loan from the International Monetary Fund as part of the global aid package the fund announced last month, according to Dominique Strauss-Kahn, managing director of the IMF Nor is the government likely to ask for one, since it would require the kind of severe changes it has been unwilling to make, economists said.
"It seems that Argentina is in the middle of its own trap, trying to resolve a big dilemma: a recession in the short run, with an IMF adjustment program, or take the risk of default in the medium term," said Alfredo Coutiño, senior economist for Latin America at Moody's Economy.com.
Officials at Argentina's Economy Ministry did not respond to repeated requests for interviews. Government officials have played down the country's fiscal problems in recent months, insisting Argentina will not default.
But with the Senate due to vote on Kirchner's pension plan in the next week, Argentines have filed lawsuits defending their right to the money, while foreign holders of some of the government's defaulted debt have persuaded courts — including in New York — to freeze some of the pension funds' accounts.
Here in Palermo, Menghani said sales at his restaurants had dropped 12 percent in the past month. He has already laid off two employees.
He also knows that he could be contributing to the strain on Argentina's banking system by converting so much of his money into dollars.
"It's a Catch 22 situation," he said. "But the government was sending some wrong signals, and I decided to be cautious. They did not give me much of a choice."
****************
Germany, China and U.S. feel pain of global downturn
Reuters
Thursday, November 13, 2008
By Patrick Fitzgibbons
Three of the world's largest economies painted bleak pictures of current conditions on Thursday as the United States, China and Germany all provided fresh evidence of the global economic slide.
Adding to the overall gloom, the Organisation for Economic Cooperation and Development (OECD) cut its economic output forecasts for the United States, Japan and euro zone, seeing a tumble into recession for all three.
The worst financial crisis in 80 years, which rippled around the world following the collapse of the U.S. housing market, is taking a heavy toll.
Germany said its economy, Europe's largest, contracted by 0.5 percent in the third quarter, putting it in recession for the first time in five years.
The decline -- much sharper than the 0.2 percent forecast -- was accentuated by German export growth grinding to a halt.
"We are going to have to face up to a very difficult and long-lasting economic crisis," Germany's deputy economy minister, Walther Otremba, told Reuters.
Analysts agreed with that grim forecast.
"The headwinds of the financial crisis and the global economic slowdown are blowing right in the face of the German economy," said Carsten Brzeski of ING Financial Markets.
In the United States, the already bleak employment picture looked gloomier when initial claims for unemployment insurance, a weekly indicator, moved to 516,000 in the week ended November 1.
The worse-than-expected number was the grimmest since the weeks following the attacks of September 11, 2001.
"We no longer have hurricanes or other special factors to blame for elevated numbers as we did, say, in September," said Dana Saporta, analyst at Dresdner Kleinwort. "So the higher level we are seeing is probably reflecting a fundamental weakening in the labour market."
The United States also said it started off its fiscal year with a record -- and unexpectedly high -- budget deficit of $237.18 billion (161.58 billion pounds) in October as financial bailout costs piled up. In October 2007, the deficit was $56.84 billion.
In China, which has unveiled a 4 trillion yuan ($586 billion) stimulus package, annual industrial output growth slowed to 8.2 percent in October, the weakest since October 2001, as manufacturers scaled back production.
In global company news:
* British telecommunications company BT Group said it was cutting 10,000 jobs at home and overseas.
* Intel Corp cut its fourth-quarter revenue estimate on weak global demand.
* Goldman Sachs suspended its rating on General Motors Co and said the automaker needs at least $22 billion in federal aid to survive.
Still, U.S. stocks ended sharply higher on Thursday on widespread bargain-hunting after three down days in a row. The Dow Jones industrial average rose more than 550 points, or 6.7 percent.
TIMELY BOOST?
After a series of big rate cuts by central banks, the OECD said it was time for more governments to provide an extra boost to their economies by way of fiscal stimulus in the form of tax cuts or increased government spending.
U.S. President-elect Barack Obama is advocating a second U.S. fiscal package and help for American carmakers, Japanese politicians are debating the details of a pump-priming plan and the British government is expected to follow suit in its pre-budget report later this month.
Obama, who will take office in January, is also considering appointing an auto czar when he takes office, according to an aide.
G20 GATHERING
Leaders of the G20 industrialized and emerging nations will gather in Washington on Friday to discuss the crisis with investors hoping for concrete policy action.
Japan is prepared to offer foreign reserves worth up to $100 billion to the International Monetary Fund if the Washington-based lender needs extra funds to help emerging economies, a government source said on Thursday.
The summit falls at an awkward time politically as U.S. President George W. Bush prepares to leave office. He travelled to Wall Street on Thursday to outline his views on the financial markets.
Bush defended the free market system, but acknowledged there should be some reforms to correct the problems that led to the global financial crisis.
"While reforms in the financial sector are essential, the long-term solution to today's problems is sustained economic growth," the president said. [ID:nN13546369]
While Bush was in New York, the U.S. Congress pressed some in the financial community about the current state of the industry.
Some of the world's richest and most powerful hedge fund managers said they support greater transparency for the secretive industry, but offered divergent views on whether the industry contributed to the financial crisis.
George Soros, chairman of Soros Fund Management, said hedge funds were an integral part of the financial market bubble that has now burst.
"A deep recession is now inevitable and the possibility of a depression cannot be ruled out," Soros said at a U.S. House Oversight and Government Reform Committee hearing.
John Paulson, Philip Falcone, James Simons and Kenneth Griffin also testified.
The price of oil hit a 22-month low at $55 a barrel on worries that a recession will curb demand before bouncing back. Stocks in Europe ended down 0.4 percent, the third successive day of losses.
Banks warned of tough times ahead.
* Mizuho Financial Group, Japan's No. 2 bank, said it plans to raise up to $3.1 billion after unveiling a $402 million quarterly loss.
* JPMorgan Chase & Co could face $1.6 billion-$1.7 billion of writedowns in the fourth quarter, according to analysts who cover the bank.
* Bank of Ireland said profits fell by a third and it cancelled its cash dividend.
* Shares of Commonwealth Bank of Australia hit a four-year low after it warned investors to expect a big jump in bad debt.
(Reporting by Reuters bureaus worldwide; Additional writing by Keith Weir, Tony Munroe and Yoko Nishikawa; Editing by Brian Moss, Steve Orlofsky, Gary Hill)
Reuters
Thursday, November 13, 2008
By Patrick Fitzgibbons
Three of the world's largest economies painted bleak pictures of current conditions on Thursday as the United States, China and Germany all provided fresh evidence of the global economic slide.
Adding to the overall gloom, the Organisation for Economic Cooperation and Development (OECD) cut its economic output forecasts for the United States, Japan and euro zone, seeing a tumble into recession for all three.
The worst financial crisis in 80 years, which rippled around the world following the collapse of the U.S. housing market, is taking a heavy toll.
Germany said its economy, Europe's largest, contracted by 0.5 percent in the third quarter, putting it in recession for the first time in five years.
The decline -- much sharper than the 0.2 percent forecast -- was accentuated by German export growth grinding to a halt.
"We are going to have to face up to a very difficult and long-lasting economic crisis," Germany's deputy economy minister, Walther Otremba, told Reuters.
Analysts agreed with that grim forecast.
"The headwinds of the financial crisis and the global economic slowdown are blowing right in the face of the German economy," said Carsten Brzeski of ING Financial Markets.
In the United States, the already bleak employment picture looked gloomier when initial claims for unemployment insurance, a weekly indicator, moved to 516,000 in the week ended November 1.
The worse-than-expected number was the grimmest since the weeks following the attacks of September 11, 2001.
"We no longer have hurricanes or other special factors to blame for elevated numbers as we did, say, in September," said Dana Saporta, analyst at Dresdner Kleinwort. "So the higher level we are seeing is probably reflecting a fundamental weakening in the labour market."
The United States also said it started off its fiscal year with a record -- and unexpectedly high -- budget deficit of $237.18 billion (161.58 billion pounds) in October as financial bailout costs piled up. In October 2007, the deficit was $56.84 billion.
In China, which has unveiled a 4 trillion yuan ($586 billion) stimulus package, annual industrial output growth slowed to 8.2 percent in October, the weakest since October 2001, as manufacturers scaled back production.
In global company news:
* British telecommunications company BT Group said it was cutting 10,000 jobs at home and overseas.
* Intel Corp cut its fourth-quarter revenue estimate on weak global demand.
* Goldman Sachs suspended its rating on General Motors Co and said the automaker needs at least $22 billion in federal aid to survive.
Still, U.S. stocks ended sharply higher on Thursday on widespread bargain-hunting after three down days in a row. The Dow Jones industrial average rose more than 550 points, or 6.7 percent.
TIMELY BOOST?
After a series of big rate cuts by central banks, the OECD said it was time for more governments to provide an extra boost to their economies by way of fiscal stimulus in the form of tax cuts or increased government spending.
U.S. President-elect Barack Obama is advocating a second U.S. fiscal package and help for American carmakers, Japanese politicians are debating the details of a pump-priming plan and the British government is expected to follow suit in its pre-budget report later this month.
Obama, who will take office in January, is also considering appointing an auto czar when he takes office, according to an aide.
G20 GATHERING
Leaders of the G20 industrialized and emerging nations will gather in Washington on Friday to discuss the crisis with investors hoping for concrete policy action.
Japan is prepared to offer foreign reserves worth up to $100 billion to the International Monetary Fund if the Washington-based lender needs extra funds to help emerging economies, a government source said on Thursday.
The summit falls at an awkward time politically as U.S. President George W. Bush prepares to leave office. He travelled to Wall Street on Thursday to outline his views on the financial markets.
Bush defended the free market system, but acknowledged there should be some reforms to correct the problems that led to the global financial crisis.
"While reforms in the financial sector are essential, the long-term solution to today's problems is sustained economic growth," the president said. [ID:nN13546369]
While Bush was in New York, the U.S. Congress pressed some in the financial community about the current state of the industry.
Some of the world's richest and most powerful hedge fund managers said they support greater transparency for the secretive industry, but offered divergent views on whether the industry contributed to the financial crisis.
George Soros, chairman of Soros Fund Management, said hedge funds were an integral part of the financial market bubble that has now burst.
"A deep recession is now inevitable and the possibility of a depression cannot be ruled out," Soros said at a U.S. House Oversight and Government Reform Committee hearing.
John Paulson, Philip Falcone, James Simons and Kenneth Griffin also testified.
The price of oil hit a 22-month low at $55 a barrel on worries that a recession will curb demand before bouncing back. Stocks in Europe ended down 0.4 percent, the third successive day of losses.
Banks warned of tough times ahead.
* Mizuho Financial Group, Japan's No. 2 bank, said it plans to raise up to $3.1 billion after unveiling a $402 million quarterly loss.
* JPMorgan Chase & Co could face $1.6 billion-$1.7 billion of writedowns in the fourth quarter, according to analysts who cover the bank.
* Bank of Ireland said profits fell by a third and it cancelled its cash dividend.
* Shares of Commonwealth Bank of Australia hit a four-year low after it warned investors to expect a big jump in bad debt.
(Reporting by Reuters bureaus worldwide; Additional writing by Keith Weir, Tony Munroe and Yoko Nishikawa; Editing by Brian Moss, Steve Orlofsky, Gary Hill)
Grim global forecast from private equity firms
By Michael FlahertyReuters
Thursday, November 13, 2008
HONG KONG: Top executives at some of the world's largest private equity firms gave a grim forecast Thursday for the U.S. and global economies, while predicting that Asia would recover from the downturn more quickly than other regions.
The co-founder of Carlyle Group, David Rubenstein, said he expected a recession in the United States to last longer than the historical average of about nine months.
"The recession this time will be far deeper than what we've seen for quite some time," he said. "I suspect the recession will last at least a year, and I suspect quarter over quarter to have negative growth of 2 to 4 percent."
The U.S. unemployment rate was likely to rise to 10 percent, from a 14-year high of 6.5 percent in October, Rubenstein added.
Adding to the difficult economic period was a U.S. government in transition, he said, with Barack Obama not scheduled to take office as president until Jan. 20.
The managing director of Bain Capital, Paul Edgerley, predicted that U.S. home prices would drop another 15 percent to 20 percent and forecast "a very deep recession, I think the worst we've seen in my lifetime."
He pointed out that 70 percent of the gross domestic product in the United States was related to consumer spending.
"The consumer is beaten up and they have a long way to go," Edgerley said at the Asian Venture Capital Journal private equity conference in Hong Kong. "It's going to take a long time for the U.S. economy to turn around and become a growth engine."
He added that the United States was not alone, with Britain, Spain and Ireland "probably in a bigger mess than the U.S. is in now."
A steeper drop in U.S. home prices would likely add further challenges to Bain's investment in Home Depot Supply, the professional unit of the giant U.S. retailer of home construction materials.
David Bonderman, a founder of the private equity firm TPG and one of the most influential figures in that sector, said a global recession would be deep and prolonged, adding that he believed the U.S. housing market would fall further.
Bonderman and Edgerley agreed that Asia, while getting hurt by the financial crisis, was well suited to withstand it, thanks in part to banks' relative lack of exposure to the risky subprime mortgage securities that sparked the global financial crisis.
Price/equity ratios are low in Asia, as Asian equities tend to fall harder in a recession, Bonderman said.
He also noted that consumer spending was still rising across Asia, although confidence was being dampened by falling stock markets and concerns over the effect of the global financial crisis.
Edgerley was more optimistic, saying the region was in a better position to weather the financial storm, based on the growth of its consumer market and burgeoning middle class. Bain's focus in Asia is on China, Japan and India.
"I think it's likely that China will grow at 7 to 8 percent for most of 2009 and 2010," Edgerley said.
He was less encouraging about the prospects for India because the country's economy was not as driven by exports as that of China. He said India's economy would grow 5 percent to 7 percent over the next year as capital investment slowed from outside the country.
TPG Capital, the private equity firm based in Fort Worth, Texas, has hit a rough patch lately, with several investments getting hit by the credit crunch.
The move by the U.S. government in September to close and sell the banking assets of the savings and loan company Washington Mutual to JPMorgan Chase wiped out a $1.35 billion investment that TPG had made five months earlier.
It was the largest U.S. bank failure ever, and it dealt a blow to TPG's wallet as well as its reputation as one of the savviest buyout investors across the globe.
Bonderman said culprits in the credit crisis included the accounting profession and mark-to-market accounting rules.
"With mark to market, you see artificially low prices, unlike mark to model," the formula used by insurers, he said. "When you force people to take a mark down, you cause a death spiral."
TPG's investments in BankThai in Bangkok, Taishin Financial Holdings in Taipei and the Japanese consumer finance company NIS Group are all under pressure.
TPG Capital, formerly Texas Pacific Group, is one of the largest private equity firms in the world, with more than $50 billion under management. Bain Capital, based in Boston, is another of largest private equity firms, and is currently investing a buyout fund of about $10 billion.
Edgerley, who joined Bain in 1988, has been involved in investments in companies including Brenntag Holding, a chemicals company, and Sensata Technologies, formerly a unit of Texas Instruments.
By Michael FlahertyReuters
Thursday, November 13, 2008
HONG KONG: Top executives at some of the world's largest private equity firms gave a grim forecast Thursday for the U.S. and global economies, while predicting that Asia would recover from the downturn more quickly than other regions.
The co-founder of Carlyle Group, David Rubenstein, said he expected a recession in the United States to last longer than the historical average of about nine months.
"The recession this time will be far deeper than what we've seen for quite some time," he said. "I suspect the recession will last at least a year, and I suspect quarter over quarter to have negative growth of 2 to 4 percent."
The U.S. unemployment rate was likely to rise to 10 percent, from a 14-year high of 6.5 percent in October, Rubenstein added.
Adding to the difficult economic period was a U.S. government in transition, he said, with Barack Obama not scheduled to take office as president until Jan. 20.
The managing director of Bain Capital, Paul Edgerley, predicted that U.S. home prices would drop another 15 percent to 20 percent and forecast "a very deep recession, I think the worst we've seen in my lifetime."
He pointed out that 70 percent of the gross domestic product in the United States was related to consumer spending.
"The consumer is beaten up and they have a long way to go," Edgerley said at the Asian Venture Capital Journal private equity conference in Hong Kong. "It's going to take a long time for the U.S. economy to turn around and become a growth engine."
He added that the United States was not alone, with Britain, Spain and Ireland "probably in a bigger mess than the U.S. is in now."
A steeper drop in U.S. home prices would likely add further challenges to Bain's investment in Home Depot Supply, the professional unit of the giant U.S. retailer of home construction materials.
David Bonderman, a founder of the private equity firm TPG and one of the most influential figures in that sector, said a global recession would be deep and prolonged, adding that he believed the U.S. housing market would fall further.
Bonderman and Edgerley agreed that Asia, while getting hurt by the financial crisis, was well suited to withstand it, thanks in part to banks' relative lack of exposure to the risky subprime mortgage securities that sparked the global financial crisis.
Price/equity ratios are low in Asia, as Asian equities tend to fall harder in a recession, Bonderman said.
He also noted that consumer spending was still rising across Asia, although confidence was being dampened by falling stock markets and concerns over the effect of the global financial crisis.
Edgerley was more optimistic, saying the region was in a better position to weather the financial storm, based on the growth of its consumer market and burgeoning middle class. Bain's focus in Asia is on China, Japan and India.
"I think it's likely that China will grow at 7 to 8 percent for most of 2009 and 2010," Edgerley said.
He was less encouraging about the prospects for India because the country's economy was not as driven by exports as that of China. He said India's economy would grow 5 percent to 7 percent over the next year as capital investment slowed from outside the country.
TPG Capital, the private equity firm based in Fort Worth, Texas, has hit a rough patch lately, with several investments getting hit by the credit crunch.
The move by the U.S. government in September to close and sell the banking assets of the savings and loan company Washington Mutual to JPMorgan Chase wiped out a $1.35 billion investment that TPG had made five months earlier.
It was the largest U.S. bank failure ever, and it dealt a blow to TPG's wallet as well as its reputation as one of the savviest buyout investors across the globe.
Bonderman said culprits in the credit crisis included the accounting profession and mark-to-market accounting rules.
"With mark to market, you see artificially low prices, unlike mark to model," the formula used by insurers, he said. "When you force people to take a mark down, you cause a death spiral."
TPG's investments in BankThai in Bangkok, Taishin Financial Holdings in Taipei and the Japanese consumer finance company NIS Group are all under pressure.
TPG Capital, formerly Texas Pacific Group, is one of the largest private equity firms in the world, with more than $50 billion under management. Bain Capital, based in Boston, is another of largest private equity firms, and is currently investing a buyout fund of about $10 billion.
Edgerley, who joined Bain in 1988, has been involved in investments in companies including Brenntag Holding, a chemicals company, and Sensata Technologies, formerly a unit of Texas Instruments.
Turkey's hero, behind the bronze veneer
By Sabrina Tavernise
Thursday, November 13, 2008
ISTANBUL: After nearly a century of looking serious, Mustafa Kemal Ataturk, the founder of modern Turkey, has started to smile.
Ataturk — a war-hero-turned-statesman who defended Turkey during the partitioning of the Ottoman Empire — is the subject of what is perhaps the world's longest personality cult.
His portrait hangs in every tea shop, government office and classroom. Insulting his memory is a crime under Turkish law. And every Nov. 10, Turkey observes a moment of silence to commemorate his death in 1938.
But the ironclad official version might be softening. Last month a documentary on Ataturk was released that looks at his human side. That might not sound like much, but in a country where official history is kept under lock and key, the film, "Mustafa," was a brave endeavor.
The film is by no means an effort to tear the leader down. It is a largely sympathetic portrayal. But the mere fact that its director, Can Dundar, was able to show Ataturk looking less like a bronze statue and more like a man with a bad drinking habit who sometimes got bored, says a lot about how far Turkey has come in the past 10 years.
"Can Dundar opened the gates of an ivory cage that we have locked ourselves in," Mehmet Ali Birand, a journalist, wrote in the daily newspaper Posta.
Founded in 1923, modern Turkey in its early years was monochromatic, as authorities scrubbed the country of differences to forge a national identity. But as wealth and democracy have increased, so have efforts to re-evaluate the past, bringing some of those differences, ethnic and religious, into focus.
Turkish intellectuals like Dundar have begun to question the official line, opening up painful debates on topics that have long been considered closed. Ataturk, whose name means father of the Turks, was one of the most important figures of the 20th century, but his story is not broadly known in the West, in part because his godlike status in Turkey has made it too politically prickly to tell.
Previous attempts to tell it on film have failed. In an article last year titled "The 56-Year Story of the Unmade Ataturk Film," an English-language newspaper, The Turkish Daily News, said, "Actors have grown old waiting for the role," citing reported efforts by Antonio Banderas, Kevin Costner and Yul Brynner.
"Turkey would never want to see its founding father, which it sees as a holy person, be portrayed as a person with human weaknesses," the paper said.
That trait is at the heart of many of this country's problems. Turkey has a tremendous capacity for denial, which includes the Armenian genocide early in the last century and a large Kurdish minority whose existence the state is only beginning to acknowledge. Without facing that history, intellectuals here argue, Turkey will never be able to move beyond it.
"Ataturk is used as a shield by those who are blocking discussions on many deformities in this country," wrote Ahmet Altan, one of the country's most prominent intellectuals and a columnist for Taraf, a liberal daily newspaper. "They attribute godlike status to Ataturk and then hide behind it."
Dundar drew on a wide selection of Ataturk's diaries and letters that had been closed in military archives for decades. The man who emerges in the film is even more radical in his beliefs than Turks have been taught, Dundar said.
Ataturk was determined, for example, to subordinate Islam and to force Turks to look and behave as Westerners. In 1914, Dundar said, the 33-year-old Ataturk attended a ball in the Czech spa of Carlsbad with a Turkish diplomat and his wife, who remarked that she could not imagine such a scene — the dancing, the dress — in her home country.
In a later entry in his diaries, Ataturk wrote that "it would not be difficult at all," Dundar said. "If I would be given the power, I would do it overnight," Ataturk wrote.
"Ataturk didn't believe it should happen over time," Dundar said. "He thought it should be abrupt."
Dundar said he could use only a small fraction of the material he sifted through that revealed something about Ataturk's thoughts on Islam. The rest was too explosive, he said.
There were a few sharp divergences from the official history, though the film veered close. In one scene, Ataturk says, just before an address to an early Parliament, that he believes the areas populated predominantly by Kurds should have a special status. The concept is extremely controversial in Turkey, which fears that its largely Kurdish southeast will want to secede, and discussions of special status for the region are strictly taboo.
The film, which opened on Oct. 29, National Day, and is being shown in more than 200 theaters around Turkey, was praised by intellectuals but drew a frenzy of angry reactions. ( Dundar, knowing the delicacy of the topic, preferred to speak in his native Turkish for the interview for maximum precision of language, though his English is fluent.)
"Your production is a priceless source for people who want to tarnish young minds with their dark thoughts," wrote a viewer on the movie's Web site who identified himself as Tulay. "Surely, you would also qualify for a Nobel Prize," he wrote in a reference to the Nobel Prize-winning Turkish novelist Orhan Pamuk, who was spurned by the Turkish establishment after discussing the Armenian genocide.
"I denounce you."
Nevertheless, the kinder, gentler Ataturk seems to be a turning point of some sort for Turkey. Even the Turkish state seems to feel the need for some adjustments: New bank notes planned for circulation in 2009 picture the leader smiling, not scowling.
By Sabrina Tavernise
Thursday, November 13, 2008
ISTANBUL: After nearly a century of looking serious, Mustafa Kemal Ataturk, the founder of modern Turkey, has started to smile.
Ataturk — a war-hero-turned-statesman who defended Turkey during the partitioning of the Ottoman Empire — is the subject of what is perhaps the world's longest personality cult.
His portrait hangs in every tea shop, government office and classroom. Insulting his memory is a crime under Turkish law. And every Nov. 10, Turkey observes a moment of silence to commemorate his death in 1938.
But the ironclad official version might be softening. Last month a documentary on Ataturk was released that looks at his human side. That might not sound like much, but in a country where official history is kept under lock and key, the film, "Mustafa," was a brave endeavor.
The film is by no means an effort to tear the leader down. It is a largely sympathetic portrayal. But the mere fact that its director, Can Dundar, was able to show Ataturk looking less like a bronze statue and more like a man with a bad drinking habit who sometimes got bored, says a lot about how far Turkey has come in the past 10 years.
"Can Dundar opened the gates of an ivory cage that we have locked ourselves in," Mehmet Ali Birand, a journalist, wrote in the daily newspaper Posta.
Founded in 1923, modern Turkey in its early years was monochromatic, as authorities scrubbed the country of differences to forge a national identity. But as wealth and democracy have increased, so have efforts to re-evaluate the past, bringing some of those differences, ethnic and religious, into focus.
Turkish intellectuals like Dundar have begun to question the official line, opening up painful debates on topics that have long been considered closed. Ataturk, whose name means father of the Turks, was one of the most important figures of the 20th century, but his story is not broadly known in the West, in part because his godlike status in Turkey has made it too politically prickly to tell.
Previous attempts to tell it on film have failed. In an article last year titled "The 56-Year Story of the Unmade Ataturk Film," an English-language newspaper, The Turkish Daily News, said, "Actors have grown old waiting for the role," citing reported efforts by Antonio Banderas, Kevin Costner and Yul Brynner.
"Turkey would never want to see its founding father, which it sees as a holy person, be portrayed as a person with human weaknesses," the paper said.
That trait is at the heart of many of this country's problems. Turkey has a tremendous capacity for denial, which includes the Armenian genocide early in the last century and a large Kurdish minority whose existence the state is only beginning to acknowledge. Without facing that history, intellectuals here argue, Turkey will never be able to move beyond it.
"Ataturk is used as a shield by those who are blocking discussions on many deformities in this country," wrote Ahmet Altan, one of the country's most prominent intellectuals and a columnist for Taraf, a liberal daily newspaper. "They attribute godlike status to Ataturk and then hide behind it."
Dundar drew on a wide selection of Ataturk's diaries and letters that had been closed in military archives for decades. The man who emerges in the film is even more radical in his beliefs than Turks have been taught, Dundar said.
Ataturk was determined, for example, to subordinate Islam and to force Turks to look and behave as Westerners. In 1914, Dundar said, the 33-year-old Ataturk attended a ball in the Czech spa of Carlsbad with a Turkish diplomat and his wife, who remarked that she could not imagine such a scene — the dancing, the dress — in her home country.
In a later entry in his diaries, Ataturk wrote that "it would not be difficult at all," Dundar said. "If I would be given the power, I would do it overnight," Ataturk wrote.
"Ataturk didn't believe it should happen over time," Dundar said. "He thought it should be abrupt."
Dundar said he could use only a small fraction of the material he sifted through that revealed something about Ataturk's thoughts on Islam. The rest was too explosive, he said.
There were a few sharp divergences from the official history, though the film veered close. In one scene, Ataturk says, just before an address to an early Parliament, that he believes the areas populated predominantly by Kurds should have a special status. The concept is extremely controversial in Turkey, which fears that its largely Kurdish southeast will want to secede, and discussions of special status for the region are strictly taboo.
The film, which opened on Oct. 29, National Day, and is being shown in more than 200 theaters around Turkey, was praised by intellectuals but drew a frenzy of angry reactions. ( Dundar, knowing the delicacy of the topic, preferred to speak in his native Turkish for the interview for maximum precision of language, though his English is fluent.)
"Your production is a priceless source for people who want to tarnish young minds with their dark thoughts," wrote a viewer on the movie's Web site who identified himself as Tulay. "Surely, you would also qualify for a Nobel Prize," he wrote in a reference to the Nobel Prize-winning Turkish novelist Orhan Pamuk, who was spurned by the Turkish establishment after discussing the Armenian genocide.
"I denounce you."
Nevertheless, the kinder, gentler Ataturk seems to be a turning point of some sort for Turkey. Even the Turkish state seems to feel the need for some adjustments: New bank notes planned for circulation in 2009 picture the leader smiling, not scowling.
**************
BOOK REVIEW
A.B. Yehoshua's 'Friendly Fire'
By Ethan Bronner
Thursday, November 13, 2008
Friendly Fire
By Ethan Bronner
Thursday, November 13, 2008
Friendly Fire
A Duet By A.B. Yehoshua, translated by Stuart Schoffman
386 pages. Harcourt. $26
Acouple of years ago, the Israeli writer A.B. Yehoshua upset many American Jews by asserting that a full Jewish life could be had only in the Jewish state. Jews ruled by Jews, he said, were deciding whether to withdraw from territory and torture terrorists. Jews elsewhere might contribute to similar conversations but were only "playing with Jewishness," not defining it.
The depth - and burdens - of a full Jewish life in the only Jewish state form the central themes of Yehoshua's latest novel, "Friendly Fire," a work that interlaces a depiction of almost aggressively ordinary day-to-day Israeli activity with an emotional and symbol-laden journey to that other bloody cradle of civilization, Africa.
The two halves of the narrative aim to echo and complement each other, and when they do Yehoshua achieves a remarkable artistry. However, this isn't always the case. The result is a fine but flawed novel, rendered from the Hebrew in an excellent, nicely tuned translation by Stuart Schoffman.
Yehoshua came of age just after Israel's creation in 1948 and, like Amos Oz and Aharon Appelfeld, has been one of his country's most vital chroniclers and critics. He is the author of eight previous novels, the most accomplished of which is "Mr. Mani," a multigenerational look at Jewish identity and Israel through five conversations over more than a century. "Friendly Fire" has its own structural ambition. (Yehoshua has said that he admires Faulkner's narrative innovations.) A duet, the novel switches back and forth between two main characters, a married couple in late middle age, Amotz and Daniela Yaari.
He is the sober, slightly boring but admirably responsible owner of an elevator engineering company, while she is flightier, more intellectual, an adventuresome teacher who has gone off to Tanzania to see her brother-in-law and grieve over her recently deceased sister. Highly interdependent co-rulers of a small, respectable and well-regulated world of friends, children and grandchildren, Amotz and Daniela are rarely apart (this also describes Yehoshua's own marriage), so the week of disruption to their routine over the Hanukkah holiday feels full of foreboding and significance. And it turns out to be.
When Daniela arrives in Africa, she discovers that her brother-in-law, Yirmiyahu (Hebrew for Jeremiah), has sought to cut himself off entirely from his roots. A former Israeli diplomat, he tells her he doesn't know the name of the current prime minister and doesn't wish to know. When she takes out a box of Hanukkah candles so they can light them together, he throws them in the furnace and says he has no interest in the Jewish calendar. "I've simply decided to take a rest here from all of that," Yirmi tells his sister-in-law.
"A rest from what?" she asks, stunned.
"From the whole messy stew," he replies. "Jewish and Israeli."
As manager of an anthropological dig, Yirmi works closely with a Sudanese woman, an animist whose entire family was slaughtered in her country's civil war and who, despite this, "grew up to be a woman of great tenderness and humanity." Suffering, even holocaust, Yehoshua implies, aren't the monopoly of the Jews, and they're no excuse for cruelty. Moreover, monotheism isn't the only honorable explanation for the inexplicable mysteries of the universe.
But it turns out that Yirmi can no more cut himself off from Israel than can Daniela, who never changes her watch to local time and worries about her extended family, no matter what exotic landscape she inhabits. For the death that haunts this story isn't that of her sister, Yirmi's wife, but of her nephew, his son, six years earlier as a soldier in the Israeli-occupied West Bank. He was accidently shot by fellow soldiers during an ambush, the victim of what is called in English "friendly fire." In Hebrew - Eish Yedidutit - these words don't carry the same meaning, and therefore have a jarring impact on both the ear and the heart.
In his rage and desperation, Yirmi seizes on this phrase, translated from English, when he first hears it as "some small spark of light that would help me navigate through the great darkness that awaited me and better identify the true sickness that afflicts all of us." In search of that sickness, he travels twice to the West Bank Palestinian home where his son lost his life, and his encounters there are the most powerful scenes in the book. Yirmi wants to know exactly how and why his son was killed, and the Palestinians give him the answer he's seeking.
It's a painful one, offered without sympathy. And while this adds to Yirmi's misery, he can't blame them for failing to feel sorry for the occupier and his dead occupier son.
Although Yehoshua is a long-standing critic of the occupation, he doesn't lionize the Palestinians. There are no heroes here. The land relentlessly eats its own, and "friendly fire" is just one of its ways. After his son's death, Yirmi pores over the harsh poetic writings of his namesake, the Old Testament prophet, who seems to argue that God is a cruel master promising only further cruelty for the sins of previous generations. There is no escape, not even in the depths of Africa.
It's hard to know what to make of this pessimism because Yirmi, who has lost his job, his son and his wife, isn't a trustworthy guide. Generally, he seems less wise than lost. Moreover, the other half of the novel is a light, pleasant chronicle of Amotz, the well-meaning bourgeois, with his elevator company and his family - his father, in a wheelchair; his slightly too sexy daughter-in-law; his fine son who skipped his military reserve duty and now has to pay for it; his grandchildren who await Hanukkah presents. All is not perfect, of course, but Amotz's is a successful, honorable life in the modern Jewish state, the sort of life Herzl could have only fantasized about.
It may be that Yehoshua is hinting at the growing split in Israeli life, as exemplified by the self-absorbed, comfortable existence of Tel Avivians, protected by the separation barrier along and near the West Bank boundary, who pay less and less attention to the festering conflict a few miles away. Israelis, the novel suggests, are all living a kind of unconscious duet.
The conflict serves at most as an irritating background noise, like the one afflicting the fancy Tel Aviv tower where Amotz's company did its latest job - the elevator shafts howl in strong winds and the tenants want them fixed. The word in Hebrew for wind and spirit is the same - ruach - and Yehoshua appears to be drawing a link between the mysteries of Tel Aviv elevators and the animism of Africa. To fix the problem, Amotz ends up relying on a pixie of a woman with unusual hearing rather than well-trained engineers. But what exactly does this link mean? The connection feels elusive; Yehoshua's failure to make us understand it is one of the book's weaknesses.
One of the novel's strengths is its careful inspection of the nature of familial relationships, rendered through exceptionally accurate dialogue. Yehoshua writes with depth and clarity, for example, of the decline in Yirmi's marital sex life after his son's death, and he is equally convincing in Amotz's observations of his own offspring. But the Tel Aviv plot is, in the end, more tepid than riveting, even as a counterpoint to the emotional and political drama played out on the Tanzanian plains.
Ethan Bronner is the Jerusalem bureau chief for The New York Times.
Acouple of years ago, the Israeli writer A.B. Yehoshua upset many American Jews by asserting that a full Jewish life could be had only in the Jewish state. Jews ruled by Jews, he said, were deciding whether to withdraw from territory and torture terrorists. Jews elsewhere might contribute to similar conversations but were only "playing with Jewishness," not defining it.
The depth - and burdens - of a full Jewish life in the only Jewish state form the central themes of Yehoshua's latest novel, "Friendly Fire," a work that interlaces a depiction of almost aggressively ordinary day-to-day Israeli activity with an emotional and symbol-laden journey to that other bloody cradle of civilization, Africa.
The two halves of the narrative aim to echo and complement each other, and when they do Yehoshua achieves a remarkable artistry. However, this isn't always the case. The result is a fine but flawed novel, rendered from the Hebrew in an excellent, nicely tuned translation by Stuart Schoffman.
Yehoshua came of age just after Israel's creation in 1948 and, like Amos Oz and Aharon Appelfeld, has been one of his country's most vital chroniclers and critics. He is the author of eight previous novels, the most accomplished of which is "Mr. Mani," a multigenerational look at Jewish identity and Israel through five conversations over more than a century. "Friendly Fire" has its own structural ambition. (Yehoshua has said that he admires Faulkner's narrative innovations.) A duet, the novel switches back and forth between two main characters, a married couple in late middle age, Amotz and Daniela Yaari.
He is the sober, slightly boring but admirably responsible owner of an elevator engineering company, while she is flightier, more intellectual, an adventuresome teacher who has gone off to Tanzania to see her brother-in-law and grieve over her recently deceased sister. Highly interdependent co-rulers of a small, respectable and well-regulated world of friends, children and grandchildren, Amotz and Daniela are rarely apart (this also describes Yehoshua's own marriage), so the week of disruption to their routine over the Hanukkah holiday feels full of foreboding and significance. And it turns out to be.
When Daniela arrives in Africa, she discovers that her brother-in-law, Yirmiyahu (Hebrew for Jeremiah), has sought to cut himself off entirely from his roots. A former Israeli diplomat, he tells her he doesn't know the name of the current prime minister and doesn't wish to know. When she takes out a box of Hanukkah candles so they can light them together, he throws them in the furnace and says he has no interest in the Jewish calendar. "I've simply decided to take a rest here from all of that," Yirmi tells his sister-in-law.
"A rest from what?" she asks, stunned.
"From the whole messy stew," he replies. "Jewish and Israeli."
As manager of an anthropological dig, Yirmi works closely with a Sudanese woman, an animist whose entire family was slaughtered in her country's civil war and who, despite this, "grew up to be a woman of great tenderness and humanity." Suffering, even holocaust, Yehoshua implies, aren't the monopoly of the Jews, and they're no excuse for cruelty. Moreover, monotheism isn't the only honorable explanation for the inexplicable mysteries of the universe.
But it turns out that Yirmi can no more cut himself off from Israel than can Daniela, who never changes her watch to local time and worries about her extended family, no matter what exotic landscape she inhabits. For the death that haunts this story isn't that of her sister, Yirmi's wife, but of her nephew, his son, six years earlier as a soldier in the Israeli-occupied West Bank. He was accidently shot by fellow soldiers during an ambush, the victim of what is called in English "friendly fire." In Hebrew - Eish Yedidutit - these words don't carry the same meaning, and therefore have a jarring impact on both the ear and the heart.
In his rage and desperation, Yirmi seizes on this phrase, translated from English, when he first hears it as "some small spark of light that would help me navigate through the great darkness that awaited me and better identify the true sickness that afflicts all of us." In search of that sickness, he travels twice to the West Bank Palestinian home where his son lost his life, and his encounters there are the most powerful scenes in the book. Yirmi wants to know exactly how and why his son was killed, and the Palestinians give him the answer he's seeking.
It's a painful one, offered without sympathy. And while this adds to Yirmi's misery, he can't blame them for failing to feel sorry for the occupier and his dead occupier son.
Although Yehoshua is a long-standing critic of the occupation, he doesn't lionize the Palestinians. There are no heroes here. The land relentlessly eats its own, and "friendly fire" is just one of its ways. After his son's death, Yirmi pores over the harsh poetic writings of his namesake, the Old Testament prophet, who seems to argue that God is a cruel master promising only further cruelty for the sins of previous generations. There is no escape, not even in the depths of Africa.
It's hard to know what to make of this pessimism because Yirmi, who has lost his job, his son and his wife, isn't a trustworthy guide. Generally, he seems less wise than lost. Moreover, the other half of the novel is a light, pleasant chronicle of Amotz, the well-meaning bourgeois, with his elevator company and his family - his father, in a wheelchair; his slightly too sexy daughter-in-law; his fine son who skipped his military reserve duty and now has to pay for it; his grandchildren who await Hanukkah presents. All is not perfect, of course, but Amotz's is a successful, honorable life in the modern Jewish state, the sort of life Herzl could have only fantasized about.
It may be that Yehoshua is hinting at the growing split in Israeli life, as exemplified by the self-absorbed, comfortable existence of Tel Avivians, protected by the separation barrier along and near the West Bank boundary, who pay less and less attention to the festering conflict a few miles away. Israelis, the novel suggests, are all living a kind of unconscious duet.
The conflict serves at most as an irritating background noise, like the one afflicting the fancy Tel Aviv tower where Amotz's company did its latest job - the elevator shafts howl in strong winds and the tenants want them fixed. The word in Hebrew for wind and spirit is the same - ruach - and Yehoshua appears to be drawing a link between the mysteries of Tel Aviv elevators and the animism of Africa. To fix the problem, Amotz ends up relying on a pixie of a woman with unusual hearing rather than well-trained engineers. But what exactly does this link mean? The connection feels elusive; Yehoshua's failure to make us understand it is one of the book's weaknesses.
One of the novel's strengths is its careful inspection of the nature of familial relationships, rendered through exceptionally accurate dialogue. Yehoshua writes with depth and clarity, for example, of the decline in Yirmi's marital sex life after his son's death, and he is equally convincing in Amotz's observations of his own offspring. But the Tel Aviv plot is, in the end, more tepid than riveting, even as a counterpoint to the emotional and political drama played out on the Tanzanian plains.
Ethan Bronner is the Jerusalem bureau chief for The New York Times.
A senior fellow at the Institute of Nonexistence
By Richard Pérez-Peña
Thursday, November 13, 2008
It was among the juicier post-election recriminations: Fox News Channel quoted an unnamed McCain campaign figure as saying that Sarah Palin did not know that Africa was a continent.
Who would say such a thing? On Monday the answer popped up on a blog and popped out of the mouth of David Shuster, an MSNBC anchor. "Turns out it was Martin Eisenstadt, a McCain policy adviser, who has come forward today to identify himself as the source of the leaks," Shuster said.
Trouble is, Martin Eisenstadt doesn't exist. His blog does, but it's a put-on. The think tank where he is a senior fellow — the Harding Institute for Freedom and Democracy — is just a Web site. The TV clips of him on YouTube are fakes.
And the claim of credit for the Africa anecdote is just the latest ruse by Eisenstadt, who turns out to be a very elaborate hoax that has been going on for months. MSNBC, which quickly corrected the mistake, has plenty of company in being taken in by an Eisenstadt hoax, including The New Republic and The Los Angeles Times.
Now a pair of obscure filmmakers say they created Martin Eisenstadt to help them pitch a TV show based on the character. But under the circumstances, why should anyone believe a word they say?
"That's a really good question," one of the two, Eitan Gorlin, said with a laugh.
(For what it's worth, another reporter for The New York Times is an acquaintance of Gorlin and vouches for his identity, and Gorlin is indeed "Mr. Eisenstadt" in those videos. He and his partner in deception, Dan Mirvish, have entries on the Internet Movie Database, imdb.com. But still. ...)
They say the blame lies not with them but with shoddiness in the traditional news media and especially the blogosphere.
"With the 24-hour news cycle they rush into anything they can find," said Mirvish, 40.
Gorlin, 39, argued that Eisenstadt was no more of a joke than half the bloggers or political commentators on the Internet or television.
An MSNBC spokesman, Jeremy Gaines, explained the network's misstep by saying someone in the newsroom received the Palin item in an e-mail message from a colleague and assumed it had been checked out. "It had not been vetted," he said. "It should not have made air."
But most of Eisenstadt's victims have been bloggers, a reflection of the sloppy speed at which any tidbit, no matter how specious, can bounce around the Internet. And they fell for the fake material despite ample warnings online about Eisenstadt, including the work of one blogger who spent months chasing the illusion around cyberspace, trying to debunk it.
The hoax began a year ago with short videos of a parking valet character, who Gorlin and Mirvish said was the original idea for a TV series.
Soon there were videos showing him driving a car while spouting offensive, opinionated nonsense in praise of Rudolph Giuliani. Those videos attracted tens of thousands of Internet hits and a bit of news media attention.
When Giuliani dropped out of the presidential race, the character morphed into Eisenstadt, a parody of a blowhard cable news commentator.
Gorlin said they chose the name because "all the neocons in the Bush administration had Jewish last names and Christian first names."
Eisenstadt became an adviser to Senator John McCain and got a blog, updated occasionally with comments claiming insider knowledge, and other bloggers began quoting and linking to it. It mixed weird-but-true items with false ones that were plausible, if just barely.
The inventors fabricated the Harding Institute, named for one of the most scorned presidents, and made Eisenstadt a senior fellow.
It didn't hurt that a man named Michael Eisenstadt is a real expert at the Washington Institute for Near East Policy and is quoted in the mainstream media. The real Eisenstadt said in an interview that he was only dimly aware of the fake one, and that his main concern was that people understood that "I had nothing to do with this."
Before long Gorlin and Mirvish had produced a short documentary on Martin Eisenstadt, supposedly for the BBC, posted in several parts on YouTube.
In June they produced what appeared to be an interview with Eisenstadt on Iraqi television promoting construction of a casino in the Green Zone in Baghdad. Then they sent out a news release in which he apologized. Outraged Iraqi bloggers protested the casino idea.
Among the Americans who took that bait was Jonathan Stein, a reporter for Mother Jones. A few hours later Stein put up a post on the magazine's political blog, with the title "Hoax Alert: Bizarre 'McCain Adviser' Too Good to Be True," and explained how he had been fooled.
In July, after the McCain campaign compared Senator Barack Obama to Paris Hilton, the Eisenstadt blog said "the phone was burning off the hook" at McCain headquarters, with angry calls from Hilton's grandfather and others. A Los Angeles Times political blog, among others, retold the story, citing Eisenstadt by name and linking to his blog.
Last month Eisenstadt blogged that Samuel Wurzelbacher, Joe the Plumber, was closely related to Charles Keating, the disgraced former savings and loan chief. It wasn't true, but other bloggers ran with it.
Among those taken in by Monday's confession about the Palin Africa report was The New Republic's political blog. Later the magazine posted this atop the entry: "Oy — this would appear to be a hoax. Apologies."
But the truth was out for all to see long before the big-name take-downs. For months sourcewatch.org has identified Martin Eisenstadt as a hoax. When Stein was the victim, he blogged that "there was enough info on the Web that I should have sussed this thing out."
And then there is William Wolfrum, a blogger who has played Javert to Eisenstadt's Valjean, tracking the hoaxster across cyberspace and repeatedly debunking his claims. Gorlin and Mirvish praised his tenacity, adding that the news media could learn something from him.
"As if there isn't enough misinformation on this election, it was shocking to see so much time wasted on things that didn't exist," Wolfrum said in an interview.
And how can we know that Wolfrum is real and not part of the hoax?
Long pause. "Yeah, that's a tough one."
By Richard Pérez-Peña
Thursday, November 13, 2008
It was among the juicier post-election recriminations: Fox News Channel quoted an unnamed McCain campaign figure as saying that Sarah Palin did not know that Africa was a continent.
Who would say such a thing? On Monday the answer popped up on a blog and popped out of the mouth of David Shuster, an MSNBC anchor. "Turns out it was Martin Eisenstadt, a McCain policy adviser, who has come forward today to identify himself as the source of the leaks," Shuster said.
Trouble is, Martin Eisenstadt doesn't exist. His blog does, but it's a put-on. The think tank where he is a senior fellow — the Harding Institute for Freedom and Democracy — is just a Web site. The TV clips of him on YouTube are fakes.
And the claim of credit for the Africa anecdote is just the latest ruse by Eisenstadt, who turns out to be a very elaborate hoax that has been going on for months. MSNBC, which quickly corrected the mistake, has plenty of company in being taken in by an Eisenstadt hoax, including The New Republic and The Los Angeles Times.
Now a pair of obscure filmmakers say they created Martin Eisenstadt to help them pitch a TV show based on the character. But under the circumstances, why should anyone believe a word they say?
"That's a really good question," one of the two, Eitan Gorlin, said with a laugh.
(For what it's worth, another reporter for The New York Times is an acquaintance of Gorlin and vouches for his identity, and Gorlin is indeed "Mr. Eisenstadt" in those videos. He and his partner in deception, Dan Mirvish, have entries on the Internet Movie Database, imdb.com. But still. ...)
They say the blame lies not with them but with shoddiness in the traditional news media and especially the blogosphere.
"With the 24-hour news cycle they rush into anything they can find," said Mirvish, 40.
Gorlin, 39, argued that Eisenstadt was no more of a joke than half the bloggers or political commentators on the Internet or television.
An MSNBC spokesman, Jeremy Gaines, explained the network's misstep by saying someone in the newsroom received the Palin item in an e-mail message from a colleague and assumed it had been checked out. "It had not been vetted," he said. "It should not have made air."
But most of Eisenstadt's victims have been bloggers, a reflection of the sloppy speed at which any tidbit, no matter how specious, can bounce around the Internet. And they fell for the fake material despite ample warnings online about Eisenstadt, including the work of one blogger who spent months chasing the illusion around cyberspace, trying to debunk it.
The hoax began a year ago with short videos of a parking valet character, who Gorlin and Mirvish said was the original idea for a TV series.
Soon there were videos showing him driving a car while spouting offensive, opinionated nonsense in praise of Rudolph Giuliani. Those videos attracted tens of thousands of Internet hits and a bit of news media attention.
When Giuliani dropped out of the presidential race, the character morphed into Eisenstadt, a parody of a blowhard cable news commentator.
Gorlin said they chose the name because "all the neocons in the Bush administration had Jewish last names and Christian first names."
Eisenstadt became an adviser to Senator John McCain and got a blog, updated occasionally with comments claiming insider knowledge, and other bloggers began quoting and linking to it. It mixed weird-but-true items with false ones that were plausible, if just barely.
The inventors fabricated the Harding Institute, named for one of the most scorned presidents, and made Eisenstadt a senior fellow.
It didn't hurt that a man named Michael Eisenstadt is a real expert at the Washington Institute for Near East Policy and is quoted in the mainstream media. The real Eisenstadt said in an interview that he was only dimly aware of the fake one, and that his main concern was that people understood that "I had nothing to do with this."
Before long Gorlin and Mirvish had produced a short documentary on Martin Eisenstadt, supposedly for the BBC, posted in several parts on YouTube.
In June they produced what appeared to be an interview with Eisenstadt on Iraqi television promoting construction of a casino in the Green Zone in Baghdad. Then they sent out a news release in which he apologized. Outraged Iraqi bloggers protested the casino idea.
Among the Americans who took that bait was Jonathan Stein, a reporter for Mother Jones. A few hours later Stein put up a post on the magazine's political blog, with the title "Hoax Alert: Bizarre 'McCain Adviser' Too Good to Be True," and explained how he had been fooled.
In July, after the McCain campaign compared Senator Barack Obama to Paris Hilton, the Eisenstadt blog said "the phone was burning off the hook" at McCain headquarters, with angry calls from Hilton's grandfather and others. A Los Angeles Times political blog, among others, retold the story, citing Eisenstadt by name and linking to his blog.
Last month Eisenstadt blogged that Samuel Wurzelbacher, Joe the Plumber, was closely related to Charles Keating, the disgraced former savings and loan chief. It wasn't true, but other bloggers ran with it.
Among those taken in by Monday's confession about the Palin Africa report was The New Republic's political blog. Later the magazine posted this atop the entry: "Oy — this would appear to be a hoax. Apologies."
But the truth was out for all to see long before the big-name take-downs. For months sourcewatch.org has identified Martin Eisenstadt as a hoax. When Stein was the victim, he blogged that "there was enough info on the Web that I should have sussed this thing out."
And then there is William Wolfrum, a blogger who has played Javert to Eisenstadt's Valjean, tracking the hoaxster across cyberspace and repeatedly debunking his claims. Gorlin and Mirvish praised his tenacity, adding that the news media could learn something from him.
"As if there isn't enough misinformation on this election, it was shocking to see so much time wasted on things that didn't exist," Wolfrum said in an interview.
And how can we know that Wolfrum is real and not part of the hoax?
Long pause. "Yeah, that's a tough one."
Hello, I'm your son
By William Georgiades
Thursday, November 13, 2008
One day about five months ago, I found myself sitting with a woman in the tearoom of a hotel in South Kensington. She looked very familiar and in fact had features similar to those I looked at in the mirror every day, but we had never been formally introduced. We last met 41 years previously, when she gave me up for adoption.
The process of finding her lasted nine years and was so tricky that I almost gave up on several occasions. Three days earlier, sitting down to work in New York, I had an e-mail message from yet another London-based social worker who had been on the case for a few weeks. He wrote, rather plainly, that he had made contact and that attached I could find a note from my mother. In the note she said that she hoped I was happy and well, that she would love to meet me and that she herself was happy and well. I wrote back immediately and said I happened to have business in London that weekend; would she have time to meet?
So we sat, and I peppered her with questions. After a while she made a presentation of sorts - pulling out family photographs. Then I told her about myself. I was raised by two perfectly lovely people who made sure I was well educated, well loved, well fed and all that. They couldn't have been nicer. But still, I did manage to be expelled from six schools in a row. When I mentioned being expelled from just one school, my new old mother said, "Oh, that must have been terrible for you," and so I left it at that.
After a few cups of tea, she told me that she had something strange to tell me and that I should prepare myself. So far she had been perfectly lovely. I had expected her to be drunk and angry and chain-smoking. Otherwise I expected something spectacular - Mick Jagger's love child, a connection to the royal family.
Well, she said, your father and I ended up getting back together several years after you were born, and we had two daughters and we have lived together for more than 30 years. So you can meet your father and your two full sisters as well if you like.
Oh, I said. You're right. That is quite strange. Of all the things I had imagined, a lovely, rather romantic story like that hadn't quite occurred to me.
Two hours went by very quickly. I suggested she invite her husband, my father, to join us. I said I wasn't quite ready to face two full sisters. He was there within 10 minutes. My father looked like me; he had a soft Irish brogue and a quiet sense of humor, and he and his wife, my mother, finished each other's sentences. I kept trying to think of a way to describe the family that raised me without using the words "mother" and "father."
Coincidences started to mount up. After getting back together, the couple lived at the same address in London for more than three decades. As a teenager, I lived near their house. We must have walked past each other's houses a hundred times.
We decided to have dinner. It was a Saturday night, and there was an hour-and-a-half wait for a table. They pointed out the pub where they met. I had been to that pub dozens of times; it was next door to my adoptive grandparents' house.
We talked for hours over dinner. It was so odd to look at these two people and feel perfectly at home with both of them. My mother described the circumstances of my adoption. She was 19; she wanted to keep me; neither of them had enough money to raise a child; and every single person told her she had to give me up. I thanked her, as delicately as possible, for letting me exist.
As we had coffee I joked that maybe I wasn't their son after all. They roared. I was relieved. They had a sense of humor.
The next morning I flew back to New York in a daze, spending the whole flight staring at the photographs of this new family. A year and a half before, my daughter was born in New York, and she was the first person I met who shared my blood. Now I was looking at a whole cast of characters who shared my blood. It settled me. My parents appeared to be gentle, lovely people.
Back home, it took me a few days to tell my wife about this newfound family. When I did, I showed her all the photographs, which she took and framed and added to the wall of our apartment devoted to family pictures.
Even now, the pictures - the married couple saying cheers in Australia, the sisters smiling on a beach in Thailand - cause me to do a double take as I walk by them, not so much wondering, Who are those people, as thinking, Oh, there you are.
William Georgiades is an actor and writer living in New York.
By William Georgiades
Thursday, November 13, 2008
One day about five months ago, I found myself sitting with a woman in the tearoom of a hotel in South Kensington. She looked very familiar and in fact had features similar to those I looked at in the mirror every day, but we had never been formally introduced. We last met 41 years previously, when she gave me up for adoption.
The process of finding her lasted nine years and was so tricky that I almost gave up on several occasions. Three days earlier, sitting down to work in New York, I had an e-mail message from yet another London-based social worker who had been on the case for a few weeks. He wrote, rather plainly, that he had made contact and that attached I could find a note from my mother. In the note she said that she hoped I was happy and well, that she would love to meet me and that she herself was happy and well. I wrote back immediately and said I happened to have business in London that weekend; would she have time to meet?
So we sat, and I peppered her with questions. After a while she made a presentation of sorts - pulling out family photographs. Then I told her about myself. I was raised by two perfectly lovely people who made sure I was well educated, well loved, well fed and all that. They couldn't have been nicer. But still, I did manage to be expelled from six schools in a row. When I mentioned being expelled from just one school, my new old mother said, "Oh, that must have been terrible for you," and so I left it at that.
After a few cups of tea, she told me that she had something strange to tell me and that I should prepare myself. So far she had been perfectly lovely. I had expected her to be drunk and angry and chain-smoking. Otherwise I expected something spectacular - Mick Jagger's love child, a connection to the royal family.
Well, she said, your father and I ended up getting back together several years after you were born, and we had two daughters and we have lived together for more than 30 years. So you can meet your father and your two full sisters as well if you like.
Oh, I said. You're right. That is quite strange. Of all the things I had imagined, a lovely, rather romantic story like that hadn't quite occurred to me.
Two hours went by very quickly. I suggested she invite her husband, my father, to join us. I said I wasn't quite ready to face two full sisters. He was there within 10 minutes. My father looked like me; he had a soft Irish brogue and a quiet sense of humor, and he and his wife, my mother, finished each other's sentences. I kept trying to think of a way to describe the family that raised me without using the words "mother" and "father."
Coincidences started to mount up. After getting back together, the couple lived at the same address in London for more than three decades. As a teenager, I lived near their house. We must have walked past each other's houses a hundred times.
We decided to have dinner. It was a Saturday night, and there was an hour-and-a-half wait for a table. They pointed out the pub where they met. I had been to that pub dozens of times; it was next door to my adoptive grandparents' house.
We talked for hours over dinner. It was so odd to look at these two people and feel perfectly at home with both of them. My mother described the circumstances of my adoption. She was 19; she wanted to keep me; neither of them had enough money to raise a child; and every single person told her she had to give me up. I thanked her, as delicately as possible, for letting me exist.
As we had coffee I joked that maybe I wasn't their son after all. They roared. I was relieved. They had a sense of humor.
The next morning I flew back to New York in a daze, spending the whole flight staring at the photographs of this new family. A year and a half before, my daughter was born in New York, and she was the first person I met who shared my blood. Now I was looking at a whole cast of characters who shared my blood. It settled me. My parents appeared to be gentle, lovely people.
Back home, it took me a few days to tell my wife about this newfound family. When I did, I showed her all the photographs, which she took and framed and added to the wall of our apartment devoted to family pictures.
Even now, the pictures - the married couple saying cheers in Australia, the sisters smiling on a beach in Thailand - cause me to do a double take as I walk by them, not so much wondering, Who are those people, as thinking, Oh, there you are.
William Georgiades is an actor and writer living in New York.
ALL PHOTOGRAPHS COPYRIGHT IAN WALTHEW 2008
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