Subject: Thoughts on Niger From: Mik To: All Date Posted: Wed, Aug 17, 2005 at 15:41:18 (EDT) Email Address: Not Provided Message: Emma, I don't know much about Niger as my expertise is in English and Portuguese speaking Africa. My first thought (which could be wrong) on the principle of 'Functioning Democracy' in Africa is unfortunately very cynical (here we go again - but I will end off with a positive example this time). Most 'democracies' in Africa are NOT true functioning democracies. Not even South Africa which saw open and fair elections with a change of president. Africa is (in general) still run by tribes. And people vote in their tribal leaders. For this reason, no matter how bad the leader may be, he will still be voted in because he represents the majority tribe. In Uganda we saw something interesting. The majority tribe is located in the North of the country and are Idi Amin supporters (that is how Idi Amin came to power in the first place). There are two more tribes in the South and the people in the south realised that by coming together they are a majority. So they vote for Museveni (who is the current president of Uganda). They will always vote for Museveni because he will represent their tribes (and they don't want to be ruled by any other tribal leader). Luckily a lot of these leaders are behaving themselves due to international pressure. But they slip up every so often as it appears in Niger. In South Africa, the majority tribe is the Xhosa and the most feared tribe is the Zulu. The Zulu tribe has their own political representation, but the remaining tribes vote along with the Xhosa tribe for the ANC. And we can be sure that the ANC will remain in power for as long as the population of Xhosas is the largest (which appears to be forever). We hope that with time and improved education, tribal links will diminish and more pure democracy will flourish. Now for the positive side: There is one country in Africa that is truly democratic. In fact it is the oldest democracy in Africa and actually the most succesful country in Africa.... Botswana. This country with a mere 1.4 million people has only one tribe. So competing politicians are evaluated on their political strength, not tribal relation. For a country that is almost entirely desert, has to import most of its water and import all its electricity, they are not only per capita the richest but the most progressive country in Africa. They are actually the true model for Africa's future. So when done properly, democracy works well.

Subject: Re: Thoughts on Niger From: Emma To: Mik Date Posted: Wed, Aug 17, 2005 at 15:43:21 (EDT) Email Address: Not Provided Message: An excellent response to articles on Niger. I am thinking and talking about the points your have made, and I did find the response this morning but it is always helpful to check for I might have missed. Excellent.

Subject: An Investor's Puzzle From: Terri To: All Date Posted: Wed, Aug 17, 2005 at 14:42:20 (EDT) Email Address: Not Provided Message: There is an investor's puzzle I am well aware of but sort of wish to wish away. Inflation leaving out energy is no problem, but with energy there is a problem. So too, corporate profits are fine including energy but not fine otherwise. If we have an economy driven by housing, we increasingly have an energy company driven stock market.

Subject: Philosopher of Optimism Endures From: Emma To: All Date Posted: Wed, Aug 17, 2005 at 12:41:41 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/17/books/17wils.html Philosopher of Optimism Endures Negative Deluge By BRAD SPURGEON GORRAN HAVEN, Britain - Any intellectual who divides opinion as much as Colin Wilson has for almost 50 years must be onto something, even if it is only whether humans should be pessimistic or optimistic. Mr. Wilson, who turned 74 in June and whose autobiography, 'Dreaming to Some Purpose,' recently appeared in paperback from Arrow, describes in the first chapter how he made his own choice. The son of working-class parents from Leicester - his father was in the boot and shoe trade - he was forced to quit school and go to work at 16, even though his ambition was to become 'Einstein's successor.' After a stint in a wool factory, he found a job as a laboratory assistant, but he was still in despair and decided to kill himself. On the verge of swallowing hydrocyanic acid, he had an insight: there were two Colin Wilsons, one an idiotic, self-pitying teenager and the other a thinking man, his real self. The idiot, he realized, would kill them both. 'In that moment,' he wrote, 'I glimpsed the marvelous, immense richness of reality, extending to distant horizons.' Achieving such moments of optimistic insight has been his goal and subject matter ever since, through more than 100 books, from his first success, 'The Outsider,' published in 1956, when he was declared a major existentialist thinker at 24, to the autobiography. In an interview last month at his home of nearly 50 years on the Cornish coast, Mr. Wilson was as optimistic as ever, even though his autobiography and his life's work have come under strong attack in some quarters. 'What I wanted to do was to try to create a philosophy upon a completely new foundation,' he said, sitting in his living room along with a parrot, two dogs and part of his collection of 30,000 books and as many records. 'Whereas in the past optimism had been regarded as rather shallow - because 'oh well, it's just your temperament, you happen to be just a cheerful sort of person' - what I wanted to do was to establish that in fact it is the pessimists who are allowing all kinds of errors to creep into their work.' He includes in that category writers like Hemingway and philosophers like Sartre. In books on sex, crime, psychology and the occult, and in more than a dozen novels, Mr. Wilson has explored how pessimism can rob ordinary people of their powers. 'If you asked me what is the basis of all my work,' he said, 'it's the feeling there's something basically wrong with human beings. Human beings are like grandfather clocks driven by watch springs. Our powers appear to be taken away from us by something.' The critics, particularly in Britain, have alternately called him a genius and a fool. His autobiography, published in hardcover last year, has received mixed reviews. Though lauded by some, the attacks on it and Mr. Wilson have been as virulent as those he provoked in the 1950's after he became a popular culture name with the publication of 'The Outsider.' That book dealt with alienation in thinkers, artists and men of action like T. E. Lawrence, van Gogh, Camus and Nietzsche, and caught the mood of the age. Critics, including Cyril Connolly and Philip Toynbee, hailed Mr. Wilson as a British version of the French existentialists. His fans ranged from Muammar el-Qaddafi to Groucho Marx, who asked his British publisher to send a copy of his own autobiography to three people in Britain: Winston Churchill, Somerset Maugham and Colin Wilson. 'The Outsider' was translated into dozens of languages and sold millions of copies. It has never been out of print. The Times of London called Mr. Wilson and John Osborne - another young working-class man, whose play 'Look Back in Anger' opened about the same time 'The Outsider' was published - 'angry young men.' That name was passed on to others of their generation, including Kingsley Amis, Alan Sillitoe and even Doris Lessing. But fame brought its own problems for Wilson. His sometimes tumultuous early personal life became fodder for gossip columnists. He was still married to his first wife while living with his future second wife, Joy. His publisher, Victor Gollancz, urged him to leave the spotlight, and he and Joy moved to Cornwall. But the publicity had done its damage. His second book, 'Religion and the Rebel,' was panned and his career looked dead. Mr. Wilson said the episode had actually saved him as a writer, however. 'Too much success gets you resting on your laurels and creates a kind of quicksand that you can't get out of,' he said. 'So I was relieved to get out of London.' He said his books were probably heading for condemnation in Britain anyway. 'I'm basically a writer of ideas, and the English aren't interested in ideas,' he said. 'The English, I'm afraid, are totally brainless. If you're a writer of ideas like Sartre or Foucault or Derrida, then the general French public know your name, whereas here in England, their equivalent in the world of philosophy wouldn't be known.' He never lost belief in the importance of his work in trying to find out how to harness human beings' full powers and wipe out gloom. 'Sartre's 'man is a useless passion,' and Camus's feeling that life is absurd, and so on, basically meant that philosophy itself had turned really pretty dark,' he said. 'I could see that there was a basic fallacy in Sartre and Camus and all of these existentialists, Heidegger and so on. The basic fallacy lay in their failure to understand the actual foundation of the problem.' That foundation, he said, is that human perception is intentional; the pessimists themselves paint their world black. Mr. Wilson has spent much of his life researching how to achieve those moments of well-being that bring insight, what the American psychologist Abraham Maslow called 'peak experiences.' Those moments can come only through effort, concentration or focus, and refusing to lose one's vital energies through pessimism. 'What it means basically is that you're able to focus until you suddenly experience that sense that everything is good,' Mr. Wilson said. 'We go around leaking energy in the same way that someone who has slashed their wrists would go around leaking blood. 'Once you can actually get over that and recognize that this is not necessary, suddenly you begin to see the possibility of achieving a state of mind, a kind of steady focus, which means that you see things as extremely good.' If harnessed by everyone, this could lead to the next step in human evolution, a kind of Superman. 'The problem with human beings so far is that they are met with so many setbacks that they are quite easily defeatable, particularly in the modern age when they've got too separated from their roots,' he said. Over the last year, he has been forced to test his own powers in this area. 'When I was pretty sure that the autobiography was going to be a great success, and when it, on the contrary, got viciously attacked,' Mr. Wilson said, 'well, I know I'm not wrong. Obviously the times are out of joint.' Though 'Dreaming to Some Purpose' was warmly received in The Independent on Sunday and The Spectator and was praised by the novelist Philip Pullman, the autobiography - and Mr. Wilson - received a barrage of negative profiles and reviews in The Sunday Times and The Observer. These made fun of the book's more eccentric parts, like his avowed fetish for women's panties. As a measure of the passions that Mr. Wilson provokes, Robert Meadley, an essayist, wrote 'The Odyssey of a Dogged Optimist' (Savoy, 2004), a 188-page book defending him. 'If you think a man's a fool and his books are a waste of time, how long does it take to say so?' Mr. Meadley wrote, questioning the space the newspapers gave to the attacks. Part of Mr. Meadley's conclusion is that the British intellectual establishment still felt threatened by Mr. Wilson, a self-educated outsider from the working class. 'One of my main problems as far as the public is concerned is that I've always been interested in too many things,' Mr. Wilson said, 'and if they can't typecast you as a writer on this or that, then I'm afraid you tend not to be understood at all.'

Subject: A new brand of populism in Germany From: Setanta To: All Date Posted: Wed, Aug 17, 2005 at 11:25:51 (EDT) Email Address: Not Provided Message: Dublin in the summer of 1905 felt like a very British city. Yes, you were in Ireland, but British rule in Ireland, and particularly Dublin, would have felt very secure. Had anyone suggested that, within little more than a decade, there would be a bloody rising, leading to a war of independence and culminating in the Free State, you would probably have laughed off their forecast as the deluded dream of extreme nationalists. In the summer of 2005, anyone suggesting that Europe in general, and Germany in particular, might revisit the path that led to the rise of Hitler, could be similarly dismissed. Yet, on closer inspection, remarkable trends have emerged in Europe over the past few months which indicate that populism could resurface quite easily. In France and the Netherlands, the No votes to the European constitution were a warning, but the recent political developments in Germany - where a populist protest party formed three weeks ago is registering 12 per cent at the polls - are much more telling. Germany votes on September 16.Until a few weeks ago, it was expected that this would result in either the centre-right or the centre-left winning, but from nowhere, a party with the loose description of Der Linkspar, or Left Party, has elbowed its way into the reckoning. The Linkspar is the brainchild of the former leader of the East German communist party, Gregor Gysi, and the former firebrand of the Social Democrat Party, Oskar Lafontaine. Both are eloquent orators and are using ordinary Germans' main fears - unemployment and foreigners - to galvanise voters. Neither man has a clear agenda, but their platform is a hodge-podge of issues designed to push plenty of old-fashioned populist buttons. All the usual suspects are in the mix, from the far-left favourite of higher taxes on business, to the far-right gem of blaming foreigners for stealing German jobs one day, to banning foreign speculators from taking over German companies the next. Last week, it was a defence of Iran's right to develop nuclear weapons against the US/Israeli alliance in the Middle East, and an adoption of the slogans of the anti-globalisation movements. Despite the strong impression that the Linkspartie is making it up as it goes along, Europe's most educated electorate is responding. Why? An unexpected place to start explaining why Germans would support a mix of protectionism at home and anti-Americanism abroad is China. China is changing the economic landscape for everyone, but it is threatening Germany more than any other country in Europe. The reason is that Germany is the world's pre-eminent exporter of manufactured goods. Despite years of high costs, Germany has managed to retain its dominance across a variety of areas. This means Germany has much to lose from China's emergence as the workshop of the world. But, unlike the US, which has an enormous trade and current account deficit that prompts regular China-bashing from political and corporate leaders, Germany's trade account is in enormous surplus, so the threat from China is not well signposted or understood. This opacity is the nub of Germany's problem, even though China's threat to Germany is being felt in the more politically sensitive arena of unemployment. In contrast, the US feels Chinese competition in the virtual world of current account deficits and currency fluctuations, which may send regular readers of the Financial Times into delirium, but does not determine elections. Unemployment, on the other hand – particularly if it stands at over five million voters as it does in Germany - affects the very soul of the nation. But why does China have a more significant impact on German unemployment than it does on American joblessness? And why does that lead to anti-American, rather than anti-Chinese political sentiment in Germany? This is the conundrum. German jobs do not necessarily get exported to China directly. The mechanism is more circuitous. Due to the opportunities that globalisation gives to transnational corporations, every time they make corporate decisions, they are factoring the cost in China into their calculations. It is impossible for any civilised society to compete with Chinese rates of pay that start at 50 cent an hour, so the German worker is priced out of the manufacturing market for new jobs. But those in existing jobs are protected by strong labour laws so, in the short term, it is those without jobs (the unemployed and young workers trying to come into the labour force for the first time) who suffer twice as much. The reason this same process has not led to a rise in American unemployment is that the US has replaced manufacturing jobs with service jobs, and its service economy is driven by its credit bubble, which has been fuelled, as in Ireland, by its housing boom. In Germany, there is no housing boom. In fact, house prices have hardly budged for ten years. Without a housing boom, you get no credit bubble; with no credit bubble, there is no consumer spending; without consumer spending, there are no service jobs; and with fewer jobs, a country will never have political consensus. So far, so explicable, but why has German political anger that results from the economic conundrum been directed at America, rather than China? There are many reasons for this. Possibly because China is remote, it is difficult to articulate what form anti-Chinese protests might take. Another possibility is that those who respond to the Linkspart's anti-American rhetoric can't actually see the full picture. It is also possible that anti-globalisation, because it is primarily a vehicle for anti-Americanism, offers a readymade cocktail of easily-recognised villains, which might be confused if the Chinese were thrown in. My own hunch is that being anti-American is simply easier. The leaders of the Linkspar are part of the long continental leftist tradition of anti-Americanism. Whatever the reasons, the Linkspar is tapping into German fears that the world is changing too rapidly and that this change is threatening their country. It is easy to see why the cosmopolitan elite of the political and corporate world does not fear this threat, for it is benefiting from it. But in Germany, France, Italy and Holland, the man on the street is worried. If your livelihood were to be outsourced to Beijing, wouldn't you feel the same way? The election in Germany should be examined closely to see what happens when a nation feels economically threatened. Not for the first time, Germany is being hypnotised by populists with listenable and potent rhetoric. http://www.davidmcwilliams.ie/Articles/view.asp?CategoryID=-1&CategoryName=&ArticleID=294

Subject: Re: A new brand of populism in Germany From: Terri To: Setanta Date Posted: Wed, Aug 17, 2005 at 11:55:08 (EDT) Email Address: Not Provided Message: Germany needs a housing boom! Now.

Subject: Re: A new brand of populism in Germany From: Terri To: Setanta Date Posted: Wed, Aug 17, 2005 at 11:53:14 (EDT) Email Address: Not Provided Message: The column seems extreme in pessimism. What do you make of the situation?

Subject: Ads Using the Everyday Woman From: Emma To: All Date Posted: Wed, Aug 17, 2005 at 11:07:30 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/17/business/media/17adco.html For Everyday Products, Ads Using the Everyday Woman By STUART ELLIOTT Madison Avenue is increasingly interested in using everyday women in advertising instead of just waifish supermodels. The change comes after the Dove line of personal-care products sold by Unilever introduced what it called a 'campaign for real beauty,' which presents women in advertisements as they are rather than as some believe they ought to be. If the fad becomes a trend and shows legs, so to speak, it has the potential to fundamentally change decades of image-making on Madison Avenue. But that is a big if indeed. There have been many previous instances of ads that showed so-called real women in place of professional models, which receded as the allure of glamour again reared its beautiful head. This week, Nike is introducing a humorous print and online campaign for exercise gear, frankly glorifying body parts that until now were almost never seen in ads, much less celebrated. One ad, which begins boldly, 'My butt is big,' features an oversize photograph of the derrière in question. Another Nike ad declares, 'I have thunder thighs,' while a third asserts: 'My shoulders aren't dainty or proportional to my hips. Some say they are like a man's. I say, leave men out of it.' The Nike ads, by Wieden & Kennedy in Portland, Ore., are arriving days after the Chicken of the Sea brand of tuna introduced a television commercial showing a gorgeous young woman being ogled by the men in her office. She can escape their wolfish ways only in the elevator, which she enters alone, then breathes a sigh of relief - revealing that she really has a more-than-ample stomach, which she had been holding in. The Nike campaign was in the works, executives say, well before the much-publicized arrival last month of Dove print and outdoor ads showing six women, none of them models, sizes 4 to 12, smiling in their underwear. (The first of the Dove 'real beauty' ads, showing older, wrinkled women, started appearing last fall.) The Chicken of the Sea commercial is adapted from a spot that its parent, Thai Union Frozen Products, began running in Asia in 2001. Even so, the arrival of all the ads at the same time suggests that change may be in the air. 'We've gotten tired of airbrushed pictures none of us can relate to or recognize,' said Linda Kaplan Thaler, one of the most prominent women in advertising, whose agency, the Kaplan Thaler Group in New York, was not involved in creating any of the campaigns. Advertisers are 'loosening the reins,' said Ms. Kaplan Thaler, who is chief executive and chief creative officer at her agency, which is owned by the Publicis Groupe, in recognition of the reality that 'women are the majority of consumers and are buying most of the products.' But those facts have been evident for years. Why the new style of ads now? One reason, said Nathan Coyle, senior strategist at Brain Reserve in New York, a consulting company, is the advent of reality television. 'Your neighbors, everyday people, are the new celebrities,' Mr. Coyle said, which feeds the desire for marketers 'to shift from depicting women who are unattainable to women who are attainable.' Kelly Simmons, president of a brand consulting company in Philadelphia named Bubble, offered another reason: the aging of the baby-boom generation - the 76 million Americans born from 1946 to 1964 - who have long set the pace for marketers and advertising agencies. The first baby boomers will start turning 60 on Jan. 1. 'There's no question baby boomers feel better about their bodies,' Ms. Simmons said, 'and are determined to age beautifully,' adding, 'It feels there are real voices of women coming through' in the Dove and Nike ads. 'I applaud the trend.' Nancy Monsarrat, United States director for advertising at Nike in Beaverton, Ore., said that in addition to the different attitudes about body image among boomer women, 'younger women have a different perspective' from that of their counterparts a decade or two ago. 'They're more personally independent about who they can and should be,' Ms. Monsarrat said, which is also reflected in the campaign's approach. 'One of the things we've noticed is if you go to an exercise class, if you go to a marathon, active women come in a lot of shapes and sizes,' she added. 'This can be a great celebration of that.' Fitness and health are also the focus of the Chicken of the Sea commercial, said John Signorino, the company's president and chief executive, in San Diego. He imported the spot to the United States after consumers - including, he said, his wife - received overseas versions of it from friends by e-mail. 'It's an effort to show consumers, in an attention-getting way, that tuna, and Chicken of the Sea, fit into a healthy lifestyle,' Mr. Signorino said. The commercial is being shown, or soon will be, on networks like ABC, CBS, HGTV and Oxygen, he added, and will be circulated through e-mail. The spot is adapted from the original version created by an agency in Bangkok named Chaiyo. Ms. Monsarrat said the Nike campaign, which is also scheduled to appear on a Web site (www.nikewomen.com), is in keeping with her company's efforts, dating back more than a decade, to address issues about women's self-images in a positive way, without stereotypes. She cited campaigns that carried themes like 'This is not a goddess' and 'If you let me play,' all of which were intended, she said, to be 'honest in how we communicate with our target consumer.' Nike was not alone in the 1990's in running ads meant to question the conventional wisdom about images of women in advertising. In 1997, the Body Shop gained international attention for a campaign carrying the theme 'Love your body,' which featured a Rubenesque plastic doll named Ruby. The print ads and posters showed the voluptuous, even zaftig, Ruby reclining on a sofa under this headline: 'There are 3 billion women who don't look like supermodels and only 8 who do.' And since 1997, the Advertising Women of New York club has presented awards to campaigns that its members deem to be breaking ground by portraying women in realistic, nonstereotypical ways. In addition to Nike, winners of such awards have included Adidas, Avon, Gatorade, John Hancock and Reebok. The waxing and waning of so-called real women in advertising comes as marketers and agencies embrace the idea, then revert to traditional images when they believe it is time for a new direction as consumers lose interest. 'Advertising sometimes starts trends and sometimes it follows trends,' Ms. Kaplan Thaler said. Even if they do not turn up in ads, 'real women have always been here, are here and continue to be here,' she added. 'I'm always happy to see advertising that does not dictate a norm none of us can achieve.' Still, said Ms. Simmons of Bubble, who studies sex issues in marketing, more remains to be done before the stereotypes are banished. 'The emphasis is still on women's bodies' in the new ads, Ms. Simmons said. 'It's not like we're looking at their irises.'

Subject: Bonds From: Terri To: All Date Posted: Wed, Aug 17, 2005 at 10:33:40 (EDT) Email Address: Not Provided Message: Notice that amazingly the long term Treasury bond is below 4.25% in yield again. There is a steady demand for long term bonds, as though inflation is simply not going to be a concern. This has to be a sign investors are confident the Federal Reserve is well ahead of any price problem that might arise.

Subject: Re: Bonds From: David E.. To: Terri Date Posted: Wed, Aug 17, 2005 at 12:31:06 (EDT) Email Address: Not Provided Message: -Another possible viewpoint on why 10 year bonds are priced so low - The steady stream of demand for bonds mostly comes from China and Japan. Whose demand is driven by the need to keep the yen and the remimbi priced low. It has been suggested that the Chinese will do everything in their power to keep the remimbi priced low until the Chinese 2008 Olympics are over. When trouble strikes it will come quickly. Keep your powder dry and diversify to protect against both the possibilities of inflation or deflation.

Subject: Re: Bonds From: Emma To: David E.. Date Posted: Wed, Aug 17, 2005 at 12:44:17 (EDT) Email Address: Not Provided Message: This is an apt comment; agreed. There are 2 more articles on the danger of the housing bubble in the Wall Street Journal today. Paul Krugman is not alone in worrying.

Subject: Re: Bonds From: Terri To: Emma Date Posted: Wed, Aug 17, 2005 at 13:16:19 (EDT) Email Address: Not Provided Message: David, I too think there will be little movement in the value of the Yuan till at least the Olympics. Whether the dollar can hold against other currencies till then is not clear however, nor is it clear bonds can hold. I just do not have a sense of this, so I think value value value with every purchase.

Subject: Dear Bobby From: Emma To: All Date Posted: Wed, Aug 17, 2005 at 10:22:46 (EDT) Email Address: Not Provided Message: Dear Bobby, Please save a set of posts if possible when you store part of the message board. Thanks lots :)

Subject: When Doctors Advise Investors From: Emma To: All Date Posted: Wed, Aug 17, 2005 at 09:56:50 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/17/opinion/17wed2.html When Doctors Advise Investors It's getting harder and harder to disentangle the medical profession from financial conflicts of interest. The familiar concern has involved doctors who take money from pharmaceutical or biotechnology companies for consulting or research. Such ties inevitably call into question how objective such doctors can be in conducting research, offering advice to government agencies or prescribing drugs for patients. It is never wholly clear whether the doctor is focused on the medical needs of patients or has one eye on the prospects of a financial patron. Now, as described yesterday in an article by Stephanie Saul and Jenny Anderson in The Times, there is an additional concern: doctors who are paid to give advice to investment firms. The worry here is not that doctors will somehow shortchange their patients, but that their advice to financial firms may distort the markets, offering sophisticated investors the kind of insider information that the ordinary investor can't get. With little notice or alarm, this form of financial consulting has expanded rapidly. An article on June 1 in The Journal of the American Medical Association concluded that almost 10 percent of the nation's 700,000 doctors had entered into formal consulting relations with the investment industry. The percentage of doctors from academic medical centers, where much of the clinical research of interest to investors takes place, was thought to be considerably higher. The financial firms seeking advice include hedge funds, venture capital firms, investment bankers and stockbrokers, among others. They are assisted by specialized companies that enroll doctors and link them with information-hungry financial firms. A doctor is typically paid on an hourly basis - at rates ranging from $200 to more than $1,000 per hour - for consulting that can be done by telephone or face to face. This kind of consulting looks like a recipe for trouble. The information most prized by investors is some hint as to how an experimental drug is performing in ongoing clinical trials or informed guidance about problems that may trouble the Food and Drug Administration. Although the doctors are routinely warned not to reveal confidential or proprietary information, it is a virtual certainty that when the scope of consulting is so large, there will be disclosures, even if they are inadvertent. The best antidote would be a pledge of abstinence backed by the ethical guidelines of medical societies. Any doctor who has inside information about clinical trials or the F.D.A.'s thinking should not do consulting work for investment firms.

Subject: Doctors' Links With Investor Matchmakers From: Emma To: All Date Posted: Wed, Aug 17, 2005 at 09:56:01 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/16/business/16research.html?ex=1281844800&en=93361cff80b4cbe8&ei=5090&partner=rssuserland&emc=rss Doctors' Links With Investor Matchmakers Raise Concerns By STEPHANIE SAUL and JENNY ANDERSON At first, the calls seemed innocuous. Investment companies were offering Dr. Ronald B. Natale $200 or $300 for 15 minutes, asking that he discuss general trends in lung cancer, sometimes over the telephone. But Dr. Natale became suspicious as the money offers kept growing, just before he was to present the case for Iressa, a new lung cancer drug, to a Food and Drug Administration advisory panel in September 2002. Dr. Natale's access to research data on Iressa made him an attractive source for investment researchers seeking inside information. 'Wow, they were offering $1,000, $1,500, for 30 minutes of my time,' said Dr. Natale, a prominent researcher at Cedars-Sinai Comprehensive Cancer Center in Los Angeles. He said he routinely turned down offers to speak to investors. While Dr. Natale has qualms, other doctors apparently do not. Nearly 10 percent of the nation's 700,000 doctors have signed up as consultants with a new segment of the investment industry - companies that act as the Match.com of the investment world, according to an article in The Journal of the American Medical Association. For a fee, they arrange conversations between investors and leading professionals, experts or even employees of major companies. Matching investors with doctors can raise particularly troubling questions. Physicians frequently serve as clinical researchers for the pharmaceutical and biotechnology industries, testing new drugs. Inside knowledge about those tests, before it is publicly available, could be worth millions. The Securities and Exchange Commission has now begun looking at whether doctors, participating in clinical trials, are accepting money to talk to analysts and investors about the confidential results. Such a breach, under some circumstances, could be construed as a violation of insider trading law. Among the businesses that have emerged as matchmakers is Gerson Lehrman Group of New York. Founded in 1998, Gerson is the industry leader in connecting investors with specialists in fields ranging from Turkish cement to underwire brassieres. Gerson's 150,000 specialists include 60,000 physicians. Another company, Leerink Swann & Company of Boston, has a subsidiary that advertises a network of more than 11,500 medical professionals, including physicians, willing to talk to investors. The idea is fairly new, but the business model has already come under scrutiny. Even though the companies prohibit panelists from violating confidences or revealing proprietary information, such conversations carry the risk that participants will betray secrets. 'The frequency of physician contact, this matrix or extraordinary network of physicians that were at the disposal of investment firms, is a setup for trouble,' said Dr. Eric J. Topol of the Cleveland Clinic, who co-wrote the JAMA article, which appeared in June, exploring the growing relationships between physicians and investment companies. Dr. Topol has firsthand knowledge of the problem. Last year, he gave up his own $12,000-a-year position on a hedge fund advisory panel after concluding it created the appearance of impropriety. Dr. Topol was stung by implications that his expertise helped the fund short Merck before the company's decision to withdraw Vioxx last September. But Dr. Topol had written about the cardiovascular problems associated with Vioxx and similar cox-2 painkillers well before he joined the hedge fund in 2003. Dr. Topol, the Cleveland Clinic's chief of cardiology, also ended his relationship with several companies in the health care and pharmaceutical businesses. 'If you weigh the liabilities and the jeopardy against the limited upside, it does not come out in favor of these relationships,' said Dr. Topol, whose article cited various ways doctors earned money as consultants and advisers to industry. Investment houses and research analysts often sponsor dinners where paid panels of physicians give their thoughts about pharmaceutical developments. Investment analysts attend medical society meetings, where they mingle with practicing physicians. Hedge funds hire physicians to sit on advisory panels. 'We do this all the time,' said Jami Rubin, a pharmaceutical industry analyst with Morgan Stanley, who said her company frequently relied on physicians for advice. 'We pay them for their time. Sometimes they do conference calls. Sometimes they prepare slide shows.' Ms. Rubin said she used doctors as educators to 'explain how drugs work, their mechanism of action, potential shortfalls, positives, negatives, speculation on the issues that the F.D.A. might have.' 'I don't think there's any issue about that whatsoever,' she said. Concerns about whether investment companies could get inside word about clinical research has prompted some precautions. The F.D.A., which regulates clinical trials, does not have authority over investment transactions. But last year the agency took steps to increase information-sharing with the S.E.C. In a statement last week, the F.D.A. said that any activity that raised questions about the integrity of clinical research could render the results useless for supporting new drug applications. A recent article in The Seattle Times indicated that it had found 26 instances in which doctors had given up confidential information to analysts. Several medical societies have taken steps to protect scientific papers submitted by their members. The American Society of Clinical Oncologists, for example, gives its members advance copies of research papers presented at its meetings; the copies are covered in shrink-wrap and accompanied by a warning that they are only for educational use. Members are barred from trading on information in the abstracts until after it is publicly available. The Biotechnology Industry Organization, which includes companies whose fate can turn on one clinical trial, is reviewing whether additional regulation is necessary. 'Ultimately our companies are the most likely to be victimized by this kind of conduct,' said the association's chief executive, Jim Greenwood. Mr. Greenwood said that one of the organization's member companies, Isis Pharmaceuticals, complained three years ago to UBS. That was after a UBS analyst issued a report contending that a lung cancer drug had failed a Phase 3 clinical trial, citing 'recent conversations with investigators involved in the trial.' Shares of Isis tumbled 20 percent the day of the report. A UBS spokesman, Mark Hengel, declined to comment on whether doctors involved in the trial were surveyed, but said: 'UBS research notes are highly regarded. The information is sourced and broadly disseminated to our client base.' Some firms like Gerson Lehrman do not supply investment advice, but simply serve as a go-between. Gerson Lehrman was started by Mark Gerson, a Yale Law School graduate and a former teacher, and Thomas Lehrman, to publish books about major changes in industries. The business evolved when hedge fund managers said they did not have the time to read books but preferred access to the list of experts the authors had used. So now the business works like this: hedge funds or mutual funds pay Gerson Lehrman an annual subscription fee, in the range of $120,000 a year, per sector. Gerson pays its specialists at a rate set by the specialist. Portfolio mangers, for example, submit to Gerson a project they are working on and Gerson scours its database for the best specialists, then contacts them to check their availability and ability to participate. Each is sent a disclosure form requiring them not to disclose material nonpublic information, trade secrets or breach any previously confidentiality agreements. Gerson Lehrman and Leerink Swann declined to comment for this article. But a letter from Mark Gerson, chief executive of Gerson Lehrman, said: 'Before participating in our network, all physicians and scientists sign a contract that explicitly states they must not violate any of their confidentiality agreements, must check if they are unsure what those confidentiality obligations are and will be paid for time allocated to a project if they must discontinue it out of any related concerns.' Last week, according to people close to the company, Gerson Lehrman started to offer compliance officers from hedge funds and mutual funds the ability to submit a 'blacklist' of ticker symbols of companies owned by the fund. That way, if a fund owns a particular company's stock, Gerson can block the fund's analysts from requesting experts linked to that company. According to Dr. Topol, Gerson Lehrman has built its network over the Internet, sending out e-mail messages to large physician groups, hoping they will enroll. 'Most physicians have been targets of e-mails,' he said. One member of Gerson Lehrman's physician panel, Dr. Eric Scott Sills of Atlanta, said he had participated in telephone conferences for Gerson Lehrman five or six times in the last 18 months. Dr. Sills, an infertility specialist who also conducts clinical research, said he was never told exactly what company the callers were representing. 'They've never asked about present research projects going on at our center in Atlanta and never asked me to share preliminary data sets with them,' he said. Dr. Natale of Cedars-Sinai said that as a clinical researcher he was uncomfortable with taking fees to consult for the investment community. 'I really don't want to have to think about whether it's ethical or unethical, what information I cannot share, what's confidential and what's not confidential,' he said, explaining why he turns down such offers. Clinical trials of drugs are usually double-blind, meaning that neither the physicians nor the patients know which patients are getting the experimental drug and which are receiving sugar pills. Large trials often have many sites with small numbers of patients. 'It's not common for one investigator to have the full picture,' said Dr. Elliott Sigal, director of global research for Bristol-Myers Squibb. Some are concerned, however, that important information could unintentionally slip out. 'Obviously, they're not trying to get any physician to provide inside information,' Dr. Topol said of companies like Gerson Lehrman. 'But invariably, even without awareness and even without intent, that can happen.' And the appearance of impropriety by itself is a problem, said Dr. Catherine De Angelis, the editor of The Journal of the American Medical Association. The advice Dr. De Angelis said she gave Dr. Topol last year could apply more broadly. 'Whatever you're making from just being a consultant, just give it up,' she said. 'It's not worth our integrity. Even though you know you're not doing anything wrong. It's the perception.'

Subject: Donald Luskin Krugman truth squad From: Jon Wesley To: All Date Posted: Tues, Aug 16, 2005 at 15:44:46 (EDT) Email Address: familyguyantiflag@yahoo.com Message: I don't know if this has been brought up before, because I am new here, but can anyone give me information on whether this guy from the National Review Online is actually factual in his so called 'debunking' of Paul Krugman's work? I have read examples of his stuff, and some of it is BS but is there any info that anyone else can give me? Thanks very much.

Subject: Re: Donald Luskin Krugman truth squad From: Jennifer To: Jon Wesley Date Posted: Wed, Aug 17, 2005 at 10:41:38 (EDT) Email Address: Not Provided Message: These sources are never worth a glance.

Subject: Gene-Altered Rice and the Farm Belt From: Emma To: All Date Posted: Tues, Aug 16, 2005 at 15:18:10 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/16/business/16biorice.html Can Gene-Altered Rice Rescue the Farm Belt? By ALEXEI BARRIONUEVO WATSON, Mo. - Like an expectant father, Jason Garst stood in calf-deep water and studied the three-foot-high rice plants growing in a flooded field here. It was a curious sight in northwest Missouri, where the growing season is considered to be too short for rice. Mr. Garst, a sixth-generation farmer, is hoping at least one of the 12 varieties on his test plot will sprout this fall. If one does, he will start growing rice plants that have been genetically engineered to produce proteins found in human milk, saliva and tears. Once converted into a powder form, those proteins would be used in granola bars and drinks to help infants in developing countries avoid death from diarrhea. 'I know in my heart that this will be better than anything else we are doing,' said Mr. Garst, 35, who also farms soybeans and potatoes. The rice project is backed by a private company called Ventria Bioscience but also has the support of the state and a local university, which are hoping to reverse the long decline in the area's farm economy. But the project has run into opposition from environmental groups and even the beer giant Anheuser-Busch amid fears about the health effects of genetically engineered crops, making Mr. Garst's little rice paddy a piece of a larger battlefield. The economic and academic ambitions of the Missouri project make it unique, but the arguments echo those heard in similar disputes in Europe and, increasingly, in the United States. Critics of Ventria's plans are concerned that the gene-altered rice could contaminate regular rice crops and pose a health risk to consumers, scaring off buyers. Ventria and its academic partner in the project, Northwest Missouri State University, say they can control the potential for contamination. And they say the risks are minimal when balanced against the potential for the special rice to help cut the costs of drugs and save lives. The debate has a certain urgency in the Farm Belt because it highlights the challenge facing much of the region's economy: finding new products that will reduce farmers' reliance on commodity crops. As equipment has become more efficient and foreign competition has stiffened, farms have consolidated and profit margins have shrunk, forcing farmers to plant ever more acres to squeeze out a living. The genetic engineering work that Ventria and other companies are doing can add value to products like rice, offering farmers a more stable income that does not rely on steep government subsidies. 'There is no question that this represents a chance to transform the economy of the region,' said Mark Drabenstott, director of the Center for the Study of Rural America at the Federal Reserve Bank of Kansas City. 'For regions like northwest Missouri, there is not a long list of economic alternatives.' Despite opposition, Ventria's plans to grow genetically engineered rice - eventually to commercial scale - are going forward. The company began growing rice in North Carolina this summer after getting approval from the Agriculture Department. Once Ventria decides where it will grow rice in Missouri, it will have to apply for a permit from the department, a process expected to take two to three months. Dean L. Hubbard, president of Northwest Missouri State, persuaded Ventria last year to move its operations from Sacramento to new buildings planned for the Northwest campus in Maryville, about 90 miles north of Kansas City. Seeking a way to reverse the area's slide in population, Dr. Hubbard teamed up with Melvin D. Booth, a Northwest Missouri alumnus who previously ran two large biotechnology companies. The two approached Ventria about making it part of the university's plan to form joint ventures with young biopharmaceutical companies. Ventria was already considering similar offers from universities in Georgia, Louisiana and North Carolina, but Scott E. Deeter, Ventria's chief executive, agreed to visit the university last August. Mr. Deeter said that on the ride from the Kansas City airport, he was intrigued when Dr. Hubbard described the university's program to heat and cool the campus using bio-fuel derived from paper and wood chips. At the meeting, Mr. Garst presented him with a research paper he had prepared on what it would take to grow rice in northern Missouri. 'It was very impressive,' said Ning Huang, Ventria's vice president for research and development, who was there. Finally it came down to whether Ventria scientists would agree to move to Maryville, population 10,000, from California. Next year 13 will move, including Dr. Huang. Under the agreement reached last November, Ventria will pay farmers more than double what they make on their most profitable crop, and pay Northwest Missouri $500 an acre for crops grown on university land. The university is spending about $10 million to help build a production and teaching complex, and the state is kicking in another $10 million. Atchison County, Mo., where Mr. Garst's farmland is, has lost more than 1,000 people, or 14 percent of its population, since 1990. The town of Watson, once a thriving rural hub with three grocery stores and an opera house, has just over 100 people and no place to buy a soda. Most buildings have been boarded up. 'To reverse the population slide, you have to make it profitable to farm,' Dr. Hubbard said. 'My dream is that 10 years from now, this rural economy has been transformed, that it is vibrant again and people are renovating their downtowns.' The fate of Mr. Garst's experimental rice plot has loomed larger since Ventria encountered resistance to planting its rice in the southern part of the state, where rice has traditionally been grown. When the company was considering Missouri as a place to grow its rice, it talked to Anheuser-Busch, which uses Missouri rice in its beer. Mr. Deeter said Anheuser-Busch initially did not raise any opposition to the project. But when Ventria tried to plant rice in southern Missouri this spring, the beer maker threatened not to buy any rice grown in the state. The company feared a consumer backlash if people thought gene-altered rice could end up in their bottles of Bud. For Missouri's farm economy, the risk of growing pharmaceutical rice is high. More than half of Missouri's rice is sent abroad, to the European Union and Caribbean countries that are especially sensitive about genetically modified products. 'We are still having to make statements to our customers that the rice we export is not genetically modified,' said Carl Brothers, the vice president for marketing at Riceland Foods, which markets more than half of Missouri's rice. 'We are concerned longer term that if Ventria and others get involved that will get harder to say.' The two companies reached a truce in April: Ventria agreed not to grow genetically modified rice within 120 miles of commercial rice crops. 'We can continue to purchase rice grown and processed in Missouri as long as Ventria's growing areas remain sufficiently far from commercial rice production,' said Francine Katz, a spokeswoman for Anheuser-Busch. That deal suddenly made four test plots in the northern part of the state, including Mr. Garst's, all the more important, since Ventria's agreement with Northwest Missouri State calls for the company to grow 70 percent of its rice in the state. To prove to its customers that it would have a diverse supply base, Ventria must grow in at least one other location in North America, and is also searching for a growing area in the Southern Hemisphere to be able to produce year-round. In June, Ventria planted 70 acres of genetically modified rice in North Carolina. There, environmentalists continue to attack the company, saying the rice poses a threat to other crops and the human food chain. Ventria's rice fields are just a few miles from a rice-seed-screening research center and are also close to two wildlife refuges with large populations of migrant birds and swans that environmentalists contend could transport Ventria's rice seeds into wild areas. Storms and floods, environmentalists say, could also lead to rice contamination. 'Just washing away in a big rain- storm is enough,' said Margaret Mellon, director of the food and environment program at the Union of Concerned Scientists in Washington. Scientists at Ventria, which is yet to make any money from its bio-rice, say rice is among the safest crops for genetic engineering. Rice stalks pollinate themselves, so the altered genes, which are synthetic versions of human genes, cannot be easily transferred to plants in other fields. And Ventria requires farmers to employ a 'closed system,' using dedicated equipment and a production process where the seed is ground into a powder before it leaves the farm. But critics say that there is no way to guarantee that the farmers will follow all the government regulations and Ventria's rules, and that they are worried about the risk of contamination because it would be hard to detect. 'We simply wouldn't know if a contamination event took place,' said Craig Culp, a spokesman for the Center for Food Safety, in Washington. Dr. Hubbard acknowledged that there are risks, but he said he believed that they were minimal. Federal regulations have been tested before, most notably in 2002, when drug-producing corn made by ProdiGene began sprouting in soybean fields near its Iowa and Nebraska sites. The Agriculture Department seized 500,000 bushels of soybeans and assessed the company nearly $3 million in fines and disposal costs. Earlier, in 2000, a gene-altered variety of corn that was approved for animal feed but not for human consumption was found in taco shells and other grocery items, prompting recalls. Mr. Garst is a modern breed of farmer with a master's degree and a healthy interest in science. And he himself has done whatever he can to wring more from his commodity crops, even trying out a $300,000 tractor that steers automatically using a global-positioning satellite to till straighter rows. 'Obviously, you will not see pharmaceutical crops from here to Kansas City,' he said of Ventria's project. 'But there will be pockets in this area where you will see development. If you keep two more farmers in this area it is huge - there are four of us now.'

Subject: One Hundred Years of Uncertainty From: Emma To: All Date Posted: Tues, Aug 16, 2005 at 14:32:51 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/04/08/opinion/08greene.html?ex=1270612800&en=c87d6bab356df279&ei=5090&partner=rssuserland One Hundred Years of Uncertainty By BRIAN GREENE JUST about a hundred years ago, Albert Einstein began writing a paper that secured his place in the pantheon of humankind's greatest thinkers. With his discovery of special relativity, Einstein upended the familiar, thousands-year-old conception of space and time. To be sure, even a century later, not everyone has fully embraced Einstein's discovery. Nevertheless, say 'Einstein' and most everyone thinks 'relativity.' What is less widely appreciated, however, is that physicists call 1905 Einstein's 'miracle year' not because of the discovery of relativity alone, but because in that year Einstein achieved the unimaginable, writing four papers that each resulted in deep and formative changes to our understanding of the universe. One of these papers - not on relativity - garnered him the 1921 Nobel Prize in physics. It also began a transformation in physics that Einstein found so disquieting that he spent the last 30 years of his life in a determined effort to repudiate it. Two of the four 1905 papers were indeed on relativity. The first, completed in June, laid out the foundations of his new view of space and time, showing that distances and durations are not absolute, as everyone since Newton had thought, but instead are affected by one's motion. Clocks moving relative to one another tick off time at different rates; yardsticks moving relative to one another measure different lengths. You don't perceive this because the speeds of everyday life are too slow for the effects to be noticeable. If you could move near the speed of light, the effects would be obvious. The second relativity paper, completed in September, is a three-page addendum to the first, which derived his most famous result, E = mc2, an equation as short as it is powerful. It told the world that matter can be converted into energy - and a lot of it - since the speed of light squared (c2) is a huge number. We've witnessed this equation's consequences in the devastating might of nuclear weapons and the tantalizing promise of nuclear energy. The third paper, completed in May, conclusively established the existence of atoms - an idea discussed in various forms for millenniums - by showing that the numerous microscopic collisions they'd generate would account for the observed, though previously unexplained, jittery motion of impurities suspended in liquids. With these three papers, our view of space, time and matter was permanently changed. Yet, it is the remaining 1905 paper, written in March, whose legacy is arguably the most profound. In this work, Einstein went against the grain of conventional wisdom and argued that light, at its most elementary level, is not a wave, as everyone had thought, but actually a stream of tiny packets or bundles of energy that have since come to be known as photons. This might sound like a largely technical advance, updating one description of light to another. But through subsequent research that amplified and extended Einstein's argument (see Figures 1 through 3), scientists revealed a mathematically precise and thoroughly startling picture of reality called quantum mechanics. Before the discovery of quantum mechanics, the framework of physics was this: If you tell me how things are now, I can then use the laws of physics to calculate, and hence predict, how things will be later. You tell me the velocity of a baseball as it leaves Derek Jeter's bat, and I can use the laws of physics to calculate where it will land a handful of seconds later. You tell me the height of a building from which a flowerpot has fallen, and I can use the laws of physics to calculate the speed of impact when it hits the ground. You tell me the positions of the Earth and the Moon, and I can use the laws of physics to calculate the date of the first solar eclipse in the 25th century. What's important is that in these and all other examples, the accuracy of my predictions depends solely on the accuracy of the information you give me. Even laws that differ substantially in detail - from the classical laws of Newton to the relativistic laws of Einstein - fit squarely within this framework. Quantum mechanics does not merely challenge the previous laws of physics. Quantum mechanics challenges this centuries-old framework of physics itself. According to quantum mechanics, physics cannot make definite predictions. Instead, even if you give me the most precise description possible of how things are now, we learn from quantum mechanics that the most physics can do is predict the probability that things will turn out one way, or another, or another way still. The reason we have for so long been unaware that the universe evolves probabilistically is that for the relatively large, everyday objects we typically encounter - baseballs, flowerpots, the Moon - quantum mechanics shows that the probabilities become highly skewed, hugely favoring one outcome and effectively suppressing all others. A typical quantum calculation reveals that if you tell me the velocity of something as large as a baseball, there is more than a 99.99999999999999 (or so) percent likelihood that it will land at the location I can figure out using the laws of Newton or, for even better accuracy, the laws of Einstein. With such a skewed probability, the quantum reasoning goes, we have long overlooked the tiny chance that the baseball can (and, on extraordinarily rare occasions, will) land somewhere completely different. When it comes to small objects like molecules, atoms and subatomic particles, though, the quantum probabilities are typically not skewed. For the motion of an electron zipping around the nucleus of an atom, for example, a quantum calculation lays out odds that are all roughly comparable that the electron will be in a variety of different locations - a 13 percent chance, say, that the electron will be here, a 19 percent chance that it will be there, an 11 percent chance that it will be in a third place, and so on. Crucially, these predictions can be tested. Take an enormous sample of identically prepared atoms, measure the electron's position in each, and tally up the number of times you find the electron at one location or another. According to the pre-quantum framework, identical starting conditions should yield identical outcomes; we should find the electron to be at the same place in each measurement. But if quantum mechanics is right, in 13 percent of our measurements we should find the electron here, in 19 percent we should find it there, in 11 percent we should find it in that third place. And, to fantastic precision, we do. Faced with a mountain of supporting data, Einstein couldn't argue with the success of quantum mechanics. But to him, even though his own Nobel Prize-winning work was a catalyst for the quantum revolution, the theory was anathema. Commentators over the decades have focused on Einstein's refusal to accept the probabilistic framework of quantum mechanics, a position summarized in his frequent comment that 'God does not play dice with the universe.' Einstein, radical thinker that he was, still believed in the sanctity of a universe that evolved in a fully definite, fully predictable manner. If, as quantum mechanics asserted, the best you can ever do is predict probabilities, Einstein countered that he'd 'rather be a cobbler, or even an employee in a gaming house, than a physicist.' This emphasis, however, partly obscures a larger point. It wasn't the mere reliance on probabilistic predictions that so troubled Einstein. Unlike many of his colleagues, Einstein believed that a fundamental physical theory was much more than the sum total of its predictions - it was a mathematical reflection of an underlying reality. And the reality entailed by quantum mechanics was a reality Einstein couldn't accept. An example: Imagine you shoot an electron from here and a few seconds later it's detected by your equipment over there. What path did the electron follow during the passage from you to the detector? The answer according to quantum mechanics? There is no answer. The very idea that an electron, or a photon, or any other particle, travels along a single, definite trajectory from here to there is a quaint version of reality that quantum mechanics declares outmoded. Instead, the proponents of quantum theory claimed, reality consists of a haze of all possibilities - all trajectories - mutually commingling and simultaneously unfolding. And why don't we see this? According to the quantum doctrine, when we make a measurement or perform an observation, we force the myriad possibilities to ante up, snap out of the haze and settle on a single outcome. But between observations - when we are not looking - reality consists entirely of jostling possibilities. Quantum reality, in other words, remains ambiguous until measured. The reality of common perception is thus merely a definitive-looking veneer obscuring the internal workings of a highly uncertain cosmos. Which is where Einstein drew a line in the sand. A universe of this sort offended him; he could not accept, as he put it, that 'the Old One' would so profoundly incorporate a hidden element of happenstance in the nature of reality. Einstein quipped to his quantum colleagues, 'Do you really think the Moon is not there when you're not looking?' and set himself the Herculean task of reworking the laws of physics to resurrect conventional reality. Einstein waged a two-front assault on the problem. He sought an internal chink in the quantum framework that would establish it as a mere steppingstone on the path to a deeper and more complete description of the universe. At the same time, he sought a grander synthesis of nature's laws - what he called a 'unified theory' - that he believed would reveal the probabilities of quantum mechanics to be no more profound than the probabilities offered in weather forecasts, probabilities that simply reflect an incomplete knowledge of an underlying, definite reality. In 1935, through a disarmingly simple mathematical analysis, Einstein (with two colleagues) established a beachhead on the first front. He proved that quantum mechanics is either an incomplete theory or, if it is complete, the universe is - in Einstein's words - 'spooky.' Why 'spooky?' Because the theory would allow certain widely separated particles to correlate their behaviors perfectly (somewhat as if a pair of widely separated dice would always come up the same number when tossed at distant casinos). Since such 'spooky' behavior would border on nuttiness, Einstein thought he'd made clear that quantum theory couldn't yet be considered a complete description of reality. The nimble quantum proponents, however, would have nothing of it. They insisted that quantum theory made predictions - albeit statistical predictions - that were consistently born out by experiment. By the precepts of the scientific method, they argued, the theory was established. They maintained that searching beyond the theory's predictions for a glimpse of a reality behind the quantum equations betrayed a foolhardy intellectual greediness. Nevertheless, for the remaining decades of his life, Einstein could not give up the quest, exclaiming at one point, 'I have thought a hundred times more about quantum problems than I have about relativity.' He turned exclusively to his second line of attack and became absorbed with the prospect of finding the unified theory, a preoccupation that resulted in his losing touch with mainstream physics. By the 1940's, the once dapper young iconoclast had grown into a wizened old man of science who was widely viewed as a revolutionary thinker of a bygone era. By the early 1950's, Einstein realized he was losing the battle. But the memories of his earlier success with relativity - 'the years of anxious searching in the dark, with their intense longing, their alternations of confidence and exhaustion and the final emergence into the light' - urged him onward. Maybe the intense light of discovery that had so brilliantly illuminated his path as a young man would shine once again. While lying in a bed in Princeton Hospital in mid-April 1955, Einstein asked for the pad of paper on which he had been scribbling equations in the desperate hope that in his final hours the truth would come to him. It didn't. Was Einstein misguided? Must we accept that there is a fuzzy, probabilistic quantum arena lying just beneath the definitive experiences of everyday reality? As of today, we still don't have a final answer. Fifty years after Einstein's death, however, the scales have certainly tipped farther in this direction. Decades of painstaking experimentation have confirmed quantum theory's predictions beyond the slightest doubt. Moreover, in a shocking scientific twist, some of the more recent of these experiments have shown that Einstein's 'spooky' processes do in fact take place (particles many miles apart have been shown capable of correlating their behavior). It's a stunning finding, and one that reaffirms Einstein's uncanny ability to unearth features of nature so mind-boggling that even he couldn't accept what he'd found. Finally, there has been tremendous progress over the last 20 years toward a unified theory with the discovery and development of superstring theory. So far, though, superstring theory embraces quantum theory without change, and has thus not revealed the definitive reality Einstein so passionately sought. With the passage of time and quantum mechanics' unassailable successes, debate about the theory's meaning has quieted. The majority of physicists have simply stopped worrying about quantum mechanics' meaning, even as they employ its mathematics to make the most precise predictions in the history of science. Others prefer reformulations of quantum mechanics that claim to restore some features of conventional reality at the expense of additional - and, some have argued, more troubling - deviations (like the notion that there are parallel universes). Yet others investigate hypothesized modifications to the theory's equations that don't spoil its successful predictions but try to bring it closer to common experience. Over the 25 years since I first learned quantum mechanics, I've at various times subscribed to each of these perspectives. My shifting attitude, however, reflects that I'm still unsettled. Were Einstein to interrogate me today about quantum reality, I'd have to admit that deep inside I harbor many of the doubts that gnawed at him for decades. Can it really be that the solid world of experience and perception, in which a single, definite reality appears to unfold with dependable certainty, rests on the shifting sands of quantum probabilities? Well, yes. Probably. The evidence is compelling and tangible. Although we have yet to fully lay bare quantum mechanics' grand lesson for the underlying nature of the universe, I like to think even Einstein would be impressed that in the 50 years since his death our facility with quantum mechanics has matured from a mathematical understanding of the subatomic realm to precision control. Today's technological wizardry (computers, M.R.I.'s, smart bombs) exists only because research in applied quantum physics has resulted in techniques for manipulating the motion of electrons - probabilities and all - through mazes of ultramicroscopic circuitry. Advances hovering on the horizon, like nanoscience and quantum computers, offer the promise of even more spectacular transformations. So the next time you use your cellphone or laptop, pause for a moment. Recognize that even these commonplace devices rely on our greatest, yet most puzzling, scientific achievement and - as things now stand - tap into humankind's most supreme assault on the idea that reality is what we think it is. Brian Greene, a professor of physics and mathematics at Columbia, is the author of 'The Elegant Universe,'' and, most recently, 'The Fabric of the Cosmos.'

Subject: Comes a Quest to Save the Tiger From: Emma To: All Date Posted: Tues, Aug 16, 2005 at 12:08:58 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/16/science/16conv.html From a Childhood Ambition Comes a Quest to Save the Tiger By CLAUDIA DREIFUS In the 1960's, when Ullas Karanth was a teenager in India, he read books by naturalists who were researching the tigers of Asia. 'Someday, I'll study tigers, too,' he told himself. But in a country still emerging from colonial rule, there was no such profession as wildlife biologist. And so Ullas Karanth took up engineering, which he detested, only to give it up and become a farmer, bringing him closer to the wilderness and the tigers. By the 1980's, he had established himself as a kind of amateur biologist gathering information on the animals of the Nagarahole reserve near to his farm. That work eventually led to an opportunity to study in the United States and later to become a protégé of the pioneering tiger expert George Schaller. Today Dr. Karanth is himself a leading tiger researcher and the director of the Wildlife Conservation Society's India Program, which is based in Bangalore. Dr. Karanth, 57, was in New York on a recent summer afternoon to attend a conference at the Bronx Zoo, a subsidiary of the conservation society, on the future of tigers in the wild. In a break in the proceedings, he spoke of his favorite feline. Q. Do we know how many wild tigers still exist in India? A. We don't. The government claims that there are over 3,000. But that figure is based on a flawed counting method that officials developed for themselves. There are preservation groups who claim the number is more like 1,000. It's probably not that low. At the Wildlife Conservation Society, we won't guess. What we will say, based on scientific data, is that there are only about 115,000 square miles of forest still left in the country where tigers can thrive and breed. In most of that territory, there's been a tremendous tiger decline due to habitat degradation by local people and development activities like mines, dams and roads, and the poaching of tiger prey. We believe that if India is to have tigers, these wildlife reserves must be rigorously protected. Q. Is the killing of tigers for use in traditional Chinese medicine contributing to their disappearance? A. That's part of it. The fact that the parts of one dead tiger are worth something like $5,000 certainly encourages poachers. Actually the biggest threat to tiger survival is habitat destruction and the uncontrolled hunting of tiger-prey species. We have plenty of forest areas where there should be tigers, but their numbers are low there because the prey species have been hunted out by local people. So it turns out that if you want to protect tigers, you also need to protect the deer. In India, wildlife conservation has an unusual history. Tigers were very much in decline until the 1970's, when Indira Gandhi came to power. She was an autocrat. But she was also a very keen naturalist, and she had complete control over the nation's politics. Mrs. Gandhi told her minions that there would be no more destruction of important wildlife areas and she enforced that order. She put in strong laws, stopped uncontrolled hunting and logging in the reserves. And thanks to her cracking of the whip, the tiger came back. That recovery continued until the 1990's, when Indian politics became very fragmented. The leaders we've had since are excellent on economic development, but none have shown much interest in conservation. Q. You've spent decades observing tiger behavior. What do you find most interesting about them? A. The way nature has designed them. They are built to take down prey four to five times their own size. If I went into the forest, it would be hard for me to get within striking range of a deer. This huge cat does it effortlessly. It can grab onto something that weighs about a ton, wrestles it down and kill it, all very safely and quietly. Q. Have you ever gotten emotionally involved with the animals you were observing? A. Objective scientists aren't supposed to, but I have. During the early 1990's, I was putting radio collars on tigers and leopards at Nagarahole reserve in southern India and then tracking their behavior. With time, this one leopard got really quite habituated to me. For two years, I'd follow him at night. I had a little laboratory in the middle of the forest, and this leopard used to come around at midnight frequently and I'd hear his call. Even half asleep, I'd turn on my receiver and when I'd pick up his signals, I felt, oh, O.K., there's my leopard. But one morning, his signal read as if he was lying inactive somewhere in the forest and I really got worried. When I finally located him, he was strung up like a lynching victim. The leopard had walked into a snare some poacher had set up for deer. Yes, I know, leopards have high mortality rates, and I'm not supposed to feel emotion. But when this happens to a creature you know, you can't be coldblooded. Incidents like this happen every day and their toll on animal life is cumulative. The killers are usually local people trying to get some protein. However, this is one reason I feel negatively toward the 'sustainable use' concept that one hears so much in development circles. Q. What's wrong with the concept of sustainable use and the idea of financing projects for local people to make money from the forests, and in turn protect the animals? A. It's naïve. People and tigers have never coexisted harmoniously. They compete for land, protein, resources. In a country like India where there are so many people and so little land, sustainable development is actually a recipe for wiping out the protected areas. If you want tigers, you can't have people sweeping through the reserves cutting down trees, gathering forest products, hunting for protein and creating gardens that fragment the natural areas. Moreover, you definitely should not be paying forestry officials - charged with protecting wildlife - to do rural economic development. If you do it, their mission drifts toward development and the wildlife conservation part gets lost. To protect wildlife, you have to do the harder thing, which is set aside some areas where human activities are reduced or eliminated. At present, about 5 percent of the country is designated as protected. But I estimate that 75 percent of that 'protected' land has been compromised by human activity. This needs to be halted. Q. Do you think the Indian tiger can be saved? A. Certainly. If there's the will. One thing that gives us a head start: India actually has more wild tigers than our neighbors. We won't need to reintroduce them. Also, tigers reproduce easily; they are not like pandas. Also, I believe that there are aspects of Indian culture that can be mobilized for conservation. If you look at the Hindu religion, there's real guilt associated with the killing of an animal. So if you are protecting a park and you catch a poacher, this sense of guilt puts the enforcement officials at an advantage. Another thing, at the core of our religion is the belief that man is a part of nature. This supports the idea that wild animals have a right to survive. I've talked with farmers whose crops have been raided by elephants, and they really hated them. But when you asked, 'Don't elephants and tigers have the right to exist?' they always said yes. All these factors make me optimistic.

Subject: The Long Arm of Einstein From: Emma To: All Date Posted: Tues, Aug 16, 2005 at 11:52:03 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/16/science/16gps.html The Long Arm of Einstein Guides My Steering Wheel By LAWRENCE M. KRAUSS I was driving in Los Angeles a few weeks ago and relying on a global positioning system receiver attached to my hand-held organizer, which was verbally guiding me through a maze of freeways and unfamiliar streets. I had plenty of time stopped in traffic jams to ponder the scientific breakthroughs that made this technology possible. What I thought about were not the triumphs of Silicon Valley and microchips. I thought about Albert Einstein. The United Nations and several other international organizations have designated 2005 as the World Year of Physics in honor of Einstein's 'miracle year' in 1905, when he wrote five seminal papers that changed the way we think about the world. But his greatest achievement occurred a decade later, when he finished his general theory of relativity. Einstein revolutionized our understanding of space, time and the nature of gravity. He described a universe in which matter and energy could curve space, which in turn would affect the dynamics of matter and energy, which then could affect the geometry of space, and so on. It took more than three decades to develop the first direct terrestrial experimental tests of his esoteric ideas. But, esoteric or not, without general relativity, I couldn't precisely navigate through Los Angeles. Global positioning systems rely on careful measurement differences between signals sent from several satellites thousands of miles apart. The time differences between the signals sent to the device in my car must be measured to an accuracy of about a billionth of a second to distinguish my position to within a few feet. But general relativity predicts that the relative clicking of clocks changes depending on their position in a gravitational field. Satellites located high above Earth are moving in a gravitational field that is slightly weaker than what we experience on the ground. As a result, their internal clocks tick at a different rate than those on Earth. The effect is extremely small, but it is comparable to the accuracy needed to distinguish the position of objects on the scale that is otherwise possible with needed by global positioning devices. Without correcting for it, the systems would give results that are ever so slightly off. Einstein didn't develop general relativity because he wanted to find a better way to track his own position. He wanted to address fundamental questions about the universe, and even if he had been so inclined he probably could not have foreseen in 1915 the technology that makes G.P.S. measurements possible today. This is a timely example of the cross-germination of fundamental scientific investigation and modern technological innovation than this. The insights that Einstein's theories have given us about the basic workings of the cosmos, on scales as large as the visible universe itself, and going back to the earliest moments of the Big Bang, are invaluable to our understanding of nature and themselves should justify the support we provide for continuing research in general relativity and cosmology. But in a time when many areas of fundamental research are facing drastic budget threats in favor of more targeted programs with short-term goals, it is worth remembering that even the most esoteric scientific ideas can ultimately affect one's daily life. It is something worth thinking about the next time you are caught in a traffic jam. Lawrence M. Krauss is director of the Center for Education and Research in Cosmology and Astrophysics at Case Western Reserve University. His new book,'Hiding in the Mirror,' will appear this fall.

Subject: And Newton? From: Mik To: Emma Date Posted: Tues, Aug 16, 2005 at 13:57:37 (EDT) Email Address: Not Provided Message: I know this is the year where we are to give respect to Einstein for what he did, but I do think it is somewhat unfair to give this much credit to Einstein for the GPS technology and no where as much to Newton or Doppler. The error correction due to Einstein's theory of relativity is ever so slight (as the author points out). The error could be about 2 feet (if that) where as the overall error from a GPS is in excess of 4 feet. Meaning that Einstein's contribution to the GPS is negligable. Sorry for being so cynical. Without Newton on the other hand, the GPS system would not even be up in the space let alone measuring where we are. We use Newton's laws of gravity (not Einstein's) to get the rocket/satelite into space. The orbit and angle for broadcasting signals are decided using Newtonian physics/mechanics. And after moving from the genius of what Newton left us, let's not forget Doppler who worked out that frequecy changes based on movement. By measuring the Doppler effect we can figure out the movement of the satelite and the movement of the car. Yes Einstein's theories apply well to Cosmology (better than Newtonian and Doppler), but perhaps Lawrence Krauss has a bias towards Einstein.

Subject: Re: And Newton? From: Emma To: Mik Date Posted: Tues, Aug 16, 2005 at 14:20:55 (EDT) Email Address: Not Provided Message: Of course you are right, but remember that Newton's mathematics is not set aside by Einstein's except in extreme circumstances. Newton is simple subsumed, and Doppler gave Einstein ideas on special relativity effects. Listen to a train whistle as the tone changes and think of relativity of motion with only light speed constant.

Subject: Sorry Emma From: Mik To: Emma Date Posted: Tues, Aug 16, 2005 at 15:21:39 (EDT) Email Address: Not Provided Message: You are right. I've just overly cynical lately. I've gota starting being more positive.

Subject: Re: Sorry Emma From: Emma To: Mik Date Posted: Tues, Aug 16, 2005 at 16:28:38 (EDT) Email Address: Not Provided Message: No, you are always making me think of interesting possibilities. I am still working on applying Jared Diamond.

Subject: Re: Sorry Emma From: Emma To: Emma Date Posted: Tues, Aug 16, 2005 at 16:31:04 (EDT) Email Address: Not Provided Message: Notice the Niger post from Sunday. 'Meanwhile, People Starve.'

Subject: Niger From: Mik To: Emma Date Posted: Wed, Aug 17, 2005 at 14:53:25 (EDT) Email Address: Not Provided Message: I made a posting in reply to you Niger article. But it appears to have been pushed off the board. Did you my response?

Subject: Re: Niger From: Emma To: Mik Date Posted: Wed, Aug 17, 2005 at 15:44:07 (EDT) Email Address: Not Provided Message: Excellent, posted above.

Subject: Gossip Turns Out to Serve a Purpose From: Emma To: All Date Posted: Tues, Aug 16, 2005 at 11:51:32 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/16/science/16goss.html Have You Heard? Gossip Turns Out to Serve a Purpose By BENEDICT CAREY Juicy gossip moves so quickly - He did what? She has pictures? - that few people have time to cover their ears, even if they wanted to. 'I heard a lot in the hallway, on the way to class,' said Mady Miraglia, 35, a high school history teacher in Los Gatos, Calif., speaking about a previous job, where she got a running commentary from fellow teachers on the sexual peccadilloes and classroom struggles of her colleagues. 'To be honest, it made me feel better as a teacher to hear others being put down,' she said. 'I was out there on my own, I had no sense of how I was doing in class, and the gossip gave me some connection. And I felt like it gave me status, knowing information, being on the inside.' Gossip has long been dismissed by researchers as little more than background noise, blather with no useful function. But some investigators now say that gossip should be central to any study of group interaction. People find it irresistible for good reason: Gossip not only helps clarify and enforce the rules that keep people working well together, studies suggest, but it circulates crucial information about the behavior of others that cannot be published in an office manual. As often as it sullies reputations, psychologists say, gossip offers a foothold for newcomers in a group and a safety net for group members who feel in danger of falling out. 'There has been a tendency to denigrate gossip as sloppy and unreliable' and unworthy of serious study, said David Sloan Wilson, a professor of biology and anthropology at the State University of New York at Binghamton and the author of 'Darwin's Cathedral,' a book on evolution and group behavior. 'But gossip appears to be a very sophisticated, multifunctional interaction which is important in policing behaviors in a group and defining group membership.' When two or more people huddle to share inside information about another person who is absent, they are often spreading important news, and enacting a mutually protective ritual that may have evolved from early grooming behaviors, some biologists argue. Long-term studies of Pacific Islanders, American middle-school children and residents of rural Newfoundland and Mexico, among others, have confirmed that the content and frequency of gossip are universal: people devote anywhere from a fifth to two-thirds or more of their daily conversation to gossip, and men appear to be just as eager for the skinny as women. Sneaking, lying and cheating among friends or acquaintances make for the most savory material, of course, and most people pass on their best nuggets to at least two other people, surveys find. This grapevine branches out through almost every social group and it functions, in part, to keep people from straying too far outside the group's rules, written and unwritten, social scientists find. In one recent experiment, Dr. Wilson led a team of researchers who asked a group of 195 men and women to rate their approval or disapproval of several situations in which people talked behind the back of a neighbor. In one, a rancher complained to other ranchers that his neighbor had neglected to fix a fence, allowing cattle to wander and freeload. The report was accurate, and the students did not disapprove of the gossip. But men in particular, the researchers found, strongly objected if the rancher chose to keep mum about the fence incident. 'Plain and simple he should have told about the problem to warn other ranchers,' wrote one study participant, expressing a common sentiment that, in this case, a failure to gossip put the group at risk. 'We're told we're not supposed to gossip, that our reputation plummets, but in this context there may be an expectation that you should gossip: you're obligated to tell, like an informal version of the honor code at military academies,' Dr. Wilson said. This rule-enforcing dynamic is hardly confined to the lab. For 18 months, Kevin Kniffin, an anthropologist at the University of Wisconsin, tracked the social interactions of a university crew team, about 50 men and women who rowed together in groups of four or eight. Dr. Kniffin said he was still analyzing his research notes. But a preliminary finding, he said, was that gossip levels peaked when the team included a slacker, a young man who regularly missed practices or showed up late. Fellow crew members joked about the slacker's sex life behind his back and made cruel cracks about his character and manhood, in part because the man's shortcoming reflected badly on the entire team. 'As soon as this guy left the team, the people were back to talking about radio, food, politics, weather, those sorts of things,' Dr. Kniffin said. 'There was very little negative gossip.' Given this protective group function, gossiping too little may be at least as risky as gossiping too much, some psychologists say. After all, scuttlebutt is the most highly valued social currency there is. While humor and story telling can warm any occasion, a good scoop spreads through a room like an illicit and irresistible drug, passed along in nods and crooked smiles, in discreet walks out to the balcony, the corridor, the powder room. Knowing that your boss is cheating on his wife, or that a sister-in-law has a drinking problem or a rival has benefited from a secret trust fund may be enormously important, and in many cases change a person's behavior for the better. 'We all know people who are not calibrated to the social world at all, who if they participated in gossip sessions would learn a whole lot of stuff they need to know and can't learn anywhere else, like how reliable people are, how trustworthy,' said Sarah Wert, a psychologist at Yale. 'Not participating in gossip at some level can be unhealthy, and abnormal.' Talking out of school may also buffer against low-grade depressive moods. In one recent study, Dr. Wert had 84 college students write about a time in their lives when they felt particularly alienated socially, and also about a memory of being warmly accepted. After finishing the task, Dr. Wert prompted the participants to gossip with a friend about a mutual acquaintance, as she filmed the exchanges. Those who rated their self-esteem highly showed a clear pattern: they spread good gossip when they felt accepted and a more derogatory brand when they felt marginalized. The gossip may involve putting someone else down to feel better by comparison. Or it may simply be a way to connect with someone else and share insecurities. But the end result, she said, is often a healthy relief of social and professional anxiety. Ms. Miraglia, the high school teacher, said that in her previous job she found it especially comforting to hear about more senior teachers' struggle to control difficult students. 'It was my first job, and I felt overwhelmed, and to hear someone say, 'There's no control in that class' about another teacher, that helped build my confidence,' she said. She said she also heard about teachers who made inappropriate comments to students about sex, a clear violation of school policy and professional standards. Adept gossipers usually sense which kinds of discreet talk are most likely to win acceptance from a particular group. For example, a closely knit corporate team with clear values - working late hours, for instance - will tend to embrace a person who gripes in private about a colleague who leaves early and shun one who complains about the late nights. By contrast, a widely dispersed sales force may lap up gossip about colleagues, but take it lightly, allowing members to work however they please, said Eric K. Foster, a scholar at the Institute for Survey Research at Temple University in Philadelphia, who recently published an analysis of gossip research. It is harder to judge how gossip will move through groups that are split into factions, like companies with divisions that are entirely independent, Dr. Foster said. 'In these situations, it is the person who gravitates into a intermediate position, making connections between the factions, who controls the gossip flow and holds a lot of power,' he said. Such people can mask devious intentions, spread false rumors and manipulate others for years, as anyone who has worked in an organization for a long time knows. But to the extent that healthy gossip has evolved to protect social groups, it will also ultimately expose many of those who cheat and betray. Any particularly nasty gossip has an author or authors, after all, and any functioning gossip network builds up a memory. So do the people who are tuned in to the network. In one 2004 study, psychologists had college students in Ohio fill out questionnaires, asking about the best gossip they had heard in the last week, the last month and the last year. The students then explained in writing what they learned by hearing the stories. Among the life lessons: 'Infidelity will eventually catch up with you,' 'Cheerful people are not necessarily happy people' and 'Just because someone says they have pictures of something doesn't mean they do.' None of which they had learned in class.

Subject: Spyware and Cookies From: Emma To: All Date Posted: Tues, Aug 16, 2005 at 07:22:01 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/15/business/media/15adcol.html Spyware Heats Up the Debate Over Cookies By BOB TEDESCHI INTERNET users are taking back control of their computers, and online marketers and publishers are not pleased with the results. But they don't quite know what to do about their conundrum - if it is a conundrum, since they can't even agree on that. Until recently, Internet businesses could track their users freely, using what are known as cookies, tiny text files they embed on the user's hard drive. Now, with the proliferation of antispyware programs that can delete unwanted cookies, they often cannot tell who has been to their Web site before or what they have seen. And this erosion of control over a tool for gaining insight into consumer behavior has many of them fretting. 'Cookies are critical from a business perspective,' said Lorraine Ross, vice president for sales at USAToday.com. 'They help us do things like track our profitability per unique visitor, for instance. But if you don't know how many people are coming in, you don't really have a handle on whether your profitability is improving or not.' It isn't necessarily just corporate America that is threatened by the anticookie fervor, Ms. Ross said - the deleters stand to suffer, too. For example, cookies help a computer limit how many times a user sees annoying ads like a floating, animated message. Such 'frequency caps,' to use industry parlance, are common among publishers. 'So cookies are a really good thing for managing the user's experience,' she said. Last year, though, Ms. Ross said executives at the company debated how effective their frequency limits were, since a growing number of Internet users were deleting cookies and possibly seeing lots of animated ads. Ms. Ross said that like most established companies, USAToday.com did not use its cookies to identify its users. 'But the user's paranoia is understandable, given the history,' she said. Cookies first got a bad name in 1999, when DoubleClick announced that it would use them to identify Internet users and analyze both their offline purchasing patterns and online surfing habits for the purpose of showing them more relevant online ads. That plan died a loud, painful death after privacy advocates objected strenuously, and marketers and publishers have since taken a much more cautious approach. Even so, privacy advocates deplore cookies and, as software programs like Webroot Spy Sweeper and McAfee AntiSpyware have come on the market, surfers by the millions are apparently knocking the cookies out of service as fast as the programs can be installed. This spring, the online consulting firm Jupiter Research published a report saying that nearly 40 percent of Internet users surveyed regularly erased them. 'I don't think cookies should be out there at all,' said Marc Rotenberg, executive director of the Electronic Privacy Information Center, an advocacy group based in Washington, 'but the good news here is that consumers are at least becoming more sophisticated about the appropriate use of cookies.' Eric Peterson, the analyst who wrote the Jupiter report, pointed out that most of the deleted files were so-called third-party cookies placed on the computer by a company other than the one operating the site the user was visiting. Most publishers rely on outside companies like DoubleClick and Atlas to send ads to the user's computer and track the effectiveness of campaigns. Antispyware programs often leave in place first-party cookies, which can save users the inconvenience of having to log in to a news site each time they visit, but remove third-party cookies, the main target of users' ire. Some people say they think that total anonymity is the way to go. The threat to the bottom line is real. Mr. Peterson said cookies not only helped sites measure overall profitability, but were critical in measuring the effectiveness of individual advertising campaigns. Marketers, for instance, could conceivably pay a Web site to deliver ads to 100,000 people, but only reach about 60,000 because so many of them were being counted twice. 'If you're O.K. with getting your ads to half as many people, and not really being sure how effective your campaign was, well then you can happily put your head in the sand,' Mr. Peterson said. 'Most people tell us they want data more accurate than that.' But are that many people really blocking cookies? Some executives aren't so sure. 'When I talk to publishers, nobody says the problem is as big as the press suggests,' said Greg Stuart, chief executive of the Interactive Advertising Bureau, an industry trade group. 'So our role should be to get to some factual basis.' Mr. Stuart said his organization was planning its own research into the issue because, he said, much of the recent research 'involves asking consumers about what they did, which isn't always a good indicator of their behavior.' Another doubter is Peter Naylor, senior vice president for sales at iVillage, a network of women's sites. 'I don't think the problem is real, based on what we're seeing, or more importantly not seeing,' he said. Mr. Naylor said he had not conducted tests or surveys to determine if his company's visitors were deleting or blocking cookies, 'but nothing has changed dramatically enough to raise a red flag.' 'And I've heard literally nothing about it from advertisers,' he added. Among those companies fielding the most calls about cookie deletion are advertising technology businesses like Atlas. Young-Bean Song, the director of analytics for Atlas, said that even if the cookie deletion rates were as high as 40 percent, publishers and marketers could still rely on the data from the 60 percent remaining of a site's users to gauge the effectiveness of their advertising campaigns and other important statistics. Perhaps because executives cannot agree on the scope of the problem, solutions have been slow to emerge. Mr. Stuart of the Interactive Advertising Bureau said that if the issue turned out to be as big as some suspect, his organization was likely to embark on an ad campaign to convince online users that cookies were not harmful. Already, Internet companies are trying to accommodate Web users in practical ways. In May, WebTrends, a site that had helped online businesses analyze advertising and Web site data by using third-party cookies, began offering its clients the ability to offer first-party cookies without losing the data associated with the old third-party ones. Greg Drew, WebTrends' chief executive, said some users still blocked cookies altogether, so the solution was not completely effective. Still, he said, many clients had flocked to the service. In the meantime, Ms. Ross of USAToday.com said the real solution was to overcome consumer hostility toward what she regards as a legitimate business practice that makes life easier for everyone. That may be a long shot, but she is hopeful. 'We have to think about long-term answers,' she said. 'We need to have users love their cookies, for the right reasons.'

Subject: Philadelphia Story: The Next Borough From: Emma To: All Date Posted: Mon, Aug 15, 2005 at 15:37:34 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/14/fashion/sundaystyles/14PHILLY.html Philadelphia Story: The Next Borough By JESSICA PRESSLER PHILADELPHIA WEARING a Paul Green School of Rock T-shirt, his bangs plastered to his forehead in the summer heat, Laris Kreslins pulled in front of a handsome brownstone on Rittenhouse Square, the priciest neighborhood in the city, and hopped out of his car. 'We're going to show you what a real Philly apartment looks like,' he said, unlocking the door to reveal a spacious one-bedroom flat sparsely decorated with CD's and copies of music magazines. 'As you can see, it has hardwood floors, lots of light and very high ceilings,' he said. Then Mr. Kreslins paused and delivered what he knew would be the kicker: 'Rent is $800 a month. Heat and electricity included.' Mr. Kreslins isn't selling real estate. He's selling Philadelphia. The publisher of Arthur, a free arts and culture magazine, Mr. Kreslins, 30, lived in a tiny apartment in Williamsburg, Brooklyn, before leaving New York two years ago and ending up in Philadelphia, where he and his girlfriend, Kendra Gaeta, 30, another Brooklynite, bought a four-bedroom house close to the Philadelphia Museum of Art in March and promptly started a Web site, movetophilly.com. The site, designed to lure 20- and 30-something singles and couples to the city, features a sultry caricature of Patti LaBelle, a longtime resident, who entreats visitors to e-mail for the kind of tour Mr. Kreslins was recently holding, taking visitors to a thrift store, a Polish butcher and his friend Brendan's apartment. Philadelphians occasionally refer to their city - somewhat deprecatingly - as the 'sixth borough' of New York, and with almost 8,000 commuters making the 75-minute train ride between the cities each weekday, the label seems not far off the mark. But Mr. Kreslins and Ms. Gaeta are a new breed of Philadelphia-bound commuters, those who come from New York by train or the popular Chinatown bus for a weekend and then come back, with a U-Haul, to stay. They are the first wave of what could be called Philadelphia's Brooklynization. Hard numbers assessing exactly how many new residents are from New York are not available, but real estate brokers are noting an influx of prospective buyers and renters from the city; club owners and restaurant employees have spotted newcomers, on both sides of the bar; and 'everyone knows someone who's moved here from New York,' said Paul Levy, the executive director of the Center City District, a business improvement group, and himself a former Brooklyn resident. Attracted by a thriving arts and music scene here and a cost of living that is 37 percent lower than New York's, according to city figures, a significant number of youngish artists, musicians, restaurateurs and designers are leaving New York City and heading down the turnpike for the same reasons they once moved to Brooklyn from Manhattan. 'We got priced out of Manhattan, and we moved to Brooklyn,' said John Schmersal, 32, of the three-member band Enon; two of them migrated here in January. 'Then we got priced out of Brooklyn. Now we're in Philadelphia.' On a recent Friday night Mr. Schmersal and his girlfriend, Toko Yasuda, were huddled at the bar at the Khyber, a smoky rock institution in the nightclub-heavy Old City neighborhood, a Colonial area of narrow streets bordering the Delaware River east of City Hall, to see Love as Laughter, a New York City band. 'We like going to shows here,' Mr. Schmersal said. 'In New York there are so many people, it's impossible to even get in to see hot bands.' Much less be in a band. 'For years I was willing to sacrifice quality of life for artistic fulfillment - you know, you find a circle of artists and you scrape by,' said Anna Neighbor, a 27-year-old bass player and Williamsburg exile, between sips of Yuengling lager at a bar in the Northern Liberties neighborhood, an artists' enclave north of City Hall. In January Ms. Neighbor and her husband, Daniel Matz, and Jason McNeely, all members of the indie rock band Windsor for the Derby, decided to leave Brooklyn. Ms. Neighbor and Mr. Matz discovered Fishtown, a gentrifying blue-collar neighborhood adjacent to Northern Liberties, where, in the last five years, youthful faces with bed head have made their way among the traditionally Irish Catholic residents. They found a three-bedroom row house for $170,000. 'New York is mythologically all about vibrancy and creativity, but it's hard to work a 40-hour week and come home and be Jackson Pollock,' said Mr. Matz, 32, a guitarist. He said that by living in Philadelphia he could support himself teaching public school and devote the rest of his time to his band. A few blocks away from Ms. Neighbor's house live Laura Watt, a 38-year-old painter, and her husband, Clark Thompson, 38, a financial services technician who left his Manhattan-based bank for one in Philadelphia a year ago. They settled in a three-level condominium in a new housing development called Rag Flats in Fishtown with their two children, Gus and Lydia. At $439,000 it was pricier than any of the block's three-story row houses, but with three bedrooms, each with an outdoor deck; solar heat and electricity; a rooftop with spectacular views; and a dumbwaiter going down to the kitchen, they thought it was worth it. 'Philadelphia reminds me a lot of what Brooklyn used to be like,' said Ms. Watt, who had lived in Brooklyn and Westchester County for 15 years. Fifteen or 20 years ago, the idea of Philadelphia as a place to go for quality life would have been laughable to many people, even to Philadelphians. Sandwiched between New York and Washington, Philadelphia was a flyover city - trainover really - a place where a mayor had ordered the bombing of a neighborhood and where Eagles fans reveled in booing their own team, its chief popular exports cheese steaks and 'Rocky.' While Philadelphia's rich cultural history, like its art museum, its symphony orchestra and its Colonial architecture, gave the city establishment credentials, it did not produce much of an avant-garde. 'The Philadelphia market was really provincial,' said Steven Lowy, who opened a gallery in Philadelphia in 1984 but fled back to Manhattan three years later. Lately the city has stepped up its efforts to woo people back, in part by trying to position Center City as 'young and hip and cool,' said Meryl Levitz, the president of the Greater Philadelphia Tourism and Marketing Corporation, who regularly holds lunches at which she tells the New York media, 'We're closer than the Hamptons!' The campaign had a boost last month when Forbes magazine named Philadelphia No. 12 on its list of best cities for singles (out of 40), a jump from No. 15 a year ago. In 2004 tourists in Philadelphia numbered 25.5 million, an increase of 41 percent in the last five years, and though the city had been losing residents - especially young ones - steadily since the 1950's, when it had 2.07 million people, the population of the city, the nation's fifth-largest, has leveled off at 1.5 million in the last four years. A government plan to provide the city with free wireless Internet access has as yet gone unrealized, but the national publicity surrounding it has given Philadelphia a progressive image, as has a marketing campaign by the tourism bureau, started in 2003 to attract gay tourists. That tagline was 'Get your history straight and your nightlife gay.' 'There's a big gay clientele coming down here,' said Michael McCann, a real estate agent with Prudential Fox and Roach, who also said he has seen a 'significant increase' in buyers from Manhattan and has worked with 'a ton' of 'single people and couples between 28 and 43' from Brooklyn. Often they move to start the kind of business they had in New York. Danuta Mieloch, 39, an owner of Rescue Rittenhouse Spa, who administered body scrubs to celebrities at Paul Labrecque on the Upper East Side before moving to Philadelphia to start her own place, is an example. Jose Garces, 33, a former chef at Chicama and Pipa in Gramercy Park, will open Amada, a tapas restaurant in Old City, in September. Matthew Izzo, 35, and his business partner, Mark Ax, 35, defected from New York design firms to start their own home and design boutiques, the Matthew Izzo shops. 'It's just so much more workable here,' Mr. Izzo said. 'It's smaller and more manageable.' And Lindsay Berman, 27, who left a marketing job at the Showtime network in Manhattan, is waiting tables part time at Jones, a 70's throwback diner in Center City, while she gets her T-shirt line, Dirty Old Shirt, off the ground. Not that everyone is committed for life. Some 'can't give up their Brooklyn phone numbers,' said Heather Murphy Monteith, a dancer who runs a disco for toddlers. She has noticed 718 and 917 area codes popping up on the contact sheets. Some keep more than just their digits: Mitzi Wong, 36, a buyer for the Philadelphia-based trend mecca Anthropologie, bought a 'Jane Austen-like' row house in Society Hill, the historic Philadelphia neighborhood, but she is keeping her East Village apartment for weekends. Lee Daniels, a native Philadelphian and producer of the film 'Monster's Ball,' rents in Harlem but bought a luxury apartment on the Delaware riverfront. 'So many people are moving here,' Mr. Daniels said. 'People just fall in love with it.' Many of the things that were once deterring about Philadelphia have also been turned around. The recent lifting of archaic building ordinances and a 10-year tax abatement on new construction means that blighted factories and brownstones are now being converted, many into luxury apartments, and new buildings are going up in place of weed-filled lots. Bring-your-own restaurants, born out of Pennsylvania's Puritan liquor restrictions, have become a charming hallmark of Center City. Philadelphia still has its share of urban blight: It ranks higher than New York in homelessness, crime and poverty. It maintains a high position in the Men's Health list of America's Fattest Cities each year, and, as New Yorkers often complain, you would be hard-pressed to find much open after 2 a.m. But the renaissance in real estate and restaurants has aligned with the city's music scene, which runs the gamut of cool. In a recent conversation Nick Sylvester, who covers Philadelphia music for The Village Voice and Pitchfork Media, an online music magazine, mentions diverse acts like the indie rockers Dr. Dog and Man Man, Beanie Sigel's State Property crew, and D.J.'s Diplo and Dave Pianka. 'Philly's decidedly anti-scene, and that appeals to a lot of musicians that move there,' he said. 'They can actually do their own thing.' There are art shows of international renown, like the Salvador Dalí show at the Philadelphia Museum of Art in the spring, and shows by quirky collectives like Space 1026 in Chinatown, which recently housed an installation made with Cheez-Its. All of which has collided with a peculiar cultural moment in which uncool is the new cool, in which blue-collar scrappiness and a surfeit of fried-meat specialties now seems endearingly kitschy. At least one developer is banking on the hope that Philadelphia's appeal is not just a fleeting fad. On a vast tract of land in Northern Liberties, an area once notable for hate crimes and heroin availability, a 50-year-old former shopping center developer named Bart Blatstein is building a $100 million development. Scheduled for completion in 2007, it will have 1,000 apartments, half a million square feet of ground-floor retail space and 100,000 square feet of industrial-chic office space, all of which Mr. Blatstein says will be offered at reduced rents to 'edgy, creative types.' The project is seeking New Yorkers. (Mr. Blatstein's company, Tower Properties, plans to advertise both in The Village Voice and on New York's Craigslist.) 'We want it to be a cross between Williamsburg and SoHo,' he said. But Mr. Lowy, of Portico gallery in SoHo, is skeptical about the long-run chances for young artists: 'The quality of life is pretty good but many of those artists probably won't stay. Can you get an art dealer to come to your studio when you're in Philly? Sure, you have time to make more art, but there's no one to buy it.'

Subject: Death Tax? Double Tax? It's No Tax From: Emma To: All Date Posted: Mon, Aug 15, 2005 at 14:22:57 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/14/business/yourmoney/14view.html Death Tax? Double Tax? For Most, It's No Tax By EDMUND L. ANDREWS WASHINGTON WHEN Congress comes back from its summer recess, one of the first things Senate Republicans will try to do, again, is kill the estate tax. Perhaps no other tax has so many passionate, persevering and politically organized opponents as the estate tax, or 'death tax,' as they have branded it. As Michael J. Graetz and Ian Shapiro of Yale recount in 'Death by a Thousand Cuts' (Princeton University Press), their entertaining account of the repeal movement, opponents of the estate tax have already achieved a remarkable political feat by building broad public support for abolishing a tax that currently affects only 2 percent of all estates. But repeal would be costly - more than $70 billion a year, once it was complete - and many of the populist arguments in favor of repeal are misleading. If estate or inheritance taxes were frozen at today's levels, they would have almost no impact on family farmers and most small-business owners. And while opponents contend that the estate tax is a 'double tax,' many of the earnings that are subject to it were never taxed in the first place. The tax opponents, many of whom began as political neophytes more than 20 years ago, lead a powerful coalition of small-business owners, farmers, trade associations and corporate lobbying groups like the American Council on Capital Formation. Killing the estate tax is one of President Bush's top priorities, and the House of Representatives has already passed a repeal measure four different times. But Senate Republicans, despite attempts to cut a deal with conservative Democrats before the summer recess, have been stalled on the issue. Unable to muster the 60 votes they need to overcome a Democratic filibuster, Senate leaders are now vowing to push for full repeal as soon as they come back in September. Hoping to pressure Democrats from conservative farming states just before Congress adjourned, two business-backed advocacy groups spent about $500,000 on television ads last month in states including Montana, North Dakota, Arkansas and Louisiana. The ads, produced by the American Family Business Institute and the Free Enterprise Fund - the first an advocacy group dedicated to abolishing the estate tax, the second an advocacy group aimed at a wider range of tax cuts - focused on images of soldiers fighting on D-Day in World War II. 'The I.R.S. hits this greatest generation with an unjust double tax, the death tax,' the narrator intoned in an ad aimed at North Dakota. Viewers are urged to 'tell Kent Conrad,' the state's Democratic senator, to 'change his vote.' But despite the populist rhetoric and oft-repeated horror stories about families being forced to sell their farms in order to pay estate taxes, the battle is over a very large amount of money held by a very small number of families. A report last month by the Congressional Budget Office found that in 2000 only 2 percent of all estates - about 52,000 - were subject to any estate tax. At that point, taxes were imposed only on estates worth $675,000 or more. The limit rose to $1.5 million in 2004, and if that limit had been in effect in 2000, only 13,771 estates - fewer than 1 percent - would have been subject to the tax. All but 740 of them would have had enough in liquid assets to cover estate tax liabilities, the office estimated. At the moment, taxes are imposed only on estates worth more than $1.5 million. Under Mr. Bush's tax cut of 2001, the estate tax is set to shrink steadily over this decade and disappear in 2010. But the 2001 bill called for the estate tax to reappear in full force in 2011. The nonpartisan Joint Committee on Taxation estimates that full repeal would cost $290 billion over the next 10 years, but that calculation understates the true cost because full repeal would not occur until 2011. Once the estate tax was fully repealed, the Treasury would lose more than $70 billion a year in today's dollars. Over the first 10 years of full repeal, the cost would total more than $700 billion, plus interest. Assuming that the government is still running an annual deficit in 2011, which is more likely than not, the total 10-year cost would be close to $1 trillion. A compromise being floated by Senator Jon Kyl, Republican of Arizona, could be almost as expensive. Indeed, because of a strange wrinkle, the compromise could end up being far more generous to many heirs than outright repeal. Mr. Kyl's proposal called for excluding estate taxes on all property up to $3.5 million and taxing anything above that amount at 15 percent - the same rate now charged on capital gains. Under current law, estate tax rates range up to about 45 percent. As a practical matter, Mr. Kyl's approach would eliminate the estate tax for more than 99 percent of all families and greatly reduce taxes for the few who owed anything at all. If the $3.5 million exclusion were in effect in 2000, the Congressional Budget Office estimated, only 3,676 estates - about 0.15 percent of all estates - would have had to pay any tax. But the proposed compromise also comes with an important twist that could make it more expensive than the $53 billion a year estimated by Congressional tax scorers. The twist is that the proposal would retain a big tax break that is supposed to disappear along with the estate tax. That break is known as the 'stepped-up basis,' and it means that an heir does not owe any capital gains taxes on any increase in value of property during the life of the person who died. A mansion that appreciated to $10 million from $1 million, for example, would not be subject to any capital gains taxes on that profit if an heir sold it. For many families with estates worth less than $3.5 million, that could amount to a double tax break. A person could build up wealth for years, yet avoid paying taxes because the gains were all 'unrealized.' His children could then inherit the property, sell it and avoid both the capital gains and estate taxes. The added cost of retaining a stepped-up basis may be only partially reflected in the official cost estimates of Mr. Kyl's proposal, because it is difficult to estimate when people will sell inherited property. But the American Family Business Institute has said that a very high percentage of heirs sell or restructure their holdings within five years. That's why it is misleading for opponents of the estate tax to claim that it is a double tax on earnings that have already been taxed once. In many cases, that's not true. 'A lot of assets that passed through very large estates have never been taxed and never will be,' said Mr. Graetz of Yale. 'It's a very big issue.' For thousands of single-digit millionaires, that could be a very good deal indeed.

Subject: CBO and OMB - who gonna pay da tax? From: Johnny5 To: Emma Date Posted: Mon, Aug 15, 2005 at 19:57:33 (EDT) Email Address: johnny5@yahoo.com Message: Congressional Budget Office Douglas J. Holtz-Eakin , Congressional Budget Office Watched on cspan today - taxes are going to have to be paid by someone going forward 10 years, there is just no way around it. Elephants seem they want the poor man to pay, Donkey Spratt said wait, maybe the rich man needs to pay. I am all for it, let the rich man pay some more, kudlow and friends don't like the death tax, but I remember oliver stone's gordon gecko saying how too much wealth is controlled by idiot sons and widows.

Subject: Immigrant Women Line Up for Day Labor From: Emma To: All Date Posted: Mon, Aug 15, 2005 at 08:43:41 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/15/nyregion/15labor.html Invisible to Most, Immigrant Women Line Up for Day Labor By NINA BERNSTEIN The women are not noticed by the weekday morning crowds that rush past Eighth Avenue and 37th Street, in the heart of Manhattan's fashion district. They arrive in twos and threes after 8 a.m., shrinking against the buildings on both sides of the avenue, until scores of them are waiting, small, dark-haired Mexicans, Ecuadoreans, Hondurans. By noon they have vanished. In swift, discreet sidewalk negotiations, perhaps half have been hired for a day's work at the minimum wage or less in some of the neighborhood's last struggling garment factories. The rest have given up until tomorrow. A few miles away in Williamsburg, commuters on the busy Brooklyn-Queens Expressway are equally oblivious to the similar scene unfolding on an overpass above them. There, the work at stake is $8-an-hour housecleaning, and those vying for a day's scrubbing, mainly for Hasidic homemakers, stand in a crude ascending hierarchy of employer preference: Mexican and Central American women in their 30's at the back, Polish immigrant women in their 50's and 60's in the middle, and young Polish students with a command of English at the head of the line. At a time when male day laborers have become the most public and contentious face of economic immigration to the United States, these two rare female shape-ups have doubled in size almost unobserved in recent years. Their growth reflects a larger overlooked reality: Women make up 44 percent of the nation's low-wage immigrant work force, and worldwide, studies show, more and more women are migrating for work. Often invisible and undercounted, experts say, female economic migrants are an increasing presence, especially in big cities like New York, where the demand is not for men to pick lettuce or process poultry, but for women to pick up the scraps of a collapsed manufacturing sector, or to serve in the vast underground economy of domestic service. Although more women across the country are showing up in day-labor hiring halls, often run by grass-roots labor groups, experts say that these two female shape-ups may well be the only significant ones of their kind in the nation - places where women are willing to put their personal safety in jeopardy for a few hours of work. 'What else is there to do if you have nothing to eat?' asked Rosario Jocha, 49, still standing on Eighth Avenue at 11 a.m. on a recent Wednesday. She said she had recently grabbed a day's work cutting threads from jackets even when the employer, a Chinese immigrant subcontractor, insisted he could not pay more than $5.75 an hour, 25 cents below the state minimum wage. 'I've been here 11 years, and I still haven't found a stable, steady job.' At both locations, some of the women waiting for work had been in the country as little as a few months; others, like Ms. Jocha, a Queens resident from Ecuador, were old-timers who spoke of better jobs lost when small-business employers could not pay rising rent. On Eighth Avenue, merchants said that 100 to 150 women regularly sought work six mornings a week year round - double or triple the number when the intersection first emerged as an informal female hiring site about six years ago. Yet May Chen, a vice president of Unite, the garment workers' union, whose headquarters is only a dozen blocks away, said she was unaware of the shape-up's existence until she was asked about it for this article. And Aaron Adams, a veteran garment center landlord who passes by every day, said he had assumed the women standing there 'were just shooting the breeze.' Rhacel Salazar Parreñas, a sociologist who has written extensively about the feminization of migration, said she was not surprised. 'The space that these women occupy, the public spaces in the city, are just like fleeting moments,' she said. 'They don't really have a place in the city that's visible, so it's easy to ignore them.' Even the discussion of legal guest worker proposals in Congress centers on male migrants, she said. But though nationally men account for about two-thirds of labor migration among illegal immigrants, primarily because of agricultural demand, she said, global patterns indicate that women are easily half the immigrant workers flowing to large metropolitan areas like New York. Ms. Parreñas and other researchers find that women who migrate for work are likely to be single mothers supporting children in their native countries. Compared with their male counterparts, they earn less, despite higher levels of education, according to a 2002 study of the United States' low-wage immigrant work force by the Urban Institute, a research group in Washington, which estimated that two million foreign-born women made less than the minimum wage. Yet women are also more likely to remain in America, and they send home a higher proportion of their earnings. Unvarnished lessons in global supply, demand and division play out at both New York hiring sites. 'We never talk to the Latinas - sometimes they agree to work for less,' said Teresa, a 53-year-old Polish widow who, like many of the 60 women waiting for cleaning work near Marcy and Division Avenues in Williamsburg on a recent Friday morning, would give only her first name. At the other end of the curved concrete abutment, Maria, 35, from Ecuador, gave a shrug. 'They pay them more,' she complained, as a woman in Hasidic dress passed by the Spanish-speaking group and selected a tall young Polish woman. 'It's just that they're white.' Even among the Poles, immigration complicates the pecking order. Some older women won green cards after years as live-in maids for sponsors, and boast in broken English of children in college. Other women lack papers, or shuttle on temporary work visas between their struggling families in rural Poland and spartan, overpriced rooms in Brooklyn. And in summer, just when demand declines because of employer vacations, they now face growing numbers of young Polish women working illegally on tourist visas while living rent-free with Brooklyn relatives. 'They don't want babushkas,' complained Zofia, a 50-year-old mother of five, as a young Hasidic man led Justyne, a 24-year-old Polish student, to his S.U.V. Not all employers had the same preferences, however, and most, like Rifky Kohn, 28, a pregnant mother of four, were on foot. At midday, with the Sabbath approaching, she gladly hired a Polish woman in her late 60's. 'She looks more experienced,' explained Mrs. Kohn. Rosa Yumbla, who supports four children in Ecuador, recently skipped a day on the overpass to address a national conference of day labor organizers at New York University Law School. She spoke at the urging of the Latin American Workers Project, an advocacy group in Brooklyn. 'We suffer the changing weather throughout the year, the heat of the sun and cold in winter, because where we wait to be picked up is on the corner,' Ms. Yumbla said in Spanish to an audience that included the mayor's commissioner for immigrant affairs. 'Help us secure a space where we can be safer.' For now, the women depend on one another and their own instincts for safety. On a recent Wednesday, when a man on Eighth Avenue approached a young Mexican woman with a vague description of a part-time job in a store at the Port Authority, an older woman drew close and signaled disapproval. The man, who gave his name as Victor Miranda and his age as 55, then turned to Josefa Limas, 32, who arrived from Puebla, Mexico, only six months ago. She, too, shook her head. 'Sometimes they'll just end up taking you somewhere else,' she said, describing another woman's close call the previous day. 'An Indian man took her to an elevator and wouldn't let her out. He came over and tried to grab her. She pressed an emergency button and got away.' Still, the pressure to take chances can be strong. Nellie, 32, who shares a room in the Bronx, pulled out a picture of the three children she left four years ago with her sister in rural Ecuador, in an effort to earn money for the heart operation needed by her son, the youngest. 'The little I make here I send to him,' she said. 'Many times I just want to go to be with him, but I don't have the money to do so. It gives me a desperate feeling.' On this day she counted herself lucky: she had been called back for a second day's work at $6 an hour, she said. And leaving the line, she melted into the crowd.

Subject: Re: Immigrant Women Line Up for Day Labor From: Johnny5 To: Emma Date Posted: Mon, Aug 15, 2005 at 12:59:07 (EDT) Email Address: johnny5@yahoo.com Message: 'Compared with their male counterparts, they earn less, despite higher levels of education, according to a 2002 study of the United States' low-wage immigrant work force by the Urban Institute,' How said, higher education should be rewarded - they are supposed to be coming to a more fair country than they left no?

Subject: I don't understand Kudlow From: Poyetas To: All Date Posted: Mon, Aug 15, 2005 at 05:11:37 (EDT) Email Address: Not Provided Message: Based on what I've been seeing, everyone on this forum should have their own talkshow because they are twice as informed as everyone who does have a talkshow and debates Krugman. What in the world is Larry Kudlow talking about?? 1. 'the expansion of homeownership among the middle, lower-middle and lower-income classes is one of the great benefits and boons of this economic prosperity.' - People are just re-mortgaging their homes, that is no net increase in home ownership. 'But they are looking at stocks vs. real estate and saying, well, at least I am going to be able to hold my investment' - Your investment will hold as long as the housing market holds because the economy is 85% housing! Your putting all your eggs in one basket. ITS A HIGHLY CORRELATED ECONOMY!! 'Just real quick, I think it is an investment-led recovery, particularly capital investment' - Ummmmm, haven't we learned anything from the 1990's?? I've said this before...Money (with a view to profit) does not create solutions, money does not increase creativity. They are mutually exclusive. Invest in things that foster creative thoughts by all means, but don't expect to make returns off something as spontanious and irrational as human ingenuity. You will always lose!

Subject: Noyce on Cspan From: Johnny5 To: Poyetas Date Posted: Mon, Aug 15, 2005 at 13:07:06 (EDT) Email Address: johnny5@yahoo.com Message: 'but don't expect to make returns off something as spontanious and irrational as human ingenuity. You will always lose! ' HAHA - I just watched a special on the father of silicon valley, Noyce - he said he always liked ideas that were new and untested and hated the tried and true. Bill Gates is a slave to innovation. RE kudlow's claim - I have seen in inner city palm beach county, several homes that were very ugly and slum looking have been remodeled and renovated and the areas are looking better. True those people are under more debt load now, but their neighborhoods sure look pretty - I guess what do you think is more important - looking pretty or sustainable finances - now remember IMAGE is A LOT here in america. My carpentar redneck friend probably put it best, he was sick and tired of the women he saw read homes and garden and then to follow the latest fashion rip up a perfectly good kitchen to put in the latest corian countertops and make her husband have to work a second job to pay for it - HAHA! I think krugman is not so much about IMAGE as fundamentals - he would probably buy his daughters the 20 dollar jeans at kmart - but kudlow is gonna get his daughters the 300 dollar jeans because like he says - it looks better. HAHA!

Subject: Re: I don't understand Kudlow From: Emma To: Poyetas Date Posted: Mon, Aug 15, 2005 at 08:47:06 (EDT) Email Address: Not Provided Message: This is an excellent way to handle rebuttal. Nice points. 'Invest in things that foster creative thoughts by all means, but don't expect to make returns off something as spontanious and irrational as human ingenuity.' Nicely expressed.

Subject: investing From: byron To: All Date Posted: Sun, Aug 14, 2005 at 23:30:03 (EDT) Email Address: Not Provided Message: My daughter has a small amount in vanguard indext 500. She just started working a new job and i am trying to get her to start investing for her eventual retirement. Should she continue in the 500 indext or mix it up in some other vanguard funds? I know vanguard is touted quite a bit on this forum and the advise from you all is pretty sound. Byron

Subject: Re: investing From: Terri To: byron Date Posted: Mon, Aug 15, 2005 at 05:47:12 (EDT) Email Address: Not Provided Message: Byron Vanguard has switched all it indexes but the S&P to the Morgan Stanley constructions which are superior to the old indexes in construction. The S&P however is so popular that it has not been switched. John Bogle suggested years ago that the index of choice be broader than the S&P. So, I do not use the S&P. The Vanguard LargeCap Index is closest to the S&P but includes more midcap companies. Then there is the Total Stock Market Index which includes midcap and smallcap. There is the MidCap Index and value and growth in both large and small cap. I have leaned to value and midcap indexes, and much prefer the SmallCap Value index to the complete smallcap or growth smallcap. When building in the beginning I find no reason not to use a single index as LargeCap or Total Stock Market. I will add....

Subject: Re: investing From: John C. To: Terri Date Posted: Mon, Aug 15, 2005 at 12:43:25 (EDT) Email Address: Not Provided Message: 'Vanguard has switched all it indexes but the S&P to the Morgan Stanley constructions which are superior to the old indexes in construction' can you explain why they are better. I've heard arguments both ways, but would like your rational.

Subject: Utilities and Durables From: Johnny5 To: John C. Date Posted: Mon, Aug 15, 2005 at 20:06:17 (EDT) Email Address: johnny5@yahoo.com Message: I hold xom and vtrix, pete weis and warren buffet has said worry for the dollar, I share their concern. There are india and china funds like IIF that have done well recently and maybe not have a currency fall like ours. Between the 2 china scares me more with her state controlled companies and opaque banks and poor loans. Also you want to remember buffet was recently looking at buying utility companies, jim rogers on fox money hour also said to buy utilities - also Joe Kernan and the Brain on CNBC said GE may buy utilities - you may ask - who so many talking about utilities - well 70 year old laws have been changed and now big companies can buy small utilities - so they all are thinking this is probably gonna bring a lot of buyout offers for utilities from the big companies. I know terri has commented on healthcare and utilities and vangaurd has ETF's - so you may want to look there. Just last week I listened at old Peter Lynch Advice and bought some VDC - vanguard consumer durables - I hear discretionary spending is about to get very tight according to the congressional budget office. Stick with vanguard and thier ETF's and you should be A OK.

Subject: Re: Utilities and Durables From: Terri To: Johnny5 Date Posted: Mon, Aug 15, 2005 at 21:19:19 (EDT) Email Address: Not Provided Message: Use the full name to avoid being confused. What you bought was the Consumer Staples Index, not consumer durables. Staples are razor blades and such, where durables are furniture and such.

Subject: Oh no!! From: Johnny5 To: Terri Date Posted: Tues, Aug 16, 2005 at 01:18:44 (EDT) Email Address: johnny5@yahoo.com Message: Oh no - what am I to do Terri? I thought vanguard had a durables ETF - where am I to invest for durables? No vangaurd fund or ETF seems to have over 15% consumer durables - now I have a big hole in my diversification Terri. Oh this is very troublesome news - are there any etf's that can help me fill my durables need?

Subject: Re: investing From: Emma To: John C. Date Posted: Mon, Aug 15, 2005 at 14:37:19 (EDT) Email Address: Not Provided Message: The MSCI family are the finest indexes I know of. They are weighted for active shares only, so market capitalizations are better reflected. Because they reflect only active shares and are broader they are less volatile on movement of the largest companies. The indexes change less often, so there is less portfolio adjustment and cost and tax consequence. Changes in the indexes are made well after market closes, so are harder to gauge by speculators. Vanguard has made an excellent switch and has completely secure long term contracts that allow use of exchange traded funds for all the MSCI family.

Subject: Re: investing From: John C. To: Emma Date Posted: Mon, Aug 15, 2005 at 17:00:38 (EDT) Email Address: Not Provided Message: 'Because they reflect only active shares and are broader they are less volatile on movement of the largest companies' actually float adjusted indices by definition are more volatile than a full cap weighted counterpart; in this case that fact is irrelevant since we are talking about the style metrics used to categorize stocks, i.e. Barra uses the price/book ratio as its only metric, and MSCI uses multiple metrics to come up with a more liberal policy in categorizing stocks as value vs. growth, small vs. large, etc. In that case, Barra would be more 'volatile' in stock turnover. With that said, it doesn't necessarily mean going forward that MSCI funds will out perform Russell or Barra (Vanguard admits this point) rather they feel that the steps MSCI takes to construct an index is more appropriate.

Subject: Re: investing From: Emma To: Emma Date Posted: Mon, Aug 15, 2005 at 14:47:48 (EDT) Email Address: Not Provided Message: http://flagship5.vanguard.com/VGApp/hnw/FundsByName Superior after cost performance by MSCI to other index families. I love the Vanguard-MSCI family choice, though I want a Vanguard-MSCI Europe value index. We are so lucky to have Vanguard, and if you think other mutual fund families are a problem look to Europe, Japan, and Australia and feel even more fortunate.

Subject: Re: investing From: Terri To: Terri Date Posted: Mon, Aug 15, 2005 at 05:55:21 (EDT) Email Address: Not Provided Message: Emma posted these excellent articles below: http://www.nytimes.com/2005/08/13/business/13nocera.html Pro Tells Why the Little Guy Just Can't Win By Joseph Nocera http://www.vanguard.com/bogle_site/sp20050524.htm The Arithmetic of Mutual Fund Investing is More Important Than Ever Remarks by John C. Bogle Founder and Former Chairman, The Vanguard Group American Association of Individual Investors Philadelphia Chapter

Subject: Re: investing From: Terri To: Terri Date Posted: Mon, Aug 15, 2005 at 06:00:53 (EDT) Email Address: Not Provided Message: http://flagship5.vanguard.com/VGApp/hnw/FundsByName I have loved the Vanguard Health Care Fund for long term investing, but Vanguard closes funds from time to time so they do not become too large and this fund is closed at present. There is the Vanguard Health Care Index however.

Subject: Re: investing From: Jennifer To: Terri Date Posted: Mon, Aug 15, 2005 at 07:15:43 (EDT) Email Address: Not Provided Message: The reason for Vanguard is that is the company giving individual investors a real chance to come close to the sort of institutional returns we always hear advertised but never can come close to with high cost companies. Indexing or low cost management works wonderfully when we save and invest continually.

Subject: Re: investing From: byron To: Jennifer Date Posted: Mon, Aug 15, 2005 at 16:41:50 (EDT) Email Address: Not Provided Message: Thanks for your inputs and i will pass this info on to her.

Subject: Re: investing From: Britney To: byron Date Posted: Mon, Aug 15, 2005 at 19:46:48 (EDT) Email Address: Not Provided Message: This is good advice. My parents started using Vanguard in the early 1980s and we followed and have never had a regret. We index and use Health Care and Energy, but we also have bought individual company shares over the years when we thought the values right and just put the shares away. We use Vanguard for all our financial transactions.

Subject: Re: investing From: Dorian To: Britney Date Posted: Wed, Aug 17, 2005 at 04:44:50 (EDT) Email Address: Not Provided Message: We use Vanguard for all our financial transactions. What is a good investment brokerage to use to purchase stocks, mutual funds, etc.? Dorian

Subject: Re: investing From: Terri To: Dorian Date Posted: Wed, Aug 17, 2005 at 05:45:15 (EDT) Email Address: Not Provided Message: Vanguard serves as a mutual fund company, as a discount brokerage, and as a commercial bank. Financial planning or advising services are also available.

Subject: Re: investing From: Emma To: Terri Date Posted: Wed, Aug 17, 2005 at 10:20:52 (EDT) Email Address: Not Provided Message: Vanguard has all the services an investor needs.

Subject: A Selective Housing Bubble From: Terri To: All Date Posted: Sun, Aug 14, 2005 at 15:15:57 (EDT) Email Address: Not Provided Message: When we refer to a housing bubble, we are referring to speculative housing prices in select areas such as San Francisco or New York or Los Angeles or Miami, or what Paul Krugman has called the 'Zoned Zones' in which development prospects are reasonably limited. In the 'Flatlands' of Topeka or Minneapolis, housing prices have risen but development is simpler and there is no necessary bubble. I would not care to see the Fed worry about Miami and limit growth in Minneapolis.

Subject: Re: A Selective Housing Bubble From: Poyetas To: Terri Date Posted: Mon, Aug 15, 2005 at 04:39:26 (EDT) Email Address: Not Provided Message: My thoughts exactly Terri, Furthurmore, as previously mentioned, an interest rate hike will only deflate the bubble faster or even make it burst, which is the last thing the economy needs at the moment. The bubble is unsustainable but the aim should be to gradually reduce it rather than kill it. The problem is, who is going to pick up the slack? I've said this before, we need a new area of growth that is going to drive the economy for the next 10 years. IT is a facilitator but not an end itself. However, creativity is something that this administration demonstratibly lacks.

Subject: Federal Reserve Policy From: Terri To: All Date Posted: Sun, Aug 14, 2005 at 15:05:20 (EDT) Email Address: Not Provided Message: The legislative purpose of the Federal reserve is to balance a tendency to inflation with as robust a labor market as possible. Inflation refers to general price increases rather than to rising asset prices. There is no provision for the Fed to try to control specific asset prices. There is especially no reason for the Fed to try to lower housing prices in San Francisco with no regard to employment in Chicago. Risking a possible recession to control selectively rising asset prices, makes little sense.

Subject: Under Pressure From: E,mma To: All Date Posted: Sun, Aug 14, 2005 at 13:13:02 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/14/magazine/14CRYOVAC.html Under Pressure By AMANDA HESSER A few weeks ago at Per Se, Thomas Keller's four-star restaurant in New York City, a waiter set a salad of diced watermelon and hearts of peach palm in front of me. ''This is watermelon that has been Cryovacked,'' he explained. ''It's something new we're doing. I think you will like it.'' This was a watershed moment on two accounts. First, because Keller had indeed managed to make something as mundane as watermelon taste different -- it had the crisp density of a McIntosh apple. But also because American dining has reached the level of sophistication at which a waiter will assume that a diner knows what ''Cryovacked'' is, and that this knowledge will enhance the experience of tasting diced watermelon. That won't be assumed here. ''Cryovacking'' is an industry term for putting food in a plastic bag and vacuum-packing it. Sometimes the food is then cooked in the bag. Other times, the pressure of the packing process is used to infuse flavors into ingredients. The watermelon, for instance, was vacuum-packed with 20 pounds of pressure per square centimeter, to compact the fruit's cells and concentrate its flavor. It had the texture of meat. Just the thing for backyard picnics. Cryovacking, which is more often called sous vide (French for ''under vacuum''), is poised to change the way restaurant chefs cook -- and like the Wolf stove and the immersion blender, it will probably trickle down to the home kitchen someday. Cryovacking has also given great momentum to the scientific cooking revolution of the last five years. Chefs have begun using techniques developed for industrial food production and advances in science to manipulate the chemical make-up of proteins, starches and fats to create new textures and flavors -- everything from fried mayonnaise to hot gelatins. Ferran Adriá is often seen as the hero of this movement. From his tiny restaurant, El Bulli, in Rosas, Spain, Adriá has sought to reform diners' expectations of ingredients like caviar (his might look just like osetra but is made of squid ink and calcium chloride) and to invent new flavors and textures (carrot juice frothed to a texture he calls ''air''). But the man who helped Keller master the technique that would compress watermelon and poach lobster with exquisite results, who taught Wylie Dufresne how to ''flash pickle'' water chestnuts with honey and sherry vinegar and who is having a greater impact on how people cook than anyone since Escoffier is not even a chef. Bruno Goussault, 63, is both a scientist and an economist. He has been training chefs like Fabio Trabocchi at the Ritz-Carlton and Michel Richard at Citronelle, both in Washington, Dan Barber at Blue Hill in New York and Daniel Boulud at Daniel, also in New York, not only how to use sous vide but also to understand the science behind it. Where Escoffier organized the way chefs cook, dividing the professional kitchen into stations (sauces, cold foods, sautéing, pastry), Goussault has reprogrammed their approach to temperature, technique and taste -- their fundamental understanding of cooking. At Charlie Trotter's in Chicago, the intense heat and scrape of pans against the stove is giving way to an almost placid atmosphere, the barely audible hum of water baths that run 24 hours a day. Dufresne, the chef at the innovative Manhattan restaurant WD-50, calls Goussault's contribution to cooking ''monumental.'' The advancements he has made are on par with the invention of the food processor and the gas stove, Thomas Keller says, and they will be around forever. ''With the Cuisinart,'' Keller says, ''there was no one that came with it. You got the book inside. With sous vide, the technology is so complex and there are so many variables. The thing that comes with sous vide is Bruno.'' When I met Goussault this past June, he was working at the American office of Cuisine Solutions, a food manufacturer in Alexandria, Va. He had on a blue checked shirt and a tie dotted with tiny bunnies. Goussault wanted to show me around the Cuisine Solutions plant, so we dressed in lab coats, booties, shower caps and masks, as if we were preparing for surgery, then headed into the damp, cold world of a food factory. In one room, a row of square steel vats was set on a platform. Inside one of the vats, hundreds of lamb shanks, sealed in vacuum-packed plastic bags, were submerged in water, cooking. There was no scent of food, nor the kind of steam and heat we normally associate with cooking. ''When you cook at home, you have a lot of flavor in your apartment,'' Goussault explained. ''And when you cook sous vide, all that flavor is inside the bag.'' The sous vide bag works as a hermetic seal, keeping in both juices and aroma; and by cooking in water, you get better heat transfer than you would in, say, an oven. Goussault began working more intensively with Cuisine Solutions' American operations in 1998. The company, which now grosses $50 million a year, prepares food for the Super Bowl, Costco, the first-class cabins on Air France and American Airlines, the MGM Grand in Las Vegas and large hotel chains like Westin and Hyatt. Much of that food is cooked sous vide. When you order braised short ribs at the Hyatt Regency in Phoenix, what you are served was actually cooked for 42 hours in Virginia and then simply reheated in the bag and garnished in Phoenix. Until recently, Goussault's most significant work had been on this scale. He developed the sous vide process for a number of hotels and food companies in France, Japan, Hong Kong, the Philippines and the U.S., enabling them to produce higher quality foods without preservatives. And in Norway, Chile and Africa, he designed fish-processing factories, where line-caught fish are cleaned and cooked (some of them before the fish can go into rigor mortis, and therefore before enzymes begin breaking down the flesh), yielding better quality fish with a longer shelf life. Goussault, who logged more than 120,000 miles on airplanes last year, has more plans yet: he hopes to take sous vide to the Niger River basin between Mali and Niger, where farmers from surrounding regions take their cattle. He would build feedlots, using the local abundance of cottonseed for feed. After slaughtering, the meat could be cooked, sous vide of course, using solar power. Goussault designed the production line at Cuisine Solutions for 130,000 meals a day. Like most food factories, it is very cold, with large refrigerated rooms that decrease the risk of bacteria. Long conveyor grills sear hundreds of chicken breasts at a time; steel tumblers the size of jet engines are filled with ingredients, then pressurized, a process that forces seasonings to penetrate the foods more deeply. This is Goussault's real domain. He is as much an engineer as a scientist -- as pleased with his invention of nonslip doilies for French train tables as he is with his cooking techniques. For decades, food was poached in sturdy plastic bags at traditional temperatures, simmering or boiling. Goussault discovered that keeping the temperature as low as possible and later cooling the food in several stages yielded a wildly different -- and tastier -- result. A piece of fish, for instance, can be cooked at about 130 degrees -- a hot bath, essentially -- for 30 minutes, then cooled, successively, at room temperature, in cold water, then in ice water, before being reheated and served. Cooking in bags at such low temperatures was long considered a recipe for botulism, but Goussault has debunked this fear, proving that the long cooking times followed by proper cooling kill bacteria with the same effectiveness as higher temperatures, also stabilizing the food so it can be stored longer before serving. Higher temperatures, Goussault argues, do irreparable damage to food. The cell walls in the food burst, making it impossible for the food to reabsorb the liquid it loses. Roasting a chicken at 350 degrees until its internal temperature reaches 180 degrees (as the U.S.D.A. recommends) causes the breast meat to dry out and juices to accumulate in the bottom of the pan. Tradition has it that cooks use those lost juices to make a gravy, which is later reapplied to the dry meat. All of which, come to think of it, doesn't make much sense. Low temperatures make for extremely succulent food because there is virtually no loss of natural juices. All of the gravy is reabsorbed by the meat, intensifying its flavor and allowing it to retain its structural integrity. As Goussault explains, ''You have the expansion, you have a little purge and during the chilling system -- if you have a good chilling system -- you can absorb this exudation.'' There's nothing more romantic to a chef than absorbing exudation. Vacuum-packing foods provides a number of other advantages. The hermetic seal created in a sous vide bag traps flavor that would otherwise be lost. Carrots simmered in water, for instance, bleed off much of their flavor. As Yannick Alléno, the chef at Le Meurice, a two-star restaurant in Paris, points out, ''You would almost be better off drinking the water.'' The atmospheric pressure created during the vacuum-packing process also promotes osmosis among the contents of the bag, so sous vide has become an important tool for marinating and curing foods and infusing oils with spices and herbs. As a result, chefs don't need to use as much seasoning, either. When they are marinating a food with an expensive aromatic like truffles, this can make all the difference. After the tour, we sat down in a small test kitchen above the factory floor to taste some of the company's products -- a lamb shank that had been cooked for 36 hours, scallops and the like. Goussault ate with relish, washing it down with red wine. When he is at home in Paris, he likes to grill steaks and roast lamb, but for now those primitive techniques were far from view. Goussault instructed the chef in the kitchen to drop an egg into a thermal circulator, sous vide's ''oven'' -- a circulating water bath whose temperature can be adjusted to within a tenth of a degree. It was set at 64.5 degrees Celsius (about 148 degrees Fahrenheit), which he calculated as the perfect egg-cooking temperature. Chefs, Goussault said, ''need people like me to regulate and to push the creativity to the next place.'' He quantifies what chefs aim to do intuitively. Some need less help than others. ''I was in Joël's kitchen,'' Goussault said, referring to Joël Robuchon, one of France's most revered chefs, ''and he was cooking eggs, so I tested the temperature; I put in my probe, and it was 64.5. I asked him how he knew this, and he just said that was how he liked it best.'' After 45 minutes, the chef removed the egg from the water and Goussault cracked it over his plate. I had never seen an egg like this: the whites and yolk, cooked to precisely the same consistency, spilled out like a wobbly custard, and Goussault, using a spoon, began pulling the whites from the yolk. The yolk was bright and creamy and stood up like a marshmallow. ''You see, you see!'' Goussault said. ''It's all about the temperature.'' Sous Vide has been around since the late 1960's, when food-grade plastic films and vacuum packing were mastered by French and American engineers and later manufactured under the aegis of the Cryovac division of the W. R. Grace Company. Originally, vacuum-packing was used to seal and pasteurize industrial foods for a longer shelf life. In 1974, Pierre Troisgros, a three-star chef in Roanne, France, decided to look for a new way to cook his foie gras, which shed 30 to 50 percent of its original weight in cooking. He enlisted Georges Pralus, a chef, to help. Pralus had the idea of wrapping the foie gras in layers of plastic before they cooked it and, after a number of experiments, they had their breakthrough: the foie gras lost only 5 percent of its weight -- an enormous savings. Pralus, now widely known as the father of sous vide, eventually worked with Cryovac to open his own school, Culinary Innovation, where he taught the technique. Over the years, thousands of chefs from around the world have come to study with him. Goussault, as it happens, was working along the same lines, but at an industrial level. In 1974, Goussault worked on a study that was presented on the sous vide cooking of beef shoulder at an international frozen-foods conference in Strasbourg, France. They found that cooking the beef sous vide extended its shelf life to 60 days. France, however, would not change its food-safety laws regarding perishability until the 1990's. ''The thing I write today is the same thing I wrote 34 years ago,'' Goussault says, laughing, ''but nobody listened. Now, a few people listen.'' Today Goussault is friends with Pralus and even invests in his school, although they teach different approaches (Pralus cooks sous vide at higher temperatures), and they continue to subtly disparage each other's work. ''He might have done the research,'' Pralus said of Goussault, ''but I was the first one who did sous vide for restaurants, who made it a culinary endeavor.'' Without Pralus, sous vide might never have reached the temples of cuisine. Smiling, Goussault said: ''Pralus calls himself the pope of sous vide. He tells people he invented sous vide, but it's not true. But I let him say that because it makes him feel better. So after he said he was the pope, I said I was the sous-pope.'' Chefs say that Pralus is the artist, Goussault the scientist. It just happens that the artistry in sous vide can be extremely dangerous from a food-safety perspective, which is why the two began collaborating in 1980, when executives at Cryovac asked Goussault to add a scientific basis to Pralus's training. ''They asked me to give it the right system because Georges Pralus is completely undisciplined,'' Goussault explained. He has been the man behind the curtain all along. Goussault became a scientist almost as a last resort. He had previously studied in a seminary (an experiment that ended, he said, ''because I was not able to respect the vow of chastity''), lived in a commune, earned degrees in economics, agriculture and psychology and spent time in Niger before settling in Paris in 1970 as a scientist in food-safety laboratories. In the 1980's, a project with SNCF, France's national train system, gave him the opportunity to work with Joel Robuchon to create a menu for its first-class service between Paris and Strasbourg. Robuchon, concerned about the fragility of high-quality food, knew there was no way to assemble fresh ingredients at 100 miles per hour. With Goussault, he developed a menu based on foods that could be prepared sous vide and simply reheated on the train. In 1991, Goussault started his own consulting company, the Centre de Recherche et d'Études Pour l'Alimentation, where he now trains chefs like Michel Bras and Alain Ducasse in everything from the use of carrageenan and seaweed extracts to sous vide. Goussault's team of seven engineers also develops products for companies like Nestlé, and it tests equipment for manufacturers, like a new oven that can go from 200 degrees Fahrenheit to 500 degrees in less than three minutes. Even though many chefs in France use sous vide in their restaurants, it had long been considered a technique suitable only to chains and factories. The fact that some old-guard French chefs like Alain Senderens, Paul Bocuse and Joël Robuchon have signature lines of sous vide convenience foods in supermarkets has not helped to remove the stigma. A television news report in the mid-90's revealed that the French restaurant chain Chez Margot was cooking some of its entrées sous vide; it went bankrupt soon after. ''Joël Robuchon is the only chef who openly admits he uses it,'' Goussault said. ''One member of Le Club des Cents'' -- an esteemed gastronomy club -- ''said that any chef who uses sous vide is a fraud.'' Indeed, when I interviewed Senderens recently, he initially denied using sous vide in his kitchen at Lucas Carton, his three-star restaurant in Paris. But when I mentioned that the cooks at Le Meurice, a nearby up-and-coming restaurant, were using sous vide to prepare more than 50 items on the menu, Senderens suddenly remembered that he does use sous vide at Lucas Carton -- but only for the chicken with truffles. Even in America, where there are fewer such prejudices, sous vide has taken more than two decades to gain acceptance. In 1988, just when Cuisine Solutions, then called Vie de France, and a few chain restaurants were gearing up their sous vide operations, The Washington Post published an article questioning the safety of sous vide and other food-storage techniques like modified-atmosphere packaging, which were new at the time. Although sous vide was legal to use, the Food and Drug Administration has always warned of its potential dangers in restaurants. Still, sous vide is part of the F.D.A.'s Food Code, and any manufacturer who wants to use it can get permission by applying to the U.S.D.A. Chipotle, a burrito chain backed by McDonald's, now cooks all its braised pork sous vide. There may be hope for airline food yet. n high-end restaurants, sous vide began as a rarefied curiosity. Sous vide machines cost $3,000 to $6,000; thermal circulators start at $1,200; and staff training by Goussault runs $2,000 a day for a minimum of four days. David Bouley, who learned from Pralus, was one of the first American chefs to use sous vide at his restaurant, then called Bouley Bakery. Shea Gallante, the chef at Cru in New York City, who then worked for Bouley, admitted, ''At the time, no one was really sure how it worked.'' Thomas Keller, who has done work with Cuisine Solutions for a sous vide product line, has had Goussault train the kitchen staff at both the French Laundry, his signature restaurant in Yountville, Calif., and Per Se, in New York. Two years ago, Michael Anthony at Blue Hill contacted Goussault to learn more about the technique. Since then, word about Goussault has spread among American chefs. Recently, Fabio Trabocchi invited Goussault to spend four days training his team at the Ritz-Carlton in Washington. Sous vide has reached the stage where the art must now catch up to the science. While industrial food companies use sous vide primarily for braising -- where all of the ingredients are in the bag -- chefs are beginning to see it as a way to prepare and manipulate individual ingredients, sometimes without even cooking them. And, naturally, they are using much higher quality ingredients, so the results are quite different from what you might get, say, on American Airlines. If you go to Cru and order Gallante's Wagyu beef, it will be unlike any piece of beef from a saute pan or broiler. Instead of a brownish rim and increasing redness toward the center, it will be evenly rare from the outer edge all the way through. At Per Se and the French Laundry, cooks are using sous vide to compress peaches, cucumbers and tomatoes. They've found that compressing celery has the same effect as blanching it and therefore saves them a step. ''Pineapple is extraordinary,'' Keller says. They're also using it to infuse oils and slow-cook pig's head. Chefs have found less lofty ways to employ the technique as well. At CityZen, in the Mandarin Oriental hotel in Washington, they make ice cream bases in sous vide. ''There's no putting your sugar and egg and cream in a pan and stirring,'' says Eric Ziebold, the chef. His pastry chef blends the ingredients, seals them in a bag and cooks it in water. ''More than anything, the vegetables and the proteins taste remarkably more like themselves,'' Dan Barber, the chef and owner of Blue Hill, wrote in an e-mail message. ''When it comes to things like artichokes, steaming and boiling and braising are fine, but there's a great loss of liquid as it cooks -- which is another way of saying a great loss of flavor because the juice of the artichoke itself, while mostly water, is very flavorful. Sous vide eliminates this loss, and hence the sensation that you're tasting a true artichoke -- not just a delicious artichoke, but an artichoke the way it was intended to taste.'' Much is made of the artistry of chefs, but running a restaurant kitchen well often has more to do with control and consistency. And in large kitchens or multiple restaurants, those things can get out of hand pretty quickly. Alléno, the chef at Le Meurice, oversees 72 cooks; Daniel Boulud has a staff of 65 to 70 among his three New York restaurants. Most cooking relies on the cook's ability to judge doneness based on sight and feel. With sous vide, it is all about precise times and temperatures. ''You can have your restaurant 6,000 miles away,'' Ziebold says, ''and you don't have to worry about the cooks at your restaurant in D.C. getting the duck right because they're cooking it sous vide and they know the temperature.'' Every year, Janos Kiss, the corporate executive chef for Hyatt Hotels and Resorts, prepares a dinner for more than 5,000 people on Super Bowl weekend. It used to take 20 chefs four days to cook the dinner. Now, with sous vide, they do it with six chefs in two days. In the long run, sous vide's great contribution may well be this consistency. A chef with a restaurant empire, like Nobuyuki Matsuhisa, may finally be able to guarantee that the lobster with wasabi-pepper sauce at Nobu in London is every bit as good as the one at Nobu in New York. It may spell the end to bad wedding food. And if it catches on at companies from Stouffer's to Whole Foods, it could forever alter the state of convenience food. In the meantime, all the attention being paid to temperature and laboratory precision has pushed chefs in more creative directions. When Grant Achatz built his new restaurant Alinea in Chicago, thermal circulators from PolyScience, a laboratory-equipment manufacturer, were part of the kitchen design. To these, he has added a 40,000-r.p.m. homogenizer (what Philip Preston, the president of PolyScience, calls a ''coffee grinder on steroids'') -- for making the world's most emulsified vinaigrettes and confections like carrot pudding made with carrot juice, cocoa butter and grapeseed oil -- and an entirely new mechanism they're calling the Antigriddle, which has a surface that chills to minus 30 degrees Celsius (minus 22 Fahrenheit), allowing you to freeze food in the same way you would saute it. A dollop of sour cream becomes brittle on the bottom and stays at room temperature on top. For all chefs' forward thinking, though, top kitchens still run on frat-house principles. So sous vide also comes in handy for hazing new cooks. At WD-50, Dufresne said, ''I've seen virtually every kind of personal belonging end up in one of these bags.'' Veteran cooks are known to take a new cook's clothing from his locker and put it through the sous vide machine, compressing his jeans and shirt to the size of hockey pucks. In late July, Goussault went to Citronelle in Washington for a follow-up training session with Michel Richard's head cooks, David Deshaies and Cedric Maupillier. They were having trouble with the salmon and sweetbreads done sous vide. The salmon had a perfect silky texture but was too fragile and, they worried, undercooked. And the sweetbreads were losing too much liquid. Goussault is often called in to help chefs perfect their technique. ''My job is to repeat, repeat, repeat,'' he says. He unpacked his briefcase, removing a laptop, a box of batteries, a jumble of wires and a number of handheld monitors that, when hooked up to the foods with probes, can record their minute-to-minute temperature arc during the cooking process. The large stoves around the kitchen were mostly unoccupied. Two thermal circulators sat poised on a steel countertop, humming like Jacuzzis. Deshaies dropped two pieces of salmon in ice water that contained 10 percent salt, then set a timer for 10 minutes. Salt, according to Goussault, ''modifies the osmotic pressure in the cells,'' meaning it prevents the albumen, that white substance, ghastly to chefs, that gathers on the surface of fish, from leaching out of the salmon when it cooks. They sealed the salmon in sous vide and inserted probes. It now looked as if the salmon had a heart monitor. For meats and fish, there is a window of doneness between 52 degrees Celsius (about 125 degrees Fahrenheit) and 62 degrees Celsius (about 144 degrees Fahrenheit). Below 52, you risk bacteria. Above 62, you begin denaturing proteins. Goussault then put one piece of salmon in a thermal circulator set at 56 degrees Celsius and one set at 53 degrees Celsius to see if they could raise the final internal temperature to 54 and 50 degrees respectively without changing the texture they had achieved in the piece they had cooked to 47 degrees. Food cooking in a thermal circulator looks a bit like an animated version of a Damien Hirst sculpture -- abstract animal parts suspended in a vibrating liquid. Standing over his cutting board, Deshaies said, ''Some chefs the other day, they said to me: 'What? So you put it in the plastic and put it in the water and that's it?' '' He shook his head. ''It's not so easy.'' It takes practice to get the sous vide machine to seal correctly. Foods must be chilled before sealing, otherwise the pressure inside the machine will cause them to cook during the sealing process. The pressure must also be calibrated for every type of food, so the food stays compact but firm. Once the food is sealed, its proper cooking temperature and internal temperature must be determined. Citronelle's lamb loin, for instance, is first infused with garlic in a sous vide pouch, then it is sauteed, chilled, resealed in sous vide and cooked in a thermal circulator at 60 degrees Celsius until its internal temperature reaches 56 degrees. It is then cooled at room temperature, in cold water, then further cooled in ice water, then chilled until an order comes in, at which point it is reheated in a warm water bath, still in its sous vide bag. As Barber at Blue Hill explained: ''If you're patient, and you try different temperatures and different times, at some point you'll achieve a taste from the product that's better than it's ever tasted before. I'm not exaggerating. That's happened to me with nearly everything, almost never the first time I try it, but over time and with experimentation, that's the reward.'' After 40 minutes or so, the pieces of salmon registered at 50 degrees and 54 degrees. Each was removed from the hot water, and cooled systematically. It was time to taste. On three plates, Deshaies lined up the pieces of salmon, including the one cooked the day before to 47 degrees. All three pieces were pink all the way through and glistening with moisture, a consistency unlike that of any piece of salmon cooked in an oven. The piece cooked to 54 degrees was dismissed as ''airplane food.'' Deshaies and Maupillier preferred the fish they had cooked to 47 degrees, a temperature that Goussault insisted was unsafe. The salmon cooked to 50 degrees was a good compromise, moist and delicate, but without any signs of rawness. Goussault seemed tense. He had recently done a similar experiment with Thomas Keller's team at the French Laundry, and he now explained that Keller had also preferred the 47 degree salmon. ''Like us!'' Deshaies said. ''But his sous-chef feels the difference between 47 and 50 is too little and 50 is safer,'' Goussault said. He then added: ''His is different. He does it with olive oil. Delicious.'' For Deshaies, it was suddenly no longer about science. He shot a concerned look at Richard. ''We can do that, too,'' he said.

Subject: Meanwhile, People Starve From: Emma To: All Date Posted: Sun, Aug 14, 2005 at 10:01:30 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/14/opinion/14sun2.html Meanwhile, People Starve Were it not for Hilary Andersson, a BBC television journalist, Niger's starving people would very likely be getting as little attention as the starving citizens of nearby Mali, Burkina Faso and Mauritania. Her wrenching report from Niger, where more than three million people are now in danger of starving to death, set off a worldwide aid effort that a year of United Nations warnings could not. Had attention been paid sooner, lives could have been saved, at one-eightieth - that's right, one-eightieth - what it will cost today. And easy, affordable steps that could prevent such scenes elsewhere, like a proposed United Nations $500 million emergency response fund, haven't been taken. Niger, one of the world's poorest countries, has long lived at the mercy of an unforgiving climate, and the destruction of last year's crops through drought and crop-eating locusts is the main cause of its present plight. The usual contributors to famine elsewhere, like war, dictatorship or crackpot economic theories, are notably absent. Niger's government is democratically elected and President Mamadou Tandja's orthodox budget-balancing and market-opening policies are regularly praised by Western leaders and international lenders. Regrettably, Mr. Tandja has an unhealthy tendency to take that orthodoxy too far, to his people's detriment. In April, with the famine already gathering force, he imposed food tax increases as part of a budget-balancing package. Amid widespread protests, he later backed off. But in an interview with the BBC last week, he insisted that his people 'look well-fed' and that reports to the contrary were 'false propaganda' being spread by aid agencies to attract funding. For the historically minded, his bizarre insensitivity to his people's suffering evokes parallels with Ireland's deadly famine of more than a century and a half ago, where the rigid laissez-faire ideology of the ruling British authorities made the bad problem of a failed potato crop needlessly worse. Then, locally grown grains were sold abroad for profit while millions of Irish peasants were allowed to starve. Today, market stalls in Maradi, a major trading center of Niger, are piled high with food for the few who can afford it, while elsewhere in the same city thousands of starving and desperate people jostle for scarce relief supplies. The Nobel Prize-winning economist, Amartya Sen, has taught, rightly, that 'no famine has ever taken place in the history of the world in a functioning democracy.' Functioning is the key word; leaders who are truly accountable to their people have strong incentives to take timely preventive action. Mr. Tandja, whom President Bush hailed at the White House this June as an exemplary democrat, clearly needs a refresher course in humane economics and accountable democracy.

Subject: Functioning Democracy in Africa From: Mik To: Emma Date Posted: Wed, Aug 17, 2005 at 09:36:42 (EDT) Email Address: Not Provided Message: Emma, I don't know much about Niger as my expertise is in English and Portuguese speaking Africa. My first thought (which could be wrong) on the principle of 'Functioning Democracy' in Africa is unfortunately very cynical (here we go again - but I will end off with a positive example this time). Most 'democracies' in Africa are NOT true functioning democracies. Not even South Africa which saw open and fair elections with a change of president. Africa is (in general) still run by tribes. And people vote in their tribal leaders. For this reason, no matter how bad the leader may be, he will still be voted in because he represents the majority tribe. In Uganda we saw something interesting. The majority tribe is located in the North of the country and are Idi Amin supporters (that is how Idi Amin came to power in the first place). There are two more tribes in the South and the people in the south realised that by coming together they are a majority. So they vote for Museveni (who is the current president of Uganda). They will always vote for Museveni because he will represent their tribes (and they don't want to be ruled by any other tribal leader). Luckily a lot of these leaders are behaving themselves due to international pressure. But they slip up every so often as it appears in Niger. In South Africa, the majority tribe is the Xhosa and the most feared tribe is the Zulu. The Zulu tribe has their own political representation, but the remaining tribes vote along with the Xhosa tribe for the ANC. And we can be sure that the ANC will remain in power for as long as the population of Xhosas is the largest (which appears to be forever). We hope that with time and improved education, tribal links will diminish and more pure democracy will flourish. Now for the positive side: There is one country in Africa that is truly democratic. In fact it is the oldest democracy in Africa and actually the most succesful country in Africa.... Botswana. This country with a mere 1.4 million people has only one tribe. So competing politicians are evaluated on their political strength, not tribal relation. For a country that is almost entirely desert, has to import most of its water and import all its electricity, they are not only per capita the richest but the most progressive country in Africa. They are actually the true model for Africa's future. So when done properly, democracy works well.

Subject: Re: Functioning Democracy in Africa From: Emma To: Mik Date Posted: Wed, Aug 17, 2005 at 10:19:41 (EDT) Email Address: Not Provided Message: Excellent analysis. These comments are most important; I will discuss them further today. By the way, we should watch for adverse effects from rising oil prices in southern Africa.

Subject: Arithmetic of Mutual Fund Investing From: Emma To: All Date Posted: Sun, Aug 14, 2005 at 07:47:42 (EDT) Email Address: Not Provided Message: http://www.vanguard.com/bogle_site/sp20050524.htm The Arithmetic of Mutual Fund Investing is More Important Than Ever Remarks by John C. Bogle Founder and Former Chairman, The Vanguard Group American Association of Individual Investors Philadelphia Chapter It's a delight for me to meet once again with the Philadelphia Chapter of the American Association of Individual Investors. These are clearly troubled times in our markets, in our nation, and around our globe, but their place in history is yet unknown. It is a curious coincidence that my two previous visits with you happened to come at crucial inflection points in stock prices—the first near a market low that preceded a huge upsurge; the second immediately before a market high that preceded one of the two biggest declines in the past seventy years.* It was on September 27, 1988, when I first visited with you. The stock market was still suffering the aftershock of its stunning one-day decline of 22 percent on 'Black Monday,' October 19, 1987. I urged you to ignore a story that had just appeared in TIME magazine with the headline, 'Buy Stocks? No Way!' that described the stock market of the day as 'a dangerous game.' Then, the Dow Jones Industrial Average was at a level of 2,080; stocks were selling at 12 times earnings; and it took no brilliance at all to urge you to continue to own stocks and 'stay the course.' On November 23, 1999, I met with you again. Then, the stock market bubble was approaching its peak, which it reached only a few months later. The Dow was at 11,000, stocks were selling at an astonishing 32 times earnings, and again it took no brainpower to forecast that stock returns over the decade ahead would likely average no more than 7 percent per year. While in 1988 I had urged you 'not to get carried away with pessimism,' in 1999 I urged you 'not to get carried away with optimism.' In both cases, I suggested that a carefully balanced asset allocation between stocks and bonds would enable you to 'stay the course' no matter what might lie ahead. What to Do Today? Despite the 'tradition' of my two prior visits, I do not see today's stock market as having reached an inflection point. It is neither at the bargain basement extreme we witnessed in 1988, nor at the bubble-bursting extreme it reached before the 2000 high. The Dow was to ease upward to 11,700, then drop to 7,290, and recover to today's level of 10,460. With stocks now selling at about 20 times earnings, price-earnings ratios seem high, but not alarmingly so. Importantly, based on the methodology said to be used by Federal Reserve Chairman Alan Greenspan, stocks seem quite fairly valued when compared to bonds, the principal investment alternative. The 'Fed Model' compares the relationship of the current earnings yield on stocks (the reciprocal of the p/e ratio; a p/e of 20 represents an earnings yield of 5 percent) with the interest rate on the 10-year U.S. Treasury bond. Today, the earnings yield of 5 percent is almost 20 percent above the bond yield of 4.1 percent, while in 1988 it was slightly lower. In late 1999, however, the earnings yield of 3.4 percent was only about half of the bond yield of 6.3 percent. The higher apparent equity premium today might suggest that stocks today are substantially more attractive than they were in 1988. However, I simply don't believe that, for at least three reasons: One, corporate earnings may be under pressure over the next few years, raising P/Es and reducing the earnings yield. Two, bond yields may, and I believe will, rise, though when the rise may come and how much it may be is totally problematical. And three, we live in an especially uncertain world, facing threats of unbridled deficits in our federal budget and our balance of payments, national disunity, and the ever-present threats of terrorism, nuclear proliferation, and global warming. To me, these concerns do not require that you abandon your own investment policy; but I would urge you to (as I do personally) lean toward the conservative side.' The Simple Arithmetic of Financial Market Returns What lies ahead for stocks and bonds? As we look to the future, the most important thing to remember is that in the long run what drives the returns on financial investments are the relentless rules of humble arithmetic: For stocks, the investment return is driven by a simple combination of the initial dividend yield on stocks plus the rate of future earnings growth, the fundamental factors of investment that have accounted for 10 percentage points—5 percent dividends and 5 percent earnings growth—of the 10.2 percent of the long run return on stocks—nearly 100 percent. In the short-run, however, it is not investment, but speculation that calls the tune. When the price-earnings ratio rose from 16 times to 32 times during the 1990s—a 100 percent increase—that change in investor sentiment alone added fully 7 percent per year to the investment return of 10 ½ percent in that glorious decade of speculation, bringing the total return to a robust 17.8 percent. But with today's dividend yield of a meager 2 percent and future earnings growth assumed to be equal to the long-term average of 5 percent, we might be looking at future annual stock returns of only about 7 percent. (If the p/e multiple rises from 20 times to, say, 22 times, add a percentage point, if the p/e declines to 18 times, subtract one point; two points if it declines to 16 times.) Yes, I realize that the long-term return on stocks has averaged much more than that, but that 10 percent annual historical return was buttressed by a 5 percent dividend. So today's dividend yield of about 2 percent results in a dead-weight loss of 3 percentage points a year in the potential return. While the investment fundamentals of earnings and dividends drive historical stock returns over the long-run, past returns on bonds tell us nothing about the future. But the bond arithmetic is even easier and more reliable. The present bond yield tells us nearly all that we need to know, for the best single predictor of the future returns on bonds is today's bond yield. With the 10-year Treasury a hair over 4 percent and long-term corporates at about 6 percent, let's assume (perhaps generously) a future return on bonds of about 5 percent on a diversified corporate/government bond portfolio. While no one can be certain, it seems reasonable, then, to expect stocks to deliver a return of 7 percent more or less over the coming decade, representing a 2 percentage point equity premium over the roughly 5 percent that bonds are likely to deliver. After a two-decade run in which (a) stocks delivered 13 percent (even including the disappointing returns of the past five years), largely because of the extra one percentage point arising from the higher dividend yield; and the 4 percentage points that came from p/e expansion; and (b) bonds delivered a return of about 8 percent (which was, after all, the bond yield at the outset), these returns may seem disappointing. Nonetheless, this simple but compelling arithmetic is what we must deal with in establishing reasonable expectations regarding future returns in the financial markets—returns that, in my judgment are almost certain to be well below the returns of the 1980s and 1990s, when we literally 'never had it so good.' The Simple Arithmetic of the CMH Sadly, when we describe our rational expectations for future returns in the financial markets, we are implicitly concealing the central fact of investing. As a group, investors never—never!—enjoy the gross return that the markets deliver. Investors earn the net return, after all of the costs of our system of financial intermediation. Thus, just as gambling in the casino is a zero-sum game before the croupiers rake in their share (I'm told that this is called 'vigorish,' or 'the vig') and a loser's game thereafter, so beating the stock and bond markets is a zero-sum game before intermediation costs, and a loser's game thereafter. The reality is that the mutual fund croupiers rake huge sums off the stock market table. Just consider the annual costs incurred by the investor in the average equity fund: (1) Management fee 0.9 percent, plus other expenses 0.6, for a total expense ratio of 1.5 percent. (2) Hidden portfolio transaction costs of at least 0.8 percent (the average fund turns its portfolio over at an astonishing 100 percent per year, meaning that a $5 billion dollar fund sells $5 billion of stocks every year and reinvests the proceeds in another $5 billion, $10 billion in all). (3) Sales commissions on load funds, about 0.7 percent (a 5 percent commission, spread out over, say, seven years). Total: 3 percent per year.** Most of you are likely familiar with the EMH—the Efficient Market Hypothesis—that suggests that most stocks are fairly valued, most of the time. But the relentless rules of humble arithmetic remind us of something both more certain and more profound than the EMH. I call it the CMH—the Cost Matters Hypothesis—the iron rule that investors as a group must always lose to the stock market by the amount of the costs they incur. The Simple Arithmetic of Fund Expenses and Taxes When we examine the record of the past two decades, the relentless rules of humble arithmetic have clearly proven dangerous to the wealth of most families who have entrusted the responsibility for overseeing their hard-earned assets to mutual funds. That humble arithmetic—gross return, minus cost, equals net return—has destroyed their wealth in almost precisely the measure that our CMH suggests. Investors have learned, and learned the hard way, that in mutual funds it's not that 'you get what you pay for.' It's that, almost tautologically, 'you get what you don't pay for.' Let's look at the record. Over the past 20 years, a simple, low-cost, no-load stock market index fund delivered an annual return of 12.8 percent—just a hair short of the 13.0 percent return of the market itself. During the same period the average equity mutual fund delivered a return of just 10.0 percent, less than 80 percent of the market's annual return. It is no accident that this shortfall of 2.8 percentage points per year, arose largely from those estimated annual costs of about 3.0 percent presented moments ago. Compounded over that long period, each $1 invested in the index fund grew by $10.12—the magic of compounding returns—while each $1 in the average find grew by just $5.73, not 80 percent of the market's return, but a shriveled-up 57 percent—a victim of the tyranny of compounding costs. The magic, alas, is overwhelmed by the tyranny. (The fund industry, of course, focuses on the former and is tight-lipped about the latter.) And that's before taxes. Because of the shocking tax inefficiency engendered by its astonishingly high (100-percent-plus) portfolio turnover, the average managed equity fund cost its taxable investors another 2.2 percentage points in taxes, producing not 57 percent of the market's annual return, but only 41 percent. With the index fund relinquishing only 0.9 points in taxes, the gap between the equity fund and the index fund rises from 2.8 to 4.1 percentage points per year. The average fund deferred almost no gains during this period; the index fund deferred nearly all. (Deferred taxes may be the ultimate example of how you get what you don't pay for.) But the arithmetic gets even worse. For the wealth accumulated in the index fund and the average equity fund should be measured not only in nominal dollars, but in real dollars. When we reduce both returns by the inflation rate of 3.0 percent, the real annual return drops to 8.9 percent for the index fund and to 4.8 percent for the equity fund. That obviously leaves the 4.1 percentage-point gap unchanged. But the compounding of those lower annual returns further widens the cumulative gap. Over the past twenty years, the cumulative profit of each $1 initially invested in the managed fund came to just $1.55 in real terms, after taxes and costs, only 34 percent of the real profit of $4.50 on the index fund. The index fund actually increased your capital by 190 percent! The Simple Arithmetic of Income Expropriation The impact of costs and taxes on mutual fund total returns, however, substantially understates their profound impact on investors. While funds are inordinately tax-inefficient when it comes to capital gains, they are remarkably—and perversely—tax-efficient when it comes to dividend income. Why? Because about 85 percent of the yield of the average equity fund is 'taxed,' as it were, by mutual fund fees and expenses, leaving only 15 percent of the dividend income to be distributed to equity fund investors and taxed by our federal and local governments. Shocking as that may sound, the mathematical reality is that when we deduct equity fund expense ratio of 1.5 percent from today's 1.8 percent dividend yield on stocks, all that remains is a puny net dividend yield of 0.3 percent for the fund owner. There are two simple ways to avoid this confiscation of your income. One way is to do your equity fishing in the low-cost pond. The ten percent of funds with the lowest expense ratios (averaging 0.3 percent) consume 'only' 20 percent of income. (Conversely, the highest-cost ten percent, with expense ratios averaging 2.5 percent, actually consumes 225 percent of those funds' income.) The other way is to own a low-cost stock market index fund, whose costs of as little as 0.1 percent consume a mere 7 percent of its income, leaving 93 percent for you. In the case of bond funds, of course, income is a much more significant factor. A bond fund's net yield typically accounts for about 100 percent of its long-run return. Yet the expense ratio of the average bond fund (0.8 percent) consumes almost 20 percent of its gross yield of 4.5 percent, reducing it to a net yield of 3.8 percent. Further, these numbers substantially understate the confiscatory nature of costs, for most bond funds carry hefty sales commissions. If you pay a 4 ½ percent front-end load to acquire a bond fund, it eats up more than 100 percent of your first year's net income. The way to maximize your income in bond funds is to rely on the same simple arithmetic as in stock funds: either own only low-cost bond funds, where 7 percent of the yield is consumed by expenses, leaving 93 percent for you (and buy no-load funds rather than paying that hefty 4 ½ percent load for the privilege of having your income depleted); or, better yet, own a no-load bond index fund, where, after the deduction of only about 1/10 of 1 percent for expenses, 97 percent of the income goes to you. While today we don't read much about money market funds, the same simple arithmetic applies. The high cost funds eat up 38 percent of your income, and the low cost funds consume just 8 percent. (While there are no indexed money market funds, it's fair to say that almost all money market funds are virtual index funds. Commodity-like, they almost uniformly earn the average returns in the money markets, and deliver returns to investors that are largely differentiated by their costs.) Yet investors in high cost money market funds seem perfectly happy to accept a 1.6 percent yield when a 2.4 percent yield—fully 50% higher—lies there for the taking. But only for those who are willing to do the simple arithmetic. The Simple Arithmetic of Hedge Funds When the outlook for returns on stocks and bonds is as subdued as I have suggested today, it's especially tempting to reach for higher returns by seeking out other kinds of investments. Yet looking for 'something better' than stocks and bonds implies that there is something better. Is there? Today's 'big new idea' for gaining extra returns is 'alternative investments,' although, in fact these alternatives are just stocks and bonds of a different character and mix, boxed in a different and more expensive package. But I wonder if their popularity isn't simply the inevitable reaction of investors (and brokers) who, after one of history's great bear markets, want to buy (or sell!) something new. Hedge funds, of course, are the talk of the town. But please don't forget that many individual hedge funds are taking risks, often hidden, that would send chills up and down one's spine. (Think of the failure of Long-Term Capital Management; think of the 700 hedge funds that reportedly folded last year.) Further, when hundreds of billions of dollars flow into hedge funds, their managers chase an increasingly limited supply of market inefficiencies, and the value to be added by hedging strategies is apt to get arbitraged away. As yesterday's successful managers are flooded with money, their growth virtually precludes their repeating past achievements in the future. What is more, those past achievements of hedge funds have been overrated. A recent study showed that the average hedge fund earned a return of about 9.3 percent per year in 1995-2003, slightly less than the stock market return of 9.4 percent, and more relevantly, less than the 10.1 percent return on a conservative stock/bond balanced fund (which happened to be slightly less volatile). As to the future, simple arithmetic again can help us in evaluating potential hedge und returns. If the stock market were to deliver a 7 percent return in the future, the investor, in a low-expense, tax-efficient index fund, would likely realize a net after-tax return of about 6.2 percent. Even if we grudgingly assume that a hedge fund were to earn 10 percent—no mean task in the tough environment ahead—it would deliver only 4.8 percent, only two-thirds of the net return on the simple index fund. Why? Because the managers would take 2.8 percent (1 percent plus 20 percent of the total return), and taxes (for an investor in the 33 percent tax bracket) could come to an additional 2.4 percentage points, a total reduction of 5.2 percentage points in the 10 percent gross return. The risk of selecting the right hedge fund is huge, and while the popular hedge-fund-of-hedge-funds diversify that risk, they are even more costly. The simple arithmetic of hedge funds—even if you are lucky enough to pick a winner—suggest that their high costs and high taxes will result in inadequate net returns to their investors. My conclusion: nearly all individual investors should join me in resisting succumbing to the siren song of these over-rated hedge fund temptresses. The Simple Arithmetic of Exchange-Traded Funds There's another investment product that has recently caught the eye of the fanciful investing public: the exchange-traded fund, or ETF. These funds are generally low-cost index funds that can be traded in the stock market just like regular stocks. As one advertisement for the Standard and Poor's 500 ETF (the 'Spider', in the lingo of the financial community) says, 'Now you can trade the S & P 500 all day long, in real time.' Leaving totally aside for the moment the question of why anyone in his right mind would want to do that, the simple arithmetic of investing suggests that most investors should ignore this so-called opportunity. As you must know, I love index funds that track the S&P 500 and total stock market. But not as trading vehicles; as vehicles for owning the stock market at low cost and high tax efficiency and holding it, well, forever. But most investors in ETFs seem to be following, not my advice, but the advice in the Spider ad. The share turnover of Spiders during the past year came to a cool 4,536 percent, meaning that the average share was apparently held for a period of less than one day! But as suitable as ETFs may be for long-term investors, they are totally unsuitable for rapid fire traders. Why? Because of costs. Let's take a look at the simple arithmetic of ETFs, and make a few highly conservative assumptions: 1) an investor buys, and later sells 100 shares of the Spider (approximately $12,000; with its bargain basement expense ratio of 0.11 percent (other ETFs can be three or four times as costly to operate). 2) he pays a minimum commission of $35 for each transaction (lower if done electronically, higher if done over the phone); 3) he goes in and out of the Spider (a) twice a year (turnover 200 percent), (b) five times a year (500 percent), or (c) once a month (1200 percent, but still a far cry from the 4,000-plus percent average turnover). The investor's total annual costs, respectively, would then take 1.3 percent, 3.0 percent, and 7.1 percent from his annual return—repeated over time, a large dent! If the investor can successfully time these trades, he may be able to make up these deficits; if not, which is much more likely, he will lose even more than those costs. Only long-term holders are certain to benefit from the glitteringly low expenses of most ETFs. The traders that ETF sponsors appeal to in their ads are destined to be playing a loser's game, all because of the relentless rules of the humble arithmetic of the markets. Simple Arithmetic—Wrapping Up Whether we look at future market returns in the financial markets, or the Cost Matters Hypothesis, or the real world of fund expenses and taxes, or maximizing income, or the superficial appeal of hedge funds and the foolishness of trading ETFs, we are left with one certain conclusion: investors who ignore costs are courting failure; investors who control costs are maximizing their chances of success. The long-term differences in the wealth they accumulate will be truly staggering. Why? Because for the former group, the magic of compounding returns is overwhelmed by the tyranny of compounding costs; for the latter group, the magic of compounding returns stands almost on its own. When the arithmetic of investing suggests lower returns in the financial markets in the years ahead, the ability to capture the fair share (up to almost 100 percent) that you deserve will be more important than ever. Low cost funds—and of course index funds—are the best way to get your fair share. But don't take my word for it. Ask Warren Buffett. Ask his mentor, Benjamin Graham. Ask Jack Meyer, the remarkably successful wizard who tripled the Harvard Endowment Fund from $8 billion to $27 billion. Here's what Mr. Meyer had to say: 'Most people think they can find managers who can outperform, but most people are wrong. 85 percent to 90 percent of managers fail to match their benchmarks. Because managers have fees and incur transaction costs, you know that in the aggregate they are deleting value. The investment business is a giant scam.' When asked, 'can private investors draw any lessons from what Harvard does?' Mr. Meyer answered: 'Yes.' He then recounted the lessons. 'First, get diversified. Come up with a portfolio that covers a lot of asset classes. Second, you want to keep your fees low.' That means avoiding the most hyped but expensive funds, in favor of low-cost index funds. No doubt about it. And finally, invest for the long term.' In a sense, Mr. Meyer is simply stating the obvious: the all-market index fund and the Standard & Poor's 500 Index fund are far better ways to invest than searching through a seemingly-endless list of the products of the marketing-driven, asset-gathering machine that today's mutual fund industry has become. A small minority of managed equity funds may approach that simple ideal, and certainly some few will surpass it. But the odds in favor of success, as I've shown you this evening, are terrible. If that's not enough, ask any economist who's won the Nobel Prize. And if that's not enough, just use your common sense to think through what I've just said. Successful investing is pretty simple. Just do a few simple things right, and avoid making stupid mistakes. Such as thinking that you know more than the market does; investing on impulse, buying on tips, believing that past success repeats itself in the future; and letting your emotions overwhelm your reason. Four Essential Rules Let me close with four essential rules that wise investors, whatever strategy they pursue, should follow: First, pare costs to the bone. Realize that in investing you get what you don't pay for. Whatever future returns the stock and bond markets are generous enough to deliver, few investors will succeed in capturing 100% of those returns, simply because of the high costs of investing—all those commissions, management fees, investment expenses, yes, even taxes. Second, diversify. Own American business and hold on to it. Not one company or industry, but a broadly diversified portfolio of lots of companies and industries. Buy such a portfolio, never sell, and hold it forever. No one knows what stocks will do tomorrow, or even what they'll do over the next decade, but over the long pull the dividends and earnings growth of American business will be reflected in rising stock prices. Third, don't forget to allocate your assets prudently between stocks and bonds. As the years roll on, we have more wealth at stake, less time to recoup losses, and begin to rely on our investments to provide income. Each of these critical factors suggests that, as investors age, we should own even larger bond portions. (A rule of thumb: begin with the idea that your bond percentage should roughly be equal to your age.) Fourth, don't do something, just stand there. Stay the course. Once you get your costs down, your stocks and bonds diversified, and your stock/bond balance right. Not only expenses, but emotions, are the investor's greatest enemy. It may take courage and wisdom, but 'Stay the Course' remains the name of the game. Thank you. * The speeches I gave to AAII on those two dates are included in my 2001 book, John Bogle on Investing, The First Fifty Years. ** I've used the unweighted average expense ratio, higher than the asset-weighted ratio of 1.1 percent. But I've ignored out-of-pocket costs, penalties on early redemption of fund shares, and opportunity cost. (Most equity funds are about 95 percent invested in stocks, thus diluting the market's long-term return premium.)

Subject: Paradise and Money Lost From: Emma To: All Date Posted: Sun, Aug 14, 2005 at 07:22:38 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/14/business/yourmoney/14hedge.html Paradise and Money Lost By JULIE CRESWELL ON Feb. 24, Ronald S. Kochman hurried out of the elevator onto the 17th floor of an office tower in West Palm Beach, Fla., that KL Group, a hedge fund advisory firm, called home. Normally bustling with activity, the place was eerily quiet that morning as Mr. Kochman strode past the elegant conference rooms toward his destination: the corner office of Won Sok Lee, one of the firm's principals. Two days earlier, Securities and Exchange Commission officials had unexpectedly visited KL's offices, demanding to see documents. Now some employees were reporting that Mr. Lee was missing - along with nearly all the money in the firm's accounts. Mr. Kochman, a prominent trust and estate lawyer in the Palm Beach area, had much to lose. Not only had he sunk his savings, about $4 million, into the funds, but he had also put his reputation on the line by urging his own clients to invest with KL, where he had become a principal early last year. So when someone with keys to Mr. Lee's office asked him why he wanted to go in that morning, a tearful Mr. Kochman collapsed on his knees and said, 'It's gone. It's all gone,' according to a person who witnessed the event. 'The money is missing and Won has jumped ship.' Today, the S.E.C., the Justice Department and a court-appointed receiver are still trying to unravel what happened. Investigators now say they believe that more than $200 million of investors' money has vanished, possibly making this one of the largest hedge fund frauds ever. In March, the S.E.C. sued Mr. Lee and two brothers, John and Yung Bae Kim, accusing them of securities fraud. While the funds' managers blinded investors with records showing supposedly dazzling returns, the money was actually being frittered away in bad trades or simply stolen, according to the court-appointed receiver, the law firm Lewis Tein. Mr. Lee and Yung Kim have disappeared, and John Kim, who is cooperating with the investigation, denies any knowledge of wrongdoing. 'These guys were slick. They would have given Barnum & Bailey a run for their money,' said Guy A. Lewis, a partner at Lewis Tein and a former United States attorney for the Southern District of Florida who, in the early 1990's, helped to prosecute Gen. Manuel Antonio Noriega of Panama. 'This wasn't just a straight fraud. It was hocus-pocus, smoke and mirrors.' THIS much is known: Three years ago, Mr. Lee and the Kim brothers opened a hedge fund advisory business in Palm Beach, one of the nation's wealthiest enclaves. Driving flashy cars and living lavish lifestyles, the three principals - all Korean-born Americans in their mid-30's - befriended the right people, who provided them with access to society functions and introductions to their wealthy clients. The aura of success and exclusivity around the firm was so strong that investors often begged to be let into its funds, some of which were said to have astounding annualized returns of 125 percent for several years. Among the funds' 225 investors were some of Palm Beach's elite, including Jerome Fisher, the founder of the Nine West shoe store chain; Carlos Morrison, an heir to the Fisher Body automotive fortune; and golf pros Nick Price and Raymond Floyd, according to people who have seen lists of investors. While Palm Beach is still abuzz about the collapse of KL, few investors want to acknowledge that they were caught up in the frenzy. Donald J. Trump, who owns several properties in the area, said in an interview that he had been contacted about investing in the fund but didn't because he thought the returns were too good to be true. 'These guys duped a lot of people down in Palm Beach, smart people with lots of money,' Mr. Trump said. 'These people feel they were conned, and they're embarrassed. They just don't want to talk about it.' The investigation has been hampered by a web of more than 30 domestic bank accounts - and more overseas - where money was moved around quickly. Individual, hedge fund and proprietary trading accounts were intermingled at the firm, and false bank statements were rampant, according to the receiver. 'There has been a tremendous amount of money lost,' said Scott A. Masel, the S.E.C.'s head counsel in Miami investigating KL. 'We might be looking at something akin to a Ponzi scheme, but the records make it difficult to pin down exactly what happened here.' What's clear is that scores of well-heeled investors missed signs that things were not quite right at KL. It turns out, for example, that the fund's principals had little experience in the securities industry. And there was never a formal independent audit to verify whether the remarkable returns reported by the funds were real. 'Even if the guy running the hedge fund has a sterling 20-year reputation on Wall Street, a sophisticated investor who's going to put $20 million in that fund wants to see those safeguards in place,' said Lewis N. Brown, the counsel for a Palm Beach accounting firm that performed some accounting services for one of the smaller KL hedge funds. 'That didn't happen here.' THE story of KL starts in a San Francisco apartment in the late 1990's, where John Kim and Mr. Lee were caught up in a major fad: day-trading of technology stocks. From what can be pieced together about their background through public records and interviews with former colleagues, the two had virtually no experience trading stocks. (Calls to Mr. Kim's lawyers were not returned. Yung Kim and Mr. Lee could not be reached.) Mr. Lee grew up in Las Vegas - where his father now works as a marketing executive at the Bellagio Hotel and Casino - and earned a law degree at Tulane University in 1996. He worked as an associate in the gambling department at a Las Vegas law firm, and, in the late 1990's, in the tax department at a San Diego law firm. John Kim and Yung Kim grew up in a Virginia suburb of Washington. John, who is also known as Jung Kim and is the older of the two, told colleagues that he had graduated from George Washington University and then operated a coffee importing business in South Korea, but that the government took it away and deported him because it was so successful. Mr. Kim bragged to others that he had a vast Wall Street background, often evoking his time in the mergers and acquisitions department at Merrill Lynch, according to former colleagues. (Merrill Lynch said it had no records that Mr. Kim had ever worked there.) The NASD, a regulator that licenses securities professionals, says it has no records that any of the firm's original three principals had the necessary licenses to trade stocks for clients, which a Wall Street brokerage firm would require. Such licenses, however, are not needed to run a hedge fund. Whatever their credentials, Mr. Kim and Mr. Lee rode the tech boom, reporting strong returns to friends and associates. Soon they began attracting outside investors. Eventually, they moved their operation to an office in Irvine, Calif., where they hired a number of young, fairly inexperienced people to trade the principals' own money, or proprietary accounts, while Mr. Kim focused on trading clients' and hedge fund assets. Mr. Lee handled back-office duties and Yung Kim served as the firm's chief financial officer. In August 2002, John Kim and a childhood friend, Rob Melley, decided to open an East Coast branch of KL in the Palm Beach area. But within a couple of months, the two friends had a falling-out after Mr. Kim became frustrated over what he felt was the slow pace of the Palm Beach expansion, according to a former employee who did not want to be identified because of continuing investigations. Mr. Melley walked away from the venture, although his father, James, who was also very close to Mr. Kim, remained a KL investor, according to the former employee. Calls to Rob Melley's residence and to James Melley's lawyers were not returned. Through James Melley, Mr. Kim and his partners met the man who would play a crucial role in giving them entry to the Palm Beach scene: Ronald Kochman. Since the late 1990's, Mr. Kochman had built a lucrative trusts-and-estates practice, counting a number of Palm Beach's movers and shakers as clients. 'Kochman had one of the pre-eminent practices down here,' said Richard Rampell, an accountant who worked with Mr. Kochman on several occasions. 'In the last couple of years, he probated two estates that were well into nine or even 10 figures. He was the envy of a lot of lawyers.' Mr. Kochman would not comment for this article. According to investigators and KL employees, Mr. Kochman became increasingly involved with the firm and formed a close friendship with Mr. Kim, who made him one of its principals. Mr. Kochman, these people said, believed that there were greater riches to be reaped if KL were sold to a large Wall Street firm, as Mr. Kim indicated it eventually would be. They said Mr. Kochman planned to downsize his trusts-and-estates business in order to play an even bigger role at KL. Trusting his new friends, Mr. Kochman provided introductions to his clients and friends and was responsible for bringing in many of KL's investors, according to investigators. His role has now become a focal point among investigators and lawyers representing some of the clients that he put into the fund. Gary Klein, a former S.E.C. branch chief whose firm, Klein & Sallah, represents 65 investors who lost at least $90 million in KL, said that a number of them were also clients of Mr. Kochman's law practice. 'That was clearly a breach of fiduciary duty if Kochman was a principal at KL and didn't disclose it,' Mr. Klein said. Mr. Kochman's lawyer would not comment on whether his client had recommended his own clients to the fund. 'I think Mr. Kochman believed that there might be a future for him' at KL, said his lawyer, Morris Weinberg Jr. 'This looked like a wonderful opportunity that, obviously, didn't work out.' NOT that it was all that difficult for KL to persuade investors to jump into the funds with both feet. Its main fund reported strong returns of 70 percent in 2003 and 40 percent in 2004, according to statements given to investors. The lifestyle of the funds' original three principals also supported the picture of a business doing well. The young men drove flashy cars: Maseratis, Porsche 911's and Mercedes SL 500's. (The firm's personal masseuse drove a Jaguar X-Type that was provided by KL.) End-of-year holiday parties were held in Las Vegas, where Mr. Kim and Mr. Lee were high-rolling VIP's at several casinos. The crown jewel was KL's luxurious offices in the new Esperante building in downtown West Palm Beach. The large sunlit offices were filled with gorgeous desks designed by Dakota Jackson and a conference table that had to be hoisted 17 floors through the building's elevator shaft. Some walls were covered in a gray suede fabric, and in the corner of Mr. Kim's office was a $6,000 massage chair. The trading floor had large flat-panel televisions scattered throughout. It all was a great way to impress clients, who were ushered in to watch the main attraction: Mr. Kim. From his captain's chair, he traded frenetically, surrounded by 20 computer screens. But like so many things at KL, not all was what it seemed. There were, for instance, the many faces of Mr. Kim himself. To KL's investors, he was charismatic and respectful. Several older men who invested in the fund are said by former employees to have treated him like a son. Inside KL, though, Mr. Kim's moods swung sharply. At times, he was extremely patient and friendly with the young traders, going to their homes for poker games. Some employees, however, describe Mr. Kim as an egotistical bully who would have fits of rage. And Mr. Kim may not have been as successful an investor as he wanted people to believe. In fact, a former KL trader said that Mr. Kim did not make any money at all in his trading activities. In KL offering letters, Mr. Kim claimed to have developed a proprietary technical analysis system called 'SmartCharts' that involved short-selling stocks that were making highs in the market - betting that those stocks would lose value. 'Essentially, John was constantly trading against the trend,' recalled the trader, who also did not want to be identified because of his involvement in continuing regulatory investigations. 'The strongest stocks in the fall of 2004 were stocks he was selling short.' Those shorted stocks included those of eBay, Yahoo and Research in Motion, the maker of the BlackBerry wireless device, this trader said. The trader said Mr. Kim often traded ahead of a company's quarterly earnings report - a bet on whether the company would miss, meet or beat Wall Street's expectations. The firm's proprietary traders weren't faring very well, either. A majority of the young, inexperienced traders were not making enough money from their bets in the market to earn a commission. Instead, they were receiving a $1,500 draw each month that they were expected to pay back, according to the receiver. Based on the receiver's investigation so far, it appears that any trading profits the firm recorded during 2003 or 2004 were promptly stolen by the defendants in the securities fraud case, according to Michael R. Tein, a former federal prosecutor who is now a partner at Lewis Tein. As losses mounted late last year, the house of cards holding up KL began to collapse. Last fall, a number of investors started to clamor for an independent audit of KL's funds. 'We told them, 'We have to have audits done on this thing,' ' said a person who invested in one of KL's funds in early 2004 but did not want to be identified because he did not want to be associated with the scandal. 'They kept promising they would do it, but kept putting it off.' The investor said he was even offered 'big incentives' in a meeting late last year with John Kim and Mr. Kochman to bring in new investors. 'I told them when you give me a confirmed, certified audit, I'll consider doing something for you,' the investor said. Certain investors who were receiving daily and weekly updates on the performance of KL's funds realized that they were starting to lose money. Between the losses and the lack of a certified audit, at least two large KL investors filled out withdrawal slips so that they could remove about $10 million from the funds by the end of the year, according to a former employee. Fearing that investors would redeem more money from the funds - money the funds may not have had, according to investigators - the firm's principals raced to stop the outflows. One of their biggest investors who was ready to bolt late last year was a local eye surgeon, Dr. Salomon E. Melgen. By last fall, Dr. Melgen intended to withdraw some of the $12.3 million investment that he and a holding company he controlled had already given to John Kim to manage, according to a lawsuit he filed against the advisory firm and its principals. (Mr. Melgen's lawyer said he would not comment for this article.) Instead, in October, John Kim and Mr. Lee signed a document that guaranteed that Dr. Melgen's $12.3 million would be repaid at the end of January 2005, according to the document. The money was to be set aside in a separate account and traded only by John Kim. Dr. Melgen had invested an additional $7 million in one of KL's funds and put $1 million in a separate account under an agreement that would allow Mr. Kim to use an airplane owned by Dr. Melgen. Within four months of Dr. Melgen's receiving the signed guarantee, his $20 million investment had disappeared, according to the lawsuit. In late February, regulators from the S.E.C. entered KL's California and Palm Beach offices simultaneously, demanding to see documents. Mr. Kim avoided the regulators in West Palm Beach, saying he couldn't be bothered during trading hours, a former employee said. In California, though, regulators met with both Mr. Lee and Yung Kim, S.E.C. documents show. After the meeting, investigators said, Mr. Lee walked out of the office, leaving a half-eaten bag of cookies on his desk. The next morning he went to the airport and bought a one-way ticket for South Korea, using frequent-flier miles, the investigators said. The day after that, Yung Kim disappeared as well. A few days after the S.E.C. appeared on KL's doorstep, John Kim invited about 30 employees to his home. As the employees listened in shock, he said that the company was under investigation and that his brother and Mr. Lee were missing. He said nothing about missing funds. 'John put his arms around me, apologized profusely about what was happening and told me he didn't know anything,' said Al Farinelli, the firm's controller. 'He said his brother was responsible for everything.' John Kim's assets have been frozen by the S.E.C., but he agreed to cooperate with investigators in exchange for being granted access to enough money to pay for eye surgery for his young daughter earlier this year, according to the S.E.C. Mr. Kim has said that, based on his knowledge of his own trading activity, the hedge fund was profitable, according to testimony he provided to regulators in March. If losses did occur, he said, he had no idea whether they were a result of trading screens that had been doctored, or if Mr. Lee and Yung Kim had lost any profits in their own trading activities. Some KL investors say they believe him. 'I think John Kim is a victim in all of this. So is Ron Kochman,' said a female investor who didn't want to be identified but who was friendly with Mr. Kim and his family as well as with Mr. Lee. When asked if she held Mr. Kim responsible for losses she incurred, the investor said, 'I'm the only one responsible for deciding to be in the fund.' LAWYERS at Lewis Tein said they had fielded calls from investors who were eager to give Mr. Kim money again because they believed he could make it back for them. But several people who once called Mr. Kim a friend said they are skeptical of Mr. Kim's claims. 'We're reviewing documents, e-mails and trading records and some of what we've seen so far may not support Mr. Kim's position,' said David B. Rosemberg, a lawyer at Lewis Tein. Other people said they were bothered by a last-minute trip that Mr. Kim made to South Korea in December, when he bought a $650,000 home in Seoul. Furthermore, the S.E.C. said this spring that at least $20 million of investor funds were diverted for the personal use of KL's principals, including Mr. Kim. Investigators said they believe that the fancy cars and even some of Mr. Kim's mortgage payments came directly from KL's coffers. Will the whole story of KL ever be known? Investigators are poring over documents and statements, trying to put together what happened, but that will take months, and even then a clear picture may not emerge. As for the millions lost by investors, it is unlikely that much will be recouped, according to lawyers involved in the case. But people searching for a bigger lesson from the story of KL might find it in a sign at the firm's opulent West Palm Beach offices. It lists KL's 36 trading principles. No. 26? Greed kills.

Subject: Dear Bobby From: Terri To: All Date Posted: Sat, Aug 13, 2005 at 18:19:43 (EDT) Email Address: Not Provided Message: Dear Bobby, when you clean the message board can you leave us a set of recent posts again. Thanks for all always :)

Subject: Why the Little Guy Just Can't Win From: Emma To: All Date Posted: Sat, Aug 13, 2005 at 18:03:29 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/13/business/13nocera.html Pro Tells Why the Little Guy Just Can't Win By Joseph Nocera WHEN I started out on this new book,' David F. Swensen was saying the other day, 'I thought I was going to take what we do at Yale and make it accessible to the individual investor.' Oh, lucky day! Mr. Swensen, the chief investment officer of the Yale endowment - and to my mind, the best manager of institutional money in the United States - was going to show you and me how to invest the way he does. To his surprise, however, the book Mr. Swensen eventually wrote, 'Unconventional Success: A Fundamental Approach to Personal Investment,' published this last Tuesday, turned out to be the opposite of what he intended. Its title notwithstanding, it doesn't show the little guy how to invest like Yale. Instead, it shows why the little guy will never be able to invest the way Yale does. For all the 'democratization' that has taken place in the world of personal investing the deck is still stacked against the individual. That was Mr. Swensen's fundamental discovery. And his willingness to change course and turn 'Unconventional Success' into a polemic aimed primarily at mutual fund companies, but also at other Wall Street types who fleece the little guy, is to his everlasting credit. After all, he could have told us to buy stocks in companies whose products we buy at the supermarket, like a certain investment genius of a previous era. Any regrets about that advice, Peter Lynch? A YALE graduate and a protégé of the Nobel laureate James Tobin, David Swensen took over the Yale endowment in 1985, at the tender age of 31, after a brief stint on Wall Street. Within a few years, he had turned it into the best-run, most influential institutional fund in the country - the fund that every other institution wants to emulate. His track record is astounding: over the last two decades, Yale has generated average annual returns of 16.1 percent, a number no one else can touch. The fund itself has grown in that time to over $15 billion from $1.3 billion, even though it now spends over $550 million a year to help cover Yale's operating budget. Even more impressive, though, is the way Mr. Swensen and his Yale colleagues have gone about generating those returns. When Mr. Swensen first took over, Yale's portfolio held stocks and bonds, period. Like most institutional portfolios of that time, 'it was neither diversified nor particularly equity-oriented,' Mr. Swensen recalled. Today, the endowment has barely 5 percent in bond holdings. 'The other 95 percent,' he said, 'are in places that we think will provide 'equity like' returns.' Which is not to say it is all in equities. On the contrary, the Yale portfolio is extraordinarily diversified, which both lifts returns and protects against disaster. At the end of the 2004 fiscal year, Yale had a mere 15 percent of its assets in domestic equities, and another 15 percent in foreign stocks. It had 15 percent in private equity, and 18 percent in 'real assets,' which includes investments in timber and energy. But its biggest percentage, 26 percent, was in something called 'absolute return.' That is a category invented by Mr. Swensen in 1990. It means hedge funds. Before Mr. Swensen arrived on the scene, hedge fund investors were almost exclusively rich people. But he quickly realized that the best hedge fund managers were extremely skilled, and he began putting Yale's money in a variety of hedge funds. Eventually, other institutions realized that Yale was making money in good markets and bad ones, and they raced to copy Mr. Swensen's model. If you want to understand why hedge funds are exploding these days, a big reason is that every big institutional investor in the country is trying to do what Yale does. His new book has given Mr. Swensen a greater appreciation of the enormous advantages he has as an institutional money manager, starting with the obvious fact that he has a staff that spends full-time researching investment possibilities. Thus, he takes it as a given that individuals shouldn't pick stocks themselves. 'I see every day how competitive the markets are, and how tough. So the idea that you can do this yourself, that's out the window.' But as he looked around at the alternatives for individuals, he found himself horrified by what he saw - especially at the $8 trillion mutual fund industry, which is the primary means through which individuals invest in the market. Although his prose tends to be on the academic side, his sense of outrage comes through on every page of 'Unconventional Success.' What is it about mutual funds Mr. Swensen finds offensive? Just about everything. He hates the way the loads and all the hidden fees mean that the investor is always behind the eight ball. (When I asked him about hedge fund fees, which are much higher, Mr. Swensen replied: 'I don't mind paying a lot for actual performance. Besides, when we negotiate fees, it's sophisticated investor versus fund manager. It's a fair fight.') He thinks that it is criminal for fund companies to allow popular funds to balloon in size, making it nearly impossible for the manager to beat the market. He hates the way the industry pushes exactly the wrong fund at the wrong time - Internet-oriented funds at the height of the bubble, for instance. (He has one example of a Schwab advertisement during the bubble that is simply devastating.) He notes, as others have before, that the vast majority of actively managed funds underperform. He uses 'invidious,' 'investor-damaging' and 'dirty scheme' to describe the general behavior of the industry. Even the mutual fund monitoring companies don't help even the odds. Mr. Swensen absolutely skewers Morningstar, the company that has built its reputation rating mutual funds. His data shows that, like Moody's belatedly downgrading a corporate bond, Morningstar downgrades this or that poorly performing mutual fund only after the damage has been done. His core point, though, is that the for-profit fund industry has a fundamental conflict between its desire for corporate profits and its fiduciary duty to its investors. And the profit motive wins out every time. So does Mr. Swensen offer any hope at all? Some. He thinks we'd all be better off sticking with index funds, instead of trying to beat the market. He thinks we should get our index funds from Vanguard, with its rock-bottom fees. (As a not-for-profit company, Vanguard also doesn't have the central conflict of interest.) We should have a diversified portfolio of index funds, for the same reason Yale does. We should be disciplined in our approach, especially in rebalancing our portfolio to stick to our diversification targets. Of course, this invariably means paring back on winners and increasing our investment in laggards. But as sensible, and, in truth, not particularly unconventional, as this advice is, how many of us will actually follow it? Human beings simply aren't hard-wired to be good investors. Think about it: how many of us, really, have the fortitude to pare back our winners and buy more of our losers? Most of us do just the opposite. Heck, so do most mutual fund managers, which is why they can't beat the market either. There is a reason we as a culture have accorded hero-like status to great investors like Warren E. Buffett and Peter Lynch. For all the cultural reinforcement we get that investing is something anybody ought to be able to master, we know in our bones it's not true. Mr. Buffett and Mr. Lynch are like great athletes, who have the skill and the emotional makeup to do something well that the rest of us can only dream about. That describes David Swensen, too. What he has to say is worth listening to. But will we ever truly hear it?

Subject: Re: Why the Little Guy Just Can't Win From: Emma To: Emma Date Posted: Sat, Aug 13, 2005 at 18:06:58 (EDT) Email Address: Not Provided Message: Notice that Vanguard index funds become the alternative investments. I will read this book in the next couple of days, even though a Yalie od all people wrote it :) I will then deny reading it however.

Subject: Re: Why the Little Guy Just Can't Win From: Emma To: Emma Date Posted: Sat, Aug 13, 2005 at 18:08:28 (EDT) Email Address: Not Provided Message: Oh, Bobby is a Yalie. But, we forgive Bobby.

Subject: Re: Why the Little Guy Just Can't Win From: Dorian To: Emma Date Posted: Sun, Aug 14, 2005 at 02:10:52 (EDT) Email Address: Not Provided Message: A very good article Emma. I look forward to your report on the book. Might very well order it from my library. Thanks, Dorian

Subject: More Africans Enter U.S. From: Emma To: All Date Posted: Sat, Aug 13, 2005 at 14:19:41 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/02/21/nyregion/21africa.html?ex=1124596800&en=575a695f2433d525&ei=5070&emc=eta1 February 21, 2005 More Africans Enter U.S. Than in Days of Slavery By SAM ROBERTS For the first time, more blacks are coming to the United States from Africa than during the slave trade. Since 1990, according to immigration figures, more have arrived voluntarily than the total who disembarked in chains before the United States outlawed international slave trafficking in 1807. More have been coming here annually - about 50,000 legal immigrants - than in any of the peak years of the middle passage across the Atlantic, and more have migrated here from Africa since 1990 than in nearly the entire preceding two centuries. New York State draws the most; Nigeria and Ghana are among the top 20 sources of immigrants to New York City. But many have moved to metropolitan Washington, Atlanta, Chicago, Los Angeles, Boston and Houston. Pockets of refugees, especially Somalis, have found havens in Minnesota, Maine and Oregon. The movement is still a trickle compared with the number of newcomers from Latin America and Asia, but it is already redefining what it means to be African-American. The steady decline in the percentage of African-Americans with ancestors who suffered directly through the middle passage and Jim Crow is also shaping the debate over affirmative action, diversity programs and other initiatives intended to redress the legacy of slavery. In Africa, the flow is contributing to a brain drain. But at the same time, African-born residents of the United States are sharing their relative prosperity here by sending more than $1 billion annually back to their families and friends. 'Basically, people are coming to reclaim the wealth that's been taken from their countries,' said Howard Dodson, director of the Schomburg Center for Research in Black Culture, in Harlem, which has just inaugurated an exhibition, Web site and book, titled 'In Motion,' to commemorate the African diaspora. The influx has other potential implications, from recalibrating the largely monolithic way white America views blacks to raising concerns that American-born blacks will again be left behind. 'Historically, every immigrant group has jumped over American-born blacks,' said Eric Foner, the Columbia University historian. 'The final irony would be if African immigrants did, too.' The flow from Africa began in the 1970's, mostly with refugees from Ethiopia and Somalia, and escalated in the 1990's, when the number of black residents of the United States born in sub-Saharan Africa nearly tripled. Combined with the much larger flow of Caribbean blacks, the recent arrivals from Africa accounted for about 25 percent of black population growth in the United States over all during the decade. Nationally, the proportion of blacks who are foreign born rose to about 7.3 percent from 4.9 percent in the 1990's. In New York City, about 1 in 3 blacks are foreign born. According to the census, the proportion of black people living in the United States who describe themselves as African-born, while still small, more than doubled in the 1990's, to 1.7 percent from about 0.8 percent, for a total estimated conservatively at more than 600,000. About 1.7 million United States residents identify their ancestry as sub-Saharan. Those numbers reflect only legal immigrants, who have been arriving at the rate of about 50,000 a year, first mostly as refugees and students and more recently through family reunification and diversity visas. Many speak English, were raised in large cities and capitalist economies, live in families headed by married couples and are generally more highly educated and have higher-paying jobs than American-born blacks. There is no official count of the many others who entered the country illegally or have overstayed their visas and who are likely to be less well off. Kim Nichols, co-executive director of the African Services Committee, which directs newcomers to health care, housing and other services in the New York region, estimates that the number of illegal African immigrants dwarfs the legal ones. 'We think it's a multiple of at least four,' she said. Africans' reasons for coming echo the aspirations of earlier immigrants. 'Senegal became too small,' said Marie Lopy, who arrived as a student in 1996, worked as a bookkeeper in a restaurant and earned an associate degree in biology from the City University of New York. After winning a place in an American immigration lottery that his secretary had entered for him in 1994, Daouda Ndiaye recalls being persuaded by his six children to leave Senegal, where he was working as a financial manager. 'I said, 'I'm 45, I'd have to build a whole new life, I'd have to go to school to learn English,' ' he recalled. 'They said, 'We want you to go and we want you to send for us because there's more opportunity in the U.S. than here.' ' His wife and two of his children have joined him in the United States, where he has worked as a sporting goods store manager and is now a translator. That the latest movement of black Africans arriving voluntarily surpasses the total who disembarked in chains before the United States outlawed international slave trafficking is a bit of a statistical anomaly. That total, most historians now agree, was about 500,000, with an annual peak of perhaps 30,000, compared with the millions overall who were sold into slavery from Africa. Many died aboard ship. Most were transported to the Caribbean and Brazil, where they were vulnerable to indigenous diseases and to the rigors of raising sugar cane, which was harder to cultivate than cotton or rice, the predominant crops on plantations in the United States, where the slave population was better able to survive and reproduce. Moreover, black Africans represented a much higher proportion of the population then than they do today. In 1800, about 20 percent of the 5 million or so people in the United States were black. Among nearly 300 million Americans today, about 13 percent are black. Still, with Europe increasingly inhospitable and much of Africa still suffering from the ravages of drought and the AIDS epidemic and the vagaries of economic mismanagement, the number migrating to the United States is growing - despite the reluctance of some Africans to come face to face with the effects of centuries of enduring discrimination. In the 1960's, 28,954 legal immigrants were admitted from all of Africa, a figure that rose geometrically to 80,779 in the 1970's, 176,893 in the 1980's and 354,939 in the 1990's. In 2002, 60,269 were admitted, including 8,291 from Nigeria, 7,574 from Ethiopia, 4,537 from Somalia, 4,256 from Ghana and 3,207 from Kenya. To many Americans, the most visible signs of the movement are the proliferation of African churches, mosques, hair-braiding salons, street vendors and supermarket deliverymen, the controversy over female genital mutilation and the election last year of Barack Obama, son of a native Kenyan, to the United States Senate from Illinois. Especially in New York City, the shooting deaths of two unarmed African immigrants, Amadou Diallo from Guinea in 1999 and Ousmane Zongo from Burkina Faso in 2003, come to mind. Immigrants arrive with their own perceptions and expectations, from countries where blacks constitute a majority at every level of society, only to discover that whether they are professors or peddlers, they may be lumped together here by whites and even by American-born blacks. 'You have the positive impact that race is not seen to be an absolute definer of people's opportunities,' Kathleen Newland, director of the Migration Policy Institute, a nonpartisan research group, said, 'but that begs the larger question of what does it mean to have a black skin in the United States.' Agba Mangalabou, who arrived from Togo in 2002, recalls his surprise when he moved here from Europe. 'In Germany, everyone knew I was African,' he said. 'Here, nobody knows if I'm African or American.' Ms. Lopy, who now works as a medical interpreter for the African Services Committee, describes herself as 'African, first and foremost,' though the identity of her children will depend on whom she marries and where. 'I'll raise them to be African-something,' she said, 'but ultimately they'll define it for themselves.' Sylviane A. Diouf, a historian and researcher at the New York Public Library's Schomburg Center and Dr. Dodson's co-author of 'In Motion,' said that Americans have a more positive view of immigrants in general than they do of American-born blacks. Referring to African immigrants, she said: 'They are better educated, they're here to work, to prosper, they're more compliant and don't pose a threat.' Dr. Dodson added, 'They're not politically mobilized as yet and not as closely tied to the African-American agenda.' While the ancestors of most Caribbean-born blacks were enslaved, and slavery also victimized the forbears of many African-born blacks, the growing proportion of immigrants may further complicate the debate over programs envisioned to redress the legacies of slavery. 'I think there is a legitimate set of specific claims by persons born in the United States that don't necessarily apply to Caribbean or African populations that have come here subsequently,' Dr. Dodson said. 'African-born and Caribbean-born brothers and sisters have realized that the police don't discriminate on the basis of nationality - ask Amadou Diallo,' said Professor Charles J. Ogletree Jr., who teaches at Harvard Law School and has warned colleges and universities that admitting mostly foreign-born blacks to meet the goals of affirmative action is insufficient. 'Whether you are from Brazil or from Cuba, you are still products of slavery,' he continued. 'But the threshold is that people of African descent who were born and raised and suffered in America have to be the first among equals.' French-speaking Haitians do not necessarily mix with English-speaking West Indians, much less with Africans, and competition for jobs has been another source of tension. 'The Africans tend to be quite industrious and entrepreneurial and often take advantage of opportunities that might have been here for others before,' said Kim Nichols of the African Services Committee. 'We're talking about very profoundly different cultures,' Kathleen Newland said. Analyses by the Department of City Planning, and by the Lewis Mumford Center for Comparative Urban and Regional Research, in Albany found recent immigrants often segregated from other blacks. The census found Nigerian clusters in Flatlands and Canarsie in Brooklyn and Ghanaians in Morris Heights and High Bridge in the Bronx. 'As with European ethnics at the turn of the century,' Joseph J. Salvo, the director of the population division of the Department of City Planning, and Arun Peter Lobo, the deputy director, wrote recently, 'ethnicity has been a powerful force in shaping black residential settlement in New York.' Immigration may also shift some of the nation's focus from racial distinctions to ethnic ones. 'Certainly, South Africa showed us that minority status does not necessarily correlate to one's position in society, but rather that power and its uses are the issues,' said Samuel K. Roberts of Columbia, a history professor who is also on the faculty of the university's Institute for Research in African-American Studies. 'That being said, increasingly distinguishing between black Americans and black Africans may produce conditions in which we will be less prone to think of a fictional construct of 'race' as the distinguishing factor among all of us in North America.' How long might those distinctions last? 'I guess one of the questions will have to be what happens in the next generation or two,' said Professor Foner of Columbia. 'In America, marriage is the great solvent. Are they going to melt into the African-American population? Most likely yes.'

Subject: The Dollar Problem From: Terri To: All Date Posted: Sat, Aug 13, 2005 at 11:32:49 (EDT) Email Address: Not Provided Message: The problem is the dollar is overvalued from a trade perspective, but growth in Europe and Japan and elsewhere is still highly dependent on exports demand from America and decline in the value of the dollar will be at least somewhat resisted. China has increased the value of the Yuan by 2%, which will have a minimal effect on trade, and she is not likely to be successfully pressured from here. So, the dollar should lose value but how? Currency traders have just not attacked the dollar so far. They might well regret attacking the dollar dearly.

Subject: Racial and Ethnic Minorities Gain From: Emma To: All Date Posted: Sat, Aug 13, 2005 at 06:00:29 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/12/national/12census.html Racial and Ethnic Minorities Gain in the Nation as a Whole By ROBERT PEAR WASHINGTON -The nation as a whole is moving in the direction of its two most populous states, California and Texas, where members of racial and ethnic minorities account for more than half the population, the Census Bureau said Thursday. Non-Hispanic whites now make up two-thirds of the nation's total population, the bureau said, but that proportion will dip to one-half by 2050, according to the agency's latest projections. In a new report, estimating population levels as of July 1, 2004, the Census Bureau said Texas had a minority population of 11.3 million, accounting for 50.2 percent of its total population of 22.5 million. Texas is the fourth state in which minority groups, taken together, account for a majority of the population. But no one racial or ethnic group by itself accounts for a majority of the total population there. Steven H. Murdock, the state demographer for Texas, said, 'In some sense, Texas is a preview of what the nation will become in the long run.' 'Our future in Texas is increasingly tied to our minority populations,' Mr. Murdock said. If their education and skills continue to lag, he added, the state will be less competitive in the global economy. Members of racial and ethnic minorities also make up more than half the population in Hawaii (77 percent) and New Mexico (56.5 percent). In California, state officials said minorities had accounted for more than half of the population since 1998, and the Census Bureau said they now made up 55.5 percent of the total. Minorities accounted for about 40 percent of the population in each of five other states: Maryland, Mississippi, Georgia, New York and Arizona. New York had the largest black population, 3.5 million, while California had the largest Hispanic population (12.4 million) and the largest Asian population (4.8 million). Mr. Murdock said immigration accounted for half of the recent increase in Texas's minority population, while half was because of the excess of births over deaths. Hispanic women, who are having children at a rate of 3 per woman, had a significantly higher fertility rate than blacks, with an average of 2.3, and non-Hispanic whites, with an average of 1.9, Mr. Murdock said. In the four-year interval from the last census, in April 2000, to July 2004, the bureau reported, the total population of the United States grew 4.3 percent, to 293.7 million, and the black population increased by 5.7 percent, to 39.2 million. But, it said, the Asian population increased 16.2 percent, to 14 million, and the Hispanic population rose 17 percent, to 41.3 million. Hispanics can be of any race. In the same four-year period, the bureau said, the non-Hispanic white population grew 1.1 percent, to 197.8 million, while the rest of the nation - the 'minority population' - grew 11.6 percent, to 95.8 million. Cecilia Muñoz, a vice president of the National Council of La Raza, a Latino civil rights group, said: 'This great diversity and constant demographic change make us a dynamic country. They do not cause unrest or commotion. They are part of a process that's intrinsically American.' Ms. Muñoz said 'the political strength of Latinos takes a while to catch up with our demographic strength,' in part because one-third of the Latino population is under the age of 18 and many Hispanics are not citizens. Among counties, the Census Bureau said, Los Angeles had the largest Hispanic population, 4.6 million, and the largest Asian population, 1.4 million. Non-Hispanic whites accounted for just 30 percent of the county's total population of 9.9 million. Cook County, Ill., which includes Chicago, had the largest black population, 1.4 million. The Census Bureau figures show that Hispanics account for 36 percent of the total population in the nation's five largest counties: 9.1 million of the 25.4 million people who live in Los Angeles, Cook County, Harris County, Tex. (Houston), Maricopa County, Ariz. (Phoenix) and Orange County, Calif. In Texas, as in many other states, said Mr. Murdock, a professor at the University of Texas, San Antonio, 'the white population is growing very slowly, while other racial and ethnic groups are growing quite rapidly.' Officials in California and Texas said Hispanics had fanned out across their states, while the black population tended to be more concentrated in urban areas. Hispanics are the largest ethnic group in four of the five largest cities in Texas, Houston, Dallas, San Antonio and El Paso, Mr. Murdock said. But, he said, they also account for much of the population growth in rural counties.

Subject: Assess Your Area's Real Estate Bubble From: Emma To: All Date Posted: Sat, Aug 13, 2005 at 05:59:49 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/13/realestate/13froth.html Do Try This at Home: Assess Your Area's Real Estate Bubble By DAMON DARLIN For the first time since the residential real estate marathon began 13 years ago, parts of the country are showing signs of exhaustion. But if you rely on the experts to declare that a particular area's bubble has popped, you may have waited too long. So how can a homeowner tell if a market is about to go bust? This may be one of those rare occasions when professionals parsing data are at a disadvantage to regular people watching the market. That's because the main driver of today's market is consumer psychology. Home prices go up as long as people expect them to go up. When they stop believing, prices fall - and no economist in Washington can get wind of that faster than someone chatting over knockwurst at a neighborhood block party. 'Economists looking at the macrodata will be the last to know,' said Richard A. Brown, chief economist at the Federal Deposit Insurance Corporation. What you will learn from the professionals who are dutifully crunching numbers is that prices are not falling significantly in any of the hot markets, but in a dozen or so cities in the Northeast and in California, they are near the peak. In Boston, for example, the time that homes are sitting on the market has stretched to 46 days from 39 days a year ago. An analysis of price appreciation, done for The New York Times by the Joint Center for Housing Studies at Harvard, shows that the price appreciation in cities including New York City; Austin, Tex.; Philadelphia; and Providence, R.I., are decelerating. Appreciation in Detroit and Denver has already slowed to a crawl. 'It's taking a lot longer to sell a home,' says Karl A. Martone, a Re/Max Properties agent in Providence, where homes now sit on the market an average of 65 days, up from 14 days a year ago. The region has almost six months of inventory, which is up 35 percent from a year ago. Vicki Doran, a real estate agent with Coldwell Banker in Providence, says: 'It's switching to a buyer's market. Last year buyers had to snap things up. Now they can shop around.' Even a few markets in hard-charging California - San Diego, Orange County and Santa Cruz - are part of the trend, according to data from the first three months of the year. Data for the second quarter to be released by the government on Sept. 1 may confirm the trend. But already Christopher Thornberg, senior forecaster at UCLA Anderson Forecast, a service of the University of California, Los Angeles, says California has 'peaked and is already coming down the back side.' On Tuesday, David A. Lereah, the chief economist at the National Association of Realtors, said that the housing market was 'probably close to a peak right now.' Take a look at the hot San Diego condo market. In Park Place, one of the many sleek towers of condominiums recently slung up around Petco Park, a one-bedroom condo is offered for $719,000. Someone buying it would expect to make mortgage payments of about $3,775 a month, plus monthly maintenance fees. But someone really wanting to live in the high-rise, with hardwood floors, granite countertops and city views for a lot less, could rent a nearly identical unit in the same building for $2,400 a month. That is clear evidence prices have to move down. You are more apt to see that the price of residential property no longer is connected to its underlying value than a person looking only at spreadsheets of sales data. Prices in overheated markets must, by definition, come back down to the mean. Knowing which way the market is headed before buying or selling is extremely important to anyone who wants to protect the wealth tied up in a house. And it certainly matters to anyone who is thinking of buying because it never makes much sense to buy at the top of the market. 'The turning point is pretty important,' Mr. Brown said, 'because the trend will play out for years.' The trouble is, economists have been wrong before when they try to call the market. Three years ago, Dean Baker, co-director of the Center for Economic and Policy Research in Washington, said that it would be only a matter of months before prices began to fall. Prognosticators at the research firm Economy.com declared that the peak was last summer. Celia Chen, the firm's director for housing economics, is now saying that it will come this year. 'The timing is always difficult with these things,' admits Ian Morris, chief United States economist at HSBC Securities U.S.A., who made the same call, repeatedly. John Karevoll, an analyst with DataQuick Information Systems, which provides real estate data to lenders, said: 'We've been told for years that the peak is just around the corner. The economists have so much egg on their faces.' Don't be too hard on them. It's the nature of their science. N. Gregory Mankiw, the Harvard University professor and former head of the White House Council of Economic Advisers, made one of the most famous miscalls. In 1989 he wrote a paper arguing that the aging of the baby boomers was going to undermine the housing market in the 1990's and 2000's. Whoops. Though it appears the shift is now at hand, the end of the bubble will not look anything like the crash in the stock market after the technology bubble. The stock market turns frenetic when investors scramble to get out and prices fall sharply. In housing, however, a collapse is signaled by a sharp drop in activity as people hold off buying. Houses stay on the market longer. Inventories grow. Only then will prices fall, slowly. Economists say prices will lag a slowdown in the market by four to six months. Some of the data on where a local market is headed is available on the Internet (links are at nytimes.com/business). In other cases, your real estate agent is your best friend. He or she has access to a storehouse of raw data from the local Multiple Listing Service. Here are some indicators to look at: Market activity How many homes are sold compared with the month before is the earliest indicator, but it is notorious for false positives. But if the number of homes sold starts to drop, perk up. Every county tracks this and makes it available to the public. Inventory Some of the most crucial pieces of information are held closely by real estate agents. The number of houses on the market is one of them. The national average is 4.3 months; 6 months is closer to normal, the National Association of Realtors says. When it grows, there is trouble coming. Time on the market Agents control access to this information, and be warned: they know how to manipulate it. A house that has been languishing can be taken off and put back to look like a fresh listing. But you'll still be able to see the average time stretching as a clear signal of cooling. Prices It's what you care about most. But month-to-month comparisons are nearly useless as an indicator because sales of a few houses on either end of the market can skew the figures. DataQuick at www.dqnews.com has some data and the Office of Federal Housing Enterprise Oversight issues quarterly reports. Failed to sell The super-secret indicator among agents is the number of houses that are quietly taken off the market - usually because they are priced too high. Wheedle the number out of them and you'll have a strong indicator of market health. Price-to-rent ratio This is a wonderful measure that gets at the intrinsic value of a property, but it's a tricky tool for the layman. Rent data include everything from studios to four-bedroom penthouses, making a comparison with single-family homes difficult. Some of the rent data can be found at www.realfacts. com. Loan quality The popularity of interest-only mortgages could become one of the best indicators of a fragile market, several economists say. Mr. Thornberg of UCLA Anderson says it's a sign that lenders are scraping the bottom of the barrel. 'We are close to running out of shills,' he says. Risk The PMI Group of Walnut Creek, Calif., a provider of data to the mortgage industry, estimates how much prices could drop using an econometric model. It publishes the list of at-risk cities at www.pmigroup.com. Popular sentiment To judge from the media, the housing bubble may have peaked in June. According to a Nexis search of magazines and newspapers, that month was the peak, with 312 references to 'housing bubble,' almost six times that of a year earlier. It fell 24 percent in July. Of course, there is one constant: real estate agent sentiment. Most of them will never tire of saying it's a great time to buy. Despite the signs of a slowdown, Mr. Martone, the Providence real estate agent, says prices are holding and he still does not have enough properties to sell. He says, 'I am the eternal optimist.'

Subject: Errors Cited in Assessing Climate Data From: Emma To: All Date Posted: Sat, Aug 13, 2005 at 05:56:40 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/12/science/earth/12climate.long.html Errors Cited in Assessing Climate Data By ANDREW C. REVKIN Some scientists who question whether human-caused global warming poses a threat have long pointed to records that showed the atmosphere's lowest layer, the troposphere, had not warmed over the last two decades and had cooled in the tropics. Now two independent studies have found errors in the complicated calculations used to generate the old temperature records, which involved stitching together data from thousands of weather balloons lofted around the world and a series of short-lived weather satellites. A third study shows that when the errors are taken into account, the troposphere actually got warmer. Moreover, that warming trend largely agrees with the warmer surface temperatures that have been recorded and conforms to predictions in recent computer models. The three papers were published yesterday in the online edition of the journal Science. The scientists who developed the original troposphere temperature records from satellite data, John R. Christy and Roy W. Spencer of the University of Alabama in Huntsville, conceded yesterday that they had made a mistake but said that their revised calculations still produced a warming rate too small to be a concern. 'Our view hasn't changed,' Dr. Christy said. 'We still have this modest warming.' Other climate experts, however, said that the new studies were very significant, effectively resolving a puzzle that had been used by opponents of curbs on heat-trapping greenhouse gases. “These papers should lay to rest once and for all the claims by John Christy and other global warming skeptics that a disagreement between tropospheric and surface temperature trends means that there are problems with surface temperature records or with climate models,” said Alan Robock, a meteorologist at Rutgers University. The findings will be featured in a report on temperature trends in the lower atmosphere that is the first product to emerge from the Bush administration's 10-year program intended to resolve uncertainties in climate science. Several scientists involved in the new studies said that the government climate program, by forcing everyone involved to meet five times, had helped generate the new findings. 'It felt like a boxing ring on occasion,' said Peter W. Thorne, an expert on the weather balloon data at the Hadley Center for Climate Prediction and Research in Britain and an author of one of the studies. Temperatures at thousands of places across the surface of the earth have been measured for generations. But far fewer measurements have been made of temperatures in the air from the surface through the troposphere, which extends up about five miles. Until recently Dr. Christy and Dr. Spencer were the only scientists who had plowed through vast volumes of data from weather satellites to see if they could indirectly deduce the temperature of several layers within the troposphere. They and other scientists have also tried to analyze temperature readings gathered by some 700 weather balloons lofted twice a day around the world. But each of those efforts has been fraught with complexities and uncertainties. The satellites' orbits shift and sink over time, their instruments are affected by sunlight and darkness, and data from a succession of satellites has to be calibrated to account for eccentricities of sensitive instruments. Starting around 2001, the satellite data and methods of Dr. Christy and Dr. Spencer were re-examined by Carl A. Mears and Frank J. Wentz, scientists at Remote Sensing Systems, a company in Santa Rosa, Calif., that does satellite data analysis for NASA. They and several other teams have since found more significant warming trends than the original estimate. But the new paper, by Dr. Mears and Dr. Wentz, identifies a fresh error in the original calculations that, more firmly than ever, showed warming in the troposphere, particularly in the tropics. The error, in a calculation used to adjust for the drift of the satellites, was disclosed to the University of Alabama scientists at one of the government-run meetings this year, Dr. Christy said. The new analysis of data from weather balloons examined just one possible source of error, the direct heating of the instruments by the sun. It found that when data were examined in a way that accounted for that effect, the temperature record produced a warming, particularly in the tropics, again putting the data in line with theory. 'Things being debated now are details about the models,' said Steven Sherwood, the lead author of the paper on the balloon data and an atmospheric physicist at Yale. 'Nobody is debating any more that significant climate changes are coming.'

Subject: Léopold Senghor From: Emma To: All Date Posted: Fri, Aug 12, 2005 at 19:48:22 (EDT) Email Address: Not Provided Message: http://carpe.umd.edu/congo_basin_news/news_article.asp?article=98 December 21, 2001 Léopold Senghor: Senegal's Poet of Négritude By ALBIN KREBS - New York Times Léopold Sédar Senghor, a poet, professor, philosopher and statesman who became the first president of Senegal when it gained independence from France, died yesterday at his home in Normandy. Mr. Senghor, one of the central figures in the political upheaval that led to freedom for France's African colonies, was 95. His life was a blend of African and European experiences. In World War II, he fought in an all-African French Army unit and spent two years in a Nazi camp after being captured. In 1984, he became the first black member of the French Academy. In between, he served as an always eloquent, often critical spokesman for the cause and culture of Africa. 'I wear European clothing,' he once said, 'and the Americans dance to jazz which derives from our African rhythms: civilization in the 20th century is universal. No people can get along without others.' The current president of Senegal, Abdoulaye Wade, announced the death to a summit meeting of West African nations in Dakar, Senegal. President Alpha Oumar Konaré of Mali, speaking for the 15 leaders there, hailed Mr. Senghor as a 'great politician and great African.' President Jacques Chirac of France yesterday mourned Mr. Senghor as a historic figure for Africa. 'Poetry has lost one of its masters, Senegal a statesman, Africa a visionary and France a friend,' he said in a statement. Mr. Senghor's career was studded with paradoxes. He was a Roman Catholic who led a predominantly Muslim nation, a sophisticated scholar who drew his primary support from peasants and a poet who wielded political power with great skill. Among African leaders, Mr. Senghor was the chief theoretician of négritude, or 'blackness,' his definition for the common culture and spiritual heritage of the black peoples of Africa. In one of his earliest poems, 'Totem,' he wrote: I must hide in the intimate depths of my veins The Ancestor storm-dark skinned, shot with lightning and thunder And my guardian animal, I must hide him Lest I smash through the boom of scandal. He is my faithful blood and demands fidelity Protecting my naked pride against Myself and all the insolence of lucky races. Mr. Senghor was also an eloquent diplomat, who on the one hand deftly criticized the colonial policies of Portugal and South Africa, while on the other scolding some developing nations for what he considered their hypocrisy. At the United Nations in 1961, for instance, he noted the double standards applied by some nations newly rid of colonialism. 'We have denounced the imperialism of the great powers only to secrete a miniature imperialism toward our neighbors,' he said then. 'We have demanded disarmament from the great powers only to transform our countries into arsenals. We proclaim our neutralism, but we do not always base it upon a policy of neutrality.' Mr. Senghor was born Oct. 9, 1906, in the small Senegalese coastal town of Joal. His father was a prosperous peanut planter and trader who had 20 children. His mother, a Roman Catholic, had him educated at a nearby Catholic mission and seminary and nurtured Mr. Senghor's first ambition - to become, as he recalled many years later, 'a teaching priest to work toward the intellectual emancipation of my race.' When he turned 20, however, Mr. Senghor abandoned his calling to the priesthood and transferred to secondary school in Dakar. In 1928 he won a partial scholarship that permitted him to study at the Lycèe Louis-le-Grand at the Sorbonne in Paris, where he formed a lifelong friendship with Georges Pompidou, who was later to become prime minister and then president of France. During his Sorbonne years, Mr. Senghor said, he also discovered 'the unmistakable imprint of African art on modern painting, sculpture, music and literature,' which confirmed his belief in Africa's contribution to 'the civilization of the universal.' In his studies in philosophy, Mr. Senghor originated, with Aimé Césaire of Martinique and Léon G. Damas of French Guiana, the concept of négritude, in part as a proud protest against French rule and the policy of assimilation. Négritude retained a respect for French, European and Western poetry and political thought, but Mr. Senghor as a young scholar emphasized the importance of his African heritage and urged his compatriots to 'assimilate, not be assimilated.' His love poems over the years reflected themes of négritude, dealing as they did with what he saw as the 'soullessness' of Western civilization - 'No mother's breast. Legs in nylon.' - and he maintained that only African culture has preserved a mystic means of reviving 'the world that has died of machines and cannons.' Further, Mr. Senghor believed, the African culture gained strength from its closeness to nature and its people's ancestors, while Western culture was out of step with the world's ancient and natural rhythms. In his poetry, Mr. Senghor could sound like Walt Whitman or Robinson Jeffers. His poems carried a tone of optimism, often of exuberant celebration, according to critics like Clive Wake and John Reed, who translated his collected poems. At the Sorbonne, Mr. Senghor was recognized as one of the most brilliant students, and upon his graduation in 1935 achieved the distinction of becoming the first African agrégé, the highest-ranked teacher in the French school system. He taught French to French children in Tours. In 1939, while teaching at another school near Paris, he was drafted into the French Army, serving in an all-African unit until 1940, when he was captured by the Germans. During the two years he spent in Nazi prison camps, he wrote some of his best poems, collected in 1945 in a volume titled 'Chantes d'Ombre.' Mr. Senghor returned to teaching and writing after the war, and in 1945 became deputy for Senegal to the French Constituent Assembly. A year later, he was elected one of Senegal's two deputies to the National Assembly. Sitting in the legislature for the Socialist Party, he soon decided that only an African party could adequately represent African needs. Having founded the Senegalese Democratic Bloc in 1948, he ran as that party's candidate in 1951 and defeated the Socialist candidate for the National Assembly. By the mid-1950's, the French Parliament had embarked on a policy aimed at giving a large measure of self-government to the African colonies. Mr. Senghor opposed the policy, believing that it would result in a proliferation of small, weak nations. Instead, Mr. Senghor favored a federal unity between French Equatorial Africa and the French colonies of West Africa. Later, he successfully appealed to President Charles de Gaulle of France for independence, and Senegal became a republic in 1960. Mr. Senghor was elected its first president. Late in 1962, he repulsed an attempted coup led by a longtime protégé, Prime Minister Mamadou Dia, ordering his old friend imprisoned for life. From then on, he tolerated no challenge to his generally moderate, pro-Western policies. Mr. Senghor won re-election to the presidency in 1963, 1968 and 1973, and remained president until his retirement in 1980. The first African president voluntarily to resign power, he handed the office to his chosen successor, Abdou Diouf. As president, Mr. Senghor faced problems common among the emerging nations of Africa. His country was poor, its resources mostly limited to fishing, peanut farming and the mining of phosphates. He devoted himself to modernizing agriculture, with limited success, and tried to combat the corruption and inefficiency that had become endemic under French rule. In foreign policy he was a neutralist, while at home he advocated a special form of 'African socialism,' which he said should be devoid of both atheism and excessive materialism. In contrast to African leaders who fell under the sway of the Soviets in the cold war, he emphasized his disapproval of a 'dictatorship of the proletariat.' In 1946, Mr. Senghor married Ginette Éboué, the daughter of a Guyanese who was a prominent colonial official in Africa. They had two children before divorcing nine years later. He later married Colette Hubert, a Frenchwoman from Normandy, where he spent much of his time after retirement. The couple had one son, Philippe, who died in an accident in the 1980's.

Subject: African Creativity From: Emma To: All Date Posted: Fri, Aug 12, 2005 at 19:46:51 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/04/29/arts/design/29cott.html?ex=1124510400&en=aa0134a7ffd551eb&ei=5070&emc=eta1 April 29, 2005 African Creativity, More About the Momentary Than the Monumental By HOLLAND COTTER ''Resonance From the Past'' at the Museum for African Art is what is known as a collection show, meaning in this case roughly 90 sculptures, along with a few bead and fabric pieces, from the African holdings of the New Orleans Museum of Art. They make a savory anthology, with plenty of textbook staples and some surprises tucked in. Like many anthologies, though, this one is about browsing, rather than about a productive sorting and synthesizing of information. And given the radical thinking coming out of the still-marginalized field of African art history, and the many stories still waiting to be told, it can't help seeming, despite its manifold beauties, like a missed opportunity to shape and present fresh research. My visit coincided with an event at which such research was being presented: a stimulating symposium of young scholars of African art, organized by Susan Vogel at Columbia University, where she teaches. None of the speakers focused on the kind of ''classical'' sculpture in the collection. Several argued against the standard academic equation of art and objects, and specifically the equation of African art with a canon of museum-vetted sculptures. Instead, they talked about African art as mutable, ephemeral, time-based, kinetic, contingent and defined by fluid situations rather than by single, solid things. Equivalents of contemporary Western forms like conceptual art, process art, performance art, installation art, body art and sound art have been practiced in Africa for centuries. And any comprehensive study of African art is, by necessity, multidisciplinary, with art historians and anthropologists heading a list that also includes musicologists, folklorists, linguists, dance historians, architectural historians and scholars of religion, aesthetics, ethnology and philosophy. Visions of this fusion were dancing in my head as I traveled from Columbia to the Museum for African Art. So I wasn't surprised that the word exciting repeatedly came to mind as I walked through a show for which I'd had only mild expectations. Piece after piece, no matter how familiar the form, made me slow my pace. Every encounter was a contact high. I wasn't seeing just objects. I was seeing a network of ideas. Heightened receptivity is not, I hasten to say, a prerequisite for appreciating a show that has, on its own terms, much to offer. The New Orleans museum's African collection is a fine and representative one, as befits a city with a 70 percent African-American population. (The museum is in the process of expanding its African galleries, which is why the collection is on the road.) And the curator, Frank Herreman, former deputy director of exhibitions at the Museum for African Art, has chosen well, from a Kota reliquary guardian figure (a modernist icon) and a Ciwara crest mask (its form now a logo for an African airline) to pieces notable for their rarity. Among these is an elegant wooden door carved by a Baule artist from Ivory Coast with a low-relief image of a large fish devouring a smaller one, a cautionary emblem of misused power. Immaculately preserved, the door must stand in for a whole range of Baule architectural art that had ceased production by the time of Ivorian independence in 1960. The artist's name we don't know. And until fairly recently, anonymity was assumed to be standard in African art. Not necessarily so. In many cultures, individual artists were and are revered; sometimes their fame was widespread. The Yoruba court sculptor Olowe of Ise (circa 1875-1938) is one of the best known in the West, and New Orleans has a splendid example of his work: a palace veranda post carved in the form of an armed and mounted warrior. It is one of the collection's most accessible sculptures, both because of its unmysterious function, documented in 1930 photographs, and a naturalistic style comparable to some in the West. And indeed, cross-cultural links, and specifically trans-Atlantic links, crop up throughout the show. One may be detected in a memorial staff attributed to the 19th-century Yoruba-born artist Akati Akpele Kendo. It is crowned by a miniature vignette in wrought iron of a top-hatted court official surrounded by twisty-looking animals and a table arrayed with liquor jars. If you wanted to locate stylistic sources for drawings by the African-American artist Bill Traylor (1854-1947), you might start here. And an elaborate Yoruba masquerade costume on display, about halfway into the show, anticipates the strutting, swooping exhibitionism of New Orleans Mardi Gras attire. Made from layers of boldly patterned textiles and panels of bright beadwork, the costume, when danced, was meant to embody an ancestral spirit. ''When danced'' is an important qualification. As festive as it looks in the museum, in an African context the costume needed more than good lighting to come to life. It needed a body, movement, drums, songs and a responsive crowd that believed in art's power to bridge the divine and human worlds and to turn flesh into spirit, and back again. Without all or some of this, it was just cloth and beads, a fragment of something bigger waiting to happen. Sculptures come with comparable requirements. A wooden power figure, or nkisi, from Congo has a meticulously carved, sensationally expressive head but a sketchy, genderless block of a body. In fact, once the figure was in use, the body would have been concealed under layers of materials -- animal skins, feathers, leaves -- applied to ignite the object's spiritual potential, an activation further intensified through singing and praying. The final product would be a kind of psychic smart bomb, lethal to evil. But in the museum, stripped of vivifying substances, deprived of songs, prayers and touch, it is not that. It's an intriguing sculpture, but it is also, to quote the art historian Wyatt MacGaffey in the show's catalog, ''powerless, a relic of another time, another place, another way of life.'' These realities bring us to the conceptual dimension of African art, which, the symposium suggested, is its primary one. It is certainly the dimension least compatible with object-based art history. That discipline has little room for the art of body painting, as described by Sarah Adams; or for the abstract Yoruba assemblages, all gesture and placement, described by David T. Doris; or for the transfer of figurative traditions from sculpture to photographs to the Internet, as described by Till Förster. None of this material has obvious museum or market potential. Its ephemeral quality even reinforces a common perception that apart from a century or two of ''tribal'' sculpture, Africa lacks any significant body of preservable, displayable art. So, by extension, it lacks an art history. In this argument, much hinges on how you describe history and art. At the Columbia symposium, Sylvester Okwunodu Ogbechie seemed to speak for at least some of his colleagues when he talked of art history not as a fixed body of objects but as an ever-shifting system of knowledge embodied in different forms in different ways at different times. Some forms stay the same but change their meanings; others become obsolete so that new forms can be invented, a dynamic seriously impeded by the creation of inviolable canons of objects and values. None of these ideas, abstract as they may sound, should be difficult for Western audiences to grasp. Western art in the 20th century produced just two great, self-challenging innovations. In the first half of the century, it was abstraction (minimalism was one of several offshoots), which freed art from images and made it a universe unto itself. The great invention of the second half was conceptualism. It freed art from forms and made it a way of existing in the world. Africa fully absorbed its own versions of all of this well before the 20th century. The West, by contrast, has never fully absorbed or been fully comfortable with any of it. That's why our major art museums and our major art history departments, when they do turn their attention to African art, often don't know what they are looking at, or want to know. (For good reason. To apply the kind of thinking emerging from African art to Western art, as should be happening, would change art history as we know it.) But certain scholars do know what they are looking at. So do certain museums. And to them it is thrilling, utterly. The Museum for African Art is one of those museums. And even when an exhibition is conceptually conservative, like this one, the material is choice, and the atmosphere bracing and expansive. So pay a visit. Browse a marvelous African collection. And start looking hard at what you don't see.

Subject: Re: African vs North American Native Creativity From: Mik To: Emma Date Posted: Mon, Aug 15, 2005 at 11:59:38 (EDT) Email Address: Not Provided Message: This has been a pet interest of mine: collecting African art (although I give most of it away). Understanding African art and its materials has raised some noval concepts that I suppose may link back to Jared Diamond. What I have found interesting is that African art has changed significantly over time. You can clearly see western influence, whether they are making toy cars, chess boards or coffins shaped like aeroplanes. To some degree African art has become comercialised - hey they want to get paid for their work. But to another degree, the art reflects a changing culture. Hey all cultures change over time.... or do they? I noticed that the Native American culture is just a series of variations on the same theme. Certain symbols have certain meanings, but Native art holds true to that limited set of symbols. I hate to say this but it appears as though the Native American art is simply remaining stagnant. Repeat the same thing enough times and it will become boring. I can understand why the Native American children would rather do something different and appealing. I then found out that the Government of Canada supports Native Americans in 'rebuilding their true culture' in a form of attempting to protect what's left of their culture after many years of ravage. It is this protection that, in my mind, allows the elders to repeat their art form and remain stagnant. In comparing the African and Native American art, I must ask, 'Are 'we' doing the right thing by supporting the Native Americans in remaining in their time warp? Are we not actually doing a dis-service?' This is obviously a very sensitive issue and in the same way Jared Diamond challanges us to face the issue - I am asking the simply question: Should we not step away from the Native American culture in an attempt to allow them to face all of the world's influences in a bid to save their culture? Comments?

Subject: Going on the road From: Pete Weis To: All Date Posted: Fri, Aug 12, 2005 at 12:19:58 (EDT) Email Address: Not Provided Message: Saying goodby to our house tomorrow. Losing internet sometime today. I've truely enjoyed this site - thanks to everyone and especially Bobby. Will catch up with the Unofficial Paul Krugman site periodically while stopping at motels which have internet as we head East. We are completely out of debt!!! Comstock Partners, Inc. The Potential Crisis at Fannie Mae August 11, 2005 We have no proprietary information about Fannie Mae, but what is publicly known is scary enough. As you may recall, last December the SEC required Fannie to restate prior financial statements while the Office of Federal Oversight (OFHEO) accused the company of widespread accounting regularities that resulted in false and misleading statements. Significantly, the questionable practices included the way Fannie accounted for their huge amount of derivatives. On Tuesday, a company press release gave some alarming hints on how extensive the problem may be. The press release stated that in order to accomplish the restatements, “we have to obtain and validate market values for a large volume of transactions including all of our derivatives, commitments and securities at multiple points in time over the restatement period. To illustrate the breadth of this undertaking, we estimate we will need to record over one million lines of journal entries, determine hundreds of thousands of commitment prices and securities values, and verify some 20,000 derivative prices…” “…This year we expect that over 30 percent of our employees will spend over half their time on it, and many more are involved. In addition we are bringing some 1,500 consultants on board by year’s end to help with the restatement…Altogether, we project devoting six to eight million labor hours to the restatement. We are also investing over $100 million in technology projects to enhance or create new systems related to accounting and reporting…we do not believe the restatement will be completed until sometime during the second half of 2006…” It seems to us that anybody reading that press release should be shocked by what appears to be the paucity of knowledge about what is going on at a company of such great size and importance to the U.S. economy. About 18 months ago Fed Chairman Greenspan stated that problems at both Fannie Mae and Freddie Mac had the potential to bring down the financial system. He stated at the time that, “…Most of the concerns associated with systemic risks stem from the size of the balance sheets that these GSEs (government-sponsored enterprises) maintain…”. He added that the immense size of their holdings and the need to keep growing to satisfy their shareholders made them increasingly vulnerable. The White House, too, in its 2003 budget report, expressed their concerns. They stated that although both GSEs tries to limit their risks through various risk-management methods, these techniques “do not eliminate all the risk associated with funding long-term, mostly fixed-rate assets that have uncertain payment streams… Furthermore, the hedging transactions transform credit or interest rate risk into counterparty risk (the risk that a counterparty of a hedging transaction fails to honor the contract). Thus the GSEs management of counterparty risk is of increasing importance”. Now it appears that Fannie Mae’s internal controls have been so weak that no one actually knows what the risks are or what the auditors will find—and we won’t know for at least another year. For a company as important to the U.S. as Fannie Mae, this is a national problem with widespread potential for developing into a dangerous financial crisis.

Subject: Re: Going on the road From: Emma To: Pete Weis Date Posted: Fri, Aug 12, 2005 at 13:05:08 (EDT) Email Address: Not Provided Message: I am happy for you, but so sad for us.

Subject: Re: Going on the road From: Jennifer To: Pete Weis Date Posted: Fri, Aug 12, 2005 at 13:00:57 (EDT) Email Address: Not Provided Message: Pete, whatever will we do without you. I did not guess you were leaving your home. Yes, this is our sad loss. We will think of you.

Subject: Re: Going on the road From: Terri To: Pete Weis Date Posted: Fri, Aug 12, 2005 at 12:55:53 (EDT) Email Address: Not Provided Message: I am terribly saddened. You will be missed so much. Please try to look to us.

Subject: Re: Going on the road From: Emma To: Terri Date Posted: Fri, Aug 12, 2005 at 12:57:37 (EDT) Email Address: Not Provided Message: Each day I have looked for your notes. I only hope you will settle soon and find us again. This is surely losing a friend. I had no idea you would leave.

Subject: Not leaving From: Pete Weis To: Emma Date Posted: Fri, Aug 12, 2005 at 14:26:14 (EDT) Email Address: Not Provided Message: will check in from time to time! Take care all!!

Subject: Re: Not leaving From: Pancho Villa To: Pete Weis Date Posted: Fri, Aug 12, 2005 at 15:04:03 (EDT) Email Address: nma@hotmail.com Message: Dear Pete, hasta luego amigo and hear you soon

Subject: Re: Not leaving From: Dorian To: Pancho Villa Date Posted: Sat, Aug 13, 2005 at 06:36:32 (EDT) Email Address: Not Provided Message: Dear Pete, Although I rarely post here I visit this site every day. And to be perfectly honest, the first thing I do is scan through the posts to read yours. Thanks so much for your valuable insight, your choice of articles to share and all your many other contributions. I wish you the best and hope to keep up with you through you travels. Dorian

Subject: Yes, I worry. From: Terri To: All Date Posted: Fri, Aug 12, 2005 at 11:00:31 (EDT) Email Address: Not Provided Message: Paul Krugman's articles have been excellent and increasingly worrisome. Yes, I worry :)

Subject: Re: Yes, I worry. From: Mik To: Terri Date Posted: Fri, Aug 12, 2005 at 11:58:58 (EDT) Email Address: Not Provided Message: Hhmm I have come to learn something different about what makes the US economy move forward. When I think back to my economics class, we learnt about the cycle of money and the opposite cycle of input. I think you remember it: person works for factory, factory makes product, person buys product, and so the cycle goes. What is missing in that cycle is the sales and marketing component. In other words, the price of the product partly covers the manufacture cost and partly covers the marketing/sales cost. In essence we can take the 'Factory component' in the economic cycle and split it into two: factory and sales/marketing. Now, I have also come to understand that far more money can be made out of sales and marketing than can be made out of the factory. For example, a shirt is made in Indonesia for a measly $2 but will sell in the US for, say, $20. The increase in price (from $2 to $20) goes to the Sales and Marketing. In essence, Sales and Marketing can make in excess of 900% markup. Now tell me, what kind of business do you want to be involved in: manufacture or in Sales/Marketing? It is no coincidence that the biggest company in the world (Wal Mart) is a Sales and Marketing company. It is no coincidence that sending factories overseas is alright.... so long as the sales and marketing is done right here. So to respond to the question made by Paul Krugman's Russian neighbour, America has become rich and powerful not because it makes stuff but because there is far more money in just selling the stuff that others make. Of course there is warped side to this. What will the jobs of the future be? Clerks for Wal Mart or McDonalds? or perhaps owners of your own store? But I think you get the picture.

Subject: Re: Yes, I worry. From: Terri To: Mik Date Posted: Fri, Aug 12, 2005 at 13:02:53 (EDT) Email Address: Not Provided Message: I do understand. Ah, Mik, you must be Pete for us.

Subject: Re: Yes, I worry. From: Mik To: Terri Date Posted: Fri, Aug 12, 2005 at 13:35:35 (EDT) Email Address: Not Provided Message: Huh? Pete?

Subject: Re: Yes, I worry. From: Poyetas To: Mik Date Posted: Fri, Aug 12, 2005 at 16:14:27 (EDT) Email Address: Not Provided Message: Disaster will be dictated by two interrelated events. How quickly the fed raises interest rates, thus killing the housing bubble and what industry will be there to absorb all those being laid off construction. Government debt will soar in the absence of tax revenues from a depressed economy. America will become increasingly reliant on foreign capital to keep going unless a new growth (real growth) industry is found.

Subject: Re: Yes, I worry. From: Emma To: Poyetas Date Posted: Fri, Aug 12, 2005 at 17:04:49 (EDT) Email Address: Not Provided Message: Well summarized, what I would like to have seena dn would like to see now is using Federal revenue sgaring with the states to foster infra-structure development. Paul Krugman suggested this many times from 2001 on. Imagine what we could do with a fully wired high speed Internet network as exists in the Nordic countries and South Korea and increasingly Canada and Japan. We need the energy grids made more reliable. Transportation has been provided for. Schools need to be built and renovated. Research labs developed....

Subject: The path of least (human?) resistance From: Pancho Villa To: All Date Posted: Thurs, Aug 11, 2005 at 19:03:38 (EDT) Email Address: nma@hotmail.com Message: This is how tne real estate bubble will end From Mr Bruce Steinberg. Sir, It was fascinating to learn how Meg Whitman, eBay president and chief executive, looks 'for markets where there is price and information inefficiency' yet declares 'real estate is pretty darn efficient' ('From Netscape to the Next Big Thing'. Comment & Analysis, August 5) in the face of a much ballyhooed real estate bubble. In 2001, the Nobel prize for economics was awarded to George Akerlof, Michael Spence and Joseph Stiglitz for their work on how asymmetrical information influences economic markets. Their theory, first described by Akerlof in the 1970s in an essay entitled 'The Market for Lemons' ('lemons' being a colloquialism for bad used cars), explains how when one party in a market has more information than the other, this unequal information can lead to adverse selection and ultimately the collapse of an entire market. Oversimplified, bad products and services chase out buyers seeking good products and services and both buyers and sellers of good products and services suffer. The full theory can be applied to the efficiency of labour markets as well as the collapse of the IT bubble. For the former, workers out of work tend to stay that way because potential employers assume those workers are not good enough for a job and tend to offer insufficient pay to attract the best candidates. However, in the case of permanent recruitment services, staffing services as well as temporary employees bring more information to the 'buyer' to enable the potential employer to make a more reasonable job offer than they would offer an unknown candidate. Perhaps the success of job boards can be partially attributed to their providing more labour market information to all parties involved in the employment process. The theory can also be used to explain how the IT equity bubble burst. Early in the dotcom era, the casual observer or investor viewed all IT companies as more or less identical although in reality their profit potential varied greatly - only insiders knew which were which. Low-profit but over-valued companies tended to follow the path of least resistance to fund their financial expansion by issuing more of their own shares and hence attracted more attention in the early developmental stage of the sector. Although seasoned investors and experienced venture capitalists may have known they were backing shaky high-tech and dotcom companies and knew it was a bubble, they believed they could ride the wave, profit wildly and get out in time. Eventually all investors became more educated, realised the valuations were not based on any profit potential, dumped their shares and prices plummeted. In the current real estate environment, ultimately there will not be enough inexperienced buyers and real estate speculators - those who do not know the true value of the property they are purchasing - to go around. The educated will ultimately regain control of the market and the current bull real estate market, which at times looks similar to a Ponzi scheme, will end. Then Ms Whitman may reconsider her view of price efficiencies in the real estate sector. Isn't it nice to see a practical application to economic theory? Bruce Steinberg, Economic and Employment Consultant, Alexandria, VA 22309, US --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- Meg Whitman, eBay president and chief executive: 'I look back and say, 'What were we thinking?' We quit two jobs, moved to California, put the children in new schools. I didn't think it was going to be anything like it turned out. I thought eBay could be a great collectibles website for the US. I thought this could be a small, quite profitable company. 'We began to understand that what worked in collectibles would work in other markets as well What eBay does is make inefficient markets efficient. 'The business model is very powerful. We were able to move globally far faster than land-based companies can. The remarkable thing about eBay is that it's instantly local: 98 per cent of our content is user-generated. 'The other thing I wasn't expecting was the way the market empowered small businesses. That was a big surprise. I thought this would be the home of big business. But it has levelled the playing field, and made small businesses as accessible as big ones. That was an 'a-ha' moment. 'Some categories didn't work the way we thought they would. We look for markets where there is price and information inefficiency. It turns out that real estate is pretty darn efficient. 'I am startled by the ubiquity of the internet today. It is one of the fastest-growing technologies ever. It's just remarkable. It has changed the way we communicate, the way we play. E-mail has changed the way business is conducted. 'The timing may finally be right now for mobile access. We thought it was important to have mobile access to eBay and the net five years ago, but nobody used it. That could be changing because of the growing power of mobile phones. In countries like China and India, you may see a shift to primary access to the internet coming through mobile handsets. Moving to 100 per cent broadband penetration will also make a huge difference. You will see an always-on internet that changes the way people behave. 'There is still room for new internet leaders to be created. Of the five biggest internet companies 10 years from now, I can imagine that two or three of the existing leaders will stay on, but that two will be companies that haven't even been bom yet. The internet is an incredibly dynamic environment. You have to respond really fast.'

Subject: Re: The path of least (human?) resistance From: Jennifer To: Pancho Villa Date Posted: Fri, Aug 12, 2005 at 13:01:36 (EDT) Email Address: Not Provided Message: Dear dear Pete is leaving.

Subject: Re: The path of least (human?) resistance From: Terri To: Pancho Villa Date Posted: Thurs, Aug 11, 2005 at 20:16:00 (EDT) Email Address: Not Provided Message: Fascinating article, as usual but possibly more so.

Subject: IBA: (International Basket Association) From: Pancho Villa To: All Date Posted: Thurs, Aug 11, 2005 at 18:37:57 (EDT) Email Address: nma@hotmail.com Message: China names currencies in its basket By Richard McGregor in Beijing China has disclosed the four leading currencies in the trade-weighted basket used to manage the remninbi following its decision in late July to end its decade-old peg to the US dollar and introduce a managed float. The currencies - the US dollar, the euro, the yen and the Korean won - were chosen because they represent the economies of China's largest trading partners, said Zhou Xiaochuan, the governor of the People's Bank of China, the central bank. Mr Zhou did not reveal the relative weightings of the currencies in the basket, and analysts differed about the weight allocated to the dollar, with estimates ranging from 30 to 70 per cent. Other currencies included in the basket, but with smaller weightings, include the Canadian, Australian and Singapore dollars, the Thai baht. the British pound and the Malaysian ringgit, ail currencies of significant trading partners for China. Mr Zhou's announcement yesterday in Shanghai. where the central bank is upgrading its office to improve oversight of the city's expanding finance industry, coincided with the release of a series of reforms to deepen China's foreign exchange markets. The PBoC, in a series of announcements this week, has said it will expand the onshore currency swaps and renminbi futures markets with the issue of new trading licences to local banks. Stephen Green, of Standard Chartered Bank in Shanghai, said the expansion of trading would not result in an immediate increase in volatility of the currency, as the new entrants needed time to get approval for products and win customers' confidence. 'But the introduction of such hedging tools is a necessary step before bringing in more flexibility in China's forex rate,' he said. Since China abandoned the peg last month and revalued the renminbi by 2.1 per cent, the currency has fluctuated only marginally in daily trading, closing slightly stronger yesterday at RmbS.lO to one US dollar, compared with the Rmb8.ll rate announced on July 21. The composition of the currency basket is unlikely to have any immediate impact on China's STllbn (€575bn. £396bn) in foreign exchange reserves, which are mostly in US dollars. The inclusion of two Asian currencies in the basket is a reflection of the bank's expectation that regional trade, now- overwhelmingly denominated in' US dollars, will increasingly be conducted in local currencies. --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- -- Yuan shift fuels talk of loosening Gulf-dollar peg (Reuters) 3 August 2005 RIYADH — China’s revaluation of the yuan is fuelling debate in Gulf Arab states about the wisdom of fixing their currencies to a weak US dollar while trading links with Asia and Europe continue to grow. Oil giant Saudi Arabia and most of its neighbours have pegged their currencies to the dollar for years, a policy which helped anchor their young and fragile economies through the turbulence of low crude prices in the late 1980s and the 1990s. Officials insist they want to preserve a link, which has served them well in the past — at least until the planned monetary union of six Gulf Arab states in 2010 — and few analysts expect any quick change. But the weakness in recent years of the dollar and the growth in Asian and European imports have cut into the purchasing power of the Gulf countries, whose export earnings from oil are also denominated in dollars. The value of Gulf Arab imports from China, which were negligible just a decade ago, grew last year to $14.5 billion, or 8.5 per cent of total imports. While record oil prices may mask the impact of costlier goods, economists say the case for linking to a basket of currencies instead of the dollar — just like China — is gaining ground. ”There is a gathering debate about this,” said Daniel Hanna, an economist with Standard Chartered bank in Dubai. “The majority of the Gulf trade is with Asia and the European Union. You can make a case that the currency peg should reflect that better, especially since China will be their fastest growing partner,” he said. One vocal advocate of swift change, National Commercial Bank senior economist Nahed Taher, says Saudi Arabia cannot afford to wait until 2010 to loosen ties between the riyal SAR and the dollar, which have been fixed since 1987. Taher has called for a managed float of the riyal against a basket of currencies, within a 5 per cent band, arguing that costlier imports are partly responsible for pushing annual inflation up to 6 per cent for the last two years. Other economists dispute Taher’s figures, and the Saudi Arabian Monetary Agency says inflation is less than 1 per cent. But with oil prices set to remain high for the foreseeable future and the region witnessing its fastest growth since the 1970s oil boom, policy makers in the Gulf may chafe at the limited room for manoeuvre, which a tight currency peg imposes. Hanna said Qatar and the United Arab Emirates in particular are already suffering inflationary pressure, which would be easier to tackle with a more flexible monetary policy. Barriers to change: The six states of the Gulf Cooperation Council — Saudi Arabia, Oman, Bahrain, Qatar, Kuwait and the United Arab Emirates — control more than half of global oil reserves. Supporters of the dollar link say that since oil is priced in dollars, any change would introduce a new foreign exchange risk for governments who depend for nearly all their revenues on crude exports. Although most GCC states have informally linked their currencies to the dollar for years, they only formalised that step as a group in 2002 when Kuwait switched to the dollar from a basket of currencies. Abandoning their joint position could undermine credibility of the GCC’s goal of monetary union within five years. “We’ve just agreed to a formal peg ... It is too soon after that to change,” said Abdel Aziz Aluwaisheg, director of the GCC Secretariat’s economic integration department. “There is a realisation that we are losing because of pegging to the dollar but there is also a feeling that this (reluctance to change so soon) is a big obstacle —as well as the issue of foreign exchange risk.” Aluwaisheg said Gulf officials have discussed informally whether any change should happen before 2010, but that no formal proposals have been presented by any of the six countries. Expressing his personal view, Aluwaisheg said he believed the time had come to start thinking about changing the peg “even before the unification of the currency”. “But obviously if it is done, it has to be done jointly. The whole idea of dollar peg is to have irrevocable cross exchange rates between the six Gulf currencies before they are unified.” Abandoning the dollar peg, which helped curb double-digit inflation in Saudi Arabia in the 1980s, for a basket of currencies was not without risk, he added. Any change may be a remote prospect for now. Central bank governors talk openly about the post-2010 options for their unified currency — either fully or partially floating or pegged to the dollar, the euro or a basket of currencies. But they insist the dollar peg stays until then. Earlier this month, Saudi Arabia’s deputy central bank governor Mohammad AlJasser denied a British newspaper report that Gulf countries were reviewing the dollar link. Hanna said big changes are unlikely before the new currency is born but some fine-tuning may occur before then if the dollar slips further. Kuwait, for example, quietly tweaked the rate on its dinar in January in a move, which drew little attention. “By no means are we saying that this will change tomorrow,” Hanna said. “The dollar peg has done wonders”. http://www.khaleejtimes.com/DisplayArticle.asp?xfile=data/business/2005/August/business_August52.xml§ion=business&col=

Subject: The 'Hoffa-Stern(-Democrats) alliance'? From: Pancho Villa To: All Date Posted: Thurs, Aug 11, 2005 at 18:20:24 (EDT) Email Address: nma@hotmail.com Message: JAGDISH BHAGWATI An opportunity for Democrats to denounce protectionism Trade liberalisation, a powerful source of prosperity in both rich and poor countries, may not be led by the US today but it cannot proceed without it. While US leadership for freeing trade was manifest in the post-war period, it has been steadily eroded, as is evident from the record of votes in the Congress on recent trade initiatives. The great American free trade machine is sputtering. Not only did President Bill Clinton nearly lose the vote for the North American Free Trade Agreement, but he could not get renewal of fast-track authority - which would have allowed him more easily to negotiate new free trade deals. Just last month, the Central American Free Trade Agreement was passed by only a one-vote majority. At the cancerous core of this erosion of America's commitment to freer trade is the Democratic party. The number of Democrats voting for trade liberalisation has dwindled steadily over the past decade. Astonishingly, only 15 Democrats voted for Cafta. An irritated Democratic leadership declared war on the treacherous 15, vowing to destroy them at the next election. The underlying explanation is the stranglehold that unions, fearful of globalisation, have steadily acquired over the Democratic party. Yet, the recent split in America's labour movement offers an opportunity for the Democrats to break out of this straitjacket, without endangering working-class support, and to return America to a vigorous commitment to free trade. A crack in the protectionist door is finally in view. Two weeks ago, confronting a crisis over a decline in union membership to just 8 per cent of the private workforce, the AFL-CIO, the national labour federation, split. Unions representing nearly 40 per cent of the membership left the federation and have founded their own Change to Win Coalition. The split reflected a basic difference of opinion between the incumbents, led by John Sweeney, AFL-CIO president , and the dissidents, led by Andrew Stern of the Service Employees International Union, over the appropriate strategy to reinvigorate the labour movement. The dissident unions favoured a return to the conventional 'micro' strategy that would focus on the use of dues primarily to unionise more workers. The AFL-CIO wanted, instead, a continuation of the current 'macro' strategy to focus mainly on political activity. The dissidents are clearly right insofar as dwindling or stagnant membership cannot but weaken the ability of unions to function effectively through bargaining power in the workplace. But they are wrong in thinking that politics is not important. Domestic politics is critical. If the right to strike, for example, is crippled by restrictions on sympathetic strikes and by protecting the ability to hire replacement workers, then unions are likely to turn into paper tigers, making membership less attractive. But international politics is an altogether different matter. That is where the AFL-CIO has dug a huge hole with much effort and cash, and pushed the Democratic party firmly into it. Terrified that trade with countries with lower wages and labour standards will produce more paupers in America by lowering US wages, and will even reduce American labour standards, the AFL-CIO has long embraced the view that workers' only salvation is to raise the cost of production of competing industries abroad by requiring them to have the same labour standards as the US. In short, there must be a 'level playing field'. What is more natural, then, for the AFL-CIO than to take its agenda into the trade arena, use the vocabulary of 'fair trade' and assert that it is unfair to have to compete with countries with lower standards, and then steadily to convert the Democratic party, its political ally, to that position? In this process, the AFL-CIO has also been able to exploit the fact that altruism, as against the self-interest of reducing the competitive ability of rival producers abroad, can also be cited as a rationale for asking for higher labour standards abroad. Again, the AFL-CIO has never been able to meet objections of those such as myself who have argued that policy instruments other than trade or other sanctions are better used for altruistic reasons; and that trade sanctions are likely even to be counterproductive. The political campaign of the AFL-CIO and some of its allies such as Lori Wallach, the trade chief of Ralph Nader's group, The Public Citizen, has also used the astonishing argument that freeing trade without raising labour standards in the poor countries will harm these countries and their poor, so that making trade liberalisation contingent on the raising of labour standards abroad is good for them, too. You do not have to be a psychiatrist to see why it is comforting if, as a sadist, I flog you because it gives me great pleasure, yet can convince myself that it is good for you too. The Democratic party, the natural ally of the AFL-CIO, has therefore become its natural target and victim. Protectionism, masked as the creation of a level playing field and 'safeguarding our jobs' by putting ever-increasing labour standards into successive bilateral free trade agreements, for instance, has become the party's modus operand!. And where such maximalist demands are not met, as in the recent vote on Cafta, the Democrats have overwhelmingly voted against the proposed trade liberalisation. This is self-destructive to both the Democrats and the US. There is widespread opposition to these demands by the majority of democratic developing countries - among them India and Brazil - because they are seen as motivated by protectionist considerations. The demands make the US appear unilateralist: 'You raise your standards the way we want them or else,' they seem to say. They are also considered hypocritical as the US conformity to labour standards leaves a lot to be desired, as is evident from reports from groups including Human Rights Watch. The Democratic party is set into a protectionist mode when it comes to helping the poor countries trade their way out of poverty. The AFL-CIO split, therefore, offers a chance for the Democrats to shake themselves out of a predicament in which they could embrace free trade only by losing their precious constituency of organised labour. Now, with the labour movement itself raising questions about the AFL-CIO strategy, they can confront the federation and tell them to focus on domestic policies to secure legislation to protect the workers at the workplace but get out of international politics and let the party get on with freeing trade. Tony Blair, the British prime minister, managed to get the Labour party out of the destructive (but not the constructive) agendas of the British trade unions. It is time for the Democratic leadership to do the same. The writer, university professor of economics and law at Columbia University, is the author of In Defense of Globalization. He is finishing a new book: Terrified by Trade: The Paradox of Protectionism in the United States. FT Thursday August 11 2005

Subject: Jared Diamond From: Emma To: All Date Posted: Thurs, Aug 11, 2005 at 17:38:09 (EDT) Email Address: Not Provided Message: What is necessary is to think back to Jared Diamond and ask whether any of his geographic observations related to Latin America or Africa, for instance, today. What can be explained apart from culture about the ways in which people live through the world?

Subject: Re: Jared Diamond From: Mik To: Emma Date Posted: Thurs, Aug 11, 2005 at 17:49:07 (EDT) Email Address: Not Provided Message: I'm not sure what you mean. Are you referring to the development of people?

Subject: Re: Jared Diamond From: Emma To: Mik Date Posted: Thurs, Aug 11, 2005 at 20:30:11 (EDT) Email Address: Not Provided Message: I will follow up, but I mean that we can try to determine whether Diamond's geographic framework can explain contemporary development patterns in southern Africa. A framework rather apart from cultural analysis at least to begin with.

Subject: Re: Jared Diamond From: Mik To: Emma Date Posted: Fri, Aug 12, 2005 at 11:42:03 (EDT) Email Address: Not Provided Message: Whoa, that's deep. I'm sure the geography has affected 'contemporary culture' in Southern Africa, but 'development patterns'? I don't know. You gona have me thinking about that the whole weekend.... damn ;-)

Subject: Re: Jared Diamond From: Emma To: Mik Date Posted: Fri, Aug 12, 2005 at 13:04:02 (EDT) Email Address: Not Provided Message: We should remember that South Africa lies below the Tropic of Capricorn, and has a similar geography to southern Europe and similar economic potentials. Each geographic region of Africa has distinct geographic potentials and difficulties to overcome. I will add as there is time, but I too am thinking.

Subject: Re: Jared Diamond From: Mik To: Emma Date Posted: Fri, Aug 12, 2005 at 14:02:28 (EDT) Email Address: Not Provided Message: That's a tough one. If we look at 'contemporary times' or more like in the last 50 or so years, the history of the region has been greatly affected by colonisation and by communism (more than Geography). Many developing countries went from decolonisation direct to either full blown communism or dictatorships sponsored by either the West or the East and their reign of tyranny was ignored as the West/East were simply looking for allegiance. South Africa avoided all that. South Africa was allowed to be a 'self governing' colony in the early 1900's (along with Australia, New Zealand and Canada). Then in 1950, at the time the decolonisation trend began, South Africa got independance and remaind under apartheid rule until 1992. It was only in 1980 that the West started slowly implementing sanctions, but from the early 1900's right through to 1994, SA did not endure any revolution or economic stranglhold from an emperialist power. By the time of change of govenment in 1994, Communism was over. In the ruling Party of South Africa (the ANC), over 50% of their leadership are members of the South African Communist Party. But today, the communist party has no teeth (and no backing). So they had no choice but to switch to market economics and proper democracy. In essence there is a direct link between the fall of the Berlin wall and the changes in South Africa. Apartheid became not only a crime against humanity but a good way to keep communism out. Well the fall of communism lead to the fall of apartheid. The ironic twist, when South Africa achieved full democracy with majority rule, Yugoslavia looked to South Africa and decided to do the same. South Africa has more religious, cultural and regional diveristy than Yugoslavia. Hey if it worked in South Africa, why not in Yugoslavia.... well why not... because Yugoslavia didn't have Mandela... that's why not. Look at the stark difference and similarity between the two. One is in Africa, one is in Europe. Both have wide diversity, both have tremendous economic problems, yet only one survived to grow out of the upheavel. The solution - GOOD LEADERSHIP.... now why hasn't Jared Diamond addressed this issue? No matter if you are in Turkmenistan, Zimbabwe, UK, China, Canada or the USA. Good leaders make a difference. If your country is blessed with the right people coming to power at the right time.... you are lucky. Now how about Jared Diamond trying to put emphasis on why some countries have conducive environments to good leadership and why some are don't? I don't know the answer to this question... but I believe it is very pertinent. Okay enough... I'm off on my weekend... have a good one Emma.

Subject: Re: Jared Diamond From: Emma To: Mik Date Posted: Fri, Aug 12, 2005 at 19:54:16 (EDT) Email Address: Not Provided Message: Excellent, but first we go back to geography then we look to culture. Wherein does South Africa, below the Tropic of Capricorn differ from Nigeria in geography?

Subject: Afro-Pop Duo Unexpectedly on the Rise From: Emma To: All Date Posted: Thurs, Aug 11, 2005 at 17:29:58 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/11/arts/music/11note.html Afro-Pop Duo Unexpectedly on the Rise By KELEFA SANNEH They are the kinds of rock stars who wear their sunglasses everywhere, onstage and off. If you arrange to meet them at 4 o'clock in the afternoon in a Midtown hotel, they will be wearing sunglasses there, too. Like many canny celebrities, Amadou Bagayoko and Mariam Doumbia - famous throughout West Africa and lately a fixture on the French pop charts - have found a way to capitalize on their sense of style: They have a deal with Alain Mikli, the French designer of glasses, and wear a sleek, aluminum model of his. But their fashion isn't simply fashion: for many years, the duo now known as Amadou & Mariam were famous throughout West Africa simply as the Blind Couple From Mali. On Aug. 2, Nonesuch Records issued an American version of 'Dimanche à Bamako,' the duo's lovely, fizzy collaboration with the mischievous European producer Manu Chao, which has already been discovered by a surprising number of European listeners: the French have bought more than 100,000 copies alone. Now American listeners have a chance to hear one of the year's most unexpected rock 'n' roll success stories: a nimble, playful CD that nods toward everything from indie-rock to dance music. This week the duo made a rare promotional trip to the United States, which ended with a pair of rapturously received concerts at Joe's Pub on Tuesday night. Sometime after 1 a.m. on Wednesday, they began the final encore with 'La Réalité,' an exuberant Afro-disco track that gives Mr. Bagayoko space to wind his guitar lines around a refrain borrowed from the eccentric reggae producer Lee Perry; from the noise in the crowd, even the two singers onstage must have known that people were dancing. (The duo plans to return to New York next month, for the CMJ Music Marathon.) Growing up, Mr. Bagayoko, 50, and Ms. Doumbia, 47, feasted on imports. They heard soul and funk and lots of French music, but what seemed to make the biggest impression were blues and rock, some of which they'd get from friends who visited Europe. Comfortably sunglassed in his Midtown hotel, Mr. Bagayoko switched from the French he speaks (and sings in) to rattle off the names: 'John Lee Hooker, Led Zeppelin, Pink Floyd.' Ms. Doumbia jumped in: 'Jimi Hendrix.' In a sense, the duo's music is a celebration of a kind of musical exchange that has swiftly - and, perhaps, happily - become obsolete. These days, a young fan in Mali doesn't have to import Led Zeppelin records from overseas. The country's musicians produce plenty of their own CD's, and thanks to a younger generation of listeners and musicians, Mali now has one of Africa's richest hip-hop scenes. 'They listen to much less rock 'n' roll,' Mr. Bagayoko said with a rueful smile. Mr. Bagayoko started playing guitar in the 1960's, and in 1974 he joined Les Ambassadeurs du Motel, one of the country's most popular groups - its ranks included another leading musician, Salif Keita - which played a wide range of genres. Oddly enough, though, what drew Mr. Bagayoko to rock 'n' roll was a sense of cultural pride: both he and Ms. Doumbia are proud of their Bambara ethnicity, and they say that traditional Bambara music is much closer to the blues than it is to other kinds of West African pop. In the 1980's, the duo resettled in Abidjan, in the Ivory Coast, and began releasing a series of cassettes and then a series of CD's, while developing their graceful but surprisingly muscular style: a chanted refrain might give way to a chugging guitar riff; a percussionist pounding a djembe might be joined by one of Mr. Bagayoko's serpentine solos. By the time the group released 'Wati' (Universal France), in 2002, Mr. Chao was hooked, and when he asked to work with the duo, they agreed, although not without trepidation about the more chaotic sound that he helped them achieve. 'We had a feeling it would be a success in France and Europe,' Mr. Bagayoko said. 'But we were worried that it would be too strong for Africans. So it was a pleasant surprise when people in Mali liked it, too.' Amadou & Mariam often write simple lyrics full of general - even vague - pleas for peace and harmony, though the music turns these familiar themes into giddy daydreams. It would seem that Mr. Chao nudged the duo toward something slightly quirkier: he helped write and sing the impressionistic lyrics of songs like 'Sénégal Fast-Food' and 'Camions Sauvage,' a light-hearted tirade against dangerous truck drivers. The two are clearly happy with 'Dimanche à Bamako,' and with the success it has brought them, which did not come by accident. In Bamako as elsewhere, pop stars tend to be hustlers, too, and with Amadou & Mariam, you get the appealing sense that they've figured out clever ways to acknowledge all their different audiences at once. Their previous album, 'Wati,' included 'Ilbiwan,' a grand and seemingly deeply felt tribute to the Moors of northern Mali. Mr. Bagayoko said it goes down especially well at certain concerts. 'When we play that song,' he explained, 'the Moors stand, they dance.' He smiled slyly, and Ms. Doumbia smiled, too. 'And they give us money.' Ah. Mightn't it be time, then, for a similar song about the proud - and, let's hope, generous - people of America? Ms. Doumbia chuckled. 'It's coming soon,' she said.

Subject: Brazilian Director Changes the Recipe From: Emma To: All Date Posted: Thurs, Aug 11, 2005 at 16:24:39 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/09/movies/09cons.html?ex=1281240000&en=b8caef78d7596ad2&ei=5090&partner=rssuserland&emc=rss Brazilian Director Changes the Recipe for the Film of a Le Carré Novel By CHARLES McGRATH Mike Newell, perhaps best known for 'Four Weddings and a Funeral,' was supposed to direct 'The Constant Gardener,' a new film based on the John le Carré thriller of the same title, which opens on Aug. 26. But then Mr. Newell signed on to make 'Harry Potter and the Goblet of Fire,' the fourth installment in the Hogwarts saga, and Simon Channing Williams, the producer of 'The Constant Gardener,' decided he might have a class problem. 'It suddenly occurred to me that we had been going down the wrong track,' Mr. Channing Williams said recently in an interview at his London office. 'Here we had a middle-class author, a middle-class director, a middle-class producer and a middle-class actor,' he explained, referring to Mr. Le Carré, Mr. Newell, himself and Ralph Fiennes, who had already been cast in the lead. He added that this was perhaps an opportunity to think outside class boundaries. 'The Constant Gardener' is in part the story of a man who, like the original scheme for the movie, is in danger of suffocating within the British class system: Justin Quayle, the title character, is an Old Etonian who works as a pen-pushing midlevel diplomat at the British High Commission in Kenya and is concerned mostly with tending his flower garden and keeping up appearances. But the book is also the story of Quayle's liberation, through a love affair and marriage and, eventually, as he tries to solve the mystery of his wife's murder, through immersion in Kenya itself. Kenya is more than a setting, in fact; it's practically a character. Once Mr. Channing Williams realized that, he said, his thinking led him inevitably to Fernando Meirelles, the Brazilian director who was nominated for an Academy Award for 'City of God,' his film about rivalry among child gangs in the slums of Rio. 'Fernando is not interested in the British class structure,' Mr. Channing Williams said. 'What he brings to this is his innate understanding of human nature.' After the success of 'City of God,' Mr. Meirelles found himself much in demand. He was even offered 'Collateral,' the Tom Cruise and Jamie Foxx thriller. But he is not a fan of big studio movies and he turned all his suitors down. He did agree to meet with Mr. Channing Williams, however, because he is a great admirer of the director Mike Leigh, and Mr. Channing Williams has produced a number of Mr. Leigh's films. Mr. Channing Williams gave Mr. Meirelles the 'Constant Gardener' script, and Mr. Meirelles, who as it happens had just been visiting Kenya himself, signed on virtually overnight. Right away he started tinkering with Jeffrey Caine's screenplay. 'When John le Carré wrote the story, the story's seen through a British point of view,' Mr. Meirelles said in an interview in New York in June. 'And I think when I read the story, I put myself on the Kenyan side because, really, I come from Brazil.' Among other things, Mr. Meirelles wrote several new African characters into the story, not all of whom survived the cutting process. What does remain is a remarkable sense of place: a vivid evocation of the Kenyan landscape and cityscape in one of Nairobi's most down-and-out neighborhoods, through which sewage flows in open, rag-cluttered trenches; and tracking shots of Kibera, Nairobi's sprawling, tin-roofed shantytown, which are as enthralling as they are disturbing. 'As you know, there's a lot of slums in Brazil,' Mr. Meirelles said. 'But compared to the slums in Kenya, the Brazilian ones are really Beverly Hills.' In Kenya, he said: 'They don't have water, they don't have electricity, they don't have cement - it's all dirt. And they cook with fire. Can you imagine? A million people living there and everyone cooking with fire in the middle of the city? It's the poorest place I've ever seen in my life.' Though Mr. Meirelles had never made a film outside Brazil before, Mr. Channing Williams said he wasn't worried and pointed out that 'at a certain level, filmmaking is just filmmaking.' Mr. Meirelles said much the same thing, adding that the main difference between 'The Constant Gardener' and other films he had worked on was that 'the wine is better; you travel first class.' The only thing that made him nervous, he said, was meeting Ralph Fiennes. 'I said to myself: 'Well, what am I going to say to Ralph Fiennes?' ' But Mr. Fiennes immediately understood his point of view in telling the story, Mr. Mereilles said, and they got along just fine. He also enjoyed working with Rachel Weisz, who plays Tessa, Quayle's wife, and brings some sensuous immediacy to a role that in the novel is perhaps overly idealized. 'I think I was very lucky with this,' Mr. Meirelles said of both actors. 'Not only because they're good actors but because of their commitment. I was not expecting that level of commitment with stars.' Mr. Meirelles, who before he got into feature filmmaking had shot by his count more than a thousand 30-second commercials for Brazilian television, is used to working quickly and with a small crew, and he occasionally felt oppressed by the sheer scale of the 'Constant Gardener' production. 'You know, I just wanted to go places and shoot something with a hand-held camera,' he said, recalling that his favorite moments were when he stole away with a cameraman, a soundman, his director of photography, César Charlone, and one or two of the actors. One such scene takes place when Tessa and her friend Arnold Bluhm, an African doctor, simply walk through Kibera, as Kenyan life throngs around them. 'No security, no production, nobody,' Mr. Meirelles said. 'Just five people walking around, and we improvised some very good lines.'

Subject: Entrenched Epidemic From: Emma To: All Date Posted: Thurs, Aug 11, 2005 at 14:31:42 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/11/international/africa/11women.html Entrenched Epidemic: Wife-Beatings in Africa By SHARON LaFRANIERE LAGOS, Nigeria - It was a typical husband-wife argument. She wanted to visit her parents. He wanted her to stay home. So they settled it in what some here say is an all-too-typical fashion, Rosalynn Isimeto-Osibuamhe recalled of the incident in December 2001. Her husband, Emmanuel, followed her out the door. Then he beat her unconscious, she says, and left her lying in the street near their apartment. Ms. Isimeto-Osibuamhe, then 31 and in the fifth year of her marriage, had broken an unwritten rule in this part of the world: she had defied her husband. Surveys throughout sub-Saharan Africa show that many men - and women, too - consider such disobedience ample justification for a beating. Not Ms. Isimeto-Osibuamhe. A university graduate and founder of a French school, she packed her clothes and walked out as soon as she got back from the hospital. So far, although her resolve sometimes wavers and she does not want a divorce, she has not gone back. 'He doesn't believe I have any rights of my own,' she said in an interview outside her French classroom. 'If I say no, he beats me. I said: 'Wow. That is not what I want in life.' ' Women suffer from violence in every society. In few places, however, is the abuse more entrenched, and accepted, than in sub-Saharan Africa. One in three Nigerian women reported having been physically abused by a male partner, according to the latest study, conducted in 1993. The wife of the deputy governor of a northern Nigerian province told reporters last year that her husband beat her incessantly, in part because she watched television movies. One of President Olusegun Obasanjo's appointees to a national anticorruption commission was allegedly killed by her husband in 2000, two days after she asked the state police commissioner to protect her. 'It is like it is a normal thing for women to be treated by their husbands as punching bags,' Obong Rita Akpan, until last month Nigeria's minister for women's affairs, said in an interview here. 'The Nigerian man thinks that a woman is his inferior. Right from childhood, right from infancy, the boy is preferred to the girl. Even when they marry out of love, they still think the woman is below them and they do whatever they want.' In Zambia, nearly half of women surveyed said a male partner had beaten them, according to a 2004 study financed by the United States - the highest percentage of nine developing nations surveyed on three continents. In South Africa, researchers for the Medical Research Council estimated last year that a male partner kills a girlfriend or spouse every six hours - the highest mortality rate from domestic violence ever reported, they say. In Harare, Zimbabwe's capital, domestic violence accounts for more than 6 in 10 murder cases in court, a United Nations report concluded last year. Yet most women remain silent about the abuse, women's rights organizations say. A World Health Organization study has found that while more than a third of Namibian women reported enduring physical or sexual abuse by a male partner, often resulting in injury, six in seven victims had either kept it to themselves or confided only in a friend or relative. Help is typically not easy to find. Nigeria, Africa's largest nation with nearly 130 million people, has only two shelters for battered women, both opened in the last four years. The United States, by contrast, has about 1,200 such havens. Moreover, many women say wifely transgression justify beatings. About half of women interviewed in Zambia in 2001 and 2002 said husbands had a right to beat wives who argue with them, burn the dinner, go out without the husband's permission, neglect the children or refuse sex. To Kenny Adebayo, a 30-year-old driver in Lagos, the issue is clear-cut. 'If you tell your wife she puts too much salt in the dinner, and every day, every day, every day there is too much salt, one day you will get emotional and hurt her,' he said. 'We men in Africa hate disrespect.' Nigeria's penal code, in force in the Muslim-dominated north, specifically allows husbands to discipline their wives - just as it allows parents and teachers to discipline children - as long as they do not inflict grievous harm. Assault laws could apply, but the police typically see wife-beating as an exception. Domestic violence bills have been proposed in six of Nigeria's three dozen provinces but adopted in just two. Women's rights activists say that the prevalence of abuse is emblematic of the low status of women in sub-Saharan Africa. Typically less educated, they work longer hours and transport three times as much weight as men, hauling firewood, water and sacks of corn on their heads. Ms. Isimeto-Osibuamhe does not fit that standard profile. Articulate, with a fashionable haircut and a sociology book in her bag, she speaks in a confident, even assertive tone of voice. Her diary is full of plans for various projects she hopes to undertake. 'I am an organizer,' she said in a series of interviews. 'I am a leader.' But that did not save her from a seemingly endless string of beatings during her eight-year marriage to her husband, Emmanuel. By Nigerian standards, Ms. Isimeto-Osibuamhe said, her parents were progressive. Her father occasionally beat her mother, but he also encouraged his daughter, the oldest of seven children, to pursue her studies and, later, her careers as a marketing executive, French teacher and host of a French educational television show. She was only about 16 when she met Emmanuel. Like her, he went on to graduate from a university, specializing in accounting. Slim and handsome, he slapped her only once during their long courtship, she said. She thought it was an aberration. It wasn't. Now 35, Ms. Isimeto-Osibuamhe says that Emmanuel beat her more than 60 times after she married him in 1997. He beat her, she says, while she was pregnant with their son, now 6. He threw a lantern at her. He held a knife to her head, she said, while a friend pleaded with him not to kill her. Emmanuel Osibuamhe, 36, now says he was wrong to beat his wife. But in a two-hour interview in his office, which doubles as barber shop, he insisted that she drove him to it by deliberately provoking him. Pacing the floor in freshly pressed pants, polished shoes and yellow shirt, he grew increasingly agitated as he recalled how she challenged his authority. 'You can't imagine yourself beating your wife?' he said. 'You can't imagine yourself being pushed to that level? But some people just push you over the edge, and you do things that you are not supposed to do.' 'For God's sake,' he added. 'You are the head of the home as the man. You must have a home that is submissive to you.' To him, that means accepting that he is the head of the household and makes the final decisions. It also means that all property be in his name and that his wife ask his permission before she visits her family, he said. When Ms. Isimeto-Osibuamhe eventually sought help, others only seemed to support her husband's view. She went to the police. 'They told me I am not a small girl,' she recalled. 'If I don't want to be married, I should get divorced.' She told her father-in-law. He advised her that 'beating is normal.' She told her local pastor, who counseled her that 'I shouldn't make him so angry,' telling her 'whatever my husband says, I should submit.' She found support, finally, at Project Alert on Violence Against Women, a nonprofit organization that runs one of Nigeria's two shelters. She lived at the shelter for weeks. She titled her statement detailing the violence 'A Cry for Help.' Briget Osekwe, the senior program officer, said the group's files contained 200 cases like Ms. Isimeto-Osibuamhe's. Even some women who are economically independent like Ms. Isimeto-Osibuamhe, she said, are loath to divorce their husbands for fear of social disgrace. 'In this society, a woman must do everything she can to make her marriage work,' said Josephine Effah-Chukwuma, who set up Project Alert in 1999. 'If it fails, the woman gets the blame.' Since she moved out, Ms. Isimeto-Osibuamhe said, her husband has hit her a dozen times, once knocking her to the floor of their church. She is torn over whether it is possible for him to change. She worries about how she will raise her son, now living with his grandparents, should she divorce. 'Should I stay because of the baby and then get killed?' she asked. But at another point she asked a reporter to make sure that in any account of her story, her last name would be hyphenated to include his. Her diary is filled with notes on how his views are wrong. 'Marriage to you: A slavery relationship!' she wrote this January. She has now found a new outlet as the creator and host of a local television show on domestic violence. After the first program was broadcast, she said, she was deluged with calls from women like herself. She hopes to pursue their cause through a little foundation she has formed called 'Happy Family.' 'An African man believes his wife is like a piece of property, is like a car, is like a shoe, is like something for him to trample on,' Ms. Isimeto-Osibuamhe said. 'Our men need education.' So do 'our mothers, our fathers, our sons,' she added. 'The whole society needs to be overhauled.'

Subject: Button Pushing From: Johnny5 To: Emma Date Posted: Thurs, Aug 11, 2005 at 14:41:45 (EDT) Email Address: johnny5@yahoo.com Message: Dear Emma, thank you so much for posting this important topic - I was worried in your previous reply to MIC you would restrain yourself and self censor to the detriment of us all. Always fire away Emma, if a person is too insecure to bear your most mild of slings and arrows, they are probably too insecure for the great melting pot anyways - either you let others push your buttons and give them control or you do not - I am glad to see like the woman in the article - you are not going to let that be a concern. As always though there is a happy medium, too much slings and arrows and too little are both extremes. I long for the day when violence is stamped out of this world and the people it breeds no longer walk our planet. Hate and violence are taught. This is a great thing for the people in that part of the world - thank you so much for posting it and giving the rest of us hope.

Subject: Re: Button Pushing From: Emma To: Johnny5 Date Posted: Thurs, Aug 11, 2005 at 15:37:55 (EDT) Email Address: Not Provided Message: Thank you for a remarkably kind comment. We are passing through a period in which we must think more deeply about violence in many guises. I can too easily be discouraged even by thinking about the subject. Thank you so much, as always. You have a sensitive way about you.

Subject: Re: Entrenched Epidemic From: Emma To: Emma Date Posted: Thurs, Aug 11, 2005 at 14:32:43 (EDT) Email Address: Not Provided Message: We must end such practices everywhere.

Subject: Re: Entrenched Epidemic From: Mik To: Emma Date Posted: Thurs, Aug 11, 2005 at 15:11:59 (EDT) Email Address: Not Provided Message: Huh... were we pushing each other's buttons? There is actually an interesting concept in this form of violence. Did you know it is actually relatively new. Like in only the last 15 years have we seen a rapid rise in violence towards women in Africa. There are two sides to this coin: 1. On the one side men have always culturally been regarded as having the absolute word in the relationship. 2. African women are being more and more exposed to images of liberated women, paricularly from the Western world. And of course women like these images. When you have a culture that was quite well set in its ways and all of a sudden, men are faced with a growing challange to the 'word' we have a perfect recipe for disaster. This is a kind of tacit influence of the west bringing in good and bad change into Africa. Good in that it is simply wrong that women have been subservient for so long, bad in that it is having a violent reaction. Now comes the question... now that this phenomena has started to occur partly due to our involvement, do we now, as foreigners, impose ourselves into African culture and implement changes such as teaching young boys that women are equal to men in every way? Careful this is a loaded question.

Subject: Re: Entrenched Epidemic From: Emma To: Mik Date Posted: Thurs, Aug 11, 2005 at 15:34:03 (EDT) Email Address: Not Provided Message: There are issues of human rights that must be considered to transcend culture. South Africa now has among the world's strongest Constitutional affirmations of ethnic and gender equality. South Africa must be a model. The rest I have to consider carefully.

Subject: Re: Entrenched Epidemic From: Mik To: Emma Date Posted: Thurs, Aug 11, 2005 at 16:58:19 (EDT) Email Address: Not Provided Message: No argument from me... I agree 100%.

Subject: Still Growing From: Terri To: All Date Posted: Thurs, Aug 11, 2005 at 11:14:11 (EDT) Email Address: Not Provided Message: Sure, this is what a sound bull market is all about; making gradual gains testing every negative premise. We are now almost 3 years into this global bull market. Notice the nice consumer spending report. We are holding well.

Subject: Quest to Banish Fat in Tasty Ways From: Emma To: All Date Posted: Thurs, Aug 11, 2005 at 09:48:14 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/11/business/11food.html Science's Quest to Banish Fat in Tasty Ways By MELANIE WARNER Low-fat fried chicken may seem like a contradiction in terms, but not to Stephen Kelleher. On a recent summer morning, he hovered over a whirling assembly line as a waterfall of gray liquid cascaded over slabs of breaded chicken. Then the magic began. During the bath in the liquid solution, which consisted of water and protein molecules extracted from a slurry of chicken or fish tissue, a thin, imperceptible shield formed around the meat. When the chicken was submerged in oil, the coating blocked fat from being absorbed from the fryer. Voilà! The chicken contained 50 percent less fat than a typical piece of fried chicken. Just another day in the strange world of food scientists. Mr. Kelleher, the founder of Proteus Industries in Gloucester, Mass., is one of many chemists who work, often in secret, in a little-understood part of the $550 billion processed-food industry. These are the people who ultimately put food together, and their mission is critical: developing foods that let consumers have their cake and eat it, too. With two-thirds of Americans considered overweight and yet many professing a desire to eat healthier, every major food producer and food-ingredient company has ordered its scientists to find the holy grail: products that either have less bad stuff - fat, white flour, sugar and salt - or more good stuff like whole grains, fiber and fish oil. Some of these food additives are natural and some are not. But even those that are natural hardly evoke images of a country harvest. Fat-repellent coatings, after all, do not grow on trees. Coming soon to your grocery store, for example, could be salty corn chips cooked in oil but that are marketed as healthy because the addition of chemically modified starches make them high in fiber. Labeled simply as 'modified cornstarch,' this additive cannot be broken down until it reaches the colon, much like the natural fiber found in fruit and vegetables. Also coming soon: bread containing microscopic capsules of fish oil, enabling food companies to contend that the bread is 'heart-healthy' because of the cholesterol and triglyceride-lowering omega-3 fatty acids found in fish oil. Some nutritionists question whether all this alchemy will further confuse consumers about the basics of good nutrition. Marion Nestle, a professor of nutrition at New York University, maintains that the best way to get fish oil into your diet will always be to eat fish. 'What this does is to turn food into medicine,' said Professor Nestle. 'Omega-3's occur naturally in food like fish, chicken and eggs, and plants to a lesser extent. Why do we need to get it from bread?' One reason may be that products that can be marketed as healthier often generate higher sales and fatter profits for food companies. PepsiCo, for instance, reports that sales of its healthier 'Smart Spot' items - products like Baked Lay's potato crisps, Tropicana orange juice, Diet Pepsi and Quaker oatmeal - are growing at double the pace of other products. Foods labeled as healthy also present a show of good faith to administration officials, members of Congress, consumer groups and trial lawyers, who all monitor the food industry's response to the nation's obesity problem. Ingredient companies today sell $4 billion worth of additives to the food industry a year and are responsible for many of the common properties of processed food. Additives, for instance, keep the fruit in yogurt suspended, not plopped at the bottom. They make sure that chicken dinners do not come out of the microwave hot around the edges and cold in the middle, and they allow many foods to stay in warehouses or on supermarket shelves for up to nine months without spoiling. Tate & Lyle of London, one of the largest food-ingredient companies in the world, makes the popular sweetener Splenda. It recently started selling a whole-grain 'cracker system' composed of Splenda and hydrolyzed wheat protein, an additive that has been manipulated - either chemically or through enzymes - to give the softness of white flour without adding carbohydrates. Other ingredient companies are focusing on what they can add to food to make it healthier. Both Cargill, the commodities giant that has a large food-ingredient business, and National Starch Food Innovation, the food arm of National Starch and Chemical based in Bridgewater, N.J., and itself a unit of the giant Imperial Chemical Industries of Britain, have seized upon the fact that the average American consumes less than half the fiber each day that the government recommends. Nutritionists consider fiber beneficial because it prompts slower, steady digestion, preventing spikes in blood sugar and insulin. It has also been shown to lessen the risk of colon cancer. The most obvious way to get more fiber into the diet is to increase consumption of whole and unprocessed fruit, vegetables and beans. But food companies say that many Americans are unwilling to make significant changes in their eating choices to do this, and food companies are more than willing to fill in the gaps. Rather than simply add a fiber like bran to foods, which can produce a coarse consistency that some dislike, Cargill and National Starch are selling something called resistant starch. They start with starch that has been extracted from either tapioca or corn and then modify it through a patented process - Cargill uses chemicals and National Starch uses enzymes - so that it will resist digestion in a way that mimics naturally occurring fiber. Judy Marlett, a fiber expert and former nutrition professor at the University of Wisconsin, explains that when starch is modified to be resistant, the molecular structure changes. The bonds between glucose molecules are covered up so that digestive enzymes cannot get to them. As a result, resistant starch, like natural fiber, is not digested until it reaches the lower intestine, where bacteria are finally able to break it down. Dorothy Peterson, a starch specialist for Cargill, says that the company is marketing resistant starch as an additive for products including bread, muffins, pasta and corn chips, allowing companies to increase the fiber content by several grams a serving. 'It's a simple way to do fiber addition,' Ms. Peterson said. 'We've gotten a tremendous amount of interest from customers.' One corporate customer already using National Starch's Hi-maize resistant starch is Sara Lee, which has added it to several products in its Delightful line of low-calorie bread. Listed on the label as cornstarch, it adds just under a gram of fiber for each two-slice serving. Dannon is using a similar product, resistant maltodextrin, in its Light 'n' Fit With Fiber yogurt, which has three grams of fiber a serving. Omega-3 fatty acids, which studies have shown to protect against heart disease and are essential for brain development in infants, is another ingredient that food companies are clamoring over. Last September, the F.D.A. approved the health claim for omega-3 that it may reduce the risk of heart disease. The best source of omega-3's is the oil in fish. But fish oil is, well, fishy, and is not a natural fit for inclusion in the likes of bread, muffins and cereal bars. To deal with this, National Starch recently perfected technology that encapsulates fish oil, so it can be added to foods without an unappealing taste or smell. A specially modified cornstarch and a vegetable protein, usually soy, are mixed with water and fish oil and then cycled through machines that evaporate the water. In the process, the starch and protein molecules attach themselves to the droplets of fish oil, forming a shield. The concoction emerges from the machines as a beige powder. Jim Zallie, a food scientist and National Starch group vice president, says that a company in Seattle is testing the product for its bread. The label on the bread, he says, is unlikely to advertise the fish oil content, but simply cite the presence of omega-3's. Kellogg has signed a 15-year licensing deal with Martek Biosciences, a company that sells omega-3 fatty acids derived from algae, which have a milder smell and do not necessarily need to be encapsulated. Kellogg declined to comment on the deal or when the algae-based omega-3's might appear in its products. Kerry Ingredients, a Wisconsin-based subsidiary of the Kerry Group, a European food giant, is doing similar encapsulation with fiber, also to avoid the unseemly taste and texture issues. Without encapsulation, the ground-up soybean hulls the company is using as fiber make food taste a bit like sawdust. But guar gum, which comes from the seeds of the guar plant and is used widely in food as an inexpensive thickener and stabilizer, is even more problematic. Kerry Ingredients is using guar, which has a neutral flavor, as a fiber source, 'but it's the consistency of mucus,' said Jack Maegli, a food scientist who heads research and development for new products at Kerry Ingredients. 'If you eat too much of it, it invokes the gag reflex. I know it sounds unpleasant, and it is unpleasant. That's why we encapsulate it.' The problem, Professor Nestle said, is that ingredients that are extracted from their natural sources are never as good as the real thing. She cited plant sterols, another seemingly healthy ingredient popping up in various foods. Extracted from soybeans using a chemical solvent, plant sterols are promoted for their cholesterol-reducing benefits and have been added to yogurt, orange juice and cereal. But, Professor Nestle said: 'No way do plant sterols replace whole fruits or vegetables, or even beans for that matter. The evidence is pretty clear that foods work, but single nutrients don't.' Food companies insist that, unlike their critics, they are pragmatists. They say their consumer research shows that convenience and taste still outrank nutrition as the top priority for most people and that consumers have no intention of giving up their favorite foods. That is good news for the industry. If Americans stopped eating large quantities of fried chicken, sweetened breakfast cereal, cookies and snack chips, the financial health of many companies would suffer. And that is why food scientists like Mr. Kelleher of Proteus Industries keep searching for the perfect recipe for low-fat chicken. Pat Verduin, head of research and development at ConAgra Foods, which sells fried chicken and fish to restaurants and schools through its food-service operations, says that other companies have tried other coatings using a pectin-based solution, which leads to a gummy texture and oil that pools unevenly on the surface of the product. 'I think what Proteus is doing is novel,' Ms. Verduin said, adding that ConAgra is looking at the technology. 'They may be on to something.'

Subject: America's Summer of Discontent From: Emma To: All Date Posted: Thurs, Aug 11, 2005 at 09:29:22 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/11/opinion/11thu1.html America's Summer of Discontent Yesterday, Unocal shareholders agreed to be bought by Chevron for about $18 billion in the biggest oil acquisition in years. The deal brought to a final close a sad hostile takeover fight in which a Chinese government-owned company, Cnooc, was effectively blocked from the game by a hostile United States Congress. When analysts and economic historians look back, this summer may well prove to be the turning point in Chinese-American relations, the time when America chose short-range paranoia over rational behavior. From the dozen or so proposals in Congress for across-the-board tariffs against Chinese imports to the Pentagon's rumblings about Chinese military buildups, the rhetoric from Washington keeps escalating. America seems to be on the run, fueled by the false perception that China's rapid economic rise poses an inevitable threat to the United States. By repeatedly demonizing China, Washington risks creating the hostility it fears. The Chinese economic surge has been awesome. If America is going to respond to it reasonably, its leaders - and the public - will have to acknowledge the obvious: China is no longer a second-level economic power that can be bullied around. America's financial stability rests in no small way on the continued Chinese purchase of the government's debt. And in foreign affairs, China's concerns will have to be part of almost every calculation. Congress had the power to insert a clause in the energy bill that would make it all but impossible for the Chinese to buy Unocal. But Congress cannot stop China's thirst for oil. Its energy consumption has increased phenomenally, up 65 percent between 2002 and 2004. It is now the second-largest oil market in the world, behind the United States. Among the places it has been shopping are Iran and Sudan. Those oil-market relationships have already created considerable problems for the United States. Part of the reason it was so hard for America and Britain to get the humanitarian crisis in Darfur onto the United Nations' Security Council agenda last year was because China resisted calls to pressure the Sudanese government. Similarly, any attempt to impose United Nations economic sanctions on Iran for its nuclear program now risks running into opposition from Beijing. The scheduled visit of China's president, Hu Jintao, to Washington next month is a chance to put Chinese-American relations on a sounder footing. President Bush should seize the opportunity to muzzle the anti-China crowd who are putting flashy sound bites ahead of America's greater global interests.

Subject: Essays in Search of Happy Endings From: Emma To: All Date Posted: Thurs, Aug 11, 2005 at 09:02:53 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/10/education/10education.html Essays in Search of Happy Endings By MICHAEL WINERIP LOS ANGELES LAST spring, not long after a ninth-grade girl was murdered in a drive-by shooting in front of Locke High School, Liza Levine, an English teacher, assigned an essay about what it was like being a student at Locke. Teachers rarely know the full story behind their students, and this is particularly so at Locke, in South Central, one of the city's poorest and toughest areas. 'So much goes on away from school,' says Ms. Levine, who loses students to homelessness, pregnancy, work, drugs and jail. She never knows which ones will make it through. Most don't. The ninth grade at Locke four years ago had 979 students; in June, 322 graduated. The 657 who disappeared? Much of current education reform is aimed at developing a formula to accurately calculate their disappearance; creating programs and new schools to prevent their disappearance, and punishing schools that lose them. But those who disappeared are teenagers and remain elusive, even when you can ask them why. Ms. Levine's favorite 'Day in the Life' essay was by Lesly Castillo, 15, who was repeating ninth grade, and, the teacher feared, on the verge of dropping out. The teacher liked the quiet honesty of the essay. Ms. Levine usually has three or four students in each class who cannot read and more who do not focus, but says, 'I can count on Lesly to be cognitively all there.' Being physically all there is another matter. From Lesly's tattoos, Ms. Levine suspected she was a gang member. Lesly has a history of skipping, and has been taken to court by school officials for truancy. When she missed a few days early in the semester, Ms. Levine called home. Lesly's mother came in immediately. The parents are Mexican immigrants who do not speak English, common at Locke, where two-thirds of the students are Hispanic, the rest black. Her father works nights for a demolition company removing asbestos, and her mother is a housewife. Lesly's younger brother and sister get A's in elementary school. 'Lesly has two responsive parents,' Ms. Levine says. 'That's a big part of the battle. I told her mom, she's the kind of kid who can graduate, go to college.' Lesly's attendance improved, which gave Ms. Levine hope. Her midterm grade was C. Then she disappeared the week the class was preparing for the final on 'Lord of the Flies,' returning in time to try and bluff her way through. 'I gave her a mercy D,' Ms. Levine says. 'Was it right to pass her? Probably not. But the course teaches them to write for the state test and she has the capability. If I gave her an F, it would have just put her five credits further behind.' A Day in the Life. English, Period 3. Every morning I wake up around 6:30 ... and I tune in the oldies radio station ... My little brother runs to the bathroom first and he takes forever in there so me and my little sister just have to wait ... I wake up arguing with my mom for any reason, so I just can't wait to get to school, just not to be home any more. Once I'm in school I can't be there anymore. I get bored and sometimes that just makes me want to go back home. When I get to first period it's boring throughout until third period, but not all the times, only sometimes when the lesson is hard to understand or sometimes it's just hard to concentrate in school when you have problems and you're thinking about when it's your next court date or after a whole day in court ... Or just thinking of a way to stay safe when you walk home. Locke is one of the city's lowest performing schools, although the principal, Dr. Frank Wells, who is starting his second year, and several teachers say there have been gains in recent years. A new after-school program and night school give failing students the chance to make up credits; a second algebra class a day was added to help students pass the state test; a college-prep support program for midlevel students is credited with adding 100 graduates this year. 'Six seniors are going to Ivy League colleges,' Dr. Wells says. Even at Locke, the motivated find opportunity. As with many city schools, a major obstacle to improving Locke is the exodus of veteran teachers. A quarter of Locke's teachers last year were new; three-quarters had been at Locke five years or less. The principal is constantly filling vacancies. Lesly's summer school English course was taught by Ammarin Vacharaprusadee, 23 - or Mr. V - a recent college graduate, dispatched to Room 226 at the last minute. 'They just gave me the key the first day and said take the class,' he says. 'They didn't give me a curriculum. No books. I'm making it up as I go.' Several of the 23 students had their heads down much of the class. A few slept. They were supposed to do a half-hour of silent reading and write about it, but only a handful brought books. The rest, including Lesly, were allowed to write an essay on why it's important to bring your book. 'If I write, 'I ain't got it; that's why I don't got it,' is that worth points?' asked one of three boys who taunted the young teacher the entire two hours. Lesly arrived that day in late July having turned in only 5 of 11 assignments. In an hour she handed in the missing six, and Mr. V quickly gave her credit in his grade book. 'I was getting a failure and Mr. V said that boosted it to an A,' she says. Mr. V acknowledged that he barely skimmed the dozens of papers handed in that day. 'As long as they're turned in they get credit,' he says. THIS is why veterans like Ms. Levine, 47, who started at Locke in 2001, are so important. 'She's mastered her craft,' says Dr. Wells, the principal, 'and I love her heart.' Ms. Levine made a dozen home visits last year. When they read Elie Wiesel's 'Night,' she took the class to the Holocaust museum in Los Angeles. When they read 'Romeo and Juliet,' they translated it into modern speech. When a senior with a baby hadn't arrived to take the AP English test, Ms. Levine raced to the girl's home, dropped the baby off at day care and delivered the girl on time. But it is hard to hold the Ms. Levines. At urban schools a major exodus comes by the fourth year, and Ms. Levine recently decided to leave, for a suburban job. 'I'm racked with guilt,' she says. 'But you burn out. There's always this feeling that something else bad is going to happen to the kids that's out of your control.' She was angry after hearing why Lesly missed the week before finals. 'I called the house,' Ms. Levine says. 'She told me she'd gone to live with her boyfriend. She said, 'Don't worry, Miss, I'm not with him anymore, he's 24.' I said, 'Lesly, that's statutory rape, he can go to jail.' ' And Lesly? 'Didn't say anything,' Ms. Levine says. After fourth period is lunch and I like to kick back and just chill and talk about the problems we have and to find a way to fix them. We only get to kick it for a little while because sometimes we get searched just in case we have any type of weapons or drugs. Then the bell rings to go onto fifth period ... My friends have that class and we just make fun of the teacher. At the end of the school day my mom picks me up and I go home and just talk on the phone until my dad gets home and starts ripping on me, then we all just start arguing over using the phone. Then around 5:30 me and my mom leave to go to the park to work out ... When I get home I take a look at my caller ID ... My boyfriend calls or just one of my friends calls to tell me about a new problem we have on our backs. Or I also receive calls from homies telling me that one of the homegirls or homeboys got shot or killed or just simply put in jail. Not long ago my homie Caprice, rest in peace, got shot and killed by the police ... It was all over the news. The Castillos came from Mexico when Lesly was 4. As they struggled up the ladder, they moved eight times in 11 years. Her dad, Ramon, wanted to own a house, and the area he could afford was South Central. It is a small immaculate home on a street bordered by a freeway and junkyard. He says he hopes to sell for a profit, then move away, so his younger children do not have Lesly's troubles. 'Everything I do in this country is for my family,' he says. In eighth grade, Lesly says: 'My parents were real strict, they wouldn't let me go out. So I went out during school. I had a schedule. Monday I went to school. Tuesday to Thursday I didn't. Friday they gave tests; I went a half day and left after lunch.' Lesly looks mature for her age and liked the attention of older boys, even if they were gang members. 'I was 13 they were 18, then like 20, 23, 24.' She now attributes much of her trouble to her relationship with the 24-year-old gang leader. At one point, she was sent to court for truancy, another time for a fight when she kicked a girl's eye shut. She had her gang name tattooed in inch-high letters on her left breast. 'My dad wouldn't talk to me,' Lesly says. 'He kept saying why did you do it? You have a family, why do you need them?' Why did she? 'I don't know,' Lesly says. 'I guess I was just hanging with the wrong people, doing the wrong thing at the wrong time.' Moving in with the 24-year-old was a turning point. It was miserable, she says. He was lazy, wasn't around much, spent most of the time at the house of another girl he'd gotten pregnant. After a week, she returned home. Recently, through a mutual friend, he sent back her love letters and photos. She tore them up. 'He has no power over me,' she says. 'He can't force me to go back to him.' I also have to go to counseling. Counseling is mostly given to you by court or your parents sign you up ... It's when you do bad in school or at home and in counseling they try to help you ... Personally I think it doesn't work. When I get home I take a shower. I like to draw ...and listen to some oldies and start to worry on what you have done bad and the consequences. I also think on how to do things right and not to get caught doing bad things. I also try to find a way to stay out of probation, house arrest or do things right so I won't get locked up. After I get tired I put everything away and I go to sleep. The guidance counselor told Lesly that she still does not have enough credits for 10th grade. Lesly says this fall she will go to after-school from 3:30 to 5 and night school from 5 to 8 to make up the credits. But Ms. Levine says it is a bad sign that Lesly dropped her second summer course, algebra. 'I hope she'll make it,' Ms. Levine says. 'But I'm too much of a realist. I don't think so.' Lesly's father, too, is guarded. He says he sees small signs of change, but wants to see the grades. Lesly herself is not sure. 'Sometimes I think I can,' she says, 'but I may not. I've been in ninth grade so many years. Ninth grade! What's hard about ninth grade? I think it's that I haven't been to school so much.' The only person Lesly is allowed out with now is Stephanie Zamora, her best friend since seventh grade. Stephanie is in 11th grade with a B average and has plans for college. Stephanie takes Lesly to her church. Her boyfriend is a senior who plans to join the Marines. 'My boyfriend treats me right,' she tells Lesly. 'He tries to help me in school. He shows me he cares about me. He's a serious person.' 'So serious,' Lesly says. 'He cracks a little joke,' Stephanie says. 'Only with you,' Lesly says. 'Lesly's problem is she goes for the easy stuff,' Stephanie says. 'I do.' 'She just thinks about the right now,' Stephanie says. 'Yeah,' Lesly says. 'I'm still worried she'll go back to this guy.' 'I'm not going back to him,' Lesly says.

Subject: Loand, Loans, Loans From: Terri To: All Date Posted: Thurs, Aug 11, 2005 at 06:16:00 (EDT) Email Address: Not Provided Message: This evening, I happened to hear a radio ad, in a book store of all places, for 500,000 dollars in mortgage or home financing for 14 dollars a month. No more was mentioned, just 14 dollars a month for 500,000 dollars in loans. Since there was during the Red Sox game, I am sure it must be so :) Huh.

Subject: Fixed and Adjustable Debt From: Terri To: All Date Posted: Thurs, Aug 11, 2005 at 06:15:08 (EDT) Email Address: Not Provided Message: I am wondering however how much middle class debt is long term fixed rate debt, how much variable or adjustable rate debt. In western Europe by the way there is almost no long term fixed rate mortgage debt, so inflation in Europe would bring no middle class debt relief. I expect by now there would be less relief here than we might guess even with fixed rate mortgages.

Subject: A Reagan era conservative's view From: Pete Weis To: All Date Posted: Wed, Aug 10, 2005 at 13:44:28 (EDT) Email Address: Not Provided Message: August 9, 2005 Good News! Soon You'll No Longer Need an Expensive College Education to Work in the US Watching the Economy Crumble By PAUL CRAIG ROBERTS The US continues its descent into the Third World, but you would never know it from news reports of the Bureau of Labor Statistics’ July payroll jobs release. The media gives a bare bones jobs report that is misleading. The public heard that 207,000 jobs were created in July. If not a reassuring figure, at least it is not a disturbing one. On the surface things look to be pretty much OK. It is when you look into the composition of these jobs that the concern arises. Of the new jobs, 26,000 (about 13%) are tax-supported government jobs. That leaves 181,000 private sector jobs. Of these private sector jobs, 177,000, or 98%, are in the domestic service sector. Here is the breakdown of the major categories: • 30,000 food servers and bar tenders; • 28,000 health care and social assistance: • 12,000 real estate; • 6,000 credit intermediation; • 8,000 transit and ground passenger transportation; • 50,000 retail trade; and • 8,000 wholesale trade. (There were 7,000 construction jobs, most of which were filled by Mexicans immigrants.) Not a single one of these jobs produces a tradable good or service that can be exported or serve as an import substitute to help reduce the massive and growing US trade deficit. The US economy is employing people to sell things, to move people around, and to serve them fast food and alcoholic beverages. The items may have an American brand name, but they are mainly made off shore. For example, 70% of Wal-Mart’s goods are made in China. Where are the jobs for the 65,000 engineers the US graduates each year? Where are the jobs for the physics, chemistry, and math majors? Who needs a university degree to wait tables and serve drinks, to build houses, to work as hospital orderlies, bus drivers, and sales clerks? In the 21st century job growth in the US economy has consistently reflected that of a Third World country--low productivity domestic services jobs. This goes on month after month and no one catches on--least of all the economists and the policymakers. Economists assume that every high productivity, high paying job that is shipped out of the country is a net gain for America. We are getting things cheaper, they say. Perhaps, for a while, until the dollar goes. What the cheaper goods argument overlooks are the reductions in the productivity and pay of employed Americans and in the manufacturing, technical, and scientific capability of the US economy. What is the point of higher education when the job opportunities in the economy do not require it? These questions are too difficult for economists, politicians, and newscasters. Instead, we hear that “last month the US economy created 207,000 jobs.” Television has an inexhaustible supply of optimistic economists. Last weekend CNN had John Rutledge (erroneously billed as the person who drafted President Reagan’s economic program) explaining that the strength of the US economy was “mom and pop businesses.” The college student with whom I was watching the program broke out laughing. What mom and pop businesses? Everything that used to be mom and pop businesses has been replaced with chains and discount retailers. Auto parts stores are chains, pharmacies are chains, restaurants are chains. Wal-Mart, Home Depot, and Lowes, have destroyed hardware stores, clothing stores, appliance stores, building supply stores, gardening shops, whatever--you name it. Just try starting a small business today. Most gasoline station/convenience stores seem to be the property of immigrant ethnic groups who acquired them with the aid of a taxpayer-financed US government loan. Today a mom and pop business is a cleaning service that employs Mexicans, a pool service, a lawn service, or a limo service. In recent years the US economy has been kept afloat by low interest rates. The low interest rates have fueled a real estate boom. As housing prices rise, people refinance their mortgages, take equity out of their homes and spend the money, thus keeping the consumer economy going. The massive American trade and budget deficits are covered by the willingness of Asian countries, principally Japan and China, to hold US government bonds and to continue to acquire ownership of America’s real assets in exchange for their penetration of US markets. This game will not go on forever. When it stops, what is left to drive the US economy? Paul Craig Roberts has held a number of academic appointments and has contributed to numerous scholarly publications. He served as Assistant Secretary of the Treasury in the Reagan administration. His graduate economics education was at the University of Virginia, the University of California at Berkeley, and Oxford University. He is coauthor of The Tyranny of Good Intentions.He can be reached at: paulcraigroberts@yahoo.com

Subject: Scotty just died - who inspires now? From: Johnny5 To: Pete Weis Date Posted: Wed, Aug 10, 2005 at 14:54:12 (EDT) Email Address: johnny5@yahoo.com Message: Pete if you ever watched star trek, james doohan was scotty, he got a lot of kids excited to go into engineering education and go work for NASA and such. I turn on TV shows today though and it is stuff like everybody loves raymond or bart simpson and stuff like that. But when I was a kid it was about science and spaceships and all those neat things. Now the man that played scotty just died recently - who do the kids look to now? Is this just a trend in american society? Didn't britain us to have lots of good science stuff on the BBC - dr.who, blakes 7, etc etc - is the stuff hitting the young impressionable minds overseas the science fiction stuff or comedy?

Subject: Re: Scotty just died - who inspires now? From: Pancho Villa To: Johnny5 Date Posted: Thurs, Aug 11, 2005 at 19:52:13 (EDT) Email Address: nma@hotmail.com Message: GWB to Scotty: 'Could you still be able to beam me back to earth, Scotty?'

Subject: Re: Scotty just died - who inspires now? From: Setanta To: Johnny5 Date Posted: Thurs, Aug 11, 2005 at 05:16:35 (EDT) Email Address: Not Provided Message: i suspect it is similar to the crap churned out in the US; teen programs like OC, Smallville and MTV Cribs. the day of the gallant heroes fixing warp coils and conduit tubes are at an end. and with it the imagination necessary fuel innovation. teens are more interested in the pretty people and their rich lifestyles.

Subject: Oh NO !! From: Mik To: Johnny5 Date Posted: Wed, Aug 10, 2005 at 16:04:52 (EDT) Email Address: Not Provided Message: If kids are going to turn to 'Home Improvements' (that comedy show) for their inspiration to become DIY types we are in trouble. Even worse kids will be looking up to Parris Hilton and Jessica Simpson for their inspiration.... that's it we are going to hell in a hand basket.

Subject: Tim Allen busted for cocaine From: Johnny5 To: Mik Date Posted: Wed, Aug 10, 2005 at 16:15:23 (EDT) Email Address: johnny5@yahoo.com Message: http://www.rotten.com/library/bio/entertainers/actors/tim-allen/ 2 Oct 1978 Tim Allen is arrested with 1.4 pounds of cocaine at Kalamazoo Airport in Michigan. After testifying against his partner, Allen serves only 2.5 years for felony drug possession. Otherwise, it would have been a life sentence. Tim later becomes a comic, ultimately landing the starring role in the ABC television sitcom Home Improvement. 26 Nov 1979 Tim Allen pleads no contest to the drug charge and receives 3-7 years. He ultimately serves 28 months in the Sandstone Federal Correctional Institution.

Subject: International Stocks From: Terri To: All Date Posted: Wed, Aug 10, 2005 at 13:04:01 (EDT) Email Address: Not Provided Message: http://www.msci.com/equity/index2.html This Morgan Stanley website is great. As far as I know there is no site like this from a European company. Every developed country stock market is positive in domestic currency and most are up over 10%. Japan as always is relatively weak in yen and negative in dollars. Ireland and Portugal are also weak. The Europe Index is up over 16% in domestic currency and 6% in dollars.

Subject: Vtrix From: Johnny5 To: Terri Date Posted: Wed, Aug 10, 2005 at 14:48:44 (EDT) Email Address: johnny5@yahoo.com Message: Thank you so much sweet Terri for putting me onto Vanguards VTRIX.

Subject: Re: Vtrix From: Terri To: Johnny5 Date Posted: Wed, Aug 10, 2005 at 15:30:49 (EDT) Email Address: Not Provided Message: Thank you for ExxonMobil. Wish I properly understood why American oil companies need a 20 billion dollar subsidy for exploration.

Subject: He Created a Mirror for Black America From: Emma To: All Date Posted: Wed, Aug 10, 2005 at 12:07:03 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/10/arts/design/10john.html He Created a Mirror for Black America By FELICIA R. LEE For generations of black Americans, Ebony and Jet were much more than magazines. The publishing empire founded by John H. Johnson in 1942, which made him both rich and one of the most powerful black Americans, chronicled black possibilities, achievements and positive images. They fed a hunger for information and good feelings during the many decades when black people seldom saw themselves reflected in the larger culture except in the most stereotypical ways. Mr. Johnson, who died two days ago in Chicago at 87, was an iconic figure among black Americans, not only because of his business success but also because of his ability to showcase the sweeping range of black America, said business executives, academics and journalists interviewed yesterday. Many recalled sitting down with an issue of Ebony and thumbing through the photographs of movie stars, sports figures and ordinary black Americans and being thrilled finally to see people who looked like themselves. 'John Johnson's genius was that he could define the collective unconscious of the African-American people and put it into print,' said Henry Louis Gates Jr., director of the W. E. B. Du Bois Institute for African and African-American Research at Harvard University. Ellis Cose, a black former Chicagoan who is a contributing editor at Newsweek and the author of several books on social issues, said he was even thrilled when walking past the Ebony building on South Michigan Avenue, a high-rise emblem of black entrepreneurship. 'The whole enterprise was astounding,' he said. And years later, when he interviewed Archbishop Desmond Tutu in South Africa, Mr. Cose said that Mr. Tutu told him that he, too, had been inspired by Ebony during the dark years of apartheid. Indeed, the two magazines were not just celebrations of black success, as embodied by Mr. Johnson himself, but were also forums for the airing of black concerns, issues and politics, said Aldon Morris, a professor of sociology at Northwestern University. Those issues included everything from interracial dating to voting rights to school desegregation. 'The first thing to remember is that the Johnson Publishing Company was founded during the era of Jim Crow segregation,' Mr. Morris said. 'Beyond being oppressed and at the bottom of the society, it was an era of lynching and an era when black people did not have due process under law.' 'There were very few successful black businesses,' Mr. Morris continued. 'Everyone could identify with a black man at the height of oppression, in the 1940's, who would not give up his dream.' It said something about Mr. Johnson's place in American life that he had honorary degrees from both the historically black Howard University and from Harvard, and that he was comfortable with celebrities like the Rev. Jesse Jackson and the comedian Bill Cosby. Ebony magazine was equally populist. It printed everything from recipes to articles on black history (long before black studies became an academic discipline) and had articles on glamorous movie stars, quiet black scientists, bachelors and bachelorettes, beauty queens and politicians. It showcased the family of Jackie Robinson as well as documenting the 1963 March on Washington. The weekly, pocket-size Jet Magazine featured a female centerfold but also first published the now famous open-coffin photograph of the bloated, battered body of Emmett Till, the black teen-ager from Chicago who was lynched in Mississippi in 1955 for supposedly whistling at a white woman. It helped galvanize black opposition to such oppression and violence. 'He had an absolutely total clarity of vision,' said Phillip Dixon, chairman of the journalism department at Howard. 'He knew what his magazines were supposed to be and who the magazine was supposed to be for. It was clear to him that there was a hunger among African-Americans to see ourselves as whole people - not caricatures, not stereotypes, not stick figures, but whole people who loved their families, who kept their homes well, who longed to own things.' Mr. Johnson was also a philanthropist who shared his strategies for success. In 1982, he become the first African-American on Forbes magazine's list of the 400 wealthiest Americans. Two years ago, Mr. Johnson donated $4 million to Howard University's school of communications, which was then named the John H. Johnson School of Communications. 'I knew him as a philanthropist and someone deeply committed to higher education,' said H. Patrick Swygert, the president of Howard. 'He is part of a history of entrepreneurs within the African-American community. He's part of a tradition of success and giving back. He wasn't the first black publisher, but he was truly national in reach and scope. Ebony and Jet took on a role of celebration and certification, with something generated by us.' The magazines also provided jobs to scores of black journalists who were not hired in significant numbers by mainstream publications until the late 1960's, said Pamela Newkirk, an associate professor of journalism at New York University and the author of 'Within the Veil,' a history of blacks and journalism. The success of Ebony also helped pave the way for black publications that came in its wake - everything from Essence to Black Enterprise. Earl Graves, the founder and publisher of Black Enterprise, said Mr. Johnson was unusually generous with his time and ideas. 'He was ahead of his time,' Mr. Graves said yesterday. 'He showed African-Americans how they could be part of the landscape of this country.' The Rev. Jesse Jackson, a close friend, said, 'He survived and built a business that changed the face of American journalism and put a human face on black Americans.'

Subject: Emma quick take a look From: Mik To: Emma Date Posted: Thurs, Aug 11, 2005 at 10:00:07 (EDT) Email Address: Not Provided Message: Emma, I was dumb struck when I logged into one of my favourite news magazine sites and saw the title of their latest magazine take a look: www.fm.co.za As it turns out, the word 'nigger' is only an insult here in North America and is not seen in any such insulting way in Africa. Hence the reason they decided to be daring with their magazine cover. I guess it is the old statement of a rose will still smell as sweat by any other name.

Subject: Re: Emma quick take a look From: Emma To: Mik Date Posted: Thurs, Aug 11, 2005 at 11:17:09 (EDT) Email Address: Not Provided Message: This is a word that I have never used and will never use for any reason.

Subject: Re: Emma quick take a look From: Emma To: Emma Date Posted: Thurs, Aug 11, 2005 at 13:50:39 (EDT) Email Address: Not Provided Message: I read the article thoroughly, but the magazine should not have used such a headline. There was no call for it. The article was interesting beyond the sad headline.

Subject: Re: Emma quick take a look From: Mik To: Emma Date Posted: Thurs, Aug 11, 2005 at 11:28:56 (EDT) Email Address: Not Provided Message: Believe me, it's not something I go looking for. I just couldn't believe the audacity of this very upstanding magazine to go use that word. It is obvious that they know that the word has a different level of connotation between countries and they know they can get away with it.

Subject: Re: Emma quick take a look From: Emma To: Mik Date Posted: Thurs, Aug 11, 2005 at 14:28:04 (EDT) Email Address: Not Provided Message: Mik, you are a gem. I know what you mean and I do understand. I am shy of what can be hurtful always as are you. I am thinking of a post myself that may be too rough. Still, the magazine must promote itself in other ways.

Subject: What did buddha say? From: Johnny5 To: Mik Date Posted: Thurs, Aug 11, 2005 at 14:25:59 (EDT) Email Address: johnny5@yahoo.com Message: Those that take offense do more damage than those they assume to give it. I have been called cracker, mestizo, speedy gonzales (my favorite) and hoalie in moving between various cultures - my grandfather was from mexico so I guess that is the reason for the many names - hehe. I could let this give offense or no - it was always my personal choice. When i was younger other people's inescurities and self doubts were a concern - but there comes a time when you have to grab the klingon by his forehead and spit in his drink and get over all the silly insensitivities. Some of my friends took great offense at similar slurs - some of them are sitting in jail now hating life - when they could be out here chatting it up and having a great time with you and emma and the rest like me.

Subject: Re: What did buddha say? From: Mik To: Johnny5 Date Posted: Thurs, Aug 11, 2005 at 15:14:13 (EDT) Email Address: Not Provided Message: Very well said.

Subject: Re: What did buddha say? From: Emma To: Mik Date Posted: Thurs, Aug 11, 2005 at 15:58:30 (EDT) Email Address: Not Provided Message: I do understand. There will be no name calling here.

Subject: Re: He Created a Mirror for Black America From: Setanta To: Emma Date Posted: Wed, Aug 10, 2005 at 12:36:28 (EDT) Email Address: Not Provided Message: A truly inspiring story of empowerment. its a pity that the political correctness endemic in society now has overtaken much of his laudible goals. even the name African-American is a mis-nomer. a friend of mine tells an interesting story. while he was coach of the American 'Eagles' (the US international rugby team) his coaching assistant was a white south african. the south african (who's family had been in SA for as long as people had been in the US) considered himself an African American, much to the confusion of the players. technically he was absolutely correct, he had become an American citizen a few years previously. he thought he had more right to be called an african american than negros who had lived in the US for generations. as uncomfortable as this makes us feel, there is a certain logic to it. the Home Secretary in the UK is embarking on the same route, trying to start referring to 'british asians' and 'british indians'. fortunately, the people to whom these labels will be applied to are appalled and outraged. they insist in being called british, and this irishman supports them 100%!!! technically i'd should called an american/danish/scottish irishman.

Subject: Teddy Roosevelt From: Johnny5 To: Setanta Date Posted: Wed, Aug 10, 2005 at 15:13:44 (EDT) Email Address: johnny5@yahoo.com Message: Said there was no place in america for hyphenated americans. Divided we fall.

Subject: Re: He Created a Mirror for Black America From: Terri To: Setanta Date Posted: Wed, Aug 10, 2005 at 13:11:33 (EDT) Email Address: Not Provided Message: Excellent comment. I am completely content with African American or for me Irish American, but I wonder if we are not more secure in being American than a British Indian may be in being British. I do not know. Indians and Japanese I know seem to prefer Asian American. Latino or Latina is common.

Subject: Re: He Created a Mirror for Black America From: Terri To: Terri Date Posted: Wed, Aug 10, 2005 at 13:14:05 (EDT) Email Address: Not Provided Message: What is important is that we all feel we belong.

Subject: Stocks From: Terri To: All Date Posted: Wed, Aug 10, 2005 at 11:09:23 (EDT) Email Address: Not Provided Message: Notice, another rising interest rate scare passes and stocks begin the climb again. European stocks are booming.

Subject: Dean Baker on Pensions from 2003 From: Johnny5 To: All Date Posted: Wed, Aug 10, 2005 at 10:53:44 (EDT) Email Address: johnny5@yahoo.com Message: Dean Baker has been called the Cassandra of our day - the ancient seer who no one believed. http://inthesetimes.com/comments.php?id=185_0_1_0_C Bursting Bubbles Why the economy will go from bad to worse By Dean Baker | 5.9.03 print | email | comment Where is the best place to go for good advice about the stock market and the economy? The Wall Street Journal, Business Week, Fortune? If it is late 1999 and the stock market is soaring to record highs, the correct answer is In These Times. In December 1999, when the economic and political establishment was singing the praises of the “new economy” and promising an era of unparalleled prosperity, In These Times ran “After the Fall,” a cover story by Dean Baker, which explained that a stock market crash was inevitable. Baker also warned of some of the consequences of the crash—downsized 401(k) retirement plans, a funding crisis for defined-benefit pension plans, shriveling endowments for universities and foundations, and a recession pushing the unemployment rate up past 6 percent. During the ’90s boom, Baker was one of the few economists who clearly identified the stock market bubble. But no one in a position of power was willing to listen, even though the main thrust of the argument rested on basic arithmetic. Remarkably, the same “experts” who led the nation into the bubble are still dominating public debate on the economy. So In These Times is willing to break with the conventional wisdom again. In the first of a special two-part series on the economy, Baker explains how related bubbles in the property and currency markets have yet to burst, and how that prospect could severely hamper our quality of life for years to come. --- --- --- --- --

Subject: Amid Boston Glut, Office Projects Shift From: Emma To: All Date Posted: Wed, Aug 10, 2005 at 05:53:26 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/10/realestate/10boston.html? Amid Boston Glut, Office Projects Shift to Condos By SUSAN DIESENHOUSE BOSTON - Construction activity is brisk among the downtown high-rises here. But with occupancy poor in the office market for the fifth consecutive year, the activity is centered on developing luxury condominiums in new and existing buildings rather than producing new office space. Last spring, two projects once planned as office space won city approval to be built as luxury condos instead, and more such conversions are expected. In addition, over the last year, about two million square feet of existing office space has been pulled out of the market and is being renovated, mostly for luxury housing and hotels, said Gilbert Dailey, a senior director at Cushman & Wakefield of Massachusetts Inc. One building under construction is the 96-unit Folio Boston at 80 Broad Street. After a year of marketing, 62 units are under contract and the rest are on sale for $700,000 to $1.2 million, said the developer, Michael Rauseo, president of the Suffolk Companies, who in 2001 intended to build office space on the lower floors and about 35 condos above. The preference for residential projects reflects an office market with 16.6 percent of its space available for lease or sublease, only a slight improvement from the 20-year high of 19.7 percent reached in the third quarter of 2004. As for average asking rents, they are about half the peak reached in 2000. This poor performance is a result of weak demand, and is segmenting the office market between premium upper floors and those below. By the end of June, 13.9 percent of space above the 15th floor was available at an average asking rent of $42.62 a square foot. On lower floors, an additional 800,000 square feet brought the availability rate to 16.6 percent with asking rents of $32.49, said Debra J. Gould, a principal at Spaulding & Slye Colliers International, a real estate developer, investor and broker. 'We're seeing a greater-than-usual spread in rents,' she said. For the first time in many years, small to midsize professional firms can find 20,000-square-foot high-rise floors with expansive views. But big corporations that once filled sprawling 60,000-square-foot low-rise floors with clerical and administrative workers have moved these back-office operations to lower-cost sites, have adopted technology that enables them to further cut the number of employees or they need less space because of consolidation. So far this year, major financial tenants seeking to sublet their space have put 1.7 million square feet back on the downtown Boston market, which has a total of 56 million square feet. Manulife Financial, which acquired John Hancock, released 725,622 square feet of space; Bank of America, which purchased Fleet Bank, released 245,082 square feet. Despite lackluster leasing and growth prospects, commercial properties here are achieving record sale prices. Well-leased properties fetch $350 to $605 a square foot. But even those with, or anticipating, high vacancies are commanding solid prices. Last fall, 330 Stuart Street, a building that is about 80 percent vacant, sold for $267 a square foot. Earlier this year, One Faneuil Square, a retail and office building that was totally vacant, sold for about $450 a square foot, brokers said. 'Landlords who can't find tenants are selling,' said Jonathan G. Sloan, co-chief executive of Century Bank, a regional community lender with $1.8 billion in assets. With investors spurning securities markets, they are bidding up commercial property prices. But 'high sale prices reflect activity in financial markets, not the value of real estate,' Mr. Sloan said. 'The state economy is at a questionable turning point. The labor force has been reduced. Businesses aren't investing in capital plant. The growing companies are nonoffice users like health care, education and biotechnology. Where will the office growth come from? If there's more outsourcing, we're in for rough straits.' The discrepancies between real estate fundamentals and commercial property values also worry William F. McCall Jr., president of McCall & Almy, real estate advisers. A landlord who in 2000 could net $25 a square foot for an office building now nets about $15 a square foot because of vacancies, lower rents and higher tax and operating expenses. Buyers paying high prices, therefore, are settling for annual returns around 6 percent rather than the 10 percent they may have realized five years ago, he said. 'They'll stop buying offices when they find higher returns elsewhere,' Mr. McCall said. 'The big question: Is there an office market bubble here?' But the lure for residential developers is strong: condominiums sell for $750 to $1,500 a square foot. Such a prospect presumably moved Rose Associates of New York to change direction after spending four years planning to build the 214,000-square-foot Two Financial Center. In April, it won city approval to instead put up a $110 million 162-unit condominium. Rose declined requests for an interview.

Subject: 1031 Tenant in Common From: Johnny5 To: Emma Date Posted: Wed, Aug 10, 2005 at 10:45:41 (EDT) Email Address: johnny5@yahoo.com Message: Emma I have been looking around at some 1031 TIC investments, most of the TIC people I have talked too have some office property in california or texas with about 7.5% rates. I have talked so some people in texas that are looking at some oil and gas interests for the exchange, but I already hold so much XOM I wanted to diversify. They are telling me it is getting very hard to find good properties anymore, florida only has about 1-3% cap rates. Japanese guys came over here and bought office buildings and paid too much in the past. I don't want to repeat thier mistake - thanks for the article.

Subject: 'My Heart Will Go On' ...Glen From: Pancho Villa To: All Date Posted: Wed, Aug 10, 2005 at 03:59:34 (EDT) Email Address: nma@hotmail.com Message: http://www.harpers.org/TheIcebergCometh.html

Subject: Re: 'My Heart Will Go On' ...Glen From: Emma To: Pancho Villa Date Posted: Wed, Aug 10, 2005 at 05:52:30 (EDT) Email Address: Not Provided Message: Now I prefer classical, but my sister loves jazz. Your tastes are happily eclectic.

Subject: Melanoma Is Epidemic. Or Is It? From: Emma To: All Date Posted: Tues, Aug 09, 2005 at 17:21:09 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/09/health/09skin.html?pagewanted=print Melanoma Is Epidemic. Or Is It? By GINA KOLATA The nation is in the grip of what looks like a terrifying melanoma epidemic: melanoma is being diagnosed at more than double the rate it was in 1986, increasing faster than any other major cancer. But why the numbers are increasing is a contentious subject, so touchy that one dermatologist called it 'the third rail of dermatology.' Many dermatologists argue that melanoma, the most deadly of the skin cancers, is in fact becoming more common. And they recommend regular skin cancer screening as the best way to save lives. But some specialists say that what the numbers represent is not an epidemic of skin cancer but an epidemic of skin cancer screening, and a new study lends support to this view. In the study, published in the current issue of The British Medical Journal, Dr. H. Gilbert Welch of the Department of Veterans Affairs in White River Junction, Vt., and Dartmouth Medical School and his colleagues analyzed melanoma's changing incidence and death rate over time. The researchers used Medicare data to track the swift rise in melanoma cases since 1986 and data compiled by the National Cancer Institute to track the death rate and the number of people with early and late-stage disease. They found that since 1986, skin biopsies have risen by 250 percent, a figure nearly the same as the rise in the incidence of early stage melanoma. But there was no change in the melanoma death rate. And the incidence of advanced disease also did not change, the researchers found. Dr. Welch and two colleagues, Dr. Steven Woloshin and Dr. Lisa M. Schwartz, argue that if there was really an epidemic of melanoma - for example, if something in the environment was causing people to get the skin cancer, scientists should see increases in cancers at all stages. This is what happened with lung cancer caused by smoking, and with other cancers caused by toxic substances. The fact that the increase was seen only in very early stage disease was a tip-off that the epidemic might be less than it seemed, Dr. Welch said. And that, he says, leads to a difficult question. The point of screening for melanoma is to reduce the death toll from the cancer. But if screening has not altered the number of patients with advanced disease or lowered the death rate, what is its benefit? 'That's the million dollar question,' Dr. Welch said. 'It certainly raises questions about whether we're doing any good.' The researchers hastened to add that people who notice suspicious moles or spots should not hesitate to see a doctor. But skin cancer screening, they said, is directed at healthy people who have no reason to suspect that anything is wrong. The federal Preventative Services Task Force, which makes screening recommendations, has said that there was insufficient evidence to recommend either for or against skin screening. But the American Cancer Society recommends regular skin screening, as does the American Academy of Dermatology, which sponsors Melanoma Mondays and free skin screening clinics that see more than 200,00 people a year. Speaking for the dermatology academy, one of its past presidents, Dr. Darrell Rigel, a dermatologist in New York, said it only made sense to look for melanomas and remove them before they spread. 'As dermatologists, we see people die every day from melanoma,' he said. 'And there's another thing we know with melanoma that's very clear. The earlier you find it and treat it, the better the survival.' More and more people are having skin biopsies, Dr. Rigel said, but he questioned Dr. Welch's conclusion that the biopsies were leading to excessive diagnoses of melanoma. 'I would say the inverse is more likely,' Dr. Rigel said. 'There are more melanomas and therefore more biopsies.' At the American Cancer Society, Dr. Len Lichtenfeld, an oncologist, said his group reviewed the same data as Dr. Welch and came to a different conclusion. Screening, he said, appears to be saving lives. As evidence Dr. Lichtenfeld pointed to a trend in the data indicating that the death rate from the disease rose slightly year by year until about a decade ago. That is consistent with an increase in serious cases of melanoma. Now, he said, 'there has been a suggestion in the data that the death rates in the Medicare age group are going down,' an effect that would be expected if screening was working. He added, 'We agree that some of the melanomas are biologically indolent, but we also feel that when we look at the trend in the data and the suggestion of decreased mortality that there has been a benefit from increased surveillance for the disease.' Dr. Welch disagrees. He said the cancer society was 'taking tiny, tiny differences' in death rates from year to year and 'putting a huge microscope on it.' In fact, he said, the death rate has been basically flat since 1986, although it bounces around slightly from year to year as a result of statistical fluctuations. 'We don't disagree about the data,' Dr. Welch said. 'We disagree about the interpretation. We are not arguing that there is zero change in disease burden. We are arguing that most of the newly diagnosed cases are the result of increased screening.' In a 1997 article, two dermatologists, Dr. Robert Swerlick and Dr. Suephy Chen of Emory University and the Atlanta Veterans Affairs Medical Center, wrote that while some people might be saved by screening, there also are risks from a melanoma diagnosis. 'After a patient has received the diagnosis of melanoma, obtaining insurance can be extremely difficult,' they wrote. 'The diagnosis of melanoma also results in heightened scrutiny of all first-degree relatives and family members of the patient, and if increased surveillance leads to increased diagnosis, this process may also put them at risk for the diagnosis of melanoma.' Others who study cancer screening said that Dr. Welch's arguments were convincing and that he had raised issues about the national melanoma epidemic that could not easily be dismissed. Dr. Barnett Kramer, associate director of the Office of Disease Prevention at the National Institutes of Health, said that, of course, the ideal way to know if a screening program works is to do a randomized clinical trial, assigning some people to screening and not others, then seeing if the screening saved lives. Absent such a study, he said, he finds Dr. Welch's paper convincing. 'It's doesn't look like our melanoma awareness campaigns have made an impact on mortality or on late-stage disease,' Dr. Kramer said. Dr. Russell Harris, a professor of medicine at the University of North Carolina and a member of the Preventive Services Task Force, said the new paper 'should certainly make us worry about screening.' That also is the view of Dr. A. Bernard Ackerman, emeritus director of the Ackerman Academy of Dermatopathology in New York. Dermatologists have gone too far, he said, with screening clinics, removing innocuous moles and diagnosing melanoma too freely. It makes sense for a doctor to look at your skin during a regular physical exam, Dr. Ackerman said, but screening programs have led to an excessive zeal for skin biopsies and for diagnosing melanoma. 'There has been a mania for taking off these moles that are of no consequence,' Dr. Ackerman said. 'We're talking about billions and billions of dollars being spent, based on hype.' While there may be questions about screening programs, Dr. Swerlick said that few in his field wanted to discussion their merits. He and Dr. Chen tried to open the debate themselves a few years ago but were met with hostility or disdain, he said. 'My colleagues in private practice know what we have written and they can't imagine that it could be correct,' Dr. Swerlick said. 'This is a very touchy subject,' he added. And he appreciates why. 'Many well-intentioned people have focused their clinical careers on this,' he said, 'and I can understand how unnerving it might be to be faced with the prospect that their efforts have been directed toward something ineffectual.' For his part, Dr. Welch says that early detection 'is a double-edged sword and people need to remember that.' A few people might be saved because a cancer is found early, he said, but many, many more will be thrown into the medical mill when there is nothing wrong with them. 'People should realize that is the price we pay for screening,' Dr. Welch said, and although screening is widely promoted, 'we ought to know whether it helps.'

Subject: Number of Unsold Houses Grows From: Emma To: All Date Posted: Tues, Aug 09, 2005 at 15:43:19 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/07/realestate/07lizo.html Number of Unsold Houses Grows By VALERIE COTSALAS THE number of homes for sale on Long Island and in Queens in June was 22 percent higher this year compared with the same time last year, signaling, some say, that prices have been raised too high for many buyers. The numbers come from the Multiple Listing Service of Long Island, a network of about 2,300 real estate offices in Long Island and Queens. The service also reports that median home sale prices are still rising in Nassau and Suffolk, but at a slower rate. 'A lot of people are trying to cash in on the boom before it goes away,' said Irwin Kellner, the Weller professor of economics at Hofstra University and chief economist for North Fork Bank. With more people putting homes on the market at ever higher prices, the supply is starting to outpace demand, Mr. Kellner said. 'I think I see the beginnings of a cooling for the housing boom right now on Long Island,' he said. Real estate brokers have encountered both edgy sellers and savvier buyers, saying that news reports on the real estate market have added to the uncertainty and anxiety on both sides. Brokers also say that more older homeowners are trying to cash in on the equity in their homes and fatten their retirement nest egg. Evelyn Atanas, the owner of Atanas Realty in Williston Park, said many homeowners she has encountered are worried about housing prices leveling off. 'The sellers are very nervous,' Ms. Atanas said. 'I had people in today who were saying: 'What should I do? Should I sell? Should I rent?' ' Kathy Anastasio of Anastasio Associates in Huntington said that she still sees a lot of buyers, but that lately sellers slightly outnumber them. 'We have some people trying to cash in, but we also have more sellers because they're asking more than they should, more than it will appraise for, more than it will actually sell for,' Ms. Anastasio said. Ms. Anastasio, who specializes in the Huntington market in Suffolk County, said there were 762 more homes for sale in the Town of Huntington during the first six months of 2005 than during the same period last year, while the number of homes sold during that time declined by 184, according to numbers from the Multiple Listing Service. Sharon Topper, of Topper Realty in Long Beach, said that unsold houses are accumulating because sellers are holding out for a high offer, and because there are so many hesitant buyers. 'I have a lot of people sitting in high-priced rentals who sold their homes,' Ms. Topper said. 'They're sitting in $4,000-a-month rentals waiting for the bubble to burst.' Homes are still selling at all-time highs in Long Beach, Ms. Topper said, especially condos and co-ops with ocean views, but 'a lot of houses are $100,000 overpriced, and people are sitting and waiting on those.' The median sale price for a home, according to the Long Island Board of Realtors, in both Suffolk and Nassau Counties rose 10.5 percent, to $436,000 in June, compared with the same month last year. That was less than the previous year's increase in prices, which was 12.4 percent. 'They're beginning to slow down, though 10 percent is nothing to sneeze at,' Mr. Kellner said of the change in home price increases. Lost in the Multiple Listing Service reports is data on the very expensive houses on the East End, where many real estate offices are not members of the services. Brokers say that demand and prices on the East End are still very strong and that there is no excess inventory. 'In the village of Southampton, there's not a whole lot' of homes at the high end, according to Dottie Herman, chief executive of Prudential Douglas Elliman. Numbers in the luxury market can be deceiving, she added, if not tempered with knowledge of the yearly trends. Suffolk Research Service, a firm that tracks East End real estate transactions, reports that in Southampton, for example, 12 percent fewer homes were sold in the first six months of 2005 than in the same period last year. That's down from a 39.5 percent increase in sales in the first six months of 2004. But Ms. Herman said that the important sales numbers for the Southampton market turn up in September and October, after homeowners have collected their summer seasonal rents and decide to sell their homes. 'Over the summer, my offices have all done well,' Ms. Herman said of her firm's East End business. 'And the high end is still very strong.' Academics who study real estate trends across the country note that while there may be a surplus of homes on the market, they may not be in the kinds of places people want or can afford. That appears to be the case in Long Island. 'If you look for a town house or a condo or anything on Long Island, there's not enough supply,' said Clifford Sondock, president of the Jericho-based Land Use Institute, a real estate and planning think tank. He said that between the start of 2000 through November 2004, new home construction on Long Island had declined by 68 percent. Nationwide, he said, there was an increase of 18 percent. 'In order to maintain a level average home price in any market, you need to build at least four new homes per thousand people' each year, Mr. Sondock said. But fewer than two homes per thousand people are built each year on Long Island, he said, largely because of zoning regulations that restrict builders to producing single-family homes. In areas like Houston and Las Vegas, relaxed zoning has resulted in up to 60 percent increases in new construction. 'The problem with a restrictive market like Long Island is the builders produce what the political system will allow,' Mr. Sondock said. 'So if there's a demand for town homes, which are more dense, but the political system doesn't allow more density, the builders will produce single-family homes instead.'

Subject: G.M. Thrives in China From: Emma To: All Date Posted: Tues, Aug 09, 2005 at 14:56:45 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/09/automobiles/09mini.html G.M. Thrives in China With Small, Thrifty Vans BY KEITH BRADSHER LIUZHOU, China - In this obscure corner of southern China, General Motors seems to have hit on a hot new formula: $5,000 minivans that get 43 miles to the gallon in city driving. That combination of advantages has captivated Chinese buyers, propelling G.M. into the leading spot in this nascent car market. Compact and utilitarian, these vehicles, called Wuling Sunshine minivans, hardly fit the big-is-better image of G.M., known in the United States for producing some of the largest gas guzzlers on the market, like Hummers. The minivans, which G.M. builds in a joint venture with a Chinese partner, have a quarter the horsepower of American minivans, weak acceleration and a top speed of 81 miles an hour. The seats are only a third the thickness of seats in Western models but look plush compared with some Chinese cars. Their development was led by an American, Philip F. Murtaugh, a native of Ohio and a maverick executive who was willing to zig while the rest of G.M. was zagging. Mr. Murtaugh was able to create in China the kind of innovative environment that G.M. has struggled for decades to achieve in its American operations. But whether G.M. can duplicate elsewhere its achievements in China or even keep its pace here is unclear. In what may be a telling sign of the corporate culture at G.M., Mr. Murtaugh's success in China led not to promotion but to his departure from the company. G.M. declined to discuss personnel matters, but both it and Mr. Murtaugh said he resigned and was not dismissed. A soft-spoken man in a company known for autocratic leaders, Mr. Murtaugh ran the China operations for more than nine years from his base in Shanghai, repeatedly making some of the best calls in the industry. Now he finds himself unemployed and living in a small community in rural Kentucky. His resignation in March, at the age of 49, came shortly after senior company executives reorganized management to give more power to Detroit executives to oversee design, engineering and various manufacturing disciplines all over the world, including operations in China. The shift was supposed to allow greater coordination between the growing Chinese operations and the rest of G.M.'s businesses. Other G.M. regional executives had already been more under Detroit's control and did not leave the company. For years, G.M. has linked its fortunes in the United States to the sale of big vehicles, like Chevrolet Suburbans, only to find oil prices soaring and many Americans nervous about paying more than $50 for a tank of gas. But here in China, Mr. Murtaugh's G.M. was the only multinational automaker that spotted the potential in the late 1990's for building lots of small, inexpensive, fuel-sipping cars, minivans and pickup trucks. 'It is impressive, and it is strategically very smart,' said Michael Dunne, president of Automotive Resources Asia, a consulting firm based in Beijing and Bangkok. The utilitarian minivans and pickups are mainly purchased in China by small-business owners in towns and smaller cities, who drive them both to carry supplies for their businesses and to transport their families. Gasoline in China is slightly cheaper than in the United States, as the government is gradually passing on price increases to consumers. The minivans have been a big hit, helping G.M. sell more than 170,000 very small vehicles - automobile types not available in the United States - and to pass Volkswagen this year in sales in a market that VW has dominated for two decades. They have helped turn China into G.M.'s biggest center of automotive profit - in contrast to losses in manufacturing operations in the United States - and its second-largest market in terms of the number of vehicles sold, after the United States. In the important market for larger cars, those not made by the Wuling joint venture, Honda, Toyota and Hyundai are gaining on Volkswagen and, to a lesser extent, G.M. Such slippage is a familiar experience for G.M. at home. It has repeatedly failed to halt a slide in its domestic market share that began in the 1960's, and has faced the humiliation of seeing its bonds downgraded to junk status this spring. G.M.'s success in China shows that the company, the world's largest automaker, can still summon the energy and innovation occasionally to take command of a big market. The Chinese government has also encouraged a shift toward more efficient models through stringent fuel-economy regulations, even as Congress has opted for more subsidies for oil production and a limit on hybrid car subsidies. G.M.'s reward came in the first half of this year, when demand for the utilitarian vehicle market in China soared in response to steep gasoline prices and rising prosperity among peasants and small-business owners. G.M.'s sales of spartan minivans and pickups and of very small cars have climbed faster than those of its rivals, to 172,368 in the first half of this year, up 48.7 percent from the period a year earlier. Its Asian and Pacific division - just 5 percent of worldwide sales - is increasingly dominated by the fortunes of its China business. The division earned $176 million in the second quarter, even as overall automotive operations lost $948 million amid heavy losses in North America. The factory here now runs day and night, six days a week. 'When the employees stop for lunch, the maintenance people run in,' said Yao Zuo Ping, the chief of manufacturing. Mr. Murtaugh played a central role in 1996 in setting up the company's main operation in China, a 50-50 joint venture with the Shanghai Automotive Industry Corporation, or S.A.I.C. Instead of following the usual G.M. career track of bouncing through assignments around the world every couple of years, he stayed on to run the operation for nearly a decade. In the late 90's, he noticed that millions of small-business owners and affluent peasants were not yet prosperous enough to afford the latest Western models but were saving enough to acquire more frugal vehicles selling for less than $5,000. 'Essentially, it is his baby,' said Stephen Small, the joint venture's G.M.-appointed chief financial officer. Mr. Murtaugh never learned to speak Chinese, but he was instrumental in setting up the Liuzhou joint venture, which is 34 percent owned by G.M., 50.1 percent by S.A.I.C. and the rest by the Liuzhou Wuling Automotive Company. His personal skills and ability to explain the latest ways to run a factory, often borrowed from Japanese automakers, made a deep impression with executives here, as did his regular visits. 'Murtaugh himself was actually paying a lot of attention to our facility here,' said Shen Yang, the president of the joint venture and a leading executive at the factory for more than a decade before G.M. invested here. To build the cars, G.M. helped gut and rebuild a former tractor factory in ways that could become a model for automobile production in China for years to come. Long white halls erected in 1958 during Mao's Great Leap Forward still stand here, the paint peeling in places, the wood window frames warped and the windowpanes cracked and broken. Inside, however, is a factory that combines old and new management techniques. Small, plastic racks of parts delivered several times or more a day have replaced large bins of parts delivered to the assembly line in big shipments every few days. This way, the factory can keep low inventories and order quick design changes, if necessary, from nearby suppliers. The assembly process has only one robot, for sealing windshields, relying mostly on workers earning $60 a month, above average for this impoverished region. That comes after G.M.'s experience in Shanghai, where it installed four dozen robots for its first assembly line only to find them much costlier and less flexible than people; G.M.'s second assembly line there was built with only four robots. 'Low cost doesn't just mean low wages, it means low investment,' Mr. Small said. Worker safety in most Chinese factories is abysmal by Western standards. But workers at the factory here wear safety glasses, and the equipment has automatic cutoffs to prevent workers from losing fingers. Mr. Murtaugh said in a telephone interview from his home, now in Cadiz, Ky., that he made safety suggestions at the start of his first visit to the factory in 1999. 'We got about 20 paces inside the stamping plant and I said to Shen Yang, 'How many eye surgeries and finger amputations do you perform every year?' ' Before the joint venture began to be set up in 1999, Wuling did not even have procedures for handling workers' suggestions. Now, the workers are given extensive information about the performance of their units and encouraged to submit suggestions. The factory received 4,000 suggestions from its 5,000 employees last year, and as many suggestions again in the first five months of this year. Zhou Libo, a 28-year-old worker who welds minivan underbodies and has worked here for 10 years, said that until the last several years, 'We made a lot of parts that were not good quality and had to be thrown away.' Mr. Murtaugh's departure was widely seen within the automotive industry as linked to moves by G.M. that limited his autonomy. Last summer, the company transferred executives from Singapore to an office just down the street from Mr. Murtaugh's in Shanghai, a shift that made closer supervision possible. Mr. Shen, the president of the joint venture here, becomes visibly emotional when he mentions Mr. Murtaugh's surprise departure. 'I have a very good relationship with Mr. Murtaugh, he is my friend, and seeing him leave is very hard on me,' Mr. Shen said, his voice catching slightly. 'He was both a teacher and a friend.' Mr. Murtaugh said that he was playing a little golf now, but found himself with many idle hours. 'I'm looking for work,' he said, and then joked, 'do you have a deck that needs painting?'

Subject: Re: G.M. Thrives in China From: Pete Weis To: Emma Date Posted: Wed, Aug 10, 2005 at 22:03:12 (EDT) Email Address: Not Provided Message: Guess what? These are just the type of vehicles which will be selling here in the US when gas climbs to $3-4 bucks a gallon and beyond and many American consumers are in such debt that they will be attracted to a vehicle which goes for $10,000 or less. The only problem it will be built in China even if it is GM!

Subject: Re: G.M. Thrives in China From: Bambitroll To: Emma Date Posted: Wed, Aug 10, 2005 at 09:03:02 (EDT) Email Address: juan@btcorp.org Message: To understand the importance of the Chinese economy in the world, here is a very good article from the economist here in the economy section: http://btcorp.dyndns.org/Truth/TruthIndex.htm Bambitroll. http://bambitroll.blogspot.com/

Subject: Re: G.M. Thrives in China From: Mik To: Bambitroll Date Posted: Wed, Aug 10, 2005 at 16:16:37 (EDT) Email Address: Not Provided Message: I don't mean to sound insulting, but your blog doesn't put any new perspective on the China issues. It pretty much repeats and exaggerates what many people have known for a long while. You may want to do some research into the growth of the South Asian countries (India, Pakistan, Sri Lanka and Bangladesh). The combined investment into this region more than doubles that of China. And this is recent. We have a whole new spin and China has their own new worries. Without the US component, China would be in a trade deficit (Krugman) in other words, for all of its glorious economic rise, China is hopelessly fixed to US trade and its workers are becoming expensive in comparison to its neighbouring countries. China has to continue funding US bonds in order to keep that cycle of trade going. At the same time, next door to China we are seeing the rise of a whole new power.... now what's going to happen?

Subject: Re: G.M. Thrives in China From: Pete Weis To: Mik Date Posted: Wed, Aug 10, 2005 at 22:07:06 (EDT) Email Address: Not Provided Message: Well, maybe those GM minivans will be built in Bangladesh.

Subject: Re: G.M. Thrives in China From: Mik To: Pete Weis Date Posted: Thurs, Aug 11, 2005 at 09:53:49 (EDT) Email Address: Not Provided Message: Actually GM has just invested short of 1 Billion US$ to build Hummers in Africa.....

Subject: Re: G.M. Thrives in China From: Emma To: Mik Date Posted: Thurs, Aug 11, 2005 at 11:25:05 (EDT) Email Address: Not Provided Message: This is most interesting, and possibly a breakthrough. Where is the investment? South Africa?

Subject: G.M. Thrives in Africa From: Mik To: Emma Date Posted: Thurs, Aug 11, 2005 at 11:55:04 (EDT) Email Address: Not Provided Message: Yep - I read it in that now 'notorious' magazine. Also GM makes a whole series of cars in South Africa such as Opel. Interesting that we don't have Opel in this country. The full investment package by GM including factory extensions to other car models and then the Hummer factory. Today, South Africa is the world's second largest manufacturer of new car parts. Here is the GM- Hummer Story: GM to produce Hummer H3 in South Africa Associated Press Comment on this story Send this story to a friend Get Home Delivery DETROIT -- General Motors Corp. said Wednesday it will build a version of the Hummer H3 in South Africa starting next year, marking the first time a Hummer has been built outside the United States. GM said it is investing $100 million to develop and produce the mid-size H3 at its Struandale facility in Port Elizabeth, South Africa. GM said it eventually could produce 10,000 of the vehicles in South Africa, solely for export to Europe, Asia, the Middle East and Africa. The H3 is expected to go on sale in South Africa in mid-2007, GM said. The Struandale facility currently produces Opel and Isuzu products. A GM plant in Shreveport, La., will continue to produce a version of the H3 destined for the North American market and some markets in Europe and the Middle East. GM has been losing ground in the U.S. market this year but has said it will meet or exceed its targets in other worldwide markets. GM shares rose 56 cents to $29.60 in midday trading Wednesday on the New York Stock Exchange. On the Net: General Motors Corp.: http://www.gm.com

Subject: Re: G.M. Thrives in Africa From: Emma To: Mik Date Posted: Thurs, Aug 11, 2005 at 14:30:12 (EDT) Email Address: Not Provided Message: If only South Africa could be the engine and model for southern Africa. Africa needs South Africa so dearly. Do not worry about the magazine. we can be critical when we need to be.

Subject: Re: G.M. Thrives in Africa From: Mik To: Emma Date Posted: Thurs, Aug 11, 2005 at 15:25:45 (EDT) Email Address: Not Provided Message: Actually South Africa is fuelling the economic boom in Africa. Did you know that South Africa has since the end of sanctions in 1992 invested so heavily into Africa that today it contributes 5% to the GDP of the entire English and Portuguese speaking African countries stretching right up to Ethiopia. That is far more than any other country or economic block of countries contributes to Africa. I think there is a lot we don't know about Africa. I think a lot of people think nothing comes out of Africa and nothing is happening in Africa. If I say to you, 'Ethiopia.' What do you picture? Deserts and starving people? Images from the famine of the 1980's? Yet when I landed in Addis Ababa I was stumped to see forests, a bustling city with highrise buildings. Things do move in Africa and economies are growing. Just that wealth in Africa has become a bit too distorted for me. The end of the cold war has drastically changed Africa. No longer will dictators get money in exchange for allegiance. We now have the chance to say, 'Either get your act together or we will want nothing to do with you.' But alas, Zimbabwe will be the litmus test on weather we are to face a new form of cold war with China.

Subject: Re: G.M. Thrives in Africa From: Emma To: Mik Date Posted: Thurs, Aug 11, 2005 at 15:55:36 (EDT) Email Address: Not Provided Message: Agreed completely. We want more.

Subject: Saudis face troubled future From: Setanta To: All Date Posted: Tues, Aug 09, 2005 at 10:56:55 (EDT) Email Address: Not Provided Message: Armenians were the first Christians. In the third century the country officially declared itself Christian. Despite a deep and violent schism between Eastern (Orthodox) and Western (Catholic) Christianity in the 11th century,many of our present-day religious rituals and holy days are Armenian in origin. One of the most symbolic Armenian rites was to locate all churches on the site of a freshwater well, and this tradition continues in Catholic countries of the Mediterranean. Water was the symbol of life, and by linking the church with water, religious leaders reiterated the central, powerful position of the church. This placed the church at the heart of community life not only spiritually but commercially. For close to 2,000 years, water was the world's most valuable commodity places with water blossomed, places without water died. Today, oil is the new water. As in the ancient church, he who controls oil puts himself at the centre of the global economy. Sometimes we fail to appreciate the enormous power of oil. It is crucial to everything we take for granted. Modern life is based on oil, and after the humanmind, oil is the world's primary resource.This makes Saudi Arabia the world's oil well a prized asset. Last week, the man who ruled the country for 23 years died, causing the price of oil to move above $62 a barrel. Over the coming years, the future of the global economy will be increasingly tied up with the fortunes of this secretive kingdom, its royal family and its extreme form of Islam. The new ruler, King Abdullah Azziz, and the other ruling senior princes are worried.To the north, in Iraq, a government dominated by Shia Muslims is emerging chaotically. To the north-west, in Syria, a friendly government is being vilified for its continued meddling in Lebanon. At home, two historic rounds of municipal elections indicate that some ordinary Saudis quite like democracy, though others are thought still to prefer a theocracy led by Osama bin Laden.To compound it all, the price of oil is too high for Saudi taste, and looks like going higher. There is one unifying feature of all these events: the Saudis have little ability to control them. This is what really worries the senior princes and what they discuss late at night as their cronies and relatives slump in the sumptuous cushions around them. When we think of Saudi Arabia we always look at it from our western perspective, which amounts to little more than ‘they have oil, keep them sweet'. For us, Saudi Arabia is oil and oil is Saudi Arabia. The Saudi perspective on Saudi Arabia is notably different: oil is a blessing, rather than the kingdom's sole reason for existing. The Saudi leadership's role in the Arab world, and a similar role in the Islamic world, are the crucial indicators, as seen from the vantage point of Riyadh. Despite so-called Arab unity, leadership of the fractious Arab world can be a tiresome burden, especially when most countries seem to want Saudi cash in return for any support they provide. And leadership in the Islamic world is bound up with Saudi Arabia's custodianship of the two holy cities of Islam, Mecca and Medina. Managing these centres of Islam and the pilgrimages to them is crucial to the legitimacy that is conferred on the Saudi royal family in return. So the Saudi/Arab/Islamic view of Saudi Arabia is considerably different and more complex than the western image of the place. As a result, the next generation of Saudi leaders has its work cut out. Because all the main ruling princes are well into their seventies and eighties, even this week's smooth transition sheds little light on the longer term. Meanwhile, the challenges are becoming more problematic and the pressures more acute. In terms of foreign policy, from a Saudi perspective the Cold War was a golden era. The United States gave security guarantees in return for a friendly oil-exporting policy. Communism was the enemy; Islam was the protection from both Moscow and unwanted American interference. The collapse of the SovietUnion, and, more recently, the disastrous US occupation of Iraq, are, to Riyadh, unwelcome trends. In the good old days, Saudi Arabia preserved its Islamic legitimacy at home by indulging the religious establishment and its strict Wahabi version of Islam. Youths imbued with Islamic fanaticism could be exported to Afghanistan, Bosnia or Chechnya. Those that returned and did not want to settle down to normal lives could be recruited into the religious police. This template for domestic stability collapsed after September 11, 2001. Regionally, Riyadh dominated the Gulf Cooperation Council that formed a bloc against the twin Persian Gulf threats of Iran and Iraq. Further afield, the Saudis could support both the Syrians and the Arafat-led Palestinians against Israel, while also telling Washington that Riyadh was really working for Middle East peace. Post-Afghanistan, post-Iraq, post-Arafat, Saudi Arabia does not feel comfortable. Washington seems intent on allow-ing the growth of a Shia Muslim belt to the north, implicitly threatening the Sunni kingdom's leadership role in Islam. Closer to home, the Gulf states no longer accept Saudi leadership. Abu Dhabi, the lead emirate of the UAE, has reopened a vexatious oil-related border dispute. Other states,most notably Kuwait and Qatar, have developed their own direct links to Washington. And on the Israeli-Palestinian dispute, the Americans, to quote US president George Bush, are demanding that “Arab states establish normal ties with Israel” a prospect that gives Riyadh heartburn. In reality, the Saudis are not even beginning to try to sell the notion to their domestic or wider Islamic constituencies. Of course, $60 per barrel for oil means there are no short-term revenue problems, but this price level is accelerating the emergence of alternative technologies, which is another nightmare for the Saudis. They want stable prices that keep the rest of us addicted to their oil, rather than high prices that cause us to explore other energy options. However, surging demand from China means that they have to pump out more oil than ever just to keep prices where they are. All this is compounded by the uncomfortable but nagging reminder that at some stage in the next generation, oil will begin to run out. It is clear that the world economy needs a stable Saudi Arabia more than ever but far from clear whether Saudi Arabia's next generation of leaders will be able to deliver this. Like the ancient Armenians whose Christian star shone brightly, then dimmed and can now be only faintly discerned in intricate religious ritual, the golden age of Saudi Arabia may be coming to a close.

Subject: Re: Saudis face troubled future From: Emma To: Setanta Date Posted: Tues, Aug 09, 2005 at 12:24:51 (EDT) Email Address: Not Provided Message: Here I must disagree. This is truly a wonderful time for the Saudis. They are energy rich in a different way than other energy rich countries in that they need little energy for themselves and export almost all they produce. They have ample reserves, despite the questioners. They have the complete protection of the United States. Saudi Arabia has some social problems, but there is absolutely no danger to the state, and a future of immense promise.

Subject: Re: Saudis face troubled future From: Setanta To: Setanta Date Posted: Tues, Aug 09, 2005 at 10:59:41 (EDT) Email Address: Not Provided Message: People are barely blinking as oil has jumped from $57 to $64 over the past few days. It only seems like yesterday that $35 oil was the critical level and prices above $40 'could not be sustained for long before settling in a $30-$35 per barrel range' according to BP. It seems that its not only oil that has enjoyed this huge price hike - the price of most US stocks and houses has exploded during the past few months of June and July. Is this a co-incidence? I hear, despite the oil price, sales of gas gussling monster trucks like the Ford F150 pickup are now near all time highs in the US with one sold every second. I have to wonder what world forecasters like Pimco's Bill Gross and the bond market are in, still betting on a deflationary recession!

Subject: Re: Saudis face troubled future From: Emma To: Setanta Date Posted: Tues, Aug 09, 2005 at 12:28:40 (EDT) Email Address: Not Provided Message: Terrific questions to consider. I have noticed that betting against Bill Gross has long been the way to prosper. What Gross says and does however even if meant to be the same can change in a moment. Even if the housing market is already slowing, growth should be fine for the rest of the year. Also, look to Europe's stock markets which are booming.

Subject: Re: Saudis face troubled future From: Mik To: Emma Date Posted: Wed, Aug 10, 2005 at 11:45:44 (EDT) Email Address: Not Provided Message: It was a Saudi Prince who made the quote, 'The iron age did not come to an end because of a lack of iron. So too the oil age won't come to an end because of a lack of oil.' Those are very deep words. All Saudis know very well that their neigbouring cousins in Yemen (who have no oil) are of the same tribal group and exact same religious background, yet the Yemenese are dirt poor and run down. All Saudis face the strong reminder that without oil, they would be no different than Yemen. But are the Saudis open-minded enough to drastically do something about it? Let me put forward to you this argument: The end of the oil age is a given. Hybrid motor cars will dramatically decrease our dependancy on oil, and the economic perfection of the fuel cell in, say, about 5 years will result in the final nails in the oil-age-coffin within 30 years. Nuclear power will gain vast prevelence in within, say, 10 years. Only jet aircrafts will still be relient on oil (and that amount will add up to a fraction of what is currently used). Demand will dramatically decrease and the price of oil will plummet (making air travel cheap again). So here is the question: How do you picture the geo-political and economic environment that WILL develop within the next 30 years?

Subject: Nuclear gonna kill kids From: Johnny5 To: Mik Date Posted: Wed, Aug 10, 2005 at 14:35:18 (EDT) Email Address: johnny5@yahoo.com Message: I agree, nuclear seems the only serious strategy. However a chain in society is only as strong as the weakest link and there are lots of weak links, an oil refinery getting fouled up by a dumb employee does some damage - but not like a nuclear plant will. What was it Jared Diamond was saying about sustainable living?? http://www.lutins.org/nukes.html This is for the history of nuclear lies and coverups - childrens teeth were found with radiation in them, how sad. http://www.palmbeachpost.com/business/content/business/epaper/2005/08/09/m1a_fplnuke_0809.html Just recently FPL in florida was found to be dumping nuclear waste into the community. We need better controls and monitoring, but that takes money, and the money is going to wars and building roads, not tighter nuclear control.

Subject: Re: Nuclear gonna kill kids From: Mik To: Johnny5 Date Posted: Wed, Aug 10, 2005 at 16:01:06 (EDT) Email Address: Not Provided Message: Holy cow, You Americans need to sort out your nuclear issues. Nuclear power plants are now found throughout the world n(even in Africa). We have progressed as a society in our knowledge of safe nuclear energy and developed a whole new concept in nuclear power safety through the Pebble Bed Modular Reactor. Here's some info for you: The Pebble Bed Modular Reactor (PBMR) is based on a simple design, with passive safety features that require no human intervention, and that cannot be bypassed or rendered ineffective in any way. In all existing power reactors, safety objectives are achieved by means of custom-engineered, active safety systems. In contrast, the PBMR is inherently safe as a result of the design, the materials used, the fuel, and the physics involved. This means that, should a worst-case scenario occur, no human intervention is required in the short or medium term. Nuclear accidents are principally driven by the residual power (decay heat) generated by the fuel after the chain reaction, caused by radioactive decay of fission products, is stopped. If this decay heat is not removed, it will heat up the nuclear fuel until its fission product retention capability is degraded and its radioactivity is released. In 'conventional' reactors, the heat removal is achieved by active cooling systems (such as pumps) and relies on the presence of the heat transfer fluid (e.g. water). Because of the potential for failure in these systems, they are duplicated to provide redundancy. Other systems, such as a containment building, are provided to mitigate the consequences of failure and provide a further barrier to radioactive release. In the PBMR, the removal of the decay heat is achieved by radiation, conduction and convection, independent of the reactor coolant conditions. The combination of the very low-power density of the core (1/30th of the power density of a Pressurized Water Reactor), and the temperature resistance of fuel in billions of independent particles to high-temperature, underpins the superior safety characteristics of this type of reactor. The helium, which is used to transfer heat from the core to the power-generating gas turbines, is chemically inert. It cannot combine with other chemicals, it is non-combustible and it produces little radioactivity when passed through the core. Since air cannot enter the primary circuit, oxygen cannot get into the high temperature core to corrode the graphite used in the reactor.

Subject: PBMR offers much hope From: Johnny5 To: Mik Date Posted: Wed, Aug 10, 2005 at 16:11:16 (EDT) Email Address: johnny5@yahoo.com Message: Bush could have put this in his energy bill, instead we get the same old politics and taking care of his friends. What power does an oil man and his friends have in a world of pebble bed nuclear reactors? Oil has been key policy in a lot of our military/political decisions - that culture is entrenched, and will have to be rooted out for new things to take hold - all good things come to those who wait - hehe.

Subject: Housing & the worldwide consumer From: Pete Weis To: All Date Posted: Tues, Aug 09, 2005 at 08:57:15 (EDT) Email Address: Not Provided Message: From The Guardian: Are consumers living on borrowed time? With last week's interest rate cut came a series of bad-debt warnings. Is this just the beginning, asks Heather Stewart Sunday August 7, 2005 Observer As if to underline the urgency of the Bank of England's first cut in interest rates for two years last week, Britain's lenders have issued a string of warnings that their debt-ridden customers are beginning to struggle. Barclays, Royal Bank of Scotland, HBOS and Lloyds-TSB all tempered strong financial results by admitting that bad debts had increased, while HSBC said Britain had become its 'most difficult credit market'. Britain's consumers, who have got used to watching the price of their home shoot up by double-digit percentages, and flashing their credit cards to tide themselves over, are showing signs of fatigue. As a result, GDP growth has slowed sharply since the beginning of the year. News that house repossessions had hit their highest level since 2001, and personal insolvencies were up 36.5 per cent on a year ago, provided further evidence that some consumers are overstretched. The question Bank-watchers are now asking is whether the soggy retail climate is a short-term blip or the beginning of a long-awaited readjustment in the British economy. And whether Thursday's decision, which took rates to 4.5 per cent, will be enough to nudge consumers back on course. In a poll carried out by news agency Reuters after Thursday's decision, 70 per cent of economists said that they expected at least one more cut. The MPC itself warned that 'although there are some signs of a pickup in consumer spending, downside risks remain in the near term'. Danny Gabay, a former Bank of England economist at consultancy Fathom, falls firmly into the doves' camp. He believes one or two rate reductions will not change the fact that some households have simply borrowed too much. 'The consensus view is that there's nothing fundamentally wrong, and all the Bank of England is doing is easing the burden slightly. The more negative view is that this particular horse has already bolted: banks have overextended credit, because it was too cheap, and certain sections of the population have taken on too much debt. 'If the process that is under way is one of balance sheet readjustment, then this is just the end of the beginning. We feel that the consumer retrenchment could be more serious than people expect.' He believes there is a chance that rates could fall as low as 2 per cent by the end of next year to offset that retrenchment. Roger Bootle, economic adviser to Deloitte and Touche, has long predicted that rates could be at 3.5 per cent by the middle of 2006, with another reduction before the end of this year. He said that with demand falling away, the Bank could safely continue cutting rates, and allowing the pound to depreciate, without fear of sparking inflation or reigniting the housing market boom. 'Reductions in rates will not cause house price inflation to re-accelerate, because excessively high interest rates were not the problem in the first place,' he said. 'The problem is that house prices are too high in relation to earnings. This means that investors face unfavourable prospects for immediate capital gains while first time buyers face difficulty in amassing the necessary deposit. Lower interest rates will make little difference to these two problems.' However, not everyone believes it is inevitable that consumers will face a reckoning in the coming months, forcing rates lower. Malcolm Barr, chief UK economist at JP Morgan, believes GDP growth will pick up later this year as the global economy improves and the cheaper pound boosts businesses. He is predicting that the next move in rates, in 2006, will be up. 'In the next six months we will see a stabilisation period,' he says. 'The global economy is doing better, the UK labour market will stabilise. It won't feel good, but it will feel better. Then we are going to get to a point where the MPC feels uncomfortable with rates at 4.5 per cent.' Not all the recent news has been bad. Retail sales picked up slightly in June, contradicting the dire warnings of retailers; and surveys have suggested that the service sector remains resilient. Meanwhile, early pessimistic estimates of manufacturing output in the second quarter of the year were revised up slightly on Friday. Certainly, the Bank's statement after it announced its decision suggests it is pinning its hopes on a revival over the next few months. 'Looking further ahead,' it said, 'the rise in equity prices and the recent fall in the exchange rate should boost activity.' Few experts were willing to criticise the Bank's decision last week: growth has been so 'subdued' since the beginning of the year, as the MPC put it, that it had little option but to move - and with a 5-4 vote for no-change in July, the committee had carefully signalled to the markets what it planned to do. But John Butler, chief UK economist at HSBC, said the Bank might yet have to make more rate cuts than it expects, because a quarter-point reduction in borrowing costs is a blunt instrument when consumers are seriously over-borrowed, and businesses are unwilling to invest. In the Eighties, Edward Heath derided the then Chancellor, Nigel Lawson, as a 'one club golfer', whose only tool for managing the economy was interest rates. The Bank's Monetary Policy Committee is a team of one club golfers, which some analysts argue is inevitably struggling to deal with the consequences of the long-running housing boom. 'What you hope to do when you're a central bank and you've had a bubble like this is to execute a soft landing and hope something comes along and means you don't have to rely on credit growth to sustain the economy into the future,' says Graham Turner of GFC Economics. The problem for the Bank this year has been that that something - which it hoped would be exports, or business investment - has failed to materialise. Analysts say the decline in sterling could shift the focus back to Britain's beleaguered manufacturers - but for the time being, exporters continue to suffer and business investment remains weak. Not for the first time since the MPC was born, it has been left relying on the great British shopper.

Subject: Re: Housing & the worldwide consumer From: Emma To: Pete Weis Date Posted: Tues, Aug 09, 2005 at 12:34:02 (EDT) Email Address: Not Provided Message: Britain should be watched carefully, but economies do not suddenly falter and Britain is growing and has already begun to lower interest rates. British stocks are holding well. The hope then is the action of the Bank of England will take effect before a serious slowing.

Subject: consumerism From: Lilia Mallik To: All Date Posted: Mon, Aug 08, 2005 at 19:56:19 (EDT) Email Address: lilia.mallik@gmail.com Message: Paul, Consumerism can be used to raise economic growth, employment stability, and savings rates. Any consumer should reduce consumption in order to raise their savings. This has a compound effect because these consumers tend to be less likely to be the targets for a society that far too eager to sell their products. Savings also will eventually lead to greater unearned income, lower debt payments, and lower debt interest payments. The consumer should aim to support business cultures that allow them to raise their own savings rates. For example, the consumer should aim to regulate the food industry so that they can improve their diet. The consumer should also support business cultures that aim to do some social good. The consumer should also aim to support good people. The consumer should also try to provide some measure of job stability to people by providing some sort of regular outlay for an particular organization. The consumer also needs to support business cultures that support their own empowerment, education, and family. Consumers should also consider getting involved in the political process if they face major problems. Consumers need to be more careful with media consumption. They should support better, educational, informative media. The consumer should aim to be less exploitive on media and to be less dependent on media. Consumer need to contribute and support media while being mindful of their own media power. Media consumers also need an outlet for their own media power. Please let me know if you have any feedback. I like reading your work. Sincerely, Lilia Mallik lm9740.tripod.com

Subject: Re: consumerism From: Emma To: Lilia Mallik Date Posted: Tues, Aug 09, 2005 at 12:41:05 (EDT) Email Address: Not Provided Message: Quite an interesting comment, that asks considable thought. The question is how to realistically form consumer coalitions, but then we can foster more competition.

Subject: Co-operatives From: jimsum To: Emma Date Posted: Wed, Aug 10, 2005 at 21:07:23 (EDT) Email Address: Not Provided Message: There is an excellent business model that has been time-tested; co-operatives. I lived in a student housing co-op while in University. It really was built, owned and operated by students. It housed 1000 occupants in various buildings, and the board of directors of this multi-million dollar company was composed entirely of student residents. I also happen to belong to a co-op that sells recreation and outdoor equipment. This co-op really doesn't look or operate much differently than any other retail outlet, but the goods are high-quality and a good value. The employees also tend to be well treated. In both these cases, the market wasn't supplying what some consumers wanted. However, instead of whining about it, those people went out and did it better. If there are any co-ops near you, check them out and support them if you can. There's no reason everything has to be stamped with a logo, wrapped in cellophane, and bought from a skid in the big box store.

Subject: Re: Co-operatives From: Emma To: jimsum Date Posted: Thurs, Aug 11, 2005 at 09:49:09 (EDT) Email Address: Not Provided Message: Agreed, but co-ops are hard hard to come by.

Subject: Niger's Nomads Agonize as Livestock Die From: Emma To: All Date Posted: Mon, Aug 08, 2005 at 15:26:26 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/07/international/africa/06cnd-niger.html Niger's Nomads Agonize as Livestock Die By MICHAEL WINES ZOURARE, Niger - With his black burnoose and piercing tan eyes set in angular, leathery features, Ali Yougouda is the very picture of a Tuareg, a stoic nomad who juggles two wives, 10 children and life on the Sahara's fringes without breaking a sweat. Until he talks about his herd. In May, he was tending 68 head of cattle and sheep. Today he has 18 cows and bulls. He is devastated, bereft. 'The first two died of pneumonia,' he said, crouching beneath a tree in this remote mud-hut village. 'Then the rest started to die slowly, from hunger, because all they could find in their stomachs was sand. The last one died two weeks ago.' Mr. Yougouda, 40, epitomizes another side of Niger's hunger crisis: the devastation it has wrought on this nation's legendary nomads and herders. Mr. Yougouda's Tuareg tribe, known as the Kel Ouawar-Gadabeji, has suffered hunger and privation from the scattered rains that reduced last autumn's harvest and the food stocks that normally see them through the long dry season. But the hundreds of tribespeople in this village have so far survived. Not so their livestock, which the herdsmen have pushed farther and farther afield in search of green pastures. Weak from the trek, their stomachs filled with grit from pulling the few tufts of grass from the sandy earth, thousands of the animals have simply lain down to die in recent months. The carcasses of long-curve-horned cattle dot the landscape on the sole path to the village, an hour's bone-cracking journey via four-by-four from the nearest dirt road. The losses not only threaten the centuries-old tradition of the Tuareg and other nomads like the Fulani, also known as the Peulh. It is a personal blow, even a humiliation, for a people who regard their animals almost as kin. 'We treat them like brothers and sisters,' said Amadou Abou, the elder brother of the village chief here. 'We're inseparable. It's a tragedy because we have lost what is most dear to us - an animal, a brother.' A handful of international charities, including Oxfam and CARE International, are rushing to the nomads' aid with food, money and more livestock. But the nomads, scattered across Niger's vast rural stretches, are not easy to find, much less to reach. 'The situation is extremely grave for the Tuareg, because they live from their cattle,' said Illiassou Adamou, who heads CARE's office in Maradi, just south of one of the worst-hit areas. 'When you lose a bovine, it takes five years to raise another to replace it. When you lose cattle this year, even if the situation is good next year, it's still a critical situation.' While rains are somewhat better, the past months' dry spell is still snuffing out the livelihoods of thousands of herders across Niger, especially around Dakoro, a regional center where 40,000 people live, and where rains have been spotty for two years straight. The Tuareg and Fulani, in their flowing burnooses and conical, feathered hats, have ranged across the area for centuries with their cattle, sheep, donkeys and goats, following rain and fresh grass in the lands just below the Sahara. They seldom eat their charges, preferring to live off their milk and to sell them for money to buy the sorghum and millet that anchor their diets. The reduced rains have dealt these nomads a triple whammy. The grains on which they rely have skyrocketed in price. The postharvest leavings of sorghum and millet plants - on which their herds rely - became equally scarce. The grasslands that supplement the animals' diets also shrank. And what forage and crops remained was seized upon last autumn by swarms of locusts that descended in clouds and, the nomads say, denuded the landscape. Those nomads who drove their herds south toward Nigeria, where rains were better, often suffered few losses. Those who chased rumors of rain in the north, around Dakoro, were just as frequently wiped out. 'Survive? Did we survive?' asked Mr. Abou, the chief's thin, balding elder brother. 'The remnants of plants and the livestock we had, that's how we survived.' When money ran out to buy cheap foodfrom the more urban south, he said, tribespeople resorted to boiling leaves and roots plucked out of the ground. Mr. Yougouda, the black-robed herdsman, lost all 30 of his sheep and 20 of his 38 cows after months of roaming in a futile hunt for green pastures. 'Sometimes we had to pull the cow up, because he had given up,' he said. Some would call him lucky. In Bargas, perhaps 20 miles east of Zourare, Souley Gorba, 28, took 100 sheep, 70 cows and 20 goats to hunt for pasture last October. He returned in June with 11 animals. 'I went south, all the way to Saboumachi' - about 50 miles - 'and I stayed there five months,' Mr. Gorba said. 'Then I realized that it was every bit as bad as where I had come from.' By February, he said, his herd was growing sick from hunger. He began selling cows to raise money to feed the rest - and saw prices plummet in June to $25 a head from hundreds of dollars per head. In a sense, the Tuareg and Fulani are used to this: the Sahel region of central Africa, just south of the Sahara, suffers a cyclical drought that thins herds and reduces food stocks roughly every 10 years. The worst in memory came in 1984, when a crop failure led to a food and forage shortfall that made headlines the next year, and briefly put African hunger atop the list of global priorities. This summer, Oxfam is giving thousands of herders vouchers for food and other vital goods in exchange for needed work like collecting animal carcasses and cutting trenches in fields to prevent erosion, until the hunger crisis eases. The charity also is buying up weakened animals for slaughter at nearly triple the market price. That not only frees up scarce pasture for stronger animals, but helps slow the steep drop in prices for cattle - and gives hungry families enough money to buy 220 pounds of millet. CARE takes another tack, giving groups of herders new cattle - two females and a male - which are passed on to other herders as they produce calves. Mr. Amadou of CARE calls the latest crisis a temporary blow for the nomads, who he says will roam Niger 'as long as the world exists.' Some may, but the Fulani nomad, Mr. Gorba, may not be one of them. After losing nearly 200 head of livestock, he and his wife rented land from a farmer this year and began learning how to grow millet. The loss of his animals, he said, is a grief that equals the loss of his parents, and the loss of his heritage is an ache inside him. 'It is my great worry that I will not be able to get enough animals to have a herd again,' he said Friday, standing in the shade of a mud wall at a market set up by Oxfam to trade vouchers for food and other essentials. 'I haven't any idea how to do it.' But 'I can't miss the life of a nomad,' he said, 'because I will never give it up. I will be sedentary. But in my heart, I will be a nomad.'

Subject: Niger's Anguish Is Reflected From: Emma To: All Date Posted: Mon, Aug 08, 2005 at 13:03:30 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/05/international/africa/05niger.html Niger's Anguish Is Reflected in Its Dying Children By MICHAEL WINES ELKOKIYA, Niger - At sunset Wednesday, in an unmarked grave in a cemetery rimmed by millet fields, the men of this mud-walled village buried Baby Boy Saminou, the latest casualty of the hunger ravaging 3.6 million farmers and herders in this destitute nation. At 16 months, he was little bigger than some newborns, with the matchstick limbs and skeletal ribs of the severely malnourished. He had died three hours earlier in the intensive care unit of a field hospital run by Doctors Without Borders, where 30 others like him still lie with their mothers on metal cots. One in five is dying - the result, many say, of a belated response by the outside world to a disaster predicted in detail nine months ago. Niger's latest hunger problem, like Baby Boy Saminou's tragedy, is more complex than it first appears. As aid begins to trickle into some of the nearly 4,000 villages across southern Niger that need help - the vanguard of a flood of food brought forth by television images of shrunken babies - the rich world's response to Niger's worst nutrition crisis since the 1985 famine is, in fact, proving too late for many. Unseen on television, however, are the shrunken infants who die all but unnoticed even in so-called normal years. Of each 1,000 children born alive in this, the world's second-poorest nation, a staggering 262 fail to reach their fifth birthdays. Five of Baby Boy Saminou's seven brothers and sisters were among them. The longest-surviving of those who died reached 4 years of age. Asked what killed the last three, Saminou's father, Saidou Ida, said simply, 'Malnutrition.' International aid officials and charity workers here say that the world's dilatory reaction to Niger's woes is hard to excuse. Some of them also say that Niger's miseries this year are merely a worsened version of its perennial ones - and that until Niger addresses its problems of primitive farming, primitive health care and primitive social conditions, infants will continue to die unnoticed in numbers that dwarf any hunger emergency. 'That is the bigger question that both Niger and the international community, everyone, needs to answer,' Marcus Prior, the West Africa spokesman for the World Food Program, said in an interview in Maradi, the regional city where little Saminou died. 'We feel that we've tried to raise awareness. But at the same time, this is something that's a recurring problem.' That it is a perennial problem, Mr. Prior and others stress, in no way minimizes the urgency of Niger's current disaster - erratic rainfall and severe food shortages in the agricultural and herding belts where many of Niger's 11 million to 12 million people live. Together, they are pushing the death rate for small children even higher than Niger's customary one-in-four level, and killing off the livestock upon which the nation's nomads depend. How many people need aid depends on the yardstick used. About 1.2 million of Niger's 3.6 million rural farmers and herders are described as 'extremely vulnerable' to food shortages and in need of food aid, according to an assessment of Niger's crisis conducted four months ago by the United Nations, major charities and Niger's government. Of those, about 874,000 urgently need free food, the latest assessment concluded late last month, and that number could rise until the harvest is completed in October. But that does not mean that nearly 900,000 people will starve; the vast bulk of the hungry will somehow survive. Most of those who do die will be young children. But even among those, most will not die of starvation. 'Children will likely die from malnourishment, but a substantial proportion is probably dying from conditions related to poor water quality, or other non-food-related problems,' FEWS Net, a famine warning service financed with United States assistance, reported late last month. Much of this disaster was suspected last November, when experts monitoring Niger's farms found a 220,000-ton shortfall - about 7.5 percent of the normal crop - in the harvest of grains, especially the millet that is the staple of most people's diet. Among others, the United Nations World Food Program and Doctors Without Borders sounded alarms, and Niger's government, with World Food Program approval, quickly asked donors to give Niger 71,000 tons of food aid and $3 million for the 400,000 most vulnerable farmers and herders. By May, it had received fewer than 7,000 tons of food and one $323,000 donation, from Luxembourg. 'I think everyone knew that a crisis was going on,' said Johanne Sekkenes, the Niger mission head of Doctors Without Borders, in an interview in Niamey, the capital. 'But the answer given at the time, from governments and international agencies in Niger, was that the ongoing, normal development programs should be reinforced.' Niger's government ruled out both free food aid and health care to hungry families, preferring to sell surplus millet at subsidized prices in an effort to force the price of scarce millet down. But millet prices skyrocketed, forcing families to sell cattle and other goods to buy food. The charity has angrily accused governments of allowing children to die, albeit not intentionally, so that the free market in grain would not be disrupted. Others say that Niger is on a steady course toward future disasters, free aid or not. Even with huge numbers of dying children, the average woman bears seven babies, and the population is growing at a rate that by 2026 will double the number of people on a land that already is straining its capacity. Moreover, Niger has few of the modern tools that might enable it to feed itself, meaning that charities must make up a food shortage virtually every year. 'You've seen the kind of tools people use to farm,' Mr. Prior said. 'You've seen the lack of irrigation and the total dependency on what falls from the sky. I doubt you've seen any fertilizer or modern technology being used.' When the rainy season arrived in June, bringing malaria and other diseases with it, children weakened by lack of food began to fall ill and die in numbers even greater than in normal years. Doctors Without Borders has treated more than 14,000 children at six centers this year, more than double the 2004 total. It has nearly 5,000 under treatment today. Admissions at its centers rose by a quarter from mid-July to August. Among the newcomers was Baby Boy Saminou, whose 40-year-old mother, Mariama, brought him to the charity's Maradi hospital Wednesday from her village of about 2,500, down a rutted road 15 miles away. The boy was receiving free food, and had visited the Doctors Without Borders clinic five days earlier with a mouth infection. But his condition worsened last weekend. 'I didn't even have time to talk to her, the baby was so bad,' Chantelle Umtoni, 34, the chief of the intensive care ward, said as she watched the mother and child from her desk Wednesday afternoon. 'He has severe anemia. He has severe malaria. He was dehydrated - completely dry. And he had heart failure.' Indeed, doctors restarted his heart as they plugged bags of blood and intravenous fluid into him and clapped an oxygen mask on his face to assist his labored breathing. Dr. Umtoni said she gave the boy a 50-50 chance of living. Dire as they are, such cases are not unusual. 'We average 30, 35 children every day,' she said. 'All of them are malnourished, severely malnourished. That's already a severe disease by itself. Add atop that malaria and anemia, and they come in a bit too late.' Mariama sat by her child, draped in the same brilliant orange-and-green cloth she wore, and watched him as she toted up her family. Of eight children, five were dead. The two survivors, she said, are 15 and 17 years old. As she spoke, a nurse, Boraka Abdou, put a stethoscope to the baby's chest, listened, then summoned Dr. Umtoni. She listened intently. Then, wordlessly, the two removed his oxygen mask and catheters. Mariama stared at her dead child, impassive, then covered him in a red scarf. An hour later, she was home, having ridden the 15 miles with her baby in her arms, tears running down her face. Outside her compound, she gave the dead child to her mother-in-law, who washed its face. Then she sat on a wooden bowl used to grind millet and wailed, inconsolable. Women, hearing the news, came to grieve with her. The two women bathed Baby Boy Saminou and wrapped him in a white T-shirt for a traditional Islamic burial. The village chief, Moussa Djidji, said that at least 10 of the village's children had died since January.

Subject: Hope for Hungry Niger Children From: Emma To: All Date Posted: Mon, Aug 08, 2005 at 12:29:54 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/08/international/africa/08niger.html Hope for Hungry Children, Arriving in a Foil Packet By MICHAEL WINES MARADI, Niger - In the crowd of riotously dressed mothers clasping wailing, naked infants at a Doctors Without Borders feeding center just west of here, Taorey Asama, at 27 months, stands out for a heart-rending reason: she looks like a normal baby. Many of the others have the skeletal frames and baggy skin of children with severe malnutrition. The good news is that a month ago, so did Taorey. 'When she came here, she was all small and curled up,' said her mother, Henda, 30. 'It's Plumpy'nut that's made her like this. She's immense!' Never heard of Plumpy'nut? Come to Maradi, a bustling crossroads where the number of malnourished children exceeds even the flocks of motor scooters flitting down its dirt streets. At this epicenter of Niger's latest hunger crisis, Plumpy'nut is saving lives, perhaps including Taorey's. Plumpy'nut, which comes in a silvery foil package the size of two grasping baby-size hands, is 500 calories of fortified peanut butter, a beige paste about as thick as mashed potatoes and stuffed with milk, vitamins and minerals. But that is akin to calling a 1945 Mouton Rothschild fortified grape juice. Since the packets came into the hands of relief organizations during the Darfur crisis in Sudan, they have been revolutionizing emergency care for severely malnourished children who are old enough to take solid food, by taking care out of crowded field hospitals and straight into mothers' homes. The prescription given to mothers here is simple: give one baby two packets of Plumpy'nut each day. Watch him wolf them down. Wait for him to grow. Which he will, almost immediately: badly malnourished babies can gain one to two pounds a week eating Plumpy'nut. 'This product, it's beyond opinion - it's documented, it's scientific fact,' Dr. Milton Tectonidis, a Paris-based nutrition specialist for Doctors Without Borders, said in an interview here. 'We've seen it working. With this one product, we can treat three-quarters of children on an outpatient basis. Before, we had to hospitalize them all and give them fortified milk.' Traditional malnutrition therapy hospitalizes the tots, nursing them to health with steady infusions of vitamin-laced milk. Then they are sent home with powdered milk formula to complete their recovery. It works well, but milk is costly, must be mixed from water and is prone to spoiling. And when mothers prepare the formula with the dirty water all too common in impoverished villages, babies get sick. In comparison, Plumpy'nut - the name melds the words 'plump' and 'peanut' - costs less than the milk formula, has a two-year shelf life and need not be mixed with anything. Its sealed packaging and thick consistency make it a poor home for disease-causing germs that thrive in milk. Perhaps most revolutionary, however, is that mothers, not doctors, can give it to their toddlers. That not only reduces costs, but also frees the doctors to treat the sickest children, who often suffer not just from malnutrition, but also from diseases like malaria or dysentery. The usual course of treatment is four weeks of Plumpy'nut, costing about $20, along with grain-based food like Unimix, a vitamin-packed flour that can be made into the porridge many Africans eat. But some children return to health in as little as two weeks. The product is the brainchild of a French scientist, André Briend, who had labored in vain for years to concoct a ready-to-eat nutrition supplement, until serendipity - a bottle of the popular Nutella breakfast spread on his kitchen table - led him to try a paste instead using candy bars and other kinds of food. Later, Nutriset, a French company that specializes in making food supplements for relief work, began packaging the formula under the name Plumpy'nut. For three months, Doctors Without Borders has been handing out week-long supplies of Plumpy'nut, 14 foil packets in a black plastic grocery sack, at its five outpatient feeding centers in Maradi and 21 centers elsewhere in Niger. Not everyone gets it: newcomer babies are weighed and measured, and only those whose weight is dramatically below normal for their height qualify. Those who are too ill for outpatient care go to a nearby field hospital. About 700 babies are being treated in Maradi, and about 130 more arrive for screening each day, of which perhaps 80 are accepted and given an ankle bracelet - their ticket, so to speak, good for a weekly trip to the center for more foil packs, bags of grain and cooking oil. Across the area of hunger in Niger, about 5,000 children spread across 32 feeding centers are being given the packets. Theodore Bitangi, a 33-year-old nurse who oversees the Maradi feeding centers, says that the program is growing almost as rapidly as its patients. 'When they come in, the state they're in, they look like embryos. They're so small sometimes,' he said. 'And after taking Plumpy'nut, they look like real babies.' Mothers who have been feeding the paste to their babies would hardly disagree. 'As soon as I got him home, he started eating it - every day, aggressively,' Idrissa, 24, who has no last name, said of her 2-year-old son. 'And after three days, I could see a big difference. The change was abrupt.' Her son, who refused to open his eyes before starting the Plumpy'nut regimen one week ago, has added fat under his sagging skin and, when his packet is finished, cries for another. 'I don't know how to express it,' Idrissa said. 'I'm so happy.' Raham, 45, who has no last name, walks an hour each way to the clinic from her village, Madata, to pick up a weekly bag of Plumpy'nut for her year-old son, Safia Ibrahim. 'It's no problem to walk that far,' she said, 'because it's for the health of my baby. And there's nothing to eat in our village.' One of the virtues of Plumpy'nut is that it can be made almost anywhere with local materials and a slurry of vitamins and minerals prepared by Nutriset. Versions of the same product are being manufactured in Malawi and in Niger's capital, Niamey, and Nutriset has welcomed the notion of local partners - from charities to women's groups - who might make Plumpy'nut under license or even as franchisees. Which raises a question: if Plumpy'nut is good enough to give malnourished children in food emergencies, why not give it to the countless thousands of children in Niger who are hungry when the world's attention is directed elsewhere? The United Nations reports that 150,000 children under age 5 in Niger are severely malnourished, and another 650,000 moderately malnourished - all together, about one in five. Malnutrition is a factor in 60 percent of deaths of children younger than 5 - and in Niger, more than a quarter of all children never reach their fifth birthday. Fourteen packets a week times 150,000 children times 4 weeks is a lot of Plumpy'nut. But then, says Dr. Tectonidis, it is not the mathematics, or even the nutrition science, that is the hard part. It is keeping the world's eyes focused on solving Niger's everyday hunger problem once the television coverage of this crisis has ended. 'We know what's needed in terms of malnutrition,' he said. 'It's just the will that's lacking.'

Subject: Fantastic Story From: Mik To: Emma Date Posted: Mon, Aug 08, 2005 at 13:55:33 (EDT) Email Address: Not Provided Message: Thanks Emma.

Subject: For you.... From: Emma To: Mik Date Posted: Mon, Aug 08, 2005 at 15:07:22 (EDT) Email Address: Not Provided Message: This was especially for you. A stunning story.

Subject: Melting Mountain Majesties From: Emma To: All Date Posted: Mon, Aug 08, 2005 at 12:24:58 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/08/international/europe/08glacier.html Melting Mountain Majesties: Warming in Austrian Alps By RICHARD BERNSTEIN KAISER-FRANZ-JOSEFS-HÖHE, Austria - The jagged peak of the 11,361-foot mountain known as the Johannisberg looms against the sky at the end of a stunningly beautiful valley here in the Austrian Alps, and the Pasterze, Austria's biggest glacier, extends slowly downward and away from it for five miles. The glacier is broad and grand, like the river of ice it is, and yet something about it is visibly not right, and you can tell right away what it is from the steep cable car that was built a bit more than 40 years ago to take tourists from the heights above down to the glacier itself. 'When it was built, it went right down to the glacier,' recalled Erhard Trojer, owner of the Hotel Lärchenhof in the nearby ski resort village of Heiligenblut. But now, if you stand at the bottom of the cable car line and look down at the tourists disporting themselves on the glacier, it is as though you are looking at them from an airplane. 'It's going down from four to eight meters a year,' or about 13 to 26 feet, said Mr. Trojer, who grew up in this valley. 'In the early 1960's, they used to have a ski race every spring from the top of the Grossglockner to the bottom of the glacier.' The Grossglockner, which looms above the Pasterze, is, at 12,460 feet, Austria's highest mountain. 'They can't do it anymore,' Mr. Trojer said a bit sadly. 'It's warmed up, and there isn't enough snow.' Austria's glaciers - there are 925 of them - are shrinking fast, and as they shrink, this part of the world is slowly losing one of its many attractions, those rivers of ice that, figuratively and almost literally, reflect the grandeur of the mountains around them. This is not happening only in Austria, of course. It's a worldwide phenomenon. One Chinese expert on glaciers, Yao Tandong, director of the Institute of Tibetan Plateau Research at the Chinese Academy of Sciences, has said that the glaciers in the Himalayas shrink annually by an amount equivalent to all the water in the Yellow River, Agence France-Presse has reported. In Switzerland, Austria, and Germany, some ski resorts - Ischgl, about 100 miles west of here, is one example - are so eager to retain the glaciers that they are covering them with vast sheets of white, sun-reflecting insulation in order to save them. All kinds of hazards are being predicted as consequences of the glacial shrinkage, among them the possibility that desert towns in China's Xinjiang Province, which depend on seasonal glacial melting, will lose their underground water supplies. Two European geologists, Andrea Hampel of the University of Bern and Ralf Hetzel of the University of Münster, wrote in the journal Nature earlier this year that the retreat of glaciers could cause an increase in the number of earthquakes. Other scientists have warned that lakes forming in the back of glaciers because of melting ice could burst through cracks in the glaciers and cause tsunami-like devastation to towns down below. 'The problem is that the permafrost is going away,' Hans-Erwin Minor, of the Swiss Federal Institute of Technology in Zurich, said in a telephone interview. 'And there will be instabilities in the mountains, debris flows, mud flows, erosion of loose material.' Mr. Minor and other scientists attribute the speed of Pasterze's slow disappearance to the same global warming that is melting the polar ice caps. But they say that even without the impact of human activity the glacier would probably be shrinking anyway, as glaciers have always done in response to the earth's long cycles of relative warmth and cold. 'If you go back in history, there have been very large temperature changes,' Mr. Minor said. 'And now we are having a temperature change most likely influenced by man, and that accelerates the shrinkage. It's definitely the case that human action has an influence.' The Pasterze is Austria's best-known glacier, attracting hundreds of thousands of visitors a year, who drive, motorcycle or bicycle over the Grossglocknerstrasse, an amazing mountain road open only in summer, that was built in the early 1930's to attract tourists to this region. On a recent Thursday, there were so many visitors that the immense multistoried parking garage at Kaiser-Franz-Josefs-Höhe (Emperor Franz Joseph's Heights) was full, and people in cars on the road below had to wait up to an hour for a space. Standing at the bottom of the tram and looking across the valley, a visitor can see a sort of divide, perhaps 150 yards above the valley floor, marking the highest point of the glacier's bed. A line demarcates the moss-covered rocky mountain above from a steeply slanted, crumbled moraine below. The swift, stone-colored stream emanating from the glacier's edge flows past. The glacier records show that Pasterze reached its greatest extent in the middle of the 19th century and has been retreating ever since. At the moment it is 1.5 miles shorter than it was 150 or so years ago. A bit over four decades ago, when the tram was built to bring visitors to the glacier, it was almost 500 feet higher than it is now, which is why the people scrambling around on top of it look so small from the tram bottom now. 'Normally the snow on the glacier should be there until the middle of July,' said Bernhard Pichler, who trained as a geologist and now works for the tourist office in Heiligenblut, a few miles away at the end of the Grossglocknerstrasse. 'If there is enough snow,' he continued, 'the sun can melt some of it without reduction of the glacier, but we used to get five to seven meters of snow each winter and now we only get about three, and now the snow melts away by the beginning to middle of May.'

Subject: Bush says there aint no global warming From: Johnny5 To: Emma Date Posted: Tues, Aug 09, 2005 at 15:54:59 (EDT) Email Address: johnny5@yahoo.com Message: and I don't believe him - HAHA! How BUSH thinks: intuition over intellect http://www.latimes.com/news/printedition/opinion/la-oe-chait5aug05,0,6079158.column How BUSH thinks: intuition over intellect By Jonathan Chait The Los Angeles Times August 5, 2005 AS SOMEBODY WHO doesn't have the slightest feeling one way or another about baseball star Rafael Palmeiro, I have to say that it seems pretty clear Palmeiro has used STEROIDS. Palmeiro recently tested positive for steroid use. And then there's former teammate Jose Canseco's allegation that he and Palmeiro both used STEROIDS, which is impossible to verify but would seem to explain why Palmeiro's annual home run total nearly doubled after Canseco joined him on the Texas Rangers. None of this is ironclad proof, but it seems the simplest way to reconcile the available data. President BUSH, though, doesn't see it this way at all. When asked about Palmeiro's positive steroid test, BUSH — who knew Palmeiro when the president owned the Rangers — replied, 'Rafael Palmeiro is a friend. He testified in public and I believe him. He's the kind of person that's going to stand up in front of the Klieg lights and say he didn't use STEROIDS, and I believe him.' This statement perfectly crystallizes BUSH's thinking. Facts don't matter to him. What matters is how he feels about the person in question. In 2001, for instance, BUSH met with Russian President Vladimir V. Putin, and the two hit it off. As BUSH later told Peggy Noonan, Putin recounted to him a story involving a cross given to him by his mother. 'I said to him, 'You know, I found that story very interesting. You see, President Putin, I think you judge a person on something other than just politics. I think it's important for me and for you to look for the depth of a person's soul and character. I was touched by the fact your mother gave you the cross.' ' BUSH publicly testified of Putin, 'I was able to get a sense of his soul.' Personally, I put less weight on the fact that Putin got a cross from his mother, and more on the fact that Putin has smothered Russian democracy by outlawing opposition parties, shut down any remotely skeptical media outlet and subjected his critics to political show trials. Yet this sort of evidence has had barely any effect on BUSH. Two years later, he was still praising Putin's desire for 'a country in which democracy and freedom and rule of law thrive.' BUSH is even apt to apply this particular brand of illogic to his own character. In one of the 2000 presidential debates, Al Gore pointed out that BUSH as governor of Texas opposed a measure to expand children's healthcare and instead used the money for a tax cut. The debate moderator then asked BUSH, 'Are those numbers correct? Are his charges correct?' To which BUSH replied, 'If he's trying to allege that I'm a hardhearted person and I don't care about children, he's absolutely wrong.' The style of BUSH's reply is telling. Gore was trying to make a point about BUSH's moral priorities by establishing a series of facts about BUSH's behavior. Rather than deny having chosen tax cuts over children's healthcare, or explain his rationale for having done so, BUSH changed the subject to more comfortable ground: judging people's hearts. He asked the audience to intuit, based on the way he carries himself, that he is a warmhearted person, and thus to reject out of hand any facts that might clash with this impression. The point isn't just that BUSH refuses to engage with facts he finds inconvenient. (Many fail that test.) It's that BUSH rejects reason itself. Reason is a process by which we draw our broader conclusions from an accumulation of specific evidence. When the evidence changes ('Hey, this Putin guy seems to be squelching dissent'), our conclusions can also ('Perhaps he doesn't love democracy as much as he said he did!'). BUSH, on the other hand, arrives at his beliefs through intuition. His supporters marvel at the unshakeable certainty of his convictions. Well, no wonder.

Subject: Productivity Is the Issue of the Hour From: Emma To: All Date Posted: Mon, Aug 08, 2005 at 11:07:11 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/08/business/08fed.html Productivity Is the Issue of the Hour for the Fed By EDMUND L. ANDREWS WASHINGTON - Ten years ago, Alan Greenspan, the Federal Reserve chairman, broke with conventional wisdom and correctly recognized that the United States had entered an era of faster growth in productivity. It was a huge shift that allowed the Fed to encourage faster economic growth and increased prosperity without significant inflation. But as Mr. Greenspan prepares to retire, probably by early January, the Federal Reserve faces a slowdown from the torrid pace of productivity in the past several years. As shown by the big jump in jobs during July, up 207,000 from June, and the more than 1.3 million jobs added this year, the pool of unemployed workers is dwindling and wages are rising faster than productivity. The big question for the Federal Reserve is whether the lull is simply a return to the average pace since 1995 or a return to the doldrums that prevailed from the early 1970's to the early 1990's. With economic growth strong and labor costs rising, Fed officials are all but certain to raise short-term interest rates on Tuesday to 3.5 percent and to increase them again to at least 4 percent by the end of the year as they grope toward a neutral monetary policy. The issue of productivity growth lies behind much of the debate. If output climbs more slowly than labor costs, companies will be under pressure to raise prices. If output rises in line with labor costs, whether because of new technology or new ways of doing business, wages and employment can rise without contributing to inflation. Productivity growth has slowed sharply in the last year, but Fed officials and most outside specialists said this was to be expected. Productivity often surges in the early part of an economic recovery, as companies rush to meet higher demand but are still too nervous to add workers, and then slows as employment picks up. The issue for Fed officials is the long-term trend. From about 1973 to 1995, productivity rose an average of 1.5 percent a year. But the pace nearly doubled after 1995, to almost 3 percent, as major advances in technology spurred big drops in the cost of computing power and companies invested heavily in information technology. Productivity growth shot up to 4 percent a year from 2001 through 2004. Employers shaken by the recession of 2001 and then uncertainties tied to terrorism and war sought and found ways to increase production without hiring workers. And because many companies overspent on technology in the 1990's, they were able to generate new efficiencies without additional investment in the years that followed. The superheated productivity, which caused anemic job growth for three years, appears to be ending. According to the Bureau of Labor Statistics, hourly wages for nonfarm businesses climbed at an annual rate of 10.2 percent in the fourth quarter of 2004 - the biggest jump in almost five years - and by 6.3 percent in the first three months of this year. Unit labor costs, or the cost of labor for a given amount of output, went down in 2001 and 2002 but have climbed sharply since the middle of last year. So far, productivity has remained strong - 4 percent in 2004, for the third year in a row, and 2.9 percent in the first quarter of 2005. Fed economists say they believe the normal rate of productivity growth in the new era is about 2.5 percent. But Mr. Greenspan recently cautioned that predictions were difficult, because the pace of productivity growth depends heavily on the pace of technological innovation. 'Over the past decade, the U.S. economy has benefited from a remarkable acceleration of productivity,' Mr. Greenspan told the Senate Banking Committee last month. 'But experience suggests that such rapid advances are unlikely to be maintained in an economy that has reached the cutting edge of technology.' Mr. Greenspan and other Fed officials have noted that there are some possible red flags. One measure of technological innovation is the drop in prices for computing power and communications. Those declines have been much smaller in recent years than they were in the boom years of the late 90's. According to the Commerce Department Bureau of Economic Analysis, which prepares the government's growth statistics, technology prices are falling much slower now than in the 1990's. Prices for computer equipment, adjusted for increases in processing power, plunged by more than 23 percent a year from 1995 through 1999. But since 2000, the declines have slowed to about 10 percent - roughly where they were before the big productivity boom. A similar pattern holds for prices on a broader array of information and communications technology. 'The rate of technical change, which is the most difficult thing to measure, seems to be slowing from the unprecedented pace of a few years ago,' said Mark Zandi, chief economist at Economy.com. The issue is important to future productivity, because many analysts say they believe that plunging technology prices were responsible - along with the dot-com stock market bubble - for a big part of the huge investment in such equipment during the 1990's. Mr. Zandi added that investment in technology, though strong, was not as strong as it was when the productivity boom took off. As a share of gross domestic product, investment in equipment and software has slipped from about 9 percent in the late 1990's to 8 percent today. But in a paper published last December by the Federal Reserve Bank of New York, a trio of economists predicted that technology would keep productivity growth about 2.6 percent. Dale Jorgenson, a professor at Harvard and a co-author of the study, said last week, 'We are experiencing productivity growth that is very high by historic standards, and there is nothing on the horizon to slow it down,' The biggest risk, he cautioned, is not that innovation will slow down but that the United States is too dependent on foreign capital for its investments. 'Productivity is zooming along because of the investment, but we are not financing much of this ourselves,' he said.

Subject: OIL From: Pete Weis To: All Date Posted: Mon, Aug 08, 2005 at 10:54:47 (EDT) Email Address: Not Provided Message: As oil hits another record high today it's being and has been blamed on things like the death of the head of the Saudi family or the lack of refineries or yada, yada, yada... But you rarely hear the real reason - worldwide demand is rising while the Earth has less and less to give and we've been lied to with regard to this. All of the 'optimistic' economic and stockmarket forecasts out there not only don't see oil going higher but many try to sell the idea that it is going lower.

Subject: Re: OIL From: Bambitroll To: Pete Weis Date Posted: Wed, Aug 10, 2005 at 08:56:41 (EDT) Email Address: juan@btcorp.org Message: In today's situation, with our appetite for oil vs our ability to produce enough, the outlook is pretty bleak. I just read a very good book about that! Have a look here: http://btcorp.dyndns.org/Books/Reviews.htm Bambitroll. http://bambitroll.blogspot.com/

Subject: Re: OIL From: Pete Weis To: Bambitroll Date Posted: Wed, Aug 10, 2005 at 22:17:13 (EDT) Email Address: Not Provided Message: Good recommendation. Future economics, IMO, will be more and more about diminishing resources and less and less about comparative advantage!

Subject: Re: OIL From: Dorian To: Pete Weis Date Posted: Tues, Aug 09, 2005 at 05:27:01 (EDT) Email Address: Not Provided Message: <> I remember listening to the radio (NPR) about a year ago when an analyst argued that the price of oil would level off, that the rise was a temporary phenomenon, etc. by pointing to the price of oil futures. He stated that oil futures several years out were in the $35.00 range. I thought to myself: ths sounds awfully wrong. I wish I knew how to short oil futures. We are constantly faced with the choice of trusting our common sense or believing, against our better judgement, the stories spun in the press.

Subject: Re: OIL From: Emma To: Dorian Date Posted: Tues, Aug 09, 2005 at 12:36:03 (EDT) Email Address: Not Provided Message: Excellent point, for now common sense has it widely and not just on the price of oil. With common sense we might be a lot more secure right now :)

Subject: What the Fed should do? From: Pete Weis To: All Date Posted: Mon, Aug 08, 2005 at 10:14:06 (EDT) Email Address: Not Provided Message: While I agree with almost everything Stephen Cecchetti says with regard to the effects of the housing boom on consumption and GDP, I wonder if he underestimates the downward effect of higher interest rates (with so much of the housing market in the US on ARMS, interest only, and reverse mortgages with early teaser rates) on consumption. I also wonder if he underestimates the dangers of the unraveling of easy credit as mortgage defaults inevitably increase with higher rates. And what about all the interest rate swaps involved with over-the-counter derivative contracts? He could be right about urging the Fed to continue raising rates to reign in the housing market, but this horse is pretty spooky and has some pretty shakey legs. From the Financial Times: Why the Federal Reserve must raise interest rates By Stephen Cecchetti Sun Aug 7, 2:25 PM ET When housing markets boom, homeowners get rich. And the rich drive fancy cars, have expensive flat-screen televisions and go on nice holidays. At least that is the way people think it is supposed to work. But we all need somewhere to live so, while the above may be true for some, it cannot work for all of us at the same time. Economy-wide consumption should not respond to changes in property values. That the impact has been large is a problem for everyone, especially for monetary policymakers. As the Federal Reserve's Open Market Committee (FOMC) meets tomorrow morning, housing should be at the centre of the discussion. Alan Greenspan, the chairman, and his colleagues are in a bind because of the strategy they have followed over the past five years. It now looks as if their overdue reaction to the housing boom will require them to raise interest rates well beyond the 4 per cent or so that most people now expect. The story starts with the internet boom of the late 1990s. At the time, Fed policymakers concluded that since it was so difficult to identify bubbles as they are inflating, it is best to wait and clean up the mess after the crash. In 2001, that is what they did. The FOMC lowered the short-term interest rate from 6 per cent to 1 per cent. The predictable result was a housing boom. The value of residential housing in the US is 55 per cent higher today than it was only five years ago. Since household consumption reacts quickly and strongly to increases in property wealth, a recession was nearly averted. Fed policy replaced the internet bubble with a housing bubble. The problem is that equity and property are very different. When stock prices rise, it signals improved future profitability. Faster growth means higher incomes and more resources to devote to current (and future) consumption. Housing is different. We all have to live somewhere. When housing prices rise it does not signal any increase in the quantity of economy-wide output. While someone with a bigger house could move into a smaller one, for each person trading down and taking wealth out of their home, someone is trading up and putting wealth in. A rise in property prices means people are consuming more housing, not that they are wealthier. This logic is clear. Even so, when economists look at individuals they see a large effect - an increase in housing wealth has about twice the impact on consumption of an equivalent increase in stock market wealth. For the US economy, the $6,500bn increase in housing wealth since 2000 amounts to a $200bn rise in consumption - enough to push GDP up 1.5 per cent and drive the household savings rate to zero. Much of this added consumption has been financed by increased borrowing. This means that as interest rates rise, an increasing portion of household incomes will have to be devoted to repaying the $4,000bn in additional debt incurred during the first half of this decade. Low interest rates have encouraged borrowing from the future. And the more we borrow, the larger the debt and the bigger the adjustment. The most troubling aspect of this is the Fed's reaction. The minutes tell us that the FOMC spent a portion of their June meeting discussing housing, concluding that since there is no way to know if there is a housing bubble, there is nothing to be done. These conclusions bear an eerie resemblance to comments made at the height of the internet bubble in the late 1990s. These statements reveal that policymakers are taking the wrong approach. Consumption should not react to increases in housing wealth. Household spending levels are simply unsustainable and something has to be done. The policy prescription is simple: raise interest rates. Higher interest rates both make borrowing more expensive, reducing household demand, and raise returns on alternative assets for yield-chasing financial institutions. Hopefully, the Fed can emulate its colleagues at the Reserve Bank of Australia. After three years of nearly 20 per cent annual increases, housing prices have been nearly flat for the past 18 months. A series of interest rate increases, coupled with strong public statements, seems to have done the job. While Australian growth has fallen from 4 per cent to less than 2 per cent, it appears the worst is over. Following this lead, the FOMC should (1) increase interest rates at the coming meeting; (2) signal that they are far from done; and (3) warn people that the best we can hope for is that housing prices stop rising, but that there is a real risk of collapse. The writer is professor of international economics and finance, International Business School, Brandeis University

Subject: Worry About Inflation and Growth From: Terri To: Pete Weis Date Posted: Mon, Aug 08, 2005 at 10:39:02 (EDT) Email Address: Not Provided Message: The Federal Reserve should concern itself only about the prospect of general inflation, which is most unlikely, and not asset prices. The Fed will however raise rates by another quarter of a percent at this meeting and continue to raise rates until the economy shows signs of slowing.

Subject: Who cares about inflation? From: Poyetas To: Terri Date Posted: Wed, Aug 10, 2005 at 09:25:09 (EDT) Email Address: Not Provided Message: I agree with Terri...but, The housing bubble is the result of an imperfect market. I don't think the article is 100% correct in its view on stocks but the point is that perhaps the transmission mechanism of lower interest rates does not have the desired effect when personal saving rates are already extremely low.

Subject: Dean Baker on Cspan From: Johnny5 To: Poyetas Date Posted: Wed, Aug 10, 2005 at 10:50:39 (EDT) Email Address: johnny5@yahoo.com Message: http://www.cepr.net/pages/housing_bubble.htm I watched him on Cspan yesterday talking about the housing bubble, he had some very troublesome numbers. http://www.cepr.net/publications/yes_housing_bubble.htm Housing: Alan Greenspan’s Second Bubble By Dean Baker* Survivors of the recent stock market crash should rightly be worried that a sharp drop in housing prices could deliver a second major blow to their retirement dreams. The fact that there has been an unprecedented run-up in home prices over the last eight years creates the possibility for an unprecedented decline in the years ahead - just as the spurt in the NASDAQ at the end of the nineties created the basis for its plunge after March of 2000. The basic facts are striking. According to the government's House Price Index (HPI), the increase in the sale price of an average house has exceeded the overall rate of inflation by more than 40 percentage points over the last eight years. In the past, house prices had largely kept pace with the overall rate of inflation. It important to recognize what this index shows - the HPI tracks the change in price for the same home. This means that the rise in this index is not being driven by better quality homes, it is being driven by homes of the same quality costing more. Also, it is important to remember that the HPI is measuring housing sale prices. The Bureau of Labor Statistics has an index that measures the rental prices of owner occupied housing. The fact that this rental index has not risen anywhere near as rapidly as the HPI (and is now rising less rapidly than the overall rate of inflation), is convincing evidence that there is a housing bubble. If there were some underlying factor driving up the demand for housing, then it should lead to comparable increases in home sale prices and rental prices, as it always did in the past. Instead, people are willing to pay more for owning a home, but not in general willing to pay more for rent, at least relative to rate of inflation. This suggests a bubble waiting to pop. While the federal government has played an active in role in trying to promote homeownership in recent years, this is not a new policy, and the initiatives of the last decade have not been especially large. For example, the $200 million annual appropriation provided for in the American Dream Down Payment Act, will be sufficient to provide $15,000 down payments for 13,000 home buyers each year, approximately 0.17 percent of the homes purchased annually. This policy is not likely to have much of an impact on the overall housing market. The secondary market in mortgages has indeed grown in the last ten years, but this market was already huge twenty years ago. Furthermore, competition may have been successful in driving mortgage fees down over the last twenty years, but the full chart (CHART 4) from Ms. Croke's column would show that mortgage fees, like mortgage interest rates, have just now fallen back to their levels of the mid-sixties, not exactly the basis for an unprecedented boom in home prices. It is questionable whether the economy has become less volatile as claimed; the recent slump has produced the most prolonged period of job loss since the Great Depression. However, it is reasonable to believe that homeownership would be more valuable in a period of great volatility, since the safety of homeownership might be seen as especially appealing if stocks and other assets pose great risks. The fact that people are borrowing against their homes at a rapid rate (more than $750 billion in 2003) is more evidence of an unsustainable bubble. The ratio of mortgage debt to home equity is at record highs. This fact is especially scary given that equity values may be inflated by as much as 20 to 30 percent as a result of the housing bubble, and that the nation's demographics (with the baby boomers approaching retirement) suggest that many homeowners should have largely paid off their mortgages. The market is responding to the housing bubble exactly as economic theory would predict. New homes are being built at record rate, far faster than can be supported by population and income growth. At the moment, this has mostly affected the rental market, leading to record vacancy rates and falling rental prices. However, as home prices continue to rise, many potential homebuyers will opt to rent, especially when interest rates rise. And vacant rental units can be put up for sale. The end result will be a loss of $2 to $3 trillion in housing wealth, and a downturn that is even worse than the fallout from the stock market crash.

Subject: Was Someone Squeezing Treasuries? From: Emma To: All Date Posted: Sun, Aug 07, 2005 at 15:13:09 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/07/business/yourmoney/07gret.html Was Someone Squeezing Treasuries? By Gretchen Morgenson A STORM swept through the United States Treasury market in June, creating big losses at banks and brokerage firms and bringing back memories of the infamous short squeeze by Salomon Brothers in 1991 that ultimately brought the firm to its knees. The recent turmoil is a troubling sign that the pools of capital at hedge funds and investment firms have grown so enormous that they can easily swamp the government securities market, one of the world's deepest, most liquid and heavily used financial markets. The upheaval also involved a short squeeze - financial-speak for what happens to short-sellers when they are forced to stanch their losses in a buying spree that sends prices higher and higher. Back in 1991, remember, a trader at Salomon Brothers propelled the price of Treasury securities skyward by illegally buying more than the firm's allotted share at auction. That squeeze created significant losses for many other players in the market and enraged regulators. The government punished the trader, Paul W. Mozer, and the firm, which paid $290 million in fines and penalties to settle the matter. John H. Gutfreund, Salomon Brothers' chief executive at the time, resigned as a result of the mess. This time around, the market upheaval centered on a 10-year Treasury security issued in February 2002 that pays an interest rate of 4.875 percent. The notes generated about $25 billion for the government when they were issued, but the amount of bonds changing hands regularly, known as the float, is significantly smaller than that. It's not known who was behind the recent short squeeze and there is no indication that the activity was illegal. But by far and away the largest holder of the 10-year Treasury in question, and therefore the one that would benefit the most from the action, is the Pacific Investment Management Company, or Pimco, the $500 billion money management firm specializing in fixed-income investments and overseen by William H. Gross. As of June, according to data from Bloomberg News, Pimco held more than 45 percent of the outstanding 10-year security in its various funds. Pimco's percent of the daily float was unknown but would have been far larger. James M. Keller, a managing director at Pimco and director of its government/derivatives desk, said that the company as a policy does not comment on its trades. This particular 10-year note was also the security underlying a Treasury futures contract that expired in June. Such contracts are crucial hedging vehicles for investors and traders in mortgage-backed securities, corporate bonds and other fixed-income investments. Problems began emerging in late May, when traders who had sold the 10-year note short suddenly found that they could no longer go into the open market and borrow the securities for delivery to their purchasers. If sellers of a security cannot deliver it to buyers, the trades cannot settle. In Wall Street parlance, this is called a 'fail.' ACCORDING to traders, beginning in late May and extending into June, billions of dollars of the 10-year Treasury were failing each day. It was clear that one or more holders of the securities had stopped lending them, setting up what appeared to be a perfect short squeeze. As sellers scrambled to buy back the securities to cover their short positions, the price of the Treasury rose, creating losses for anyone who still had a short position. Holders of securities often agree to lend them, for a fee, to traders who are short the security. If no securities are available to be borrowed, anyone who is short the security must pay the amount of the coupon or interest rate to the people who have bought them. So, those who were short this particular Treasury were losing twice: once on the coupon, and again as the security's price rose. The June turmoil was not limited to the Treasury market, however. It also created problems for the throngs of traders at brokerage firms, hedge funds and banks that use the futures market to hedge their positions in other fixed-income securities. At one point, positions taken by investors in the Treasury futures contract that had the unborrowable 10-year note as its underlying security reached $200 billion. Under the terms of a futures contract, any trader who has sold one must supply the underlying security to the contract's owner when it expires. If a trader fails to make the delivery, he or she may face a penalty from the Chicago Board of Trade, where Treasury futures change hands. The disruption of the Treasury market in June seemed to have prompted the Chicago Board of Trade to institute limits on the number of Treasury futures contracts a trader can buy or sell in the last 10 trading days of its cycle. For example, traders in the futures contract that corresponds to a 10-year Treasury will be limited to 50,000 contracts. The limits, announced on June 29, go into effect with the December contracts. The last limit on the 10-year Treasury was 7,500 contracts; it was in place from 1990 to 1992. Officials at the Chicago Board of Trade declined to discuss why the changes were made. But a notice explaining the new limits said the exchange's action furthered its 'interest in providing deep, liquid and transparent markets and underscores our commitment to protecting the integrity of these contracts.' And last week, Treasury officials discussed the problem of large capital pools possibly overwhelming the government securities market. In a meeting last Tuesday of the Treasury Borrowing Advisory Committee of the Bond Market Association, which meets with Treasury officials four times a year to discuss matters relating to the financial markets, Timothy S. Bitsberger, assistant secretary for financial markets at the Treasury, said it was considering creating a securities lending facility to provide an extra supply of Treasuries in emergencies when large numbers of settlement failures occur. According to the minutes of the meeting, some people in attendance expressed support for the lending facility. Others, the minutes reported, were opposed. As is customary, the minutes did not identify which members were for or against the emergency lending facility. The advisory committee's members are executives at brokerage firms, banks and hedge funds. One member is Mr. Keller, the Pimco managing director. He declined to discuss his view on the emergency lending facility. In an interview on Friday, Mr. Bitsberger said that a proposal outlining how an emergency facility would work could emerge in the next six months. He said the Treasury is concerned that, as fails increase, some market participants may re-examine their reliance on government securities. There is no doubt that supply and demand in the government securities market is becoming increasingly imbalanced. And such imbalances almost guarantee greater volatility in Treasuries and, therefore, interest rates. From 1981 to 2004, according to government figures, Treasury securities outstanding grew 8 percent each year, on average, while annual trading volume increased 16 percent, on average. And from 2000 to 2004, Treasuries outstanding increased 4 percent a year, on average, while average trading volume rocketed 22 percent. The futures contract expiring in September is based on a Treasury issue that is even smaller - $19.5 billion - than the $25 billion 10-year underlying the expired June contract. In other words, fasten your seat belt. More gyrations in this market almost certainly lie ahead.

Subject: Asset Values From: Terri To: All Date Posted: Sun, Aug 07, 2005 at 08:05:18 (EDT) Email Address: Not Provided Message: After reading the interesting article on asset allocation difficulties several times, I find that even if I agree to the premise that all asset classes are overvalued there is no reason to change an investment approach that emphasizes finding value and gradually diversifying as value is found in different assets. If all asset classes are overvalued, not all assets are overvalued and some assets are more protected than others against market declines. Besides, if assets we have long owned that are overvalued are to lose some value that may be acceptable in avoiding selling all our assets as they appreciate and become expensive. The need then is the same as ever, patiently look for fairly valued assets.

Subject: F.C.C. Eases High-Speed Access Rules From: Emma To: All Date Posted: Sat, Aug 06, 2005 at 15:53:59 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/06/technology/06tele.html F.C.C. Eases High-Speed Access Rules By STEPHEN LABATON WASHINGTON - Federal regulators on Friday eased rules governing high-speed Internet services offered by phone companies, saying they hope it will speed Internet growth. Handing a significant regulatory victory to the Bell companies, the Federal Communications Commission said the carriers no longer had to provide rival Internet service providers with access to their lines at reduced rates. The commission said the move would foster competition by putting phone companies on an even footing with cable companies and other sellers of Internet service and would provide more incentive for phone companies to upgrade their networks and offerings. The change, however, was criticized by consumer groups, which asserted that it could lead instead to higher prices and reduced competition from independent suppliers. The decision is the latest in a series of victories by the Bell companies in their regulatory march over competitors that had tried, under the Telecommunications Act of 1996, to gain a stronger industry foothold through the low-cost use of the extensive Bell telephone network. Under the Bush administration, the Bells have prevailed in the regulatory battle. As they have been relieved of their obligations to offer low-cost access to their phone lines, they have pushed aside competition from local carriers as well as long-distance companies like MCI and AT&T. Still, the Bell companies have complained that they face far greater regulation than cable companies in areas where they compete - including high-speed Internet access and, increasingly, television service - and the commission's decision on Friday aimed to reduce some of those differences. The rule change was the first major action under the commission's new chairman, Kevin J. Martin, since his appointment by President Bush in March. It was approved with unusual unanimity by the four members after Mr. Martin fashioned a compromise with the agency's two Democrats that limited some of the impact of the ruling on other areas. The compromise set a one-year transition before the new rules take effect. It also required the telephone companies to continue their contributions to universal service funds, which pay for phone and Internet services in underserved areas. Critics of the deregulatory action taken on high-speed Internet service - by making new distinctions between such service from ordinary telephone service - had raised concerns that it threatened to undermine the financing of the universal service funds. The commission on Friday imposed a nine-month moratorium on any changes to the contribution rates to allow time to devise a new set of contribution rules. In a companion decision, the agency adopted a measure requiring providers of Internet-based telephone service, like conventional phone companies, to make their systems accessible to law-enforcement authorities to monitor suspected terrorists and criminals. The measure, which sets an 18-month transition period, was enacted over the objections of some Internet phone companies, which have said the regulations will impose burdensome costs. The commission also adopted a policy statement that, while not enforceable as a rule, commits the agency to promote unfettered public access to the Internet - so that no provider can, for example, block certain sites for commercial reasons. The decision to relax the rules mandating access for rival Internet services was hailed by the Bell companies, which have been pressing for the changes for months. Their cause got a boost five weeks ago when the United States Supreme Court ruled that cable companies do not have to allow rivals to offer high-speed Internet access over their systems. That decision, a victory for the commission, prompted the agency to move with unusual alacrity so that the cable rules would also apply to the phone companies' technology for high-speed Internet service, known as digital subscriber line, or D.S.L. 'The order that we adopt today is a momentous one,' Mr. Martin said. 'It ends the regulatory inequities that currently exist between cable and telephone companies in their provision of broadband Internet services. As I have said on numerous occasions, leveling the playing field between these providers has been one of my highest priorities.' His prediction that the decision would lead to increased competition and lower prices was sharply disputed by some consumer groups. 'The Federal Communications Commission continues down the wrong path on deregulation, allowing giant phone companies to tighten their stranglehold on competition, stifle innovation and reach even deeper into the pockets of consumers,' said Gene Kimmelman, public policy director at Consumers Union. 'Consumers will be forced to pay higher prices for Internet access.' Executives at the Bell companies offered a different perspective. 'The benefits of this ruling will ripple across our communities by encouraging greater investment in and a wider rollout of broadband networks,' said James C. Smith, a senior vice president at SBC Communications. 'Discarding decades-old requirements and regulatory assumptions that are out of sync with today's competitive broadband marketplace will also spur more innovative products and services for consumers.' Susanne A. Guyer, a senior vice president of Verizon, said the decision 'will help accelerate deployment of broadband networks, enabling greater choice and increased access for consumers.'

Subject: And Canada does the exact opposite From: Mik To: Emma Date Posted: Mon, Aug 08, 2005 at 11:57:28 (EDT) Email Address: Not Provided Message: CRTC rules against big phone companies Last Updated Fri, 13 May 2005 09:08:11 EDT CBC News OTTAWA - The CRTC ruled against the big telephone companies on Thursday, saying it will regulate internet-based phone service the same as any other local phone service. In a decision issued on Thursday, Canada's telecom regulator told dominant local phone service providers such as Bell and Telus that they cannot offer internet-based phone services below cost. 'This decision will further the goal of building sustainable competition in local telephone markets,' the regulator said in a prepared statement. 'Under this decision, incumbent local exchange carriers – those with market power – cannot price their local VoIP services below cost to stifle competition.' Voice over internet protocol (VoIP) technology allows phone calls to be made over high-speed internet lines. VoIP costs less to operate because it doesn't require expensive wires and switching equipment. The CRTC restricts the established phone giants in order to boost competition and protect consumers. It regulates prices and makes them share their infrastructures with competitors. New companies entering the VoIP market can set prices as low as they want, said the CRTC. 'We hope to create conditions that will allow new entrants to establish a foothold in the local telephone services market,' said CRTC chairman Charles Dalfen. Bell and Telus have both announced plans to appeal Thursday's decision, calling it disappointing. 'Telus believes this is the wrong decision at the wrong time, because it fails to fully unleash the power of the internet,' said Janet Yale, executive VP of corporate affairs at Telus. 'The commission has misunderstood this new competitive paradigm in what may turn out to be an historic mistake with significant consequences,' said Lawson Hunter, executive VP at Bell. A number of non-telephone companies are moving ahead with VoIP services, including Alberta's Shaw Cable and Ontario's Rogers Cable. Cable and other companies will be allowed to offer internet-based local phone service at a cheaper rate.

Subject: Re: And Canada does the exact opposite From: Terri To: Mik Date Posted: Mon, Aug 08, 2005 at 18:55:56 (EDT) Email Address: Not Provided Message: Smart smart Canada. What a disgrace, as we fall behind!

Subject: Re: And Canada does the exact opposite From: Terri To: Terri Date Posted: Mon, Aug 08, 2005 at 19:47:06 (EDT) Email Address: Not Provided Message: This Administration has limited competition in internet usage as well as in broadcasting.

Subject: Land of the Midnight Tee Time From: Emma To: All Date Posted: Sat, Aug 06, 2005 at 11:52:25 (EDT) Email Address: Not Provided Message: http://travel2.nytimes.com/2005/08/07/travel/07norway.html Golf in the Land of the Midnight Tee Time By JEFF Z. KLEIN IT was going to be a tough chip shot: 50 yards onto a tiny green with the ocean right behind, the sun hanging just above the horizon and casting a bright gold glow on the water. One o'clock in the morning, and the sun is in my eyes. I should have been asleep. I was at Lofoten Golf Links in Norway, the fourth or fifth northernmost golf course in the world, during the summer solstice last June. I'd just traveled for 26 hours straight: the flight from Newark to Oslo, then another to the northern city of Bodo, a quick dash to catch the coastal steamer for the six-hour passage to Svolvaer, the port town in the breathtakingly beautiful Lofoten islands, then a 45-minute drive to Hov, a farmstead on a single-lane road surrounded by ocean and snow-capped peaks. I was 95 miles above the Arctic Circle and exhausted. But the midnight sun was out, the temperature was a soothing 60 degrees, and a lush golf course was at my disposal, so why sleep? 'This time of year, you get spectacular bursts of energy,' said Frode J. Hov, the course's founder and managing director, who grew up in this place. 'At 2 a.m. you suddenly decide you want to paint the walls, so you do, then three hours later you realize that you have to finish the whole room, and you wonder, 'What was I thinking?' ' It may have been 1 in the morning, but I was not the only golfer on the course. Two local boys of about 18 were searching for a ball in the heather on No. 3. 'I play every day,' one said. 'This is the best time - midnight or later.' On No. 5, an Australian named Ian trotted over to introduce himself. 'I work here at the shop,' he said, 'and after I close at 12:30 or so, I come out and play nine holes. It's kind of ridiculous really, but I've worked here three summers now, and this is where I've learned to play golf.' But 90 minutes later, I was the only soul on the course. The mountains were standing out clearly in the Arctic three-quarters light, the Norwegian Sea was lapping against the rocks, sparrows and gulls were chirping and calling as if it was dawn, and just off a white sand beach less than half a mile away, a small red house stood alone in a deep green field of turf. Lofoten Golf Links stands on Frode Hov's family land. The idea to open a course here first occurred to a family friend and was embraced by Frode's father and by Frode himself, who thought about it further as a student of tourism at Lillehammer College in the mid-90's. Many found the idea quixotic - there were very few golfers and courses then in Norway and Scandinavia in general, and the game was almost entirely unknown in the north. Frode's father died before he could start work on the course, but his grandfather, a fisherman like so many of the older generation in Lofoten, had given his blessing. ' 'As long as it makes money,' he told me,' Frode recalled. 'He was a fisherman, so he knew what the important thing was.' In April 1998 work finally began on the seaside fields that would become the course. Using very little construction equipment, Frode and his associates went at it, right up to opening day on July 14. The result is a nine-hole course of just 2,172 yards - par 31, with four par-4's and five par-3's - incorporating all the natural features of the rocky headland and only rudimentarily manicured. The architect, a Sweden-based Englishman named Jeremy Turner, placed tees on promontories, fairways on narrow isthmuses and postage-stamp greens bare centimeters from sandy beaches. He left thick stands of gorse and clover everywhere. It's the kind of golf course the Scots might have made hundreds of years ago. The next morning, the wind was up out of the south. Huge clouds poured over the tops of the mountains. Greens I could hit with a seven-iron the night before now required a five-wood to reach. I played with Chris and Yvonne, a Dutch couple. Chris sliced his shot into the ocean. I hit mine onto the beach. Yvonne lost balls in the gorse, in a brook, in a lawn of enormous daffodils, in the rocks, on a waterside strand of old mollusk shells. 'I am hitting the ball in silly places,' she said. In the afternoon, I played with Frode. 'When the sun comes out for a whole day,' he said, 'the grass just explodes. It grows like a couple of inches just in a few hours.' On No. 2, he pointed to some rocks and shrub-covered peat marked off by four little white out-of-bounds stakes. 'That's a Viking grave,' he said casually. 'There are a couple more over on No. 8. 'When my grandfather, and his father, used to plow this land,' he continued, 'they'd sometimes turn up skeletons and some artifacts - a Viking sword, a gold ring, the foundations of a house, the outlines of a Viking ship.' Hov, Frode said, comes from an Old Norse word meaning sacred place of offering. What did he think of people playing golf where Viking bones rest? 'They'd probably think it's fun,' he said. 'They were Vikings.' The day drizzled on, gray and chilly and wet. Others came into the clubhouse from Sweden, from a Norwegian town on the mainland about 180 miles to the north, from Lofoten itself. Paal-Tore, a midfielder for the local soccer team, clomped in. He is one of 450 dues-paying members of the Lofoten Golf Links and like many of them, his expectations have been warped by having this golf course form their entire experience of the game. 'I had a good shot on 5,' he said, 'and it was six inches short.' Well done, I said. 'No, no,' he said. 'It was six inches short, and it rolled into the water.' Lofoten, one of only a half-dozen Norwegian courses north of the Arctic Circle (two, in Tromso and Narvik, are both 18 holes and set in the woods rather than on the water; another, at North Cape, is a muddy six-hole course at the most northerly point in continental Europe), plays host to between 2,000 and 3,000 nonmember rounds each season, mid-April to mid-October. From May 23 through July 24, the sun doesn't set at all, and it is light all night till the beginning of August. Late May to early August is the season of 'midnattgolf,' when, supposedly, you can circle the course 16 times in 24 hours, as a South African guest claimed to have done in 2001. The 100-mile-long chain is first glimpsed as a massive sheet of mountains rising 3,000 feet out of the sea - the so-called Lofoten Wall - but as boats approach, the mountains part into innumerable fiords, bays and coves. In the main town, Svolvaer, a perfect harbor is set against towering mountains, and the last few years have seen the appearance of waterfront condos, a popular coffeehouse and several restaurants. A 10-minute boat ride from Svolvaer takes you to the island of Skrova, population roughly 300 - most of which is involved in Norway's whaling industry. Whaling is legal in Norway, which puts a veterinarian on every whaleboat to monitor the humane hunting of the minke whale and ensure that the quota - 790 this year - is not exceeded. In August, when most of Europe is on vacation, Lofoten's narrow roads fill with camping Germans, Swedes and Norwegians who fish, scuba dive, hike, climb or just relax. Beaches, coves, cute but sturdy fishing boats and tidy farmhouses appear and disappear in bright light or foggy mists, each island linked by spectacular bridges that soar over surging tidal straits. Along the way beautiful fishing villages hug the fiords, and in the middle of the islands, in the town of Borg, site of the largest Viking manor house ever unearthed, a museum recreates the Norse world of a thousand years ago. A FOG rolled in from the sea. Frode and I were tromping down the second fairway, through a patch of little white flowers that in July produce the northern delicacy of Arctic cloudberries. 'People have gotten into fights over picking cloudberries on other people's land,' he said. 'You go over to your neighbor's land to pick his berries in the fog so he can't see you. Then you sneak back to your land. And you run into him sneaking back from picking your cloudberries.' Later the clouds were high, leaving everything gray but perfect for golf. 'Two years ago I played in a midnight sun tournament in Tromso,' said Kenneth, a Svolvaer hotel manager, before teeing off on No. 3. 'You were supposed to play four rounds of 18 holes in 24 hours. It was exhausting. I don't even remember playing the last round.' He and Arne, a Svolvaer insurance man, kept score closely. They knew all the rules, made sure to count all penalty strokes and handed in their scorecard at the end of the round. There were no mulligans, no gimme putts. 'It's for our handicap,' Kenneth said. All the golfers from Lofoten kept score like this, and often their first question to me was 'What's your handicap?' In Scandinavia, the golf boom of the 90's was handled more formally than it was in the United States, explained the Lofoten club pro, Van MacDougall, an expatriate Canadian who has lived in Sweden and Norway for the last 30 years. Beginning golfers have to earn a 'green card' in order to play at many courses; that involves passing a basic golfing test as well as a written test on the rules. 'As a result,' Van said, 'most Scandinavians don't play golf the casual way you're used to playing. Especially up here - they're all competing with each other, keeping an eye on each other, all the time. You've got to remember it's still new to them, but they've come a really long way in a short time.' On the par-3 fourth hole, I put my tee shot into a brook, but after a drop I got down for a bogey four. 'FEE-reh,' I said in my best approximation of the Norwegian word for four. Kenneth and Arne had a brief conversation in their native language. 'Did you lose your ball in the brook?' Kenneth asked. Yes, I answered. 'Then that should be a five?' he said. He explained the rule. I changed my score to a five. At 1 a.m., the light was like late afternoon. The wild North Atlantic surged around a little 19th-century navigation cairn on the rocks off the shore. I was out with Ian, who'd just wrecked an excellent round by losing two balls in a row. 'Every time something goes wrong like this,' he said, 'you look up and see what's around you, and you say, 'Right, what was I upset about?' ' The next day it rained too steadily to go out on the course. Finally at 2 a.m., I went to bed in my room at the Lofoten clubhouse. But as I lay there awaiting sleep, the room suddenly went bright gold. Outside, the wind had blown the clouds away, and the sky was turquoise, the sunlight turning the mountainsides yellow and pink and green. I went out and stood on the road. The only sounds came from the oystercatcher birds, calling above the steady rush of the waves. In Norway, June 23 is Midsummer Day, when families gather to light evening bonfires, have barbecues and revel in the long, warm days and nights that offset the dark northern winters, which, for now, seem so far away. Across Lofoten fires were burning, black smoke curling up into the sky. The Hov family and various golf course workers set up a seven-foot-tall pyramid of driftwood and scrap on Hov's little white-sand beach. The workers huddled under umbrellas and poured wine and jibed one another about their various nationalities. Neighbors came with beer and wine and a Frisbee. Hot dogs and whale steaks were cooked on the grill. Someone brought out a guitar, and people gathered round to sing the tunes they knew, from Bob Dylan and Lou Reed to A-Ha and even Wig Wam, a Kiss-like band of thickset Norwegians that represented the country in the 2005 Eurovision song contest. At 11:30 the party was winding down, and since my plane wasn't leaving till 5:45 a.m. and the rain was letting up, we drew the logical conclusion, a bit tipsy as we were: there would be one more round of midnight golf. In a few minutes we were headed to the first tee, high on a rock overlooking the sea: myself, Ian, Van and Per-Christian, a young course worker who'd grown up a couple of miles down the road. Ian's girlfriend, Ursula, an Irishwoman and a fine golfer herself, was walking the course with us, carrying a box of zinfandel and a wine glass for moral support. The banter was thick and fast - these were good friends in a remote place united by their enjoyment of golf. The moon was full, though we couldn't see it, making the high tide even higher. Sometimes we had to roll up our cuffs as the ocean ran across the little isthmuses that connect the fairways to the greens. Per-Christian looked up and said, 'It feels like it's going to rain.' How did he know? 'When you live here all your life, you can sort of sense these things,' he said sagely. 'Also, I felt some drops a minute ago.' We made our way across the course in the drizzle. Ursula kept offering us sips of wine as reward for good shots and as fortification after bad ones. I sliced a tee shot into the ocean and muttered darkly. Van said don't worry; just take a look around you and try to remember what you see. I looked around. The sea was swelling against the shore. The snow-capped mountaintops were shrouded in mist. The gulls were drifting slowly above the deep green fairway. And the golfers were standing together, laughing at a joke someone told in the wee-hours light of Lofoten.

Subject: Diversify From: johnny5 To: All Date Posted: Sat, Aug 06, 2005 at 10:05:11 (EDT) Email Address: johnny5@yahoo.com Message: With buffet short the dollar, china not able to buy oil with thier dollars, and with this following article, I have very little faith in the dollar or dollar based assets long term. Pete keeps warning people. We can't time the market - but long term who would disagree and why? http://www.signonsandiego.com/news/business/20050802-0023-economy-gulf-currency.html By Dominic Evans REUTERS 12:23 a.m. August 2, 2005 RIYADH – China's revaluation of the yuan is fuelling debate in Gulf Arab states about the wisdom of fixing their currencies to a weak U.S. dollar while trading links with Asia and Europe continue to grow. Oil giant Saudi Arabia and most of its neighbours have pegged their currencies to the dollar for years, a policy which helped anchor their young and fragile economies through the turbulence of low crude prices in the late 1980s and the 1990s. Officials insist they want to preserve a link which has served them well in the past – at least until the planned monetary union of six Gulf Arab states in 2010 – and few analysts expect any quick change. But the weakness in recent years of the dollar and the growth in Asian and European imports have cut into the purchasing power of the Gulf countries, whose export earnings from oil are also denominated in dollars. The value of Gulf Arab imports from China, which were negligible just a decade ago, grew last year to $14.5 billion, or 8.5 percent of total imports. While record oil prices may mask the impact of costlier goods, economists say the case for linking to a basket of currencies instead of the dollar – just like China – is gaining ground. 'There is a gathering debate about this,' said Daniel Hanna, an economist with Standard Chartered bank in Dubai. 'The majority of the Gulf trade is with Asia and the European Union. You can make a case that the currency peg should reflect that better, especially since China will be their fastest growing partner,' he said. One vocal advocate of swift change, National Commercial Bank senior economist Nahed Taher, says Saudi Arabia cannot afford to wait until 2010 to loosen ties between the riyal (SAR-) and the dollar which have been fixed since 1987. Taher has called for a managed float of the riyal against a basket of currencies, within a 5 percent band, arguing that costlier imports are partly responsible for pushing annual inflation up to 6 percent for the last two years. Other economists dispute Taher's figures, and the Saudi Arabian Monetary Agency says inflation is less than 1 percent. But with oil prices set to remain high for the foreseeable future and the region witnessing its fastest growth since the 1970s oil boom, policy makers in the Gulf may chafe at the limited room for manoeuvre which a tight currency peg imposes. Hanna said Qatar and the United Arab Emirates in particular are already suffering inflationary pressure which would be easier to tackle with a more flexible monetary policy. BARRIERS TO CHANGE The six states of the Gulf Cooperation Council – Saudi Arabia, Oman, Bahrain, Qatar, Kuwait and the United Arab Emirates – control more than half of global oil reserves. Supporters of the dollar link say that since oil is priced in dollars, any change would introduce a new foreign exchange risk for governments who depend for nearly all their revenues on crude exports. Regional politics also make any early move unlikely. Although most GCC states have informally linked their currencies to the dollar for years, they only formalised that step as a group in 2002 when Kuwait switched to the dollar from a basket of currencies. Abandoning their joint position could undermine credibility of the GCC's goal of monetary union within five years. 'We've just agreed to a formal peg ... It is too soon after that to change,' said Abdel Aziz Aluwaisheg, director of the GCC Secretariat's economic integration department. 'There is a realisation that we are losing because of pegging to the dollar but there is also a feeling that this (reluctance to change so soon) is a big obstacle – as well as the issue of foreign exchange risk.' Aluwaisheg said Gulf officials have discussed informally whether any change should happen before 2010, but that no formal proposals have been presented by any of the six countries. Expressing his personal view, Aluwaisheg said he believed the time had come to start thinking about changing the peg 'even before the unification of the currency.' 'But obviously if it is done, it has to be done jointly. The whole idea of dollar peg is to have irrevocable cross exchange rates between the six Gulf currencies before they are unified.' Abandoning the dollar peg, which helped curb double-digit inflation in Saudi Arabia in the 1980s, for a basket of currencies was not without risk, he added. Any change may be a remote prospect for now. Central bank governors talk openly about the post-2010 options for their unified currency – either fully or partially floating or pegged to the dollar, the euro or a basket of currencies. But they insist the dollar peg stays until then. Earlier this month, Saudi Arabia's deputy central bank governor Mohammad Al-Jasser denied a British newspaper report that Gulf countries were reviewing the dollar link. Hanna said big changes are unlikely before the new currency is born but some fine-tuning may occur before then if the dollar slips further. Kuwait, for example, quietly tweaked the rate on its dinar in January in a move which drew little attention. 'By no means are we saying that this will change tomorrow,' Hanna said.

Subject: Employment From: Terri To: All Date Posted: Fri, Aug 05, 2005 at 19:34:57 (EDT) Email Address: Not Provided Message: Unemployment has been worse than shown by the 5% rate but the participation rate will increase if growth stays at 3.5% or better with moderate or slowing productivity. Since we can expect a meaningful stimulus from the Congressional bills just passed, growth could be beyond 3.5% if the Federal Reserve continues to raise short term rates only moderately. An interesting policy mix coming.

Subject: The Bond Market From: Terri To: All Date Posted: Fri, Aug 05, 2005 at 11:08:36 (EDT) Email Address: Not Provided Message: The tremendous bull market in bonds may have finally ended. The labor market really has improved, and long term bond prices are building in the improvement. So much for international central bank or hedge fund support for long term bonds.

Subject: Re: The Bond Market From: Terri To: Terri Date Posted: Fri, Aug 05, 2005 at 14:22:04 (EDT) Email Address: Not Provided Message: Foreign central banks or none, from the time the labor market began to firm in quality of work offered and wages long term interest rates have increased. I would guess lots of hedge fund position have been resolved and we are back to being able to take the bond market for the economic indicator Robert Rubin found. Just as Bill Gross and Stephen Roach found a bull market for bonds developing, the bull market appears to have turned.

Subject: Too Much Pork and Too Little Sugar From: Emma To: All Date Posted: Fri, Aug 05, 2005 at 10:56:21 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/05/opinion/05friedman.html Too Much Pork and Too Little Sugar By THOMAS L. FRIEDMAN Wow, I am so relieved that Congress has finally agreed on an energy bill. Now that's out of the way, maybe Congress will focus on solving our energy problem. Sorry to be so cynical, but an energy bill that doesn't enjoin our auto companies to sharply improve their mileage standards is just not serious. This bill is what the energy expert Gal Luft calls 'the sum of all lobbies.' While it contains some useful provisions, it also contains massive pork slabs dished out to the vested interests who need them least - like oil companies - and has no overarching strategy to deal with the new world. And the world has changed in the past few years. First, the global economic playing field is being leveled, and millions of people who were out of the game - from China, India and the former Soviet empire - are now walking onto the field, each dreaming of a house, a car, a toaster and a microwave. As they move from low-energy to high-energy consumers, they are becoming steadily rising competitors with us for oil. Second, we are in a war. It is a war against open societies mounted by Islamo-fascists, who are nurtured by mosques, charities and madrasas preaching an intolerant brand of Islam and financed by medieval regimes sustained by our oil purchases. Yes, we are financing both sides in the war on terrorism: our soldiers and the fascist terrorists. George Bush's failure, on the morning after 9/11, to call on Americans to accept a gasoline tax to curb our oil imports was one of the greatest wasted opportunities in U.S. history. Does the energy bill begin to remedy that? Hardly. It doesn't really touch the auto companies, which have used most of the technological advances of the last two decades to make our cars bigger and faster, rather than more fuel-efficient. Congress even rejected the idea of rating tires for fuel efficiency, which might have encouraged consumers to buy the most fuel-efficient treads. The White House? It blocked an amendment that would have required the president to find ways to cut oil use by one million barrels a day by 2015 - on the grounds that it might have required imposing better fuel economy on our carmakers. We need a strategic approach to energy. We need to redesign work so more people work at home instead of driving in; we need to reconfigure our cars and mass transit; we need a broader definition of what we think of as fuel. And we need a tax policy that both entices, and compels, U.S. firms to be innovative with green energy solutions. This is going to be a huge global industry - as China and India become high-impact consumers - and we should lead it. Many technologies that could make a difference are already here - from hybrid engines to ethanol. All that is needed is a gasoline tax of $2 a gallon to get consumers and Detroit to change their behavior and adopt them. As Representative Edward Markey noted, auto fuel economy peaked at 26.5 miles per gallon in 1986, and 'we've been going backward every since' - even though we have the technology to change that right now. 'This is not rocket science,' he rightly noted. 'It's auto mechanics.' It's also imagination. 'During the 1973 Arab oil embargo Brazil was importing almost 80 percent of its fuel supply,' notes Mr. Luft, director of the Institute for the Analysis of Global Security. 'Within three decades it cut its dependence by more than half. ... During that period the Brazilians invested massively in a sugar-based ethanol industry to the degree that about a third of the fuel they use in their vehicles is domestically grown. They also created a fleet that can accommodate this fuel.' Half the new cars sold this year in Brazil will run on any combination of gasoline and ethanol. 'Bringing hydrocarbons and carbohydrates to live happily together in the same fuel tank,' he added, 'has not only made Brazil close to energy independence, but has also insulated the Brazilian economy from the harming impact of the current spike in oil prices.' The new energy bill includes support for corn-based ethanol, but, bowing to the dictates of the U.S. corn and sugar lobbies (which oppose sugar imports), it ignores Brazilian-style sugar-based ethanol, even though it takes much less energy to make and produces more energy than corn-based ethanol. We are ready to import oil from Saudi Arabia but not sugar from Brazil. The sum of all lobbies. ... It seems as though only a big crisis will force our country to override all the cynical lobbies and change our energy usage. I thought 9/11 was that crisis. It sure was for me, but not, it seems, for this White House, Congress or many Americans. Do we really have to wait for something bigger in order to get smarter?

Subject: Play the Republican game From: Mik To: Emma Date Posted: Mon, Aug 08, 2005 at 13:49:41 (EDT) Email Address: Not Provided Message: Interesting that the theory of Supply-Side economics introduces the concept of how reducing taxes pays for itself (Krugman). The US has among the lowest gas-taxes around. So by increasing tax on gas would go contrary to the current administration's economic agenda. They do appear to hold firm to the supply-side theory by not increasing the gas tax as a means of using economics to curb reliance on gas. There is some irony in this concept though. For all the millions and millions of cars consuming millions and millions of gallons of gas every day, the government does make tax revenue from America's big thirsty car engines. By getting people to use more efficient engines (particularly hybrid engines) we could see a dramatic drop in gas consumption and a dramatic drop in gas-tax revenue (well beyond any revenue increases from increased gas tax). Hhhmm at what stage does one out-do the other. ie: Option 1: increase gas-tax - people switch to more efficient engines and we have a drastic drop in gas-tax revenue. For a government that desperately needs all the tax revenue it can get to fund that huge deficit - not a good idea. Option 2: keep the gas-tax low - invent methods of keep gas prices low (subsidise the oil companies) and keep the status-quo of cheap energy driving an economy forward while providing huge sums of money in gas-tax; and... well fight a war over an oil rich country, put in a half-hearted attempt to address Kyoto. Right now, in my mind, I can understand that energy policy and the budget deficit are closely interlinked. I can also see the irony, the need to keep that tax money coming in. Why not play the Republican anti-tax card and campaign for NO TAX ON GAS. Hey if the Republican party is so committed to reducing tax, then they should remove tax on gas. Very hypothetically speaking - if they do remove tax on gas then 'Option 1' no longer becomes an issue and the government will be far more free to look at the environmental and security issues related to gasoline. In this way a policy towards gas consumption will be severed from any hidden agendas of raising tax funding and the need to keep the Global status-quo. So here is the secret for you - instead of lobbying for increasing fuel tax to curb the usage of large cars - rather lobby for NO TAX ON GAS - after all that is the ultimate goal of the Republicans - just beat them at their own game.

Subject: Re: Play the Republican game From: Terri To: Mik Date Posted: Mon, Aug 08, 2005 at 18:57:40 (EDT) Email Address: Not Provided Message: Wonderful :)

Subject: Asset Allocator's Nightmare From: Pete Weis To: All Date Posted: Fri, Aug 05, 2005 at 10:51:00 (EDT) Email Address: Not Provided Message: August 05, 2005 An Asset Allocator's Nightmare by Doug Wakefield In April of this year I attended a conference hosted by Altegris in La Jolla, California. With the wealth of investment experience and expertise, for my 20 years in the business, it was by far the best investment conference I have ever attended. The first speaker, Mark Finn of Vantage Consulting Group, has been advising Fortune 500 companies for over 30 years. At the end of his talk, he said something very interesting. He stated that the current environment was an 'asset allocator's nightmare'. One of the reasons that his words caught my attention was that I had come across a piece by Jeremy Grantham (principal of GMO, a global investment firm managing in excess of $74 billion that has worked with institutions since the 1970's) where he voiced similar apprehensions. In Grantham's third quarter 2004 letter to the investment committee, he has a section titled 'The Nightmare for Asset Allocators: What on Earth Can We Do to Prevent Losses?' In his 7 year forecast, speaking about 'every equity and fixed income asset class,' he notes 'there has never been a more broadly overpriced mix of assets.' While one may not be familiar with these men and their careers, anyone looking at market charts over the last two years can easily see why these men, and others like them, are concerned. The charts and tables presented in this piece make it painfully clear that this is beyond a doubt an asset allocator's nightmare. Before we look at what is actually happening, let's stop and review how this is supposed to work theoretically. The world of modern finance refers to diversification as the use of non-correlating assets. The College of Financial Planning's Investment Planning textbook teaches that, 'Diversification and the reduction in unsystematic risk require that assets' returns not be highly positively correlated. When there is a highly positive correlation, there is no risk reduction. When the returns are perfectly negatively, risk is erased. This indicates that combining these assets whose returns fluctuate exactly in opposite directions has the effect on the portfolio of completely erasing risk.' 2 In short, assets that move in step with each other have more potential risk than assets that move in opposite directions from each other. My purpose here is only to say that true diversification can be useful in reducing certain types of risk. Our common sense and life experiences tell us as much. We have all heard the old saying, 'Don't put all your eggs in one basket.' We all agree that if we have five people each carrying a basket with one egg, we have less chance of all of them getting broken than if we had one person carrying all five eggs in one basket. The problem is that the current situation appears to be more like 5 people running a race with their legs tied together on a rainy day after the staying up all night at a keg party. It would be an understatement to say that the last 24 months have produced many positive results. Indeed, the effect is that bullish sentiment has grown to historical lengths. A closer look at these euphoric charts should leave us more concerned for what will happen in the next 24 months. A cursory look reveals that all of these markets are moving in the same direction. This convergence essentially reduces the benefits of diversification. For example, how is it that the price of commodities has gone up and the price of the 30-year government bond has gone up as well? This is inconsistent. As the price of commodities (stuff) goes up, people usually demand a higher yield to offset inflation, causing the price of bonds to go down. How can gas and oil prices go up so much, and retail stocks, a sign of consumer spending, rise sharply too? If health care goes up and insurance costs climb, how does the consumer have more money to spend on retail products, much less a purchase as large as a house? Why are small caps, large caps, the Russian stock market, the German stock market, the Singapore stock markets, and the Mexico stock market all up so strong? How can all of these non-correlating markets move up together? More importantly, is this sustainable? Before we address this conundrum, let's look at one more troubling aspect of our current market situation. If we look at 20-year periods on the S&P 500 from 1919 to the present, we notice that the highest average 20-year return was 13.4. However, if the average Price to Earnings ratio (P/E) was 19, the average return was only 3.2%, and I assure the reader that there were some years of heavy losses in those 20-year timeframes. 3 The current average P/E, obtained from the S&P 500's website, is 20.7. 4 Decile S&P 500 Decile Avg. Avg. Begin P/E Avg. End P/E 1 3.2% 19 9 5 6.7% 14 14 10 13.4% 10 29 Current - Crestmont 26 ??? Current - S&P 20.70 ??? As an aside, in speaking with Ed Easterling, founder of www.crestmontresearch.com and author of Unexpected Returns: Understanding Secular Stock Market Cycles, he thought it important that the reader understand that these P/E ratios are based on trailing earnings, which is the original way P/Es were calculated. The powers that be have since changed the P/E calculation. The calculations of the Leading Economic Indicators and the Consumer Price Index and many other government and market supplied numbers have been changed as well. But that is another topic that I will address as a separate issue on another day. For now, let us look at the price changes in the previously mentioned indices and see where we stand today. Index/Asset Price 7/28/03 Price 7/28/05 % Change $CRB/Commodities 234.71 312.0 32.9 $USB/30 Govt. Bond 105.86 115.31 8.9 $XOI/ Oil 463.11 942.85 103.6 RTH/Retail 80.45 102.72 27.7 $HMO/Health Care 792.73 1479.14 86.6 IYR/Real Estate 43.25 67.8 56.8 $SML/Small Cap 231.31 352.90 52.6 $SPX/Large Cap 989.28 1234.18 24.8 $RTSI/Russian 459.84 779.18 69.4 $DAX/Germany 3411.37 4886.50 43.2 $STI/Singapore 1580.88 2352.56 48.8 $IXX/Mexico 7240.57 14409.7 99.0 Price data collected through www.stockcharts.com So as you can see from these numbers, with the exception of the 30-year government bond, over the last 2 years all of these indices have exceeded the highest 20-year average returns of the S&P 500. To see what has caused all of these indices to move in step with stellar returns for the last two year, we need look no further than the monetary policies of the Federal Reserve. We are floating on a sea of liquidity. From June 28, 2003 to July 18, 2005 the money supply, as measured by M3, has grown by $836 billion dollars from $8.913 trillion to $9.749 trillion. 6 From the indices presented here and the GDP and other numbers coming from the government, one would think that we have, once again, inflated our way to victory. As for the debt that has been created along the way, (don't worry) we'll inflate that away too. However, oddly, since the first Federal Funds Rate increase was announced on June 30, 2004 and in spite of its inflationary monetary polices, the 30-year government bond is up from 105.61 to 115.31. This is what we would expect to see if the Fed had cut interest rates or kept money supply growth to a minimum. As we are all aware, the Federal Reserve has raised its rate from 1% to 3.25%. When government bonds go up almost 10% in an environment where the Fed Funds Rate is increasing, this does not bode well for future economic prospects. The predominant theme in history has been that when an economy has grown weaker, bonds prices have gone up. When inflation concerns are tame and business prospects are bleak, we see a flight to the safety and returns of the government bond. When the economy picks up, business prospects expand, and inflation heats up, bond prices fall. So while the stock market churns out high returns, the bond market does not seem the least concerned with inflation or a stronger economy. Once again, something is wrong. So based on our common sense, modern financial theory, and decades of price history on the S&P 500, we know that the real world is screaming a story far different than pretty pie charts of average annual returns produced to give investors a false sense of security. Coloring the eggs differently will not make investment portfolio returns safer. A lot of eggs are about to be broken.

Subject: Is it a nightmare From: David E.. To: Pete Weis Date Posted: Sat, Aug 06, 2005 at 18:42:38 (EDT) Email Address: Not Provided Message: If I read this right, the nighmare is that everything is fully priced. So unless I missed something, that is not the nightmare that I have. My asset allocation nightmare is that the asset correlation for all of my asset classes moves to one- and the market goes down big time. That is this asset allocator's nightmare. I didnt see any reason in the article to think that all asset classes will move in unison, all of them by the same amount, so I think I will sleep well tonight.

Subject: Re: Asset Allocator's Nightmare From: johnny5 To: Pete Weis Date Posted: Sat, Aug 06, 2005 at 10:00:01 (EDT) Email Address: johnny5@yahoo.com Message: great read Pete, I have asian friends telling me they are buying lots of japanese real estate and gold to diversify away from us dollar and dollar denominated assets.

Subject: The correlation problem From: Pete Weis To: johnny5 Date Posted: Sun, Aug 07, 2005 at 13:29:11 (EDT) Email Address: Not Provided Message: We have a highly 'correlated' economy!!

Subject: Re: The correlation problem From: Poyetas To: Pete Weis Date Posted: Mon, Aug 08, 2005 at 06:17:57 (EDT) Email Address: Not Provided Message: Increasing bond prices due to china and the convex effect caused by the housing bubble. Bond prices need to fall, but the article is correct. Something is definetely not right. If this huge increase in money supply has driven the housing bubble then that means that Krugman is right. Its a question of time before the s*** hits the fan.

Subject: Re: The correlation problem From: Emma To: Poyetas Date Posted: Tues, Aug 09, 2005 at 12:38:54 (EDT) Email Address: Not Provided Message: Should housing slow significantly and especially if housing prices begin to fall, bonds will be an excellent investment. Notice the slowing of housing in Britain and Australia and the Netherlands, and the strong stock markets as well.

Subject: Re: The correlation problem From: Poyetas To: Emma Date Posted: Wed, Aug 10, 2005 at 09:02:00 (EDT) Email Address: Not Provided Message: The housing bubble will fall as interest rates rise. This means that bond prices will also go down, unless the chinese somehow increase their current appetite for US Treasuries. This is unlikely as an increase in interest rates will attract capital flows and the dollar will see a subsequent rise in value. The chinese will not need to keep on buying US treasuries to keep the dollar overvalued. The trade deficit will increase and unless someone picks up the slack, who's gonna buy all those t-bills?

Subject: Re: The correlation problem From: Terri To: Poyetas Date Posted: Mon, Aug 08, 2005 at 13:04:37 (EDT) Email Address: Not Provided Message: I am thinking about your interesting comment.

Subject: Employment and Interest Rates From: Terri To: All Date Posted: Fri, Aug 05, 2005 at 09:05:49 (EDT) Email Address: Not Provided Message: Well, job creation was fairly robust last month and labor costs are rising faster than inflation. We can be sure the Federal reserve will continue to raise rates for some while. The bond market will be interesting to watch today.

Subject: New Face of Hunger, Without Old Excuses From: Emma To: All Date Posted: Fri, Aug 05, 2005 at 05:44:25 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/31/weekinreview/31polgreen.html New Face of Hunger, Without the Old Excuses By LYDIA POLGREEN THE pictures are wrenching. A nomad holds an infant aloft, its gaunt head lolling dangerously, its matchstick limbs akimbo. A father asks God to forgive him for weeping publicly; he has just buried his son. A child in an emergency clinic awakens from a hunger-induced stupor only to moan and weep from the pain of his starvation-induced skin sores. These images of victims of a food crisis in the vast, landlocked West African nation of Niger, captured by a BBC television correspondent and shown around the world, look like something the world has seen before - the famine in Ethiopia in the 1980's. That catastrophe prompted an extraordinary outpouring of generosity, along with a vow that the world would never again stand by as millions went hungry. Yet here it is again, far smaller in scale, yet replete with images of stick-thin children with hunger-swollen bellies clinging to bony, flat-breasted mothers. Once again there is the question: what causes these calamities that invariably afflict the world's poorest corners? The immediate cause is certainly known. Locust swarms and poor rains last year wiped out much of the nation's harvest and caused grain prices to triple. But when misfortunes strike other countries, they can help their people, with planning, with resources and by seeking aid from abroad. So what has gone so terribly wrong in Niger? For decades famine was seen largely as a consequence of bad political leadership. Food scarcity in Ethiopia in the 1980's had natural causes, but its transformation into a deadly famine came to be understood as mostly man-made, the result of a Stalinist regime's collectivist ideology and its pursuit of victory over insurgents without regard to the well-being of its people. It seemed a neat illustration of the development the economist Amartya Sen's dictum: 'No famine has ever taken place in the history of the world in a functioning democracy.' But that does not explain Niger's problem. Niger is a democracy. It has been one since 1999, when it made the transition to multiparty democracy and constitutional rule after a decade of turmoil. It has also made, in part at least, the painful transition from a centralized, state-run economy to a market-driven one, earning praise and ultimately relief from about half of its estimated $1.6 billion in foreign debt from the World Bank. Yet Niger still earns a horrifically high score on the index of human misery compiled by the United Nations Development Program, which lists it as the second least developed nation in the world, just ahead of Sierra Leone. More than 25 percent of its children die before their fifth birthdays. Those who survive go on to scrape a meager existence from a harsh, arid savanna that is just barely suitable for farming and cattle grazing, yet must feed 12 million people. Cyclical droughts and chronic hunger are a way of life. Life expectancy tops out at 46 years. Nor is Niger alone in its troubles. Of the 25 countries at the bottom of the development list, all but two are in Africa. Niger's food crisis - it is not, despite news reports, a famine yet - is not even the worst on the continent. Similar problems, involving even larger numbers, exist in Zimbabwe, Ethiopia, Darfur and elsewhere. Far from ignoring or playing down its troubles, Niger's government, in cooperation with international aid agencies, sounded the alarm back in November. It provided subsidized grain and other aid from its own stocks, and has apparently made every effort to avert disaster. The world simply failed to respond, leaving the government unable to mount a sufficient aid campaign. 'The world has not noticed,' said Mark Malloch Brown, chief of staff to the Kofi Annan, the United Nations secretary general. 'When you get a crisis of this kind in a little known, landlocked country, which is Francophone and hard to reach, the inability to mobilize and galvanize sufficient support in a timely way is huge.' Of $16 million requested by the United Nations in an appeal for aid, less than a third had been received until about a week ago, when images of starving children began appearing on television. Food distribution is well under way, but precious time was lost, Mr. Malloch Brown said. Niger and its neighbors are textbook cases of what the Columbia University economist Jeffrey D. Sachs calls 'the poverty trap.' 'When poverty is extreme,' Mr. Sachs wrote in his recent book, 'The End of Poverty,' 'the poor do not have the ability - by themselves - to get out of the mess.' The new prescription he advocates for such countries, as he described it in a telephone interview, is a large infusion of aid directed to basic needs like growing more food, providing access to clean drinking water and preventing diseases like malaria. If farmers in Niger got better seeds and fertilizers, he said, they would grow more crops, preventing food shortages in the first place. Children who had safe drinking water would not suffer from diarrhea or its deadly complications, malnourishment and dehydration. Fighting malaria, which debilitates as well as kills, would increase productivity. Good roads would allow rural populations to send produce to market in flush times and let their government and aid agencies know who is in trouble in bad times. Niger may be a democracy, but its government is weak and its tiny budget is almost entirely dependent on foreign aid. It may have a free press, but if literacy is at 17 percent and few can afford radios or televisions, how can a free press safeguard against famine? It may have elections, but if the government has put itself at the mercy of international donors in return for promises of aid, can it be held to account when the world does not live up to its end of the bargain? In the end, the way out of misery for countries like Niger is neither democracy nor increased aid alone, but a blend of the two, said Stephen Devereux, an expert on famine at the University of Sussex in Britain. Mr. Sen's phrase about famine and poverty is often misquoted to leave out the word 'functioning.' Helping young democracies become functioning nations is probably the only way to inoculate countries like Niger against catastrophe. 'Niger appears to have done everything it could,' Mr. Devereux said. 'We have to ask ourselves, what do international donors owe Niger in return? If you accept the situation that a country is so poor that it will be dependent on assistance for a long time, the responsibility for preventing famine is shared.'

Subject: Growing Strength From: Jennifer To: All Date Posted: Thurs, Aug 04, 2005 at 17:36:10 (EDT) Email Address: Not Provided Message: The bills just passed by Congress will have a stimulus effect of some strength in the coming year. We will likely have strong growth even with continued Fed rate increases.

Subject: Re: Growing Strength From: Terri To: Jennifer Date Posted: Thurs, Aug 04, 2005 at 20:13:11 (EDT) Email Address: Not Provided Message: Dean Baker, who is sharp, tells us that the labor market is really tightening and labor costs rising. Also, productivity is slowing. This is not a happy combination for the Fed. Look out.

Subject: Re: Growing Strength From: Pete Weis To: Terri Date Posted: Fri, Aug 05, 2005 at 10:59:56 (EDT) Email Address: Not Provided Message: As US manufacturing and hightech continues layoffs. The job market continues to be heavily dependent on housing. Labor costs for residential housing construction are heading higher has new construction remains high. The chief economist for Merrill Lynch states that 40% of the job market is directly related to housing presently. Many of the remaining jobs are indirectly related to housing. When it comes to jobs and consumption we have increasingly become a one sector economy. We must look behind the numbers!!!

Subject: Re: Growing Strength From: Terri To: Pete Weis Date Posted: Fri, Aug 05, 2005 at 14:24:19 (EDT) Email Address: Not Provided Message: Agreed, but there is no sign housing will not carry us further. Housing has large job impacts, and we are seeing that fully now.

Subject: Direction for the Federal Reserve From: Terri To: All Date Posted: Thurs, Aug 04, 2005 at 16:15:53 (EDT) Email Address: Not Provided Message: Evaluating a new Fed chair we need to decide whether Alan Greenspan has served well and why that might have been. Greenspan has for me long had a fine sense of the near term direction of the economy and been flexible about responding to what was taken for the direction. The strong sense I have is that a coming chair will take a more mechnical approach to setting monetary policy, adopting a narrow inflation range as a guide. Then, I would imagine there are a range of candidates who would be similar. I prefer flexibility, but would be content with Ben Bernanke.

Subject: Booming Mumbai's Frailties From: Emma To: All Date Posted: Thurs, Aug 04, 2005 at 15:08:57 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/03/international/asia/03flood.html Torrential Rain Reveals Booming Mumbai's Frailties By SOMINI SENGUPTA NEW DELHI - The monsoon season this year brought India the mantle of a would-be world power with nuclear weapons in its arsenal and a friend in George W. Bush. Then came the revenge of the real. Fluke rains a week ago submerged Mumbai, the country's financial and entertainment capital, and unearthed the sorry state of the urban infrastructure that Mumbaikars already know too well. Cattle carcasses floated in ponds that suddenly materialized on city roads. Commuters died in their cars. Shanties were swept away. Residents of first-floor apartments lost all their worldly possessions. Even a week later, when the rains had subsided and many commuter trains returned to near normal service, the streets of this always hustling, always harried coastal city remained eerily quiet. People simply stayed home. On July 26, Mumbai, or Bombay as it is also known, received a record downpour of more than 30 inches in a 24-hour period. Rains came again on Monday, flights in and out of the city were curtailed, and though the death toll varied from account to account, the numbers were still staggering: 962 people had died across the state, according to officials Tuesday evening, among them 406 in Mumbai. Estimates of losses varied widely, from $700 million to $2.8 billion, in industry, agriculture and infrastructure combined. A week into the disaster, it became clear that nature alone could not be blamed, and anger began to boil among the citizenry. Why did the downpour cause such a calamity? The storm drain system, much of it built a century ago, has been clogged with garbage. The shanties of the poor, as well as the trash of the rich, have blocked gutters and creeks. Mangrove swamps, which act as nature's bathtub during the rainy season, have been built over. A river that once allowed storm water to be carried down to the Arabian Sea has since been pinched by the construction of a new road that is to connect a northern suburb to midtown Mumbai. Called Mithi, or Sweet, River, it once spawned oyster beds; now it swims with feces. 'The past has caught up with us, about which little can be done,' Gerson D'Cunha, a former advertising executive and the founder of a civic group called Agni, or Fire, said by telephone. 'It is bad weather that has caused part of the tragedy, but it is bad government policy that has compounded bad weather.' For years, environmentalists and civic activists have been screaming about what they regard as the unchecked development of the city, greased by spiraling land prices. Now they are saying they hope their city officials will take note and begin to make amends. Government officials came under fire, too, for how they responded to the disaster. Why were streets not cleared for emergency vehicles? people asked. Why did relief not reach the neediest much sooner? What would happen, a former municipal commissioner, Jamshed Kanga, wondered aloud, if Mumbai were to be hit by even a moderate earthquake? More than half of the city - not only its beggars, but its maids and security guards and washerwomen - live in slums. 'You have a tragedy of this scale and you realize how the infrastructure is totally damaged,' Mr. Kanga said. 'Naturally it does a tremendous amount of damage to the reputation of the city.' Mumbai's ambitions to become a world-class city like Shanghai, as it was once suggested, or Dubai, as it was suggested before that, fell under a wet blanket. That it happened in India's iconic city of strivers, and not in some destitute corner, only highlight the bricks-and-mortar challenge - or rather, sewage and storm-drain challenge - that faces a country keen for a seat on the United Nations Security Council. The Maharashtra State chief minister, Vilasrao Deshmukh, said Tuesday that the scale of the disaster did not allow government relief to reach everyone on time, but that government workers were today going door to door to provide rice and kerosene to all affected families. 'It was unprecedented,' he said, according to a Reuters report. 'What could any government do?' 'We will look into the urban development issue, but this is not the time to do it,' Mr. Deshmukh added. 'Our priority now is rescue, relief and rehabilitation.' Mumbai being what it is, however, there were optimists. Mr. Kanga said he hoped that disaster could be converted to blessing and that building laws would be made stricter and infrastructure repaired. A member of Parliament from Mumbai, Milind Deora, seized on it as an opportunity to devolve power to city officials who would be accountable to citizens; currently, a state-appointed municipal commissioner is technically responsible for the city. Bittu Sahgal, editor of the magazine Sanctuary Asia, said the sheer scale of the devastation from the flood perhaps would prompt a review of urban development plans that had effectively destroyed Mumbai ecological assets, the very assets that could have prevented waterlogging. 'We've got 25,000 flamingos; we've got a 103 kilometer national park with free-ranging leopards; we've got a seascape that is among the most beautiful in world,' Mr. Sahgal said. 'These assets should be defended. Decisions are in hands of people who don't have ecological foresight or hindsight. This has been a rude awakening.' Kiran Nagarkar, who counts himself as a Mumbaikar who likes to grouse about Mumbaikars, said he had witnessed a spirit of practical camaraderie and not that of a 'besieged city.' 'I don't think even on our worst days, we don't breast-beat - 'Poor us, what's happening to us,' ' said Mr. Nagarkar, a novelist and playwright. 'It's more 'Can I lend a hand?' and 'Let me get home.' It's very matter of fact, practical and helpful.'

Subject: What About Our Savings? From: Terri To: All Date Posted: Thurs, Aug 04, 2005 at 14:32:21 (EDT) Email Address: Not Provided Message: What if John Bogle is right and long term gains by mutual fund investors from the bull market onset for stocks and bonds in 1982 have been much below the gains of our total stock market index. Well, household savings since 1982 have fallen steadily to the point where they are about 0 now. That leaves our houses as an even more important saving vehicle than they might otherwise be considered. But, we have taken quite a bit of equity from our houses during the startling price increase we are experiencing. Where then are our savings to come from when prices finally do level off?

Subject: Foreign Relations From: Terri To: All Date Posted: Thurs, Aug 04, 2005 at 14:08:09 (EDT) Email Address: Not Provided Message: If we expect China to take up the international concerns we have, then we need to look more closely at working with her resource needs. Otherwise China will fend for herself and work with governments we wish to limit. We need to deepen our relationship with China.

Subject: Political Force in Global Art From: Emma To: All Date Posted: Thurs, Aug 04, 2005 at 11:22:43 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/04/arts/design/04essa.html London Sees Political Force in Global Art By ALAN RIDING PARIS - It was purely coincidental, but between the London bombings of July 7 and the failed bombings of July 21, a Commission on African and Asian Heritage appointed by London's mayor issued its first report, 'Delivering Shared Heritage,' which recommended ways of recognizing and integrating the contribution of black and Asian minorities to the life, culture and history of the city. Two years in the making, the report evidently made no mention of terrorism. The only nod to the crisis was when the report was officially presented at the Victoria and Albert Museum on July 18. Standing before a diverse audience in understandably somber mood, the mayor, Ken Livingstone, asked for one minute's silence to remember those killed or wounded on July 7. Yet the fact that three British-born Asian Muslims and one Jamaican-born Muslim convert were identified as last month's terrorist bombers has given an urgency to the report and to the continuing debate about the place of minorities in British society. It is a question increasingly faced throughout Europe, most critically in France, Germany and the Netherlands. This is where questions of history and heritage are interwoven with those of identity. A significant African and Asian population has lived in London since the late 18th century. And for two centuries, blacks and Asians have been present in politics, law, culture and the armed forces. But until recently, their contribution, like that of African-Americans, was not acknowledged in school textbooks or museums. The report highlights the perils of this lack. When a community's heritage is denied, ignored or overshadowed, it warned, 'the outcome can be debilitating, leading to disaffection and disillusionment, a sense of disenfranchisement and contributing to socio-economic decline.' And it added: 'In London, this has been the untold part of the story that urgently needs to be addressed.' Until the mid-1960's, Britain viewed much of the world through the prism of empire. While institutions like the British Museum and the Victoria and Albert boast remarkable collections of African and Asian art, much of these are the fruits of the colonial era. Today, these two museums go out of their way to link their shows to minorities living in Britain, but the commission says that more must be done. In a statement quoted by the report, Jack Lohman, director of the Museum of London Group, took a radical stance. 'Many museums were born out of the pain of conquest,' he said. 'I feel that there is a need for the museum community to acknowledge that pain. Museums that present the culture of the world need to acknowledge the story by which those collections were acquired. An apology for this pain is necessary.' The report dwelled on more practical suggestions. It proposed that museums hire more African and Asian staff and use minority experts to interpret collections. It noted that, instead of being 'showhorned' into festivals like Black History Month, African and Asian programming should be sustained year round. It also said that museums should explore their collections for long-buried material related to African and Asian heritage. To oversee these and other changes, it recommended creation of a Heritage Diversity Task Force. In this, Mr. Livingstone has found an unlikely ally in the Arts Council England, a government-financed body, which earlier this year announced that performing arts groups would have to introduce affirmative action programs if they were to continue to receive subsidies. Immigration to Western Europe rose rapidly from the 1960's on, so that the original immigrants now have children and grandchildren born in Europe. And while the first wave of immigrants came from former colonies, they now also come from everywhere in the third world. In all cases, then, the fundamental issue is how European societies adjust to them and how they adjust to the European way of life. Britain's laissez-faire tradition led to multiculturalism; that is, immigrants and their children were reconstituted as largely self-contained communities. At one level, they were accepted as 'different Britons' and, as such, were represented in politics and culture. But social inclusion was not a priority. But even that has now changed. Partly as a result of 9/11, partly because of right-wing newspaper campaigns against 'welfare-abusing' asylum seekers, attitudes in Britain have hardened. And even at a government level, the new philosophy is that if immigrants want to settle in Britain, they should become 'real Britons,' that is, speak the language, accept the values and swear loyalty. The Mayor's Commission on African and Asian Heritage, however, represents a third - arguably more realistic - position: if minorities are to feel British, they must also see themselves mirrored in British society. In Mr. Livingstone's words, they must 'see their achievements, contributions and historical presence reflected in our museums, archives, galleries and school textbooks.' In London, they are certainly highly visible. At present, 29 percent of the city's population comes from African, Caribbean, Asian and other minority groups. They are also the fastest-growing sector of the population: by 2015, city officials have calculated, they will account for 80 percent of the increase in the working-age population. And, logically, these 'new Londoners' must be made to feel at home. For some Britons, it is true, this all represents political correctness gone mad. Yet, while it may do nothing to dismantle terrorist cells, 'soft power' of this kind may help change attitudes - among white Britons as well as minorities, whether British-born or immigrant. Indeed, it could be argued that political differences become more manageable if a cultural dialogue is under way. In an intensely cosmopolitan city like London, it is one key to coexistence.

Subject: From: Mozilla/5.0 (Windows; U; Win98; en-US; rv:1.7.5) Gecko/20041107 Firefox/1.0 To: Mik Date Posted: All Email Address: NA Message: 29 July 2005 SA, Zimbabwe and the IMF A CHOICE OF STRINGS By Tony Hawkins and Sven Lünsche SA looks set to attach strict political and economic conditions to any support for Zimbabwe Any financial assistance package by SA to Zimbabwe is set come with economic and political conditions attached and will be paid directly to the International Monetary Fund (IMF), senior government sources have told the Financial Mail. Amid growing criticism of SA's proposed balance of payments support to Harare, the sources also indicate that government is seeking backing from the Zimbabwe opposition MDC for the financial rescue package. Other safeguards that SA looks set to include are phased payment of the support package to ensure Zimbabwe complies with the conditions. Apart from helping with its IMF arrears, SA could also come to Zimbabwe's assistance directly by providing humanitarian and agricultural aid. SA's position is that if there is any financial assistance it will be given in the interests of restoring political normality and stability and aiding the country's economic recovery. The SA government is especially anxious that the ruling Zanu-PF and the MDC restart their staggered talks. Furthermore, to break the political impasse SA is likely to put pressure on Zanu-PF to resume talks, which collapsed after a referendum in 2000, about drafting a new constitution . SA president Thabo Mbeki said on Sunday that Zimbabwe's threatened expulsion from the IMF could create further 'economic chaos' in the country, 'which would not be in SA's interests'. Mbeki said SA could take 'some financial responsibility for Zimbabwe's IMF debt'. Zimbabwe's arrears to the IMF stand at almost US$300m, of which SA could 'pay enough to avert Zimbabwe's immediate expulsion', says a senior financial official. Head of government communications information services, Joel Netshitenzhe, says negotiations between national treasury, the SA Reserve Bank and their Zimbabwean counterparts were continuing to finalise the terms of a loan. 'The loan needs to benefit all Zimbabweans and there should be consensus about it from all parties in the country,' he says. Zimbabwe's expulsion - to be discussed at the August 16 meeting of the IMF's executive board - has been on the agenda for the past 18 months, but following visits by its teams to Harare, the IMF decided to delay the decision because of promises by the government to reform its economic policies and repay its arrears After the IMF's most recent Article IV mission to Harare in May, there were clear signs that the fund had lost patience. The full report is unlikely to be published until September, but the mission's brief statement at the end of its visit was the harshest assessment to date, leaving the impression that the fund's patience has run out. Accordingly, the stage is set for Zimbabwe to be expelled next month - unless it can repay some of the arrears and unless it takes steps to convince the executive board that it is serious about economic reform. A senior SA government source says direct talks between SA and the IMF were continuing 'and the IMF could give Zimbabwe a negotiated grace period until September'. By paying at least some of the arrears that period could be further extended . It is not a done deal, though, because President Robert Mugabe insists that he will not accept loans - from anyone - with strings attached. SA's insistence on attaching economic and political conditions could force Mugabe to withdraw his request. The latest economic numbers - showing a net outflow of foreign currency on the current account of US$33m in the first half of the year - suggest that Mugabe must either bite the bullet and accept SA's terms, or find another funder, which is why he is in China this week. Zimbabwe said last week it was exploring alternative lines of credit with China and Malaysia and this week Mugabe met his Chinese counterpart Hu Jintao to seek financial and diplomatic support. Mugabe hopes that China will block discussions at the UN about his country's clean-up campaign, which has left 700 000 Zimbabweans homeless. What's attractive to Mugabe is that China has promised help and to not interfere in 'internal affairs'. No official details about the talks have been released, but over the past few years China has already supplied buses and civilian and military aircraft to Mugabe's government. The Chinese connection is all the more intriguing because of the extent to which Beijing is challenging SA's economic hegemony in Sub-Saharan Africa and because there could be a direct clash of interests in respect of platinum mines in Zimbabwe. Though China will not attach conditions, if it makes a loan it will want something in return, such as a pledge over future Zimbabwe exports or assets. One particular asset of interest to the Chinese is Zimbabwe's rich platinum resources - the world's second-largest deposits after SA's - mostly controlled by two SA companies: Impala Platinum and Anglo American. In other words, if Mbeki's conditions are too harsh - which seems improbable given the SA president's track record on Zimbabwe - he could have some irate SA mining companies and shareholders on his doorstep, whose Zimbabwe platinum investments could be threatened by China. All of which suggests Pretoria will make the loan, though on its own this may not be enough to ensure Zimbabwe retains its IMF membership. In raising interest rates by 20 percentage points and devaluing the Zimbabwe dollar 39% last week and 65% since mid-May, the governor of the Reserve Bank of Zimbabwe, Gideon Gono, has sent a signal to Washington that he is heeding IMF advice. These policy moves, plus a partial SA payment of the arrears, ought to be enough to justify the board giving Zimbabwe the benefit of the doubt for another six months at least. But with an overall balance of payments deficit of US$750m projected for 2005, inflation set to surge above 200% later in the year, government spending and borrowing out of control, and GDP set to decline at least 5%-6%, Zimbabwe's economy needs much more than credit lines from abroad to turn it around.

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Subject: Mexicans at Home Abroad From: Emma To: All Date Posted: Thurs, Aug 04, 2005 at 10:32:26 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/04/business/worldbusiness/04retire.html Mexicans at Home Abroad By EDUARDO PORTER and ELISABETH MALKIN In recent decades, millions of working-age Mexicans have entered the United States. Most of them have come illegally, taking jobs on the bottom rungs of the American labor market. While much of the attention remains on the persistent inflow of illegal workers, a new question is beginning to worry some analysts and policy makers on both sides of the border: What will happen when the 10 million Mexicans living in the United States become too old to work? Will they retire in the United States or will they return to Mexico? As they age, the choices these old-timers make could fray the social fabric on both sides of the border. Mexico is not prepared to receive them back. With a rapidly aging population living in Mexico and virtually no public system of social security or health insurance, Mexico could hardly cope with millions of returning immigrants who spent their working lives in the United States. 'If we add to the dynamic of aging the return of Mexicans who don't have coverage,' said Rodolfo Tuirán, a respected demographer who is under secretary of social development in the Mexican government, 'then we are talking about a significant problem.' But the United States is also unprepared to deal with millions of poor, aging immigrants, eking out a living without recourse to Social Security, Medicare, Medicaid or most other forms of federal assistance. In 2003, an estimated 710,000 Mexicans over 60 lived in the United States, 63 percent more than a decade earlier, the National Population Council of Mexico concluded, based on Census Bureau figures. About a quarter lived under the poverty line, a far greater share than the 10 percent of the overall elderly population who are poor. Those numbers are expected to swell for the current generation of illegal immigrants. Unlike earlier migrants - many of them now legal residents in the United States - today's illegal immigrants are likely to see Social Security, Medicare or Medicaid as little more than mirages. While most have paid taxes over their working lives to these programs, under current law they are not entitled to any benefits. 'If all these people that came here are going to stay, then there is a question of what will be the social cost,' said Roberto Suro, director of the Pew Hispanic Center in Washington. 'If they're only here for their working life, it's a bargain.' Immigration policy, however, might be unwittingly contributing to an increase in the number of older Mexicans staying in the United States, as increasingly tight border controls encourage illegal immigrants to settle here rather than risk keeping families in Mexico and shuttling back and forth across the border. Consider Angelita Sánchez de Valdez, who stepped into a rickety boat to cross the Rio Grande more than half a century ago, entering the United States illegally to join her husband and start a new life as a migrant farm worker. Today, Ms. Sánchez, an 83-year-old widow, is an American citizen and Mexico, she said, 'is a little bit forgotten.' Living with her daughter and son-in-law in Donna, Tex., a parched town 10 miles from the border, Ms. Sánchez receives $453 a month from Social Security plus $81 in Supplemental Security Income, intended to improve the incomes of the poor. With no private insurance and no savings, she relies on her daughter's good will, and on Medicaid to pay for prescription drugs and medical bills not covered by Medicare. Given the nature of the movements across the border, there are no definitive statistics on return flows of older migrants to Mexico. But as the number of older immigrants starts adding up, 35 years after the flow of illegal workers across the border started to swell, the trickle of returning old-timers is gathering momentum. An official survey of Mexican residents in 1990 found only 11,500 over 50 who had been living in the United States in 1985. By 2000, the number of Mexicans older than 50 who had been in the United States five years earlier rose to 27,900, according to the National Population Council. One draw pulling Mexicans back home is affordability. 'In little Mexico the money seems like a lot,' said Roselino Sebastián Castañeda, 72, who returned nine years ago to his hometown in Tierra Caliente, Guerrero, after 35 years shuttling from California to Texas to Louisiana to Colorado to Montana. He knows he could never afford to live in the United States on the $350 a month he collects from Social Security, the half of his benefit not swallowed by child support for a daughter in Arizona. But in Mexico, he said, 'if I stop drinking and stop partying I can live on that.' Another draw is property. Almost half of Mexican immigrants over 50 own property in Mexico, according to a survey by the Pew Hispanic Center. The decision can come down simply to the nebulous yet powerful tug of nostalgia. Family ties are perhaps the most powerful forces. But they can pull either way: the probability of return is much higher for the 58 percent of immigrants over 50 who left spouses back in Mexico than for the 24 percent who have spouses in the United States, according to data from the Mexican Migration Project, a survey series run by researchers at Princeton University and the Universidad de Guadalajara in Mexico. Ms. Sánchez stayed in the United States because she could not bear to leave her children and grandchildren. 'In the beginning I really tried to convince my old man to return,' she said. 'But I got used to it. Now I've got to stay here because all my family is here.' Mr. Sebastián Castañeda, on the other hand, returned to Mexico to care for his mother, who is now 96. 'That's why I don't go back' to the United States, he said. Francisco Franco Álvarez spent 30 years in California making bricks, landscaping and tending Los Angeles's sewers. He left his wife, Silvina Barba Tejeda, behind at their home in Valle de Guadalupe, Jalisco, a small rural town in western Mexico. But he returned every winter on what his daughters Silvina and María Adela joke was the annual visit to conceive. There were 16 pregnancies, 4 miscarriages and 12 children. But 22 years ago, at age 62, he decided it was time to return home. 'An old man alone is like an old dog all alone,' he said. The 10 surviving children were long gone from the nest: 4 in Mexico and 6 in the United States. He and his wife could live on $500 a month from Social Security, plus $381 from a union pension. They owned a house, partially built with money he sent back every month from his jobs in the United States. And Mr. Franco, now 84, had had enough of America. 'The pace of life there bothered me a lot,' Mr. Franco said from his perch at the threshold of an old stable and inn, where he holds court with a group of elderly men. 'Over there it's a country of slaves.' He took a swig from a mix of arnica and tequila, apparently a balm for sore throats. 'Here you can live for years,' he said. 'If I lived there I would have died.' Sitting next to Mr. Franco, Máximo Álvarez Gutiérrez, 65, sees things from the opposite perspective. He also left for the United States 45 years ago. He picked peaches in Fresno and bused tables in Los Angeles. He sent money home every month for his wife, and bought a four-bedroom house on a cobbled street. But rather than returning to live in Mexico, Mr. Álvarez brought his wife, María, to the United States six years ago. They now live in a room above the garage at the home of one of their daughters in Bellflower, Calif., southeast of downtown Los Angeles. And their house in Valle de Guadalupe lies empty for much of the year. 'I've always liked living in the United States,' said Mr. Álvarez, who is applying to become an American citizen. 'I've been there for 45 years. It's a whole life.' Most illegal immigrants in the United States have yet to reach the age in which it becomes all but impossible to lug another sack of cement across construction sites or race up and down a ladder picking peaches from a tree. When they do, their choices are likely to be different from those of the current crop of elderly. For starters, unlike most old-timers today, they will probably remain illegal. In the 1960's and 1970's, becoming a legal immigrant was relatively simple: having a child in the United States was often all it took. The Immigration Reform and Control Act of 1986 allowed another 2.3 million illegal immigrants from Mexico to become legal American residents, eligible for benefits like Social Security. But the situation is no longer so easy. In the last 10 years, crossing the border has become much more difficult as immigration restrictions have been tightened. These days, even if an illegal immigrant were entitled to obtain legal residence - say, through an adult citizen son or daughter - the immigrant would be barred officially from the United States for 10 years before being allowed to live here legally. At the same time, the continuous fortification of the southern border might have the unintended consequence of encouraging aging immigrants to stay. Douglas Massey, a professor of sociology at Princeton University who heads the Mexican Migration Project, says that tougher border controls are changing the nature of illegal immigration. Unwilling to face the border patrol and the desert crossing more often than is absolutely necessary, illegal immigrants are returning home less than they used to. Instead, they are bringing their wives and children to the United States, becoming more settled in their new land. 'Before, immigration was largely male,' Mr. Massey said. 'The vast majority would return to Mexico and they often left their families on the Mexican side of border. The militarization of the border transformed a single male migration into a family migration. That makes retirement to Mexico much more problematic.'

Subject: Housing Boom Echoes in All Corners From: Emma To: All Date Posted: Thurs, Aug 04, 2005 at 09:13:22 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/04/nyregion/04housing.html Housing Boom Echoes in All Corners of the City By JENNIFER STEINHAUER It may not replace the Empire State Building or the MetroCard, but the most fitting symbol of New York City today could be the knotty plywood wall enclosing a housing construction site. From Bensonhurst to Morrisania to Flushing, new homes are going up faster now than they have in more than 30 years. In 2004, the city approved the construction of 25,208 housing units, more than in any year since 1972, and that number is expected to be surpassed this year. Already, officials have authorized 15,870 permits. Looked at another way, the city has 38 percent of the region's population but accounts for half of its new housing starts. Much of that development is being fueled by private money, a phenomenon not seen since the 1970's. The mushrooming of housing development is an outgrowth of the city's decade-long population boom, low interest rates, government programs and a slide in crime, housing experts and city officials say. It has affected every borough and most neighborhoods, reshaping their physical form, ethnic makeup and collective memories. Throughout Brooklyn, in areas where single- and two-family homes have dominated for generations, six-story buildings are rising on every other block along some stretches, and their apartments are quickly being sold, often to first-time buyers. Large tracts of Queens, once home to factories and power plants, are being readied for apartment complexes to keep pace with the growth in immigration. In East New York, Brooklyn, once known for its crack trade and killings, single-family homes are rising for the first time in a generation. On Washington Avenue in the Morrisania section of the Bronx, where chop shops and abandoned lots of rubble and weeds once stood alone, a concrete mixer rumbles daily in front of a new eight-story building, complete with a limestone facade. 'Development is a beautiful thing,' said Gertrude Sowell, who mulled the housing rising around her from her stoop in the South Bronx, where she has lived for 45 years. 'The Bronx had to be revived. The soul was just dead, and everywhere you walked there were abandoned buildings and despair.' This new generation of homeowners has had a tremendous impact on the city's economy. In the fiscal year ended July 1, New York City took in $2.2 billion in real estate transfer taxes, generated in large part from the sale of existing real estate but also from new homes. By comparison, in the 2000 fiscal year, the city took in a $875 million. Those taxes, as well as other revenue that comes with new construction, have been a key element of the city's recovery from a fiscal crisis. While Manhattan's new buildings may get the ink, the real action is in the city's four other boroughs. 'This is my first apartment in New York,' said Grigoriy Goldfedib, who arrived in Bensonhurst, Brooklyn, from Russia six years ago and now is president of a two-year-old condominium building on 65th Street. He is one of the increasing number of immigrants who have been buying up condos around the neighborhood. Streets once cluttered with Italian delis and pastry shops now feature sushi outposts and Russian videos stores. The city's foreign-born population increased to 2.9 million in 2000 from 2.1 million in 1990, accelerating the housing boom. Newcomers and native New Yorkers are settling into neighborhoods that the city and developers had written off a decade ago as unworthy of investment. 'Housing is being built where 20 years ago people would not live,' Mayor Michael R. Bloomberg said in a telephone interview. 'Other cities in other states have just not enjoyed this kind of boom. Each block is much more diverse than people realize. There is a cooperation and a spirit that we are here together and we're going to live together.' In many cases, complaints about a lack of housing have been replaced with fears of overdevelopment. Neighbors from Bay Ridge to Throgs Neck have flooded the Bloomberg administration with requests to limit the number of apartment buildings being built in their midst, saying that they intrude on the indigenous look of blocks, create overcrowded schools and subway stations and even lower water pressure. And the Bloomberg administration has undertaken the largest rezoning program since 1961, prohibiting new apartment buildings on blocks where they look out of character and rezoning former manufacturing areas to allow for residential development. 'We needed to channel growth directed to areas that can handle it,' said Amanda M. Burden, head of the Department of City Planning, noting that the city had rezoned areas with extensive public transportation and infrastructure for more housing, such as downtown Brooklyn and Flushing and Jamaica in Queens. 'At the same time,' she said, 'we have to preserve our neighborhoods, because they are the city's crown jewels.' So far, 30 neighborhoods have been rezoned - some 'up,' to accommodate new housing, and others 'down' and many more areas will be similarly rezoned soon. At the same time, people charge that developers are cutting corners on safety to get buildings up fast. This battle came into focus last month when the wall of a supermarket that was being demolished to make way for a luxury high-rise apartment building collapsed on the Upper West Side, injuring several people, including a baby. But fights over what neighborhoods should look and feel like at times feel like grace notes in the cacophonous symphony of churning concrete mixers, whirling backhoes and asphalt trucks that signal the rise of yet another dozen units of housing. 'You can go anywhere in the city and lots are being developed and there is housing construction on them,' said Joseph J. Salvo, director of the City Planning Department's population division. 'These are life-changing events for many neighborhoods.' Crime Falls, Demand Rises During the 1990's, as the city's population began to rise, the need for housing became more acute. At the same time, the plummeting crime rate made neighborhoods where there had been little or no investment for years appear more attractive. When Mayor Bloomberg took office in 2002, he sought to entice private developers with low-interest loans and tax abatements, and by streamlining the processes within the Department of Buildings to make it easier to build. But coupled with the rezoning movement, market-rate buildings began to follow the government subsidized buildings in neighborhoods where such development would have been inconceivable 10 years ago. The high demand pushed up housing prices in the city's best neighborhoods. Further, as Wall Street profits have boomed, many families that once would have fled the city have stayed put. And people who could no longer afford the Upper West Side and Park Slope were willing to move to Harlem and Bedford-Stuyvesant, Williamsburg and parts of the South Bronx. 'We think there is a demand for people not making six figures,' said Ron Moelis, a principal of L & M Equity Participants who develops housing around the city. 'There is a big gap of people who want to get into homeownership and have incomes too high for low-income and have nothing to buy.' With trepidation, his company developed a large apartment building on Madison Avenue between 117th Street and 118th Streets that began selling co-ops in 2002. The opening prices were $140,000 to $300,000; they now sell for more than double those prices, Mr. Moelis said. New Units in South Bronx On a recent steaming hot day, a steady stream of women pulling laundry baskets and toddlers walked into Taino Plaza, a new seven-story apartment building on 164th Street in the Melrose section of the Bronx complete with security cameras and attractive red awnings. The building, put up by L & M, is one of a handful of low-price rental apartment buildings rising in the area. Poor New Yorkers, many looking to get out of housing projects and dilapidated apartment buildings, were quick to move in, paying $750 to $975 a month for a two-bedroom unit. 'I like it here a lot,' said Alicia Baptiste, who moved in seven months ago after years on White Plains Road, where she used to fend off petty criminals and drug dealers. 'It's really quiet, you don't hear loud noises, you don't see people hanging around the lobby.' On East 165th Street, Gertrude Sowell and Mary Logan sat on folding chairs in front of their own buildings, for years the only residential spot for blocks. They have regarded the two large apartment buildings that have risen around the corner on Washington Avenue with anticipation and suspicion. 'I have mixed feelings,' said Ms. Sowell, who hopes that new residents will result in desperately needed services, like supermarkets. 'We hope the people who go into those apartments are good neighbors.' In Morrisania, which not long ago remained a stubborn symbol of the Bronx that once burned, new housing has brought hope. 'People tend to be happier when the community they live in is improving,' said John Dudley, the district manager for the community board there for 15 years. 'People are assuming a new level of responsibility for the community.' Like dozens of other neighborhoods in the city, Flushing has seen its ethnic fabric rewoven as new housing has gone up to accommodate a surge of Asian newcomers. Since 2000, 1,746 new housing permits have been issued. At the far end of Main Street, right near the Queens Botanical Garden, one-bedroom units are for sale at $290,000 in a building that went up last month, and two-bedroom units will be offered for $420,000. At College Point Boulevard and Roosevelt Avenue, adjacent to the Flushing River and the Van Wyck Expressway, on the site of 14-acre brownfield, a developer has plans to build a 3.2 million-square-foot center, with retail stores and 1,000 apartments. A municipal parking lot on Union Street will be rezoned, too, to accommodate more housing, someof it for older New Yorkers. Some of the newest apartments are quickly inhabited by people from other parts of New York, but in other cases illegal occupancy underlies some of the buying. 'We have many cases of three families in a one-family house,' said Chuck Apelian, vice chairman of Community Board 7 in Flushing. 'People pool their money, hold six jobs, work extensive hours and with 40-year mortgages and low interest rates, it is almost like paying rent. I tell people: 'Save your money. There will be foreclosures in the future.' ' A New Start in Bensonhurst At Montes Deli and Catering on Avenue O in Bensonhurst, Chinese businessmen line up behind Italian-American housewives and teenagers with rosary beads tattooed on their ankles, all in search of the same thing: 'Eggplant parm.' The neighborhood, which has become increasingly Chinese and Russian, has shed much of its racial and ethnic tensions, it seems, perhaps in large part because newcomers have no sense of the area's troubled past. Mr. Goldfedib, who is 39, was unfamiliar with the story of Yusuf K. Hawkins, the black teenager gunned down in the streets of Bensonhurst by white teenagers in 1989. 'I never heard about that,' he said. But racial tensions have been replaced by conflicts between developers and residents, who chafe at the new buildings that appear to be going up on nearly every block. Roughly 1,000 new permits have been issued in Bensonhurst and Gravesend since 2000, accounting for more than 30 percent of new permits in Brooklyn. 'Everything that can be bad about this is bad,' said George Gifford, who has been fighting development on his block on West Fifth Street in Bensonhurst. The shortage of parking makes him loath to drive his relatives anywhere anymore. 'I have told my daughter she may have to give up her job in Marine Park because I can't give up my parking space on a Saturday night,' he said. Mr. Gifford and others argue that many of the developers are playing fast and loose with the city's building laws, have damaged property and taken safety risks. And as soon as new housing goes up, people move in. Lucy Lee, 35, lived in Chinatown after immigrating a decade ago and recently settled in Bensonhurst. 'In Chinatown, you can speak your own language and get around all right,' she said. 'But this is a better lifestyle and you can - what's that word? - assimilate.' Her main complaint? 'It's becoming too crowded with condos.'

Subject: No Way to Treat a Dragon From: Emma To: All Date Posted: Thurs, Aug 04, 2005 at 05:46:54 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/04/opinion/04thur1.html No Way to Treat a Dragon Facing crippling delays imposed by Congress, Cnooc, a state-controlled Chinese oil company, has now withdrawn its $18.5 billion bid for Unocal, conceding the prize to Chevron. That's a victory for Congressional China bashers, who continually blame China for economic woes that are largely of America's making. They successfully raised the specter of national security to justify their interference in the takeover contest. But their victory is a loss for the United States' global interests, and it sets a dangerous precedent of dealing with China by demonizing the Chinese. That approach, in turn, risks turning China, an emerging superpower, into an aggressive opponent rather than simply a global competitor. Losing Unocal, an oil company based in California, won't stop China from slaking its oil thirst somewhere else, any more than keeping the company under American ownership will quench ours. Unocal is small potatoes as oil companies go. But thwarting China may drive it even further in the direction of securing its energy from countries that really do pose a threat to America, like Iran, and from repressive regimes like the ones in Sudan and Myanmar. The United States would prefer that China cooperate with America's policy goals in such places, rather than striking oil deals that could strengthen the current rulers. Denying China a shot at Unocal also invites retaliation. Analysts expect any blowback to be narrowly focused - for instance, an airplane order might be directed to Airbus, the European consortium, rather than to Boeing. But, of course, Boeing would not be likely to think that a lost sale was a legitimate price to pay for keeping Cnooc away from Unocal, and angry politicians from the affected region would probably demand action against China. So the way has been paved for tit-for-tat retaliation. That could be a precursor to escalation, which, in turn, could be the catalyst for a serious economic clash. Congress has already spent the summer considering half a dozen proposals for across-the-board tariffs against Chinese imports. The Bush administration is also trying to forcibly stem the flow of Chinese textiles into the United States. Because China and the United States are co-dependent - Americans buy the exports to keep the Chinese economy humming, and China buys Treasury debt to finance American deficits - it's generally assumed that government and business leaders in each country will always, in the end, act rationally to avoid self-destruction. But an ongoing policy of brinksmanship is itself irrational. The Congressional hysteria over the Cnooc bid demonstrates that only too well. It is a sad example of self-interested pandering for votes and contributions - with little regard for the dangerous dynamic it could set in motion.

Subject: 'For God's Sake, Please Stop the Aid!' From: johnny5 To: All Date Posted: Wed, Aug 03, 2005 at 18:38:26 (EDT) Email Address: johnny5@yahoo.com Message: http://service.spiegel.de/cache/international/spiegel/0,1518,363663,00.html SPIEGEL INTERVIEW WITH AFRICAN ECONOMICS EXPERT 'For God's Sake, Please Stop the Aid!' The Kenyan economics expert James Shikwati, 35, says that aid to Africa does more harm than good. The avid proponent of globalization spoke with SPIEGEL about the disastrous effects of Western development policy in Africa, corrupt rulers, and the tendency to overstate the AIDS problem. Horst Friedrichs Economist James Shikwati: 'Despite the billions that have poured in to Africa, the continent remains poor.' SPIEGEL: Mr. Shikwati, the G8 summit at Gleneagles is about to beef up the development aid for Africa... Shikwati: ... for God's sake, please just stop. SPIEGEL: Stop? The industrialized nations of the West want to eliminate hunger and poverty. Shikwati: Such intentions have been damaging our continent for the past 40 years. If the industrial nations really want to help the Africans, they should finally terminate this awful aid. The countries that have collected the most development aid are also the ones that are in the worst shape. Despite the billions that have poured in to Africa, the continent remains poor. SPIEGEL: Do you have an explanation for this paradox? Shikwati: Huge bureaucracies are financed (with the aid money), corruption and complacency are promoted, Africans are taught to be beggars and not to be independent. In addition, development aid weakens the local markets everywhere and dampens the spirit of entrepreneurship that we so desperately need. As absurd as it may sound: Development aid is one of the reasons for Africa's problems. If the West were to cancel these payments, normal Africans wouldn't even notice. Only the functionaries would be hard hit. Which is why they maintain that the world would stop turning without this development aid. SPIEGEL: Even in a country like Kenya, people are starving to death each year. Someone has got to help them. Shikwati: But it has to be the Kenyans themselves who help these people. When there's a drought in a region of Kenya, our corrupt politicians reflexively cry out for more help. This call then reaches the United Nations World Food Program -- which is a massive agency of apparatchiks who are in the absurd situation of, on the one hand, being dedicated to the fight against hunger while, on the other hand, being faced with unemployment were hunger actually eliminated. It's only natural that they willingly accept the plea for more help. And it's not uncommon that they demand a little more money than the respective African government originally requested. They then forward that request to their headquarters, and before long, several thousands tons of corn are shipped to Africa ... SPIEGEL: ... corn that predominantly comes from highly-subsidized European and American farmers ... AFP Ruandan President Kagame has over a million deaths on his conscience, says Shikwati. Shikwati: ... and at some point, this corn ends up in the harbor of Mombasa. A portion of the corn often goes directly into the hands of unsrupulous politicians who then pass it on to their own tribe to boost their next election campaign. Another portion of the shipment ends up on the black market where the corn is dumped at extremely low prices. Local farmers may as well put down their hoes right away; no one can compete with the UN's World Food Program. And because the farmers go under in the face of this pressure, Kenya would have no reserves to draw on if there actually were a famine next year. It's a simple but fatal cycle. SPIEGEL: If the World Food Program didn't do anything, the people would starve. Shikwati: I don't think so. In such a case, the Kenyans, for a change, would be forced to initiate trade relations with Uganda or Tanzania, and buy their food there. This type of trade is vital for Africa. It would force us to improve our own infrastructure, while making national borders -- drawn by the Europeans by the way -- more permeable. It would also force us to establish laws favoring market economy. SPIEGEL: Would Africa actually be able to solve these problems on its own? Shikwati: Of course. Hunger should not be a problem in most of the countries south of the Sahara. In addition, there are vast natural resources: oil, gold, diamonds. Africa is always only portrayed as a continent of suffering, but most figures are vastly exaggerated. In the industrial nations, there's a sense that Africa would go under without development aid. But believe me, Africa existed before you Europeans came along. And we didn't do all that poorly either. SPIEGEL: But AIDS didn't exist at that time. NEWSLETTER Sign up for Spiegel Online's daily newsletter and get the best of Der Spiegel's and Spiegel Online's international coverage in your In-Box everyday. Shikwati: If one were to believe all the horrorifying reports, then all Kenyans should actually be dead by now. But now, tests are being carried out everywhere, and it turns out that the figures were vastly exaggerated. It's not three million Kenyans that are infected. All of the sudden, it's only about one million. Malaria is just as much of a problem, but people rarely talk about that. SPIEGEL: And why's that? Shikwati: AIDS is big business, maybe Africa's biggest business. There's nothing else that can generate as much aid money as shocking figures on AIDS. AIDS is a political disease here, and we should be very skeptical. SPIEGEL: The Americans and Europeans have frozen funds previously pledged to Kenya. The country is too corrupt, they say. Shikwati: I am afraid, though, that the money will still be transfered before long. After all, it has to go somewhere. Unfortunately, the Europeans' devastating urge to do good can no longer be countered with reason. It makes no sense whatsoever that directly after the new Kenyan government was elected -- a leadership change that ended the dictatorship of Daniel arap Mois -- the faucets were suddenly opened and streams of money poured into the country. SPIEGEL: Such aid is usually earmarked for a specific objective, though. Shikwati: That doesn't change anything. Millions of dollars earmarked for the fight against AIDS are still stashed away in Kenyan bank accounts and have not been spent. Our politicians were overwhelmed with money, and they try to siphon off as much as possible. The late tyrant of the Central African Republic, Jean Bedel Bokassa, cynically summed it up by saying: 'The French government pays for everything in our country. We ask the French for money. We get it, and then we waste it.' DPA Former Central African Republic leader Jean-Bedel Bokassa: 'We ask the French for money. We get it, and then we waste it.' SPIEGEL: In the West, there are many compassionate citizens wanting to help Africa. Each year, they donate money and pack their old clothes into collection bags ... Shikwati: ... and they flood our markets with that stuff. We can buy these donated clothes cheaply at our so-called Mitumba markets. There are Germans who spend a few dollars to get used Bayern Munich or Werder Bremen jerseys, in other words, clothes that that some German kids sent to Africa for a good cause. After buying these jerseys, they auction them off at Ebay and send them back to Germany -- for three times the price. That's insanity ... SPIEGEL: ... and hopefully an exception. Shikwati: Why do we get these mountains of clothes? No one is freezing here. Instead, our tailors lose their livlihoods. They're in the same position as our farmers. No one in the low-wage world of Africa can be cost-efficient enough to keep pace with donated products. In 1997, 137,000 workers were employed in Nigeria's textile industry. By 2003, the figure had dropped to 57,000. The results are the same in all other areas where overwhelming helpfulness and fragile African markets collide. INTERACTIVE MAP Click here to load our interactive African development aid map. SPIEGEL: Following World War II, Germany only managed to get back on its feet because the Americans poured money into the country through the Marshall Plan. Wouldn't that qualify as successful development aid? Shikwati: In Germany's case, only the destroyed infrastructure had to be repaired. Despite the economic crisis of the Weimar Republic, Germany was a highly- industrialized country before the war. The damages created by the tsunami in Thailand can also be fixed with a little money and some reconstruction aid. Africa, however, must take the first steps into modernity on its own. There must be a change in mentality. We have to stop perceiving ourselves as beggars. These days, Africans only perceive themselves as victims. On the other hand, no one can really picture an African as a businessman. In order to change the current situation, it would be helpful if the aid organizations were to pull out. SPIEGEL: If they did that, many jobs would be immediately lost ... AFP Congolese line up for a United Nations food delivery in 2002. Shikwati: ... jobs that were created artificially in the first place and that distort reality. Jobs with foreign aid organizations are, of course, quite popular, and they can be very selective in choosing the best people. When an aid organization needs a driver, dozens apply for the job. And because it's unacceptable that the aid worker's chauffeur only speaks his own tribal language, an applicant is needed who also speaks English fluently -- and, ideally, one who is also well mannered. So you end up with some African biochemist driving an aid worker around, distributing European food, and forcing local farmers out of their jobs. That's just crazy! SPIEGEL: The German government takes pride in precisely monitoring the recipients of its funds. Shikwati: And what's the result? A disaster. The German government threw money right at Rwanda's president Paul Kagame. This is a man who has the deaths of a million people on his conscience -- people that his army killed in the neighboring country of Congo. SPIEGEL: What are the Germans supposed to do? Shikwati: If they really want to fight poverty, they should completely halt development aid and give Africa the opportunity to ensure its own survival. Currently, Africa is like a child that immediately cries for its babysitter when something goes wrong. Africa should stand on its own two feet. Interview conducted by Thilo Thielke Translated from the German by Patrick Kessler Give a man a fire and he stays warm for the night, teach a man to set himself on fire and he stays warm for the rest of his life - hehe.

Subject: Re: 'For God's Sake, Please Stop the Aid!' From: Mik To: johnny5 Date Posted: Wed, Aug 03, 2005 at 19:07:20 (EDT) Email Address: Not Provided Message: Quite the eye opener hey? It is interesting that I had a similar theory on aid to Kenya only. The corrupt government of Daniel arap Mois was at one stage relying on foreign aid. Instead of implementing government programs for improved farming etc, he let the Christian agencies move in and feed his people. When I realised the direct link and the potential strength of that link I became 'very anti' the Christian associations that advertise on TV. I mean think about it - we adopt a child by giving money. They send us photos of the children (and a little story) we are helping BUT where does it stop? Why aren't the parents able to look after their own children - are we not making a bad situation worse? I believe yes. Although the situation for Kenya is much different than for other countries. Kenya had an amazing infrastructure and very good population development. Daniel arap Mois started getting way out of hand in his corruption and the aid agencies who at first glance saw the amazing characteristics of Kenya (relative to other African countries) wanted to get involved in assisting the country. As the country degraded so the aid agancies wanted to get more and more involved and slowly but surely Daniel arap Mois handed over more and more to the aid agencies so that he could concentrate on his 'personal development'. As a classic example the Mombasa to Nairobi highway is a vital life line to the country (and to the central countries of Uganda and Rwanda). Daniel arap Mois and his family own a trucking company and make some good money out of freight on this road. His trucks are the most notoriously overloaded trucks contributing 'heavily' towards the rapid degradation of the road surface. The police are told not to stop the trucks (hey they belong to the president). So this is the beginnng (and the end) of the police accepting bribes for other overloaded trucks. As the road is so vital to Kenya, Uganda and Rwanda, many aid agencies including the EU have fixed that road so many times in a desperate attempt to keep the life line going. So now not only do we have a case of the corrupt leader allowing aid agencies to take over for his incompetence, but also abusing the the situation. Amazingly enough Daniel arap Mois is still alive and well (although no longer president) and still corrupting the system.

Subject: Feeding Europe, Starving at Home From: Emma To: All Date Posted: Wed, Aug 03, 2005 at 15:03:38 (EDT) Email Address: Not Provided Message: http://movies2.nytimes.com/2005/08/03/movies/03darw.html Feeding Europe, Starving at Home By A. O. SCOTT 'Darwin's Nightmare,' Hubert Sauper's harrowing, indispensable documentary, is framed by the arrival and departure of an enormous Soviet-made cargo plane at an airstrip outside Mwanza, Tanzania. The plane, with its crew of burly Russians and Ukrainians, will leave Mwanza for Europe carrying 55 tons of processed fish caught by Lake Victoria fisherman and filleted at a local factory. Though Mr. Sauper's investigation of the economy and ecology around the lake ranges far and wide - he talks to preachers and prostitutes, to street children and former soldiers - he keeps coming back to a simple question. What do the planes bring to Africa? The answers vary. The factory managers say the planes' cavernous holds are empty when they land. One of the Russians, made uncomfortable by the question, mutters something vague about 'equipment.' Some of his colleagues, and several ordinary Mwanzans, are more forthright: the planes, while they occasionally bring humanitarian food and medical aid, more often bring the weapons that fuel the continent's endless and destructive wars. In any case, they leave behind a scene of misery and devastation that 'Darwin's Nightmare' presents as the agonized human face of globalization. While the flesh of millions of Nile perch is stripped, cleaned and flash-frozen for export to wealthy countries, millions of people in the Tanzanian interior live on the brink of famine. Some of them will eat fried fish heads, which are processed in vast open-air pits infested with maggots and scavenging birds. Along the shores of the lake, homeless children fight over scraps of food and get high from the fumes of melting plastic-foam containers used to pack the fish. In the encampments where the fishermen live, AIDS is rampant and the afflicted walk back to their villages to die. The Nile perch itself haunts the film's infernal landscape like a monstrous metaphor. An alien species introduced into Lake Victoria sometime in the 1960's, it has devoured every other kind of fish in the lake, even feeding on its own young as it grows to almost grotesque dimensions, and destroying an ancient and diverse ecosystem. To some, its prevalence is a boon, since the perch provides an exportable resource that has brought development money from the World Bank and the European Union. The survival of nearly everyone in the film is connected to the fish: the prostitutes who keep company with the pilots in the hotel bars; the displaced farmers who handle the rotting carcasses; the night watchman, armed with a bow and a few poison-tipped arrows, who guards a fish-related research institute. He is paid $1 a day and found the job after his predecessor was murdered. Filming with a skeleton crew - basically himself and another camera operator - Mr. Sauper has produced an extraordinary work of visual journalism, a richly illustrated report on a distant catastrophe that is also one of the central stories of our time. Rather than use voice-over or talking-head expert interviews, he allows the dimensions of the story to emerge through one-on-one conversation and acutely observed visual detail. But 'Darwin's Nightmare' is also a work of art. Given the gravity of Mr. Sauper's subject, and the rigorous pessimism of his inquiry, it may seem a bit silly to compliment him for his eye. There are images here that have the terrifying sublimity of a painting by El Greco or Hieronymus Bosch: rows of huge, rotting fish heads sticking out of the ground; children turning garbage into makeshift toys. At other moments, you are struck by the natural loveliness of the lake and its surrounding hills, or by the handsome, high-cheekboned faces of many of the Tanzanians. The beauty, though, is not really beside the point; it is an integral part of the movie's ethical vision, which in its tenderness and its angry sense of apocalypse seems to owe less to modern ideologies than to the prophetic rage of William Blake, who glimpsed heaven and hell at an earlier phase of capitalist development. Mr. Sauper's movie is clearly aimed at the political conscience of Western audiences, and its implicit critique of some of our assumptions about the shape and direction of the global economy deserves to be taken seriously. But its reach extends far beyond questions of policy and political economy, and it turns the fugitive, mundane facts that are any documentary's raw materials into the stuff of tragedy and prophecy.

Subject: Go out and watch this movie From: Mik To: Emma Date Posted: Thurs, Aug 04, 2005 at 09:29:11 (EDT) Email Address: Not Provided Message: This a very well made movie. The movie crew don't narrate or speak in the movie. They let all the talking be done by the locals (and the Russian pilots). A very simple documentary with some very powerful images. The movie also allows us to hear what goes through the minds of the locals. Some of it is creepy and some of it is enlightening. All very tragic. Watch this movie!!

Subject: Re: Go out and watch this movie From: Emma To: Mik Date Posted: Thurs, Aug 04, 2005 at 10:38:13 (EDT) Email Address: Not Provided Message: I agree completely. I was discussing your criticisms of Jared Diamond's framework last night, and though friends were sympathetic I think we are too wedded to cultural frameworks in analysis so I lean more strongly to geography. I will have more to say. Also, the aid issue needs to be balanced according to political context. Agreed.

Subject: The Fed Has Done Its Job From: Emma To: All Date Posted: Wed, Aug 03, 2005 at 11:08:17 (EDT) Email Address: Not Provided Message: Looking through the data again, inflation appears to have peaked for the cycle at a level lower than an Fed tightening cycle since at least 1975. Inflaion is not an issue, especially inflation due to wage and benefit increases. The Fed will keep raising rates, but the Fed has already done its job.

Subject: Blue Collars in the Boardroom From: Emma To: All Date Posted: Wed, Aug 03, 2005 at 11:01:48 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/03/business/worldbusiness/03worker.html Making a Place for Blue Collars in the Boardroom By BRIAN ELLSWORTH PUERTO ORDAZ, Venezuela - For 20 years, Pedro Gómez felt like he was just part of the machinery at his job at Aluminio del Caroní, a state-owned aluminum company in an industrial zone where the Caroní and Orinoco Rivers converge in southeastern Venezuela. Mr. Gómez, 51, a casting table operator who shovels molten aluminum down a channel from an industrial oven into a cast that makes 12-foot billets, says management never listened to his complaints about corrupt contractors or bad equipment. But things have changed. Management is now heeding his request for a new casting table, he said, and will even allow him to help determine the company's 2006 budget. This April, he was permitted to vote along with the company's other 2,700 workers to elect some of Alcasa's 19 managers and 2 of its 5 corporate directors. Most of the candidates were drawn from the rank and file. 'The managers and the workers are running this business together,' Mr. Gómez said above the din of rumbling forklifts and humming industrial fans, sweat dripping down his face from the heat of the casting house. 'It gives us new motivation to work hard.' While worker-managed businesses have been the dream of the world's socialists, in Venezuela they may become a reality. Using tottering companies as the entry point, Venezuela is offering financial incentives in exchange for carrying out 'co-management,' in which workers are decision makers, in some cases even owners, of businesses across the country. The plan essentially casts the state in the role of rescuer. Four state-owned companies - another aluminum plant besides Alcasa, a coal plant and a power plant - have begun the programs. But incentives like cheap credit and debt write-downs from the government have also enticed more than 100 private, small and medium-size companies to adopt worker management models. Twenty-three of those have agreed to hand over between 10 percent and 49 percent of their shares to employees. Driving the campaign is President Hugo Chávez, who has promised to reverse the historical dominance of Venezuela's $64 billion oil industry over the economy by revitalizing sectors like textiles and paper, reducing reliance on imports and creating jobs at the same time - a task he says he believes is best left to workers. The worker management campaign comes as Mr. Chávez has embraced socialism in a political project that promises to roll back the free-market policies begun in Latin America throughout the 1990's. 'This is a new organizational culture,' says Alcasa's president, Carlos Lanz, 62, a Marxist former guerrilla with no background in aluminum who most recently developed educational programs in rural Venezuela. 'The workers are operating as a collective rather than receiving orders from a group of experts.' Despite the enthusiasm of Alcasa's workers, the company's balance sheet leaves little room for optimism. Alcasa has lost money for years, posting $90 million in red ink in 2004, and this year's budget indicates the company could lose as much as $59 million as outdated technology and foreign competition continue to take a toll. A planned $650 million investment by the Swiss commodities trading company Glencore, aimed at doubling Alcasa's output, was suspended. Instead, the company announced last month the government would provide financing. Critics say state involvement in co-managed businesses will likely create uncompetitive enterprises, much like the sluggish state-owned companies that survived throughout the 1970's and 1980's on government subsidies. It is also unlikely to bring about the diversification from oil President Chávez is seeking. 'Since the discovery of oil in Venezuela, businesses have lived from the transfer of oil revenue, but have never produced sustainable economic activity that didn't depend on oil,' said Orlando Ochoa, an opposition sympathizer and economist who is a professor at Andrés Bello Catholic University in Caracas. 'Chávez is now insisting that co-management can resolve this problem, which is simply naïve.' Indeed, one business from which worker management is notably absent is Venezuela's most profitable company, Petróleos de Venezuela, the state oil giant known as Pdvsa (pronounced pey-dey-VEY-sah), which is still run by corporate executives who removed the two union representatives from the company's board this year. Nonetheless, Pdvsa's character has changed. After a strike in 2002 aimed at ousting President Chávez from power, the company fired almost 20,000 mostly midlevel finance and planning employees and hired more than 15,000 field workers, adding a greater rank-and-file presence. Since the program began this year, the government has spent at least $25 million to revive bankrupt and failing private enterprises. President Chávez has said he would expropriate as many as 700 bankrupt companies and others that are working below capacity. For instance, the government is preparing to inject around $8 million into Hilandería del Tinaquillo, a textile mill that wove cotton into yarn and cloth until it shut its doors in 1992, felled by cheaper imports. Joseph Mishkin, the Venezuelan owner of the textile plant, is negotiating a joint venture with the government. 'I've been looking for a way to revive that plant for 10 years,' said Mr. Mishkin, 'and I'm willing to work with anyone that can help make that happen.' But the plan has its critics. One of the most vocal is Teodoro Petkoff, a former planning minister and guerrilla who fought alongside Mr. Lanz, but has criticized many of Mr. Chávez's economic goals as unrealistic. 'Co-management is a potentially fertile idea,' Mr. Petkoff wrote in Tal Cual, the newspaper he edits. 'But if it is applied in the Tinaquillo style or with the utopian delirium of Alcasa, the result will be a terrible fiasco.' Here at Alcasa, in the industrial city of Puerto Ordaz in Venezuela's sweltering southeastern savannah, Mr. Lanz speaks more comfortably about Latin American currents of Marxism than about aluminum production. Mr. Lanz served seven years in jail for the 1976 abduction of the American glass industry executive, William F. Niehaus, who was held for three and a half years. After weeks of accusations by Mr. Chávez in February that the Bush administration was preparing to invade Venezuela, Mr. Lanz invited military reserves to the factory to prepare workers for an American invasion. But workers also point to changes in the workplace that they say will make the company run smoother. 'I worked here for 15 years and never knew anything about how much the company was producing or what we were spending our money on,' said Johnny Viera, 35, a maintenance worker in Alcasa's stamping plant. Mr. Viera and his 300 co-workers participate in roundtables that make recommendations to management, a process that recently allowed him to quickly purchase $5,000 worth of tools. It is too soon to say what the outcome of the worker management program will be, but workers seem optimistic. 'This is the workers' opportunity to improve this company's performance,' said Estalin Orta, 42, a recently elected manager of Alcasa's casting plant, chatting in an air-conditioned office above the din of the manufacturing operations below. 'And we've started at a company that has had serious financial problems - so no one can say we took the easy road.'

Subject: Jared Diamond From: Emma To: All Date Posted: Wed, Aug 03, 2005 at 10:29:13 (EDT) Email Address: Not Provided Message: Repeatedly Jared Diamond's work is taken as 'pop science.' This is absurd unless what is meant is that Diamond is a simple and clear and wonderfull engaging writer. Diamond's work shows the painstaking attention to layering of observation on observation that characterize the finst of evolutionary biologists from Charles Darwin on. Darwin was also a wonderfully clear and engaging writer. Look to Diamond and Ernst Mayr his teacher on birds and you will find presicely the same anecdotal research that he uses through 'Collapse' and 'Guns, Germs, and Steel.' We have a master scientist at hand, who has set down for us a brilliant robust framework for historical research that will be expaned for decades.

Subject: Re: Jared Diamond From: Mik To: Emma Date Posted: Wed, Aug 03, 2005 at 18:04:47 (EDT) Email Address: Not Provided Message: I have been thinking quite bit about the paper by Jared and I have some reservations on a few of his themes of why some civilisations advanced against others: 1. Infectious Disease 2. Centralised organisation 3. Domestication of animals (that contribute to development) 4. East west spread of domesticated fauna and flora I am by no means a specialist in this field (and I didn't see if you made a response to my previous post on this topic - we had a holiday in Canada) but here are my observations on the top themes: 1. Infectious Disease I find it amazing that Native Americans did not quickly adapt to the foreign diseases perhaps it is all about timing – but I have a very big flaw in Jared’s theory. His theory evolves out of the close villages and towns of Europe leading to outbreaks spreading quickly and then humans becoming immune. Yet today, the immune system of the average African is much the same as that of the European. The African’s lifestyle is much the same in this respect of close villages resulting in a quick out break and spread. Yet, it is amazing that 10% of all modern day Europeans are resistant to HIV/AIDS (according to the leading study on the disease). Why is it that the biggest plague of modern times, which is far more prevalent in Africa than Europe – and where the human bodies of African and Europeans appear to have similar immune systems, we still find that 10% of Europeans have a natural resistance to this disease. Perhaps there is an explanation but this seems to fly in the face of Jared’s theory. 2. Centralised Organisation This seems to be a bit of a revolving issue. A centralized organization lead to the quick down fall of the Chinese – so that was too centralized. Yet and uncentralised system, lead to the lack of development in North American and Australian natives. Yet the Africans were far more developed in centralizing their authority than what Jared appears to illustrate. Entire regions in Africa fell under central powers broken by geographic features such as large rivers or mountain ranges much in the same way as Europe. Again, knowing the African situation, to me, flies in the face of Jared’s theory. 3. Domestication of Animals I did a little enquiring on this topic and was startled to find that all animals can be domesticated. Even Lions have been domesticated and Rhinos could in deed be turned into horses with enough effort. I don’t know where he got the concept of “a rapid growth rate; a willingness to breed in captivity; a tractable disposition; a social structure involving submissive behavior towards dominant animals and humans; and lack of a tendency to panic when fenced in.” Have you not been to a zoo? All it takes is to capture the animal as a baby and then go through successive breeding of the animal. As I have now come to learn, African elephants can and have in deed been domesticated. The concept that the Indians succeeded in domesticating the Elephant flies in the face of Jared’s theory. 4. East west spread of domesticated fauna and flora This one is probably the most difficult for me to accept. Moving plants and animals north and south does not make that big a difference. Hey there are chicken farms in Canada and Chicken farms in Texas. The animals have got an amazing ability to adapt to change in climate and to a lesser degree so too do plants. Besides the climate from the South, say, Zambia to the North, say, Ethiopia is not so vast that a series of domesticated plants and animals could not sustain the move – after all they have been moved this distance in modern times. But going back to pre-historic times, the east west movement along the longitude of, say, Ivory coast on west Africa to Kenya in east Africa did not occur. Why? Here is probably the biggest puzzler – coffee originated in Ethiopia Africa and was traded eastwards, literally around the globe to South America where the Europeans first found it. Here is a plant that has traveled east and south around the globe, yet it never traveled west to the west coast of Africa or up to Europe. Co-incidence perhaps. But again it places a serious flaw in the theory. Every concept may not be perfect and still holds true. But when I see this many flaws, you have to pardon me if I act a little skeptical.

Subject: Terrific From: Emma To: Mik Date Posted: Wed, Aug 03, 2005 at 20:17:45 (EDT) Email Address: Not Provided Message: Interesting responses throughout. I am tired, but will think carefully of each point made on each topic. Terrific.

Subject: Can You Hear Me Now? From: Emma To: All Date Posted: Wed, Aug 03, 2005 at 09:57:39 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/03/opinion/03friedman.html Calling All Luddites By THOMAS L. FRIEDMAN I've been thinking of running for high office on a one-issue platform: I promise, if elected, that within four years America will have cellphone service as good as Ghana's. If re-elected, I promise that in eight years America will have cellphone service as good as Japan's, provided Japan agrees not to forge ahead on wireless technology. My campaign bumper sticker: 'Can You Hear Me Now?' I began thinking about this after watching the Japanese use cellphones and laptops to get on the Internet from speeding bullet trains and subways deep underground. But the last straw was when I couldn't get cellphone service while visiting I.B.M.'s headquarters in Armonk, N.Y. But don't worry - Congress is on the case. It dropped everything last week to pass a bill to protect gun makers from shooting victims' lawsuits. The fact that the U.S. has fallen to 16th in the world in broadband connectivity aroused no interest. Look, I don't even like cellphones, but this is not about gadgets. The world is moving to an Internet-based platform for commerce, education, innovation and entertainment. Wealth and productivity will go to those countries or companies that get more of their innovators, educators, students, workers and suppliers connected to this platform via computers, phones and P.D.A.'s. A new generation of politicians is waking up to this issue. For instance, Andrew Rasiej is running in New York City's Democratic primary for public advocate on a platform calling for wireless (Wi-Fi) and cellphone Internet access from every home, business and school in the city. If, God forbid, a London-like attack happens in a New York subway, don't trying calling 911. Your phone won't work down there. No wireless infrastructure. This ain't Tokyo, pal. At the City Hall subway stop this morning, Mr. Rasiej plans to show how one makes a 911 call from the subway. He will have one aide with a tin can in the subway send a message to another aide holding a tin can connected by a string. Then the message will be passed by tin can and string up to Mr. Rasiej on the street, who will call 911 with his cellphone. 'That is how you say something if you see something today in a New York subway - tin cans connected to someone with a cellphone on the street,' said Mr. Rasiej, a 47-year-old entrepreneur who founded an educational-technology nonprofit. Mr. Rasiej wants to see New York follow Philadelphia, which decided it wouldn't wait for private companies to provide connectivity to all. Instead, Philly made it a city-led project - like sewers and electricity. The whole city will be a 'hot zone,' where any resident anywhere with a computer, cellphone or P.D.A. will have cheap high-speed Wi-Fi access to the Internet. Mr. Rasiej argues that we can't trust the telecom companies to make sure that everyone is connected because new technologies, like free Internet telephony, threaten their business models. 'We can't trust the traditional politicians to be the engines of change for how people connect to their government and each other,' he said. By the way, he added, 'If New York City goes wireless, the whole country goes wireless.' Mr. Rasiej is also promoting civic photo-blogging - having people use their cellphones to take pictures of potholes or crime, and then, using Google maps, e-mailing the pictures and precise locations to City Hall. Message: In U.S. politics, the party that most quickly absorbs the latest technology often dominates. F.D.R. dominated radio and the fireside chat; J.F.K., televised debates; Republicans, direct mail and then talk radio, and now Karl Rove's networked voter databases. The technological model coming next - which Howard Dean accidentally uncovered but never fully developed - will revolve around the power of networks and blogging. The public official or candidate will no longer just be the one who talks to the many or tries to listen to the many. Rather, he or she will be a hub of connectivity for the many to work with the many - creating networks of public advocates to identify and solve problems and get behind politicians who get it. 'One elected official by himself can't solve the problems of eight million people,' Mr. Rasiej argued, 'but eight million people networked together can solve one city's problems. They can spot and offer solutions better and faster than any bureaucrat. ... The party that stakes out this new frontier will be the majority party in the 21st century. And the Democrats better understand something - their base right now is the most disconnected from the network.' Can you hear me now?

Subject: Re: Can You Hear Me Now? From: Mik To: Emma Date Posted: Wed, Aug 03, 2005 at 18:43:48 (EDT) Email Address: Not Provided Message: My theory as to why the USA is behind the rest of the world in cell phones: 2 things: 1. Law on phone numbers 2. Profiteering 1. You have a home line that you pay a fixed rate no matter who you phone within the first 3 digits of the dialing code. Cell phones came onto the market in Europa with a unique first 3 digits dialing code and everyone knew that if they were dialing a number starting with the unique 3 digit code, they would be billed extra for phoning a cell phone. In the US (and Canada) they started cell phones with the 3 digit code that is the same as any other 3 digit code in your area. In essence, you don’t know if you are dialing another fixed line or a cell phone. Who is going to pay for the special cell phone costs – the user. The fact that the users pays for incoming calls has, in my mind, become a big resistance on getting a cell phone and opening up a mass market. This is changing with special deals on incoming calls and I now see the introduction of special 3 digit codes for cell phones in some areas. 2. With all the ‘buzz’ on cell phones in Europe, the Europeans kicked off an amazing market and “everyone” wants to be part of it. With “everyone” joining in and a quick up start in cell phone signal providers coming up from nowhere competing against land line companies (that used to be traditionally government owned) the race was on to provide a seriously viable alternative to the land line. With ‘everyone’ jumping in, supply increases and prices drop. Typical supply and demand economics at play giving us the best deal. Then companies manufacturing electronic gadgets such as Siemens, B&O, Alcatel among many others wanting to get into the cell phone manufacturing game started making phones and offering special deals. Their phones could be used anywhere on any cell phone signal provider’s network and the market was huge. Again a large supply resulted in lowering the price. Last year’s stock would then be sold on special discounted sales and again give us the consumer the same benefits we get from clothing stores, mark-down prices and great choice. All the true factors of good economics being put to good use and giving us the benefit. All a huge lesson learnt by the big phone companies of the US wanting to ensure that the same does NOT happen in the US. So when cell phones were first introduced, the Americans opted to use a unique frequency band that European phones could not log into (we don’t have Alcatel, Siemens or B&O phones among so many other makes). Now we have an exclusive market for phones adapted to the US system. Then the supply of phones that were allowed in were controlled so as to ensure a full sell-out of phones and no mark-down sales or special deals. The collusion or natural slow movement between the relatively few US phone companies (that were traditionally also land line companies) ensured that new phone technologies such as internet access (which has been available in Africa for over 5 years now) would not be introduced until a sizeable profit has been made. But this is not a pessimistic posting. In fact I am glad to see that technology is beating the US companies. The Europeans introduced the Tri-band phones that can be used in the US and Europe. As all cell phones become Tri-band, we will soon see all of Europe’s (and Asia’s) greatest makes slowly surfacing into our market even as ‘after market”. I soon expect to see old generation “mark-down” phones being sold here in the States. I bought a Samsung Tri-band with a Camera for $30 brand new in Africa. It is an older generation of phone but when I bought it – it was among the more advanced phones on the market and it works in the US. So I anticipate seeing the emergence of a market for importers. As for the Cell phone signal companies – Virgin Mobile (in Canada) has probably kicked off something amazing with their cheap and nasty network offering some amazing services at no cost. If others copy Virgin Mobile, we may soon see a quick movement by the cell phone signal companies offering the same as Europe. In essence I predict we will be able to go into an average store and buy a funky yet simple phone with a couple cool features (not all the latest feature per se) for a minor $20. Then go to a cell phone provider and get a ‘zooty’ pay-as-you go card for cheap. Not pay for incoming calls and have access to services such as free voice mail, free text messaging and who knows perhaps even free web access. And no two or three year contracts with hidden clauses where they up your charges and you have to pay.

Subject: How Long can yield curve be inverted? From: David E.. To: All Date Posted: Wed, Aug 03, 2005 at 08:04:46 (EDT) Email Address: daveellis_39@hotmail.com Message: Greg Ip(WSJ) on Brad De Long's blog thinks the fed will continue to raise short term rates until long term rates will put a lid on inflation. http://delong.typepad.com/sdj/2005/08/greg_ip_reads_t.html

Subject: Re: How Long can yield curve be inverted? From: Terri To: David E.. Date Posted: Wed, Aug 03, 2005 at 09:58:35 (EDT) Email Address: Not Provided Message: I do not welcome the prospect of higher long term interest rates. Darn.

Subject: States of welfare From: Setanta To: All Date Posted: Wed, Aug 03, 2005 at 07:40:24 (EDT) Email Address: Not Provided Message: http://news.bbc.co.uk/ click on 'states of welfare' to the right of the 'war letters' article. quite an illuminating illustration!

Subject: Re: States of welfare From: Emma To: Setanta Date Posted: Wed, Aug 03, 2005 at 09:33:02 (EDT) Email Address: Not Provided Message: Thank you, for I would miss such an illustration were it not for you though because of you I regularly look to the Irish press and often the BBC or Guardian. This war is sad beyond my words. You are a gem.

Subject: Re: States of welfare From: Emma To: Emma Date Posted: Wed, Aug 03, 2005 at 09:35:15 (EDT) Email Address: Not Provided Message: Notice I copied and posted you comments about integration in Ireland on the 2 recent PK column message threads. That Ireland is working so hard on integration is truly inspiring.

Subject: Re: States of welfare From: Setanta To: Emma Date Posted: Wed, Aug 03, 2005 at 11:50:09 (EDT) Email Address: Not Provided Message: emma, i did notice. i always feel that my comments are too parochial. i try not to slip into the same 'ireland is great' vein. i wouldn't be a supporter of the party in government but i have to say they really have surprised me. i look around the city and am gobsmacked. things are so much better now than they ever were. i do feel, and try at all costs to avoid, to give the impression that i am preaching to the american readers. i am certainly very supportive of america (i suppose having a mother who hails from NY helps!) and have learnt ten times more from reading your articles and comments, terri's posts on investing, paul and pete's sharp economic insight, auros' demolition of conservative comments and all the others!

Subject: Re: States of welfare From: Emma To: Setanta Date Posted: Wed, Aug 03, 2005 at 15:01:56 (EDT) Email Address: Not Provided Message: How kind your are, and the sense is completely shared. So, we both have New York mothers :)

Subject: Asia and Interest Rates From: Terri To: All Date Posted: Wed, Aug 03, 2005 at 06:04:07 (EDT) Email Address: Not Provided Message: The most immediate problem for housing may be in the process of developing immediately, if in fact China is beginning to diversify its currency holdings. Other Asian central banks as well will surely diversify currency holding from the dollar.

Subject: Re: Asia and Interest Rates From: Jennifer To: Terri Date Posted: Wed, Aug 03, 2005 at 07:20:00 (EDT) Email Address: Not Provided Message: Likely there is and will continue to be less international demand for long term Treasury debt as Asian and other central banks slowly limit dollar holdings.

Subject: Re: Asia and Interest Rates From: Jennifer To: Jennifer Date Posted: Wed, Aug 03, 2005 at 07:29:35 (EDT) Email Address: Not Provided Message: If the Federal Reserve governors wish higher long term rates, the guess is they will have the wish. We should be worried. Inflation, by the way, seems to me of no concern in this cycle, but I am not a member of the Fed :)

Subject: Currency and Interest Rates From: Terri To: All Date Posted: Wed, Aug 03, 2005 at 05:59:47 (EDT) Email Address: Not Provided Message: We should notice that China is very slowly letting the yaun rise against the dollar, and long term interest rates are slowly rising. This could be a problem for our mortgage market, and we had best watch interest rates.

Subject: Re: Currency and Interest Rates From: Pete Weis To: Terri Date Posted: Wed, Aug 03, 2005 at 10:35:48 (EDT) Email Address: Not Provided Message: Higher rates and tighter credit will be very tough on the real estate market and the US consumer. The key is whether or not the higher yuan and Asian currencies will make US goods, which are becoming cheaper for them, more attractive to Asians? Will Asians spend more and save less and will they spend it on US products beyond Boeing aircraft?

Subject: For Pete - Alby Mangles - Adventure Bound From: johnny5 To: All Date Posted: Tues, Aug 02, 2005 at 19:31:46 (EDT) Email Address: johnny5@yahoo.com Message: http://www.albymangels.com/ http://members.ozemail.com.au/~alcalder/alby.htm Alby showed many films in the prisons and brought his sailing travels to many tortured souls who could never have seen the world if it wasn't for alby's camera. I watched many of his travels. He had great fun and did amazing things - and although his adventure spirit brought him many friends, it cost him many too. Pete the old sailors you meet that have already lived the life you are about to embark on - what do they tell you are the negatives to be concerned with? Remember one of the posters here just said American types aren't viewed so positively around the world anymore - probably alby got away with stuff back in his day because he was more respected than he would be today in similar situations. My parents went all over the world care of the US military in the 60's and 70's - coming off the ww2 generation they were embraced with kindness and love in most places - I don't think that is true today. However I read about Sheik Horn and perhaps you will be embraced by the many cultures you journey into - nothing can ever replace my many travels all over. G.I. gets upgraded to sheik Antonio Castaneda, Associated Press August 1, 2005 SHEIK0801 QAYYARAH, IRAQ -- Sheik Horn floats around the room in white robe and headdress, exchanging pleasantries with dozens of village leaders. But he's the only sheik with blond streaks in his mustache -- and the only one who attended country singer Toby Keith's recent concert in Baghdad with fellow U.S. soldiers. Officially, he's Army Staff Sgt. Dale L. Horn, but to residents of the 37 villages and towns that he patrols, he's known as the American sheik. Sheiks, or village elders, are known as the real power in rural Iraq. Horn's ascension to the esteemed position came through dry humor and the military's need to clamp down on rocket attacks. Late last year, a full-blown battle between insurgents and U.S. and Iraqi forces had erupted, and U.S. commanders assigned a unit to stop rocket and mortar attacks that regularly hit their base. Horn, 25, who had been trained to operate radars for a field artillery unit, was thrust into a job that largely hinged on coaxing locals into divulging information about insurgents. Horn, a native of Fort Walton Beach, Fla., acknowledged he had little interest in the region before being deployed. But a local sheik friendly to U.S. forces, Dr. Muhammad Ismail Ahmed, explained the inner workings of rural Iraqi society on one of Horn's first Humvee patrols. Horn says he was intrigued, and started making a point of stopping by all the villages, all but one dominated by Sunni Arabs, to talk to people about their life and security problems. Moreover, he pressed for development projects in the area: He said that he helped funnel $136,000 worth of aid into the area. Part of that paid for delivery of clean water to 30 villages during the broiling summer months. 'They saw that we were interested in them, instead of just taking care of the bases,' Horn said. Muhammad, Horn's mentor, eventually suggested during a meeting of village leaders that Horn be named a sheik. The sheiks approved by voice vote, Horn said. Some sheiks later gave him five sheep and a postage stamp of land, fulfilling some of the requirements for sheikdom. But what may have originally started as a joke among village elders has sprouted into something serious enough for 100 to 200 village leaders to meet with Horn each month to discuss security issues. Horn doesn't take his responsibilities lightly. He lately has been prodding the Iraqi Education Ministry to pay local teachers, and he closely follows a water pipeline project that he hopes will ensure the steady flow of clean water to his villages. To Horn's commanders, his success justifies his unorthodox approach: No rockets have hit their base in the last half year. 'He has developed a great relationship with local leaders,' said Lt. Col. Bradley Becker, who commands the 2nd Battalion, 8th Field Artillery Regiment. 'They love him. They're not going to let anyone shoot at Sheik Horn.' http://www.startribune.com/stories/484/5535992.html

Subject: Your Body Is Younger Than You Think From: Emma To: All Date Posted: Tues, Aug 02, 2005 at 12:55:55 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/02/science/02cell.html?incamp=article_popular Your Body Is Younger Than You Think By NICHOLAS WADE Whatever your age, your body is many years younger. In fact, even if you're middle aged, most of you may be just 10 years old or less. This heartening truth, which arises from the fact that most of the body's tissues are under constant renewal, has been underlined by a novel method of estimating the age of human cells. Its inventor, Jonas Frisen, believes the average age of all the cells in an adult's body may turn out to be as young as 7 to 10 years. But Dr. Frisen, a stem cell biologist at the Karolinska Institute in Stockholm, has also discovered a fact that explains why people behave their birth age, not the physical age of their cells: a few of the body's cell types endure from birth to death without renewal, and this special minority includes some or all of the cells of the cerebral cortex. It was a dispute over whether the cortex ever makes any new cells that got Dr. Frisen looking for a new way of figuring out how old human cells really are. Existing techniques depend on tagging DNA with chemicals but are far from perfect. Wondering if some natural tag might already be in place, Dr. Frisen recalled that the nuclear weapons tested above ground until 1963 had injected a pulse of radioactive carbon 14 into the atmosphere. Breathed in by plants worldwide and eaten by animals and people, the carbon 14 gets incorporated into the DNA of cells each time the cell divides and the DNA is duplicated. Most molecules in a cell are constantly being replaced but the DNA is not. All the carbon 14 in a cell's DNA is acquired on the cell's birth date, the day its parent cell divided. Hence the extent of carbon 14 enrichment could be used to figure out the cell's age, Dr. Frisen surmised. In practice, the method has to be performed on tissues, not individual cells, because not enough carbon 14 gets into any single cell to signal its age. Dr. Frisen then worked out a scale for converting carbon 14 enrichment into calendar dates by measuring the carbon 14 incorporated into individual tree rings in Swedish pine trees. Having validated the method with various tests, he and his colleagues have reported in the July 15 issue of Cell the results of their first tests with a few body tissues. Cells from the muscles of the ribs, taken from people in their late 30's, have an average age of 15.1 years, they say. The epithelial cells that line the surface of the gut have a rough life and are known by other methods to last only five days. Ignoring these surface cells, the average age of those in the main body of the gut is 15.9 years, Dr. Frisen found. The Karolinska team then turned to the brain, the renewal of whose cells has been a matter of much contention. Prevailing belief, by and large, is that the brain does not generate new neurons after its structure is complete, except in two specific regions, the olfactory bulb that mediates the sense of smell, and the hippocampus, where initial memories of faces and places are laid down. This consensus view was challenged a few years ago by Elizabeth Gould of Princeton, who reported finding new neurons in the cerebral cortex, along with the elegant idea that each day's memories might be recorded in the neurons generated that day. Dr. Frisen's method will enable all regions of the brain to be dated to see if any new neurons are generated. So far he has tested only cells from the visual cortex. He finds these are exactly the same age as the individual, showing that new neurons are not generated after birth in this region of the cerebral cortex, or at least not in significant numbers. Cells of the cerebellum are slightly younger than those of the cortex, which fits with the idea that the cerebellum continues developing after birth. Another contentious issue is whether the heart generates new muscle cells after birth. The conventional view that it does not has recently been challenged by Dr. Piero Anversa of the New York Medical College in Valhalla. Dr. Frisen has found the heart as a whole is generating new cells, but he has not yet measured the turnover rate of the heart's muscle cells. Although people may think of their body as a fairly permanent structure, most of it is in a state of constant flux as old cells are discarded and new ones generated in their place. Each kind of tissue has its own turnover time, depending in part on the workload endured by its cells. The cells lining the stomach, as mentioned, last only five days. The red blood cells, bruised and battered after traveling nearly 1,000 miles through the maze of the body's circulatory system, last only 120 days or so on average before being dispatched to their graveyard in the spleen. The epidermis, or surface layer of the skin, is recycled every two weeks or so. The reason for the quick replacement is that 'this is the body's saran wrap, and it can be easily damaged by scratching, solvents, wear and tear,' said Elaine Fuchs, an expert on the skin's stem cells at the Rockefeller University. As for the liver, the detoxifier of all the natural plant poisons and drugs that pass a person's lips, its life on the chemical-warfare front is quite short. An adult human liver probably has a turnover time of 300 to 500 days, said Markus Grompe, an expert on the liver's stem cells at the Oregon Health & Science University. Other tissues have lifetimes measured in years, not days, but are still far from permanent. Even the bones endure nonstop makeover. The entire human skeleton is thought to be replaced every 10 years or so in adults, as twin construction crews of bone-dissolving and bone-rebuilding cells combine to remodel it. About the only pieces of the body that last a lifetime, on present evidence, seem to be the neurons of the cerebral cortex, the inner lens cells of the eye and perhaps the muscle cells of the heart. The inner lens cells form in the embryo and then lapse into such inertness for the rest of their owner's lifetime that they dispense altogether with their nucleus and other cellular organelles. But if the body remains so perpetually youthful and vigorous, and so eminently capable of renewing its tissues, why doesn't the regeneration continue forever? Some experts believe the root cause is that the DNA accumulates mutations and its information is gradually degraded. Others blame the DNA of the mitochondria, which lack the repair mechanisms available for the chromosomes. A third theory is that the stem cells that are the source of new cells in each tissue eventually grow feeble with age. 'The notion that stem cells themselves age and become less capable of generating progeny is gaining increasing support,' Dr. Frisen said. He hopes to see if the rate of a tissue's regeneration slows as a person ages, which might point to the stem cells as being what one unwetted heel was to Achilles, the single impediment to immortality.

Subject: From Hiroshima's Shadow, Renewal From: Emma To: All Date Posted: Tues, Aug 02, 2005 at 11:12:12 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/02/science/02conv.html From Hiroshima's Shadow, Turning Radiation Into Renewal By CLAUDIA DREIFUS On a gorgeous sunny day very near a major anniversary of the testing of the first atomic bomb at Almagordo, N.M., Dr. Ritsuko Komaki, chief of thoracic radiation oncology at the M. D. Anderson Cancer Center in Houston, sat in a Manhattan living room, drinking tea and talking about nuclear weaponry. 'It's been six decades since the first atomic bomb,' said Dr. Komaki, 61. 'People don't anymore really connect to what that means. They can't imagine what it was like for humans to be under such a thing. The atomic bomb, it was never an ordinary weapon. And the one that was used on my city was small compared to what are in silos now.' Dr. Komaki knows exactly what an atomic bomb can do. Her family comes from Hiroshima. A dozen of her relatives died in the Aug. 6, 1945, bombing of that city and from its aftereffects. In fact, her entire childhood was lived in the shadow of the bomb. It's one reason she became a radiation oncologist. 'Because of my background, I was interested in radiation,' she said. 'I had a curiosity about it. I like that in my work, we use radiation to kill cancer cells and that we make radiation have a different meaning from what it had at Hiroshima.' Q. Where was your family on Aug. 6, 1945? A. We were outside of Osaka, where my father was working. I was a baby. But the family, they came from Hiroshima. So a majority of the family was there. The day after the A-bomb, my father went into Hiroshima to search for his mother and siblings. My father was exposed to the radioactive 'black rain.' He found that some of our relatives had died in the bombing. My grandmother had survived, though she had every side effect of total body radiation: her hair fell off, nose bleeding, diarrhea. Also, my 19-year-old aunt worked outside of the city and when she came home, she saw this incredible scene: all these people dying in the street, burned, some of them trying to jump into the river to get rid of the heat. We moved to back to Hiroshima when I was 4. And as a child, I could see what had happened in the city. At my school, so many of the children were orphans. They'd been sent away from Hiroshima, and when they came back, the parents had died under the bomb. Q. Were the aftereffects of the bombing frightening to witness? A. Well, you saw things: people walking about with terrible scars and burns. The bombing wasn't much talked about, though. There was a tremendous amount of sickness in my family, and, I presume, in most others. Over the years, a dozen family members died of various cancers. You were always hearing about people getting leukemia and dying. When I was 11, my friend Sadako died from a radiation-related leukemia. At my school, I was the president of the students and I organized a fund-raising campaign so that we could build a memorial to her and to all the children who died because of the bomb. The statue now stands in Peace Park in Hiroshima. This was one of the first times the bomb was openly discussed. Q. Why was there so little discussion of an event so traumatic? A. That's not what Japanese people do. Japanese people try to avoid unpleasant subjects. This tendency is a problem even now with ordinary cancer patients in Japan. They often do not go for help because they want to avoid unpleasantness. I think that when it came to the atomic bomb, a lot of people were ashamed about Pearl Harbor and who had started this war. They didn't want to discuss that, and they also didn't want to create hatred for the United States by saying, 'They shouldn't have dropped atomic bombs on Hiroshima and Nagasaki.' There was more a tendency to say, 'Well, Japan started the Second World War - so maybe we were supposed to get this punishment.' Q. Do you find it ironic that you, a child who grew up in the shadow of the atomic bomb, work with radiation every day? A. Maybe it is natural. I was always curious about radiation and its relation to all the cancer I saw as a child. When Sadako died, I vowed to become a doctor to take care of people with cancer. But when I got to medical school, I encountered something unexpected: patients who'd been treated with radiation for cancers of the voice box and cervix were sometimes cured by it. I began to read more. This was the 1970's. At the time, some of the chemotherapies were not as good as they are now. I could see that radiation therapy was less harmful and that some patients became cancer-free. That stunned me and forced me to change my thinking. I wish other Japanese doctors would change too. A friend developed a big lump around the neck. He was told by his Japanese surgeon that the only treatment was chemotherapy followed by surgery and that he would only have six months to live. He came to my husband and I at M. D. Anderson and we treated him with radiation. He's still alive, seven years later. Q. Your husband is James Cox, the head of radiation oncology at M. D. Anderson. How did your family react to your marrying an American? A. My father did not want me to. He had bad memories of the war. But my husband didn't have anything to do with the atomic bomb. So once they met Jim, there were no questions. They really liked him and felt he was the right person for me. Q. As a team, you and your husband have pioneered new treatments for lung cancer using radiation. What are some of these therapies? A. Well you know, for many years, there weren't many cures for lung cancer. And for a lot of these patients, they were smokers and their lung function was so poor that they couldn't have surgery, which made us think that radiation treatment might be a good alternative. What we developed were techniques for giving higher doses of radiation therapy that were confined to the tumor itself and that will not damage surrounding tissue. We developed together several new protocols in this area. The most common is called three-dimensional conformal radiation therapy, and it's a chemo-radiation combination that is used for a lung cancer that has already spread into the lymph nodes. With it, we've been able to increase the survival of our patients from 5 percent to better than 25 percent. And next year, we have the proton beam therapy machine going at M. D. Anderson, and with it we can do even more precise and effective treatments. The protons hit only the diseased tissue and nothing else. Q. Returning to the atomic bomb, one often hears that its use saved the lives of thousands of Americans who would have been killed if the Japanese mainland had to be invaded. How do you answer that? A. There were other ways to do that. I still wonder why they decided to drop the bomb on Hiroshima and Nagasaki. There might have been a better way to stop the war. The people who decided to drop the bomb, I'm not sure they knew its power. The people who made the bomb were physicists. They understood the blast side of it, but not the long-term effects. That's why, even today, we have to get across to people that a nuclear device is not just another bomb. It's vastly more ominous and terrible. I do have fears - especially with all this terrorism and the Iraq war. I think what it might be like if somebody decided to drop nuclear weapons and how many people could be killed. I would like to give the message to the next generation that this terrible thing should never happen again.

Subject: Re: Hiroshima Mon Amour ? From: Pancho Villa To: Emma Date Posted: Tues, Aug 02, 2005 at 19:03:07 (EDT) Email Address: nma@hotmail.com Message:

Subject: Re: Hiroshima Mon Amour ? From: Emma To: Pancho Villa Date Posted: Tues, Aug 02, 2005 at 19:08:15 (EDT) Email Address: Not Provided Message: A stunning film.

Subject: Increasing Economic Growth From: Terri To: All Date Posted: Tues, Aug 02, 2005 at 10:33:46 (EDT) Email Address: Not Provided Message: We are steadily finding that Alan Greenspan was right yet again. The economy has certainly added to its growth dynamic since the beginning of spring. We are likely to finish the year strongly, and lead the developed nations in growth. This is promising, for the Fed raises will have less slowing impact.

Subject: Re: Increasing Economic Growth From: Pete Weis To: Terri Date Posted: Tues, Aug 02, 2005 at 14:54:45 (EDT) Email Address: Not Provided Message: 'the Fed raises will have less slowing impact.' and our 3 month treasuries will yield ever higher!!!

Subject: Alan Greenspan From: Terri To: Terri Date Posted: Tues, Aug 02, 2005 at 10:39:06 (EDT) Email Address: Not Provided Message: Frankly, we can criticize Greenspan all we wish, and we should, but I will be most unhappy to see him leave the Federal reserve unless Ben Bernanke is chosen to lead and even then I will have regrets. Greenspan has a really good sense of near term economic direction.

Subject: Re: Alan Greenspan From: Pete Weis To: Terri Date Posted: Tues, Aug 02, 2005 at 14:58:21 (EDT) Email Address: Not Provided Message: Ben Bernanke will be good for Permanent Portfolio & VGPMX! But does he deserve the label, 'Helicopter Man' - we shall see if he becomes the new Fed chair.

Subject: A New Kind of Birdsong From: Emma To: All Date Posted: Tues, Aug 02, 2005 at 08:59:14 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/08/02/science/02wing.html? A New Kind of Birdsong: Music on the Wing in the Forests of Ecuador By CARL ZIMMER Richard Prum, a Yale ornithologist, was hiking through an Ecuadorean forest 18 years ago when he had one of the strangest experiences an ornithologist can have. He watched a bird sing with its wings. Dr. Prum was observing a male club-winged manakin. The tiny red-headed bird was hopping acrobatically from branch to branch in order to attract female manakins. And from time to time, the male would wave its wings over its back. Each time the manakin produced a loud, clear tone that sounded as if it came from a violin. 'I was just utterly stunned,' Dr. Prum said. 'There's literally no bird in the world that does anything that prepares you for it. It's totally unique.' Ever since, Dr. Prum has wondered how the club-winged manakin managed this feat. Now he and a former student, Kimberly Bostwick of Cornell University, believe they have solved the mystery. Club-winged manakins rake their feathers back and forth over one another, using an acoustic trick that allows crickets to sing. While the technique is common among insects, it has never been documented before in vertebrates. The noise-making skill of manakins first came to the attention of naturalists in the 1800's. The club-winged manakin belongs to the manakin family (Pipridae), which includes about 40 species, many of which have peculiarly shaped feathers that allowed them to make sounds. In many species the males use the noises during their courtship displays. 'Some of them pop like a firecracker, and there a couple that make whooshing noises in flight,' Dr. Prum said. Charles Darwin was fascinated by manakins. He believed they were a compelling example of how females could cause evolutionary change simply by the influence of their mating preferences - a process he called sexual selection. If female birds had a preference for males with large tails, for example, males with larger tails would be more successful at reproducing. Darwin argued that the peacock's tail had evolved this way. On the other hand, if females were attracted to noisy males, the males would evolve adaptations that made them noisier - as in the case of manakins. Biologists have documented the effect of sexual selection in a wide range of animals. Dr. Prum has dedicated much of his career to studying it in manakins. His research shows that wing sounds evolved independently in many manakin lineages. 'Mechanical sounds probably evolved a bunch of times in manakins,' Dr. Prum said. The club-winged manakin, with its unique ability to produce musical sounds, was the most extreme example of sexual selection in manakins. Dr. Bostwick began to study how manakins make their various noises in 1995, when she joined Dr. Prum's lab as a graduate student. In 1997, she traveled to South America to film the birds. On that trip, she saw her first live club-winged manakin. 'I was just blown away by what an odd, odd thing it was,' she said. When Dr. Bostwick returned home, she played her films in slow motion to analyze the manakin wing movements. But the club-wing manakin moved so quickly that its wings were nothing but a blur. 'How that motion created that sound was a black box,' Dr. Bostwick said. Over the next few years, this ornithological black box continued to puzzle Dr. Bostwick and Dr. Prum. Dr. Bostwick found a few clues by poring over the preserved club-winged manakins Dr. Prum had brought back from his 1987 trip. She noticed that one feather on each wing had a peculiar feature: its central vane had a series of ridges - seven on average. The club-winged manakin's wing muscles were also remarkably large. 'They were like little Popeyes, with big bulging muscles,' Dr. Bostwick said. The clues began to come together in 2002 when Dr. Bostwick returned to Ecuador with a new digital camera that could record 1,000 frames a second, over 30 times faster than her previous model. She made new films of the club-winged manakin, and when she returned home she found that she could finally see what the bird's wings were doing. It turns out that when the bird raises its wings over its back, it shakes them back and forth over 100 times a second. This alone would be a remarkable accomplishment for a bird. Hummingbirds typically flap their wings only 50 times a second. But the club-winged manakin's fast shaking alone could not produce the bird's sounds. Its wings produce tones at a frequency of around 1,400 cycles a second - about 14 times faster than it shakes its wings. 'We had to have some kind of frequency multiplier,' Dr. Prum said. Dr. Bostwick traveled to New York to study the manakin collection at the American Museum of Natural History. 'I spent a lot of time playing with the feathers,' she said. She noticed that next to the strangely ridged feather was another feather with a stiff, curved tip. She realized that each time a manakin shook its wings, its tip rakes across the ridges of the neighboring feather like a spoon moving across a washboard. Each time it hit a ridge, the tip produced a sound. The tip would strike each ridge twice - once as the feathers collided and once as they moved apart again. Dr. Bostwick realized that this raking movement allowed a wing to produce 14 sounds during each shake. As a result, a bird could shaking its wings 100 times a second could produce a sound with a frequency of 1,400 cycles a second. 'All the questions that hadn't made any sense just clicked into place,' Dr. Bostwick said. This sort of spoon-and-washboard anatomy is unknown in any other vertebrate, but it is well known in insects. Crickets, for example, have ridges on their wings that act like a pick and file when the insects rub their wings together. 'The convergence is simply stunning,' said Dr. Ronald Hoy, a Cornell expert on insect sounds. Dr. Bostwick and Dr. Prum reported their findings in the July 29 issue of the journal Science. The ornithologists plan to test their hypothesis with new experiments. On her next trip to Ecuador, Dr. Bostwick hopes to catch a male club-winged manakin and clip off the raking tip on each wing (a harmless procedure). 'I should be able to completely silence the bird,' she predicted. Dr. Bostwick argues that the new research underscores just how powerful sexual selection can be. The mating preferences of female birds can produce not only the peacock's tail or the rooster's crow, but also feathers with microscopic adaptations that let them sing like crickets. 'Darwin would have loved it if he had known,' Dr. Bostwick said.

Subject: Susan Polgar Chess Champ get crushed by Johnny5 From: johnny5 To: All Date Posted: Tues, Aug 02, 2005 at 02:31:59 (EDT) Email Address: johnny5@yahoo.com Message: Johnny5 send commies back across to russia after he kick thier butt hard Bobby Fischer Style!! HAHA - no Susan had far too strong the end game for johnny5, but he did make her work for the win - she inspire many girls to come out and play - even if johnny5 can beat most of them a bishop short. I know the liberal ladies here take lots of joy in her example - she a great ambassador for chess. She beat the record - last count I heard when I left was 330 games. She had to win 80% of them for it to count but there was only one draw and no losses when johnny5 left at 2am. http://www.palmbeachpost.com/accent/content/accent/epaper/2005/08/01/a1d_grandmaster_web_0801.html Chess player Susan Polgar is queen of her game By Mark Schwed Palm Beach Post Staff Writer Monday, August 01, 2005 It sounds like something out of a Frankenstein movie. Laszlo Polgar, who has devoted his professional life to the study of the mind, boldly declares to the world that he can turn any healthy baby into a genius. He will test his theory with his firstborn child, a girl. She will not attend public school — Laszlo believes they are factories for mediocrity. Instead, he will home-school her in his modest apartment in communist Hungary. He will teach her discipline, critical thinking, logic, math, science, English, literature, history. She will learn to speak seven languages fluently and, in time, will grow up to be a mental heavyweight. An Einstein in a skirt. The end product of this experiment is sitting in the lobby of a hotel in Palm Beach Gardens. Laszlo's girl, Susan Polgar, now 36, a single mother of two boys, is wearing a delicately cut lavender jacket and smart black slacks. Her candy-apple-red toenails stick out from soft pink sandals. She is beautiful. But it is her brain that stuns all comers. She is one of the smartest women — no, make that people — on the planet. She is in South Florida to test her mettle. Today, she will attempt to set a Guinness World Record at The Gardens mall by playing 350 chess matches. Simultaneously. As the first woman in the world to attain the World Chess Federation title of grandmaster, a term reserved for only the highest-ranked top-flight players, she is up to the task. Yet it will take up to 20 hours. She will walk from chessboard to chessboard, size up the opponents' positions, make her move and go on to the next player. When she is asked about the possibility of defeat, she arches her left eyebrow like Star Trek's Spock. 'I try to avoid losing as much as possible,' she says in her soft Hungarian accent. 'One can lose by making a silly mistake. That is upsetting. Or one can lose by being outplayed. It's no fun to lose either way. But if I do lose one of the matches, I look at it this way: I really made their day.' Whether she succeeds now is not important. Although her life has been one monumental struggle stacked upon another, she has already proved her father correct. It is possible to grow a child prodigy. Polgar's father, a psychologist and author of the book Bring Up Genius!, and mother, a Ukrainian foreign-language teacher named Klara, have since raised three daughters, all quite brilliant. The youngest, the raven-haired Sophia, was blessed with the most talent. But chess doesn't interest her. The middle sister, Judit, won the right to be called a grandmaster — after her sister did but at a younger age, 15, which is also a few months younger than when Bobby Fischer, the god of the chess world, was named one. At 29, Judit is regarded as the best woman chess player in history and still has a shot at winning the world championship — the Super Bowl of chess. But it is Susan, a grandmaster at 21, the five-time Chess Olympiad champion and four-time women's world champion, who made it all possible. She is the Rosa Parks of chess, taking women from the back of the bus of what had always been a man's game. It was as easy as driving through a brick wall. Winning games at age 4 1/2 Her crash-course in discrimination and the male ego began at the age of 4 1/2 when her father brought her into the smoke-filled chess parlor near her home. Chess can be a brutal game — 'the most violent of all sports,' according to champion Garry Kasparov. Machismo has ruled the game for thousands of years. So when little Susan walked in, the men laughed at this silly girl who wanted to take them on. In short order, the laughing stopped, and the excuses started flowing. 'I'm not feeling well,' they'd say after Polgar pulverized them. Polgar once said that she never beat a healthy man. They all had some ailment to explain why they had been defeated by a mere woman. But as the bodies piled up, it was no longer an embarrassment to be one of the victims of her fiercely aggressive style of play. It is a club with many members, almost exclusively male. At the age of 17, when she became the first woman ever to qualify for what was then called the Men's World Championship, the World Chess Federation said she couldn't play because she was a woman. Eventually, due to Susan's tenacity and the embarrassing press, the federation buckled and changed its policy. 'I'm very proud of that,' Polgar says. 'They had to change the name to eliminate the word Men's.' When she was 19, she and her sisters traveled to Greece to represent Hungary in the Women's Olympiad. They played as a team and defeated the Soviets for the first time in history. They became national heroes. When she became a grandmaster at the age of 21, there were 500 grandmasters in the world — 499 men and 1 woman. Now, there are 1,000. Ten of them are women. In 1994, Polgar married an American computer programmer and moved to Queens in New York City. When she became pregnant with her first child, the chess federation refused to allow her to postpone defense of her title as women's world champion. So she took the federation to court. She won the suit but had already lost her title because she couldn't play the match. 'She is so different than any other chess player I've known,' says Paul Truong, former captain of the Olympiad team and her friend for 21 years. 'I've been in chess for 36 years. I've known all the top players in the world. She just doesn't act like she's god.' But she does draw a crowd. On July 4, Polgar made a three-day trip to Mexico for an exhibition. 'On the first day, she was giving an exhibition for 35 people, but 1,000 showed up,' Truong says. 'The next day, 5,000 people showed up. The next day, there were 25,000 people. They had to have police protection for her. It was like going to a rock concert.' Too much time lost Polgar may be a rock star in the chess world, but she is resigned to the fact that she will never become the world chess champion. After taking years off for her pregnancies and to raise her boys, she lost too much ground to make up in the grueling world of high-level competitive chess. Still, she proved her point that women are just as good as men. Yes, there are physical differences. Women have menstrual cramps (she once fainted during a match), and they get pregnant. 'There are disadvantages,' she explains, 'but that doesn't mean women are less capable.' To ensure that women continue to play on the championship level, she has formed the Susan Polgar Foundation, designed to encourage girls to take up the game of kings. She operates a chess club in Queens, and sponsors national and international tournaments. The first one, which took place last year in Fort Lauderdale, involved 3,000 competitors and 34 state champions. The girls played chess — then donned tiaras for fun. Even in the macho world of chess, girls will be girls. Polgar has written three World Champion's Guide to Chess books (Random House) and created a series of Winning Chess DVDs that teach children how to play the game. She has a Web site (susanpolgar.com), writes frequent columns (chesscafe.com) and tours the world, promoting chess. Just like her father, she believes genius is not innate. It is earned, through hard work. 'I do believe children should be challenged in early childhood more than they are now,' says Polgar, now divorced. 'People attacked my father, said we didn't play enough as children. But children really need and crave food for the mind. They feel good about themselves when they accomplish things. Watching TV and playing video games is not very positive. It's a matter of discipline of the parent. 'It's easy to switch on the TV to entertain your children. But you'll pay for it later.' Like father, like daughter. Chess promoter Now, her master plan has evolved again. She wants chess to go Hollywood, from nerdsville to cool town. She wants chess all over TV, just like poker. 'I have had this dream for many years,' she says. 'Who ever thought poker could be televised?' Like a female version of public-relations whiz P.T. Barnum, she knows that to accomplish this, the game must change for the cameras. It must be fast-paced, action-packed, with hip music and expert commentary. It must have glitz, glamour and Hollywood dazzle. Call her Grandmaster Flash. 'I want to play Arnold Schwarzenegger, Madonna, Julia Roberts,' she says. 'They all play chess.' To make it fair, she will play blindfolded. Already, one show has been produced and aired. But plans are in the works for a series of shows next year, including a match between two former world leaders, Mikhail Gorbachev and Jimmy Carter. There is no question there is an audience for it. There are 700 million chess players worldwide, 45 million in the United States. 'And it's a more positive message than poker,' she says. She is comfortable with her place in history as the first woman grandmaster and the unofficial ambassador of chess. 'There were obstacles to overcome being a pioneer,' she says. 'But I can use myself better for chess for the next generation of players. I paved the way for my sister,' who, Polgar says, 'is arguably the strongest woman player ever.' It is true that Susan's record may be eclipsed by her younger sister, but there is one thing you should know. In all of Susan and Judit's head-to-head matches, Susan says, 'She never beat me.' Grandmaster Susan Polgar's Chess Challenge starts at 10 a.m. today at The Gardens mall, 3101 PGA Blvd., Palm Beach Gardens. For details, go to www.bocachess.com

Subject: Where to Now? From: Jennifer To: All Date Posted: Mon, Aug 01, 2005 at 20:38:20 (EDT) Email Address: Not Provided Message: The choices were simple in 1999 and 2000, for we understood if we cared to where the excess was and had ample chance to sell technology for parts of the stock market that had been turned from by investors. Also, there was the bond market with the Federal Reserve in a tightening cycle and much higher interest rate levels than now. Now, the real estate sector seems excessively priced while stocks and bonds are moderately expensive. Where to now?

Subject: The Caribbean From: Pete Weis To: Jennifer Date Posted: Mon, Aug 01, 2005 at 22:20:17 (EDT) Email Address: Not Provided Message: Buy a sailboat. Read Michener's epic Caribbean in preparation - this could be a great adventure! Picking the right boat is the big decision to be made.

Subject: Re: The Caribbean From: Emma To: Pete Weis Date Posted: Tues, Aug 02, 2005 at 05:53:25 (EDT) Email Address: Not Provided Message: The dream of sailing to the Caribbean is exciting, but please know that we would be more than just sad not to have your daily comments to read and argue about. I have never sailed, but I urge that you think ever so carefully about such a winter sail. Sailing to the Caribbean can I believe be tough and somewhat dangerous. I would be afraid and find adventure that is tamer, besides we not not lose you then.

Subject: Re: The Caribbean From: Pancho Villa To: Emma Date Posted: Tues, Aug 02, 2005 at 07:29:35 (EDT) Email Address: nma@hotmail.com Message: 'Sailing to the Caribbean can I believe be tough and somewhat dangerous.' Do You remember what happened to Sam Malone?

Subject: Pancho From: Emma To: Pancho Villa Date Posted: Tues, Aug 02, 2005 at 09:34:43 (EDT) Email Address: Not Provided Message: Pancho, you are always prized and looked forward to with pleasure :)

Subject: Re:Emma From: Pancho Villa To: Emma Date Posted: Tues, Aug 02, 2005 at 14:34:23 (EDT) Email Address: nma@hotmail.com Message: Thank you dearest Emma for this very flattering response;)

Subject: Pancho & Bobby From: Pete Weis To: Pancho Villa Date Posted: Tues, Aug 02, 2005 at 14:51:55 (EDT) Email Address: Not Provided Message: Poncho. You along with Bobby are probably the only two regular posters on this board who really understand the economic issues which we discuss. I look forward to your comments although my ability to decipher them is not always up to the task (which is my failing)! Anyway, I enjoy this board and thanks to Bobby for making it possible!

Subject: Re: Pete & Bobby From: Pancho Villa To: Pete Weis Date Posted: Tues, Aug 02, 2005 at 17:39:58 (EDT) Email Address: nma@hotmail.com Message: Dear Pete, Pete Wise, thank you for all the wisdom you shared, and I'm sure, still will share with all of us through your postings on this board And indeed, a special thank to Bobby, who gives us all the possibility and opportunity to exchange views and opinions on this 'internationally' impregnated board

Subject: Re: The Caribbean From: Emma To: Emma Date Posted: Tues, Aug 02, 2005 at 05:58:37 (EDT) Email Address: Not Provided Message: Please think ever so carefully. There are so many safer ways to adventure and learn than sailing to the Caribbean. The more I think of such a plan, the more dangerous it seems. Think of your lovely lake.

Subject: Re: The Caribbean From: Terri To: Emma Date Posted: Tues, Aug 02, 2005 at 06:08:24 (EDT) Email Address: Not Provided Message: Pete, I agree. Your plan is alarming mostly because sailing the Atlantic and Caribbean is dangerous but also because we would lose you. There are other ways to live an exciting retired life. Please do consider again.

Subject: Re: The Caribbean From: Jennifer To: Terri Date Posted: Tues, Aug 02, 2005 at 07:25:56 (EDT) Email Address: Not Provided Message: Pete, please do reconsider. What will we do if you are lost? We missed you terribly last time, and would miss you even more this time. I am once look for your comments each day. Sailing in the Caribbean strikes me as well as the others as more dangerous than exciting. Please find a tamer pursuit, with a computer close.

Subject: Dead Calm From: johnny5 To: Jennifer Date Posted: Tues, Aug 02, 2005 at 08:24:44 (EDT) Email Address: johnny5@yahoo.com Message: JOhnny5 no longer going back there - he got very cold shoulder from many caribbean types - I remember watching a movie about Pete Weis and his wife that starred the actress Rachel Ward - her crazy boyfriend and pete weis were on this island - and Pete and wife went missing and rachel ward and her friend stole thier boat - later pete and wife were found cut up in a box on the island. http://www.imdb.com/title/tt0101345/ This made for TV movie is based on one of my favorite books, by the same name, and out of all the true crime books I have ever read, I still feel at odds as to whether the person being tried was guilty of murder or assisting a murderer or not. As other people have already said, it is a story of two very different couples who sailed to an island looking for adventure/escape. The younger couple consists of a hard man in his 30s running from the law, and a girl in her late 20s, who is totally dedicated to aiding his escape and usually going along with whatever he wanted. The older couple are in their 40s, upper middle class, attractive, and their yacht, the 'Sea Wind' is a marvel, designed for a couple who would want to exist very comfortably for long periods at different ports. The younger couple were annoying to the older couple, lacking in supplies and begging at times, always needy. They brought along annoying dogs, were always running out of supplies. Although the older man Mac is not fearful of them, the woman really is, and desperate to leave. They have quite a few clashes, despite Jennifer's(the younger woman)attempts to make peace and be friends. Then one day Buck, the younger man, tells Jennifer that the older couple have 'disappeared' - he thinks they got lost fishing and are gone. According to Jennifer, she was not with him the whole day and heard nothing. They sail back to Hawaii on the 'Sea Wind assuming they are dead, and are eventually arrested. The rest of the movie revolves around Jennifer - was she an innocent who believed her boyfriend's Buck's story and heard nothing, or was she a part of the murders, or an assistant? The character Jennifer is very baffling, lying to achieve certain desires and totally truthful in other areas. Even acting at times like she didn't care what her attorney Bugliosi did or didn't do. She is a complex character, sentimental but sensible, wonderful at chess but deluded in judging character. So did Jennifer help commit these murders or know about them? Read the book/watch the movie. I still can't figure it out. I wish this were on video, so I could see it again. I thought it was well-cast with Richard Crenna as Bugliosi, James Garner and Deidre Hall play the older couple, and Hart Bochner and Rachel Ward play Buck and Jennifer. The only problem I have is that I didn't think Ward was quite right for the cuddly, spacy, cautious Jennifer. I don't know who I would liked to see cast, but is was not her. All in all, a 9 out of 10. Of Course go watch the classic DEAD CALM with billy zane and Tom cruise ex wife - you not want that happening to your wife eh?

Subject: Thanks all, but..... From: Pete Weis To: johnny5 Date Posted: Tues, Aug 02, 2005 at 11:44:57 (EDT) Email Address: Not Provided Message: thousands of folks sail the Caribbean every year. I owned a small (26 ft) boat which I sailed along the New England coast during the spring thru the fall. We've have owned a larger boat on Puget Sound. Maine, where I have sailed a lot in the past is actually more difficult than the Bahamas because of the fog and rock ledges which often extend from shore for quite some distance. Back then I had to use charts and dead reckoning, now it's GPS, radar, and both combined on a chart display at the helm. We intend to take it slow, always avoiding areas in seasons where weather patterns bring rough conditions, but sailing in a boat which can take on rough conditions. With today's electronics we can stay connected to the internet via satelite with providers like GlobalStar, but access time will be somewhat more limited. But there are also plenty of internet cafes in the Caribbean. If you have done much sailing, you know that it is not nearly as dangerous as driving on today's crowded highways. If you could be a time bandit and bring a 19th century sailor suddenly into the present, sit him in the passenger seat of a honda civic, and drive 70-80 miles and hour down the Santa Monica freeway or the Mass Pike, he would likely leave his finger indentations on your dashboard! It's all a matter of what your used to. And Johnny, I know the story about the couple on Palmyra - very sad. But at this time we have no intentions of sailing to some remote island with little to no resources. Funny story: Almost 20 years ago, I was anchored in Cape Porpoise harbor Maine. It was a beautiful morning and I stood on the cockpit seat with one hand holding a cup of coffee and my free arm resting on the boom - kind of a 'wow this is great' pose. Now my boat was that little 26 footer I mentioned. It was a Contessa 26 (a Swedish folkboat design built in Great Britian). This may ring a bell with some, since this is the same model boat which a young Tanya Aebi sailed alone around the world and chronicled in her great book 'Maiden Voyage'. Anyway, the Kennebunkport tourist boat pulls into Cape Porpoise and the speaker is blaring out all the historical sites and it's crackerbox, jammed full of tourists. Then the skipper who is on the speaker spies my little boat and says the following - 'and folks that little boat anchored right there in the harbor has sailed around the world!!!'. I can hear all the people oowing and awing and they're taking pictures and at that moment I'm having a Walter Mitty moment, with goose bumps up and down my arms as I sip on my coffee. That was the best cup of coffee, I ever had in my life!

Subject: Re: Thanks all, but..... From: Terri To: Pete Weis Date Posted: Tues, Aug 02, 2005 at 12:00:27 (EDT) Email Address: Not Provided Message: Then I understand you are highly skilled as a sailor. I am pleased, and should have guessed, but I know so little of sailing. Still, you must keep up with us so we can follow you about.

Subject: Re: Thanks all, but..... From: Pete Weis To: Terri Date Posted: Tues, Aug 02, 2005 at 14:38:26 (EDT) Email Address: Not Provided Message: I wouldn't refer to us as highly skilled sailors, ready to cross oceans. But we have some experience and it wouldn't hurt us to take some larger boat cruising clinics before we buy the boat. Anyway, it's kind of a cruising community on the East Coast with less experienced sailors cruising with more experience folks and learning along the way. I'll need to to be, to some extent, a HVAC mechanic, diesel mechanic, plumbing, electrical, etc. It's a new challenge and we're looking forward to it. We understand that some days will be sublime and others will be a grind, but we intend to spend more time off the boat exploring places we pull into. I'll have to improve on my fishing skills, because it will be the source of much of our diet - on a boat the best and often only fresh food will come from the sea.

Subject: Re: Thanks all, but..... From: Emma To: Pete Weis Date Posted: Tues, Aug 02, 2005 at 15:43:40 (EDT) Email Address: Not Provided Message: All I wish for is that you are both happy on sea or shore. Keep the darn computer link up however.

Subject: Sorry! From: Pete Weis To: Pete Weis Date Posted: Mon, Aug 01, 2005 at 23:21:03 (EDT) Email Address: Not Provided Message: I take your question seriously. These are difficult times to invest and secure a decent retirement when we reach that point. For the time being most of our (my wife and I) 'nest egg' is in 3 month treasuries (3.4% presently but probably headed higher) with some investment in energy companies, Permanent Portfolio, and precious metals investments such as VGPMX (probably the best precious metals fund out there) and healthcare stocks. But our investment choices are not what most folks would want. I just think that the traditional 'balanced portfolio' (60% stocks, 35% bonds, 5% cash equivalents) or some variation of this will simply lose money in the coming nears. I think you must hedge against the fall in the dollar in some way and target certain sectors which should still do relatively well even in hard times and above all seek safety (3 month treasuries). In this way we hope to do somewhat better than we would if we only had treasuries. In the end all the old timers (Russell, Templeton, Buffet, etc.) are saying stocks will get much cheaper down the road when dividends will be much higher than they are now. The key is having cash when stocks finally get cheap again (probably when the S&P gets below 10x earnings as it has in the past). The same thing goes for real estate - it will swing from extremely expensive to relatively cheap when credit gets much, much tighter and rates higher. Patience is the supreme virtue in this instance!

Subject: Watching the Bond Market From: Jennifer To: All Date Posted: Mon, Aug 01, 2005 at 19:05:33 (EDT) Email Address: Not Provided Message: Right, interest rates are my biggest worry. This market does not frighten me at all as long as long term rates stay low, but high rates will threaten housing and that has been the economic driver since 2001. There is a reason the stock market has been so halting even while making gradual gains. So I stay with value and think 'caution.'

Subject: Re: Summertime From: Pancho Villa To: Jennifer Date Posted: Mon, Aug 01, 2005 at 19:26:33 (EDT) Email Address: nma@hotmail.com Message: Bush appoints Bolton to UN during Senate recess By Caroline Daniel and Holly Yeager in Washington John Bolton, the man who famously said it would make no difference if the United Nations secretariat lost 10 floors, became US ambassador to the UN on Monday in a controversial recess appointment that ended five months of delay. The appointment, made during the August break for Congress, represented a snub to the Senate, bypassing Democratic opposition. A vote on Mr Bolton's nomination was blocked twice by Democrats amid concern at his alleged disdain for international institutions and fears he skewed intelligence on Iraq during his time at the State Department.

Subject: Rats!!! From: Pete Weis To: Pancho Villa Date Posted: Mon, Aug 01, 2005 at 20:41:46 (EDT) Email Address: Not Provided Message: I was hoping Bulldawg Bolton would end up as presidential spokesman. Now wouldn't that help CNN's ratings? Imagine the press grilling Bolton and Bolton's reactions? All kidding aside, Bolton should do as good a job at the UN as he did analyzing the intelligence that got us into Iraq. Now with that comment I'm in total agreement with many conservatives.

Subject: Re: Rats!!! From: Jennifer To: Pete Weis Date Posted: Mon, Aug 01, 2005 at 21:41:22 (EDT) Email Address: Not Provided Message: We had better keep a sense of humor these days, folks.

Subject: Federal Reserve Assurances From: Terri To: All Date Posted: Mon, Aug 01, 2005 at 17:43:05 (EDT) Email Address: Not Provided Message: There is a sense of confidence expressed repeatedly by Federal Reserve executives from Alan Greenspan on that growth imbalances notwithstanding the Fed need not worry about reviving the economy should growth falter. I hope this is so, but I really do not want to see higher long term interest rates begin to limit growth in the housing market. Were I a Fed executive I would be quite assuring, but rather anxious. This has been a cycle unlike any we have experienced, for housing has been so dominant. What takes the place of housing, or is that of no concern since a slowing in housing will leave enough secondary work on home projects to keep us growing nicely? Then too, vehicle sales have never slowed meaningfully this cycle. Investment however has not been what I would have wished.

Subject: Why ane Long Term Interest Rates Rising? From: Terri To: All Date Posted: Mon, Aug 01, 2005 at 17:16:03 (EDT) Email Address: Not Provided Message: Why are long term interest rate slowly rising? Inflation does not seem to be the issue. We appear to be past the peak core inflation reading for this cycle, a core Consumer Price Index reading that is the lowest peak of any cycle since at least 1975. Labor costs are all too limited. No, inflation would not seem the problem. I suspect either hedge funds are unwinding positions or marginally less buying of dollar assets by central banks. Why does this worry me?

Subject: Anholt-GMI Nation Brands Index From: Pancho Villa To: All Date Posted: Mon, Aug 01, 2005 at 11:24:55 (EDT) Email Address: nma@hotmail.com Message: World turning its back on Brand America By Kevin Allison in New York The US is increasingly viewed as a 'culture-free zone' inhabited by arrogant and unfriendly people, according to study of 25 countries' brand reputations. The findings, published online today, will add to concerns that anti-Americanism is hurting companies whose products are considered to be distinctly 'American'. The Anholt-GMI Nation Brands Index found that although US foreign policy remained a key driver of hostility, dissatisfaction with the world's sole superpower might run deeper. 'The US is still recognised as a leading place to do business, the home of desirable brands and popular culture,' said Simon Anholt, author of the survey. 'But its governance, its cultural heritage and its people are no longer widely respected or admired by the world.' Keith Reinhard, president of Business for Diplomatic Action, a group of business leaders dedicated to improving the US's image overseas, said help from the private sector was needed to repair Brand America. 'Right now the US government is not a credible messenger,' said Mr Reinhard, chairman of DDB Worldwide, the advertising group. 'We must work to build bridges of understanding and co-operation and respect through business-to-business activities.' Such initiatives could include lobbying for less stringent visa requirements for foreign students entering the US, increased cultural exchanges between US businesses and their foreign counterparts, and courses in diplomacy and foreign languages at business schools. The US ranked llth in the Brands Index, which asks people around the world to rate 25 countries according to their cultural, political and investment potential and other criteria. Australia received the highest overall score, with respondents expressing 'an almost universal admiration of its people, landscapes and living and working environment', according to the report. Although the US received high marks for its popular culture, it ranked last in cultural heritage, a measure of a country's 'wisdom, intelligence, and integrity', according to Mr Anholt. That the world takes a dim view of the US people will surprise most Americans themselves: the study's American respondents consistently placed the US at the top of all six categories polled. FT Monday August 1 2005

Subject: Re: Anholt-GMI Nation Brands Index From: Jennifer To: Pancho Villa Date Posted: Mon, Aug 01, 2005 at 20:40:07 (EDT) Email Address: Not Provided Message: Pancho, you are always interesting to read as well even when you are gently mysterious.

Subject: Cycles and timing From: Pete Weis To: All Date Posted: Mon, Aug 01, 2005 at 11:00:03 (EDT) Email Address: Not Provided Message: From The New Zealand Herald: Brent Sheather: Don't be too sure that stocks are a long-term winner 30.07.05 There is no shortage of information on investing in the sharemarket for mum and dad contemplating equities as a home for their savings. Trouble is that much of it, for one reason or another, is dead wrong. Take past performance as an example many people think that it's the bottom line as far as picking what's going to do well in the future. Technical analysis or charting is all about discerning the future from the past and extrapolating trends. Financial planners all over the world pay to get performance statistics for hundreds of thousands of managed funds investing in various asset classes - New Zealand shares, US shares, global shares, emerging markets, property and bonds - because mum and dad want to know, as one local Italian investor puts it, what's a going a good? Remember back in 1999/2000 trying to sell NZ shares to clients was hopeless. All they wanted was international shares with a bit of technology if you were really up with the play. Buying past performance is popular and easy to do but the odds are stacked against such a strategy because, as common sense tells us, it's already gone up. These thoughts and several other good ones are argued in a paper entitled What Did We Learn From the Great Stock Market Bubble for a forthcoming issue of the US Financial Analysts Journal. The author is Clifford Asness, of AQR Capital Management of the US. Asness is a frequent contributor to the Analysts Journal and the Journal of Portfolio Management. He has a PhD in finance from the University of Chicago and, prior to co-founding AQR Capital, was a research director of Goldman Sachs. He has also lectured at Yale and the Massachusetts Institute of Technology (MIT). AQR manages US$13.5 billion ($19.9 billion) and is based in Greenwich, Connecticut. The paper, to be published next month, is a breath of fresh air and should be compulsory reading for would-be stockbrokers and financial planners even though the reality of working in the investment industry is often such that profitability depends on perpetuating the myths rather than embracing the facts. For example, refusing to sell what's hot based on past performance is generally not a great career move. Asness' gems are written from the perspective of what we have or should have learned from the Great Stockmarket Bubble of 1998/2000 and, in so doing, he summarises much of the most important, recent research on sharemarket investing. Long-term average stock returns are a poor forecaster of the future That this truth doesn't get much airplay is due to the fact that it materially threatens the economics of the savings industry. Managed fund salespeople need historic high-equity returns to continue to make their fees look reasonable but the truth is that high historic returns don't mean high future returns. Asness uses the example of investors, back in 1999, calculating the return on US stocks from 1946 to 1999. That analysis would have showed an average historic return of 8.4 per cent per annum above inflation. Great historic performance so everyone piles in, but then, over the next five years, the annualised return was actually negative 5 per cent pa. Asness says: 'The main point is that after periods of strong returns, trailing average returns are higher, and since these periods almost always come with increases in valuation, future expected returns are actually lower ... ' Higher prices today means lower expected returns tomorrow This point is related to the one above and an understanding of it is critical for anyone investing in shares or property. Asness looks at the valuation of the US sharemarket for every 10-year period between 1927 and 2004 and sorts each of these into six categories according to their average price-earnings ratio then calculates the return in the following 10 years. His data shows that buying shares at high prices generally means lower returns in the future. More common sense. The sort of sense that also tells us that shares aren't guaranteed to outperform houses or bonds or cash for that matter if share prices are too high. Asness says: 'Next consider the hallowed property of equity returns; that stocks never lose if held for the long term. Well, if a decade is your idea of the long term, then this is only true when prices start out at or below average. When they start out expensive, there are decades where stocks not only lost to inflation but lose big.' So there goes 'hold for the long term and you'll be okay', out the window along with 'buying last year's winners'. We can also see the sense of this point if we go back to that economic formula which says returns = dividend yield plus the growth rate of earnings. When prices are high (like now) dividends are low (2 per cent) and, thus, future returns are likely to be lower than at times when dividends are higher. What this also suggests is that all that good advice saying 'time in the market' is more important than 'timing' are, well, wrong. If you buy in at a time when prices are high even 10 years may not be long enough to beat inflation. Next week more of Asness' revelations including 'why dividends are good', 'earnings don't grow at 10 per cent a year' and 'why international diversification is not a waste of time'. * Brent Sheather is a Whakatane-based investment adviser.

Subject: Thank you.... From: Terri To: Pete Weis Date Posted: Mon, Aug 01, 2005 at 16:43:06 (EDT) Email Address: Not Provided Message: Pete, know every word you post is appreciated. You do all that is possible to be polite to everyone. There are those who do not understand. No matter. All you do is always cared for.

Subject: Thank you Terri From: Pete Weis To: Terri Date Posted: Mon, Aug 01, 2005 at 20:13:32 (EDT) Email Address: Not Provided Message:

Subject: Thank you Pete From: Jennifer To: Pete Weis Date Posted: Mon, Aug 01, 2005 at 20:26:29 (EDT) Email Address: Not Provided Message: Same for me. Please try not to worry about those who are not grateful for your thoughtfulness.

Subject: Thanks Jennifer From: Pete Weis To: Jennifer Date Posted: Mon, Aug 01, 2005 at 21:19:04 (EDT) Email Address: Not Provided Message: Honestly, if you are refering to my being called a 'whack job', I thought that was pretty funny. Abner is probably a decent fellow but we live, as many have said, in a polarized world. I think we train ourselves to think in a certain way and we tend to reject opposite opinions out of hand. Certainly I'm guilty of that at times. But more people than ever seem to have an anger (for what ever reason)down deep inside and civility has disappeared. Perhaps it's these radio talk shows (Savage Nation?) which stir up the anger and sometimes downright hatred for those with a different view. The other day a conservative on TV who was being interviewed was critizing liberals for being too tolerant as if it were evil. I thought - tolerance is exactly the one virtue which we don't have enough of in this world. We just had suicide bombers in Great Britain kill a bunch of innocent people, including children, because they can't tolerate the British 'immoral' culture. We had a leading conservative televangelist claim that 911 (just after it occured) was God's punishment for America's tolerance of homosexuals and women's rights. We just had an election decided, atleast in part, because conservatives were able to use the issue of gay marriage against 'liberal' Democrats - despite an administration having gotten us into a prolonged war in Iraq for reasons which turned out to be false. Go figure - it's the world we live in and we'll just have to hope for better times, more tolerance, and less killing.

Subject: Re: Cycles and timing From: Terri To: Pete Weis Date Posted: Mon, Aug 01, 2005 at 15:41:47 (EDT) Email Address: Not Provided Message: We should always read Cliff Asness, and discuss what he has to tell us. Thank you so much for this.

Subject: Re: Cycles and timing From: Terri To: Pete Weis Date Posted: Mon, Aug 01, 2005 at 11:25:17 (EDT) Email Address: Not Provided Message: Clifford Asness is an excellent investor and analyst, and especially honest. We need to read this article.

Subject: Relative Values From: Terri To: All Date Posted: Mon, Aug 01, 2005 at 09:46:08 (EDT) Email Address: Not Provided Message: Markets do not predict the future but they contain lots of information to give us a fine sense of the present and hints of what can come. There were many hints of what would in time happen to technology stocks from 1998 to 2000, and there were investors who used the hints to look away from speculative excdess and to relative market value. There are and will be such hints in markets now. There are and will be protective stances that can be adopted even as we continue to invest. Relative values are there for us.

Subject: Responsibility From: Terri To: All Date Posted: Mon, Aug 01, 2005 at 05:54:13 (EDT) Email Address: Not Provided Message: Economists or analysts who are deeply concerned with the economy may in time prove right or wrong, but they are serving us poorly to continually express worries but never suggest how we can personally protect ourselves. We are almost 3 years into a global bull market in stocks, bonds and real estate. We need to have a steady stream of ideas for personally coping with a possible return to difficulties in any of the markets. But, I find no such responsible discussion.

Subject: Re: Responsibility From: Jennifer To: Terri Date Posted: Mon, Aug 01, 2005 at 07:26:35 (EDT) Email Address: Not Provided Message: Raising taxes or cutting social benefit programs enough to bring the deficit to the point at which it grows only as fast as the economy, is not possible with this Congressional majority heading toward an election in just over a year. The President has committed to not raising taxes. So, we must be realistic and understand how the economy is progressing with the policy we have and adopt portfolios that take account of this. We can be cautious, even pessimistic, but we need to know how to provide for ourselves for pessimism that is warranted in years is too abstract for us to act on individually now.

Subject: rise and fall of police states From: johnny5 To: Jennifer Date Posted: Tues, Aug 02, 2005 at 08:25:54 (EDT) Email Address: johnny5@yahoo.com Message: The lesser political pill you take today may save a stalin type from coming to power no? Never does this seem to occur to the people, instead things just keep spiraling out of control until a very hard person and gubbment must come in to fix things. History bears this out many times.

Subject: Re: Responsibility From: Pete Weis To: Jennifer Date Posted: Mon, Aug 01, 2005 at 11:52:26 (EDT) Email Address: Not Provided Message: Certainly it's not the job of economists to tell people how to invest, but they can warn folks that the markets, in general, can be poor places to invest at given times as did Robert Shiller in his book 'Irrational Exuberance'. The following is a response in April of 2000 to a couple of Paul Krugman op-eds which suggested that the government should step up regulation of the markets to protect investor interests. We know now after Enron, Worldcom, etc that the SEC was asleep at the switch and by early 2000 margin buying in the stock market had become dangerous not only to investors but also the economy. But if your an economist who dares to challenge Wall Street hungry for more cash, get ready for a backlash: THE IRRATIONAL ECONOMIST SYNOPSIS: Wanniski criticizes Krugman's belief that stock markets are irrational right now To: Paul Krugman, NYTimes From: Jude Wanniski Re: The Crazy Stock Market When I turned to your column last Wednesday, Dr. Krugman, I had hoped you would devote it to the previous day’s dizzy NASDAQ drop of 575 points and sharp 500-point rebound. You did not disappoint me. I automatically assumed you would inform your readers that this crazy day on Wall Street was further evidence that the market is comprised of dopes and retards who don’t know the correct prices of financial assets. As you put it: 'If you are one of the people who, despite all the evidence, retain some lingering illusions about the rationality of financial markets, yesterday should have cured you. And yesterday’s events also proved that worries about the growing practice of buying stock on margin – in effect, borrowing in order to speculate – are completely justified.' The case is now CLOSED, you wrote, which means the government should 1) place greater limits on margin buying and 2) favor companies that have earnings over companies that are attracting capital on the sheer speculation that someday they might have earnings. Inasmuch as brick and mortar Old Economy companies have earnings and high-tech Internet companies of the New Economy do not, we can see you favor the status quo. Your last line is another in a long series of assertions you have been making about the inefficiency of the market in setting prices and allocating capital: 'When things are going well there is a strong tendency to suppose that financial markets can take care of themselves. Well, they can’t.' Your belief that government wise men can do a better job than the market of setting prices and allocating capital takes more than a small step in the direction of the Soviet system. You see that, don’t you, Professor? The very idea of central planning was to eliminate the volatility of the marketplace, which led to crashes, depressions and wars. Since you took your leave of academia in January to write this twice-weekly column for the Times, you have practically boasted that you do not understand why financial markets move as they do. Now, you have declared yourself a follower of Robert Shiller, whose 'important new book, ‘Irrational Exuberance’,' you say proves that the 'excess volatility' of the markets shows there is little rational connection between prices and 'any possible rational forecast of prospective profits.' Logically, this suggests that either you and Shiller are rational and markets are not, or markets are rational and you and Shiller do not understand them. Let me try and help you out. The Wall Street market is like a giant computer, Professor, one that links the judgements of everyone who is in the market, and may at any moment choose to get out, and everyone who is not in the market, but who at any moment may choose to get in it. If you have been to a racetrack, you have noticed the tote board, which changes constantly prior to a race, as the bettors place their bets. At a horse race, betting volatility increases not only when news comes to all the players at once that there has been a change of jockeys or post positions or a scratch of one of the favorites. It also occurs as bettors watch the changing odds on the tote board before placing their bets. Where one person might look at a financial asset and refuse to make a bet when the odds on the board are 5-to-1, that bet might be made if the odds went to 10-to-1. Others, seeing no chance of a profit when the odds are 10-to-1, may give it a closer look if the odds suddenly drop to 5-to-1. It takes all kinds of people to make the market, which is especially interesting as the universe of players on Wall Street, where the betting windows never really close. In the races on Wall Street, the same kind of analysis and 'play' occurs. This is why it is nonsensical for Shiller to pin the blame on 'speculators' for the 1987 market crash, because, as you say, 'the only reason any significant number of investors gave for selling stocks was – surprise! – that prices were falling.' When I put forward my argument that the 1929 crash had been caused by the increased chances of passage of the Smoot Hawley Tariff Act, any number of economists insisted this could not have been the case, because none of the sellers mentioned it at the time. I argued that even a small number of careful analysts could tip the entire market into a decline, by getting out when they had intended to stay in. You certainly can observe the dizzy swings that occur in prices when there is an unfounded rumor that takes hold among traders. In any event, I finally was told that the original E.F. (Bud) Hutton had written in his biography that the tariff act’s progress spooked him and he got out of the market at the right time. If you don’t believe surprise passage of a high protective tariff could throw a monkey wrench into global trade and the value of financial assets attached to those trades, you would of course assume the market was high because of irrational exuberance; eventually the speculative 'bubble' burst with no real news of prospective profits. I don’t know your opinion on why 1929 happened, but I assume you are with John Kenneth Galbraith and Milton Friedman in attributing it to irrationality. As for October 1987 crash, I think it can be well documented that the broad market was suddenly surprised by the decision of the Fed and the Treasury to allow a dollar devaluation – thus breaking the Louvre Accord of February 1987. Because the capital gains tax had not been indexed to protect against inflation, any weakening of the dollar would cause dramatic increases in the effective tax on capital. Right? If you don’t believe the markets care about capital gains tax and inflation when assessing prospective earnings, you will of course buy into Shiller’s bubble theory. As to the role of margin debt, I think you and Shiller should pause and consider that a shareholder’s debt can’t possibly have an effect on the price of a share. For every dollar of debt, there is a dollar of savings. If I choose to borrow against my assets to buy shares on Wall Street, believing the shares are undervalued relative to the interest I have to pay on the debt incurred, I have to find someone willing to sell me those shares, someone who believes the better play is to lend the money at interest. The value of equities cannot in any way cause 'inflation,' nor can the size of debt. For every dollar I have earned – or borrowed from someone else who has earned it – there has been something produced at the value of a dollar. Only when the Federal Reserve forces a new dollar into the banking system, with no palpable demand for it, can there be an inflation. Why is NASDAQ swinging around so crazily then? I have been advising Polyconomics’ clients for more than a year to expect crazy swings, because the Internet stocks are like newborn babies. Any little change in the weather can threaten their very lives. The brick-and-mortar companies are able to withstand the occasional flu bug, because they have hard assets that can be collateralized. The market knows these new kids can grow up to be as big as Gulliver among the Lilliputians, but little bits of news about taxation of the Internet or threats to patent laws can cause stocks to fall sharply in the morning and rebound in the afternoon. Hey, John Crudele, the financial columnist of the NYPost, last week wrote of suspicions that the Clinton Treasury and White House had inside information on what Fed Chairman Alan Greenspan was up to, and they whispered it to pals on Wall Street at just the moment the NASDAQ was bottoming out. It was no coincidence that the rebound began when Gene Sperling, who chairs the National Economic Council at the White House, confidently told reporters that everything was going to be okay. Maybe yes, maybe no. But instead of telling your readers the market is plain nuts and the government should step in to fix it, you should spend a little more time thinking about the New Economy and how it can grow mightily or how it might be strangled in its cradle. And think back a hundred years. In 1900, the buggy-whip manufacturers had high earnings and the auto manufacturers were still dreaming about them. What are you doing with the buggy whips?

Subject: Re: Responsibility From: Terri To: Pete Weis Date Posted: Mon, Aug 01, 2005 at 15:40:05 (EDT) Email Address: Not Provided Message: Thank you, Pete. I understand, but there is not enough sound guidance given and I worry about this problem for all of us.

Subject: gold or cash From: johnny5 To: Terri Date Posted: Tues, Aug 02, 2005 at 08:25:30 (EDT) Email Address: johnny5@yahoo.com Message: some say deflation and hold cash, some say inflation and hold gold, as hedge funds unwind - credit unravels, does the money supply go up or down? when has it went down in the past? In the 30's and oil shocks of the 70's how did the investor do that held dividend paying resource or commodity stocks?

Subject: Re: gold or cash From: Pete Weis To: johnny5 Date Posted: Tues, Aug 02, 2005 at 11:56:29 (EDT) Email Address: Not Provided Message: The new economics says to avoid deflation at almost all costs. The dollar will fall. That doesn't mean that assets like stocks and real estate won't deflate. But it does mean that a gallon of milk will cost much more.

Subject: Re: Responsibility From: Pete Weis To: Terri Date Posted: Mon, Aug 01, 2005 at 16:20:41 (EDT) Email Address: Not Provided Message: It's difficult to get specific information which is competent and honest (where the broker/financial advisor doesn't have conflicts). But if we had listened to Paul Krugman and Robert Shiller with regard to their general advice in early 2000, we would have gotten out of the stock markets and into cash and boosted our investments in bond funds ( because, hopefully, we would have anticipated trouble ahead in the economy with the possibility of a stock crash and realized, at the very least, the Fed would not be raising rates). So if we had taken their advice we would have locked in much of the gains (minus the taxes) which we had accrued in the 80's & 90's. Oh, well - hindsight. The question is - are we listening to them now? Because now we can take their 'general' advice and use some foresight!!!!

Subject: Re: Responsibility From: Terri To: Pete Weis Date Posted: Mon, Aug 01, 2005 at 20:28:08 (EDT) Email Address: Not Provided Message: This time may be harder, for there are no obvious retreats.

Subject: Re: Responsibility From: Pete Weis To: Terri Date Posted: Mon, Aug 01, 2005 at 21:58:00 (EDT) Email Address: Not Provided Message: At this time, my wife and I are buying a lot of 3 month treasuries (at around 3.4%). We will be buying more Permanent Portfolio and more VGPMX - over time the dollar will head lower (possibly much lower if folks like Paul Volker are correct). Like Johnny we have a lot of oil stock even though I think oil companies have an unholy alliance with this administration and government led conservation is what is needed most when it comes to energy policy. But this is the hand we are dealt. Oil is going higher and the current account with it (until the US consumer finally packs it in or Volker's financial crisis hits)- there is much less in oil reserves out there than is being reported. I have to believe our government knows this - heck its been in the NYT's and BBC (oh that's right - those are 'liberal' news outlets and they're simply not to believed). We have a government which will wait for the crisis and then try to figure a way to sell it to the American people as the fault of the 'liberals'. Oh, and we've just sold our house - got an amount I would never have dreamed of 5 years ago. We are absolutely debt free. We are going to buy a used sailboat, probably this next spring, somewhere in New England, and head to the Caribbean for the winter. Don't expect to buy another house for some years - we'll see. Prices on used liveaboard sailboats have been coming down - guess everyone is investing in real estate instead. The sailboat may not sell for much when it comes time to sell - don't care - my wife and I don't want to leave this world wishing we had done something we only dreamed about.

Subject: Gold and texas tea From: johnny5 To: Pete Weis Date Posted: Tues, Aug 02, 2005 at 08:25:07 (EDT) Email Address: johnny5@yahoo.com Message: I owned some gold funds until this last year and had a serious warren buffet type fundamental think about my investments, and I am arguing with folks over at siliconinvestor who keep telling me to buy gold now. China will buy gold, and I say OK, I have a navy ship that needs lots of oil to make planes fly and make tanks go - and right now it seems we already not letting chinese buy that oil for thier tanks and planes with green paper - yet you gonna have me believe we gonna give up the black gold for the yellow kind? Yellow gold will not make tanks go or planes fly to keep your military going - so I ask them OK chinese by some miracle dump all their green paper and get the entire worlds supply of gold shiny metal, then they come to buy UNOCAL with lots of gold tonnage and told NOPE - thats a national security risk and george bush type gives them the finger - what good is GOLD even if you cant buy the stuff you need to make tanks and planes go with it? What did the people who grew this country need, lots of land, water, wood, roads, canals, crops, beef, steel, oil, people - etc etc - could america have become third world to first world without GOLD? I think so, now of course if everyone gives GOLD much importance then you have to think about that - but when we went to IRAQ we did not do like that movie THREE KINGS and send troops to protect art, and antiques and gold, we sent them to protect oil refineries. That shows what national governments truly value. ENERGY. Again I will recall 50's korea where the service man had a gold watch and the local economy was in shambles and he wanted to buy some nookie - his seargeant and him left the base - he didn't have his american paycheck yet and all he had on his body was the watch - they go into local pawnshop and the owner tells him look around - I got gold everywhere - gold forks, gold lighters, gold gold gold, everyone bring me thier gold. When the economy collapse everyone bring in their gold to buy my can openers and matches and soap and such. The american soldier was stressing bad for some nookie, he had not had any in awhile so he lit up a joe camel cigarette and the shop owner said OH my friend - now you have something of value - he said for one cigarette you can get all the good nookie you want - hehe. Seems local hookers valued nicotine more than shiny metal - go figure. Mogambo says buy gold, many say buy gold,I did buy gold for a few years but not now - I can see the logic of buying commodities, but if I have all the oil or food in the world and china has all the gold in the world and they come to me for food and oil I cant or wont spare - even if they offer me all the gold in the universe - I will not give up my oil or food. When you are on your sailboat Pete - will the engine need OIL to run - or gold? Remember that movie WATERWORLD - OIL made the exxon valdez economy work and SAND was the barter token of choice. And people killed for just one cup of clean water.

Subject: Re: Gold and texas tea From: Pete Weis To: johnny5 Date Posted: Tues, Aug 02, 2005 at 11:52:32 (EDT) Email Address: Not Provided Message: Johnny. Our gold investments are rather small compared to our total portfolio and are meant as a hedge against dollar devaluation. I don't expect any governments to be buying gold in the future and you're right - China would have much more interested in buying up the rights to oil reserves. It's really the citizens, in countries where the local currency is tanking, who will have an interest in trading currency for gold investment. It will, IMO, likely turn into a speculative thing eventually - at which time it will be good to get out.

Subject: Who Needs Education Schools? From: Emma To: All Date Posted: Sun, Jul 31, 2005 at 18:52:26 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/31/education/edlife/hartocollis31.html?ei=5070&en=49c5aa8ef3f581bf&ex=1122955200&pagewanted=print Who Needs Education Schools? BY ANEMONA HARTOCOLLIS THE whistle-stop town of Emporia, Kan. (population 27,000), has two claims to fame: William Allen White, the Pulitzer Prize-winning newspaper editor and confidant of Theodore Roosevelt, and turning out teachers. Emporia State University was established as a 'normal' school - dedicated solely to the training of teachers - in 1863, two years after Kansas became a state. The esteem in which teaching is held there can be seen in the one-room schoolhouse maintained as a kind of shrine at the edge of campus. The National Teachers Hall of Fame is in Emporia, and tourists come to see the dollhouse models of classrooms from the early 17th century onward and to read the plaques of inductees - 70, so far. 'Teacher education on this campus is one of the more rigorous majors,' says Teresa Mehring, dean of the teachers' college, pulling out the ACT scores of entering students to prove a point that most education deans would be hard-pressed to make and defend. A visit to classes suggests that raw material is not the only difference. The Emporia State curriculum is heavy on traditional courses like 'Using Children's Literature in the Elementary Classroom' and 'Reading for the Elementary Teacher.' The college's plain-spoken mission statement: 'To develop the professional: critical thinker, creative planner and effective practitioner.' If Emporia State is a throwback to an earlier time, when preparing teachers for the classroom was a high calling, it is also a reminder of how many teachers' colleges have strayed from the central mission of the normal school. For decades, education schools have gravitated from the practical side of teaching, seduced by large ideas like 'building a caring learning community and culture' and 'advocating for social justice,' to borrow from the literature of the Hunter College School of Education, part of the City University of New York. With the ambition of producing educators rather than technicians, in the words of Hunter's acting dean, Shirley Cohen, schools have embraced a theoretical approach. But critics say that ill prepares teachers to function effectively in the classroom. Attrition statistics tell the dismal story: 14 percent of teachers leave the classroom in the first year, nearly half by the fifth year. Today, education schools face pressure to improve from all directions. A flurry of new studies challenges their ideological bias and low admissions standards. Critics now question their very existence, with competition from fast-track routes to certification threatening their long-held monopoly on training teachers. The soul-searching has accelerated with the federal No Child Left Behind Act, which demands a 'highly qualified' teacher - state certified, with a bachelor's degree and proven knowledge of subject - in every classroom by the end of this coming school year. In fact, No Child Left Behind, with its emphasis on standards and hard data, has placed national policy in direct conflict with the prevailing approach of many colleges, where the John Dewey tradition of progressive education holds sway, marked by a deep antipathy toward testing. Some analysts are now calling for teachers' colleges to follow the Emporia State model - 'to give them a lot of practical experience so they're not shocked when they come into the classroom,' says Diane Ravitch, the education historian, who is working on a book entitled 'Forgotten Heroes of American Education: The Great Tradition of Teaching Teachers.' She adds: 'There is a disconnect of professors of education just not being capable of equipping future teachers with the practicalities to be successful. And if teachers are not successful, they will not be retained; they will either move to a different district that is not as difficult or leave teaching altogether.' The idea of 'preparing excellent teachers who are excellent in their subject,' she says, has been overtaken by other concerns - 'professors wanting to be respected in the university, and teachers' colleges wanting to become places where research is done and to be agents of transformational change.' 'At the end of the day, what would principals and parents value most?' just what do education schools teach? in a report published last year that put many educators on the defensive, researchers found that top education schools were not equipping their students to deal with the standards movement - nor giving them an understanding, going back to classical sources like Plato and Aristotle, of what constitutes an educated person. David M. Steiner, co-author of the report, is director of arts education at the National Endowment for the Arts and on leave as department chairman in educational administration, training and policy studies at Boston University. With his associate Susan D. Rozen, he reviewed the curriculums of 16 teachers' colleges, 14 of them among the nation's best, as ranked by U.S. News & World Report. Since there is little data on which educational approach translates into effective teaching, they looked for a balance in material. Instead, they found little effort to present opposing schools of thought. The general posture of education schools, they concluded, was countercultural, instilling mistrust of the system that teachers work in. Among the texts most often assigned were Jonathan Kozol's 'Savage Inequalities,' an indictment of schooling in poor urban neighborhoods, and writings by Paulo Freire, who advocates education to achieve political liberation. Theories of how children learn, like the multiple learning styles advocated by Howard Gardner of Harvard, were more likely to be taught than what children should learn, like the Core Knowledge curriculum advanced by E. D. Hirsch, a professor emeritus at the University of Virginia. Finally, Dr. Steiner wrote, prospective teachers were not being taught methods that would help their students do well on standardized tests. Most texts used to teach reading had been written by proponents of whole language methods, and there was only fleeting exposure to the kinds of scripted, phonics-based curriculums, like Open Court, that are increasingly being adopted in the nation's schools. 'There is a vision here,' Dr. Steiner said in an interview, 'and it's all just one vision. It is a synthesis of what we call the progressivist vision and the constructivist vision' - that is, the theory that it is better for children to construct knowledge than to receive it. But, he added, 'The counterview has an equal and much longer tradition - the responsibility to engage the student, but to engage the student as the authority.' To suggestions that his report was itself ideological, and conservative, Dr. Steiner says he's actually an old-fashioned liberal. On Aug. 15, Dr. Steiner will step directly into the fray, as new dean of education at Hunter College. At Hunter, he says, he hopes to prepare teachers who 'are scholars of their craft,' both proficient in methods and curriculum and able to think in a sophisticated way. Given all the sound and fury, there is surprisingly little disagreement with that. 'One of the biggest dangers we face is preparing teachers who know theory and know nothing about practice,' acknowledges Arthur Levine, president of Teachers College at Columbia, one of the leading avatars of progressive education. Historians note that Dewey himself had such concerns in the 1920's. But, Dr. Levine says, that is not what happens at strong - and philosophically diverse - education schools like Stanford, the University of Virginia, Alverno College in Milwaukee and Emporia State. 'They have a clarity of mission,' says Dr. Levine, who is conducting a two-year study on the quality of education schools that will be published in November. 'They know what they're trying to do. Their definition of success is tied to student learning in classes taught by those teachers.' It used to be that if you wanted to become a teacher, you went to an education school. Now a growing movement holds that these schools have become irrelevant, especially in urban areas. Alternative programs to certification are now offered in 47 states and the District of Columbia. Organizations like Teach for America, a Peace Corps model that puts new college graduates in troubled schools for two-year stints, and the New York City Teaching Fellows, which promotes teaching as a second career, are taking it upon themselves to train teachers. Recruits with no experience are given a quick and dirty version of education school - a few weeks of classroom management, learning theory, literacy (the teaching of reading and writing), diversity training - then placed in the classroom, with coaching from mentors. People who enter through such routes are not exempt from state requirements, like a master's degree in education in New York; the advantage is they can teach and study for the degree at the same time. Commercial organizations are also getting into the act. Harold O. Levy, the former New York City schools chancellor who helped found the Teaching Fellows, has developed an online teaching college for Kaplan Inc., the test-prep company. Similarly, David Levin, co-founder and superintendent of the KIPP schools, a network of 38 charter schools from Houston to the South Bronx, is working on a teacher-training program meant to produce the kind of teachers he needs in his schools. 'That would be our dream, to credential our own teachers,' says Mr. Levin, who adds that he has found 'a sizable gap between what people are learning in schools of education and what they need in public schools.' Where education schools fall short, he argues, is in conveying the skills you might learn in business school: how to manage time, how to build motivation and evaluation into every lesson. 'You need whatever the theory is, and you need to put it into practice,' he says. 'There needs to be immediate feedback on that practice.' There is consensus that apprenticeship along the lines of medical school - students learn the science of medicine in the classroom, then practice it in a hospital, supervised by faculty doctors - is a better model than traditional student teaching, which is often done for a semester or less and is loosely supervised, if at all, by university faculty. At Emporia State, undergraduates spend their entire senior year in surrounding school districts, including Olathe, Topeka and Kansas City. They are assigned to observe or teach classes during regular school hours. They take college classes after hours in the districts they are assigned to, not on campus. By the second semester, they are expected to function as head teachers. Supervising professors know the curriculum of those districts as well as any district employee. 'I know Olathe's program inside out,' says Tara Azwell, a professor who until recently supervised students there. 'I could step into any classroom and teach it.' Ms. Azwell says medical training is a good analogy for what Emporia State interns go through. 'They get no sleep,' she says. 'They're working 24 hours a day. There are those who have no money because they can't work a job, so they're not eating. They're in a classroom 8 to 4 every day. They really think they're going to die.' Education schools are expected to do some things 'that it's absurd to expect them to do,' says Dr. Levine. One is to send teachers into the world 'as a fully formed product,' as if they needed no further mentoring, he says, and another is 'to change the population of people applying to become teachers.' The most prestigious programs - Bank Street College of Education, Columbia, Harvard - attract the best students, but most teachers do not come from these. For at least a decade, students who intend to major in education have had among the lowest SAT scores of all college-bound seniors - in 2004, they ranked 19th of 22 intended majors, two points in combined verbal and math scores below those who planned to major in agriculture. Even 'undecided' ranked higher. And according to the American Enterprise Institute for Public Policy Research, those who leave the profession during their first few years have higher scores than those who stay. An institute report also shows that the weaker the undergraduate college, the more likely its students will end up teaching as a career. Over the last six years, prodded by federal requirements to publish test results, teachers' colleges have begun screening students before or soon after admission for the ability to pass state certification exams. These exams are notoriously easy, says Kati Haycock, director of the Education Trust, a policy institute; as a result, many education schools now have passing rates near 100 percent. But those rates say little about the quality of their programs. Hunter, for instance, has a 98 percent passing rate on the state's required Liberal Arts and Sciences Test, but students must register for the test their first semester and are not allowed to continue if they fail it. The City University of New York, which produces a third of the city's teachers, hopes to attract a higher caliber of student by starting a Teacher Academy modeled after its successful Honors College, which uses free tuition and other perks to try to lure students who might go to Ivy League universities. The academy will open in fall 2006 with 300 freshmen majoring in mathematics and science, subjects that are short of teachers. Students will take education courses and spend 1,000 hours over four years - as opposed to the usual 250 or less - in public school classrooms learning methods, observing and teaching. The academy is an experiment in 'reforming' the education of teachers at CUNY, says Selma Botman, executive vice chancellor for academic affairs. 'What we thought about is why teachers are leaving teaching, why the retention rate is not as strong as we would like it, and given the fact that CUNY educates so many teachers, how can we educate and train teachers so they stay in teaching?' Among the historically intractable problems in retaining teachers are low status and low pay, says Anthony Carnevale, a senior fellow at the National Center on Education and the Economy. Because the public sector will never pay as much as the private, he says, and because unions have resisted extra pay for high-demand skills like math teaching, the gap in ability between teachers and other white-collar professionals will become bigger, not smaller. In Mr. Carnevale's bleak picture, learning will no longer be an act of discovery but a process of drilling in predetermined principles of success. Teachers will become part of a docile force of assembly-line workers, trained to execute someone else's plans, with little room for serendipity. Some teachers complain that this is already happening in urban systems, including New York's. In this model, education schools will have to compensate for a meager talent pool by idiot-proofing teacher training. 'You tie their teaching methods to standards so that in a very aggressive way they learn to teach to the results of those tests, like a soldier,' Mr. Carnevale says. 'The voluntary military didn't always get the best of human capital. But what you did was make the training so rigorous it didn't matter.' To Mr. Carnevale, Emporia State is an aberration. People choose to teach in states like Kansas, Maine or North Dakota because they have fewer economic opportunities than do people who live in New York or Chicago, he says. 'You've got an economic development problem in Kansas,' he says, 'so you have these vestiges of talent in states that have no jobs for college graduates.' This recalls an earlier era in the profession, when talented women and minorities became teachers because they had few other options. Emporia State officials confirm the demographic forces. Most students, says Dean Mehring, are women who are the first generation in their families to get a college education. Most come from small agricultural towns in western Kansas, where job opportunities are limited. They are women like Jan Alexander, who grew up in Ulysses. Her brother, Brian, lives in Ulysses and works at County Feeders, which boasts that it is the biggest feedlot in the world. Ms. Alexander, a top student at Emporia State, has been to New York several times and dreams of moving there to teach some day. If she does leave Kansas, she will be the exception. About 80 percent of students remain close to home. Emporia State classes strive to balance the theoretical with the practical. Professors not only talk about the theories behind reading, writing and literature, but also demonstrate in painstaking detail how to teach specific lessons. In an introductory reading class last spring, Professor Azwell urged her students to listen to the language of children's literature. Her enthusiasm for the books she had selected, and was passing out to her students, was contagious. Of 'The Ghost-Eye Tree,' she said, 'It's a great scary story for little kids.' Of 'Flossie and the Fox,' she said, 'I love this one because it uses wonderful dialect. One character speaks Southern dialect, and the other one speaks very literary language, so the contrast is great.' She tells her students what a professor once told her: that a teacher should know at least 300 children's books intimately and be able to pick the right book for the right child at the right moment. Ms. Azwell says she believes in whole language, the system of teaching children to read by exposure to literature, but she does not reject phonics. The politics of teaching reading, she says, has turned whole language into a caricature of how she learned to teach reading. 'To me, phonics was never not part of whole language,' she said. 'I was taught all the language cuing systems: graphophonics, sound-symbol relationships; semantic, the meaning system; syntactic, the language structure system. So phonics is an integral part of that.' How do Kansas schoolchildren fare? Its eighth graders rank above average in reading and math nationally, and fourth graders rank second in the nation in math. While Emporia State teaches the children of farmers, Lehman College in the Bronx, part of CUNY, teaches the children of immigrants. A majority of its education students, says the dean, Annette Digby, are part time and already teaching on a temporary or fast-track license, without going through education school. One undergraduate course, 'The Teaching Profession: Birth to Grade Six,' is described in the catalog as a 'study of the professional lives of teachers and the diverse roles they assume in urban schools.' A graduate course, 'Ethics and Professionalism in Childhood Teaching,' is a 'study of the childhood teaching profession, its multiple historical, philosophical and social foundations.' Even the description of Lehman's basic reading course for undergraduates, 'Understanding and Documenting Young Children's Literacy Development and Concepts of the World Around Them,' has a theoretical tone. In one of the last sessions of the school year, a mix of graduate and undergraduate students sat in small groups at hexagonal tables, the way they had been taught to seat children in the classroom, for a seminar on how to apply what they had learned and solve the problems that came up during student teaching. In perfect teacher script, Prof. Christy Folsom had written the day's agenda on the chalkboard: '1. Quiet write. 2. Share. 3. Go over portfolio. Questions.' Dr. Folsom is a popular faculty member known for a down-to-earth manner and skill at teaching lesson plans. The mood was relaxed and trusting. She asked her students to write and then talk about their best and worst experiences in the class, and in education school. Sharon Gallagher, a 33-year-old Irish immigrant, was working as a waitress and bartender while attending Lehman for a bachelor's degree in history with an education minor. As one of her best experiences, she described how she had learned the psychological differences between third and first graders. She had been taught a system of behavior management, using color-coded warning cards, in a third-grade class and had tried to apply the same system to first graders. But when she gave warning cards to the first graders, they started to cry. She realized that positive reinforcement worked better at that age than punishment. When it came to discussing the weaknesses of education school, Ms. Gallagher and her tablemates, Melissa Noble and Carmen Pucillo, fellow seniors who also planned careers as teachers, were unanimous. 'I didn't feel I learned a lot about literacy,' Ms. Gallagher said. 'Especially balanced literacy,' Ms. Noble interjected, referring to the latest curriculum shift in the New York City school system. 'I was like, 'O.K., what do I do?' ' Ms. Pucillo was baffled by pedagogical questions like when children should stop inventing spelling and spell by the rules. 'I just didn't get the answer,' she said. 'I actually bought a book and started reading on my own,' Ms. Gallagher said. Ms. Noble said she, too, had bought a book, 'Guided Reading,' by Irene C. Fountas and Gay Su Pinnell, which had been recommended by the 'cooperating teacher' she worked with as a student teacher. At Lehman, the primary course in teaching reading is integrated with teaching social studies. 'We got more focused on social studies than we did literacy,' Ms. Noble said. Dr. Folsom acknowledged that reading and writing instruction was a weakness at Lehman and said that beginning in the fall, social studies and literacy will be offered as separate courses. While Dr. Folsom's class was focused on practical skills, 'Ethics and Professionalism in Childhood Teaching' exemplified the research-and-theory wing of education. On this day, teams of students were presenting their final projects, a 45-minute report on 'an issue or dilemma facing the teaching profession.' They had been asked to conduct what the professor called 'in-depth research,' using at least two Internet sources and two journals. One team of three students had chosen the topic of violence in schools, including a widely publicized incident in which police officers were called to a class in St. Petersburg, Fla., because a 5-year-old girl was having a temper tantrum. The group screened a news videotape of the girl being put in handcuffs and of her mother defending her behavior. They then talked about it. As an African-American sensitive to discrimination, one student, Tarsheen Jackson, said, 'I thought it was a bit much for all those officers to come in.' On the other hand, she continued: 'I don't think children will learn a lesson if their parents are talking up for them.' Another student in the audience, Sarah Perone, spoke up: 'I think if I saw my 5-year-old getting arrested by four police officers, I might be a little bit defensive also.' Aliex Ross, the professor, skirted the issue of handcuffing a child. 'Look at the power and control the child gained by throwing a tantrum,' Dr. Ross said instead. 'As professionals, we know there's a lot more to the story.' The next presentation was called 'Balanced Curriculum' - the coordination of standards and testing with students' abilities and needs. The team began by asking, 'What is a balanced curriculum?' They invited the audience to make suggestions. ('An equal amount of time distributed between all subjects' was one.) Then they revealed that they had looked for the answer in the dictionary. 'We decided to look up 'balance' and 'curriculum' because 'balanced curriculum' is not in the dictionary,' Karen Dhillon, one presenter, told the class. Ms. Dhillon recited the dictionary definitions of both words - equilibrium and harmony, for the word 'balance'- then stacked plastic blocks on a toy scale. She tried repeatedly to balance the blocks, without success, as she commented on how hard it was to maintain a balanced curriculum. Both presentations got A's. 'They're all going to be fabulous teachers,' Dr. Ross said later. 'They're really reflective. That's what really makes a competent educator, is someone who really reflects on their practice.' After class, Ms. Dhillon was less upbeat. She had come into teaching through Teach for America, and had been teaching math for two years at Middle School 399 in the Bronx while working toward her master's, and found it demoralizing. Though she did not mention it, only 9 percent of students at M.S. 399 meet city standards in math. She said she had trouble teaching the new math curriculum imposed by the city and had resorted to lying to her superiors, pretending she was using it. She looked embarrassed by this bit of subterfuge. 'But I'm leaving teaching,' she blurted. 'I just don't love it.' In June, not long after that conversation, she earned her master's in education. By then it was already too late. Anemona Hartocollis is a Times reporter and the author of 'Seven Days of Possibilities: One Teacher, 24 Kids and the Music That Changed Their Lives Forever.'

Subject: As you sow, so you shall reap? From: Pancho Villa To: All Date Posted: Sun, Jul 31, 2005 at 17:49:37 (EDT) Email Address: nma@hotmail.com Message: Inviting the avoidable J BRADFORD DELONG MAY BE it is excessive skittishness, or perhaps it is the result of global financial volatility in recent years — crises in Mexico in 1994-95, East Asia in 1997-98, Russia in 1998, and then in Brazil, Turkey, and Argentina — but we economists are more concerned about monetary affairs and possible future disasters than we have been in many decades. This month, the Switzerland-based Bank for International Settlements (BIS) was the latest to worry aloud about the financial risks that the world seems to be building into its future. “[A]ll the countries hit by financial crisis... experience[d] a very sharp slowdown,” the BIS says of the recent past. It then cites “global current account imbalances,” particularly “the US external deficit,” describing it as “unprecedented for a reserve currency country to have a current account deficit of such magnitude.” In short, the world has become “increasingly prone to financial turbulence.” The BIS hints at the possibility of a financial crisis that, with the US at its centre, would dwarf by at least an order of magnitude all crises that have occurred since 1933. Yet, in response to this risk, the BIS issues the standard textbook recommendations. Countries whose policies and economies are out of balance should change their policies, thereby restoring balance: “deficit countries should reduce the rate of growth of domestic spending below that of domestic production. Allowing their currencies to depreciate in real terms would make their products more competitive, and also provide an incentive for production to shift out of non-tradables into tradables.” This is economists’ polite code for the message that the US must gradually cut its budget deficit, while other countries — like China and Japan — must gradually let the value of the dollar fall and that of their own currencies rise. So the BIS proposes nothing new or particularly attention-grabbing. But if we turn to America’s government, we see an enormous pretence that the current budget deficit is not a problem. As Stan Collender, a noted observer of the US federal budget, has commented, “No one with federal budget responsibilities actually seems to be interested in the budget.” This is not “because the budget committees are too busy....[T]he House and Senate...are not doing much of anything...[because] they don’t want to.” Within the Bush administration, director of the office of management and budget Josh Bolten “has been virtually invisible,” while “the president and vice-president...avoid talking publicly about the budget.” Let us be clear on this point: it is not that politicians who wish to take the lead on fiscal consolidation are failing to gain traction; it is that there are no politicians — at least none with any agenda-setting influence — who are even trying to steer the US towards adopting a more responsible fiscal policy. This is a grotesque failure of leadership. Governments that pursue policies — whether US fiscal laxity or China’s just-removed exchange-rate peg — that create unsustainable imbalances do so for what they regard as important political reasons. Appeals to them to change their policies, and thus contribute to the common global good of financial stability, are fruitless unless others are seen to change their policies, act responsibly, and so contribute to the common good as well. International policy coordination requires a leader, a first mover. But, while the US, as the world’s largest economy, is best suited for this role, it has so far failed to play its part. Treasury secretary John Snow has spent almost no public time on the budget, but a lot of public time on China. Republican political operatives care far less about national savings than they do about manufacturing-sector job losses. “So what else is new?” you may ask — and with good reason. The list of issues on which the Bush administration has failed to lead is a long one, and failure to take steps to diminish the risks of future financial catastrophe cannot rank very high. The entire Bush administration has been a succession of leadership failures, so why harp on its poor financial management? From a purely practical point of view, one reason is that ensuring global financial stability is an issue on which real progress can be made relatively easily. The Bush administration may not care that deficit reduction is the right policy for America, but it might care far more if the issue were framed as a prerequisite for policy changes abroad that diminish pressure from imports on domestic manufacturing employment. (The author, professor of economics at the University of California at Berkeley, was assistant US treasury secretary during the Clinton administration) http://economictimes.indiatimes.com/articleshow/1180534.cms

Subject: Re: As you sow, so you shall reap? From: Terri To: Pancho Villa Date Posted: Sun, Jul 31, 2005 at 18:36:59 (EDT) Email Address: Not Provided Message: An excellent essay, leaving us with no particular recouse however for at least through the election in 2006 there will be no meaningful budget tightening. Besides, the majority in Congress would not opt for austerity during a Fed tightening sequence. Then, we must hope all is well for another 18 months. What I do not see is an reason there should be a crisis in the near term, so I am optimistic for a while.

Subject: Re: As you sow, so you shall reap? From: Pete Weis To: Terri Date Posted: Sun, Jul 31, 2005 at 21:14:11 (EDT) Email Address: Not Provided Message: We'll be saying there is no 'crisis in the near term' right up until the crisis finally happens!

Subject: Greenspan on Crisis From: johnny5 To: Pete Weis Date Posted: Sun, Jul 31, 2005 at 22:01:53 (EDT) Email Address: johnny5@yahoo.com Message: Didn't he say that we wouldn't know we were over the cliff until we started to fall? Or we wouldn't know we were in a bubble until it was already too late? I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said. Alan Greenspan The Fact that our economical models at The Fed, the best in the world, have been wrong for fourteen straight quarters, does not mean they will not be right in the fifteenth quarter. Alan Greenspan

Subject: The Cows Are Thriving From: Emma To: All Date Posted: Sun, Jul 31, 2005 at 13:24:16 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/31/nyregion/31vets.html The Cows Are Thriving. Now How About Their Doctors? By PETER NORLANDER LOWVILLE, N.Y. - On a recent Friday afternoon, in a county where cows outnumber people by more than two to one, Dr. Mark J. Thomas picked up three liters of intravenous fluid from his roving office: the back of a 2002 Ford pickup truck. His patient at the Hilltop Farm was a sick 12-year-old cow, one of more than 60,000 dairy cattle that he and the five other veterinarians at the Countryside Veterinary Clinic provide care for in this rural upstate area. 'You need to cover every emergency call,' Dr. Thomas said, as he prepared to thrust a large needle into the jugular vein in the cow's neck in order to administer the fluid. For Dr. Thomas, who works 10-hour days five days a week and is either on duty or on call every weekend, the calls do not stop. 'There's always work to do,' he said. Recently, he recruited two young veterinarians to help in his practice. But Dr. Thomas, 34, would love to have added another vet. As it is, he says he is lucky that his practice can provide emergency care and health visits to meet the needs of most of the 250 dairy farms in Lewis County, as well as other farms in northern Oneida and southern Jefferson Counties, in central New York. His situation is not uncommon. Though the country's veterinary schools produce about 2,500 veterinarians every year, the majority are choosing to devote their practice to the care of small animals, which provides a more lucrative, comfortable lifestyle than that of the rural vet, whose job often requires treating animals on farms rather than in an office. And the hours are long, with a day starting before the sun comes up and ending long after it sets. If trends continue, there will not be enough veterinarians to care for the animals that end up on the country's dining tables, according to a continuing study by researchers at Kansas State University. In 2007, the shortage of such veterinarians is predicted to be 656 and will continue to grow significantly in the following years. With heightened worries about potential terrorist threats to the country's food supply and concerns about animal-borne diseases, the lack of animal doctors is alarming, the researchers said. 'Our increasingly global food supply system requires more inspections and certifications for food exiting and entering our borders,' said one of the researchers, Dr. Bruce Prince, a professor of management at Kansas State University and one of the authors of the study. In 2003, Congress approved a bill that would provide academic loan repayment for veterinarians working in underserved areas, but has not provided funds for the program. At Hilltop Farm, which has more than 300 head of cattle, Dr. Thomas spent a half-hour with the sick cow, which was dehydrated and had an infection, and pumped a hydrated mixture of cow meal into its stomach. After he finished with the cow, which is kept in a different pen from the healthy dairy cows, Dr. Thomas scrubbed the manure off his knee-high rubber boots with soap and a high-pressure hose, to prevent the spread of diseases, before he moved along to the next farm. In addition to emergency calls, private practice veterinarians are at the front lines of protecting human health from threats that originate as animal diseases, including avian flu, monkeypox and hantavirus, according to Dr. Daryl V. Nydam, a veterinarian and an epidemiologist with the New York State Animal Health Diagnostic Center at the Cornell University College of Veterinary Medicine. 'The shortage of appropriately trained veterinarians is really key,' he said. 'We can't do it as we did 20 years ago.' The romantic notion of a veterinarian capable of treating 'All Creatures Great and Small,' depicted in James Herriot's 1972 book, is growing out of fashion as veterinary students are forced to specialize. To a large extent, the rural or suburban background of aspiring veterinarians will determine their path. 'As far back as I can remember, I just always wanted to be a veterinarian for dogs and cats,' said Elizabeth Lutz, 23, who grew up in Seaford on Long Island, and is entering her third year at the Cornell College of Veterinary Medicine in the fall. Ms. Lutz, who is working this summer at Mid Island Animal Hospital in Hicksville on Long Island, said her exposure growing up was almost exclusively to small animals. 'I've grown up my entire life with one or two dogs, tortoises, parakeets, gerbils, hamsters, and fish, and almost any injured or unwanted animal except for snakes and cats,' she said. But for Dr. Deanna Fuller, who graduated from the veterinary college at Ohio State and recently began working with Dr. Thomas at Countryside, growing up on a cattle ranch in southeastern Ohio made her want to work with big animals. 'I love being outside and being in the barn every day,' Dr. Fuller said as she helped Dr. Thomas adjust a milk harvesting system at the 200-head Hanno Farm. She added that 'it can be a big challenge to go into this industry' for those who did not grow up on a farm or were not prepared for the odors, flies and the inevitability of stepping in cow manure. Dr. Thomas, who with his wife, Tracey, has three young daughters, remembers working 12-hour days and 70-hour weeks when he joined the Countryside practice eight years ago. But as the size of farms grew, some of the work of large-animal vets was passed on to nonveterinarian farm staff members. Dr. Thomas teaches farmers and farmhands how to give a cow follow-up treatment, including intravenous fluids or stomach pumps, that once required a follow-up visit. He does much of his teaching in Spanish, as many of the farmhands are immigrants. Dr. Thomas and the other veterinarians play an important role in a place where dairy-related industries are the largest employer. Cream cheese produced in Lowville is sold in the United States, Israel, and South America. The Kraft Philadelphia Cream Cheese processing plant, which is next door to the Countryside clinic, buys much of the milk produced in Lewis County. When he returned to the vacant parking lot at Countryside, Dr. Thomas removed his rubber boots and coveralls, restocked supplies in the back of his truck and, as the sun began to set in Lowville around 8:30 p.m., finally headed home.

Subject: Housing and Economic Growth From: Terri To: All Date Posted: Sun, Jul 31, 2005 at 13:18:30 (EDT) Email Address: Not Provided Message: Though housing has been most important for growth in the economic cycle, we should not forget commercial real estate, and vehicles along with other lerge ticket consumer items. Also, health care, utilities, and financial service sectors have been growing well. We are not wholly depending on housing for economic growth, and the economy may be able to continue to grow reasonably as long as housing does not simply stop growing as opposed to moderating. We will find whether this happens in Britain, Australia and the Netherlands.

Subject: Re: Housing and Economic Growth From: Pete Weis To: Terri Date Posted: Mon, Aug 01, 2005 at 10:26:34 (EDT) Email Address: Not Provided Message: From The Financial Times: Slowing UK economy may force rates cut By Friederike Tiesenhausen Cave, Economics Reporter Published: July 31 2005 20:27 | Last updated: July 31 2005 20:27 The Bank of England will this week cut interest rates, investors and economists believe, exactly a year since it last raised the cost of borrowing to cool the housing market. Expectations have grown amid mounting evidence that the economy has slowed sharply, producing four quarters of weak growth and sluggish consumer spending and plunging the manufacturing sector back into recession. Financial markets have priced in a 25 basis points cut which would take rates to 4.5 per cent, marking the first change since last August when the Bank raised its main rate to 4.75 per cent. The move, which would come at the MPC's 100th meeting since the Bank was given independence over monetary policy in 1997, would also mark a turn in the British interest rate cycle after two years of rate tightening. It would intensify pressure on the European Central Bank, which is also publishing its August interest rate decision on Thursday, to take similar action to stimulate the economy. However, the ECB is expected to keep its main rate on hold. A Reuters poll of 47 economists found that 43 thought the Bank would cut interest rates this week. Yields on short-sterling contracts have also fallen sharply over the past month. Most respondents said rates would stay at 4.5 per cent throughout the year but financial markets have already priced in another cut to 4.25 per cent by December. City economists divide into three factions. The largest camp argues the Bank will ease interest rates on Thursday and may make a further cut a few months later but that the economy will recover without the need for further more aggressive reductions. Another smaller camp thinks the weakness in consumer spending is going to persist for some time and that more sustained interest rate cuts will be necessary. The smallest camp believes no rates cuts are necessary because the UK economy is likely to shrug off the weakness in consumer spending in the second half of the year.

Subject: More borrowing needed to close gap From: Pete Weis To: All Date Posted: Sun, Jul 31, 2005 at 12:06:56 (EDT) Email Address: Not Provided Message: JUL 27, 2005 washingtonpost.com Pay Lags Behind Inflation Overall Economy Keeps Growing, Commerce Dept. Says By Nell Henderson Washington Post Staff Writer Saturday, July 30, 2005; D01 Workers' pay and benefits rose more slowly than inflation in the second quarter, even as the U.S. economy expanded at a healthy pace, the government reported yesterday. Employers' costs for wages, salaries and benefits rose 0.7 percent in the quarter, the same pace as in the first quarter and the smallest gain in six years, the Labor Department said. Meanwhile, rising energy costs helped push consumer prices up at an annual 3.3 percent rate in the second quarter, while the economy grew at a 3.4 percent annual rate, the Commerce Department said in a separate report. Together, the reports portrayed an economy that continues to produce more goods and services even while workers' pay gains are getting smaller, nearly four years after the end of the most recent recession. Businesses are holding down the growth of their labor costs through new technologies and management practices. 'The economy's doing fine, except if you figure in working families,' said Jared Bernstein, senior economist at the Economic Policy Institute, a think tank focused on labor issues. 'We're posting great numbers in aggregate demand, yet the lousiest on record for wage growth.' Stock prices fell after the reports were released, as many investors worried that the inflation figures might prompt the Federal Reserve to raise short-term interest rates more aggressively in coming months to tamp down price pressures. The 3.3 percent increase in prices in the second quarter compares with a 2.3 percent rise in the first quarter. But Federal Reserve officials favor a Commerce Department measure of inflation that excludes food and energy prices. That price index rose at a 1.8 percent annual rate in the second quarter, down from 2.4 percent in the first quarter and within the Fed's comfort zone. Fed policymakers also follow labor costs closely for signs of inflationary pressures. The Labor Department's employment cost index report showed no cause for such concern. Over the past year, that index -- a measure that includes wages, salaries and employers' contributions to pensions, health insurance and other benefits -- rose 3.2 percent, the smallest increase in nearly six years. The slowdown partly reflects subdued growth in wages and salaries. They rose 2.4 percent in the year that ended in June -- the smallest gain since the government began collecting such information in early 1982. But it also reflects sharply reduced growth in benefit costs, as many employers have cut their pension contributions and shifted more health insurance expenses to their employees, analysts said. Many companies have also trimmed their benefit expenses by using more contract labor. Benefit costs rose 5.1 percent in the year that ended in June, the smallest yearly increase since late 2002. Benefit costs rose just 0.8 percent in the second quarter, down from a 1.2 percent advance in the first quarter. Wages and salaries rose 0.6 percent in the spring, same as in the winter. Economic growth slowed a bit in the second quarter, according to the Commerce Department's first estimate of the increase in gross domestic product, or the value of all goods and services produced in the United States. The expansion at a 3.4 percent annual rate in the spring followed a 3.8 percent annual rate in the winter. The GDP figures are adjusted for inflation. The first estimate is based on incomplete data and is subject to revision. The Commerce Department also released revisions of its GDP figures for the past three years, showing that the recovery from the 2001 recession was slightly weaker than previously reported while inflation was slightly higher. For example, the economy grew 4.2 percent last year, according to the new figures, down from the 4.4 percent that previously was thought. Some economists believe economic growth is picking up now, propelled by strong consumer spending on autos and real estate, as well as rising business investment in equipment and software. Others, however, worry that rising oil prices will dampen spending over time. Fed officials estimate that higher energy costs will shave about 0.75 percentage points off the economy's growth this year. Growth also could be dampened in coming months if rising interest rates cool the red-hot housing market, as some analysts expect.

Subject: Competitiveness: A Dangerous Obsession (Part II) From: Pancho Villa To: All Date Posted: Sun, Jul 31, 2005 at 09:12:40 (EDT) Email Address: nma@hotmail.com Message: Michael Lind: Explode the myths of global competition In today's global economy, any job can be performed anywhere. In order to compete in a global labour market, all students in advanced industrial countries need to be highly trained in science and mathematics. In order to compete in the global economy, the advanced industrial nations must downsize generous welfare states. The above represents something like the conventional wisdom about the global economy, the future job market and the welfare state. There is only one problem: every assertion in the preceding paragraph is wrong. Let us start with the first assertion: 'In today's global economy, any job can be performed anywhere.' This is false or, at best, only a half-truth. All economies, even very open ones, have both a traded sector that is exposed to foreign competition and a non-traded sector that is insulated from it. Manufacturing and agriculture tend to be in the traded sector. A growing number of services, from accounting to telephone operations, have been outsourced as well. But according to a recent study by the McKinsey Global Institute, only about 11 per cent of the world's service sector jobs can be performed remotely. Most services, such as home construction and hospital care, must by their very nature be provided by workers in the same location as their customers. In advanced industrial economies, the number of workers in the traded sector exposed to foreign competition tends to diminish over time. When an industry in the traded sector outsources, unemployed workers tend to get new jobs in the non-traded domestic service sector. Workers in the non-traded service sector, such as nurses, may face competition from immigrants for jobs in the national labour market but they are not competing with foreign workers in a global labour market. This brings us to the second misconception: 'In order to compete in a global labour market, all students in advanced industrial countries need to be highly trained in science and mathematics.' This, too, is false. According to the US labour department, the 10 fastest-growing occupations in the US in 2002-2012 are the following: 'medical assistants; networks systems and data communications analysts; physician assistants; social and human service assistants; home health aides; medical records and health information technicians; physical therapist aides; computer software engineers, applications; computer software engineers, systems software; physical therapist assistants.' The future job outlook in other industrial democracies with service economies and ageing populations is similar. It is true that four out of 10 of the fastest-growing occupations require proficiency with computers. But many of these jobs are vulnerable either to outsourcing or advances in automation. By contrast, the work of medical assistants, home health aides and physical therapists cannot be outsourced or performed by machines, barring radical advances in robotics. In the foreseeable future, nurses will outnumber computer technicians in the US and similar countries. It is absurd to tell the nurses of tomorrow that, in addition to being literate and numerate, they need to study trigonometry in order to compete with Indian and Chinese rivals. If particular nations can benefit disproportionately from technological progress, then it may be wise for governments to promote education and employment in scientific and technical fields. But scientists and engineers will never be more than a minority of the workforce in any country, and it is highly misleading to suggest otherwise. The third misconception about global competitiveness is this: 'In order to compete in the global economy, the advanced industrial nations must downsize generous welfare states.' The premise is that generous welfare states prevent high-wage countries from competing with low-wage countries such as China and India in traded-sector industries. But scaling back or abolishing the welfare state would do nothing to make the workers in a rich nation's traded sector better able to compete with labour costs in the developing world, unless workers were willing to work for Indian or Chinese wages. Far from being handicapped by big government, the countries with the world's biggest welfare states are flourishing in the global economy. According to the World Economic Forum's Global Competitiveness Report, the most competitive economies in the world are, in order, Finland, the US, Sweden, Taiwan, Denmark and Norway. Government consumes around half of gross domestic product in all of these countries, apart from Taiwan and the US, where the combined federal-state share of GDP is slightly more than 30 per cent. (The US government share of GDP is much higher when tax deductions and exemptions for public purposes are counted.) What is more, on a per capita basis from 1990 to 2002, Sweden and Finland had the same 2 per cent growth rate as the US. The truth is that the scale and scope of national welfare states is far less constrained by the global economy than many believe. Whether a country has a generous or stingy welfare state depends chiefly on its internal politics and traditions. It is time, then, to replace the conventional wisdom. In the 21st century, most workers in advanced industrial nations will work in the non-traded domestic service sector. Most will not compete with workers in other countries. And a generous welfare state need not be a hindrance to competitiveness. These statements are not as familiar as the platitudes that make up the conventional wisdom. But they happen to be true. The writer is Whitehead senior fellow at the New America Foundation FT Thursday July 28 2005

Subject: Competitiveness: A Dangerous Obsession From: Terri To: Pancho Villa Date Posted: Sun, Jul 31, 2005 at 12:29:02 (EDT) Email Address: Not Provided Message: Interesting essay for us to think about.

Subject: Dreams Suspended by Segregation From: Emma To: All Date Posted: Sun, Jul 31, 2005 at 07:38:50 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/31/education/31school.html A New Hope for Dreams Suspended by Segregation By MICHAEL JANOFSKY FARMVILLE, Va. - Warren Brown was about to enter first grade in 1959 when officials chained up the public schools in Prince Edward County rather than allow black children to sit beside white children in a classroom. Without the resources to send him away, his mother kept him at home for four years, until she found a local church offering classes to black children. Mr. Brown graduated from high school in 1972, winning basketball scholarships from three colleges, only to turn them down because he feared the academics would have been too challenging. 'I didn't get a proper foundation,' he said. 'If you're not prepared, what good is the school going to do for you?' This fall, however, Mr. Brown, at the age of 51, plans to go to college to study criminal justice. Five decades after Virginia ignored the actions of Prince Edward County and other locales that shut down their public schools in support of segregation, the state is making a rare effort to confront its racist past, in effect apologizing and offering reparations in the form of scholarships. With a $1 million donation from the billionaire media investor John Kluge and a matching amount from the state, Virginia is providing up to $5,500 a year for any state resident, like Mr. Brown, who was denied a proper education when public schools shut down. So far, more than 80 people have been approved for the scholarships, and the number is expected to rise. Several thousand are potentially eligible, many of them now well into their 60's. Rita Moseley, 58, was about to go into the sixth grade when the schools were closed. Her mother sent her more than 120 miles away to Blacksburg, Va., to live with an elderly woman and her daughter - 'total strangers,' she said - just to attend a public school willing to accept black children. Currently a secretary in the high school she would have been barred from attending, she plans to use her scholarship to study business management. 'A lot of us still feel hurt, anger and bitterness,' Ms. Moseley said. 'I've talked with grown people, now 50, 60 years old. Some have been able to move on. Some haven't. Some are still trying to figure it all out.' And many, she said sadly, will never have the chance. Most of the applicants who have come forward still live here in Prince Edward County, deep in the Bible belt of southern Virginia, where an important chapter of America's struggle with civil rights played out. A 1951 lawsuit challenging segregation was consolidated with four others to become the 1954 landmark case Brown v. Board of Education, which said separate but equal education for blacks and whites was unconstitutional. Officials here largely ignored the decision, emboldened by state law passed in 1956 known as 'massive resistance' that created a voucher program to allow white children to attend private schools. The Farmville Herald, the local newspaper, said in a March 20, 1959, editorial, describing efforts by outsiders to enforce Brown, 'It is all part of the diabolical Communist plan to disrupt American life and reduce the white race to impotency.' In June 1959, the Prince Edward County Board of Supervisors withdrew all financial support of public schools as a way to close them and skirt the order of the Brown decision. Intended for black children, it was a decision that affected white families as well. Even with the state vouchers, not all of them could afford tuition at the private schools, which makes whites eligible for the scholarships as well. Over the next few years, opposition to the county's segregationist policies gained strength, leading to a Supreme Court decision, Griffin v. Board of Education of Prince Edward County, in 1964, in which the court declared that every American child had a Constitutional right to a public school education. That ruling forced local officials to reopen their schools for all children. In the void, however, lives were shattered, families were split, dreams died. While local leaders tried to maintain quality education for whites, black families were left to fend for themselves. Some shipped their children to relatives and strangers in distant counties and states so they could attend public schools or learn from tutors. Others kept their children at home, even if it meant years without instruction. On a recent night, five black children of the 1950's, all of them now well into middle age, met at a reporter's request to share their memories and contemplate what the Brown scholarships mean. They talked about lives that could have been and lives that yet may be, now that the state has officially recognized their disrupted pasts. While they did not seem bitter, many of their words rang with sadness and pain for what was denied them and for the psychological damage of a second-class status imposed upon them by the times. Mr. Brown, now a deputy sheriff who works in the Prince Edward Middle School as a resource officer, has grappled with his anger for years, trying to keep it in proper context. 'You've got to find a way to move on,' he said. 'The anger is something you're going to have with you as long as you live. It's never going to go away. You just have to deal with it.' The group had mixed views on whether they could ever forgive the state for what happened, scholarships notwithstanding. Barbara Spring, 53, a retired firefighter, said she sat at home for four years after the schools closed. She said the scholarships enabled state officials to deal with their guilt. 'It's a way to make up for what took place, and, in part, that's good,' Ms. Spring said. 'I believe in education, but it will never heal the wounds and scars of the past.' Leola Bailey, 52, who lost two years of school before she found classes to attend in a local church, agreed. 'I feel like it's never too late to learn,' Ms. Bailey said. 'They have apologized for what they have done, but I don't know if they really mean it. I think they're doing it just to say they've done something.' But Alda Boothe, 55, a lab technician whose parents sent her to live with relatives during the years the schools were closed, was more willing to let it go. It was unfair, she said, to blame contemporary elected officials for the sins of their predecessors. Ms. Moseley, too, is willing to forgive, saying she does not feel as bitter as others. 'I'm the kind of person who thinks it's never too late,' she said. 'To do it now is better than not having done anything at all.' Even so, images of rejection still haunt her after several decades. 'I lived behind one of those schools; they were closed with chains,' she said. 'I looked at it every day of my life. If I close my eyes, I can still see those doors chained up.' The idea for the scholarships began on Feb. 18, 2003, a day the General Assembly was debating a resolution to express 'profound regret' for the Prince Edward school closings and the state's unwillingness at the time to get involved. But the scholarships were not a lawmaker's concept; they came from Ken Woodley, the current editor of The Farmville Herald, who was all too familiar with his newspaper's past and, as a white man, felt ashamed of it. Contemplating the resolution, Mr. Woodley decided the people of his community deserved something more tangible. 'At the end of the day, it's just a piece of paper, and it doesn't empower anybody to do anything,' he said in an interview at his office, one room away from the yellowed, bound volumes of old Heralds that promoted segregation. 'It doesn't give back anything that was taken away.' Mr. Woodley started a one-man campaign to create scholarships for those affected by the school closings. He wrote columns and called state lawmakers. He lobbied for additional support from Gov. Mark Warner and a handful of his predecessors. Later, he found sponsors in the State House and Senate, and by last year, bills were passed and signed by Mr. Warner, who announced the first scholarship recipients in June. 'We can't rewrite history, and we shouldn't,' said Mr. Woodley, who began working at The Herald in 1979 as a reporter. 'But we can make history, and it needs to be made. The scholarships are a piece of goodness in a world that wasn't there before. As an educational opportunity, they're a chance to give back as best we can and teach a lesson that we can never do anything like we did again.'

Subject: Tuskegee Study also source of HATE and PAIN From: johnny5 To: Emma Date Posted: Sun, Jul 31, 2005 at 14:04:14 (EDT) Email Address: johnny5@yahoo.com Message: I had one sister that moved beyond her daily beatings because of her color - one that did not - have to break that cycle. Victimization doesn't help her anymore at this point. http://www.ahrq.gov/research/may01/501RA25.htm Knowledge of the Tuskegee syphilis study continues to limit participation of blacks in medical research Blacks and other ethnic minorities have long been underrepresented in medical research studies, leading the National Institutes of Health to mandate their inclusion in all studies they fund. However, the ongoing distrust of blacks in medical research studies remains a barrier to their participation and is linked to their awareness of the U.S. government-sponsored Tuskegee Study of the natural history of syphilis among black men, according to a recent study. Black men who had syphilis and participated in the Tuskegee Study, which began in 1932, were told that they were being treated, when in reality they received little or no treatment. This practice continued even after it was discovered that syphilis could be treated effectively with penicillin, notes Vickie L. Shavers, Ph.D., of Johns Hopkins University. In a study supported in part by the Agency for Healthcare Research and Quality (HS09597), Dr. Shavers and her colleagues surveyed adults in Detroit in 1998 and 1999 about their knowledge of the Tuskegee Study and its impact on their willingness to participate in research studies. Overall, 81 percent of blacks and 28 percent of whites had prior knowledge of the Tuskegee Study. Over half (51 percent) of blacks said that their knowledge of the Tuskegee Study played a role in their reluctance to participate in clinical trials due to lack of trust in such trials; 48 percent reported that knowledge of the study had not changed their trust; and 1 percent reported that they had more trust in medical researchers. Among white respondents who knew about the study, 17 percent said they had less trust in medical researchers as a result of the study, 83 percent had no change in their level of trust, and none had more trust. These findings confirm that distrust arising from knowledge of the Tuskegee Study negatively affects the willingness of many blacks to participate in medical research studies. To include more minorities in clinical studies, medical researchers should discuss past misuse of minority participants in research, their commitment to ethical research practices, and safeguards they are using to protect participants in their particular study. See 'Knowledge of the Tuskegee Study and its impact on the willingness to participate in medical research studies,' by Dr. Shavers, Charles F. Lynch, and Leon F. Burmeister, in the December 2000 Journal of the National Medical Association 92(12), pp. 563-572. A lot of bad things were done to many, but you have to move on no? - blaming people today for others actions in the past seems silly to me but as the study shows it is a very real problem in our society.

Subject: Dreams suspended by Desegregation From: johnny5 To: Emma Date Posted: Sun, Jul 31, 2005 at 13:48:16 (EDT) Email Address: johnny5@yahoo.com Message: 'In the void, however, lives were shattered, families were split, dreams died. While local leaders tried to maintain quality education for whites, black families were left to fend for themselves. Some shipped their children to relatives and strangers in distant counties and states so they could attend public schools or learn from tutors. Others kept their children at home, even if it meant years without instruction.' My 2 sisters were young 8 and 9 year old white girls in palm beach county during desegregation (we had a mexican grandfather on dads side and half indian grandmother on moms so really mixed mutts - hehe) - they were sent to what had formerly been an all black school in west palm beach - they were beat up almost daily because they looked white - also some of thier cuban friends were also beat up because they were a different color too - one sister went to the hospital once - at that point my dad had enough and sent them to live with the grandparents 2 states away in a small rural town with a monoculture that was not 'cosmopolitan' like the big city - he was in the military and could not get transferred - it was hard on everyone involved but my sisters were able to go to school then without getting beat up and sent to the hospital for their color. It did affect her though and she takes medicine to deal with her feelings and hurt today. The other sister it doesn't haunt at all - 2 little girls at the same place and same time with completely different outcomes. That was very bad policy practiced back then on many fronts, the solution was traumatic and forced and hurt a lot of children from all sides of the city. I am here in palm beach today, many decades later, I have rode around and looked at the city schools and communities and such - it seems the mexicans and haitians and cubans are not mixing in the great melting pot but entrenching into seperate areas and culture.

Subject: Debunking the Concept of 'Race' From: Emma To: All Date Posted: Sun, Jul 31, 2005 at 07:20:02 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/30/opinion/30sat4.html?incamp=article_popular_3 Debunking the Concept of 'Race' Black Americans who explore their family histories typically hit a dead end in the early 19th century, when black Americans who were slaves were not listed in the census by name. Now some black Americans are trying to fill in the gap with genetic screening tests that purport to tell descendants exactly where in Africa their ancestors came from. But, like most people, those who think of themselves as African-American will need to search well beyond Africa to find all of their origins. This point came through with resounding clarity recently at Pennsylvania State University, where about 90 students took complex genetic screening tests that compared their samples with those of four regional groups. Many of these students thought of themselves as '100 percent' white or black or something else, but only a tiny fraction of them, as it turned out, actually fell into that category. Most learned instead that they shared genetic markers with people of different skin colors. Ostensibly 'black' subjects, for example, found that as much as half of their genetic material came from Europe, with some coming from Asia as well. One 'white' student learned that 14 percent of his DNA came from Africa - and 6 percent from East Asia. The student told The Daily Collegian, the student newspaper, earlier this year: 'When I got my results I was like, there's no way they were mine. I thought it was just an example of what the test was supposed to look like. Then I was like, Oh my God, that's me.' Prof. Samuel Richards, who teaches a course in race and ethnic relations at Penn State, uses the test results to shake students out of rigid and received notions about the biological basis of identity. By showing students that they aren't what they think they are, he shows them that race and ethnicity are more fluid and complex than most of us think. The goal is to make students less prejudiced and more open to a deeper discussion of humanity. If the genetic testing fad pushes things in this direction, it will have served an important purpose in a world that too often thinks of racial labels as absolute - and the last word when it comes to human identity.

Subject: Can't we all move forward From: johnny5 To: Emma Date Posted: Sun, Jul 31, 2005 at 13:59:42 (EDT) Email Address: johnny5@yahoo.com Message: RE penn state univeristy - most students in shock - that is disturbing - with the media coverage of common ancestry and much literature and even TV that has repeated the same message over and over on our genetic roots to find 'MANY' of the students at a major university to be in SHOCK when they discover this is alarming. Why is it so hard after repeated exposure to science fact for these students to make the mental leap earlier in thier lives? I posted a study here that harvard grads on graduation day were not able to tell reporters what basic elements trees were made of. Base concepts are hard to grasp for the mind in certain ways - unless instructed very young to very good fundamentals it will build higher level knowledge on very shaky foundations. Sometimes in great defiance to fundamental reality.

Subject: Wall Street Wrecked United's Pension From: Emma To: All Date Posted: Sun, Jul 31, 2005 at 06:36:45 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/31/business/yourmoney/31pension.html How Wall Street Wrecked United's Pension By MARY WILLIAMS WALSH HAD anyone listened to Doug Wilsman, tens of thousands of United Airlines employees would not be facing big cuts in their pensions. And the federal agency that guarantees pensions might not be struggling with its biggest losses ever. So who is Doug Wilsman? He is a retired pilot and a former fiduciary of United's pension plan for pilots, and in 1987 he discovered that the company had abandoned its older, tried-and-true approach of investing retirees' money in bonds timed to pay when the pensions came due. Instead, it had bought into the promises of Wall Street that it could put less money into the plan - and take out more later - if it just put most of the assets into the stock market. Mr. Wilsman was skeptical of such promises, and soon after learning of the change in strategy, he filed a grievance with his union, the Air Line Pilots Association. 'Hey, you guys are really building yourselves a trap,' he recalled warning them at the time. 'Someday, at the worst possible moment, when the bottom falls out of the stock market, the plan is going to have to come up with new money, and it's going to be enough to kill the company.' 'Everybody knows stocks are cyclical,' Mr. Wilsman said last week. So is the airline business. All along, he said, he thought it was almost inevitable that both would one day go south at the same time, with catastrophic results - which is just what happened this year. Given Mr. Wilsman's prescience, one might think that experts would be examining how United's investment strategies contributed to the demise of its pension funds - and whether similar scrutiny elsewhere could prevent more pension plans from crashing. Not a chance. Congress, regulators, lobbyists and the news media are all scrambling to find out what has gone wrong with the pension system. Hearings have been convened in the wake of United's default, chief executives examined under oath, bills introduced in Congress, numbers crunched. But virtually everyone is looking at the rules covering how much money a company puts into a pension plan every year - not at what happens to the money after that. While the money managers and other pension professionals who ran United's pension plan walked away from the wreck unscathed - indeed, they collected about $125 million in fees over the last five years alone, records show - the ones who will have to pick up the bill for the advisers' collective failure will be the airline's 130,000 employees and pensioners, the federal pension guarantor and probably, someday, the taxpayers. The Pension Benefit Guaranty Corporation has said that since 1974, when the insurance program was created, United has paid a little less than $100 million in premiums to insure employees' pensions. Of the $6.8 billion the agency will pay United's retirees in coming years, all but what United paid in premiums will be borne by the other companies participating in the insurance program. If those companies ever tire of footing other companies' bills, they may cancel their pension plans and drop out of the system. At that point, the taxpayers will have to step in. United is far from unique. Lifting the lid on how most pension funds are invested might raise an outcry if the 44 million Americans covered by company plans knew these things: Pension investing is largely unregulated, even though the federal government effectively covers the investment losses when a defined-benefit plan fails. At United, this freewheeling approach gave rise to investments in junk bonds, dot-coms and even what appears to be an energy venture in Albania. The Securities and Exchange Commission recently said that more than half of the consultants who help pension funds invest their money have outside business relationships that could taint their advice. It's impossible to get a current list of a company's pension investments. The most detailed, up-to-date information, on file at the Labor Department, is at least two years old. The Labor Department records also show that the money managers, actuaries, consultants and other professionals who handled United's pension plan earned about $125 million from 1999 to 2003, paid out of plan assets. The records are silent on how the individual money managers performed, nor do they even mention United's main pension consultant, the Russell Investment Group, or how much it was paid. OFFICIALS at the Pension Benefit Guaranty Corporation, the federal agency that takes over pension funds when they fail, are combing through United's pension documents, trying to ascertain how much the agency owes. What is clear is that as United's pension obligations soared, its pension assets fell. By the time the airline turned over its plan to the pension agency, the shortfall was $10.2 billion. While the federal agency tries to pinpoint its obligations, apparently no one in an official capacity is pausing to ask who the plans' outside investment professionals were, much less how they made their decisions and how they responded as the airline's fortunes faded. 'It's just a nonstarter,' said Richard A. Ippolito, the pension agency's former chief economist, who is now retired. A few years ago, he recalled, a director of the federal pension agency appeared before Congress and suggested that if companies wanted to invest their pension funds in stocks, they should pay more for their pension insurance coverage. 'I could politely say that he was vilified,' he said. 'They basically accused him of being un-American because he was asking companies to pay for the privilege of investing in stocks. He just dropped that idea.' United's actions offer a typical example of how most companies manage their pension funds. Its portfolio may look aggressive in hindsight - including high-yield bonds in companies like Adelphia and Bethlehem Steel that eventually went bankrupt, technology stocks that evaporated when the bubble burst and an assortment of private partnerships. But the general approach was in keeping with what most companies do: about 60 percent stocks, 30 percent bonds and a mixture of 'alternatives' including real estate and private equity investments. Local governments often invest their pension funds much more aggressively. A spokeswoman for United, Jean Medina, said United's pension investments 'have outperformed other similar large plans.' She added: 'United has always operated our plans in the best interests of our participants and beneficiaries, and believe our advisers act similarly.' Companies do not generally invest their pension money themselves, but instead farm out the work to an array of outside professionals. There are pension consultants to help set an investment strategy and recommend the money managers who actually pick the stocks and other particular investments. There are actuaries to design benefits packages and calculate how much companies need to contribute each year. Custodial banks hold the assets in trust. Brokers execute trades. Once a year, an outside auditor is supposed to review the plan and issue an opinion about its conformity with generally accepted accounting principles. Problems can arise when there are undisclosed relationships among these different service providers. 'Asset allocation is very much driven by hidden financial considerations,' said Edward A. H. Siedle, the president of Benchmark Financial Services, a company that audits pension funds. He said one reason that pension funds tend to invest heavily in high-turnover, active equities is that 'those investments have commissions and fees that can be shared with gatekeepers and others that pave the way.' Companies that sponsor pension plans can also reap accounting gains if they increase the risk of their pension investments. There are regulations and other legal safeguards intended to protect pensions, and companies often cite the cost and difficulty of complying with those rules. But much of this protective superstructure was designed decades ago, before the rise of the independent money manager - and before some of today's investment instruments were invented. 'Pensions are heavily regulated,' Mr. Siedle said, 'yet it's a kind of funny regulation where the regulators who are responsible for pensions really don't know much about managing money.' Thus there are rules to make sure that pension plans are not really tax shelters in disguise, rules to make sure companies treat low- and high-income workers equitably and, since 1989, rules to keep companies from taking money out of pension funds and using it to run their businesses. But there is no rule limiting aggressive investment strategies or requiring companies that want to pursue them to pay more for their pension insurance. Congress sets the premium rates, and there are bills in both houses that would raise them. But even now, the bills make no mention of studying, much less capping, investment risk, or of setting insurance premiums based on portfolio risk factors. The S.E.C. monitors investment advisers but has no legal standing to enforce the pension rules. In a study, released in May, of pension consultants, it found the industry vulnerable to abuse and referred a dozen consultants to its investigative branch for possible enforcement action. But it did not name individual consulting firms it suspected of conflicts, nor did it look specifically at how United's pension consultant, the Russell Investment Group, performed in the years leading up to the collapse of the airline's plans. Nor did the S.E.C. say if Russell was one of the consultants now being investigated more deeply. A spokeswoman for Russell, Jennifer Tice, said the company had not received any inquiries from S.E.C. since the commission completed its general examination of the industry. Ms. Tice said Russell could not explain why its name and fees were not listed in the United plan's official records, noting that plan sponsors file those records, not the consultant. United said Russell's omission from its filings was an oversight. Both Russell and United declined to say how Russell was compensated. Ms. Tice, however, said Russell helps its clients answer any questions raised by the S.E.C.'s findings, and regularly tells its consulting clients in the United States about potential conflicts of interest and Russell's policies for managing them. 'Russell is committed to full and timely disclosure of any potential conflicts of interest,' she said. THE Internal Revenue Service provides yet another layer of protection to pensions, but it has authority only over how companies design their benefits and contribute money to their plans - not over whether they have fulfilled their fiduciary duty to invest prudently. That is a job for the Labor Department. In June, the Government Accountability Office warned of chronic weakness in the Labor Department's enforcement of the pension law, and said the department ought to be coordinating its efforts with the S.E.C. The Labor Department also has authority over the disclosure of pension data. It collects long lists of all the investments in each pension fund, and of all of the money managers. But it does not track which money managers were responsible for which investments. That does not sit well with the United employees and retirees who are waiting to find out how much of their pension benefits is covered by the federal pension agency's insurance and how much they may lose. 'When I get a job, I put my name, my file number and my license in a permanent record, and I'm accountable if something goes wrong,' said Bob Stone, a lead mechanic for United Airlines who retired this year. 'It's possible for every single aircraft mechanic in the country to keep track of every single job they do. But we can't keep track of the money managers. That's too complicated for us.' Because of limits on the government's pension insurance, they will collectively lose benefits worth about $3.4 billion. Pilots will lose the most because they were promised the richest pensions. Finally, at the end of the regulatory patchwork is the Pension Benefit Guaranty Corporation. Officials there have access to some of the most current and detailed information about pensions, but they cannot do a lot with it; a 1994 act of Congress requires them to keep it secret. Officials at the pension agency sometimes confide that they feel like they are running not an agency but a big garbage can, where companies can dump their defunct pension plans, no questions asked. Earlier this year, when United defaulted, Mr. Stone's union began to ask questions about the money managers who handled its pension plan in its final years - who they were and how they had made their decisions. That labor group, the Aircraft Mechanics Fraternal Association, began to represent United's mechanics only in 2003, after the airline had gone bankrupt. It had no qualms about asking questions about how the pension fund was handled when the previous union had some say over it. 'We have to learn what went wrong,' Mr. Stone said. He added that he was sure that some money managers 'did their level best for people,' but that they all should stand by their decisions. 'Unless you separate it out and have accountability,' Mr. Stone said, 'how are you ever going to reward the good guys and get rid of the bad guys?' This summer, the labor group wrote to Labor Secretary Elaine L. Chao and Bradley D. Belt, executive director of the pension agency, asking for a forensic audit of United's pension plans, 'to determine whether any of the parties providing financial services to the plans may have contributed to their demise.' The letter, signed by the association's national director, O. V. Delle-Femine, cited the recent S.E.C. report warning of potential conflicts of interest among pension professionals, and it urged the pension agency to find out whether tainted advice had played any role in plan losses or underperformance. 'While the plan sponsor may be bankrupt, the parties that have been dealing with the plan are not,' Mr. Delle-Femine wrote. 'It may be possible to recover assets from these parties on behalf of the plan's participants.' The association also called for an audit of the pension plans at Northwest Airlines, where it also represents the mechanics. Northwest is still running its pension plans but intends to freeze one of them, for salaried employees, at the end of August, locking in employees' benefits at current levels rather than allowing them to increase as they normally would as people worked longer. Northwest is also seeking its unions' permission to freeze the other three plans. The airline has been warning that if it does not get a break on its pension funding requirements, it may have to declare bankruptcy sometime next year. Bankruptcy is often a prelude to a pension default. Mr. Delle-Femine sent his letter in June. So far, said the association's legislative liaison, Maryanne DeMarco, there has been no response from the pension agency. The Labor Department told her that Ms. Chao could not participate in an audit of Northwest's pension plans because she served on that airline's board before her confirmation as labor secretary and had recused herself from any involvement in its labor disputes. The Labor Department has yet to respond to the request for an audit of United's pension fund. 'We're all stunned that there isn't a review taking place,' said Bill Moons, a United mechanic and the president of the union's local in Denver. 'We all want the truth.' He said he and Mr. Stone were two-time losers, having earlier lost another chunk of their retirement savings when United first went bankrupt and its employee stock ownership program lost all of its value. The pilots' union had pushed hard for the employee stock ownership program back in the 1980's, at about the same time that Mr. Wilsman, the retired pilot, noticed that the airline had changed its previous investment policy for people like him. In the past, whenever a pilot retired, the airline used money from the pension fund to buy him or her an annuity from an insurance company. Annuities are lifelong streams of monthly payments, but insurance companies pay them, not pension funds. Insurance companies are regulated differently, and they have no federal guarantor like the Pension Benefit Guaranty Corporation to cover potential losses. Therefore they tend to invest conservatively, in assets that will not become wildly out of step with the payments they owe. Mr. Wilsman said he thought that an annuity was a surer thing than a pension promise backed by stocks. He also thought United had violated the terms of the pension plan, and maybe the pilots' labor contract, by making the change unilaterally. He persuaded other retired pilots to join him in bringing a case before the airline's pension board. Each retiree chipped in $25 to cover the cost of a lawyer. At roughly the same time, Mr. Wilsman also filed a grievance with the union. But the retired pilots were no match for the siren song of the stock market. The union, which handled their grievance, sided with the airline on investment policy. It said it believed that a high-risk, high-return strategy was best because, over time, it would lower United's compensation costs and free up more money to raise salaries. 'The argument was that the new people could get more benefits if they could do it by gambling than if the plan was secure,' Mr. Wilsman said. A spokesman for the pilots' union said he could not recall Mr. Wilsman's grievance and was unable to comment on it. Ms. Medina, the United spokeswoman, said that United tried to buy all the pilots' annuities in 1985, as part of a plan to terminate the pension fund and take out the surplus assets for business purposes, but that the pilots' union had blocked it. Two years later, when Mr. Wilsman and the other retirees said they wanted annuities, United told them they were too late, she said. NOT only were United and the pilots' union lined up against the retirees, Mr. Wilsman said. Even the arbitrator who was brought in to hear the case before the pension board said that he couldn't see why the retirees preferred an annuity to a pension, if the monthly payout was the same either way. 'He said that as far as he was concerned, there was absolutely no difference between an annuity and the company's promise,' Mr. Wilsman recalled. Afterward, he said, he thought he should have come up with an example of why they weren't the same, but he was tired of arguing with people dead-set against him. So he withdrew the grievance. 'It has always haunted me that I failed to cite an example,' he said in a recent telephone interview. But the best example didn't happen until 18 years later.

Subject: Re: Wall Street Wrecked United's Pension From: Pete Weis To: Emma Date Posted: Sun, Jul 31, 2005 at 13:18:23 (EDT) Email Address: Not Provided Message: The taxpayer will be bailing out pension plan after pension plan down the road. For example GM's more than $70 billion pension plan as well as Ford's are waiting in the wings. What is happening at United is going on at almost every company with a pension plan in America. There has been no real oversite or regulation of pension plan investing as this article states. Furthermore, small investors who are having brokerages (especially those with investment banking interests) manage their investments will suffer along with pensioners. However there will be no government bailout for them. At the rate we are going, government obligations will rise exponentially in the coming years, simply because no one has been guarding the 'chicken coop' and the wolves have been feeding without limit.

Subject: Re: Wall Street Wrecked United's Pension From: David E.. To: Pete Weis Date Posted: Sun, Jul 31, 2005 at 17:47:38 (EDT) Email Address: Not Provided Message: It is not only corporate pensions - it is local pensions. The county of San Diego praises its self for a well-run pension. Of course it is not- the unfunded obligations were met by selling bonds. That means the taxpayer has to pay principal and interest on an obligation that should have been met out of current funds. The city of San Diego is in worse shape, an admitted $1.3 Billion unfunded pension deficit. Financial statements for the city since 2003 have been held up pending release of pension documents. The pension board won't release them - and the entire city can not sell bonds because nobody will buy bonds without financial statements. This is a mess. San Diego and Galveston are two of the cities that the CATO institute likes to use as an example of how well people can do without social security. I am afraid that the entire country has been doing the same kind of legerman that United Airlines did. Putting off funding pensions while cutting taxes to the bone. It is not going to be pretty when the chickens come home to roost. Cheers David

Subject: Fight or Flight - Rambo Style From: johnny5 To: Pete Weis Date Posted: Sun, Jul 31, 2005 at 14:25:46 (EDT) Email Address: johnny5@yahoo.com Message: Pete I have friends in many parts of the country telling me if and when the tax burden gets too bad they will bail the titanic, already sending me links like the one below to go to new zealand - some are over 40 and can't get into australia but new zealand will let you come in if you have certain wealth or skills. Much tighter border control than the states. I remember a congressman in the late 1920's early 30's that said basically this was what happened back then, paid our creditors off and the backs of working class americans and american tax payers were made liable for debts not necessarily thier fault. I always keep in my mind the image of patton, Mcarthur and others running over the american veterans with tanks in washington DC - one veteran who had saved this guys life years earlier in the first world war. How far will the state go to preserve itself if it is a choice between them or the good of the common man? I already have a highschool buddy who is an eminant domain lawyer sending me sad stories every day it seems. http://www.immigration.govt.nz/templates/Content/ListsPopup.aspx?NRMODE=Published&NRORIGINALURL=/migrant/stream/live/familyquota/LinkAdministration/ToolboxLinks/LongTermSkillShortageList.htm?level=2&NRNODEGUID={7776F5A5-FAC2-4077-AE5B-3BEB90DED598}&NRCACHEHINT=Guest&level=2 HAHA these folks are trying to take one of the supreme court justices land that voted for land siezure - HAHA - rambo showed these fools what you have to do - you cant turn the system back against them - you need an AK47 and a red bandana on your head - RAMBO STYLE! http://www.heraldtribune.com/apps/pbcs.dll/article?AID=/20050726/OPINION/507260415/1029 Eminent domain and lost liberty I was not totally surprised to read columnist Kenneth Harney's informative article 'Congress in uproar over Supreme Court's eminent domain ruling.' I had heard of several states moving quickly to curtail the ruling. As Harney states, 'To call it a backlash would hardly do it justice. Calling it an unprecedented uprising to nullify a decision of the highest court of the land would be more accurate.' I had agreed with Justice Sandra Day O'Connor that this ruling was wrong. In four short weeks since the Supreme Court 'sanctioned the seizure of private homes by municipal governments for economic development,' Congress and more than two dozen states have set out to quickly rein in (or at least clarify) the powers of municipalities to condemn and seize homes. The U.S. House adopted by a 365-33 vote a highly unusual resolution deploring the court's ruling. Simultaneously, bipartisan support seems imminent in the Senate; Tom DeLay, R-Texas, called the Supreme Court ruling 'a travesty.' I am delighted that Congress has moved so quickly to curtail this ruling. Harney advises that Justice David H. Souter owns property in Weare, N.H., where efforts are in progress to persuade the town council to condemn the land in order to give it to developers who plan on building a hotel to be called 'The Lost Liberty Hotel.' It would feature a restaurant 'Just Desserts Cafe.' (Souter voted with the majority.) If three of the five Board of Selectmen vote to use eminent domain to take the land from Souter, hotel development will begin. Harney ends the article with 'Just desserts, indeed.' Sometimes Congress makes us proud; sometimes our court does not. Mary J. Palmer Sarasota Quotes from First Blood (1982) Trautman: It was a bad time for everyone, Rambo. It's all in the past now. Teasle: He was just another drifter who broke the law! Trautman: Vagrancy wasn't it? That's gonna look real good on his grave stone in Arlington: Here lies John Rambo, winner of the Congressional Medal of Honor, survivor of countless incursions behind enemy lines. Killed for vagrancy in Jerkwater, USA. Teasle: Now don't give me any of that crap Trautman. Do you think Rambo was the only guy who had a tough time in Vietnam? He killed a police officer for Christ's sake! Trautman: You're goddamn lucky he didn't kill all of you. --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- -- Trautman: It's good to hear your voice Johnny, it's been a long time. Look John, you've done some damage here, they don't want anymore trouble. That's why I've come. I want to come in there and fly you the hell out. Just you and me. We'll work this thing out together. Is that fair enough? Rambo: Where did you come from Sir? Trautman: Bragg. Rambo: I tried to get in touch with you, but the guy's in Bragg never knew where to find you. Trautman: You know I haven't been spending much time there lately, they've got me down in D.C. I'm shining a seat with my ass. Rambo: I wish I was back in Bragg now. Trautman: We'll talk about that when you come in. Rambo: I can't do that Sir. Trautman: Look John, we can't have you running around out there killing friendly civilians. Rambo: There are no friendly civilians! Trautman: But I'm your friend Johnny! I was there with you knee-deep in all that blood and guts. I covered your ass more than once. Seems like baling you out of trouble's got to be a life-time achievement for me. Rambo: There wouldn't be no trouble except for that king shit cop! All I wanted was something to eat. But the man kept pushing Sir. Trautman: Well you did some pushing on your own John. Rambo: They drew first blood, not me. Trautman: Look Johnny, let me come in and get you the hell out of there! Rambo: They drew first blood... Trautman: Rambo, are you still reading me? Company leader to Raven! Rambo! Acknowledge! --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --

Subject: Notes on Economic Growth From: Terri To: All Date Posted: Sat, Jul 30, 2005 at 18:20:28 (EDT) Email Address: Not Provided Message: There are 3 negative signs in the GDP growth number just released. The high energy use due to the heat wave from the Middle West to the West accounted for a large portion of industrial activity, also much of the use of inventory was consumers taking advantage of sales of new vehicles and such sales can not be sustained for more than a few months. Then, the liomited labor cost increase shows that labor simply has too little bargaining power. Wages and benefits are not contributing to inflation, but they are not robust. We are growing well, but all is not well.

Subject: China Goes to College - In a Big Way From: Terri To: All Date Posted: Sat, Jul 30, 2005 at 16:05:54 (EDT) Email Address: Not Provided Message: http://www.csmonitor.com/2005/0729/p01s01-woap.html July 29, 2005 China Goes to College - In a Big Way By Amelia Newcomb - Christian Science Monitor BEIJING - Several years ago, Chinese car manufacturer Geely grew concerned about a shortage of well-trained workers. Its solution: plunk down $800 million and start a private university. Even a decade ago, the idea would have been almost unimaginable. But in 2000, the sprawling campus of Beijing Geely University, with its Stanford-inspired quad, opened on the outskirts of Beijing - one of some 1,300 private universities that have sprung up in recent years. This September, Geely will enroll about 20,000 students, studying everything from engineering to character education to English. As China continues to surge onto the global economic stage, it is undergoing one of the most ambitious higher education expansions in the world. Spurred by a government call in the late 1990s to build world-class universities and broaden access to the masses, the country is prying open the doors of institutions that formerly served a narrow elite. It's pouring money into research, welcoming private ventures like Geely, and broadening the curriculum to ensure that its grads stay on top in a knowledge-based world economy. Like so much in China, the move is happening quickly - and in eye-popping dimensions. 'It is an unprecedented expansion,' says Gerard Postiglione, an education expert at the University of Hong Kong. It has been done, he notes, with little of the instability such a rapid boom can cause. 'It is something that has happened nowhere else in terms of scale.' Since 1998, when Jiang Zemin, then president of China, spoke on the 100th anniversary of top-ranked Peking University and issued his bracing call for change, overall college enrollment in China has roughly tripled. The country now outpaces leaders like the US, India, Russia, and Japan in numbers of students in colleges and universities. By 2010, Chinese officials estimate, at least 20 percent of high school grads will be enrolled in some form of higher education; that number is expected to rise to 50 percent by 2050. China currently has about 20 million students pursuing higher education. But the change is wrenching long-accepted practices from their foundations. The introduction of market forces throughout the 1990s has yielded tuition fees and new private colleges. Educators are adding courses that will feed a booming appetite for skilled workers. Schools have had to adjust quickly as enrollment has soared: a newly reorganized Zhejiang University, near Shanghai, for example, has grown from about 10,000 students in the mid-1990s to about 45,000, in part through consolidation with other universities. For new graduates, the most dramatic change may be that a bachelor's degree from an A-list school - once a guaranteed steppingstone to success - is now seen as simply a first step in climbing the economic ladder. More are planning to get master's degrees and even doctorates. Indeed, China almost doubled the number of science and engineering PhDs between 1996 and 2001, to just over 8,000. Some observers say that within a decade, China is likely to boast some of the world's leading engineering schools. 'This is a crucial period for China's universities,' says Shi Jinghuan, executive director of Tsinghua University's Institute of Education Research in Beijing. 'The whole society, and higher education with it, is in transition.' At Tsinghua, this year's seniors have been among the first to feel the impact of attending one of the seven institutions tapped to compete with the Harvards and Sorbonnes of the West. The school has boosted exchanges with foreign scholars and recruited them to teach, and is offering some classes in both Chinese and English. Known for several decades as the MIT of China, it is requiring more general education and allowing undergraduates to enroll in a dozen schools, from management to architecture. Most faculty have studied abroad. Extracurriculars are popular, from the venerable chorus to a recently added crew team. Virtually all students are familiar with English, and many speak it with an almost easy familiarity. The flurry of initiatives has been both positive - and a bit rattling - for students. 'College is all about knowing yourself,' asserts Yi Fang, who just graduated with a degree in finance and will pursue a master's degree in marketing. But many of her friends, she says, are just coming to grips with the fact that even a degree from Tsinghua doesn't necessarily mean an immediate great leap forward. 'Many wanted to go into investment banking, and they didn't get it,' Ms. Yi says in fluent English, echoing budding American yuppies of the 1980s. She pauses. 'I have so many choices. There's more uncertainty than four years ago.' Part of that uncertainty comes from intense competition between graduates. Given a choice, most students will still opt for a name-brand public school. But private institutions, like Beijing Geely University, have a strong card to play: practical skills that can quickly land you a job. 'There is a lot of competition among universities - there's a big shortage,' says executive president Luo Xiaoming. But simply expanding enrollment at existing universities is not the answer, he says. 'That affects quality, and that gives us a window.' Mr. Luo ticks off his school's goals: Practice and scientific work are a must, he says, as is theory - 'but not too much.' Then there's character education. 'This is most important,' he insists, saying that a well-rounded young citizen is essential to China's future. Geely is more expensive than public schools: It charges some 8,000 yuan (about $1,000) per year versus a public school's more typical 6,000 yuan. Financial aid is available, Luo says. And they provide employment: nearly 100 percent of grads got job offers last year, many of them with Geely, Luo says. The source of their success, he argues, is a culture of innovation. That focus on thinking outside the box - as well as developing a young scholar who can sort through Plato as well as a software program - is helping to drive China's rethink. The country has long valued education, of course: The 2,500-year-old precepts of Confucius undergirded learning until just over a century ago. European and American influence helped build a rich university system in the 19th and early 20th centuries. But in 1949, the rules changed. 'In the course of revolution, China destroyed one of the most promising areas of higher education outside Europe and North America,' says William Kirby, dean of faculty at Harvard University and a China scholar. The tumultuous Cultural Revolution of the 1960s and '70s was particularly damaging: National entrance exams were temporarily scrapped, students ignored their classes, and schools stopped admitting new students - or producing graduates. 'People really understand that [the Cultural Revolution] stopped China for several years and isolated it,' says Dr. Shi. Now, she says, people have their eyes on the 'world standard' - be it for WTO issues or biomedical engineering. And they're focused intently on catching up. 'It's stunning the degree to which China has reemerged as one of the leaders in the developing world, and a leader in the global development of technical talent,' says Dr. Kirby. The move toward international standards, however, poses one particularly sensitive challenge: how to handle more open discussion of politically touchy topics, as well as greater academic freedom that could lead some to challenge accepted authority. There has been progress. 'What used to be delicate matters of history are more openly discussed by scholars,' says Harvard's Kirby. 'You can do serious research on [pre-1949] Nationalist rule, for example, and praise [then-leader] Chiang Kai-Shek as a patriot.' But, he adds, 'It's much easier to be open and frank as a foreign scholar.' Still, there's little question that China has opened its classrooms in numerous ways. It's a dramatic change from 20 years ago, when the major universities taught only a select population, and followed a relatively prescribed curriculum. At the time, outreach programs and extension schools were unheard of. 'China has an enormous market of well-educated people who are primed to go to college,' says Kirby. Now, he says, it is making an enormous investment in that talent.

Subject: New York City From: Jennifer To: All Date Posted: Sat, Jul 30, 2005 at 15:35:55 (EDT) Email Address: Not Provided Message: While the are continual worries about the rising prices for housing, the rising prices have renewed neighborhood after neighborhood in New York City. I worry about the housing bubble, but the development that has taken place has helped the city become more attractive everywhere I look. I expect this effect will last even when the housing market slows. New York City is sparkling.

Subject: New caterpillar says Beef - its whats for dinner From: johnny5 To: All Date Posted: Sat, Jul 30, 2005 at 12:31:06 (EDT) Email Address: johnny5@yahoo.com Message: http://www.sciencedaily.com/upi/index.php?feed=Science&article=UPI-1-20050722-22221100-bc-us-caterpillars.xml MANOA, Hawaii, July 22 (UPI) -- A newly-named species of Hawaiian caterpillar sneaks up on snails and spins silk strands around them to capture them for dinner. Daniel Rubinoff, an entomologist of the University of Hawaii at Manoa, says the larvae of the Hyposmocoma molluscivora, are the first mollusk-eating caterpillars that scientists have officially described, Science reported. The overwhelming majority of caterpillars are vegetarians, but a few feed exclusively on insects. The researchers watched the caterpillar creep up to a tiny snail resting on the surface of a leaf, lashing it to the leaf with silk threads. 'It reminded me of Gulliver's Travels, where the Lilliputians bind him while he's sleeping,' says Rubinoff. I used to live in hawaii - amazing ecosystem over there - darwin would be proud of this new discovery - more proof of evolution for the creationists.

Subject: In China, a Musical Star Is Waiting From: Emma To: All Date Posted: Sat, Jul 30, 2005 at 11:39:30 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/30/international/asia/30dai.html?hp=&pagewanted=print In China, a Musical Star Is Waiting to Be Born By JIM YARDLEY BEIJING DAI YICHEN is in the third row, far right side, her feet kicking and scraping against the wood floor with other students in her tap dance class. The rehearsal hall fills with a noise as pounding and repetitive as a hailstorm. Yichen is lanky and a little awkward. She sidesteps and thrusts her shoulder in a suggestive move that no one in the class gets quite right. But she keeps trying. As the teacher calls forward different lines of dancers, Yichen stands off to the side, practicing her footwork. She watches herself, unsmiling, in a floor-to-ceiling mirror that betrays every stumble. Her dream is to one day perform on a Chinese equivalent of Broadway, though one does not yet exist. Yichen, 17, is one of 30 students at a private fine arts school on the outskirts of Beijing who are far removed from the days when Mao demanded that culture serve the Communist Party. They are studying how to perform in American-style musicals, an academic major about as improbable as American teenagers dedicating themselves to Beijing Opera. It is an example of the changes engulfing China that a teenager like Yichen has been far more influenced by the musical 'Cats' than by the Communist Youth League. While China is far too vast and divided between rich and poor for any one teenager to be considered typical, Yichen is representative in that her generation is expected to have opportunities unlike any before them. But those opportunities bring pressure. Yichen's parents are among the new class of urban professionals who can afford to indulge their daughter's passion. Her mother is a journalist at a cultural newspaper. Her father is a businessman. The fine arts boarding school Yichen attends is an unimaginable chance for the overwhelming majority of Chinese students, whose families cannot come close to paying the annual tuition of $4,000, almost four times China's per capita income. 'It is hard for me to describe how I feel when I sing, but I'm completely devoted to it,' she said of why she wanted to enroll. 'My teacher says I'm always lost in my song.' Her mother, Gao Xiaoli, who unwittingly sparked her daughter's interest by bringing home videos of 'Cats' and other Broadway shows, understands that China, even as it becomes more affluent, is not an indulgent country. The transition to a market economy has brought rising incomes and choices, but also fierce, unblinking competition. 'There are so many singers studying in this country now,' Ms. Gao said. 'You have to be very good.' ANYONE outside China would not hesitate in labeling Yichen's generation. They are the first to come of age in the aftermath of the government's violent repression of student protesters at Tiananmen Square in June 1989. That event seared China and still influences how the country is perceived by the world. But for many teenagers like Yichen it is an invisible marker. Media discussion of the crackdown is banned as the government has tried to blot out that day from history. Yichen would have barely been a year old at the time. 'I've never heard of it,' she said quietly. Instead, the day that transformed her life came when she was 4 and her parents divorced. Divorce was a rarity then, and Yichen instantly became different from her peers. 'My friends told me I should try to bring them back together,' Yichen recalled. 'But I never dared speak of it, and my mother wouldn't hear of it. I sometimes envied friends with two parents.' Yichen is no longer a rarity. She said nearly half the students in her class were from divorced families, many of whose parents broke up after the government loosened laws to make divorce far easier. 'Yichen is a very innocent child, and it is probably too early to explain it to her,' Ms. Gao said. 'I will when she gets to the age where she can fall in love and get married.' If the Chinese government still tightly controls political speech, the media are now filled with entertainment news. The lives of Taiwanese pop singers or Chinese soccer stars fill newspapers. Celebrities adorn buses, billboards and packages of crackers. YICHEN first thought her path into that world would be through modeling. She spent three years at a modeling school before concluding that she was not tall enough and had slight imperfections in her skin. She started school late, and despite her age, she will be entering 10th grade this fall. Her plans now include finishing high school and applying to Beijing's top conservatory. Then, possibly, she would like to study in the United States or Europe. If musicals do not work out, she says she might try singing pop songs. None of it will be easy. Her class recently held auditions for a musical staged on state television. She auditioned for a leading role but lost the part because her teacher thought she was too passive. 'I cried and cried,' she said. School dominates her daily life. She begins classes at 6:45 a.m., breaks for meals and concludes at 8:20 p.m. Her spare time is spent studying. But when she does have a free moment, she and friends go to karaoke clubs and sing, as if they were the stars they aspire to become. She paints three of her fingernails yellow and grimaces when asked why she doesn't paint them all. Unfashionable, she answered. In many ways she is the innocent her mother describes, or perhaps just a typical teenager. She said she pays no attention to politics and has never thought about joining the Communist Party. She also sounds very traditional when asked what she thinks she must do to succeed in the new China. 'As long as I study hard and love my parents, I'm quite content with what I have,' she said. 'My mother's expectations are high. She wants me to grow into a person with talent and education, with manners and a career.' One thing she has not done for her mother recently is sing. But asked to sing for a foreign reporter, the quiet, unassuming girl did not hesitate. She first sang in English and blushed when she stumbled on some of the lyrics. But when she sang a Chinese pop ballad, her voice filled the empty rehearsal hall with a clear, lovely sound. She was lost in her song.

Subject: Graft Is Threatening Latin America From: Emma To: All Date Posted: Sat, Jul 30, 2005 at 09:51:49 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/30/international/americas/30latin.html?ei=5094&en=b0b4d4c4aeb6bff2&hp=&ex=1122782400&partner=homepage&pagewanted=print Unending Graft Is Threatening Latin America By LARRY ROHTER and JUAN FORERO RIO DE JANEIRO - As he campaigned for the presidency in 2002, Luiz Inácio Lula da Silva boldly pledged to clean up the sordid politics of Brazil. His, he vowed, would be an ethical, honest and moral government the likes of which Brazil had never seen. That pledge helped him win the votes of more than 50 million Brazilians and a sweeping mandate. But now, in a gloomy echo of what has happened time and again across Latin America, Mr. da Silva's government is mired in the biggest, most audacious corruption scandal in his country's history. A congressional inquiry has heard testimony that the governing Workers' Party paid dozens of deputies from other parties a $12,500 monthly stipend for their support. This month, a party functionary was detained at an airport with $100,000 - stashed in his underwear - which he claimed to have earned selling vegetables. Mr. da Silva's chief aide has been forced to resign, as have the president, secretary general and treasurer of the Workers' Party. While Mr. da Silva has not yet been accused in the scheme, speculation that he could face impeachment is widespread, and the first street demonstrations against him, small but indignant, started this week. Brazil's scandal is just the latest reminder of the unremitting corruption that has marked Latin American politics since colonial times, when absolute rulers regarded newly conquered realms in the New World as their personal property. The important difference today is that popularly elected governments now hold sway, and corruption has emerged as one of the gravest threats to the hard-won democratic gains of the last 20 years. Across the region, these second-generation democrats have proved a disappointment, and their ineffectiveness and low standing have allowed political instability and economic disparity to grow. Opinion polls routinely cite corruption as a top cause for a dangerous disillusionment sweeping the region. The disaffection has led to violent popular outbursts, including the lynching of public officials in Peru, and has helped force out eight heads of state in five years. 'This is the great problem, and there simply has not been a break from the past,' said Edgar Villanueva, a congressman who is leading one of several investigations of the government of President Alejandro Toledo in Peru. 'What has happened in Latin America is we have not been able to get good people into power. The person in power always maintains ties to his small power base, and they forget the people, they forget their promises.' Mr. Toledo, too, came to power with similar pledges to clean up past corruption, succeeding a government under Alberto K. Fujimori, whose byzantine networks of bribery and extortion seemed to set a new standard for the region. Today more than a dozen of Mr. Toledo's relatives, including his wife and brothers, are accused of using their influence for personal gain. Opinion polls give him among the lowest ratings of any Latin American leader, and his government has been bled by nearly constant media sniping over the scandals. Similar accusations in Ecuador contributed to the fall of President Lucio Gutiérrez in April. Farther north the story is nearly the same. In Mexico, President Vicente Fox came to power in 2000, sweeping out the notoriously corrupt and authoritarian Institutional Revolutionary Party that governed for more than seven decades. But he has failed on almost every front to reverse corruption's course, from police departments along the increasingly violent border with the United States to scandals in his own administration. Not only have Mr. Fox's efforts to prosecute former government officials suspected of funneling state oil money into political campaigns come to naught, but it has come to light that his own campaign fund, Friends of Fox, took illegal contributions. His wife, Marta Sahagún de Fox, is embroiled in a series of scandals over the use of millions of dollars flowing into her charity organization, and her sons have come under congressional scrutiny for contracts they won to build public housing. Throughout Central America, too, prosecutors are pursuing cases against current and former leaders who lined their pockets while in power. In Nicaragua, former President Arnoldo Alemán has already been convicted of diverting state funds for his personal use and is appealing a 20-year sentence. Costa Rican prosecutors have accused two former presidents of taking kickbacks to award lucrative government contracts. And in Guatemala, the state's attorneys are seeking the extradition of former President Alfonso Portillo from Mexico on charges he embezzled $15.7 million. Some point to the flourishing of cases as evidence that judicial systems and governments are finally taking bad leaders to task. But many analysts and citizens regard the persistence of patronage, nepotism and bribery as a telling measure of the low quality of the region's democracies and of how little elite attitudes have changed since the time when colonial overlords ruled for the purposes of extraction and enrichment with little regard for the people beneath them. International groups like the World Bank say official graft and nepotism are so powerful that they are rotting government institutions and stunting economic growth. In recent Congressional testimony in Washington, American officials estimated that official corruption might shave as much as 15 percent off annual growth in Latin America, as public funds are pilfered and wary foreign investors shy away. Latin Americans regard corruption as their most serious problem after the region's economic crisis, according to a survey of 18 countries taken in 2004 by Latinobarómetro, a Chilean public opinion firm that regularly conducts surveys around the continent. Eighty percent of respondents have also consistently said that they perceive that corruption has increased, while other surveys show that in some Latin American countries, like Argentina, people believe that corruption has a significant effect on the ways business and politics are carried out. 'The impact of corruption on our economies is huge, just huge,' said José Ugaz, a Peruvian who investigated the crimes of the Fujimori government and investigates corruption for the World Bank. 'Then there are other effects that cannot be easily measured - people not having confidence in their governments, thinking officials are stealing money.' 'When the people lose confidence in the people governing the country,' he added, 'immediately the loss of confidence generates a lot of problems, and one of them is unrest.' Frustration has reached dangerous levels in several countries, with sometimes violent street protests. The shift from authoritarian governments to democracies, many had hoped, would squelch the kind of corruption that predominated when dictators ran the affairs of state to the benefit of a small clique of insiders and threatened whistle-blowers. Yet successor governments across the political spectrum, whether free-market advocates like Mr. Toledo or self-proclaimed leftists like Mr. da Silva, have proved even more susceptible. With once-closed economies having been opened up and corporate profits at record levels, the opportunities for graft and bribes are larger than ever. So widespread is the disgust that last year another regionwide poll found that a majority of Latin Americans would prefer a return to dictatorship if it would bring economic benefits. Despite improved economic indicators since then, the ranks of the poor have continued to swell, as has the resentment of those who are pocketing the wealth of the nation for their own benefit. While some states have markedly improved, notably Chile and Uruguay, they are the exceptions, and the envy of their neighbors. Venezuela, Paraguay and Bolivia have all had increases in corruption or have shown practically no improvement in fighting it, the annual survey by the corruption watchdog Transparency International shows. 'There is not much of a change in these countries,' said Myles Frechette, a former American ambassador to Colombia who now advises businesses investing in Latin America. 'In Brazil, the Workers' Party used to yell its head off about how corrupt all the parties were, but then they get into power and guess what, the Workers' Party was plugged in.' The Brazilian scandal in fact extends even beyond under-the-table payments to legislators. It also includes clandestine campaign contributions by companies seeking government contracts, gifts of a Land Rover and other benefits to party leaders and a secret $30 million slush fund that party leaders could dip into for purposes as yet unknown. 'Lula found a spurious form of organizing power in this country' when he took office early in 2003, César Benjamin, a disgruntled founding member of the Workers' Party, who is now a political science professor, wrote in a recent essay. 'And instead of fighting to change it, as was his political and moral obligation, he adapted himself to it.' 'The apparatus of the state has continued to be treated as booty,' he added. Corruption shows itself in many ways, but perhaps its most glaring and grating form is nepotism and patronage, the flaunting of political connections that so alienates ordinary people. Those practices also take many forms, from outright bribes to jobs and contracts awarded to unqualified or inexperienced people who happen to be related to those in power. Here in Brazil, for example, when one of Mr. da Silva's sons opened an advertising agency, a telephone company in which government banks and pension funds hold shares supplied the start-up capital. In Peru, President Toldeo's youngest brother, Pedro, is charged with having used his influence to obtain a 20-year telephone concession for a new company - with just $1,500 in assets. Another brother, Luis, is under investigation on suspicion of using his family name to obtain land from the Ministry of Agriculture. President Toledo's troubles began almost immediately, said Fernando Rospigliosi, a respected journalist who was his first minister of the interior. Militants from his governing party, Peru Possible, demanded jobs in ministries and other agencies as soon as Mr. Toledo took office, he said. Among those knocking on doors were members of the president's family, including his brother Pedro and his sister, Margarita, he said. 'They were dazzled by power and money and they immediately tried to take advantage, and they did it like it was the most natural thing in the world,' Mr. Rospigliosi said. 'They would show up at ministries and ask people to be placed in certain jobs. It's very Peruvian. You obtain power and you use the power for your own benefit.' Perhaps most ominous for the region's democratic health is that recent scandals, especially the one here, involve corruption not simply for personal enrichment, but also to obtain and hold onto power indefinitely, threatening democratic institutions themselves. Yet the leaders involved have denied wrongdoing and have been loath to accept any responsibility. A congressional commission has questioned President Toledo over his role in a related petition-forgery scheme that investigators say his sister, Margarita, headed in the late 1990's and was intended to register enough signatures to put his name on the ballot. The president has so far insisted that such a scheme never existed. 'This is a factory of lies,' he recently said on a television program. 'Take me at my word. I'm telling the truth.' As his government and his reputation collapse around him, Mr. da Silva in Brazil has taken a similar tack. He initially contended that 'as regards its electoral behavior, the Workers' Party did what has been done systematically in Brazil.' But he has since abandoned those excuses in favor of protestations of innocence and personal integrity. 'Among 180 million Brazilians, there is no one, neither man nor woman, with the authority to lecture me about ethics, morals or honesty,' he said in a speech here last week. 'In this country, the person who can debate ethics with me has yet to be born.'

Subject: Hayek On Tyrants and dumb voters From: johnny5 To: Emma Date Posted: Sat, Jul 30, 2005 at 12:38:26 (EDT) Email Address: johnny5@yahoo.com Message: 'The important difference today is that popularly elected governments now hold sway, and corruption has emerged as one of the gravest threats to the hard-won democratic gains of the last 20 years.' Perhaps the fact that we have seen millions voting themselves into complete dependence on a tyrant has made our generation understand that to choose one's government is not necessarily to secure freedom. - Hayek

Subject: European Stocks From: Terri To: All Date Posted: Sat, Jul 30, 2005 at 09:49:54 (EDT) Email Address: Not Provided Message: What continues to impress me is the strength of European stock markets. The Europe Index is now up 15.1% for the year to date in domestic currency. Other than Ireland and Portugal, for special reasons, every European market is robust. For Europeans the broad stock index has been the perfect protection against weakening currencies.

Subject: Suggestions of Strength in Economy From: Emma To: All Date Posted: Sat, Jul 30, 2005 at 09:14:17 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/30/business/30econ.html Suggestions of Strength in Economy By DAVID LEONHARDT Businesses and households went on a shopping spree this spring, causing warehouse stockpiles to shrink and setting the stage for faster economic growth during the rest of the year. The spending helped extend a solid if unspectacular expansion in the second quarter, when the economy grew at an annual rate of 3.4 percent, the Commerce Department reported yesterday, down from 3.8 percent in the first quarter. Companies took advantage of the weaker dollar to ship more goods abroad, while imports reversed course and fell slightly. It was the first time since 1991 that exports rose and imports dropped in the same quarter. In a sign of better times to come, housing construction, consumer spending and corporate investment increased more rapidly this spring than production did, causing inventories to decline sharply. Economists said companies, especially carmakers, were likely to accelerate production in the second half to rebuild their stockpiles, lifting overall growth. 'When you've got a decline in inventories this large, it's unintended,' said David Greenlaw, an economist at Morgan Stanley. 'Now producers will start to play catch up.' Forecasters said yesterday's report would lead them to raise their growth projections for the rest of the year; Morgan Stanley now expects growth of better than 5 percent during the third quarter, up from an earlier prediction of 3.7 percent. In the second quarter, growth exceeded 3 percent for the ninth consecutive quarter, the longest such streak since the mid-1980's. The yield on 10-year Treasury notes rose to 4.28 percent yesterday from 4.19 percent on Thursday, as investors apparently took the healthy growth as a signal that the Federal Reserve would keep raising its benchmark interest rate to keep inflation tame. The steady expansion has continued over the last year despite two problems that have often derailed economies in the past. Oil prices have spiked and now hover around $60 a barrel, their highest level in inflation-adjusted terms since the early 1980's. And the job market, while improving, remains weak enough that wage growth trails inflation for most workers. In a separate report, the Labor Department said yesterday that wages and salaries rose 2.4 percent during the 12 months that ended in June. The high cost of health care is one reason companies are trying to avoid giving raises; benefit costs increased 5.1 percent over the last year, the government reported. Overseas competition has also hurt wages. 'There are still a lot of price pressures and margin pressures on businesses,' said Bill Zadrozny, chief executive of Siemens Financial Services, which lends money to businesses. 'Being able to pass through costs is not easy.' Inflation has been running about 3 percent recently. Consumer spending slowed slightly during the quarter, one reason that overall economic growth dropped somewhat. As part of its regular revisions, the Commerce Department announced that the economy did not perform quite as well between 2002 and 2004 as had initially been estimated. Last year, it expanded 4.2 percent, not 4.4 percent. But the housing boom has been strong enough to make up for many of the economy's other problems. The building of new houses in the Southeast and the West has created thousands of jobs, while soaring home values in California and the Northeast have allowed homeowners to take on more debt and increase their spending. Residential spending grew at an annual rate of 9.8 percent in the second quarter, up from 9.5 percent during the first three months of the year, the Commerce Department reported. Housing has become important enough that a sharp rise in mortgage rates could potentially halt the economy's expansion. So far, though, mortgage rates, which are set by investors, have remained low even as the Fed has lifted its benchmark rate to 3.25 percent from 1 percent at the start of last summer. 'Anybody who was still holding out hope that they were almost done probably has to throw in the towel' after yesterday's report, said Joshua Shapiro, the chief United States economist at MFR, a research company in New York. 'Things are shaping up for a second half of the year that's quite perky.' Many analysts expect the Fed to raise the benchmark rate to about 4 percent by the end of the year. That would put some pressure on mortgage rates, but a host of other factors, including the growth of China, will probably keep them from spiking soon, economists say. The corporate sector's recovery from the aftermath of the 1990's bubble also helped growth in the spring. Spending on new equipment and factories rose at annual rate of 9 percent, up from a 5.7 percent increase in the first quarter and roughly matching the growth rate in 2004. Those good times seem poised to continue. A survey of Midwestern purchasing managers released yesterday offered some early evidence of the growth spurt that could come from the recent fall in inventories. Production and new orders both surged in July, after having slowed for much of the spring, according to the Chicago branch of the National Association of Purchasing Management. In the second quarter, final sales - a measure of economic growth that does not take inventories into account - grew at an annual rate of 5.8 percent. In only one other quarter since 1999 has the increase been so large. The fall in the nation's trade deficit was good news for workers, executives and policy makers who have grown concerned that the United States does not make enough of what it buys. Together, imports and exports added 1.6 percentage points to the quarter's growth; in previous recent quarters, they had shaved between 1 and 3 percentage points off growth. But economists said the turnabout was unlikely to be permanent. The dollar has risen in recent months against the euro and the yen, and there is still little sign that the economies of Europe or Japan are on the verge of a burst in growth. 'The U.S. is growing faster than the rest of the world,' Mr. Greenlaw said. 'It's very difficult to cut into your trade deficit in that environment.'

Subject: Economic Growth From: Terri To: All Date Posted: Fri, Jul 29, 2005 at 17:42:30 (EDT) Email Address: Not Provided Message: The GDP growth rate for the economy was 3.4%, but would have been higher had there not been a decline in inventory. So, we are growing at a nice rate no matter the reason. Inflation still shows itself completely under control, but the Fed is going to continue to raise short term interest rates to slow growth until they are sure there will be no inflation increase going forward. Investors would evidently prefer to have a sense the Fed will soon halt rate increases, but we are a while away from any slowing of growth which will cause the Fed to halt.

Subject: Re: Economic Growth From: Abner To: Terri Date Posted: Fri, Jul 29, 2005 at 22:06:54 (EDT) Email Address: abelanger@msn.com Message: In recent columns, Professor Krugman has been telling us to ignore the signs of an improving economy and focus on the fact that the job market in the US is not as good as it was at the height of the boom. But in this most recent column dealing with the 'French Choice', we are advised that folks not working can be a good thing, too. The good professor appears to be speaking out of both sides of his mouth with seemingly contradictory views...

Subject: Re: Economic Growth From: Pete Weis To: Abner Date Posted: Fri, Jul 29, 2005 at 23:01:24 (EDT) Email Address: Not Provided Message: Abner. I didn't get the same reading you did with 'French Choice'. The following is taken from Paul Krugman's op-ed: 'There are several reasons why the French put in fewer hours of work per capita than we do. One is that some of the French would like to work, but can't: France's unemployment rate, which tends to run about four percentage points higher than the U.S. rate, is a real problem. Another is that many French citizens retire early. But the main story is that full-time French workers work shorter weeks and take more vacations than full-time American workers.' Paul Krugman states here that the higher unemployment rate in France is 'a real problem'. But he says the main reason for the French working shorter hours and having less discretionary income is their choice to work fewer hours - a quality of life choice - not necessarily because they have an inferior economy. I'm very much in disagreement with Terri with regard to how well our economy is doing. There has been a lot of crowing about how well the US economy is doing. IMO, a strong economy is one in which (1) overall wages are gaining against inflation, (2) job growth is greater than what is needed to simply keep up with population growth (about 150,000 per month - the last two months were 110,000 & 145,000 respectively), (3) a broadly improving economy - not just supported by a single sector like housing, (4) a balanced current account where we don't have nearly 2 billion a day being drained out of the country, (5) an economy which doesn't have a government which reduces taxes and spends more and runs budget deficits through the roof. Our present economy meets none of these criteria - it's simply living on the borrowed time our housing boom is giving us. These are the kinds of issues that Paul Krugman has been raising. Come on Abner, show me where I'm wrong. Let's talk about this economy of ours. Clearly you think it's doing well and if you can honestly show me where I'm wrong, I'll come around to your way of thinking and I'll be the first to say Paul Krugman, Robert Shiller, Nouriel Roubini, Warren Buffet, Stephen Roach, etc are all full of crap and Larry Kudlow has been right all along!

Subject: Re: Economic Growth From: Abner To: Pete Weis Date Posted: Sat, Jul 30, 2005 at 10:09:11 (EDT) Email Address: Not Provided Message: Well Pete, for starters, just look at today's New York Times, page B-1, where even the NYT must somewhat grudgingly acknowledge that the economy is strengtening. The article appears under the heading, 'Suggestions of Strength in Economy,' and here are a few excerpts: 'Forecasters said yesterday's report would lead them to raise their growth projections for the rest of the year; Morgan Stanley now expects growth of better than 5 percent during the third quarter, up from an earlier prediction of 3.7 percent. In the second quarter, growth exceeded 3 percent for the ninth consecutive quarter, the longest such streak since the mid-1980's.' 'Those good times seem poised to continue. A survey of Midwestern purchasing managers released yesterday offered some early evidence of the growth spurt that could come from the recent fall in inventories. Production and new orders both surged in July, after having slowed for much of the spring, according to the Chicago branch of the National Association of Purchasing Management.'

Subject: Digging deeper From: Pete Weis To: Abner Date Posted: Sun, Jul 31, 2005 at 01:51:21 (EDT) Email Address: Not Provided Message: Abner, obviously Morgan Stanley and Wall Street, in general, has a vested interest in predicting a rosey picture ahead for the economy. In 1999 and early 2000 you wouldn't find Wall Street predicting trouble ahead for the stock markets or the economy. Nor would you find a negative outlook, ever, by Wall Street at any time in history through the many ups and downs of the markets and economy. Purchasing managers look at the here and now with little regard for what's behind it and whether or not what's behind it will continue into the future. Purchasing managers experience only what is going on in there particular region and are definitely not big picture people. For instance US auto manufacturers offered big discounts (employee discounts) for anyone purchasing an auto in July. These discounts are set to end in early August. July's US auto sales set records even though US automakers have been steadily losing money with their auto business. Auto manufacturing with all the related secondary supporting industries is huge in the Midwest. Do you suppose this has anything to do with the overall drop in inventories in the Midwest in July? With so many people buying new vehicles in July and incentives ending in August, how many vehicles do you suppose will be sold in August? I'm betting it won't be a record! At least not in the upward direction. Here's a much better, in depth, look at what's going on in the global economy from The Economist: In come the waves Jun 16th 2005 From The Economist print edition The worldwide rise in house prices is the biggest bubble in history. Prepare for the economic pain when it pops. NEVER before have real house prices risen so fast, for so long, in so many countries. Property markets have been frothing from America, Britain and Australia to France, Spain and China. Rising property prices helped to prop up the world economy after the stockmarket bubble burst in 2000. What if the housing boom now turns to bust? According to estimates by The Economist, the total value of residential property in developed economies rose by more than $30 trillion over the past five years, to over $70 trillion, an increase equivalent to 100% of those countries' combined GDPs. Not only does this dwarf any previous house-price boom, it is larger than the global stockmarket bubble in the late 1990s (an increase over five years of 80% of GDP) or America's stockmarket bubble in the late 1920s (55% of GDP). In other words, it looks like the biggest bubble in history. The global boom in house prices has been driven by two common factors: historically low interest rates have encouraged home buyers to borrow more money; and households have lost faith in equities after stockmarkets plunged, making property look attractive. Will prices now fall, or simply flatten off? And in either case, what will be the consequences for economies around the globe? The likely answers to all these questions are not comforting. The increasing importance of house prices in the world economy prompted The Economist to start publishing a set of global house-price indices in 2002 (see article). These now cover 20 countries, using data from lending institutions, estate agents and national statistics. Our latest quarterly update shows that home prices continue to rise by 10% or more in half of the countries (see table). America has seen one of the biggest increases in house-price inflation over the past year, with the average price of homes jumping by 12.5% in the year to the first quarter. In California, Florida, Nevada. Hawaii, Maryland and Washington, DC, they soared by more than 20%. In Europe, prices have long been at dizzy heights in Ireland and Spain, but over the past year have also spurted at rates of 9% or more in France, Italy, Belgium, Denmark and Sweden. Both France (15%) and Spain (15.5%) have faster house-price inflation than the United States. By contrast, some housing booms have now fizzled out. In Australia, according to official figures, the 12-month rate of increase in house prices slowed sharply to only 0.4% in the first quarter of this year, down from almost 20% in late 2003. Wishful thinkers call this a soft landing, but another index, calculated by the Commonwealth Bank of Australia, which is based on prices when contracts are agreed rather than at settlement, shows that average house prices have actually fallen by 7% since 2003; prices in once-hot Sydney have plunged by 16%. Britain's housing market has also cooled rapidly. The Nationwide index, which we use, rose by 5.5% in the year to May, down from 20% growth in July 2004. But once again, other surveys offer a gloomier picture. The Royal Institution of Chartered Surveyors (RICS) reports that prices have fallen for ten consecutive months, with a net balance of 49% of surveyors reporting falling prices in May, the weakest number since 1992 during Britain's previous house-price bust. The volume of sales has slumped by one-third compared with a year ago as both sellers and buyers have lost confidence in house valuations. House-price inflation has also slowed significantly in Ireland, the Netherlands and New Zealand over the past year. Since 1997, home prices in most countries have risen by much more in real terms (ie, after adjusting for inflation) than during any previous boom. (The glaring exceptions are Germany and Japan, where prices have been falling.) American prices have risen by less than those in Britain, yet this is still by far the biggest boom in American history, with real gains more than three times bigger than in previous housing booms in the 1970s or the 1980s. The most compelling evidence that home prices are over-valued in many countries is the diverging relationship between house prices and rents. The ratio of prices to rents is a sort of price/earnings ratio for the housing market. Just as the price of a share should equal the discounted present value of future dividends, so the price of a house should reflect the future benefits of ownership, either as rental income for an investor or the rent saved by an owner-occupier. Calculations by The Economist show that house prices have hit record levels in relation to rents in America, Britain, Australia, New Zealand, France, Spain, the Netherlands, Ireland and Belgium. This suggests that homes are even more over-valued than at previous peaks, from which prices typically fell in real terms. House prices are also at record levels in relation to incomes in these nine countries. America's ratio of prices to rents is 35% above its average level during 1975-2000 (see chart 1). By the same gauge, property is “overvalued” by 50% or more in Britain, Australia and Spain. Rental yields have fallen to well below current mortgage rates, making it impossible for many landlords to make money. To bring the ratio of prices to rents back to some sort of fair value, either rents must rise sharply or prices must fall. After many previous house-price booms most of the adjustment came through inflation pushing up rents and incomes, while home prices stayed broadly flat. But today, with inflation much lower, a similar process would take years. For example, if rents rise by an annual 2.5%, house prices would need to remain flat for 12 years to bring America's ratio of house prices to rents back to its long-term norm. Elsewhere it would take even longer. It seems more likely, then, that prices will fall. A common objection to this analysis is that low interest rates make buying a home cheaper and so justify higher prices in relation to rents. But this argument is incorrectly based on nominal, not real, interest rates and so ignores the impact of inflation in eroding the real burden of mortgage debt. If real interest rates are permanently lower, this could indeed justify higher prices in relation to rents or income. For example, real rates in Ireland and Spain were reduced significantly by these countries' membership of Europe's single currency—though not by enough to explain all of the surge in house prices. But in America and Britain, real after-tax interest rates are not especially low by historical standards. Betting the house America's housing market heated up later than those in other countries, such as Britain and Australia, but it is now looking more and more similar. Even the Federal Reserve is at last starting to fret about what is happening. Prices are being driven by speculative demand. A study by the National Association of Realtors (NAR) found that 23% of all American houses bought in 2004 were for investment, not owner-occupation. Another 13% were bought as second homes. Investors are prepared to buy houses they will rent out at a loss, just because they think prices will keep rising—the very definition of a financial bubble. “Flippers” buy and sell new properties even before they are built in the hope of a large gain. In Miami, as many as half of the original buyers resell new apartments in this way. Many properties change hands two or three times before somebody finally moves in. New, riskier forms of mortgage finance also allow buyers to borrow more. According to the NAR, 42% of all first-time buyers and 25% of all buyers made no down-payment on their home purchase last year. Indeed, homebuyers can get 105% loans to cover buying costs. And, increasingly, little or no documentation of a borrower's assets, employment and income is required for a loan. Interest-only mortgages are all the rage, along with so-called “negative amortisation loans” (the buyer pays less than the interest due and the unpaid principal and interest is added on to the loan). After an initial period, payments surge as principal repayment kicks in. In California, over 60% of all new mortgages this year are interest-only or negative-amortisation, up from 8% in 2002. The national figure is one-third. The new loans are essentially a gamble that prices will continue to rise rapidly, allowing the borrower to sell the home at a profit or refinance before any principal has to be repaid. Such loans are usually adjustable-rate mortgages (ARMs), which leave the borrower additionally exposed to higher interest rates. This year, ARMs have risen to 50% of all mortgages in those states with the biggest price rises. The rapid house-price inflation of recent years is clearly unsustainable, yet most economists in most countries (even in Britain and Australia, where prices are already falling) still cling to the hope that house prices will flatten rather than collapse. It is true that, unlike share prices, house prices tend to be somewhat “sticky” downwards. People have to live somewhere and owners are loth to accept a capital loss. As long as they can afford their mortgage payments, they will stay put until conditions improve. The snag is that eventually some owners have to sell—because of relocation, or job loss—and they will be forced to accept lower prices. Indeed, a drop in nominal prices is today more likely than after previous booms for three reasons: homes are more overvalued; inflation is much lower; and many more people have been buying houses as an investment. If house prices stop rising or start to fall, owner-occupiers will largely stay put, but over-exposed investors are more likely to sell, especially if rents do not cover their interest payments. House prices will not collapse overnight like stockmarkets—a slow puncture is more likely. But over the next five years, several countries are likely to experience price falls of 20% or more. The bubble in America's housing market is still red hot, others—in Britain, Australia and the Netherlands—have already cooled (see chart 2). What lessons might they offer the United States? The first is that, contrary to conventional wisdom, it does not require a trigger, such as a big rise in interest rates or unemployment, for house prices to decline. British home prices started to fall in the summer of 2004 after the Bank of England raised rates by a modest one and a quarter percentage points. Since 2002, the Reserve Bank of Australia has raised rates by exactly the same amount and unemployment is at a 30-year low, yet home prices have fallen. The Federal Reserve's gradual increase in rates by two percentage-points over the past year has done little to scare away buyers, because most still have fixed-rate mortgages and long-term bond yields have remained unusually low. But as more Americans have been resorting to ARMs, so the housing market is becoming more vulnerable to rising rates. Rung at the bottom British and Australian prices have stalled mainly because first-time buyers have been priced out of the market and demand from buy-to-let investors has slumped. British first-timers now account for only 29% of buyers, down from 50% in 1999. And, according to the National Association of Estate Agents, buy-to-let purchases are running 50% lower than a year ago. As prices become more and more heady in America, the same will happen there. British experience also undermines a popular argument in America that house prices must keeping rising because there is a limited supply of land and a growing number of households. As recently as a year ago, it was similarly argued that the supply of houses in Britain could not keep up with demand. But as the expectation of rising prices has faded, demand has slumped. According to RICS, the stock of houses for sale has increased by one-third over the past year. America has faster population growth than Britain, but its supply of housing has also been rising rapidly. Economists at Goldman Sachs point out that residential investment is at a 40-year high in America, yet the number of households is growing at its slowest pace for 40 years. This will create excess supply. Another mantra of housing bulls in America is that national average house prices have never fallen for a full year since modern statistics began. Yet outside America, many countries have at some time experienced a drop in average house prices, such as Britain and Sweden in the early 1990s and Japan over the past decade. So why should America be immune? Alan Greenspan, chairman of America's Federal Reserve, accepts that there are some local bubbles, but dismisses the idea of a national housing bubble that could harm the whole economy if it bursts. America has in the past seen sharp regional price declines, for example in Boston, Manhattan and San Francisco in the early 1990s. This time, with prices looking overvalued in more states than ever in the past, average American prices may well fall for the first time since the Great Depression. But even if prices in America do dip, insist the optimists, they will quickly resume their rising trend, because real house prices always rise strongly in the long term. Robert Shiller, a Yale economist, who has just updated his book “Irrational Exuberance” (first published on the eve of the stockmarket collapse in 2000), disagrees. He estimates that house prices in America rose by an annual average of only 0.4% in real terms between 1890 and 2004. And if the current boom is stripped out of the figures, along with the period after the second world war when the government offered subsidies for returning soldiers, artificially inflating prices, real house prices have been flat or falling most of the time. Another sobering warning is that after British house prices fell in the early 1990s, it took at least a decade before they returned to their previous peak, after adjusting for inflation. Another worrying lesson from abroad for America is that even a mere levelling-off of house prices can trigger a sharp slowdown in consumer spending. Take the Netherlands. In the late 1990s, the booming Dutch economy was heralded as a model of success. At the time, both house prices and household credit were rising at double-digit rates. The rate of Dutch house-price inflation then slowed from 20% in 2000 to nearly zero by 2003. This appeared to be the perfect soft landing: prices did not drop. Yet consumer spending declined in 2003, pushing the economy into recession, from which it has still not recovered. When house prices had been rising, borrowing against capital gains on homes to finance other spending had surged. Although house prices did not fall, this housing-equity withdrawal plunged after 2001, removing a powerful stimulus to spending. Housing-equity withdrawal has also fallen sharply over the past year in Britain and Australia, denting household spending. In Australia, the 12-month rate of growth in retail sales has slowed from 8% to only 1.8% over the past year; GDP growth has halved to 1.9%. In Britain, too, a cooling of the housing market has been accompanied by an abrupt slowdown in consumer spending. If, as seems likely, home prices continue to fall in both countries, spending will be further squeezed. Even a modest weakening of house prices in America would hurt consumer spending, because homeowners have been cashing out their capital gains at a record pace. Goldman Sachs estimates that total housing-equity withdrawal rose to 7.4% of personal disposable income in 2004. If prices stop rising, this “income” from capital gains will vanish. And after the gold rush? The housing market has played such a big role in propping up America's economy that a sharp slowdown in house prices is likely to have severe consequences. Over the past four years, consumer spending and residential construction have together accounted for 90% of the total growth in GDP. And over two-fifths of all private-sector jobs created since 2001 have been in housing-related sectors, such as construction, real estate and mortgage broking. One of the best international studies of how house-price busts can hurt economies has been done by the International Monetary Fund. Analysing house prices in 14 countries during 1970-2001, it identified 20 examples of “busts”, when real prices fell by almost 30% on average (the fall in nominal prices was smaller). All but one of those housing busts led to a recession, with GDP after three years falling to an average of 8% below its previous growth trend. America was the only country to avoid a boom and bust during that period. This time it looks likely to join the club. Japan provides a nasty warning of what can happen when boom turns to bust. Japanese property prices have dropped for 14 years in a row, by 40% from their peak in 1991. Yet the rise in prices in Japan during the decade before 1991 was less than the increase over the past ten years in most of the countries that have experienced housing booms (see chart 3). And it is surely no coincidence that Japan and Germany, the two countries where house prices have fallen for most of the past decade, have had the weakest growth in consumer spending of all developed economies over that period. Americans who believe that house prices can only go up and pose no risk to their economy would be well advised to look overseas.

Subject: Re: Digging deeper From: Abner To: Pete Weis Date Posted: Sun, Jul 31, 2005 at 18:18:34 (EDT) Email Address: Not Provided Message: Pete, you appear to be nearly as big a whack job as the good Professor Krugman...

Subject: Re: Digging deeper From: Pete Weis To: Abner Date Posted: Sun, Jul 31, 2005 at 20:52:36 (EDT) Email Address: Not Provided Message: Abner. When you are able to back up your assertions with some intelligent comment please feel free to express yourself. But resorting to calling people 'whack jobs' is like admitting you have nothing of substance to say. If you disagree with my posts back it up with a counter argument. So, is calling me a 'whack job' the best you can manage Abner or do you actually have some ideas about what is going on with regard to the US economy - maybe some specifics as to why you think the economy will continue to do well? Didn't mean to hurt your feelings.

Subject: Actual vs projected From: Pete Weis To: Pete Weis Date Posted: Sun, Jul 31, 2005 at 11:56:15 (EDT) Email Address: Not Provided Message: It's interesting that Morgan Stanley is projecting 5% GDP growth in the coming qtrs, since 2004 saw 4.2% growth, 1st qtr 2005 saw 3.8%, and 2nd qtr now comes in at 3.4%. And this is with a still booming housing market which continiues to prop up spending! Guess they expect housing activity to go to yet another higher level suddenly! Remember also, that these GDP numbers only subtract out the core rate of inflation which does not factor in higher energy and food costs. If the federal reserve factored in rising food and energy, what would the GDP numbers be then? Just some things to think about.

Subject: Coming soon to your neighborhood From: Pete Weis To: All Date Posted: Fri, Jul 29, 2005 at 12:26:01 (EDT) Email Address: Not Provided Message: From The Wall Street Examiner: In-Home ATM Provides Fast Cash by Theodore Mantle, Tuesday June 21 2005 Pulte Homes has partnered with Ditech.com and Fannie Mae to provide in-home cash-out refi access via a personal ATM machine incorporated into the standard kitchen design in all new homes. Discreetly tucked beneath the slab granite counter top and housed in its own alder wood cabinet, the nickel-plated money machine offers the ultimate in consumer convenience. Simply knock on the side of wood cabinet and out pops a fresh crisp new 100-dollar bill. Knock three times on the front if you want more...subsequent side knocks then dispense 500-dollar bills. A real-time data feed, delivered to your kitchen via satellite radio, updates the microprocessor inside the ATM with the latest home price appreciation percentages so your available cash is increased on an hourly basis. Fannie Mae currently limits your cash-out loan total to only 150% of your estimated home value; however future plans are to gradually increase the limit to as much as 300% depending on how hot the real estate market is in your area. A miniature tungsten lamp illuminates a faux current balance display that you can set to any value you choose before showing off the machine to your friends and relatives. (To check your actual balance available you must log on to www.Ditech.com/knockonwood/ and enter your Pulte password). posted Tuesday June 21, 05 18 PM ET

Subject: Greenspan Arrested!! From: johnny5 To: Pete Weis Date Posted: Fri, Jul 29, 2005 at 13:57:22 (EDT) Email Address: johnny5@yahoo.com Message: Alan Greenspan Charged With Killing Off Middle Class, Setting Stage for Economic Collapse Written by Felix Greenspan resists arrest before being handcuffed WASHINGTON—Alan Greenspan was arrested on Monday at the US Federal Reserve and formally charged with killing off large sections of the American middle class after police read the new book “Greenspan’s Fraud” by best-selling author and Economics Professor Ravi Batra. “I have no regrets,” snarled Greenspan as he was led away in handcuffs. “I was only following orders.” Yet the Fed Chairman later broke down and confessed to the crimes, pleading guilty. Greenspan has been killing off the middle class under a succession of US presidents from Ronald Reagan to George W. Bush, according to the new book. He helped extract trillions of dollars from the middle class to sharply enrich the rich and big business. Greenspan catered to the rich and powerful to maintain his lavish appointment as Chairman of the Federal Reserve, helping them shape government and economic policy in their favor. Batra explains how Greenspan’s policies on Social Security, income tax cuts, and the minimum wage are reducing the middle class and leading toward perilous times. Strangely, even as he harmed the middle class and created many economic crises, Greenspan has been worshiped like an oracle or wizard, and adored because he was seen as saving America from various economic crises. Although overall taxes have been reduced since Ronald Reagan, taxes have increased on the poor and been greatly reduced on the wealthy, in a robber baron taxation policy. “Greenspan’s fraud” is mainly a social security fraud which started in 1983 and continues until this day. It was based on Greenspan’s desire to raise revenues for the government without raising overall income taxes, which had been cut sharply mainly to benefit the rich in 1981. Instead of building up a trust fund with money invested on behalf of retired folks, it was used to reduce the Federal deficit. From the beginning, the surplus from the social security trust fund was used to fund the operating expenses of the government, but that was not the intent of the original legislation. These funds were to be collected for retirement, not for the government’s expenses, but the government looted the Trust Fund surplus the moment it appeared. So Greenspan’s fix for social security was a fraud because the public was convinced that the money would be saved in the trust fund while his intentions were to use additional social security revenues to balance the budget. Greenspan also cut interest rates and sharply expanded credit and debt. Wages are the main source of demand. Productivity is the main source of supply. So when wage growth lags productivity growth, there is inadequate demand. And so to shore up demand, debt must be created. Wages can be raised or debt can be created, but raising wages is something the establishment hates, and so they create more and more debt. Thus people borrow huge amounts of money. The debt culture is so strong that despite wages lagging behind productivity, there is an explosion of demand, and so demand is ahead of supply, and that causes the enormous trade deficit in America. But in addition to the wage gap, the big reason for the US trade deficit is that the manufacturing base has been destroyed in the US, and one reason for that is Greenspan’s program of financial deregulation. This financial deregulation enables foreign countries, particularly China and Japan, and foreign nationals to send money into America without any problems, which they couldn’t do in the past. All that money coming into America finances the trade deficit, and allows foreigners to buy government debt, making it possible for Americans to keep on consuming as much as they want. But in the process, because of the trade deficit, US manufacturing is destroyed. And since the US doesn’t manufacture much in America now, this trade deficit is really going to grow over time until there is some major disruption. This process leads to sharply rising corporate profits initially, and such a profit rise creates a stock market bubble, which eventually crashes because one day debt growth slows down. After the recent stock market crash, Batra claims that Greenspan went back to his old machinations to create even more debt. He did that by slashing interest rates drastically. The end result was the economy did stabilize but a real estate bubble developed in the process, and he thinks this bubble will also burst in the next two or three years or maybe even sooner. It is bound to burst because since wages continue to lag productivity, exponential growth in debt is needed for demand-supply balance, and that is simply impossible. So he thinks the next bubble to pop will be the real estate bubble. Batra believes the Iraq war has helped keep the economy going by way of increased spending. He thinks that the US government has now used almost all its defenses against a credit collapse. The 2000 stock market crash occurred because of the falling government deficit. The government began to create a surplus in its budget, and because it shifted from a deficit to the surplus, there was a big fall in debt growth. There is a time when debt growth falls and then there is a crash. Now they have re-inflated the market to another dose of debt creation. In fact there could soon be an inflationary depression resulting from a credit collapse all over the world. It would start out as a recession, but then quickly evolve into a depression because of the bursting of the real estate bubble as well as the Dow. Real estate is now a very serious problem, and Batra believes there is a real estate bubble now. In order to support the economy in the aftermath of a stock market crash, All the increase in the price of houses has enabled households to borrow a lot more money on the basis of their home equity. They are digging themselves into more debt, which means that a larger and larger portion of the income they are going to have to devote to servicing that debt is going to have to continue to rise. What is more likely according to Batra is that there will be a housing default. There will be a crunch in the economy and the politicians will want debt forgiveness but the banks will not go along with that. A depression could be worse than the 1930s. Because every market, every area is in an imbalance. Batra thinks an inflationary depression is a bigger possibility than a major deflation. Inflation is picking up now. Consumer prices are rising at the rate of 4% or 5% per year, and so inflation is coming back. The dollar is under pressure, so he thinks we are likely to see inflation along with a stagnant economy for the rest of this decade. Batra doesn’t think there is going to be a deflation, at least not prior to the collapse. He believes oil prices are going to stay high. Money supply will keep expanding because of Greenspan’s policies, so he doesn’t foresee a deflationary scenario. But he does think a housing collapse could lead to a deflationary collapse in the economy, two years or so after the housing collapse perhaps, but not right away.

Subject: Re: Greenspan Arrested!! From: Pete Weis To: johnny5 Date Posted: Fri, Jul 29, 2005 at 14:54:42 (EDT) Email Address: Not Provided Message: This piece starts as a spoof and ends up with a discussion of SMU economist Ravi Batra's ideas about where the economy is headed. Batra's ideas about wealth distribution and it's affect on the wellbeing of an economy are not popular with present day, mainstream economists - especially supply siders. MIT's Lester Thurow has said Ravi Batra's ideas are worth careful consideration (while not necessarily endorsing them). I find the charge (whether a spoof or not) that Greenspan's push to increase payroll taxes to 'ease the pain from budget deficits' (which went through the roof in the Reaganomics years) rather than to secure social security, a not completely unfounded charge. Has Greenspan ever viewed social security anything other than an fiscal problem rather than a safety net? He's always seemed to me to be a 'top-down' type of guy. He better watch out - he could get quite a burn where he's gotten a little thin.

Subject: GDP Growth in 2nd Quarter From: Abner To: All Date Posted: Fri, Jul 29, 2005 at 09:57:00 (EDT) Email Address: abelanger@msn.com Message: From reading Paul Krugman's recent columns, I could have sworn that we were hair's width from a barter economy, where we eat grass and wake up to the sound of 'bring out your dead!' every other morning. Huh, maybe I wasn't reading closely enough.

Subject: Re: GDP Growth in 2nd Quarter From: AJ To: Abner Date Posted: Fri, Jul 29, 2005 at 10:17:48 (EDT) Email Address: Not Provided Message: You were not readoing closely enough, for Paul Krugman as many economists is only worried about the labor market in the near term. Growth is fine and has been, so I suggest reading more closely and remembering why PK is considered among the finest economists in the world.

Subject: Re: GDP Growth in 2nd Quarter From: AJ To: AJ Date Posted: Fri, Jul 29, 2005 at 10:22:28 (EDT) Email Address: Not Provided Message: A GDP growth rate of 3.4% is moderate by the way, for we could easily be a 4% with relative price stability. America has a strong economy, with several long term problems that we must solve. That is what PK writes about over and over. Princeton hired PK for a reason, and we could not be happier.

Subject: An important question From: Pete Weis To: AJ Date Posted: Fri, Jul 29, 2005 at 10:47:06 (EDT) Email Address: Not Provided Message: How much of our present GDP owes to one sector - housing? A lot of recent reports attribute a large portion of job growth to the residential housing boom. This while IBM announces layoffs of 13000, HP over 14000, airlines and auto manufacturers are laying off. Housing is a highly leveraged sector and does not improve our current account - in fact it likely makes it worse. So what replaces housing when it finally cools. It is extremely difficult to sell this economy as a broadly improving economy.

Subject: many personalities From: johnny5 To: Pete Weis Date Posted: Fri, Jul 29, 2005 at 13:54:53 (EDT) Email Address: johnny5@yahoo.com Message: Now Pete, we have some names on here that seem to be the exact same person from thier writing styles, but we must treat each personality with care and respect, so when they are all selling the same economy - listen. hehe

Subject: European Stocks From: Terri To: All Date Posted: Fri, Jul 29, 2005 at 09:25:56 (EDT) Email Address: Not Provided Message: Again, I could not be more impressed by the broadness and depth of the bull stock market in Europe. This is especially encouraging no matter the future direction of the dollar. Stock valuations can readily adjust to currency value changes.

Subject: Re: European Stocks From: johnny5 To: Terri Date Posted: Sat, Jul 30, 2005 at 12:14:51 (EDT) Email Address: johnny5@yahoo.com Message: Yes terri - thank you for educating me about diversification and risk - the VTRIX my family now holds should help protect them from any dollar funny business. AS bogle keeps saying, no matter what happens with the currency, being invested is a good thing.

Subject: Re: European Stocks From: Jennifer To: johnny5 Date Posted: Sat, Jul 30, 2005 at 14:33:06 (EDT) Email Address: Not Provided Message: I wish I understood why international value stocks have so much better a record than growth stocks. If only there were separate European and Asian value indexes, but not yet.

Subject: Laying A Foundation For Human History From: Emma To: All Date Posted: Fri, Jul 29, 2005 at 09:20:33 (EDT) Email Address: Not Provided Message: http://www.edge.org/3rd_culture/diamond_pulitzer/diamond_index.html April 15, 1998 Laying A Foundation For Human History Bill Gates on Jared Diamond When Columbus, Cortes, Pizarro and other European colonists arrived in the New World five centuries ago, why weren't they driven into the sea by thousands of native warriors on horseback brandishing guns and carrying epidemic diseases? Why didn't rhino-mounted Bantu warriors swarm north to decimate horse-mounted Romans and create an empire that spanned Africa and Europe? These and many other questions are answered persuasively in Jared Diamond's fascinating new book, Guns, Germs, and Steel (W.W. Norton, 1997). It's the first explanation of history I've seen that gets at the key question of why Europeans and Asians, came to control most of the world, rather than Africans, Native Americans or other people. Diamond's primary thesis is that there's no inherent superiority among any racial or ethnic groups, and that the often-tragic failure of other races to resist expansion by other peoples was largely a matter of bad luck. He marshals mountains of evidence to suggest that Europeans and Asians achieved dominance because they had an abundance of plants and animals suitable for domestication, and because the east-west orientation of the Eurasian landmass eased the transfer of animals, crops, and technology. Eurasia had 32 of the 56 prize wild grasses that were candidates for cultivation; no other region had more than six. It was home to 13 of the 14 animals most important to humans. The Fertile Crescent, an area of Southwest Asia occupying portions of what are now Iraq, Jordan, Syria and Turkey, had six of the eight 'founder crops' and four of the five most important domesticated mammals—the cow, goat, pig and sheep. It's no surprise that the Fertile Crescent produced prodigious amounts of food and that the earliest known examples of many kinds of human development began there about 11,000 B.C. People outside Eurasia, and especially outside the Fertile Crescent, were at a big disadvantage because there wasn't much for them to work with. Few of the world's 200,000 wild plant species have food value to humans. More than 80 percent of the modern world's crop tonnage comes from just 12 species: banana, barley, corn, manioc, potato, rice, sorghum, soybean, sugar beet , sugarcane, sweet potato and wheat. 'Our failure to domesticate even a single major new food plant in modern times suggests that ancient peoples really may have explored virtually all useful wild plants and domesticated all the ones worth domesticating,' Diamond writes. Domesticated animals furnished fertilizer, meat and milk. They pulled plows. They helped win wars. Whereas the Fertile Crescent had many, California had no important mammals to domesticate, despite sharing a similar climate. In fact, North America had no large mammals suitable for domestication other than the llama, and it wasn't widespread. When human hunters arrived in the Americas via the Bering Strait about 13,000 years ago, they apparently killed most of the unwary mammals that would have been suited to domestication. 'About 15,000 years ago, the American West looked much as Africa's Serengeti Plains do today, with herds of elephants and horses pursued by lions and cheetahs, and joined by members of such exotic species as camels and giant sloths,' Diamond writes. Soon these species were extinct. In Europe and Asia, food surpluses allowed some people to specialize in science or art and others to focus their energies on being soldiers. Civilizations grew in the Fertile Crescent and spread to the east and west. One reason a native cavalry didn't drive Columbus and other European colonialists back into the Atlantic was that there were no native horsemen. The Americas didn't have horses again until Europeans brought them, and the natives didn't get them until they escaped from Spanish explorers. Rhino-mounted warriors didn't swarm into Europe from Africa because rhinos can't be domesticated. Nor can elephants, hippos, zebras or any of the other African animals that would otherwise make great allies in war. These animals can sometimes be tamed into submission, but their breeding—and hence their genetic characteristics—can't be controlled the way horses can. Diamond illustrates the enormous competitive advantage enjoyed by societies with horses and guns by recounting how Spanish conquistador Francisco Pizarro used 62 horsemen and 106 foot soldiers to destroy thousands of Inca soldiers on Nov. 16, 1532. In a matter of hours, Pizarro's small band captured the Inca emperor Atahuallpa, leader of America's most advanced state, by panicking the emperor's 80,000 guards. Disease was even more important than horses or guns in the European subjugation of the Americas and the rest of the world. Diamond estimates that European disease wiped out 95 percent of America's pre-Columbian population. Epidemics spread from tribe to tribe, often well in advance of the Europeans themselves. Why, instead, didn't Indian epidemic diseases wipe out Europeans? Epidemic diseases originated in domesticated animals. Measles, smallpox and tuberculosis came to humans from cattle, flu came from pigs and ducks, and pertussis (whooping cough) came from pigs and dogs. Indians didn't have epidemic diseases or immunities because they didn't have the domesticated animals that gave rise to the diseases. Besides having good grains, good animals and diseases on their side, Eurasians were blessed with a huge landmass that was oriented east-west rather than north-south like Africa and America. People could take their crops and livestock long distances to the east or west, because climate tended not to change much along a given latitude. Trade routes eventually opened from Asia to Europe. North-south migration tended to be vastly more difficult. Abrupt climate changes would render a crop useless, and mean the wrong forage and weather for livestock. African and American civilizations were isolated by mountains, deserts or rainforests and often unable to share in the advances of other cultures that might be as little as 1,000 miles to the north or south. Natives of Australia, New Guinea and much of the rest of the Pacific suffered because of their isolation, too. Diamond makes a compelling case that traditional lifestyles in New Guinea and Australia, rather than showing a lack of 'advancement,' as defined by Europeans, were in fact intelligent adaptations to areas with difficult soils and climates and a lack of domesticable animals. A thousand years ago Asia was equal or ahead of Europe in many technologies. Diamond argues that Europeans later pulled ahead of Asians because Japan and China became inward-looking and stopped trading ideas with other countries. The result, almost by default, was European domination of much of the world until after World War II. Japan and now China have roared back as economic powers, and for Japan technological innovation has been a key to its enormous strides in recent decades. 'Guns, Germs, and Steel' lays a foundation for understanding human history, which makes it fascinating in its own right. Because it brilliantly describes how chance advantages can lead to early success in a highly competitive environment, it also offers useful lessons for the business world and for people interested in why technologies succeed. The book reminds me that innovation sustains success while complacency leads to stagnation and decline—a lesson I try to keep in mind every day. In early human history, technological advantages were built on the availability of certain plants, animals and geographies. In today's emerging information society, the critical natural resources are human intelligence, skill and leadership. Every region of the world has these in abundance, which promises to make the next chapter of human history particularly interesting.

Subject: Bill Gates on Jared Diamond From: Emma To: Emma Date Posted: Fri, Jul 29, 2005 at 09:21:29 (EDT) Email Address: Not Provided Message: Bill Gates on Jared Diamond.

Subject: Splitting hairs From: Mik To: Emma Date Posted: Fri, Jul 29, 2005 at 13:00:55 (EDT) Email Address: Not Provided Message: Emma, I just wanted to add a few points of question to this whole philosophy: Statements by Jared include: 'Rhino-mounted warriors didn't swarm into Europe from Africa because rhinos can't be domesticated. Nor can elephants, hippos, zebras or any of the other African animals that would otherwise make great allies in war.' I don't know how true these statements hold in understanding the difference in development between India and Europe. The Indians were successful in domesticating their elephants and used the elephants to build amazing structures. The Indians invented our number system (that we use today) along with amazing intellectual systems such as the game of chess. Now it appears that African elephants are very different to Indian elephants and can't be domesticated. I have my reservations, and believe that if the opportunity had arisen, the Africans may well have been able to domesticate the Elephant. This the largest and strongest land animal on earth. The Africans may well have been able to invade on the back of Elephants (not Rhinos). Further, Jared raises the issue of 'political centrality' as a means of organising society and progress. Well you can draw a line in mid Africa (abouth South of Tanzania) and from that line North the 'lingua-franca' among Africans is Swahili, from that line South, the lingua-franca is Zulu. This is a clear indicator that there were some sort of central powers that evoked enough influence to ensure a common language. In fact the Zulus have a clear history of a two great leaders that unified the whole Souther region (Shaka Zulu was one of those leaders). In essence, I am probably splitting hairs, on the Jared statements about Elephants not being suitable for domestication when in actual fact they were domesticated. From this I would like to raise two questions: 1. Why didn't the really Africans domesticate the Elephant (unlike the Indians)? 2. Why did the Indians who did domesticate the Elephant not become so powerful that they could have driven out their colonisers earlier, or even gone forth and invaded other regions?

Subject: Re: Splitting hairs From: Emma To: Mik Date Posted: Fri, Jul 29, 2005 at 13:16:52 (EDT) Email Address: Not Provided Message: Reverse the problem. It is not the Africans did not domesticate the elephant, but that African elephants are of a different temper completely and cannot be domesticated. Horses can be domesticated, but not Zebras. No matter how clever you are, Zebras cannot be domesticated.

Subject: Re: Splitting hairs From: Ben To: Emma Date Posted: Mon, Aug 01, 2005 at 02:55:55 (EDT) Email Address: pedersb@sce.com Message: Hannibal's elephants were African.

Subject: Re: Splitting hairs From: Ben To: Emma Date Posted: Mon, Aug 01, 2005 at 02:54:52 (EDT) Email Address: pedersb@sce.com Message: Hannibal's elephants were African.

Subject: Re: Splitting hairs From: Mik To: Emma Date Posted: Fri, Jul 29, 2005 at 14:14:48 (EDT) Email Address: Not Provided Message: Actually Emma, the British started domesticating Zebras in Kenya, but that program was short lived. I have actually seen photos of English ladies riding Zebras. By that stage I think it was a whole lot easier to bring in stronger Horses than use Zebras. But you raised an interesting point - why weren't Zebras domesticated by the Africans? Adding to this statement, there used to be an animal called the Kwagga (also spelt 'Quagga') that looked half horse and half Zebra. This animal infact had many characteristics that were half Zebra and half Horse. Again - this animal could have been domesticated. Sadly the Europeans prized the unique skin of the animal and hunted it into extinction. Interestingly enough, there is a German group who have found genetic properties of the Kwagga in horses and Zebras and have been crossing these animals to produce Kwagga genese. We may well for the first time in our history bring back an extinct animal. (take a look at this site: http://home.hetnet.nl/~harrie.maas/speciesinfo/quagga.htm ) Also there are many different kinds of Elephants. We found that the Elephants on the West coast along the desert of Namibia and Angola were 'friendly' enough to hang out in the same area as the humans (and have a possibility to be domesticated like the ones in India). Where Elephants in the forest in Knysna (Southern tip of Africa) were exceptionally hostile to humans. So we had friendly elephants in a desert (what good is that?) and hostile elephants in a place we could have used them to moved heavy logs for construction.... talk about bad luck. It has just occured to me.... how the hell do I know all this?

Subject: White Hunter - Black heart From: johnny5 To: Mik Date Posted: Sat, Jul 30, 2005 at 12:05:23 (EDT) Email Address: johnny5@yahoo.com Message: Very interesting about the Zebra, I did not know that but really could not think of a reason why if a horse could be domesticated a zebra could not. Clint Eastwood made some movie about elephants, I thought it was the desert elephants that was killing man. That is very intersting, so it seems there is something about the desert that makes elephants friendly, and the forest that makes them mean - personally do you feel if we took desert baby elephants and raised them in the forests they would be human agressive and took baby forest elephants and raised them in the desert they would be nice - or is the nature part of thier design too overpowering for thier nurture part? Humans are animals and mammals like these creatures, I don't think it is genuine to say they have genetic characteristics that cant be nurtured away and then say we can do that with humans. Just as Jared says certain animals were only good for certain areas because they evolved to maximize the efficiencies of their environment - I try to talk about this in regard to humans evolving differently and then my liberal friends won't discuss it. My grandfather was mexican, yet my skin is very fair and I burn in less than 3 minutes exposure - working a sunny tropical environment all the time would be a death sentence to me. I used to love to surf but I had to give up the hobby - my doctor said I would be dead by now had I not from cancer. I understand pigs skin can burn from sun exposure just like humans - does Jared say anything about thier development between tropical regions versus colder less sunny places like nw europe or canada?

Subject: Re: Splitting hairs From: Emma To: Mik Date Posted: Fri, Jul 29, 2005 at 15:16:20 (EDT) Email Address: Not Provided Message: These are the tpyes of anecdotes set down year after year that lead to broader insights. Jared Diamond was recording such anecdotes for more than 30 years. You do have a fine fine memory. Remember, what the British aristocracy may have time for a poor people may have far too little. Training a show zebra for a technically rich people, is not readily making domestic a herd for a poorer people.

Subject: Domesticated humans From: johnny5 To: Emma Date Posted: Fri, Jul 29, 2005 at 13:51:05 (EDT) Email Address: johnny5@yahoo.com Message: And like certain elephants and horses cant be domesticated, certain people are probably more suitable to domestication as well, some can be lead, while others will never be tamed. But we are all equal elephants and equal horses right - just because we have a few black stripes doesn't mean we aren't equal eh? hehe

Subject: Re: Domesticated humans From: Mik To: johnny5 Date Posted: Fri, Jul 29, 2005 at 14:16:21 (EDT) Email Address: Not Provided Message: My mother tried to domesticate me... turns our I was not suitable for domestication.

Subject: Sean Connery - Zardoz From: johnny5 To: Mik Date Posted: Sat, Jul 30, 2005 at 12:07:50 (EDT) Email Address: johnny5@yahoo.com Message: He was not so much suitable either - I guess you were like those elephants that can't be tamed - but I have many liberals trying to convince me to the opposite - strange they would then say that some elephants are tempered right and others are not - that would imply some kind of genetic difference no - and certainly if you just give all the elephants the right kind of nurturing they can all be taught the same eh? You can't have it both ways can you? Either nature has a stronger bent over nurture or it doesn't.

Subject: How to Get Rich From: Emma To: All Date Posted: Fri, Jul 29, 2005 at 08:56:22 (EDT) Email Address: Not Provided Message: http://www.edge.org/3rd_culture/diamond_rich/rich_p2.html How To Get Rich A Talk by Jared Diamond In Guns, Germs, and Steel I asked why history has unfolded differently over the last 13,000 years in Eurasia, in the Americas, in sub-Saharan Africa, and in Aboriginal Australia, with the result that within the last 500 years Europeans were the ones who conquered Native Americans and Aboriginal Australians and sub-Saharan Africans, rather than vice versa. Most of that book, was concerned with comparing the peoples of different continents, but I knew that I couldn't publish a book comparing the histories of different continents and considering Eurasia as a unit without saying something about the fascinating problem of the differences of history within Eurasia. Why, within Eurasia, was it Europeans who conquered the world and colonized other people, rather than the Chinese or the people of India or the Middle East? I devoted seven pages to that subject at the end of Guns, Germs, and Steel, and I think I arrived at the correct solution. Nevertheless, since the publication of Guns, Germs, and Steel, I've received a lot of feedback, and the most interesting feedback has been about the implications of that comparative analysis of the histories of China, Europe, India, and the Middle East. In particular, in addition to the review of my book by Bill Gates, I've received a lot of correspondence from economists and business people, who pointed out to me possible parallels between the histories of entire human societies and histories of smaller groups. This correspondence from economists and business people has to do with the following big question: what is the best way to organize human groups and human organizations and businesses so as to maximize productivity, creativity, innovation, and wealth? Should your human group have a centralized direction, in the extreme having a dictator, or should there be diffuse or even anarchical organization? Should your collection of people be organized into a single group, or broken off into a number of groups, or broken off into a lot of groups? Should you maintain open communication between your groups, or erect walls between them, with groups working more secretly? Should you erect protectionist tariff walls against the outside, or should you expose your business or government to free competition? These questions about group organization arise at many different levels and for many types of groups. They arise, of course, about the organization of entire governments or countries: what is the best way to govern a country? Remember the classic arguments about whether the best government is a benign dictatorship, or a federal system, or an anarchical free-for-all. The same questions also rise about the organization of different companies within the same industry. How can you account for the fact that Microsoft has been so successful recently, and that IBM, which was formerly successful, fell behind but then drastically changed its organization over the last four years and improved its success? How can we explain the different successes of what we call different industrial belts? When I was a boy growing up in Boston, Route 128, the industrial belt around Boston, led the industrial world in scientific creativity and imagination. But Route 128 has fallen behind, and now Silicon Valley is the center of innovation. And the relations of businesses to each other in Silicon Valley and Route 128 are very different, possibly resulting in those different outcomes. Of course there are also the famous differences between the productivities of the economies of different countries: the differing national average productivities of Japan and the United States and France and Germany. Actually, though, there are differences between the productivities and wealths of different business sectors within the same country. For example, the German metal-working industry has a productivity rivaling that of the United States, so the Germans are certainly capable of organizing industries well, but the German beer-brewing industry is less than half as productive as the American beer-brewing industry. Or take Japan — we Americans are paranoid about the supposed efficiency of Japanese business, and the fact is that the Japanese steel industry is 45% more productive than the American steel industry. Why is it, then, that the Japanese food-producing industry is less than 1/3 as productive and efficient as the American food-processing industry? Still another example: in Korea, the steel industry is equal in efficiency to American steel making, but all other Korean industries lag behind the United States. What is it about the different organization of the German beer brewers and the German metal workers, or the different organization of the Japanese food processors and the Japanese car manufacturers, that accounts for the different productivities of these sectors within a given country? Obviously, the answers to these questions about the different success of organizations partly depend upon idiosyncracies of individuals. The success of Microsoft must have something to do with Bill Gates. If an idiot were in command of Microsoft, then however superior Microsoft's organization, Microsoft would be unlikely to be a successful business. But nevertheless one can still ask , all other things being equal, or else in the long run, or else on the average, what form of organization of human groups is best? I'm sure that there are many of you here who are involved with businesses that would like to know the answer to that question. I propose to try to learn from human history. Human history over the last 13,000 years comprises tens of thousands of different experiments. Each human society represents a different natural experiment in organizing human groups. Human societies have been organized very differently, and the outcomes have been very different. Some societies have been much more productive and innovative than others. What can we learn from these natural experiments of history that will help us all get rich? I propose to go over two batches of natural experiments that will give you insights into how to get rich. The first batch of natural experiments concerns understanding the effects of isolation and of group size and of communication with other groups on the productivity of human societies. Let's learn from the extreme examples of isolation of human societies. If isolation has any effect on human societies, the places we're most likely to see that effect are the histories of those two islands off southeastern Australia called Tasmania and Flinders Island. They lie about 200 miles off the southeast coast of Australia and are separated today from Australia by Bass Straits, but those straits are relatively shallow, so their floor lay above sea level at glacial times of low sea level up to about 10,000 years ago. The Bass Straits between Tasmania and Australia were then dry land, and Tasmania was part of the Australian mainland, just as Britain used to be part of the European mainland. When the glaciers melted, sea level rose and cut off Tasmania from the Australian mainland. So when Tasmania and Flinders were part of the Australian mainland, Australian Aborigines walked down to Tasmania and Flinders from the mainland. And then 10,000 years ago the glaciers melted, sea level rose, and Tasmania became cut off from mainland Australia by Bass Straits, which are really rough waters. In addition, the watercraft of the Tasmanians were wash-through rafts that got waterlogged and sank after about a dozen hours. The result was that the boats of the Tasmanians could not reach Australia, and the boats of the mainland Aboriginal Australians could not reach Tasmania. Thus, for the last 10,000 years the Tasmanians represented a study of isolation unprecedented in human history except in science fiction novels. Here were 4,000 Aboriginal Australians cut off on an island, and they remained totally cut off from any other people in the world until the year 1642, when Europeans 'discovered' Tasmania. What happened during those 10,000 years to that isolated 4,000-person society? And what about nearby Flinders Island, which originally supported a population of 200 cut-off Aboriginal Australians? — what happened to that tiny isolated society of 200 people during those 10,000 years? When Europeans discovered Tasmania in the 17th century, it had technologically the simplest, most 'primitive' human society of any society in the modern world. Native Tasmanians could not light a fire from scratch, they did not have bone tools, they did not have multi-piece stone tools, they did not have axes with handles, they did not have spear-throwers, they did not have boomerangs, and they did not even know how to fish. What accounts for this extreme simplicity of Tasmania society? Part of the explanation is that during the 10,000 years of isolation, the Aboriginal Australians, who numbered about 250,000, were inventing things that the isolated 4,000 Tasmanians were not inventing, such as boomerangs. Incredibly, though, archeological investigations have shown one other thing: during those 10,000 years of isolation, the Tasmanians actually lost some technologies that they had carried from the Australian mainland to Tasmania. Notably, the Tasmanians arrived in Tasmania with bone tools, and bone tools disappear from archeological record about 3,000 years ago. That's incredible, because with bone tools you can have needles, and with needles you can have warm clothing. Tasmania is at the latitude of Vladivostok and Chicago: it's snowy in the winter, and yet the Tasmanians went about either naked or just with a cape thrown over the shoulder. How do we account for these cultural losses and non-inventions of Tasmanian society? Flinders Island was even more extreme — that tiny society of 200 people on Flinders Island went extinct several millenia ago. Evidently, there is something about a small, totally isolated human society that causes either very slow innovation or else actual loss of existing inventions. That result applies not just to Tasmania and Flinders, but to other very isolated human societies. There are other examples. The Torres Strait islanders between Australia and New Guinea abandoned canoes. Most Polynesian societies lost bows and arrows, and lost pottery. The Polar Eskimos lost the kayak, Dorset Eskimos lost dogs and bow drills, and Japan lost guns. To understand these losses in extreme isolation, the easiest case to understand is Japan, because the loss of firearms in Japan was witnessed and described. It took place in a literate society. Guns arrived in Japan around 1543 with two Portuguese adventurers who stepped ashore, pulled out a gun, and shot a duck on the wings. A Japanese nobleman happened to be there, was very impressed, bought these two guns for $10,000, and had his sword-maker imitate them. Within a decade, Japan had more guns per capita than any other country in the world, and by the year 1600 Japan had the best guns of any country in the world. And then, over the course of the next century, Japan gradually abandoned guns. What happened was that the Samurai, the warrior class in Japan, had been used to fighting by standing up in front of their armies and making a graceful speech, the other opposing Samurai made an answering graceful speech, and then they had one-on-one combat. The Samurai discovered that the peasants with their guns would shoot the Samurai while the Samurai were making their graceful speeches. So the Samurai realized that guns were a danger because they were such an equalizer. The Samurai first restricted the licensing of gun factories to a hundred factories, and then they licensed fewer factories, and then they said that only three factories could repair guns, and then they said that those three factories could make only a hundred guns a year, then ten guns a year, then three guns a year, until by the 1840s when Commodore Perry came to Japan, Japan no longer had any guns. That represents the loss of a very powerful technology. This loss was possible only in Japan because of its isolation; there were no other neighbors threatening Japan. When firearms arrived in Europe, there were European princes who similarly banned firearms, and there were European princes who banned printing, but you can guess what happened. When a prince in the middle of Europe banned firearms, within a short time the prince next door who did not ban firearms either walked in and conquered, or else the prince who banned firearms quickly realized his or her mistake and reacquired firearms from next door. The banning of the guns could work only in isolated Japan, where there were no neighbors as a threat, and where there were no neighbors from whom to reacquire the technology. So these stories of isolated societies illustrate two general principles about relations between human group size and innovation or creativity. First, in any society except a totally isolated society, most innovations come in from the outside, rather than being conceived within that society. And secondly, any society undergoes local fads. By fads I mean a custom that does not make economic sense. Societies either adopt practices that are not profitable or for whatever reasons abandon practices that are profitable. But usually those fads are reversed, as a result of the societies next door without the fads out-competing the society with the fad, or else as a result of the society with the fad, like those European princes who gave up the guns, realizing they're making a big mistake and reacquiring the fad. In short, competition between human societies that are in contact with each other is what drives the invention of new technology and the continued availability of technology. Only in an isolated society, where there's no competition and no source of reintroduction, can one of these fads result in the permanent loss of a valuable technology. So that's one of the two sets of lessons that I want to draw from history, about what happens in a really isolated society and group. The other lesson that I would like to draw from history concerns what is called the optimal fragmentation principle. Namely, if you've got a human group, whether the human group is the staff of this museum, or your business, or the German beer industry, or Route 128, is that group best organized as a single large unit, or is it best organized as a number of small units, or is it best fragmented into a lot of small units? What's the most effective organization of the groups? I propose to get some empirical information about this question by comparing the histories of China and Europe. Why is it that China in the Renaissance fell behind Europe in technology? Often people assume that it has something to do with the Confucian tradition in China supposedly making the Chinese ultra-conservative, whereas the Judeo-Christian tradition in Europe supposedly stimulated science and innovation. Well, first of all, just ask Galileo about the simulating effects of the Judeo-Christian tradition on science. Then, secondly, just consider the state of technology in medieval Confucian China. China led the world in innovation and technology in the early Renaissance. Chinese inventions include canal lock gates, cast iron, compasses, deep drilling, gun powder, kites, paper, porcelain, printing, stern-post rudders, and wheelbarrows — all of those innovations are Chinese innovations. So the real question is, why did Renaissance China lose its enormous technological lead to late-starter Europe? We can get insight by seeing why China lost its lead in ocean-going ships. As of the year 1400, China had by far the best, the biggest, and the largest number of, ocean-going ships in the world. Between 1405 and 1432 the Chinese sent 7 ocean-going fleets, the so-called treasure fleets, out from China. Those fleets comprised hundreds of ships; they had total crews of 20,000 men; each of those ships dwarfed the tiny ships of Columbus; and those gigantic fleets sailed from China to Indonesia, to India, to Arabia, to the east coast of Africa, and down the east coast of Africa. It looked as if the Chinese were on the verge of rounding the Cape of Good Hope, coming up the west side of Africa, and colonizing Europe. Well, China's tremendous fleets came to an end through a typical episode of isolationism, such as one finds in the histories of many countries. There was a new emperor in China in 1432. In China there had been a Navy faction and an anti-Navy faction. In 1432, with the new emperor, the anti-Navy faction gained ascendancy. The new emperor decided that spending all this money on ships is a waste of money. Okay, there's nothing unusual about that in China; there was also isolationism in the United States in the 1930's, and Britain did not want anything to do with electric lighting until the 1920s. The difference, though, is that this abandoning of fleets in China was final, because China was unified under one emperor. When that one emperor gave the order to dismantle the shipyards and stop sending out the ships, that order applied to all of China, and China's tradition of building ocean-going ships was lost because of the decision by one person. China was a virtual gigantic island, like Tasmania. Now contrast that with what happened with ocean-going fleets in Europe. Columbus was an Italian, and he wanted an ocean-going fleet to sail across the Atlantic. Everybody in Italy considered this a stupid idea and wouldn't support it. So Columbus went to the next country, France, where everybody considered it a stupid idea and wouldn't support it. So Columbus went to Portugal, where the king of Portugal considered it a stupid idea and wouldn't support it. So Columbus went across the border to a duke of Spain who considered this stupid. And Columbus then went to another duke of Spain who also considered it a waste of money. On his sixth try Columbus went to the king and queen of Spain, who said this is stupid. Finally, on the seventh try, Columbus went back to the king and queen of Spain, who said, all right, you can have three ships, but they were small ships. Columbus sailed across the Atlantic and, as we all know, discovered the New World, came back, and brought the news to Europe. Cortez and Pizarro followed him and brought back huge quantities of wealth. Within a short time, as a result of Columbus having shown the way, 11 European countries jumped into the colonial game and got into fierce competition with each other. The essence of these events is that Europe was fragmented, so Columbus had many different chances. Essentially the same thing happened in China with clocks: one emperor's decision abolished clocks over China. China was also on the verge of building powerful water-powered machinery before the Industrial Revolution in Britain, but the emperor said 'Stop,' and so that was the end of the water-powered machinery in China. In contrast, in Europe there were princes who said no to electric lighting, or to printing, or to guns. And, yes, in certain principalities for a while printing was suppressed. But because Europe in the Renaissance was divided among 2,000 principalities, it was never the case that there was one idiot in command of all Europe who could abolish a whole technology. Inventors had lots of chances, there was always competition between different states, and when one state tried something out that proved valuable, the other states saw the opportunity and adopted it. So the real question is, why was China chronically unified, and why was Europe chronically disunified? Why is Europe disunified to this day? The answer is geography. Just picture a map of China and a map of Europe. China has a smooth coastline. Europe has an indented coastline, and each big indentation is a peninsula that became an independent country, independent ethnic group, and independent experiment in building a society: notably, the Greek peninsula, Italy, the Iberian peninsula, Denmark, and Norway/Sweden. Europe had two big islands that became important independent societies, Britain and Ireland, while China had no island big enough to become an independent society until the modern emergence of Taiwan. Europe is transected by mountain ranges that split up Europe into different principalities: the Alps, the Pyrenees, Carpathians — China does not have mountain ranges that transect China. In Europe big rivers flow radially — the Rhine, the Rhone, the Danube, and the Elbe — and they don't unify Europe. In China the two big rivers flow parallel to each other, are separated by low-lying land, and were quickly connected by canals. For those geographic reasons, China was unified in 221 B.C. and has stayed unified most of the time since then, whereas for geographic reasons Europe was never unified. Augustus couldn't do it, Charlemagne couldn't do it, and Napoleon and Hitler couldn't unify Europe. To this day, the Europe Union is having difficulties bringing any unity to Europe. So, the lesson I draw is that competition between entities that have free communication between them spurred on Europe. In China one despot could and did halt innovation in China. Instead, China's experience of technological innovation came during the times when China's unity fell apart, or when China was taken over temporarily by an outside invader. You've seen that effect even in modern times. Twenty years ago, a few idiots in control of the world's most populous nation were able to shut down the educational system for one billion people at the time of the Great Cultural Revolution, whereas it's impossible for a few idiots to shut down the educational system of all of Europe. This suggests, then, that Europe's fragmentation was a great advantage to Europe as far as technological and scientific innovation is concerned. Does this mean that a high degree of fragmentation is even better? Probably not. India was geographically even more fragmented than Europe, but India was not technologically as innovative as Europe. And this suggests that there is an optimal intermediate degree of fragmentation, that a too-unified society is a disadvantage, and a too-fragmented society is also a disadvantage. Instead, innovation proceeds most rapidly in a society with some intermediate degree of fragmentation. Okay, let's now start to apply all this to what we should do if we want to try to go out and get rich. Let's apply this to some affluent modern industries and companies. I'll give you two examples. The first example concerns that image of productivity that we Americans have as we look toward Japan. We fantasize that the industrial productivity of Japan and Germany is greater than that of the United States. And that's not true. On the average, American industrial productivity is higher than the industrial productivity of either Japan or Germany. But that average figure conceals differences among the industries of the same country, related to differences in organization — and those differences are very instructive. Let me give you two examples from case studies carried out by the McKinsey Corporation, an economics study industry based in Washington. These two examples involve the German beer industry and the Japanese food-processing industry. What about the German beer industry? Well, the Germans are very efficient in some of their industries. The German metal-working industry and the German steel industry are equal in productivity to those of the United States, but the German beer-producing industry has a productivity only 43% that of the United States. And it's not that the Germans make bad beer; the Germans make wonderful beer. Whenever my wife and I go to Germany, we take along an extra suitcase specifically for the purpose of filling it up with bottles of German beer, which we take back and dole out to ourselves for the year after each of our trips to Germany. Why, then, since the Germans make such great beer, and since their industrial organization works so successfully for steel and metal, can't they achieve a successful industrial organization for beer? It turns out that the German beer industry suffers from small-scale production. There are 1,000 little local beer companies in Germany, shielded from competition with each other because each German brewery has virtually a local monopoly, and shielded from competition with imports. The United States has 67 major beer breweries, producing 23 billion liters of beer per year. Germany has 1,000 major beer breweries, producing only half as much beer per year as the United States. That's to say that the average brewery in the U.S. produces 31 times more beer than the average brewery in Germany. That fact results from German local tastes and German government policies. German beer drinkers are fiercely loyal to their local brand of beer. And so there is no national brand of beer in Germany, analogous to Budweiser or Miller or Coors in the United States. Instead, most German beer is consumed within 30 miles of the place where it is brewed. And any of you who have been in Germany know that Germans love their local beer and loathe the beer that comes from next door. The result is that the German beer industry cannot profit from economies of scale. In the beer industry, as in other industries, production costs decrease greatly with size. The bigger the refrigerator unit for making the beer, and the longer the bottle-filling line, the cheaper is the cost of brewing beer. So these tiny German beer industries are relatively inefficient. There's no competition; there are just 1,000 local monopolies. That outcome, of Germans having their local beer loyalties, is reinforced by German government law. The German government makes it hard for foreign beers to compete on the German market. The German government has so-called beer purity laws. The German government specifies exactly what can go into beer, and not surprisingly what can go into beer is what German breweries put into beer, and it's not what American, French, and Swedish breweries like to put into beer. So it's difficult for foreign breweries to compete on the German beer market. The result is that German beer is not exported very much. Any of you who like to buy Lowenbrau in the U.S. should look at the label in the supermarket: your U.S.-bought Lowenbrau is not brewed in Germany, it's brewed on license in the United States with American productivity and American efficiencies of scale. The same inefficiency turns out to characterize some other German industries. The German soap industry and the German consumer electronics industry are also inefficient; their companies are not exposed to competition with each other, nor are they exposed to foreign competition, and so they do not acquire the best practices of international industry. But that disadvantage is not true for the German metal-producing industry or steel industry. There, big German companies compete with each other and they compete internationally, and therefore they are forced to acquire best international practices through competition. There you have an example from the German beer industry about the disadvantages of having lots of small groups that are secretive and don't compete with each other. The other example that I want to tell you about is the Japanese food-processing industry. I mentioned that we Americans are virtually paranoid about the efficiency of the Japanese, and it's true for some Japanese industries, but not for their food-processing industry. Japanese processed food is produced with an efficiency 32% of American processed foods. There are 67,000 food processing companies in Japan; there are only 21,000 in the United States, although the U.S. has double Japan's population, so the average food-processing company in the United States is six times bigger than its Japanese counterpart. What is the reason why the Japanese food-processing industry, like German beer industries, consists of small companies with local monopolies? It turns out to be basically the same two reasons as with German beer: namely, local tastes creating local monopolies, and government policies. The Japanese are fanatics for fresh foods. Any of you who have been to Japan, as my wife and I were in October, will remember what it says on Japanese containers. In the United States, when you go to the supermarket, there's one date on the container, the date by which you're supposed to throw away that bottle of milk. In Japan there are three dates on the container: there's the date when the milk was manufactured, and there's the date when the milk arrived at the supermarket, and then there's the date when the milk should be thrown away, and these dates are in big letters; the Japanese really care about the dates. So the result is that milk production in Japan always starts at one minute past midnight, so that the milk that goes to market that morning is today's milk. If milk had been produced at 11:59 p.m., the milk company would have to stamp on its container that this milk was made yesterday, and no Japanese person would buy it. The result is again that Japanese food-processing industries enjoy local monopolies. Obviously, a milk producer up in Hokkaido, northern Japan, is not going to be able to compete in Kyushu, in southern Japan, with a Kyushu producer, because of the several days in transit from Hokkaido. By the time a carton arrives in Kyushu, the people will read on the container that this milk is three days old, and no Japanese person would buy it. So that's one thing that creates local monopolies for food production in Japan: Japanese fanaticism about really fresh food. And the second thing is Japanese government policy, which reinforces these local monopolies. The Japanese government obstructs the import of foreign processed food by slapping on a ten-day quarantine. And because the Japanese care about food that was produced that very day, naturally by the time that American beef, chicken, or whatever arrives at the supermarket and the date says ten days old, the Japanese are not very enthusiastic about buying those American products. And there are other restrictions that the Japanese government imposes on foreign imports. The result is that Japanese food-processing industries are not exposed to domestic competition, they're all local monopolies, they're not exposed to foreign competition, and they don't learn the best methods in the international trade for producing food. And the result is that, in Japan, Japanese beef costs $200 a pound. My wife and I had heard about that before we went to Japan, but what we did not realize until we were brought into a supermarket by my wife's Japanese cousin is that chicken in Japan costs $25 a pound. The reason the Japanese can get away with that is that Japanese chicken producers are not exposed to competition with super-efficient American chicken producers. Now all those features are not true for some other Japanese industries. The Japanese steel industry, the Japanese metal industry, the Japanese car industry, their car-part industry, and their electronic industries have productivities greater than our American counterparts. But the Japanese soap industry, and the Japanese beer industry, and the Japanese computer industry, like the Japanese food-processing industry, are not exposed to competition, do not apply the best practices, and so have ended up with productivities below those of corresponding industries in the United States. Now let's finally apply these lessons to comparing different industries or industrial belts within the United States. I mentioned that when I was growing up, Route 128 outside of Boston led the world in productivity for an industrial belt, but Route 128 has now fallen behind Silicon Valley. Since my book 'Guns, Germs, and Steel' was published, I've spent a lot of time talking with people from Silicon Valley and some from Route 128, and they tell me that the corporate ethos in these two industrial belts is quite different. Silicon Valley consists of lots of companies that are fiercely competitive with each other, but nevertheless there's a lot of collaboration, and despite the competition there is a free flow of ideas and a free flow of people and a free flow of information between these companies that compete with each other. In contrast, I'm told that the business of Route 128 are much more secretive, and insulated from each other like Japanese milk-producing companies. Or again, what about the contrast between Microsoft and IBM? Again, since my book was published, I've acquired friends at Microsoft, and I've learned about Microsoft's organization, which is quite distinctive. Microsoft has lots of units, with free communication between units, and each of those units may have five to ten people working in them, but the units are not micro-managed, they are allowed a great deal of freedom in pursuing their own ideas. That unusual organization at Microsoft, broken up in to a lot of semi-independent units competing within the same company, contrasts with the organization at IBM, which until four years ago had much more insulated groups. A month ago, when I was talking in the industrial belt of North Carolina, the Raleigh-Durham area industrial belt, I met someone who is on the board of directors of IBM, and that person told me, Jared, what you say about IBM was quite true until four years ago: IBM did have this secretive organization which resulted in IBM's loss of competitive ability, but then IBM acquired a new CEO who changed things drastically, and IBM now has a more Microsoft-like organization, and you can see it, I'm told, in the improvement in IBM's innovativeness. So what this suggests is that we can extract from human history a couple of principles. First, the principle that really isolated groups are at a disadvantage, because most groups get most of their ideas and innovations from the outside. Second, I also derive the principle of intermediate fragmentation: you don't want excessive unity and you don't want excessive fragmentation; instead, you want your human society or business to be broken up into a number of groups which compete with each other but which also maintain relatively free communication with each other. And those I see as the overall principles of how to organize a business and get rich. But, let me conclude by emphasizing some obvious restrictions. I'm sure all of you are already thinking to yourselves, 'But, but, but, he's forgot — but but but....'— Yes, let's go back to those but-but-buts. One restriction is, I mentioned at the beginning, 'all other things being equal'. Obviously the best organization is not going to help with an idiot as a CEO, and the success of Microsoft certainly depends, at least in part, on the unusual qualities of Bill Gates, as well as on the unusual organization of Microsoft. In addition, I've been talking about conditions to maximize productivity and creativity and moneymaking ability. There are other considerations in organized human groups, and there are conditions under which productivity is not the thing you're most interested in. There are conditions where more centralization may be appropriate. For example, during a war, you do not want your air force, army, and navy to be fiercely competing with each other, but instead you want during a war more centralized control than you do in peace time. And there are also human groups for which productivity and differential money-making ability are not the overriding consideration. I don't want you to go home tonight and each of you to say to your spouse or significant other, 'Darling, I've just heard this guy Jared Diamond, who says that within human groups competition is what spurs productivity and innovation, and so I think we need to follow his advice in our household. For the next month let's see which of us earns a bigger income, and at the end of the month the bigger income-producer will keep on with the job, and the one of us who has lower income and is less efficient can turn to scrubbing the floors and shopping at the supermarkets.' That just illustrates: there are other considerations in a marriage than optimizing productivity. Again, I don't want you to go home to your several children, and say, 'Sweetie-pies, I heard this talk today by this guy Jared Diamond who enunciated some principles that I think would be really good for rearing children. We're going to see what your grades are at mid-term, and based on those grades, whichever one of you comes closer to getting all A's, that one we will support to the hilt, private schools, college, whatever you need, whereas those of you who get poor grades can start jobs as a shoe-shine boy or girl' — No! In a family, and in some other human groups, productivity is not the appropriate consideration for judging the best organization of the group. Nevertheless there are some human groups where productivity is indeed a significant consideration. And that certainly includes businesses, industrial belts, and to a considerable degree, countries. In order to understand how to organize these businesses, we could perform natural experiments. We could set up, if we were rich enough, a hundred businesses, organized a hundred different ways, see which businesses went bankrupt, and after 20 years figure that we now have the correct industrial organization. But that's an inefficient way to do it. We can instead learn from the comparative approach, by looking to natural experiments of history. I hope that some of you will be able to apply these lessons to acquiring the wealth that has so far eluded me.

Subject: Jared Diamond From: Emma To: Emma Date Posted: Fri, Jul 29, 2005 at 09:02:00 (EDT) Email Address: Not Provided Message: Jared Diamond, again the full discussion.

Subject: Question on Jared Diamond From: Setanta To: All Date Posted: Fri, Jul 29, 2005 at 05:48:19 (EDT) Email Address: Not Provided Message: can anyone remember if it was Jared Diamond who placed a bet with another prominant economist back in the early 80's that a selection of metals and minerals would decrease in (relative) price in twenty years time?

Subject: Re: Question on Jared Diamond From: Terri To: Setanta Date Posted: Fri, Jul 29, 2005 at 07:22:47 (EDT) Email Address: Not Provided Message: Definitely not, dear Setanta. I will try to remember the 2 scientists, but Diamond would never have been so arrogant. Diamond is a realist, not a 'seer.'

Subject: Re: Question on Jared Diamond From: RL To: Setanta Date Posted: Fri, Jul 29, 2005 at 07:18:31 (EDT) Email Address: rafaelloring@yahoo.es Message: it doesn't sound as JD, he isn't economist by the way.

Subject: Re: Question on Jared Diamond From: Terri To: RL Date Posted: Fri, Jul 29, 2005 at 07:24:54 (EDT) Email Address: Not Provided Message: RL, we must find out the scients in question. When I consider Diamond, I refer to him as a geographic-economist. However, Diamond is more than all an evolutionary biologist trained by Ernst Mayr.

Subject: Re: Question on Jared Diamond From: RL To: Terri Date Posted: Fri, Jul 29, 2005 at 07:59:25 (EDT) Email Address: rafaelloring@yahoo.es Message: I rather call him anthropologist but its true his work is indeed very interdisciplinary.

Subject: Re: Question on Jared Diamond From: Emma To: RL Date Posted: Fri, Jul 29, 2005 at 09:00:52 (EDT) Email Address: Not Provided Message: Jared Diamond studied to be a biologist because of Ernst Mayr and went to New Guinea to study birds, as Mayr had done before him. Both men were walking in Charles Darwin's steps, and both worked gathering data on birds as Darwin had worked. Diamond was much interested in a mechanism for human development that was not culturally dependent, as evolution is not culturally dependent.

Subject: Why Did Human History Unfold Differently From: Emma To: All Date Posted: Thurs, Jul 28, 2005 at 20:02:01 (EDT) Email Address: Not Provided Message: http://www.edge.org/3rd_culture/diamond/diamond_p2.html Why Did Human History Unfold Differently On Different Continents For The Last 13,000 Years? A Talk by Jared Diamond I've set myself the modest task of trying to explain the broad pattern of human history, on all the continents, for the last 13,000 years. Why did history take such different evolutionary courses for peoples of different continents? This problem has fascinated me for a long time, but it's now ripe for a new synthesis because of recent advances in many fields seemingly remote from history, including molecular biology, plant and animal genetics and biogeography, archaeology, and linguistics. As we all know, Eurasians, especially peoples of Europe and eastern Asia, have spread around the globe, to dominate the modern world in wealth and power. Other peoples, including most Africans, survived, and have thrown off European domination but remain behind in wealth and power. Still other peoples, including the original inhabitants of Australia, the Americas, and southern Africa, are no longer even masters of their own lands but have been decimated, subjugated, or exterminated by European colonialists. Why did history turn out that way, instead of the opposite way? Why weren't Native Americans, Africans, and Aboriginal Australians the ones who conquered or exterminated Europeans and Asians? This big question can easily be pushed back one step further. By the year A.D. 1500, the approximate year when Europe's overseas expansion was just beginning, peoples of the different continents already differed greatly in technology and political organization. Much of Eurasia and North Africa was occupied then by Iron Age states and empires, some of them on the verge of industrialization. Two Native American peoples, the Incas and Aztecs, ruled over empires with stone tools and were just starting to experiment with bronze. Parts of sub-Saharan Africa were divided among small indigenous Iron Age states or chiefdoms. But all peoples of Australia, New Guinea, and the Pacific islands, and many peoples of the Americas and sub-Saharan Africa, were still living as farmers or even still as hunter/ gatherers with stone tools. Obviously, those differences as of A.D. 1500 were the immediate cause of the modern world's inequalities. Empires with iron tools conquered or exterminated tribes with stone tools. But how did the world evolve to be the way that it was in the year A.D. 1500? This question, too can be easily pushed back a further step, with the help of written histories and archaeological discoveries. Until the end of the last Ice Age around 11,000 B.C., all humans on all continents were still living as Stone Age hunter/gatherers. Different rates of development on different continents, from 11,000 B.C. to A.D. 1500, were what produced the inequalities of A.D. 1500. While Aboriginal Australians and many Native American peoples remained Stone Age hunter/gatherers, most Eurasian peoples, and many peoples of the Americas and sub-Saharan Africa, gradually developed agriculture, herding, metallurgy, and complex political organization. Parts of Eurasia, and one small area of the Americas, developed indigenous writing as well. But each of these new developments appeared earlier in Eurasia than elsewhere. So, we can finally rephrase our question about the evolution of the modern world's inequalities as follows. Why did human development proceed at such different rates on different continents for the last 13,000 years? Those differing rates constitute the broadest pattern of history, the biggest unsolved problem of history, and my subject today. Historians tend to avoid this subject like the plague, because of its apparently racist overtones. Many people, or even most people, assume that the answer involves biological differences in average IQ among the world's populations, despite the fact that there is no evidence for the existence of such IQ differences. Even to ask the question why different peoples had different histories strikes some of us as evil, because it appears to be justifying what happened in history. In fact, we study the injustices of history for the same reason that we study genocide, and for the same reason that psychologists study the minds of murderers and rapists: not in order to justify history, genocide, murder, and rape, but instead to understand how those evil things came about, and then to use that understanding so as to prevent their happening again. In case the stink of racism still makes you feel uncomfortable about exploring this subject, just reflect on the underlying reason why so many people accept racist explanations of history's broad pattern: we don't have a convincing alternative explanation. Until we do, people will continue to gravitate by default to racist theories. That leaves us with a huge moral gap, which constitutes the strongest reason for tackling this uncomfortable subject. Let's proceed continent-by-continent. As our first continental comparison, let's consider the collision of the Old World and the New World that began with Christopher Columbus's voyage in A.D. 1492, because the proximate factors involved in that outcome are well understood. I'll now give you a summary and interpretation of the histories of North America, South America, Europe, and Asia from my perspective as a biogeographer and evolutionary biologist ÷ all that in ten minutes; 2_ minutes per continent. Here we go: Most of us are familiar with the stories of how a few hundred Spaniards under CortŽs and Pizarro overthrew the Aztec and Inca Empires. The populations of each of those empires numbered tens of millions. We're also familiar with the gruesome details of how other Europeans conquered other parts of the New World. The result is that Europeans came to settle and dominate most of the New World, while the Native American population declined drastically from its level as of A.D. 1492. Why did it happen that way? Why didn't it instead happen that the Emperors Montezuma or Atahuallpa led the Aztecs or Incas to conquer Europe? The proximate reasons are obvious. Invading Europeans had steel swords, guns, and horses, while Native Americans had only stone and wooden weapons and no animals that could be ridden. Those military advantages repeatedly enabled troops of a few dozen mounted Spaniards to defeat Indian armies numbering in the thousands. Nevertheless, steel swords, guns, and horses weren't the sole proximate factors behind the European conquest of the New World. Infectious diseases introduced with Europeans, like smallpox and measles, spread from one Indian tribe to another, far in advance of Europeans themselves, and killed an estimated 95% of the New World's Indian population. Those diseases were endemic in Europe, and Europeans had had time to develop both genetic and immune resistance to them, but Indians initially had no such resistance. That role played by infectious diseases in the European conquest of the New World was duplicated in many other parts of the world, including Aboriginal Australia, southern Africa, and many Pacific islands. Finally, there is still another set of proximate factors to consider. How is it that Pizarro and CortŽs reached the New World at all, before Aztec and Inca conquistadors could reach Europe? That outcome depended partly on technology in the form of oceangoing ships. Europeans had such ships, while the Aztecs and Incas did not. Also, those European ships were backed by the centralized political organization that enabled Spain and other European countries to build and staff the ships. Equally crucial was the role of European writing in permitting the quick spread of accurate detailed information, including maps, sailing directions, and accounts by earlier explorers, back to Europe, to motivate later explorers. So far, we've identified a series of proximate factors behind European colonization of the New World: namely, ships, political organization, and writing that brought Europeans to the New World; European germs that killed most Indians before they could reach the battlefield; and guns, steel swords, and horses that gave Europeans a big advantage on the battlefield. Now, let's try to push the chain of causation back further. Why did these proximate advantages go to the Old World rather than to the New World? Theoretically, Native Americans might have been the ones to develop steel swords and guns first, to develop oceangoing ships and empires and writing first, to be mounted on domestic animals more terrifying than horses, and to bear germs worse than smallpox. The part of that question that's easiest to answer concerns the reasons why Eurasia evolved the nastiest germs. It's striking that Native Americans evolved no devastating epidemic diseases to give to Europeans, in return for the many devastating epidemic diseases that Indians received from the Old World. There are two straightforward reasons for this gross imbalance. First, most of our familiar epidemic diseases can sustain themselves only in large dense human populations concentrated into villages and cities, which arose much earlier in the Old World than in the New World. Second, recent studies of microbes, by molecular biologists, have shown that most human epidemic diseases evolved from similar epidemic diseases of the dense populations of Old World domestic animals with which we came into close contact. For example, measles and TB evolved from diseases of our cattle, influenza from a disease of pigs, and smallpox possibly from a disease of camels. The Americas had very few native domesticated animal species from which humans could acquire such diseases. Let's now push the chain of reasoning back one step further. Why were there far more species of domesticated animals in Eurasia than in the Americas? The Americas harbor over a thousand native wild mammal species, so you might initially suppose that the Americas offered plenty of starting material for domestication. In fact, only a tiny fraction of wild mammal species has been successfully domesticated, because domestication requires that a wild animal fulfill many prerequisites: the animal has to have a diet that humans can supply; a rapid growth rate; a willingness to breed in captivity; a tractable disposition; a social structure involving submissive behavior towards dominant animals and humans; and lack of a tendency to panic when fenced in. Thousands of years ago, humans domesticated every possible large wild mammal species fulfilling all those criteria and worth domesticating, with the result that there have been no valuable additions of domestic animals in recent times, despite the efforts of modern science. Eurasia ended up with the most domesticated animal species in part because it's the world's largest land mass and offered the most wild species to begin with. That preexisting difference was magnified 13,000 years ago at the end of the last Ice Age, when most of the large mammal species of North and South America became extinct, perhaps exterminated by the first arriving Indians. As a result, Native Americans inherited far fewer species of big wild mammals than did Eurasians, leaving them only with the llama and alpaca as a domesticate. Differences between the Old and New Worlds in domesticated plants, especially in large-seeded cereals, are qualitatively similar to t hese differences in domesticated mammals, though the difference is not so extreme. Another reason for the higher local diversity of domesticated plants and animals in Eurasia than in the Americas is that Eurasia's main axis is east/west, whereas the main axis of the Americas is north/south. Eurasia's east/west axis meant that species domesticated in one part of Eurasia could easily spread thousands of miles at the same latitude, encountering the same day-length and climate to which they were already adapted. As a result, chickens and citrus fruit domesticated in Southeast Asia quickly spread westward to Europe; horses domesticated in the Ukraine quickly spread eastward to China; and the sheep, goats, cattle, wheat, and barley of the Fertile Crescent quickly spread both west and east. In contrast, the north/south axis of the Americas meant that species domesticated in one area couldn't spread far without encountering day-lengths and climates to which they were not adapted. As a result, the turkey never spread from its site of domestication in Mexico to the Andes; llamas and alpacas never spread from the Andes to Mexico, so that the Indian civilizations of Central and North America remained entirely without pack animals; and it took thousands of years for the corn that evolved in Mexico's climate to become modified into a corn adapted to the short growing season and seasonally changing day-length of North America. Eurasia's domesticated plants and animals were important for several other reasons besides letting Europeans develop nasty germs. Domesticated plants and animals yield far more calories per acre than do wild habitats, in which most species are inedible to humans. As a result, population densities of farmers and herders are typically ten to a hundred times greater than those of hunter/gatherers. That fact alone explains why farmers and herders everywhere in the world have been able to push hunter/gatherers out of land suitable for farming and herding. Domestic animals revolutionized land transport. They also revolutionized agriculture, by letting one farmer plough and manure much more land than the farmer could till or manure by the farmer's own efforts. Also, hunter/gatherer societies tend to be egalitarian and to have no political organization beyond the level of the band or tribe, whereas the food surpluses and storage made possible by agriculture permitted the development of stratified, politically centralized societies with governing elites. Those food surpluses also accelerated the development of technology, by supporting craftspeople who didn't raise their own food and who could instead devote themselves to developing metallurgy, writing, swords, and guns. Thus, we began by identifying a series of proximate explanations ÷ guns, germs, and so on ÷ for the conquest of the Americas by Europeans. Those proximate factors seem to me ultimately traceable in large part to the Old World's greater number of domesticated plants, much greater number of domesticated animals, and east/west axis. The chain of causation is most direct in explaining the Old World's advantages of horses and nasty germs. But domesticated plants and animals also led more indirectly to Eurasia's advantage in guns, swords, oceangoing ships, political organization, and writing, all of which were products of the large, dense, sedentary, stratified societies made possible by agriculture. Let's next examine whether this scheme, derived from the collision of Europeans with Native Americans, helps us understand the broadest pattern of African history, which I'll summarize in five minutes. I'll concentrate on the history of sub-Saharan Africa, because it was much more isolated from Eurasia by distance and climate than was North Africa, whose history is closely linked to Eurasia's history. Here we go again: Just as we asked why CortŽs invaded Mexico before Montezuma could invade Europe, we can similarly ask why Europeans colonized sub-Saharan Africa before sub-Saharans could colonize Europe. The proximate factors were the same familiar ones of guns, steel, oceangoing ships, political organization, and writing. But again, we can ask why guns and ships and so on ended up being developed in Europe rather than in sub-Saharan Africa. To the student of human evolution, that question is particularly puzzling, because humans have been evolving for millions of years longer in Africa than in Europe, and even anatomically modern Homo sapiens may have reached Europe from Africa only within the last 50,000 years. If time were a critical factor in the development of human societies, Africa should have enjoyed an enormous head start and advantage over Europe. Again, that outcome largely reflects biogeographic differences in the availability of domesticable wild animal and plant species. Taking first domestic animals, it's striking that the sole animal domesticated within sub-Saharan Africa was [you guess] a bird, the Guinea fowl. All of Africa's mammalian domesticates ÷ cattle, sheep, goats, horses, even dogs ÷ entered sub-Saharan Africa from the north, from Eurasia or North Africa. At first that sounds astonishing, since we now think of Africa as the continent of big wild mammals. In fact, none of those famous big wild mammal species of Africa proved domesticable. They were all disqualified by one or another problem such as: unsuitable social organization; intractable behavior; slow growth rate, and so on. Just think what the course of world history might have been like if Africa's rhinos and hippos had lent themselves to domestication! If that had been possible, African cavalry mounted on rhinos or hippos would have made mincemeat of European cavalry mounted on horses. But it couldn't happen. Instead, as I mentioned, the livestock adopted in Africa were Eurasian species that came in from the north. Africa's long axis, like that of the Americas, is north/south rather than east/west. Those Eurasian domestic mammals spread southward very slowly in Africa, because they had to adapt to different climate zones and different animal diseases. The difficulties posed by a north/south axis to the spread of domesticated species are even more striking for African crops than they are for livestock. Remember that the food staples of ancient Egypt were Fertile Crescent and Mediterranean crops like wheat and barley, which require winter rains and seasonal variation in day length for their germination. Those crops couldn't spread south in Africa beyond Ethiopia, beyond which the rains come in the summer and there's little or no seasonal variation in day length. Instead, the development of agriculture in the sub-Sahara had to await the domestication of native African plant species like sorghum and millet, adapted to Central Africa's summer rains and relatively constant day length. Ironically, those crops of Central Africa were for the same reason then unable to spread south to the Mediterranean zone of South Africa, where once again winter rains and big seasonal variations in day length prevailed. The southward advance of native African farmers with Central African crops halted in Natal, beyond which Central African crops couldn't grow ÷ with enormous consequences for the recent history of South Africa. In short, a north/south axis, and a paucity of wild plant and animal species suitable for domestication, were decisive in African history, just as they were in Native American history. Although native Africans domesticated some plants in the Sahel and in Ethiopia and in tropical West Africa, they acquired valuable domestic animals only later, from the north. The resulting advantages of Europeans in guns, ships, political organization, and writing permitted Europeans to colonize Africa, rather than Africans to colonize Europe. Let's now conclude our whirlwind tour around the globe by devoting five minutes to the last continent, Australia. Here we go again, for the last time. In modern times, Australia was the sole continent still inhabited only by hunter/gatherers. That makes Australia a critical test of any theory about continental differences in the evolution of human societies. Native Australia had no farmers or herders, no writing, no metal tools, and no political organization beyond the level of the tribe or band. Those, of course, are the reasons why European guns and germs destroyed Aboriginal Australian society. But why had all Native Australians remained hunter/gatherers? There are three obvious reasons. First, even to this day no native Australian animal species and only one plant species (the macadamia nut) have proved suitable for domestication. There still are no domestic kangaroos. Second, Australia is the smallest continent, and most of it can support only small human populations because of low rainfall and productivity. Hence the total number of Australian hunter/gatherers was only about 300,000. Finally, Australia is the most isolated continent. The sole outside contacts of Aboriginal Australians were tenuous overwater contacts with New Guineans and Indonesians. To get an idea of the significance of that small population size and isolation for the pace of development in Australia, consider the Australian island of Tasmania, which had the most extraordinary human society in the modern world. Tasmania is just an island of modest size, but it was the most extreme outpost of the most extreme continent, and it illuminates a big issue in the evolution of all human societies. Tasmania lies 130 miles southeast of Australia. When it was first visited by Europeans in 1642, Tasmania was occupied by 4,000 hunter/gatherers related to mainland Australians, but with the simplest technology of any recent people on Earth. Unlike mainland Aboriginal Australians, Tasmanians couldn't start a fire; they had no boomerangs, spear throwers, or shields; they had no bone tools, no specialized stone tools, and no compound tools like an axe head mounted on a handle; they couldn't cut down a tree or hollow out a canoe; they lacked sewing to make sewn clothing, despite Tasmania's cold winter climate with snow; and, incredibly, though they lived mostly on the sea coast, the Tasmanians didn't catch or eat fish. How did those enormous gaps in Tasmanian material culture arise? The answer stems from the fact that Tasmania used to be joined to the southern Australian mainland at Pleistocene times of low sea level, until that land bridge was severed by rising sea level 10,000 years ago. People walked out to Tasmania tens of thousands of years ago, when it was still part of Australia. Once that land bridge was severed, though, there was absolutely no further contact of Tasmanians with mainland Australians or with any other people on Earth until European arrival in 1642, because both Tasmanians and mainland Australians lacked watercraft capable of crossing those 130-mile straits between Tasmania and Australia. Tasmanian history is thus a study of human isolation unprecedented except in science fiction ÷ namely, complete isolation from other humans for 10,000 years. Tasmania had the smallest and most isolated human population in the world. If population size and isolation have any effect on accumulation of inventions, we should expect to see that effect in Tasmania. If all those technologies that I mentioned, absent from Tasmania but present on the opposite Australian mainland, were invented by Australians within the last 10,000 years, we can surely conclude at least that Tasmania's tiny population didn't invent them independently. Astonishingly, the archaeological record demonstrates something further: Tasmanians actually abandoned some technologies that they brought with them from Australia and that persisted on the Australian mainland. For example, bone tools and the practice of fishing were both present in Tasmania at the time that the land bridge was severed, and both disappeared from Tasmania by around 1500 B.C. That represents the loss of valuable technologies: fish could have been smoked to provide a winter food supply, and bone needles could have been used to sew warm clothes. What sense can we make of these cultural losses? The only interpretation that makes sense to me goes as follows. First, technology has to be invented or adopted. Human societies vary in lots of independent factors affecting their openness to innovation. Hence the higher the human population and the more societies there are on an island or continent, the greater the chance of any given invention being conceived and adopted somewhere there. Second, for all human societies except those of totally-isolated Tasmania, most technological innovations diffuse in from the outside, instead of being invented locally, so one expects the evolution of technology to proceed most rapidly in societies most closely connected with outside societies. Finally, technology not only has to be adopted; it also has to be maintained. All human societies go through fads in which they temporarily either adopt practices of little use or else abandon practices of considerable use. Whenever such economically senseless taboos arise in an area with many competing human societies, only some societies will adopt the taboo at a given time. Other societies will retain the useful practice, and will either outcompete the societies that lost it, or else will be there as a model for the societies with the taboos to repent their error and reacquire the practice. If Tasmanians had remained in contact with mainland Australians, they could have rediscovered the value and techniques of fishing and making bone tools that they had lost. But that couldn't happen in the complete isolation of Tasmania, where cultural losses became irreversible. In short, the message of the differences between Tasmanian and mainland Australian societies seems to be the following. All other things being equal, the rate of human invention is faster, and the rate of cultural loss is slower, i n areas occupied by many competing societies with many individuals and in contact with societies elsewhere. If this interpretation is correct, then it's likely to be of much broader significance. It probably provides part of the explanation why native Australians, on the world's smallest and most isolated continent, remained Stone Age hunter/ gatherers, while people of other continents were adopting agriculture and metal. It's also likely to contribute to the differences that I already discussed between the farmers of sub-Saharan Africa, the farmers of the much larger Americas, and the farmers of the still larger Eurasia. Naturally, there are many important factors in world history that I haven't had time to discuss in 40 minutes, and that I do discuss in my book. For example, I've said little or nothing about the distribution of domesticable plants (3 chapters); about the precise way in which complex political institutions and the development of writing and technology and organized religion depend on agriculture and herding; about the fascinating reasons for the differences within Eurasia between China, India, the Near East, and Europe; and about the effects of individuals, and of cultural differences unrelated to the environment, on history. But it's now time to summarize the overall meaning of this whirlwind tour through human history, with its unequally distributed guns and germs. The broadest pattern of history ÷ namely, the differences between human societies on different continents ÷ seems to me to be attributable to differences among continental environments, and not to biological differences among peoples themselves. In particular, the availability of wild plant and animal species suitable for domestication, and the ease with which those species could spread without encountering unsuitable climates, contributed decisively to the varying rates of rise of agriculture and herding, which in turn contributed decisively to the rise of human population numbers, population densities, and food surpluses, which in turn contributed decisively to the development of epidemic infectious diseases, writing, technology, and political organization. In addition, the histories of Tasmania and Australia warn us that the differing areas and isolations of the continents, by determining the number of competing societies, may have been another important factor in human development. As a biologist practicing laboratory experimental science, I'm aware that some scientists may be inclined to dismiss these historical interpretations as unprovable speculation, because they're not founded on replicated laboratory experiments. The same objection can be raised against any of the historical sciences, including astronomy, evolutionary biology, geology, and paleontology. The objection can of course be raised against the whole field of history, and most of the other social sciences. That's the reason why we're uncomfortable about considering history as a science. It's classified as a social science, which is considered not quite scientific. But remember that the word 'science' isn't derived from the Latin word for 'replicated laboratory experiment,' but instead from the Latin word 'scientia' for 'knowledge.' In science, we seek knowledge by whatever methodologies are available and appropriate. There are many fields that no one hesitates to consider sciences even though replicated laboratory experiments in those fields would be immoral, illegal, or impossible. We can't manipulate some stars while maintaining other stars as controls; we can't start and stop ice ages, and we can't experiment with designing and evolving dinosaurs. Nevertheless, we can still gain considerable insight into these historical fields by other means. Then we should surely be able to understand human history, because introspection and preserved writings give us far more insight into the ways of past humans than we have into the ways of past dinosaurs. For that reason I'm optimistic that we can eventually arrive at convincing explanations for these broadest patterns of human history.

Subject: Jared Diamond From: Emma To: Emma Date Posted: Thurs, Jul 28, 2005 at 20:04:16 (EDT) Email Address: Not Provided Message: Jared Diamond in full, first essay....

Subject: Know the Bond Market From: Terri To: All Date Posted: Thurs, Jul 28, 2005 at 17:07:45 (EDT) Email Address: Not Provided Message: Should there be a significant slowing of housing activity or even a decline in housing prices the economy would be weakened, possibly seriously. But, many indivudals are secure in houses in which they intend to stay. Also, should there be a weakening in the economy the bond market will be a fine refuge as it has been so often before. Knowing how to use bond funds properly seems to me essential. I am not the least worried about the bond market in case of a housing induced economic slowing, and I find no reason the Fed will not act decisively in such an instance. In any event, know the bond market.

Subject: How to Get Rich From: Emma To: All Date Posted: Thurs, Jul 28, 2005 at 12:44:22 (EDT) Email Address: Not Provided Message: http://www.edge.org/3rd_culture/diamond_rich/rich_p2.html How To Get Rich A Talk by Jared Diamond In Guns, Germs, and Steel I asked why history has unfolded differently over the last 13,000 years in Eurasia, in the Americas, in sub-Saharan Africa, and in Aboriginal Australia, with the result that within the last 500 years Europeans were the ones who conquered Native Americans and Aboriginal Australians and sub-Saharan Africans, rather than vice versa. Most of that book, was concerned with comparing the peoples of different continents, but I knew that I couldn't publish a book comparing the histories of different continents and considering Eurasia as a unit without saying something about the fascinating problem of the differences of history within Eurasia. Why, within Eurasia, was it Europeans who conquered the world and colonized other people, rather than the Chinese or the people of India or the Middle East? I devoted seven pages to that subject at the end of Guns, Germs, and Steel, and I think I arrived at the correct solution. Nevertheless, since the publication of Guns, Germs, and Steel, I've received a lot of feedback, and the most interesting feedback has been about the implications of that comparative analysis of the histories of China, Europe, India, and the Middle East. In particular, in addition to the review of my book by Bill Gates, I've received a lot of correspondence from economists and business people, who pointed out to me possible parallels between the histories of entire human societies and histories of smaller groups. This correspondence from economists and business people has to do with the following big question: what is the best way to organize human groups and human organizations and businesses so as to maximize productivity, creativity, innovation, and wealth? Should your human group have a centralized direction, in the extreme having a dictator, or should there be diffuse or even anarchical organization? Should your collection of people be organized into a single group, or broken off into a number of groups, or broken off into a lot of groups? Should you maintain open communication between your groups, or erect walls between them, with groups working more secretly? Should you erect protectionist tariff walls against the outside, or should you expose your business or government to free competition? These questions about group organization arise at many different levels and for many types of groups. They arise, of course, about the organization of entire governments or countries: what is the best way to govern a country? Remember the classic arguments about whether the best government is a benign dictatorship, or a federal system, or an anarchical free-for-all. The same questions also rise about the organization of different companies within the same industry. How can you account for the fact that Microsoft has been so successful recently, and that IBM, which was formerly successful, fell behind but then drastically changed its organization over the last four years and improved its success? How can we explain the different successes of what we call different industrial belts? When I was a boy growing up in Boston, Route 128, the industrial belt around Boston, led the industrial world in scientific creativity and imagination. But Route 128 has fallen behind, and now Silicon Valley is the center of innovation. And the relations of businesses to each other in Silicon Valley and Route 128 are very different, possibly resulting in those different outcomes....

Subject: Jared Diamond.... From: Emma To: Emma Date Posted: Thurs, Jul 28, 2005 at 19:17:33 (EDT) Email Address: Not Provided Message: Jared Diamond continued....

Subject: Why Did Human History Unfold Differently From: Emma To: All Date Posted: Thurs, Jul 28, 2005 at 12:16:40 (EDT) Email Address: Not Provided Message: http://www.edge.org/3rd_culture/diamond/diamond_p2.html Why Did Human History Unfold Differently On Different Continents For The Last 13,000 Years? A Talk by Jared Diamond I've set myself the modest task of trying to explain the broad pattern of human history, on all the continents, for the last 13,000 years. Why did history take such different evolutionary courses for peoples of different continents? This problem has fascinated me for a long time, but it's now ripe for a new synthesis because of recent advances in many fields seemingly remote from history, including molecular biology, plant and animal genetics and biogeography, archaeology, and linguistics. As we all know, Eurasians, especially peoples of Europe and eastern Asia, have spread around the globe, to dominate the modern world in wealth and power. Other peoples, including most Africans, survived, and have thrown off European domination but remain behind in wealth and power. Still other peoples, including the original inhabitants of Australia, the Americas, and southern Africa, are no longer even masters of their own lands but have been decimated, subjugated, or exterminated by European colonialists. Why did history turn out that way, instead of the opposite way? Why weren't Native Americans, Africans, and Aboriginal Australians the ones who conquered or exterminated Europeans and Asians? This big question can easily be pushed back one step further. By the year A.D. 1500, the approximate year when Europe's overseas expansion was just beginning, peoples of the different continents already differed greatly in technology and political organization. Much of Eurasia and North Africa was occupied then by Iron Age states and empires, some of them on the verge of industrialization. Two Native American peoples, the Incas and Aztecs, ruled over empires with stone tools and were just starting to experiment with bronze. Parts of sub-Saharan Africa were divided among small indigenous Iron Age states or chiefdoms. But all peoples of Australia, New Guinea, and the Pacific islands, and many peoples of the Americas and sub-Saharan Africa, were still living as farmers or even still as hunter/ gatherers with stone tools. Obviously, those differences as of A.D. 1500 were the immediate cause of the modern world's inequalities. Empires with iron tools conquered or exterminated tribes with stone tools. But how did the world evolve to be the way that it was in the year A.D. 1500? This question, too can be easily pushed back a further step, with the help of written histories and archaeological discoveries. Until the end of the last Ice Age around 11,000 B.C., all humans on all continents were still living as Stone Age hunter/gatherers. Different rates of development on different continents, from 11,000 B.C. to A.D. 1500, were what produced the inequalities of A.D. 1500. While Aboriginal Australians and many Native American peoples remained Stone Age hunter/gatherers, most Eurasian peoples, and many peoples of the Americas and sub-Saharan Africa, gradually developed agriculture, herding, metallurgy, and complex political organization. Parts of Eurasia, and one small area of the Americas, developed indigenous writing as well. But each of these new developments appeared earlier in Eurasia than elsewhere. So, we can finally rephrase our question about the evolution of the modern world's inequalities as follows. Why did human development proceed at such different rates on different continents for the last 13,000 years? Those differing rates constitute the broadest pattern of history, the biggest unsolved problem of history, and my subject today. Historians tend to avoid this subject like the plague, because of its apparently racist overtones. Many people, or even most people, assume that the answer involves biological differences in average IQ among the world's populations, despite the fact that there is no evidence for the existence of such IQ differences. Even to ask the question why different peoples had different histories strikes some of us as evil, because it appears to be justifying what happened in history. In fact, we study the injustices of history for the same reason that we study genocide, and for the same reason that psychologists study the minds of murderers and rapists: not in order to justify history, genocide, murder, and rape, but instead to understand how those evil things came about, and then to use that understanding so as to prevent their happening again. In case the stink of racism still makes you feel uncomfortable about exploring this subject, just reflect on the underlying reason why so many people accept racist explanations of history's broad pattern: we don't have a convincing alternative explanation. Until we do, people will continue to gravitate by default to racist theories. That leaves us with a huge moral gap, which constitutes the strongest reason for tackling this uncomfortable subject....

Subject: Re: Why Did Human History Unfold Differently From: Pete Weis To: Emma Date Posted: Thurs, Jul 28, 2005 at 17:08:18 (EDT) Email Address: Not Provided Message: It all started with the plow - man/womenkind's greatest invention. That ended the hunter-gathering and allowed free time for humans to get into trouble. Why the plow wasn't used in certain parts of the world might have something to do with soil conditions, climate and/or the availability of game to hunt.

Subject: Re: Why Did Human History Unfold Differently From: Emma To: Pete Weis Date Posted: Thurs, Jul 28, 2005 at 17:15:08 (EDT) Email Address: Not Provided Message: That is just the point of geography. I will post more, but Jared Diamond is superb.

Subject: Re: Why Did Human History Unfold Differently From: Mik To: Emma Date Posted: Thurs, Jul 28, 2005 at 18:33:53 (EDT) Email Address: Not Provided Message: Emma, please post more on this topic. In my travels in Africa, I have always wondered about this topic. Did Geography affect human development to the level that it set off a chain of events leading to domination by the Eurasians? I don't know - I have many reservations.

Subject: Re: Why Did Human History Unfold Differently From: Emma To: Mik Date Posted: Thurs, Jul 28, 2005 at 18:58:45 (EDT) Email Address: Not Provided Message: I will soon post the entire set of essays, for they are worth reading carefully however much we choose to argue with Jared Diamond. I take this work an a new and creative framework for geography and sociology, within which we will be many years filling out the histories.

Subject: Re: Why Did Human History Unfold Differently From: Mik To: Emma Date Posted: Thurs, Jul 28, 2005 at 19:26:55 (EDT) Email Address: Not Provided Message: Yep, what I like is that he openly talks about how we should not see this in a racist light. I agree totally. I have often faced the racist argument - but I refuse to accept it, because I know we are all human. Also, if we are to make some sort of racial comparison between say, white and black, my argument is, why stop there? Why not make a racial comparison between different European groups. We soon find that the person making the racial argument is from an 'inferior' group, using the very same argument. Hence we need to not fear discusing questions such as 'Why did Africans develop slower than Europeans?' We need to also ask, 'Did the advance of one group, not lead to the undermining of the natural advance of another group further exaggerating the situation?' Anyhow, enough from me - I want to read what Jared Diamond has to say.

Subject: Re: Why Did Human History Unfold Differently From: Emma To: Mik Date Posted: Thurs, Jul 28, 2005 at 19:59:40 (EDT) Email Address: Not Provided Message: Thoroughly excellent comment.

Subject: Minimum credit card payment... From: Pete Weis To: All Date Posted: Thurs, Jul 28, 2005 at 11:57:19 (EDT) Email Address: Not Provided Message: requirements to double soon per treasurey department regulation changes (probably a good thing in the long run). The following was written in 2004 - don't imagine credit card debt has gotten any better since. With the new bankruptcy laws taking effect this fall, the last paragraph seems to indicate that seniors, whose health costs get beyond their ability to pay, will have their social security payments garnished by the banks who provided the credit cards. Or is there some provision in the new bankruptcy laws which might protect seniors from becoming destitute? From Bankrate.com: 25 fascinating facts about personal debt By Paul Bannister • Bankrate.com Debt. It's been a problem for almost everyone at some time, from the ancient Greeks to modern movie stars. Throughout history if you didn't have the drachma, you literally could be enslaved by your debt, and you'd become the property of your creditor. About 200 years after the first Olympic Games, ancient Greek lawmaker and statesman, Solon, changed that for his countrymen, outlawing debt bondage and canceling all outstanding debt at that time -- a highly popular move for those with rash spending habits, even before credit cards. Today, many Greeks are wondering if the old sage will bail them out of the $6 billion in debt the country has racked up to host the 2004 Olympics. It's estimated it will take 40 years to pay it off, but that's not bad when you consider Montreal is still paying against its Olympic debt of $2 billion, held 28 years ago! If you think those debt numbers are amazing, consider these: Some 1.6 million U.S. households -- one of every 73 -- filed for bankruptcy in 2003. There are roughly 1.2 billion credit cards in use in the United States. The original Diners Club card was issued in 1950 to let businessmen charge meals. It was pasteboard with a list of the 27 restaurants that accepted it printed on the back. The first plastic card came out in 1955. Today, there are about 20,000 different cards available in the U.S. Studies show the average consumer is exposed to more than 3,000 marketing messages every day. In the last decade, it's been estimated, solicitations jumped from 1.52 billion annually to 4.29 billion. Today roughly 24 percent of personal expenditures in this country are made with credit and debit cards. Average per household debt in the U.S., not counting mortgage debt, is about $14,500 -- especially noteworthy because before the 1930s, most middle and working class people had no major debts. Banks would not lend to them; they rented their homes and if they did own a house, it was paid for as it was being built. A typical credit card purchase ends up costing 112 percent more than if cash were used. A $1,000 charge on an average credit card will take almost 22 years to pay, and will cost more than $2,300 in interest ($3,300 total) -- if only 2 percent minimum payments are made. Some 40 percent of American families annually spend more than they earn. About 60 percent of active credit card accounts are not paid off monthly. Average credit card debt among all American households is $8,400. Average card debt among people who have at least one card is $9,205 -- triple what it was in 1990. Average personal wealth of a 50-year-old American, including home equity: less than $40,000. A typical American family today pays about $1,200 annually in credit card interest. The average interest rate on credit cards is 18.9 percent. Last year the credit card industry took in $43 billion in card fees. Nine of 10 Americans claim credit card debt has never been a source of worry. But 47 percent would refuse to tell a friend how much they owe. Twenty-three percent of Americans admit to maxing out a credit card. Eleven percent of Americans admit card debts went to collection. Thirteen percent of Americans have been 30 days late paying credit card bills in the past year. The average graduate student has six credit cards and one in seven owes more than $15,000. People using credit cards in fast food restaurants spend up to 50 percent more than when they pay cash. The personal savings rate in the United States has dropped from 8 percent in the 1980s to just under 2 percent since 2000. Medical debts sink the ship in one of every 20 bankruptcies. Typical health care debt: $25,000. Typical victim: a senior on a fixed income. Typical scenario: pricey prescriptions bought on high-interest credit cards.

Subject: A Surge in Chinese Art Sales From: Emma To: All Date Posted: Thurs, Jul 28, 2005 at 11:56:43 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/iht/2005/07/26/arts/IHT-26melik23.html A Surge in Chinese Art Sales, Driven by History By SOUREN MELIKIAN - International Herald Tribune The massive entry of citizens from the People's Republic of China into the Chinese art market has become a common topic in the media. The focus is nearly always on the financial consequences or the nationalism that supposedly drives the new players. Whether the Chinese are any more nationalist in buying their own art than the British when buying Wedgwood porcelain or Georgian furniture is a moot question. What truly underlies Chinese acquisitions is a renewed awareness of history that the Maoist Cultural Revolution tried to wipe out and a new eagerness to reconnect with the cultural tokens of the past. This eagerness, common to all Chinese communities, has radically changed the makeup of Chinese art auctions in the West, now largely determined by Chinese preferences. Three decades ago the big lots were so-called 'archaic' bronzes from Chinese Antiquity, Tang pottery, Song porcelain, early Ming blue and white porcelain and, occasionally, some important Buddhist sculpture. Not any more. Taking Christie's July 12 sale as the most spectacular example, there were few archaic bronzes and hardly any Tang pots. Tradition-minded Chinese buyers will not touch them. Recovered from tombs, they imply that ancestral remains were disturbed. Nor will traditionalists acquire Buddhist sculpture hacked away from cave temples or recovered from underground digs. None of these were to be seen at Christie's. By contrast, hosts of objects that would not have been given much consideration were lavishly reproduced in the catalogue. All were dear to the hearts of those cast in the Mandarin mold or eager to see themselves as heirs to the tradition. They included rhinoceros horn wine cups, jade objets d'art, all intricately carved, and plenty of Qing dynasty porcelain. The one object in the July 12 sale that would have excited great admiration in the 1970s was a blue and white jar of the mid-14th century painted with scenes dealing with the history of China under the Warring States. The vigorous shape, and the energy with which the figures are painted, would have sent into ecstasy the Japanese in the 1970s, when they were driving the Chinese art market, but not the overseas Chinese when they in turn became a significant force in the 1980s. They showed little interest in Yuan or early Ming porcelain. Most of them saw their shapes and large sizes as alien to Chinese tradition, and rightly so. These were introduced into China by the Mongols after they conquered China and Iran. Vessels suited to the Iranian royal banquet suddenly made an appearance - large trays for mounds of rice, large wine ewers and wine jars. The first sign of a change in Chinese attitudes to blue and white came in September 2003 in a New York sale held at Doyle's. Four of the finest Ming blue and white vessels went to Xu Ximing, a businessman from Ningbo, in Zhejian Province, who had made his money in the eel trade. (Eels are a delicacy on the Chinese menu.) The vessels that the collector from central China acquired shared two characteristics. They came from an old American collection and they had imperial marks on the underside. The old American provenance was part of their attraction. Chinese buyers taking home works of art from old Western collections can enjoy the feeling of recovering heirlooms taken out of the country in the days when China was weak, politically and economically. The imperial mark topped this with a more cogent appeal. Western dealers often speak disparagingly of the Chinese love for inscribed imperial objects as if it were evidence of nouveau-riche vanity. In fact, the palace has always been at the heart of Chinese history. Seeking imperial objects is a more exalted way of reconnecting with old China and dreaming about past splendor. On July 12, the search for cultural roots through history was more in evidence than ever. The blue and white jar shot up to an extraordinary £15.68 million, or $27.7 million, setting a record for any work of art from Asia. What happened? The jar, of which only seven related examples are known, none in continental China, had links with Chinese history, recent and old. It had been acquired by a Captain Baron Haro van Hemert tot Dingshof stationed in Beijing from 1913 to 1923. A commander of the Netherlands Legation Guards Detachment, he was in charge of security in the Dutch, German and Austro-Hungarian legations. To any Chinese ear, this came as a reminder of the days when a Western military presence amounted to thinly disguised colonial intrusion. Getting back the jar would have felt like settling old scores. More important, however, was the link with the distant history of China. Not only were the scenes illustrated taken from a popular semi-historical work composed in the early 14th century, but in two cases, as Christie's expert, Rosemary Scott, observed in a finely researched essay, they followed almost to the letter those illustrated in the sole surviving copy of that book in its edition of the years 1321 to 1323. This made it a unique document of Chinese cultural history. It establishes beyond the shred of a doubt the role played by Chinese woodblock editions in 14th-century porcelain workshops at the highest level - which Christie's did not say. The Chinese responded. Up to £10 million, already an unheard of figure, some of them were still in the running. In the end they were defeated. Giuseppe Eskenazi of London, the world's leading dealer in early Chinese art, carried the prize on behalf of a client who was, he told me, 'a Westerner who has been collecting Chinese porcelain for 10 years.' If there is a next time, meaning if another splendid object of major significance to Chinese cultural history turns up, my bet is they might hang on. At lower financial levels, Chinese buyers already showed remarkable stamina. Their passion for history took a political turn with an imperial carved lacquer dated 1788. The imperial panel, which technically speaking is a tour de force, shows junks sailing toward a hilly land where an army stands in battle order. The composition is borrowed from one of the engravings commissioned by the Qianlong emperor to commemorate his repression of a Taiwan uprising. Five lines of gilt Chinese characters reproduce a poem describing the battle. At the end, a seal calls the panel the 'Treasure of the Son of Heaven.' No Chinese collector could resist that. One, bidding anonymously, raised the stakes to a prodigious £433,600, a world record in its category. This was outdone by another work of art with an imperial aura. The blue and white vase painted with a peach tree improbably hanging over rolling waves has a shape that is as beautiful as it is rare. Only one comparable example, in the Palace Museum, Beijing, is known. Christie's vase, sure enough, is inscribed with the Qianlong six-character seal on the underside. But there is more to it than its imperial provenance. Christie's expert considered the numbers of five flying bats (which symbolize the 'Five Blessings': longevity, wealth, health, virtue and the allotted life span) and nine peaches to be a rebus for 'nine-five,' a number combination reserved for the emperor's use. 'Attaining the position of the nine-five' is an expression used during the Tang dynasty to mean 'becoming the emperor.' From this, the expert deduced that 'the vase was made to celebrate the Qianlong emperor's birthday.' It seems to me that the 'nine-five' points to a more important conclusion. The vase was made to celebrate the accession to the throne of the Qianlong emperor. This dates it to 1736, explaining why it is so close to the style of the previous Yongzheng reign, which the catalogue refrains from noting. A Chinese dealer, probably acting as an agent, paid £624,000 for one of the most important gems of Chinese cultural history seen in a long time. To treat such acquisitions as syndromes of nouveau-riche fever is a curious Western misperception. Never underestimate the Chinese - nor any of the old cultures of the East, for that matter.

Subject: Notice European Stocks From: Terri To: All Date Posted: Thurs, Jul 28, 2005 at 11:17:49 (EDT) Email Address: Not Provided Message: Notice that Europe is having a terrific stock market year in terms fo domestic currencies. The Europe Index is up 14.8% in domestic currencies and 2.3% in dollars. I am impressed that European corporations have compensated fully for the strong dollar. Currency value worries seem much overdone in investing to me.

Subject: Entrepreneurs Cater to Immigrants' Needs From: Emma To: All Date Posted: Thurs, Jul 28, 2005 at 10:59:59 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/28/business/worldbusiness/28sbiz.html Entrepreneurs Cater to Immigrants’ Financial Needs By BETSY CUMMINGS Some weeks, José Edgardo Andrande makes less than $200. Other weeks, his pay tops $1,200. 'But then it goes down to $500' the next week, said Mr. Andrande, 42, a job hopper from El Salvador who, for 24 years, has shuffled among delivery, electrician, restaurant and construction jobs in the United States. Despite the fluctuations, one financial transaction has remained constant. Each month he sends $700 home to support his two sons and mother in his native San Salvador. As the Hispanic population in the United States continues to surge, rising 10 percent to 41.3 million last year, from 37.4 million in 2002, something else is surging along with it: the money, known as remittances, that day laborers who work in America's restaurant kitchens and mow suburbia's lawns send back home. The cash flow was $32 billion in 2004, up from $28 billion in 2002. And therein lies an opportunity for entrepreneurs. A cottage industry has sprung up in recent years of companies that not only transfer immigrant workers' money to their homelands cheaply, but also offer them a way to establish credit in the United States and learn how to make their money work harder. Mr. Andrande is a recent convert. He uses Mi Pueblo, a unit of the Microfinance International Corporation, a Washington company created in 2003 to help immigrants leverage the power of the remittances they send to their home countries and bolster their earning and investment potential in the United States. Last September, Microfinance started Mi Pueblo to offer account, money transfer, credit, loan and money management services to immigrants from Latin America. 'The motive of immigrants is to come here, get a job and to work hard and send money back home to support their family,' said Atsumasa Tochisako, Microfinance's chief executive. 'But, unfortunately, in a developed country like the U.S., there is not an appropriate financial service infrastructure prepared to serve those immigrant people.' As Microfinance International opens accounts, currently with Salvadorans only, through a pilot program in Maryland, Virginia, Delaware and Washington, it joins a growing contingent of smaller financial institutions, from credit unions to independent banks, that are taking an increasingly larger piece of the remittance pie. Microfinance International's four shops in the Washington area, for example, recently were conducting 1,500 transactions a month, with an average remittance of $250. But the company says transactions have been increasing recently, by 20 percent a week at each shop, fueled by radio advertisements and fliers distributed in Hispanic neighborhoods as well as by word of mouth. The company projects revenue of $2 million this year and $10 million next year and hopes to become profitable by 2007. Mr. Tochisako said the remittance market was barely tapped in the United States. Moreover, he hopes to transform remittances from being mainly a means of support for relatives back home into a new source of international financing that can empower immigrants to enhance their financial standing here and abroad, and even become entrepreneurs in the process. All of that sounds appealing to Mr. Andrande. 'That's a good idea to start a business, but I have to have the money,' he said. Most banks see Mr. Andrande, a contract worker, as a risky borrower. But not Microfinance International. It has already provided him two loans worth $5,000 this year, $2,000 of which he has already repaid. And, without a loan, his earnings after the $700 remittance for his two sons and mother in El Salvador might not cover his $610 rent in Washington and other expenses for his wife and two daughters who live here. Though sending remittances is a decades-old practice, it has only recently been tracked in the United States. Interest among banking centers is growing, largely because the dollar amounts continue to increase each year, said Donald F. Terry, manager of the multilateral investment fund of the Inter-American Development Bank in Washington, a multibillion-dollar lender to Latin American and Caribbean nations. At the same time, immigrants are becoming more emboldened to establish accounts at financial firms in their communities. Four bills currently before Congress would make it easier for immigrants to use credit unions for remittances and loans, and credit unions are eager for a greater piece of that business, said Patrick Keefe, vice president of communications for the Credit Union National Association in Washington. Their bid to join the ranks of small financial outfits, large wire-transfer firms and national banks could make for a fiercely competitive market. Mexico is by far the greatest recipient of remittances, accounting for $16.6 billion there in 2004, according to Inter-American Development Bank statistics. But for other countries, even though they may see less money, remittances are crucial for their economic stability. 'This country is held by remittances,' said José Napoleón Duarte, the son of El Salvador's president from 1984 to 1989 with the same name, and the financial manager for Fundación José Napoleón Duarte, a microfinancing company in San Salvador. The company helps some of the country's residents receive the $2.5 billion in remittances sent each year, accounting for up to 25 percent of the country's economy. It is imperative to help immigrants in the United States keep remittances flowing, specialists say. But the problem until now has been that immigrants sending cash home often paid stiff fees. The market leader, Western Union, for example, charges $12 to $70, depending on how much money is being sent and to where. The company says its prices are competitive and its plentiful locations more than justify the fees. But newcomers like Microfinance International say their fees are much lower. Mr. Tochisako's firm charges $6 to send up to $150 to Latin America and $9 for any amount over that. Fees aside, many immigrants are afraid to open accounts at major American banks for several reasons, such as fear that the banks will be as untrustworthy as the banks in their native countries. And they often have not been the most desired customers, they add, because of the small size of their accounts. They have, instead, wired money through transfer services, and the cash is consumed by families, rarely saved. With the advent of companies like Mr. Tochisako's, that is slowly changing. 'One of the things we've seen lately is a lot of people sending remittances from the U.S. are starting to think their money is not being handled well' by recipients, Mr. Duarte said. For that reason and to help local economies grow, credit unions, banks, microfinancing institutions and others are hoping to funnel remittances into accounts, rather than deliver it as cash. Companies like Microfinance International offer account services so immigrants can wire money from one account to another. That reduces sending fees and helps direct where portions of remittances end up - in savings accounts, for example, rather than directly into the free-spending hands of relatives. In addition, Microfinance International is building a base of clients in America to increase the company's revenue so that loans starting at $150,000 and up can be given to Latin American microfinance organizations which can, in turn, direct the money to entrepreneurs in their country. Of remittances sent, 'most will still be pulled out for consumption,' said Mr. Terry of the Inter-American Development Bank, 'but 15 to 20 percent stays in for savings.' Or at least that's the goal of various initiatives the Inter-American Development Bank is crafting with microfinance groups in the United States and throughout Central and South America. 'Our goal is simply over the next few years to get 10 percent of that flow into Latin America into microfinance institutions,' he said. 'That means $5 billion of the $50 billion worldwide. That's not impossible.' And, 15 to 20 percent into savings, he said, 'means more than $1 billion that could be lent to entrepreneurs in those countries.'

Subject: Popular Herb Has No Effect on Colds From: Emma To: All Date Posted: Thurs, Jul 28, 2005 at 10:29:22 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/28/health/28cold.html?hp&ex=1122609600&en=784f4af866253b8f&ei=5094&partner=homepage Study Says Popular Herb Has No Effect on Colds By GINA KOLATA Echinacea, the herbal supplement made from purple coneflower and used by millions of Americans to prevent or treat colds, neither prevented colds nor eased cold symptoms in a large and rigorous study. The study, being published today in The New England Journal of Medicine, involved 437 people who volunteered to have cold viruses dripped into their noses. Some swallowed echinacea for a week beforehand, others a placebo. Still others took echinacea or a placebo at the time they were infected. Then the subjects were secluded in hotel rooms for five days while scientists examined them for symptoms and took nasal washings to look for the virus and for an immune system protein, interleukin-8. Some had hypothesized that interleukin-8 was stimulated by echinacea, enabling the herb to stop colds. But the investigators found that those who took echinacea fared no differently from those who took a placebo: they were just as likely to catch a cold, their symptoms were just as severe, they had just as much virus in their nasal secretions, and they made no more interleukin-8. Some researchers say still further investigation is needed, with stronger doses and with echinacea species and preparations different from those used in this study. But Dr. Stephen E. Straus, director of the National Center for Complementary and Alternative Medicine, the government agency that sponsored the new research, says he for one is satisfied that echinacea is not an effective cold remedy. 'This paper says it will not pre-empt a common cold, and it stands on top of prior studies saying it doesn't treat an established cold,' he said, adding, 'We've got to stop attributing any efficacy to echinacea.' While the herb is generally safe, he said, some people are allergic to it, and it can lower blood levels of theophylline, a drug used by people who have asthma, as well as levels of medications used to treat diabetes. The study originated at the national center, where researchers were questioning what sort of supplements Americans were taking, and why. A national survey last year by the National Center for Health Statistics found that echinacea was the most popular natural product, used by some 14,665,000 people, or 40 percent of those who used natural products. The American Botanical Council, a nonprofit group that promotes the use of herbal supplements, says sales of echinacea products in 2004 were about $155 million. 'It's a product with remarkable traction,' Dr. Straus said. 'It has that traction because of the combination of folklore, myth and word of mouth which is much more than the science has borne out.' A few years ago, the National Center for Complementary and Alternative Medicine sponsored two other large studies of echinacea, one in children and the other in college students. In both studies, patients who already had a cold took the herb, which had no effect on their symptoms or the cold's duration when compared with a placebo. Still, Dr. Straus said, he got complaints. 'I had people call and say: 'You know, Steve, that's not the way I use echinacea. I don't wait until I have a cold. As soon as I feel a cold coming on, I take it and I nip it right in the bud.' ' And so, Dr. Straus said, the center leapt at the opportunity to study echinacea as a cold preventative with the most rigorous and sensitive test available. To begin with, he said, the 300-milligram dose was determined by a world-renowned expert, Dr. Rudolph Bauer, a professor of pharmaceutical biology at the Karl-Franzens University in Graz, Austria. That dose, Dr. Straus said, was one that had been employed in previous studies and the one that the World Health Organization had described as most often used by consumers. 'It was state-of-the-art methodology,' he said. 'We know exactly who gets rhinovirus dripped down their nostrils and when. We know whether they had echinacea beforehand or not.' And the investigators were looking at the relevant measures of infection and symptoms in their search for the virus and interleukin-8. In sum, Dr. Straus said, the researchers 'got it right.' The study's findings were striking, said Dr. Ronald B. Turner of the University of Virginia, the leader of the research team. 'We were trying under the best possible conditions' to get echinacea to work, Dr. Turner said, explaining that the experimental design was so sensitive that it had found protective effects from other cold remedies that could not be duplicated in the real world. But Dr. Bauer, one co-author, was among those saying the study should be repeated with other echinacea species, preparations and doses. 'I am always in favor of further studies,' Dr. Bauer said. He himself takes echinacea, he said, and will continue to do so. The American Botanical Council also called for more research. Mark Blumenthal, the group's founder and executive director, said in a press release that among other things, the herb should be tested at a higher dose. But in an editorial accompanying Dr. Turner's paper, Dr. Wallace Sampson, editor of The Scientific Review of Alternative Medicine, which analyzes alternative-medicine claims, said there was no reason to have believed that echinacea was effective against colds in the first place. In the early 20th century, echinacea 'somehow became popular for the treatment of respiratory illness in Germany,' Dr. Sampson wrote, while in the United States it was used for wound healing and other purposes for which today people would take an antibiotic. Its use faded away when real antibiotics were discovered, but it re-emerged in the 1960's as a cold remedy, with no particular reason to think it would work. Now, with increasing evidence that echinacea does not work for colds, scientists are confronting a problem, Dr. Sampson said, in that 'there is no 'demarcation of the absurd,' a point at which it is unwise to pursue an investigation further.' For Dr. Turner, that point is here. 'We should assume that echinacea does not work until somebody proves it does,' he said. That, he added, 'is the flip side of where we've been.'

Subject: Jared Diamond From: Jennifer To: All Date Posted: Thurs, Jul 28, 2005 at 09:02:31 (EDT) Email Address: Not Provided Message: The PBS series on Jared Diamond's book 'Guns, Germs, and Steel,' is excellent and helps us understand one of the profound thinkers on history. We are offered a geographical fraework for understand history that is brilliantly meticulous. I highly recommend the PBS series and Diamond's works.

Subject: Slowing Cheetahs' Fast Disappearance From: Emma To: All Date Posted: Thurs, Jul 28, 2005 at 06:08:08 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/28/international/africa/28cheetah.html?hp A Rescue Mission, Slowing Cheetahs' Fast Disappearance By MICHAEL WINES OKONJIMA, Namibia - Roused from his lair in the knee-high grass of the Namibian bush, Dewey the cheetah lifted his head toward his latest clutch of gaping humans, maybe 30 feet away, and offered a contemptuous stare of the sort that only cats can deliver. Dean Masika played at reading the animal's mind. 'Damn. They found me again,' he mocked. 'How do they do that?' Simple. Wielding an antenna that resembles an oversize branding iron, Mr. Masika leads eco-tourists to Dewey every few days as surely as if the big cat carried a homing beacon - which he does, of course, on a bulky plastic collar around his neck. But tourism is in some ways an asterisk to these visits. Dewey is one of some 70 cheetahs living on a 10,000-acre sanctuary managed by the AfriCat Foundation, a nonprofit group dedicated to helping Namibia's big carnivores survive. One purpose of Mr. Masika's drop-bys is to see if Dewey, who was rescued as a 2-month-old orphan, has picked up enough hunting skills to make it on his own. In Namibia, a nation of arid grasslands and Wild West landscapes, there are bigger cats, like lions, and more common ones, like leopards. But cats like Dewey are the ones that grab the attention of wildlife conservationists like AfriCat, and for good reason: Namibia is home to perhaps 3,000 cheetahs, up to one-fourth of the world's population. A threat to cheetahs here is a threat to the survival of the entire species. Cheetahs are now endangered, found only in Africa and in Iran, where about 200 remain. While adept hunters, they tend to fare poorly in wildlife reserves, where they must compete in a limited territory with lions and leopards. Even in Namibia, where just 1.7 million people occupy land twice the size of California, wide-open spaces favorable to cheetahs are at a premium. Untamed as much of Namibia seems, its cheetahs and leopards are threatened by development and by conflict with some 7,000 farmers and ranchers who have fenced in most of the arable land and, sometimes, see the big cats as a threat. Since the early 1990's, AfriCat and a second nonprofit, the Cheetah Conservation Fund, have rescued and relocated more than 1,600 Namibian cats, most of them cheetahs, and waged campaigns to show landowners how to live peaceably with predators they might otherwise gun down. The result, said Laurie L. Marker, the executive director of the Cheetah Conservation Fund, is that a precipitous drop in Namibia's cheetah population has been halted, and numbers have even begun to rise in the last few years. In the 1980's, Namibia's cheetah population shrank by half, with more than 800 killings reported annually to the government. Today that number is about 200. When Ms. Marker began her cheetah-saving campaign in 1990, 'probably 90 percent of the people looked at me and thought I was nuts,' she said in a telephone interview. 'At this point, a good 60 or 70 percent of people within the cheetah's range are very enlightened, and not having any problems with cheetahs.' AfriCat and the Cheetah Conservation Fund encourage farmers and ranchers to forgo guns and protect their livestock with herd dogs and by fencing in calves and lambs. Lately, they have an even more enticing proposition: cheetah-loving tourists, who are flocking to Namibia in ever greater numbers, and often staying and spending money at guest farms. 'There is definitely a change of thinking. Cattle farming is not bringing in the big bucks,' Tristan Boehme, a shareholder in AfriCat, said in an interview. 'Tourism is growing. With that, the value of wild animals grows, and with every animal having a greater value, farmers will say, 'I don't mind. You can come and release a cat on my property.' ' That is more or less how AfriCat began. With their own cattle farm struggling, Wayne Hanssen and his wife, Lisa, invited hunters and birdwatchers to their lodge in the mid-1980's to earn money. Then in 1987, they took pity on a cheetah cub displayed in a bird cage at a cattle auction, and took the cat home. A monitor lizard followed, then a honey badger, then a baboon named Elvis, then another cheetah, Caesar, and a hyena, Dracula. The Hanssens gradually came to see cheetahs as a perfect marriage of animal welfare and business. They founded AfriCat in 1991 and now cover about 40 percent of its expenses with proceeds from Okonjima, the upscale lodge and bush camp they run. Donors helped them fence off 10,000 acres of their land as a sanctuary. Escorted by guides, Okonjima guests track cheetahs on foot or watch from the safety of a Land Rover as guides feed hunks of meat to crowds of the purring, chirping cats that roam fenced-off enclosures within the reserve. The key to is release the rescued animals - usually on other farms - before they lose their fear of humans. But some must be held back, including cubs who were orphaned or kept as pets until the owners decided they were no longer so cute. One such cub was Dewey, an orphan who arrived at Okonjima in 1997 with his brothers Huey and Louie. The three were kept for two years before being fitted with collars and released into the larger reserve to see if they had the skills to survive. At first, they thrived. Then anthrax killed the two brothers, and Dewey, pining for companionship and roaming outside his old enclosure, had to be taken in again and paired with another male cheetah. Early this year, Dewey and the other male were released once more into the larger reserve. The second male refused to hunt, but Dewey fared well until June, when Okonjima guides found him lying listlessly beside an oryx he had killed - but not before the oryx gored him. Luckily, the horn had missed all his vital organs, Stitched up and treated with antibiotics, Dewey was released for the third time. 'He already had his first kill that same morning,' said Mr. Masika, the Okonjima guide. Now, after eight years and three tries at AfriCat, Dewey is a prime candidate for relocation. 'He looks like he has a good chance,' said Mr. Boehme, the shareholder.

Subject: Hey Bobby! From: Yann To: All Date Posted: Thurs, Jul 28, 2005 at 06:03:39 (EDT) Email Address: Not Provided Message: Chapter 11 and its appendix from the macro textbook are available! http://www.worthpublishers.com/krugmanwellsnew/pdf/KRUGMAN_WELLS_MACRO_CHAPTER11.pdf and http://www.worthpublishers.com/krugmanwellsnew/pdf/KRUGMAN_WELLS_MACRO_CHAPTER11_APPENDIX.pdf

Subject: Re: Hey Bobby! From: Bobby To: Yann Date Posted: Thurs, Jul 28, 2005 at 15:26:58 (EDT) Email Address: robert@pkarchive.org Message: Thanks, Yann! I just posted them.

Subject: Stability or Else? From: Terri To: All Date Posted: Wed, Jul 27, 2005 at 17:45:25 (EDT) Email Address: Not Provided Message: A significant slowing of Chinese exports to America caused be a currency revaluation would mean a slowing accumulation of dollar assets, especially bonds. Slowing accumulation of bonds by China would be accompanied by less demand for American bonds from other foreign central banks and we could find a sharp rise in American long term interest rates. I would surely not like to see that.

Subject: interest rates on the rise From: Mik To: Terri Date Posted: Wed, Jul 27, 2005 at 17:53:57 (EDT) Email Address: Not Provided Message: Well without China's influence you are already facing an increase in inflation and interest rates.... better get ready for it. Clean up those credit card debts and make sure that you have not over extended yourself on your car and home loans. How much more of an affect would China add to the interest rates (were the to slow down their bond purchases)

Subject: Re: interest rates on the rise From: Terri To: Mik Date Posted: Wed, Jul 27, 2005 at 18:50:12 (EDT) Email Address: Not Provided Message: Were China to slow purchases of dollar assets the rise in the long term Treasury rate could easily be 1 percentage point, for if China were to slow purchases so too will other central banks. Also we are in a Fed tightening cycle.

Subject: Re: interest rates on the rise From: Mik To: Terri Date Posted: Thurs, Jul 28, 2005 at 15:01:29 (EDT) Email Address: Not Provided Message: I don't know if other central banks would also slow the purchases of bonds. Europe has many of its own economic problems and a strong US Dollar is in their best interests. Also the Europeans are known for protectionist tactics and artificially holding the US Dollar high (in comparison to the Euro) is not something the Europeans would hesitate doing. One thing is for sure - we have a distortion in the market. China is exaggerating that distortion and the US is feeding it. Labour rates are artificially being held down by an under valued currency and the lack of labour unions in China. The Chinese appear to have found a magic formula for growth based on giving the US credit. This has to calm down or it will implode. If the Chinese are not willing to change, the US had better do something about it - for everyone's sake. Also, please let's not be niaive to the fact that China could easily face a revolution. A holt in production in China will have disasterous consequences in the US who have become so relient on Chinese made products and who are so heavily invested in Chinese factories. We need to ensure that the US does not have all their 'economic eggs' in one 'communist regime's basket.'.... maybe it is too late.

Subject: Re: interest rates on the rise From: Terri To: Mik Date Posted: Thurs, Jul 28, 2005 at 17:13:29 (EDT) Email Address: Not Provided Message: When there is time I will try to fully argue these interesting points. I would like to have a more responsible fiscal policy in place but that will not happen soon, however I am not the least worried about stability in China and believe the present situation is sustainable and mutually beneficial for a while.

Subject: Toyota, Moving Northward From: Mik To: All Date Posted: Wed, Jul 27, 2005 at 17:18:28 (EDT) Email Address: Not Provided Message: For those of you who have read Krugman's Story 'Toyota, Moving Northward', I have one question: So when are you coming to Canada?? ;-) (you can't shak up at my place though... well not all of you)

Subject: Let me in From: johnny5 To: Mik Date Posted: Wed, Jul 27, 2005 at 18:55:08 (EDT) Email Address: johnny5@yahoo.com Message: I tried going up there last year, they didn't like I was just gonna hang out there for awhile, they wanted me to get in and get out - I was so used to going back and forth over the mexican border with such ease I couldn't believe what A**holes your canadian border people were - why don't they do like setanta suggest and just let the people pour in - why be stingy and horde that place from the rest of us free spirits? hehe I remember reading chinese people were having babies on the plane over to canada so they could become citizens - haha - I guess you guys tightened up since then. How do I get to your house - I cant speak spanish but I did take french in college.

Subject: Re: Let me in From: Mik To: johnny5 Date Posted: Fri, Jul 29, 2005 at 13:51:10 (EDT) Email Address: Not Provided Message: The border people probably figured out that you come from a Southern State. We don't like people from the Southern States... they get all the warmth and we get nothing.... we're jealous.... we don't want you here. Apparently you almost had it right when you were looking for a language qualification to get in. It's not French or Spanish that you need to know how to speak... it's Chinese. (Mandarin or Cantonese - doesn't matter) Hhmm good point as to why Canadians don't allow more people in. It's not like there is any shortage of land or anything. But really you have to ask yourself.... do you really want to come here and face the winter? Hey we are not talking aout your American winters with like 2 feet of snow... we are talking serious stuff minus 30 degrees C (for those of us who have not gone metric that is -22F) Between you and me... It is Canada's secret plan to buy Florida.

Subject: Re: Let me in From: johnny5 To: Mik Date Posted: Sat, Jul 30, 2005 at 11:57:46 (EDT) Email Address: johnny5@yahoo.com Message: I lived in germany the majority of my childhood - I doubt the border people knew that - how do you define where a person comes from if he has lived all over and never in any one spot too long? hehe Good winters there - good german beer to keep you warm - hehe. That gluewine at the kris kringle markets warm you right up. See florida's state bird, the mosquito, I don't remember many of those birds in germany, I think the cold winters killed them off. Great if you ask me, too many kids here catching all those mosquito borne infections. RE Florida - hehe - you can have it, I am in palm beach now - just a bunch of over priced swampland. Lots of finnish retiring here though, they like the nice warm weather until the hurricanes blow thier bakeries away - hehe. Was talking to recent cuban immigrant, said his son knew english, spanish, italian, german, and french, I said what a waste - where is his chinese or japanese - he said who needs that in palm beach - I said just wait - hehe. I know Jared Diamond said certain animals and mammals are evolved to exist in certain climates and environments, maybe letting just any ole human move to any ole place in the planet is not so good for their survival there. I know I burn much faster in lots of sun and really miss the dark dreary days of germany.

Subject: O' Canada From: Terri To: Mik Date Posted: Wed, Jul 27, 2005 at 17:44:02 (EDT) Email Address: Not Provided Message: Well, Canada is such a beautiful country I would not mind roaming about at all. Nice.

Subject: Re: O' Canada From: Mik To: Terri Date Posted: Wed, Jul 27, 2005 at 17:49:48 (EDT) Email Address: Not Provided Message: I just realised something after reading a few of the posted stories. It appears that people in the Southern States are not the 'brightest crayons in the box' when it comes to education, yet the Northerners in Canada are getting the jobs because they have the education. So if the Canadians have the better education (in comparison to the Southern states), then why is it that Canadians choose to live in such a frikken freezing climate and people in the Southern States have such a nice year round climate? Hhhmm makes me wonder if the Southerners are actually a whole lot brighter than we think they are.

Subject: AYn rand From: johnny5 To: Mik Date Posted: Wed, Jul 27, 2005 at 18:50:46 (EDT) Email Address: johnny5@yahoo.com Message: It is a subject I have been harping on for years, educated ayn rands dont have kids - the very ones we need to have kids - but those dumb rednecks in south georgia pump out tons of kids - hehe. Agriculturally you needed a big family to sustain the farm in the south, was farming ever as big in winters of canada as the sunny south?

Subject: Chinese Stability From: Terri To: All Date Posted: Wed, Jul 27, 2005 at 16:33:52 (EDT) Email Address: Not Provided Message: There is no reason to believe the Chinese will further revalue the yuan for some while, for stability is seen by the Chinese as a prime element of continued high growth development. Beyond economics, stability is prized in Chinese history. Development is successful, change in pattern will not be welcome.

Subject: Re: Chinese Stability From: Mik To: Terri Date Posted: Wed, Jul 27, 2005 at 16:38:33 (EDT) Email Address: Not Provided Message: Yeah, I think it is time we rattle their cage a little. Say a 1.5% tariff on all goods made in China. And then give that money to the poor people who lost their homes in Zimbabwe (China is now supporting the Zimbabwe regime).

Subject: Re: Chinese Stability From: Terri To: Mik Date Posted: Wed, Jul 27, 2005 at 16:42:20 (EDT) Email Address: Not Provided Message: We already have quotas on a number of Chinese textiles, and we will not extend aid to Zimbabwe though I wish we could find a way to effectively do so.

Subject: Re: Chinese Stability From: Terri To: Terri Date Posted: Wed, Jul 27, 2005 at 16:50:54 (EDT) Email Address: Not Provided Message: China is reluctant to be cut off from resource supplies from sources we would boycott. This is a difficult problem for us to try to negotiate or bring to the United Nations Security Council. I worry too.

Subject: An International Bull Stock Market From: Jennifer To: All Date Posted: Wed, Jul 27, 2005 at 15:36:16 (EDT) Email Address: Not Provided Message: Notice that with the issue of China's currency settled in favor of stability, international stock markets continue to make progress. Again, this is a broad and deep international bull market that will hopefully be 3 years old in October.

Subject: Learning From Lance From: Emma To: All Date Posted: Wed, Jul 27, 2005 at 14:30:00 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/27/opinion/27friedman.html?incamp=article_popular_1 Learning From Lance By THOMAS L. FRIEDMAN There is no doubt that Lance Armstrong's seventh straight victory in the Tour de France, which has prompted sportswriters to rename the whole race the Tour de Lance, makes him one of the greatest U.S. athletes of all time. What I find most impressive about Armstrong, besides his sheer willpower to triumph over cancer, is the strategic focus he brings to his work, from his prerace training regimen to the meticulous way he and his cycling team plot out every leg of the race. It is a sight to behold. I have been thinking about them lately because their abilities to meld strength and strategy - to thoughtfully plan ahead and to sacrifice today for a big gain tomorrow - seem to be such fading virtues in American life. Sadly, those are the virtues we now associate with China, Chinese athletes and Chinese leaders. Talk to U.S. business executives and they'll often comment on how many of China's leaders are engineers, people who can talk to you about numbers, long-term problem-solving and the national interest - not a bunch of lawyers looking for a sound bite to get through the evening news. America's most serious deficit today is a deficit of such leaders in politics and business. John Mack, the new C.E.O. at Morgan Stanley, initially demanded in the contract he signed June 30 that his total pay for the next two years would be no less than the average pay package received by the C.E.O.'s at Goldman Sachs, Merrill Lynch, Lehman Brothers and Bear Stearns. If that average turned out to be more than $25 million, Mr. Mack was to be paid at least that much. He eventually backed off that demand after a howl of protest, but it struck me as the epitome of what is wrong in America today. We are now playing defense. A top C.E.O. wants to be paid not based on his performance, but based on the average of his four main rivals! That is like Lance Armstrong's saying he will race only if he is guaranteed to come in first or second, no matter what his cycling times are on each leg. I recently spent time in Ireland, which has quietly become the second-richest country in the E.U., first by going through some severe belt-tightening in which everyone had to sacrifice, then by following that with a plan to upgrade the education of its entire work force, and a strategy to recruit and induce as many global high-tech companies and researchers as possible to locate in Ireland. The Irish have a plan. They are focused. They have mobilized business, labor and government around a common agenda. They are playing offense. Wouldn't you think that if you were president, after you had read the umpteenth story about premier U.S. companies, such as Intel and Apple, building their newest factories, and even research facilities, in China, India or Ireland, that you would summon the country's top business leaders to Washington ask them just one question: 'What do we have to do so you will keep your best jobs here? Make me a list and I will not rest until I get it enacted.' And if you were president, and you had just seen more suicide bombs in London, wouldn't you say to your aides: 'We have got to reduce our dependence on Middle East oil. We have to do it for our national security. We have to do it because only if we bring down the price of crude will these countries be forced to reform. And we should want to do it because it is clear that green energy solutions are the wave of the future, and the more quickly we impose a stringent green agenda on ourselves, the more our companies will lead innovation in these technologies.' Instead, we are about to pass an energy bill that, while it does contain some good provisions, will make no real dent in our gasoline consumption, largely because no one wants to demand that Detroit build cars that get much better mileage. We are just feeding Detroit the rope to hang itself. It's assisted suicide. I thought people went to jail for that? And if you were president, would you really say to the nation, in the face of the chaos in Iraq, 'If our commanders on the ground say we need more troops, I will send them,' but they have not asked. It is not what the generals are asking you, Mr. President - it is what you are asking them, namely: 'What do you need to win?' Because it is clear we are not winning, and we are not winning because we have never made Iraq a secure place where normal politics could emerge. Oh, well, maybe we have the leaders we deserve. Maybe we just want to admire Lance Armstrong, but not be Lance Armstrong. Too much work. Maybe that's the wristband we should be wearing: Live wrong. Party on. Pay later.

Subject: Re: Learning From Lance From: Setanta To: Emma Date Posted: Thurs, Jul 28, 2005 at 05:29:56 (EDT) Email Address: Not Provided Message: Excellent article, as the great Roy Keane once said 'if you fail to prepare, then you better prepare to fail'.

Subject: Hayek On Tyrants and dumb voters From: johnny5 To: Emma Date Posted: Thurs, Jul 28, 2005 at 01:22:40 (EDT) Email Address: johnny5@yahoo.com Message: Perhaps the fact that we have seen millions voting themselves into complete dependence on a tyrant has made our generation understand that to choose one's government is not necessarily to secure freedom. - Hayek

Subject: Re: Learning From Lance From: Mik To: Emma Date Posted: Wed, Jul 27, 2005 at 16:35:23 (EDT) Email Address: Not Provided Message: Emma, did you watch the Daily Show's remarks about Lance? Considering that Lance has now retired, as of this day, cycling is now irrelevant to Americans ;-)

Subject: Re: Learning From Lance From: Terri To: Mik Date Posted: Wed, Jul 27, 2005 at 16:43:36 (EDT) Email Address: Not Provided Message: The Daily Show is terrific :)

Subject: Learning from Jurek From: johnny5 To: Terri Date Posted: Thurs, Jul 28, 2005 at 01:26:40 (EDT) Email Address: johnny5@yahoo.com Message: Stewart is such a funny guy. I wish more of my redneck buddies would watch him instead of larry the cable guy. http://seattlepi.nwsource.com/othersports/233630_jurek22.html Seattle man amazes everyone in 135-mile marathon--including himself By KRISTIN DIZON SEATTLE POST-INTELLIGENCER REPORTER Look at the photo of the man crossing the tape, arms raised in victory, mouth frozen in a primal yell. He hardly looks as if he's just run 135 miles, through 115-degree desert heat, from the lowest point in the United States to the slopes of one of its highest points, Mount Whitney. You wouldn't know that this was his first time racing the Badwater Ultramarathon, or that he shattered the course record by more than half an hour, or that he was a full two hours ahead of his closest competitor. But the accomplishment is all over Scott Jurek's face. On July 12, in 24 hours, 36 minutes and eight seconds, the Seattle man won the Badwater, one of ultrarunning's toughest events. Before the California race, Jurek had never run more than 90 minutes on pavement. Nor had he trained for the intense desert heat, except for arriving a week early to the Death Valley start area. And, he'd just come off of winning another world-class ultramarathon two weeks earlier -- barely any recovery time between two colossally demanding endurance feats. Jurek, who won his seventh Western States 100-miler in a row in June, says he conquered the Badwater by respecting the heat and biding his time. 'You have to be very patient in a race like that,' said Jurek, who lives on Capitol Hill. 'They've had lots of fast runners go in and think they can just hammer out 7-minute miles from the get go. But, it's a really long day. That's the longest that I'd ever run in my life in one shot.' Some say the Badwater is the most extreme running race in the world. Just 81 runners attempted it this year, and only 67 finished the course, which started 282 feet below sea level in Death Valley and finished 8,360 feet up Mount Whitney. Many competitors take almost as long as the 60-hour cutoff, and some will sleep or rest for hours at a time. At 31, Jurek is considered young for a world-class ultrarunner, and was the second-youngest in the entire field. Jurek, a physical therapist, running coach and consultant for Brooks Sports Inc., paced himself with 9- to 10-minute miles during the heat of the day, saving his reserves for the evening, when the temperatures sank below 100. Before the race, he probably shook things up a bit when he predicted he'd win and set a record time. Though some veterans thought that a little presumptuous, Jurek felt calm and confident. For more than half the race, Jurek ran in third place, about eight miles and 40 minutes behind the leader. And, around mile 75, he began feeling queasy, then vomited. That was the mental trough of the race, the point at which he questioned whether to continue. 'My stomach wasn't feeling very good and the heat was starting to drag me down. And, I definitely started to think, gosh, after Western States, why am I doing this so soon?' Jurek stopped and lay down for about five minutes, but his support crew of nine helpers and pacers, including his wife, Leah, urged him on. 'There's no aid stations out there, so your crew is your lifeline,' he said. Jurek, who's fought through such lows many times, told himself, 'I've been here before. I can get through this.' 'You dig down deep, whether it's the deep recesses of your body or your soul. It's very soul-searching in a way,' he said. 'Even though everything else seems to be unraveling, you try to find a way, a source of strength. And, you don't always know where that comes from.' Throughout the race, he kept cool with ice -- in his hat or bandanna, or pressed against his skin. In 24 hours, Jurek went through about 350 pounds of ice. He also sprayed himself with water to combat what felt like a hot hair dryer blasting him all day. During the peak hours of heat, Jurek drank 16-20 ounces of water every mile. When evening came, he curtailed that to 8-12 ounces per mile. For food, Jurek, a vegan, ate energy bars and gels, potatoes and rice balls, chased by soy protein drinks and electrolyte capsules. He consumed 60-120 calories every 20-30 minutes, mostly on the run. That night, when the temperature eased a bit, Jurek made his move. He gained ground on a long downhill, then closed it out. He said the finish -- 5,000 feet uphill over 13 miles -- was one of the toughest he's experienced. Badwater race director Chris Kostman said he's impressed with Jurek, who had little experience racing on pavement or in such heat. 'There are some people who thought the record was unbreakable,' Kostman said. 'He's definitely raised the bar.' Now, people are starting to think the race can be done in less than 24 hours, including Jurek. For now, he has no specific plans for another ultramarathon. He'll skip next year's Western States, but says he might run the Badwater again in the next few years. But back to that photo of Jurek crossing the finish line. He said that moment almost felt like fireworks going off. 'It's this sense, almost like, you're unstoppable,' Jurek says. 'You've reached this state where you feel on top of the world.' Amazing, even drinking that dangerous SOY didn't slow this animal down!!

Subject: An Extra Ingredient in Nonstick Pans? From: Emma To: All Date Posted: Wed, Jul 27, 2005 at 14:06:30 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/27/dining/27well.html? Is There an Extra Ingredient in Nonstick Pans? By MARIAN BURROS THE question of whether Teflon cookware is safe has moved from Web site chatter to the courtroom. But more than nonstick frying pans are under scrutiny these days. Scientists are examining the chemical makeup of other products like food containers to gauge their potential hazards. In each instance, the substance being questioned is perfluorooctanoic acid, or PFOA. Studies have shown that PFOA causes cancer and other health problems in laboratory animals, and it is under scrutiny by the Environmental Protection Agency and the Food and Drug Administration. A class action suit filed last week against DuPont in several states, including New York, charges that Teflon releases PFOA under normal cooking use and that the company did not warn consumers about its dangers. DuPont says that while PFOA is used to make Teflon, none of it remains in the finished product, and all Teflon-coated cookware is safe. The Environmental Working Group, a nonprofit environmental research and advocacy organization financed by foundations including the Rockefeller Family Fund and the Joyce Foundation, says items other than pans are likely to be the major sources of PFOA. But the group, along with many scientists, points out a different problem: an empty overheated Teflon-coated pan does pose a risk by releasing toxic fumes. DuPont does not dispute that, but there is no agreement between the company and Teflon's critics over what temperature releases the fumes. The Environmental Working Group says 325 degrees, or a medium flame; DuPont says 660 degrees. DuPont tells consumers at its Web site that the fumes can injure pet birds and cause flulike symptoms in humans at 'abnormally' high temperatures, a condition that the company says can last a couple of days. Other reports say that the fumes can kill birds. While DuPont defends its Teflon products, other companies are looking into their use of PFOA. Several animal studies, including one by the Environmental Protection Agency, show that fluorotelomers, chemicals used in food packaging as well as in rugs and clothing, break down into PFOA in the environment and when ingested. The Environmental Protection Agency began studying PFOA in 1999 and a draft report of its findings has been reviewed by an outside science advisory panel, which has said that PFOA is a likely human carcinogen. The E.P.A. disagrees and wants to describe it as a suggestive human carcinogen. The difference is important because if the panel's version is the final version the finding could call for a human cancer risk assessment. The final report will be released in the fall. What troubles the agency, and the Food and Drug Administration, is that PFOA can be found in the blood of 90 percent of Americans, according to a study by the 3M Company. Of the 600 children tested, 96 percent had PFOA in their blood; its source is unknown. Unlike dioxin and a class of chemicals known as polychlorinated biphenyls, or PCB's, which have been banned as suspected carcinogens, PFOA does not break down, remaining in the environment indefinitely. Fluorotelomers are used in microwaveable popcorn bags, in packaging for fast foods like sandwiches, chicken and French fries, as well as in packaging for pizza, bakery items, drinks and candy. They are also found in paper plates. There is currently no way for consumers to tell if packaging contains fluorotelomers. According to Tim Kropp, a toxicologist with the Environmental Working Group, 'paper plates with a really glossy look probably don't use it.' The F.D.A. has looked at PFOA in microwaveable popcorn packaging and found that the chemical migrates to the oil from the packaging during heating. But George Pauli, associate director for science and policy in the office of food additive safety at the F.D.A., said the levels found in the microwave packaging are low. 'We don't see anything at this time to say it's a safety issue,' he said. 'Food doesn't appear to be a major source.' Dr. Kropp countered: 'Any amount of PFOA you are ingesting may be a problem because we don't know what levels are safe.' Julie DeYoung, a spokeswoman for Phoenix Packaging, a division of ConAgra Foods, said: 'Studies on PFOA are preliminary, but we are taking the issue seriously and are talking with our paper suppliers about the issue. If the government tells paper suppliers to make changes, we'll support that.' ConAgra makes Orville Redenbacher's and Act II microwave popcorn and private label brands. For those who don't want to wait for definitive answers from the government, the Environmental Working Group has some suggestions: Use Teflon pans at lower temperatures, and never put them on the stove to heat without food or liquid inside. Greasy food that is heated in a microwave oven in a cardboard container is a potential source of PFOA; take the food out of the container and heat it in glass or ceramic. For popcorn in the microwave, the group suggests the following: Place a quarter-cup of good quality popcorn in a standard brown paper lunch bag; mix with oil and seasoning; seal the bag with a single staple (one staple does not contain enough metal to cause a spark) and heat for two to three minutes. Alton Brown, who cooks on the Food Network, uses this method. Another solution is to cook the old-fashioned way. If cast iron pans are seasoned and heated properly, very little oil is needed for browning. Chefs generally do not use nonstick pans because they do not think they do as good a job of cooking as cast iron and stainless steel, especially for browning.

Subject: Re: An Extra Ingredient in Nonstick Pans? From: Mik To: Emma Date Posted: Wed, Jul 27, 2005 at 16:33:48 (EDT) Email Address: Not Provided Message: I love this statement, 'The Environmental Working Group says 325 degrees, or a medium flame; DuPont says 660 degrees.' Bloody hell I hope that is not in degrees celcius as Alluminium melts at 660 degrees C and if you can get you oven up to that temperature you should be making cast moldings not cooking food. Also please don't leave your pan on the hot plate until it reaches 325 degrees. At that temperature the plastic handle will melt and emit a toxic fume. AND for heavens sake don't through cooking oil on that pan (at 325 degrees) you will turn the oil in a toxic cloud of smoke. In essence, if you are going to cook food on a non-stick pan at a normal temperature... enjoy your meal.

Subject: Re: An Extra Ingredient in Nonstick Pans? From: Terri To: Mik Date Posted: Wed, Jul 27, 2005 at 16:39:15 (EDT) Email Address: Not Provided Message: Those who know birds, know that Teflon is deadly to birds and I would have nothing at home with Teflon from iron to hair dryer to cookware. Though I welcome all sorts of high tech products, we should at least be suspicious of Teflon.

Subject: China's Currency From: Terri To: All Date Posted: Wed, Jul 27, 2005 at 12:47:20 (EDT) Email Address: Not Provided Message: China has made it clear that there will be no further revaluation of the Yuan against the dollar. Then essentially the trade and investment relationship between China and America is unchanged and China will continue to purchase dollar assets as before. I am pleased with this arrangement for both countries. This is bullish for bonds and stocks.

Subject: Re: China's Currency From: Mik To: Terri Date Posted: Wed, Jul 27, 2005 at 16:17:22 (EDT) Email Address: Not Provided Message: Krugman made an interesting statement, 'This story is still in its early days. On the first day of the new policy, the yuan rose only 2 percent, not enough to make any noticeable difference. But one of these days Chinese dollar purchases will trail off, and we'll find ourselves living in interesting times.' I think Krugman may be hinting at an immediate appreciation in the Yuan coupled with a relatively quick trail off on bond purchases by the Chinese. And how it can be an economic disaster for the USA, however I see it as an even bigger disaster for China. Mass unemployment as their products become too expensive where a population have been enjoying their new found wealth. Taking away their wealth coupled with an authoritarian regime would probably result in a revolution. I do believe the current status quo cannot be sustained and the Yuan has to appreciate some more but at a slow rate to slowly ween everyone off of an unbalanced environment. A steady increase in the Yuan coupled with a steady decrease in the purchase of US bonds by the Chinese should be the highroad forward for everyone's best interests. Of course there is that deficit problem...

Subject: Training Musicians, Not Stars, in China From: Emma To: All Date Posted: Wed, Jul 27, 2005 at 12:07:44 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/iht/2005/07/26/arts/IHT-26music.html Training Musicians, Not Stars, in China By JOYCE HOR-CHUNG LAU - International Herald Tribune Xiong Yin, a soft-spoken 19-year-old cellist, has been training to become a musician for as long as she can remember. Her parents, cellists themselves, enrolled her in piano lessons at 4 years old and cello lessons at 6. She entered the Shanghai Conservatory when she was about 9 years old and was soon sent on government-organized trips to the West to perform and compete. At 14, she moved more than 1,000 kilometers from home to accept a scholarship at the Hong Kong Academy for Performing Arts. Xiong is an expressive player with a good track record and fine technique, but she is not considered a star by the standards of China's musical elite. What makes her stand out, in a nation all but obsessed with producing the next world-famous virtuoso, is that she has little intention of becoming the next big thing. 'I don't necessarily want to be a soloist,' she said while hauling around a cello case decorated with rainbow-colored stickers and small stuffed animals. 'Is that strange to say? It's so much pressure. Maybe I like chamber music, trios and quartets - Mozart's, Haydn's and Ravel's. I like Schubert's 'Death and the Maiden' and the Shostakovich eight. It feels good to work in a group.' It's an ironic thing to say, considering that Xiong was later chosen out of more than 200 students as the winner of the concerto competition at the inaugural Canton International Summer Music Academy. Located in what seems like the last parcel of southern China's lush hills not overtaken by factories, the academy is a first in the country and has been nicknamed 'the Chinese Tanglewood' for its casual approach, use of a resident professional orchestra (the Guangzhou Symphony), picturesque setting and emphasis on ensemble playing. 'There is a very competitive attitude, which is very Asian,' said the conductor Charles Dutoit, Cisma's music director and a regular visitor to China since 1982. 'So the academy is very essential to the mentality toward music in China. 'The children in China learn an instrument and think they will be the next Heifetz,' he continued, referring to the late virtuoso. 'But you have millions of musicians in the world and only one Heifetz. It is the wrong attitude. It is simply not a good education system. Most young musicians in China will not make a good career if this continues.' Dutoit, along with the concert violinist Chantal Juillet, met repeatedly with the Guangdong Province authorities before finalizing the plan for Cisma. They had to find a middle ground between the government's desire to control the students' lives and the West's more liberal approach to education. 'The Europeans have a humanistic relationship with music, and our musicians grow up more slowly,' Dutoit said. 'In China, they grow up so fast. I just heard a 13-year-old pianist play with fantastic skill but play with no other knowledge. What does such a 13-year-old know about life?' Apparently, not much, if judged by the participants from China's outer provinces, as they stared wide-eyed at the chandeliers, fountains, pillars and pools of the ostentatious Butterfly Valley resort, where Cisma is taking place courtesy of the Guangdong government. Clutching backpacks and instrument cases, they lined up to receive student packs, filled with rules against drinking, smoking, leaving the grounds, sleeping late or fraternizing with the opposite sex. (One rule purportedly proposed by the government - 'Do not fall in love' - was later rescinded by Cisma's foreign advisers.) 'This project is very unusual for a country like China,' said Lo King-man, Cisma's director of administration and the former head of the Hong Kong Academy for Performing Arts, who first offered the scholarship to Xiong. 'Conservatories on the mainland concentrated only on finding the one student who could win the world's most difficult competitions, like Yundi Li did, and the rest can be forgotten,' he said. 'It's very wasteful to develop all that talent, and then drop it.' Juillet, the head of the academy's chamber music department, struggled with China's singular focus on virtuosity when she conducted her 12-city audition tour through Southeast Asia. 'There is a lack of knowledge in China,' said Juillet, who chose 200 musicians after hearing more than 500. 'Some teachers did not want students to audition because there is a stigma that you only become an orchestral or chamber music player if you've failed otherwise. It's a very competitive world and conditions kids to be disappointed. 'I want to show these students how much fun and joy and friendship there can be with ensemble music,' she added. The Chinese government's efforts to build concert halls, opera houses and music academies all over the country is not without political motive. Ever concerned about its place in the world, China is eager to prove that it is not only an economic powerhouse, but a cultural one as well. In this context, Cisma is particularly significant because it is said that the late Leonard Bernstein had planned to open a music camp in China more than 15 years ago but backed out because China was not developed enough or open enough at the time. 'He wanted to do it with principal chairs of the Vienna Philharmonic and got quite advanced in his planning until 1989,' Juillet said, referring to the year of the Tiananmen Square crackdown and widespread social unrest. Instead, Bernstein took his idea to Japan. In 1990, he opened the Sapporo-based Pacific Music Festival, a critically acclaimed academy where Dutoit later served as the music director and where Juillet works as the head of chamber music. To do its part to bolster China's place on the international cultural scene, the Guangdong government offered full scholarships to all 200 Cisma students, whether there was financial need or not. It also built a 600-seat concert hall at the resort which, two days before the opening, was still being finished by camouflage-clad members of the People's Liberation Army - a sure sign that someone high in the ranks was pulling strings. According to Juillet, the government 'knows they don't know much' about producing an academy like this, which is why IMG Artists, the London-based arts management company, was hired to provide a stable of foreign tutors, including principal players from orchestras like the Montreal Symphony and the Royal Concertgebouw. IMG also arranged for the concert violinist Akiko Suwanai and other soloists to perform. Still, the authorities wanted to keep a certain degree of control. 'They wanted to approve all the repertoire the students played,' Juillet said. And despite the emphasis on fun and cooperation, a concerto competition was included, perhaps out of fear that top young Chinese musicians would not attend without one. This summer's winner, Xiong, will perform Elgar's Cello Concerto on July 31 during the finale concert, which, following a Tanglewood tradition, will feature Tchaikovsky's '1812 Overture' and fireworks. 'My parents told me that, only if I win, will they come to see me,' she said.

Subject: Re: Training Musicians, Not Stars, in China From: johnny5 To: Emma Date Posted: Tues, Aug 02, 2005 at 07:29:57 (EDT) Email Address: johnny5@yahoo.com Message: This summer's winner, Xiong, will perform Elgar's Cello Concerto on July 31 during the finale concert, which, following a Tanglewood tradition, will feature Tchaikovsky's '1812 Overture' and fireworks. 'My parents told me that, only if I win, will they come to see me,' she said. (sigh) Job, money, career, success, this is all that matters, families and love - who cares anymore??

Subject: While US housing booms From: Pete Weis To: All Date Posted: Wed, Jul 27, 2005 at 10:52:28 (EDT) Email Address: Not Provided Message: CAN AMERICANS COMPETE? Is America the World's 97-lb. Weakling? In the relentless, global, tech-driven, cost-cutting struggle for business, America isn’t ready—here’s what to do about it. FORTUNE Wednesday, July 20, 2005 By Geoffrey Colvin It’s a crisis of confidence unlike anything America has felt in a generation. Residents of tiny Newton, Iowa, wake up to the distressing news that a Chinese firm—What’s it called? Haier? That’s Chinese?—wants to buy their biggest employer, the famed but foundering Maytag appliance company. Two days later, out of nowhere, a massive, government-owned Chinese oil company muscles into the bidding for America’s Unocal. The very next day a ship in Xinsha, China, loads the first Chinese-made cars bound for the West, where they’ll compete with the products of Detroit’s struggling old giants. All in one week. And only two months earlier a Chinese company most Americans had never heard of took over the personal computer business formerly owned—and mismanaged into billions of dollars of losses—by the great IBM. 'Can America compete?' is the nation’s new No. 1 anxiety, the topic of emotional debate in bars and boardrooms, the title of seminars and speeches offered by the liberal Progressive Policy Institute, the conservative economist Todd Buchholz, and countless schools and Rotary Clubs. The question is almost right, but not quite. We’re wringing our hands over the wrong thing. The problem isn’t Chinese companies threatening U.S. firms. It’s U.S. workers unable to compete with those in China—or India, or South Korea. The real question is, 'Can Americans compete?' The stakes are mammoth: Respectable analysts believe it’s possible—not certain, but possible—that the U.S. standard of living, after decades of steady ascent, could stall or even begin to decline. More worrisome is the chance that if the world’s most powerful nation finds itself getting poorer rather than richer, some kind of domestic or even global political crisis could follow. As for the big question at the center of it all—Can we compete?—the answer isn’t obvious. The don’t-worry-be-happy crowd points out that our last national fit of wailing and garment rending, when Japan was going to smite us in the 1980s, proved unfounded. We adapted and prospered, as we always had (and Japan didn’t). But today’s situation is so starkly different that it’s tough to find comfort in our experience then. We’re not building human capital the way we used to. Our primary and secondary schools are falling behind the rest of the world’s. Our universities are still excellent, but the foreign students who come to them are increasingly taking their educations back home. As other nations multiply their science and engineering graduates—building the foundation for economic progress—ours are declining, in part because those fields are seen as nerdish and simply uncool. And our culture prizes cool. No one is saying that Americans can’t adapt and win once more. But look at our preparedness today for the emerging global economy, and the conclusion seems unavoidable: We’re not ready. To understand better whether Americans are destined to be the scrawny and pathetic dweebs on the world’s economic beach, it’s necessary to refine the question. Who is most threatened? How come? What will it take to make America stronger in a new economic world? What political forces could propel—or derail—progress? Many iconic U.S. firms—Coca-Cola, Procter & Gamble, Texas Instruments—already do most of their business and employ most of their workers outside the U.S. Conversely, some of the most American brands you can think of—Hellmann’s mayonnaise, Jeeps, BV California wines—are owned by non-U.S. companies (Unilever, DaimlerChrysler, and Diageo, respectively). To complicate matters further, many products of U.S. companies are made outside the U.S.—Maytag refrigerators are no longer made in Galesburg, Ill., but in Mexico—while many non-U.S. companies make products here—your new Toyota may have come from Kentucky. Now add a few more twists: Your Dell laptop may have been assembled in Malaysia from parts made by American companies in Thailand. The truth is that large companies transcended nationality long ago, and globalization gives them as many opportunities as problems. It increasingly lets them hire, source, and sell wherever they like, and that is basically good news no matter where the incorporation papers are filed. For American workers, globalization is a radically dicier proposition—far more so than most of them realize. The fast-changing economy is exposing vast numbers of them to global labor competition, and it’s a contest millions of them can’t win right now. Three main factors are changing the game. First, the world economy is based increasingly on information, bits and bytes that have to be analyzed, processed, and moved around. Examples: software, financial services, media. Second, the cost of handling those bits and bytes—that is, of computing and telecommunications—is in free fall. Wide swaths of economic activity can be performed almost anywhere, at least in theory. Turning theory into reality is the third factor: Low-cost countries—not just China and India but also Mexico, Malaysia, Brazil, and others—are turning out large numbers of well-educated young people fully qualified to work in an information-based economy. China will produce about 3.3 million college graduates this year, India 3.1 million (all of them English-speaking), the U.S. just 1.3 million. In engineering, China’s graduates will number over 600,000, India’s 350,000, America’s only about 70,000. The result is that many Americans who thought outsourcing only threatened factory workers and call-center operators are about to learn otherwise. That is a giant development, because information-based services are the heart of the U.S. economy. With 76% of its jobs in services, America’s economy is the most service-intensive of any major country’s. Of course many of those jobs can’t be shipped abroad: Chefs, barbers, utility and NFL linemen, and many others know they can’t be replaced by even the smartest person in Bangalore. But growing numbers of other service jobs are not safe. Everyone has heard about the insurance-claims processors, accountants, and medical transcriptionists in India and elsewhere who’ve taken away U.S. jobs by doing the same work for much less money. More alarming is that the value of outsourced jobs is steadily rising. Morgan Stanley is hiring Indian bond analysts, fearsome quants who can make or cost a company millions. Texas Instruments is conducting critical parts of its next-generation chip development—extraordinarily complex work on which the company is betting its future—in India. American computer programmers who made $100,000 a year or more are getting fired because Indians and Chinese do the same work for one-fifth the cost or less. The big question is how far all this will go. A massive new study from the McKinsey Global Institute predicts that some industries could be changed beyond recognition. In packaged software worldwide, 49% of jobs could in theory be outsourced to low-wage countries; in infotech services, 44%. In other industries the potential job shifts are smaller but still so large they’d create major dislocations: Some 25% of worldwide banking jobs could be sent offshore, 19% of insurance jobs, 13% of pharmaceutical jobs. Looking at occupations rather than industries, some fields will never be the same. McKinsey figures that 52% of engineering jobs are amenable to offshoring, as are 31% of accounting jobs. Adding up all the numbers, McKinsey calculates that some 9.6 million U.S. service jobs could theoretically be sent offshore today. That is a staggering number. If all those jobs really did get outsourced, the U.S. unemployment rate would leap from 5% to 11.4%. For various reasons, not all those jobs will get sent abroad. Some companies aren’t big enough to make the effort worthwhile. Some have infotech systems so old or messed up that they can’t adapt to offshoring. Some managers just don’t like the idea. McKinsey figures that about 4.1 million service jobs will actually get offshored from high-wage countries to low-wage countries by 2008. It doesn’t make a forecast for U.S. jobs, but others have done so. Forrester Research puts the number at 3.4 million white-collar jobs by 2015. Researchers at the University of California at Berkeley believe the number will be far larger, perhaps 14 million. Even those numbers could be too low, because they’re based on surveys of company plans today and extrapolations of current trends—always iffy predictors. Professor Thomas H. Davenport of Babson College believes that outsourcing is about to become radically easier and more widespread for a seemingly mundane reason. Davenport sees industry groups and professional associations rapidly standardizing processes like purchasing and billing, making them easy to measure and assess. When that happens, he says, 'the low costs and low risks of outsourcing will accelerate the flow of jobs offshore.' The downward pressure on U.S. wages could be more immediate and severe than you might imagine. It is tempting to suppose that the giant U.S. economy couldn’t have felt much strain yet; the total number of offshored white-collar jobs is probably fewer than a million so far. But it doesn’t take the shifting of many jobs to produce ripple effects through the whole economy. Why? Most U.S. workers whose jobs are sent overseas will try to find new ones, perhaps in other industries or occupations. So the offshoring of any jobs will produce job seekers who will tend to push wages down even in industries in which outsourcing isn’t happening. Far more significantly, the mere threat of moving jobs offshore is enough to hold wages down—those growing armies of skilled workers around the world are increasing the labor supply in many occupations, and the immutable law of markets is that when supply goes up, prices come down. It has happened in all kinds of other markets—food, clothing, microchips, appliances. Why not in labor? Some economists believe they see it happening already. They note that something extremely odd occurred in the U.S. economy last year: Average compensation, including pay and benefits, fell. That is a rare event; the last time it happened was 14 years ago. More important, it usually happens in or around recessions or when productivity is going nowhere. But last year wasn’t like that. Productivity rose. The economy grew. The unemployment rate was low and falling. Every indicator pointed to strong wage increases, but just the opposite happened. Now some of the nation’s most eminent economists, including professor Richard B. Freeman of Harvard and Stephen Roach of Morgan Stanley, believe the supply of overseas workers in newly globalizing labor markets is holding U.S. pay down and will do so for years. All those university graduates in China and India threaten U.S. living standards in another way. Paradoxically, it’s not because they’ll end up working for U.S. employers, but because some of them won’t, finding jobs instead with domestic companies in their own countries. That’s a problem for America if many of those graduates are top students in science and engineering. You might wonder why we’re constantly reading about Chinese graduates in engineering and not in law, medicine, literature, or philosophy. Why this veneration of the pocket-protector set? Engineering is fine, but there’s more to life than technology, isn’t there? Obviously there is. The question—and for America and the West it’s a huge question—is whether there can be economic dominance without technology leadership. Many economists would say no. 'There is no other fundamental mover of economic development than science and technology,' Columbia University professor Jeffrey Sachs has said. He notes that until the scientific revolution began in the 17th century, virtually everyone lived on the verge of subsistence. Three centuries of technology breakthroughs are the root of today’s abundance in the developed world, and those with a technological edge—America, Japan, and Western Europe—still have the highest standard of living. So in a world economy that threatens to pull down American wages, the key to fighting back is maintaining technological superiority—continually creating high-value new jobs that workers in the rest of the world can’t do yet. What are the chances? A worrisome sign is that the brightest students from many Asian countries are staying home to get their Ph.D.s rather than coming to America, as they did in rising numbers until the mid-1990s. Those foreign Ph.D.s have been the driving force in scores of America’s most successful and innovative tech firms, but now we’re getting fewer of them, and other countries are getting more. Perhaps worse, those who still come to America for their Ph.D.s—arguably the best of the best—are returning home in increasing numbers. In economies like China’s or India’s, growing two or three times faster than America’s, elite students see huge opportunities. Even foreign nationals well established in the U.S. are heading home. 'Many of my friends are going back,' says professor Godwin Wong of Berkeley’s Haas School of Business. 'They’re leaving big corporate jobs here because they can make more money in China.' For the U.S. the loss of technology leadership could be historic. Without that advantage, there would be little to prevent living standards in the world’s interconnected economies from equilibrating. The rest of the world’s living standards would rise, and—at least in the near term—America’s would decline. Combine all those trends and the picture isn’t encouraging for America. Though the U.S. is still the world’s biggest and strongest economy by far, many Americans, from hourly workers to CEOs, feel as if they’re getting sand kicked in their faces. They know they need some serious muscle building to match the other guys on the beach. And they’re remarkably agreed on how to do it. The No. 1 policy prescription, almost regardless of whom you ask, comes down to one word: education. In an economy where technology leadership determines the winners, education trumps everything. That’s a problem for America. Our fourth-graders are among the world’s best in math and science, but by ninth grade they’ve fallen way behind. As Bill Gates says, 'This isn’t an accident or a flaw in the system; it is the system.' The good news is that we’ve overhauled the system before. A century ago, as America changed from an agricultural to an industrial economy, something called the high school movement swept the country. City and town leaders realized that an eighth-grade education, which was all that most people got, was no longer enough. They built and staffed high schools but rejected the European model, which prepared a small minority of young people for college, opting instead to prepare a majority of young people for life and work. This was a revolutionary concept, and many European authorities thought it foolish. But as research by Harvard’s Claudia Goldin and Lawrence F. Katz has shown, by 1940, America was far and away the world’s best-educated nation, a critical element of its post–World War II economic dominance. We responded to a changing world again in 1958, after the USSR orbited Sputnik while our rockets kept blowing up on the launch pad. Congress passed the National Defense Education Act, which appropriated federal money for education in math, science, and foreign languages. It worked, along with America’s grass-roots response to the threat. We went to the moon, science and engineering became cool, even glamorous, and we gained a wide technology lead. Now we need to revolutionize our schools again. As the world’s richest country, we certainly have the resources, but we seemingly lack the will, while many of our competitors are obsessed with education. In China it’s common for middle-school students to attend school from 7:30 a.m. to noon, then from 2 p.m. until 5, and again from 7 to 8:30 p.m. Contrast that with a nation where millions of parents are happy to let their kids spend hours hanging out at the mall or playing Grand Theft Auto on their Xbox or watching Pimp My Ride on MTV. To be sure, many upper-middle-class parents live in wealthy school districts with excellent schools, and they’re making private tutoring firms like Sylvan Learning Centers and Kumon into fast-growing businesses. But for most in the broad middle class or below, a top-notch K–12 education is a world away. Evidence is mounting that the way to begin reform is for legislators to establish high standards for public schools and make the schools more accountable to parents. But even if that notion becomes a movement, it’s not clear that better education will guarantee U.S. economic dominance. If we could somehow get our high school math and science scores up to South Korean standards, which would be a gargantuan achievement, then by that measure we’d be as good as they are—but they’d still be cheaper. A prescription urged just as widely is immigration reform. A critical element of America’s economic dominance has been its attraction for the world’s brightest, most ambitious people, but today’s immigration laws favor family reunification far above talent, intelligence, or credentials. If Albert Einstein wanted to move in today but had no U.S. relatives, he’d have to get in line behind thousands of poorly educated manual laborers who did. In a global economic competition, that policy seems crazy. John Doerr, the legendary Silicon Valley venture capitalist, recommends that every foreign student who gets a Ph.D. at a U.S. university should also get a green card (granting permanent residency) stapled to his or her diploma. But U.S. policy is moving in the opposite direction. The number of available H1-B visas, which allow highly qualified foreign workers to remain in the U.S. for up to six years, has been cut from 195,000 to just 65,000 a year, based on security concerns following 9/11. U.S. spending on R&D will also have to increase if the country wants to remain technologically dominant. The Task Force on the Future of American Innovation, a group of academic societies, high-tech companies, and industry associations, concludes in a recent report that 'the United States still leads the world in research and discovery, but our advantage is rapidly eroding, and our global competitors may soon overtake us.' Aggregate R&D spending by six fast-growing economies (China, Ireland, Israel, Singapore, South Korea, Taiwan) is on track to exceed U.S. spending in a few years. Industrial R&D continues to increase, but 71% of that spending is on development, not the kind of basic research that created the transistor and the laser. Federal funding of research in the physical sciences has been declining as a percentage of GDP for 30 years. The Council on Competitiveness, consisting of CEOs, university presidents, and labor leaders, wants federal research spending increased substantially, to 1% of GDP—about $110 billion a year. Incredible as it seems, America’s infotech infrastructure is no longer world-class. We rank only 12th globally in the number of broadband connections per 100 inhabitants. Look closer and the situation is even worse. South Korea is not only more wired (No. 1 globally) but its connections are far faster than ours and are available not just through wires but also through virtually every cellphone. And speaking of our cellphone infrastructure—please don’t. Anyone who travels globally knows it’s awful by world standards. Fixing all these problems would be a project of overwhelming proportions, yet it still might not make American workers competitive in today’s global labor market. The reason, again, is cost. American workers are enormously more expensive than their peers almost anywhere but in Western Europe. So they must confront what may be the most important question of their working lives: How can they be worth what they cost? As increasing numbers of them find that they can’t be, at least in the short run, the result could be political upheaval. A return to protectionism is looming. When the end of global textile quotas earlier this year caused the rapid loss of 17,000 U.S. jobs—a tiny number in a nation of 141 million workers—the administration found a loophole in the trade treaty and quickly reimposed restrictions. Senator Charles Schumer (D-New York) introduced a bill to impose a 27.5% tariff on Chinese imports, and five Republican Senators signed on as co-sponsors. The Central America Free Trade Agreement, the impact of which would be minuscule in the U.S., is struggling to pass Congress. (No one in Washington seems to think NAFTA would stand a chance of approval today.) If it all sounds terribly gloomy, it’s important to remember that gloominess has a very poor record in predicting the U.S. economy. Many traits that have helped us meet previous challenges are still with us: flexible labor markets, the world’s most highly developed capital markets, and a culture that moves on from failure and embraces new ideas. Companies aren’t standing still. Trilogy, a business software company in Austin, realized almost three years ago that hiring programmers in the U.S. no longer made sense because it could get them in India for one-fifth the cost. So it offered to help its U.S. coders learn higher-level work, becoming business experts who could help Trilogy customers make more money—for example, by showing Goodyear how to price tires more intelligently. As a general principle, learning higher-level work is what American workers have to do. And exactly what work would that be? No one is sure, though history says not to panic. Economic crises rarely reveal their solutions, but the solutions usually come along. When U.S. business went through the trauma of restructuring in the 1980s, millions of middle managers got cashiered and wondered what they’d do next. Undreamed-of new industries developed (cellphones, biotech, Internet services), and by the mid-’90s the unemployment rate was the lowest in decades. That’s history. It offers hope but no assurances. History says the rise of China, India, and other developing economies could someday lead to a new equilibrium that’s better for everyone. With resources deployed globally to their best use, prices could come down and living standards could eventually increase everywhere. After all, America’s rise didn’t impoverish Europe. On the contrary, the success of each continent helped the other get richer. What happens next in the U.S. depends on how workers respond. Trilogy CEO Joe Liemandt recalls what happened when he told programmers he wouldn’t need them as programmers anymore: 'We told them they could react in one of three ways. They could get really pissed, they could be in denial, or they could work with us to retool their skills. And we had people in each group.' It’s time for a massive, urgent American response to the global challenge. As Cisco chief John Chambers says flatly, 'We are not competitive.' Where to start? Venture capitalist John Doerr, one of America’s most passionate competitiveness campaigners, calls education 'the largest and most screwed-up part of the American economy.' He’d start there. GE chief Jeff Immelt has attacked America’s newly restrictive student visa rules. Others focus first on R&D spending or the broadband infrastructure. But the greatest challenge will be changing a culture that neither values education nor sacrifices the present for the future as much as it used to—or as much as our competitors do. And you’d better believe that American business has a role to play—after years of dot-com-bust- and scandal-driven reticence, more corporate leaders need to summon the courage to lead. While optimism has always been the best guide to predicting the U.S. economy, today’s situation is unprecedented. Global product markets have been with us forever and continue to expand. Global capital markets are still developing—watch out, Unocal and Maytag. But global labor markets on a broad scale are a new phenomenon that could, for better or worse, transform the country. How we respond—in our businesses, our government, and our culture—will shape America in the deepest way.

Subject: Re: While US housing booms From: Setanta To: Pete Weis Date Posted: Thurs, Jul 28, 2005 at 05:23:13 (EDT) Email Address: Not Provided Message: isn't it ironic it was science that led to the US winning the cold war and making it the most advanced country in the world. now, in a manchurian candidate fashion, GWB seem intent on hamstringing both science education and science in general. its as if he was brainwashed by chinese operatives to actively work against US advancement! his comment on a fundamental fact in science i.e. evolution, is that 'the jury is still out on that one'. you can imagine what the whole world thought when they heard that! secondly, his 'scepticism' on the science behind global warming and the clear and present danger it presents (look at his brother's fiefdom, sorry, state and the amount of hurricanes in the last 5 years compared to the average for the last century). incidently, how can he refute the science and proof behind global warming with a sceptical mindset yet be so gullible and niaive when it comes to Iraq's Weapons of Mass Destruction Programs. if he was sceptical of Iraq's WMD and believed in Global Warming the world and the US would be a much better place.

Subject: Re: While US housing booms From: Terri To: Setanta Date Posted: Thurs, Jul 28, 2005 at 11:59:19 (EDT) Email Address: Not Provided Message: We are undermining the general study of science and limiting support for intensive scientific study.

Subject: The tallest blade of grass is the first to be cut From: johnny5 To: Pete Weis Date Posted: Wed, Jul 27, 2005 at 18:34:03 (EDT) Email Address: johnny5@yahoo.com Message: http://science.slashdot.org/science/05/07/26/185212.shtml?tid=126&tid=103&tid=14 Posted by Zonk on Tuesday July 26, @04:24PM from the not-even-miss-america dept. instantgames writes 'According to a working paper of the National Bureau of Economic Research, rapid development of a science and technology base by populous Asian countries soon may threaten the economic position of the United States. Not only is the U.S. losing ground in high technology exports, but its very capacity to develop new technologies is declining rapidly with respect to the rest of the world. According to Richard Freeman, the paper's author, the sheer population of Asian countries may allow them to train more scientists and engineers than the U.S. while devoting a smaller share of their economy to science and technology.' From the article: 'The phenomenal growth of China's industrial base has been widely publicized, but Freeman focuses on what is perhaps the more important long-term indicator of a nation's prosperity - its re-investment in science and technology education. '

Subject: Little to Teach China About Stability From: Emma To: All Date Posted: Wed, Jul 27, 2005 at 05:56:13 (EDT) Email Address: Not Provided Message: http://news.ft.com/cms/s/79797f04-fe00-11d9-a289-00000e2511c8.html July 26, 2005 US Has Little to Teach China About Steady Economy By Joseph Stiglitz As excitement over China’s revaluation has died down – including jubilation by some of the speculators, who have at last earned an (albeit modest) return – it is time for a calmer assessment about what it does and does not mean for China, for the US and for the global economy. There remains considerable uncertainty. Though China has demonstrated a willingness to adjust its exchange rate, we do not know what will follow; will the total adjustment over the next couple of years be 10 per cent or 40 per cent? The speculators, surely, will be betting on more. And as China wisely sterilises these inflows, we can expect a continuing build-up of reserves, with this being used by speculators and their allies as an argument for further revaluation. But China will, hopefully, see through this. The key question is how the appreciation will affect global imbalances, China’s trade surplus and the US trade deficit and what, if any, will be the knock-on effects. America’s trade deficit of $700bn is nine times China’s trade surplus. China’s economy has been going gangbusters; rapid growth with little inflationary pressure. The revaluation will hardly make a dent. Even larger revaluations are not likely to do much to the global imbalances. First, we do not know accurately the size of China’s surplus because, in an attempt to circumvent exchange controls, there is over-invoicing of exports and under-invoicing of imports – part of speculative flows. The large import content of China’s exports, particularly to America, mean that China’s competitiveness will be little affected. Economists disagree about whether the import content for exports to America is 70 per cent or 80 per cent but, whatever the number, it means that the effective appreciation was almost certainly under 1 per cent. In the case of a larger revaluation, Chinese companies would probably respond to the loss of competitiveness by cutting margins, reducing further the effect of the revaluation. This revaluation – even if followed by further moderate ones – is likely only to slow the rising tide of China’s exports slightly. But whether this, or a succession of revaluations, eliminates China’s trade surplus will have little effect on the more important problem of global trade imbalances, and particularly on the US trade deficit. Much of China’s recent gains in textile sales, for instance, after the end of quotas last December, came at the expense of other developing countries. America will once again be buying from them, and so total imports will be little changed. More fundamentally, the trade deficit equals capital inflows, and capital inflows equal the difference between domestic investment and domestic savings. That is why, normally, when the fiscal deficit goes up (so domestic savings goes down), the trade deficit goes up. Neither President George W. Bush nor John Snow, the US Treasury secretary, has explained how China’s revaluation will change these basic equations. Unless domestic investment goes down or domestic savings go up, the trade deficit will persist, unabated. The trade deficit could diminish but if it does, it will not be a pretty picture. Domestic investment, for instance, could go down if we succeed in getting our wish and China’s trade surplus disappears; with China no longer using the money from its trade surplus to fund our huge fiscal deficit, medium- and long-term interest rates would rise. The economic downturn, and the decrease in investment, would be compounded if the increase in interest rates pricked the housing bubble. There is a myth of mutual dependence: China needs to export goods to the US, which needs China’s money to finance its deficit. But China could easily make up for the loss of exports to America – and the wellbeing of its citizens could even be improved – if some of the money it lends to the US was diverted to its own development. China has huge investment needs. If its government is going to lend money, why not finance its own development? Why not fund increased consumption at home, rather than that of the richest country in the world, to pay for a tax cut for the richest people in the richest country, or to fight a war which most view as anathema? But the US could not so easily make up for the gap in funding without large increases in interest rates, and these could play havoc with the economy. There is a second myth: that China would benefit from letting its exchange rate float freely, letting market forces set the price. No market economy has foresworn intervening in the exchange rate. More to the point, no market economy has fore­sworn macroeconomic interventions. Governments intervene regularly in financial markets, for instance, setting interest rates. Some market fundamentalists claim that governments should do none of this. But today, no country and few respectable economists subscribe to these views. The question, then, is what is the best set of interventions in the market? There is a high cost to exchange rate volatility, and countries where governments have intervened judiciously to stabilise their exchange rate have, by and large, done better than those that have not. Exchange rate risks impose huge costs on companies; it is costly and often impossible to divest themselves of this risk, especially in developing countries. The question of exchange rate management brings up a broader issue: the role of the state in managing the economy. Today, almost everyone recognises that countries can suffer from too little government intervention just as they can suffer from too much. China has been rebalancing and, over the past two decades, markets have become more important, the government less so. But the government still plays a critical role. China’s particular blend has served the Chinese well. It is not just that incomes have been rising at an amazing 9 per cent annually, and that high rates have been sustained for more than two decades, but the fruits of that growth have been widely shared. From 1981 to 2001, 422m Chinese have moved out of (absolute) poverty. The US economy is growing at a third the pace of China’s. Poverty is rising and median household incomes are, in real terms, declining. America’s total net savings are much less than China’s. China produces far more of the engineers and scientists that are necessary to compete in the global economy than the US, while America is cutting its expenditures on basic research as it increases military spending. Meanwhile, as America’s debt continues to balloon, its president wants to make tax cuts for the richest people permanent. With all this in mind, China’s leaders may not feel they need to seek advice from the US on how to manage either the exchange rate or the economy.

Subject: Much for the chinese to learn From: johnny5 To: Emma Date Posted: Wed, Jul 27, 2005 at 17:54:27 (EDT) Email Address: johnny5@yahoo.com Message: There is a myth of mutual dependence: China needs to export goods to the US, which needs China’s money to finance its deficit. But China could easily make up for the loss of exports to America – and the wellbeing of its citizens could even be improved – if some of the money it lends to the US was diverted to its own development. China has huge investment needs. If its government is going to lend money, why not finance its own development? Why not fund increased consumption at home, rather than that of the richest country in the world, to pay for a tax cut for the richest people in the richest country, or to fight a war which most view as anathema? Why indeed is china funding us instead of themselves - because they have much to learn from global megacorp and rich western greed and power - and to learn those things and use them will make them just as bad. http://www.resourceinvestor.com/pebble.asp?relid=11573 Cracking China's Exchange Rate Riddle By Jun Zhang 25 Jul 2005 at 07:29 AM EDT SHANGHAI (Business Day) -- China’s abrupt decision to raise the value of the renminbi (yuan) 2.1% and to end its peg to the dollar comes after months of pressure from the US. This change in policy is likely to hold for some time because a stable currency remains in China’s interest. Owing to China’s skewed economic structure, its exchange-rate regime presents much more challenging problems than those encountered by Japan and other east Asian economies. The effectiveness of a fixed exchange rate is determined by how developments in the export sector influence domestic industries and the national economy as a whole. If growth in the trade sector boosts that of domestic nontrade sectors, then a fixed exchange rate will not put pressure on the external balance of payments as demand for imports rises. Under these circumstances, revaluation of the exchange rate will not have a severe effect on an economy’s development. For example, Japanese economists argue that the Plaza Agreement, which called for “orderly appreciation” of nondollar currencies against the dollar, was a natural outgrowth of high national income. But China’s situation is vastly different. Pressure for revaluation comes when per capita income is merely $1000, so China still needs a long period of rapid economic growth to reach anything like the stage that Japan had achieved when it allowed the yen to be revalued. Equally important, unlike other east Asian economies during their early take-off stages, the expansion of China’s export sector in the past decade has not been closely linked to the development of its domestic nontrade sector, because the expansion has been fuelled mainly by foreign direct investment. Most of China’s 460000 foreign-owned enterprises are concentrated in manufacturing and assembling, increasing the import-intensiveness of exports and delinking the external-trade sector from domestic industries. This helps to widen regional disparities, with the wealthiest regions being those that have benefited from high concentrations of foreign direct investment. China has accumulated an enormous balance-of-payments surplus, which indicates the renminbi is greatly undervalued. But the surplus merely masks the structural problems of domestic economic sectors and poor regions. If foreign-owned enterprises’ exports are deducted from the total trade volume, the surplus vanishes. In short, the isolation of the export sector from the rest of China’s economy, caused by the dominance of foreign direct investment, accounts for the illusion of an undervalued renminbi. Although the expansion of exports has been dramatic, now accounting for 70% of gross domestic product, it has exerted no pull on other economic sectors, because it has been confined to foreign-owned manufacturing and assembling enterprises. With its huge domestic economy, China would never have been able to accumulate such an enormous external surplus if its growth had not been confined to such enterprises. Pressure for revaluation stems, therefore, not from the real needs of China’s economy, but from large imbalances in the US, particularly its long-standing trade deficit. As long as Asia holds its foreign reserves in dollars — a policy that continues to offer tremendous advantages for trade and economic development — China’s desire to maintain a stable value for the renminbi will continue to offer tremendous advantages for trade and economic development. Copyright: Project Syndicate, 2005. www.project-syndicate.org Zhang is director, China Centre for Economic Studies, Fudan University, Shanghai.

Subject: I disagree From: Mik To: johnny5 Date Posted: Thurs, Jul 28, 2005 at 16:27:18 (EDT) Email Address: Not Provided Message: I believe it was Krugman who once stated that if we were to take away the US-China trade component, China would be in a trade deficit. In essence they import more from their neighbouring countries than they export to those neighbouring countries. Let's not be mistaken, the US component is very important to China, hence the reason China has fixed their currency to the US Dollar. And hence the reason they are so reluctant to float their currency more. I don't think it is a myth. There is a mutual dependence that may well be growing to unhealthy levels (for both countries). China is currently borrowing heavily from the Asian Development Bank (ADB) to fund their infrastructure development. So using your analysis, why should they borrow from the ADB when they are investing so heavily into the US Economy. Simple - by investing in the US Economy and keeping it afloat, they are ensuring demand for their product, keeping their workforce busy and keeping themselves out of a trade deficit. I am sure the Chinese do get worried about US politics and lack of fiscal discipline. I am sure the Chinese are very worried about the ballooning US budget deficit. They need the US to remain healthy, just that they may need to take more of a knock to keep the US healthy. I don't know if they are prepared to accept more of a knock. In fact as a weird irony, I believe the fact that the EU has decided to remain protectionist, is what is saving the day for the US. If the EU was more open to Chinese products, the Chinese would start diverting their reliance onto the EU. By the EU keeping their borders shut, the Chinese are forced to look after the US economy.... and the US gets to enjoy growth off of Chinese cheaper goods paid partly on Chinese credit.

Subject: Re: I disagree From: Terri To: Mik Date Posted: Thurs, Jul 28, 2005 at 17:17:29 (EDT) Email Address: Not Provided Message: This is even more cleverly argued, especially the passage about Europe. Thoughtfull.

Subject: Engineered Society killing childrens smarts From: johnny5 To: All Date Posted: Wed, Jul 27, 2005 at 02:17:34 (EDT) Email Address: johnny5@yahoo.com Message: http://www.latimes.com/news/nationworld/nation/la-na-chemicals22jul22,0,129106.story Dozens of Chemicals Found in Most Americans' Bodies The concentration is especially high in children, a national study says. But experts aren't sure what the health effects are. By Marla Cone, Times Staff Writer In the largest study of chemical exposure ever conducted on human beings, the U.S. Centers for Disease Control and Prevention reported Thursday that most American children and adults were carrying in their bodies dozens of pesticides and toxic compounds used in consumer products, many of them linked to potential health threats. The report documented bigger doses in children than in adults of many chemicals, including some pyrethroids, which are in virtually every household pesticide, and phthalates, which are found in nail polish and other beauty products as well as in soft plastics. ADVERTISEMENT The CDC's director, Dr. Julie L. Gerberding, called the national exposure report — the third in an assessment that is released biennially — a breakthrough that would help public health officials home in on the most important compounds to which Americans are routinely exposed. The latest installment, which looked for 148 toxic compounds in the urine and blood of about 2,400 people age 6 and older in 2000 and 2001, is 'the largest and most comprehensive report of its kind ever released anywhere by anyone,' Gerberding said. Findings were broken down by age group and race. At Thursday's news conference, CDC officials emphasized the good news: Steep declines were found in children's exposure to lead and secondhand cigarette smoke. Lead levels in children have dropped significantly over several years, which Gerberding called an 'astonishing public health achievement' attributable largely to its removal from gasoline and paint. About 1.6% of young children tested from 1999 to 2002 had elevated levels of lead, which could lower their intelligence and damage their brains, compared with 88.2% in the late 1970s and 4.4% in the early 1990s. But the discovery of more than 100 other substances in humans, particularly children, distressed environmental health experts. 'The report in general shows that people — kids and adults — are exposed to things that aren't intended to be in their body,' said Dr. Jerome A. Paulson, an associate professor of pediatrics at the George Washington University School of Medicine and Health Sciences who specializes in children's environmental health. 'In and of itself, that is a concern. Whether it's harmful or not we can't tell from this particular study.' The new data in the 475-page report reveal how 'we have fouled our own nest,' Paulson said. 'We contaminated the environment sufficiently that there are measurable amounts of potentially toxic substances in people — kids and adults.' The CDC did not try to gauge the health threat the chemicals might pose. A measurable amount of a compound in a person's body does not mean it causes disease or other damage, the agency noted. For many compounds in the report, experts have little information on what amounts may be harmful or what they may do in combination. 'We are really at the beginning of a very complicated journey to understand the thousands of substances we are exposed to,' said Thomas Burke, associate professor at the Johns Hopkins Bloomberg School of Public Health. The discovery of pyrethroids in most people is especially important, as no one had looked for them in the human body before. Pyrethroids are synthetic versions of natural compounds found in flowers, and they have been considered safer than older pesticides, such as DDT and chlordane, that build up in the environment and have been banned in the United States. But in high doses, pyrethroids are toxic to the nervous system. They are the second most common class of pesticides that result in poisoning. At low doses, they might alter hormones. The compounds are used in large volumes in farm and household pesticides and are sprayed by public agencies to kill mosquitoes. Pyrethroids 'were a step forward [from DDT and other banned pesticides], but now we're beginning to understand that while they don't persist in the environment, many of us are exposed,' Burke said. 'We don't quite know what those levels mean.' Eleven of 12 phthalates tested were higher in children than adults. All of the phthalates but one are used in fragrances. In animal tests, and in one recent study of human babies, some of the compounds have been shown to alter male reproductive organs or to feminize hormones. Representatives of the chemical and pesticide industries praised the study, saying that human biomonitoring is the best available tool to measure exposure. They echoed the CDC in saying that discovery of the chemicals in the human body did not automatically mean they posed a threat. The report demonstrates 'that exposure to these man-made and natural substances is extremely low,' said American Chemistry Council spokesman Chris VandenHeuvel. The CDC's Gerberding said that 'for the vast majority' of the 148 chemicals in the report, 'we have no evidence of health effects.' Many toxicologists and environmental scientists disagree. Studies of animals, and in some cases people, suggest that most of the compounds can affect the brain, hormones, reproductive system or the immune system, or that they are linked to cancer. 'These are some bad actors,' Burke said. Many of the compounds have not been studied sufficiently to know what happens with chronic exposure to low doses. 'No evidence of health effects does not imply that they are not harmful,' Paulson said. 'It just means we don't know one way or another.' Environmental groups have called for U.S. law to require chemical companies to test industrial compounds more comprehensively, a proposal similar to one that the European Parliament is to debate in the fall. The evidence that many contaminants amass in children more than in adults could mean that they are exposed to larger amounts — perhaps from crawling, breathing more rapidly or putting items in their mouths — or that their bodies are less able to cope with or metabolize them. In the womb and in the first two years after birth, children undergo extraordinary cell growth, from brain neurons to immune cells, so there are more opportunities for toxic compounds to disrupt the cells, Paulson said. Animal tests show that fetuses and newborns are the most susceptible to harm from many chemicals. In the CDC study, one of every 18 women of childbearing age, or 5.7%, had mercury that exceeded the level that the U.S. Environmental Protection Agency deemed safe to a developing fetus. Tests on schoolchildren show that mercury exposure in the womb can lower IQs, with memory and vocabulary particularly impaired. The CDC plans to expand the national chemical report to more than 300 compounds in two years and about 500 in four years. An estimated 80,000 chemicals are in commercial use today.

Subject: Bond Funds From: Terri To: All Date Posted: Tues, Jul 26, 2005 at 15:50:18 (EDT) Email Address: Not Provided Message: Since I often talk about bonds, I want to emphasize just how astonishing a bull market we have passed through most recently in bonds. The 5 year return for the Vanguard Long Term Investment-Grade Bond Fund has been 10.9% annually. The return for the S&P Stock Index has been -2.5% annually. This is a stark difference that has persisted from January 2000 till June 2005. An investor who understood the bond market, or really understood Vanguard bond funds which to me is the bond market, has reaped a wonderful reward for saving most conservatively for 25 years. But, where are savings? There will of course be no repeat for bonds from here.

Subject: How Costco Became the Anti-Wal-Mart From: Emma To: All Date Posted: Tues, Jul 26, 2005 at 15:22:38 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/17/business/yourmoney/17costco.html?ex=1122523200&en=3019213891544e73&ei=5070&incamp=article_popular_3 How Costco Became the Anti-Wal-Mart By STEVEN GREENHOUSE ISSAQUAH, Wash. JIM SINEGAL, the chief executive of Costco Wholesale, the nation's fifth-largest retailer, had all the enthusiasm of an 8-year-old in a candy store as he tore open the container of one of his favorite new products: granola snack mix. 'You got to try this; it's delicious,' he said. 'And just $9.99 for 38 ounces.' Some 60 feet away, inside Costco's cavernous warehouse store here in the company's hometown, Mr. Sinegal became positively exuberant about the 87-inch-long Natuzzi brown leather sofas. 'This is just $799.99,' he said. 'It's terrific quality. Most other places you'd have to pay $1,500, even $2,000.' But the pièce de résistance, the item he most wanted to crow about, was Costco's private-label pinpoint cotton dress shirts. 'Look, these are just $12.99,' he said, while lifting a crisp blue button-down. 'At Nordstrom or Macy's, this is a $45, $50 shirt.' Combining high quality with stunningly low prices, the shirts appeal to upscale customers - and epitomize why some retail analysts say Mr. Sinegal just might be America's shrewdest merchant since Sam Walton. But not everyone is happy with Costco's business strategy. Some Wall Street analysts assert that Mr. Sinegal is overly generous not only to Costco's customers but to its workers as well. Costco's average pay, for example, is $17 an hour, 42 percent higher than its fiercest rival, Sam's Club. And Costco's health plan makes those at many other retailers look Scroogish. One analyst, Bill Dreher of Deutsche Bank, complained last year that at Costco 'it's better to be an employee or a customer than a shareholder.' Mr. Sinegal begs to differ. He rejects Wall Street's assumption that to succeed in discount retailing, companies must pay poorly and skimp on benefits, or must ratchet up prices to meet Wall Street's profit demands. Good wages and benefits are why Costco has extremely low rates of turnover and theft by employees, he said. And Costco's customers, who are more affluent than other warehouse store shoppers, stay loyal because they like that low prices do not come at the workers' expense. 'This is not altruistic,' he said. 'This is good business.' He also dismisses calls to increase Costco's product markups. Mr. Sinegal, who has been in the retailing business for more than a half-century, said that heeding Wall Street's advice to raise some prices would bring Costco's downfall. 'When I started, Sears, Roebuck was the Costco of the country, but they allowed someone else to come in under them,' he said. 'We don't want to be one of the casualties. We don't want to turn around and say, 'We got so fancy we've raised our prices,' and all of a sudden a new competitor comes in and beats our prices.' At Costco, one of Mr. Sinegal's cardinal rules is that no branded item can be marked up by more than 14 percent, and no private-label item by more than 15 percent. In contrast, supermarkets generally mark up merchandise by 25 percent, and department stores by 50 percent or more. 'They could probably get more money for a lot of items they sell,' said Ed Weller, a retailing analyst at ThinkEquity. But Mr. Sinegal warned that if Costco increased markups to 16 or 18 percent, the company might slip down a dangerous slope and lose discipline in minimizing costs and prices. Mr. Sinegal, whose father was a coal miner and steelworker, gave a simple explanation. 'On Wall Street, they're in the business of making money between now and next Thursday,' he said. 'I don't say that with any bitterness, but we can't take that view. We want to build a company that will still be here 50 and 60 years from now.' IF shareholders mind Mr. Sinegal's philosophy, it is not obvious: Costco's stock price has risen more than 10 percent in the last 12 months, while Wal-Mart's has slipped 5 percent. Costco shares sell for almost 23 times expected earnings; at Wal-Mart the multiple is about 19.Mr. Dreher said Costco's share price was so high because so many people love the company. 'It's a cult stock,' he said. Emme Kozloff, an analyst at Sanford C. Bernstein & Company, faulted Mr. Sinegal as being too generous to employees, noting that when analysts complained that Costco's workers were paying just 4 percent toward their health costs, he raised that percentage only to 8 percent, when the retail average is 25 percent. 'He has been too benevolent,' she said. 'He's right that a happy employee is a productive long-term employee, but he could force employees to pick up a little more of the burden.' Mr. Sinegal says he pays attention to analysts' advice because it enforces a healthy discipline, but he has largely shunned Wall Street pressure to be less generous to his workers. 'When Jim talks to us about setting wages and benefits, he doesn't want us to be better than everyone else, he wants us to be demonstrably better,' said John Matthews, Costco's senior vice president for human resources. With his ferocious attention to detail and price, Mr. Sinegal has made Costco the nation's leading warehouse retailer, with about half of the market, compared with 40 percent for the No. 2, Sam's Club. But Sam's is not a typical runner-up: it is part of the Wal-Mart empire, which, with $288 billion in sales last year, dwarfs Costco. But it is the customer, more than the competition, that keeps Mr. Sinegal's attention. 'We're very good merchants, and we offer value,' he said. 'The traditional retailer will say: 'I'm selling this for $10. I wonder whether I can get $10.50 or $11.' We say: 'We're selling it for $9. How do we get it down to $8?' We understand that our members don't come and shop with us because of the fancy window displays or the Santa Claus or the piano player. They come and shop with us because we offer great values.' Costco was founded with a single store in Seattle in 1983; it now has 457 stores, mostly in the United States, but also in Canada, Britain, South Korea, Taiwan and Japan. Wal-Mart, by contrast, had 642 Sam's Clubs in the United States and abroad as of Jan. 31.Costco's profit rose 22 percent last year, to $882 million, on sales of $47.1 billion. In the United States, its stores average $121 million in sales annually, far more than the $70 million for Sam's Clubs. And the average household income of Costco customers is $74,000 - with 31 percent earning over $100,000. One reason the company has risen to the top and stayed there is that Mr. Sinegal relentlessly refines his model of the warehouse store - the bare-bones, cement-floor retailing space where shoppers pay a membership fee to choose from a limited number of products in large quantities at deep discounts. Costco has 44.6 million members, with households paying $45 a year and small businesses paying $100. A typical Costco store stocks 4,000 types of items, including perhaps just four toothpaste brands, while a Wal-Mart typically stocks more than 100,000 types of items and may carry 60 sizes and brands of toothpastes. Narrowing the number of options increases the sales volume of each, allowing Costco to squeeze deeper and deeper bulk discounts from suppliers. 'He's a zealot on low prices,' Ms. Kozloff said. 'He's very reticent about finagling with his model.' Despite Costco's impressive record, Mr. Sinegal's salary is just $350,000, although he also received a $200,000 bonus last year. That puts him at less than 10 percent of many other chief executives, though Costco ranks 29th in revenue among all American companies. 'I've been very well rewarded,' said Mr. Sinegal, who is worth more than $150 million thanks to his Costco stock holdings. 'I just think that if you're going to try to run an organization that's very cost-conscious, then you can't have those disparities. Having an individual who is making 100 or 200 or 300 times more than the average person working on the floor is wrong.' There is little love lost between Wal-Mart and Costco. Wal-Mart, for example, boasts that its Sam's Club division has the lowest prices of any retailer. Mr. Sinegal emphatically dismissed that assertion with a one-word barnyard epithet. Sam's might make the case that its ketchup is cheaper than Costco's, he said, 'but you can't compare Hunt's ketchup with Heinz ketchup.' Still, Costco is feeling the heat from Sam's Club. When Sam's began to pare prices aggressively several years ago, Costco had to shave its prices - and its already thin profit margins - ever further. 'Sam's Club has dramatically improved its operation and improved the quality of their merchandise,' said Mr. Dreher, the Deutsche Bank analyst. 'Using their buying power together with Wal-Mart's, it forces Costco to be very sharp on their prices.' Mr. Sinegal's elbows can be sharp as well. As most suppliers well know, his gruff charm is not what lets him sell goods at rock-bottom prices - it's his fearsome toughness, which he rarely shows in public. He often warns suppliers not to offer other retailers lower prices than Costco gets. When a frozen-food supplier mistakenly sent Costco an invoice meant for Wal-Mart, he discovered that Wal-Mart was getting a better price. 'We have not brought that supplier back,' Mr. Sinegal said. He has to be flinty, he said, because the competition is so fierce. 'This is not the Little Sisters of the Poor,' he said. 'We have to be competitive in the toughest marketplace in the world against the biggest competitor in the world. We cannot afford to be timid.' Nor can he afford to let personal relationships get in his way. Tim Rose, Costco's senior vice president for food merchandising, recalled a time when Starbucks did not pass along savings from a drop in coffee bean prices. Though he is a friend of the Starbucks chairman, Howard Schultz, Mr. Sinegal warned he would remove Starbucks coffee from his stores unless it cut its prices. Starbucks relented. 'Howard said, 'Who do you think you are? The price police?' ' Mr. Rose recalled, adding that Mr. Sinegal replied emphatically that he was. If Mr. Sinegal feels proprietary about warehouse stores, it is for good reason. He was present at the birth of the concept, in 1954. He was 18, a student at San Diego Community College, when a friend asked him to help unload mattresses for a month-old discount store called Fed-Mart. What he thought would be a one-day job became a career. He rose to executive vice president for merchandising and became a protégé of Fed-Mart's chairman, Sol Price, who is credited with inventing the idea of high-volume warehouse stores that sell a limited number of products. Mr. Price sold Fed-Mart to a German retailer in 1975 and was fired soon after. Mr. Sinegal then left and helped Mr. Price start a new warehouse company, Price Club. Its huge success led others to enter the business: Wal-Mart started Sam's Club, Zayre's started BJ's Wholesale Club and a Seattle entrepreneur tapped Mr. Sinegal to help him found Costco. Costco has used Mr. Price's formula: sell a limited number of items, keep costs down, rely on high volume, pay workers well, have customers buy memberships and aim for upscale shoppers, especially small-business owners. In addition, don't advertise - that saves 2 percent a year in costs. Costco and Price Club merged in 1993. 'Jim has done a very good job in balancing the interests of the shareholders, the employees, the customers and the managers,' said Mr. Price, now 89 and retired. 'Most companies tilt too much one way or the other.' Mr. Sinegal, who is 69 but looks a decade younger, also delights in not tilting Costco too far into cheap merchandise, even at his warehouse stores. He loves the idea of the 'treasure hunt' - occasional, temporary specials on exotic cheeses, Coach bags, plasma screen televisions, Waterford crystal, French wine and $5,000 necklaces - scattered among staples like toilet paper by the case and institutional-size jars of mayonnaise. The treasure hunts, Mr. Sinegal says, create a sense of excitement and customer loyalty. This knack for seeing things in a new way also explains Costco's approach to retaining employees as well as shoppers. Besides paying considerably more than competitors, for example, Costco contributes generously to its workers' 401(k) plans, starting with 3 percent of salary the second year and rising to 9 percent after 25 years. ITS insurance plans absorb most dental expenses, and part-time workers are eligible for health insurance after just six months on the job, compared with two years at Wal-Mart. Eighty-five percent of Costco's workers have health insurance, compared with less than half at Wal-Mart and Target. Costco also has not shut out unions, as some of its rivals have. The Teamsters union, for example, represents 14,000 of Costco's 113,000 employees. 'They gave us the best agreement of any retailer in the country,' said Rome Aloise, the union's chief negotiator with Costco. The contract guarantees employees at least 25 hours of work a week, he said, and requires that at least half of a store's workers be full time. Workers seem enthusiastic. Beth Wagner, 36, used to manage a Rite Aid drugstore, where she made $24,000 a year and paid nearly $4,000 a year for health coverage. She quit five years ago to work at Costco, taking a cut in pay. She started at $10.50 an hour - $22,000 a year - but now makes $18 an hour as a receiving clerk. With annual bonuses, her income is about $40,000. 'I want to retire here,' she said. 'I love it here.'

Subject: Re: How Costco Became the Anti-Wal-Mart From: Pete Weis To: Emma Date Posted: Tues, Jul 26, 2005 at 15:42:12 (EDT) Email Address: Not Provided Message: My wife and I do most of our shopping at Costco and little to none at Wal-mart. Costco sells quality at bargain prices. Much of what Wal-mart sells is not quality. Costco will still be around when Wal-mart has gone the way of Woolworth.

Subject: Re: How Costco Became the Anti-Wal-Mart From: Terri To: Pete Weis Date Posted: Tues, Jul 26, 2005 at 16:46:37 (EDT) Email Address: Not Provided Message: Remember, all you write is read carefully and much appreciated. I do not shop at Wal-Mart.

Subject: Re: How Costco Became the Anti-Wal-Mart From: Pete Weis To: Terri Date Posted: Tues, Jul 26, 2005 at 20:52:28 (EDT) Email Address: Not Provided Message: Thanks Terri. I read everything you post and appreciate it also. I'm pretty good at making a fool of myself once in awhile and so I have to remember to not take myself too seriously!!

Subject: Woolworth is dead? From: Mik To: Pete Weis Date Posted: Wed, Jul 27, 2005 at 16:03:30 (EDT) Email Address: Not Provided Message: Did you know that Woolworth is still around? Yep overseas and they are a far more upscale store now. Take a look at their site: www.woolworths.co.za cheers ;-)

Subject: WOW From: Pete Weis To: Mik Date Posted: Wed, Jul 27, 2005 at 22:04:36 (EDT) Email Address: Not Provided Message: Wooly would be proud!!!! His legacy still lives!

Subject: Water Reveals Its Secrets From: Emma To: All Date Posted: Tues, Jul 26, 2005 at 14:23:33 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/26/science/26wate.html?8hpib=&pagewanted=all With a Push From the U.N., Water Reveals Its Secrets By WILLIAM J. BROAD VIENNA - The forecast, courtesy of the United Nations, is grim. Today, more than a billion people lack access to safe drinking water. Polluted water contributes, each year, to the death of about 15 million children under age 5. By midcentury, between two billion and seven billion people will face water shortages. G. Bizarri/United Nations Food and Agriculture Organization New nuclear techniques are helping developing countries better use water resources. 'No region will be spared from the impact of this crisis,' Koichiro Matsuura, director general of Unesco, recently warned. 'Water supplies are falling while the demand is dramatically growing.' He estimated that in the next two decades the average amount of water available per person on the planet will shrink by a third. But the United Nations is also working hard on solutions, helping poor countries learn a subtle art that lets them better manage their water resources to avoid tragedy. The method is known as isotope hydrology. Cheap and reliable, it takes advantage of the fact that water molecules carry unique fingerprints, based in part on differing proportions of the oxygen and hydrogen isotopes that constitute all water. Isotopes are forms of the same element that have variable numbers of neutrons in their nuclei. Using the tools of isotope hydrology, scientists can discover the age, origins, size, flow and fate of a water source. And that information, in turn, can guide sound water-use policy, letting water engineers better map underground aquifers, conserve supplies and control pollution. For instance, if the method reveals that the water in a well is young and recently derived from rain, villagers can pump away vigorously. But if it turns out to be very old - what scientists call fossil water - they need to move gingerly, taking care not to exhaust the water supply. 'You take it out once, like oil,' Werner Burkart, head of the nuclear science programs of the International Atomic Energy Agency, said in an interview. The United Nations group, best known for fighting the spread of nuclear arms, is leading the hydrology effort. Based in Vienna, it works at developing techniques as well as sharing them with scientists around the world. 'We do a lot of capability building and training of local people, so it becomes sustainable - so we don't have to inject support all the time,' said Ana María Cetto, the agency's head of technical cooperation. 'They're building their own capacity to manage their own resources.' A little money goes a long way. Each year, the isotope hydrology program spends only about $2 million on research and $5 million to aid developing states. Still, that is enough to finance 84 projects in more than 50 countries, including Bangladesh, Costa Rica, Ethiopia, Morocco and Senegal. 'If you look at the Middle East, everywhere you are using old water,' said Pradeep Aggarwal, the head of the agency's isotope hydrology unit. 'It was laid down 10,000, maybe 100,000 years ago. So you have to understand there's a limit to how long this will go.' After more than 25 years of cooperative work, the agency has gathered so much information that it is now fashioning a detailed portrait of the planet's water resources that could help prevent future crises and reduce regional friction that may erupt in water wars. 'We're talking about food security, sustainable development,' Dr. Aggarwal said. 'If it's based on unsustainable water resources, you jeopardize everything.' Oceans and seas constitute 97 percent of the planet's waters. The remaining 3 percent is fresh water, most locked up as ice, soil moisture and deep groundwater. What is available to people - mainly as rivers, lakes, aquifers, reservoirs and wetlands - comes down to less than 1 percent. Using that fresh water wisely requires considerable knowledge of the earth's water cycle, the outlines of which are well known, centering on evaporation and rain, runoff and seepage. But local riddles abound. The puzzles can include how often a particular body of water is renewed, where it flows and whether different bodies are physically linked through underground flows. In the past, water engineers would address such unknowns by carefully measuring rain and the levels of rivers and other bodies of water for many decades - typically a half-century or more. It usually took that long to learn the subtleties of the local cycles. However, isotope hydrology can do it in days, quickly illuminating water's passage through the depths. 'You really need to know how the water gets in and moves,' said Dr. Aggarwal. 'Isotopics let you do that in a cost-effective way.' The raw material is everywhere. Air, soil and water naturally contain oxygen in two forms - oxygen 16 and oxygen 18, which has two extra neutrons in its nucleus. Oxygen 18 represents about 1 oxygen atom in every 500. Because it is heavier than oxygen 16, more is left behind when water evaporates. As a result, seawater is rich in oxygen 18; rain and snow are relatively poor, and increasingly so the further inland they fall. These gradients are echoed underground. The tools of isotope hydrology let scientists see the differences, creating a window into the depths. For instance, comparing samples from different wells can reveal whether the groundwater mixes or becomes isolated in separate pools. In Ethiopia, the International Atomic Energy Agency used such techniques to help a foundering project. To supply water to the capital, Addis Ababa, the Ethiopians drilled 25 large wells, assuming that a not-too-distant river would renew the aquifer. But when the pumping started, water levels fell much faster than predicted. 'They didn't understand the hydrology,' Dr. Aggarwal recalled. 'They came to us for help.' In a two-day survey, the agency discovered little connection between the river and the wells, prompting an overhaul of the project that put new emphasis on judicious use. Scientists have now mapped the speed and direction of the area's limited groundwater flow. Ethiopia's reaction to the episode was to demand that its water scientists put greater emphasis on isotope hydrology, making it 'a standard tool for the country,' said Mohamed ElBaradei, the agency's director general. Over continents and wide lands, the study of isotope signatures can reveal if aquifers flow under national borders, helping neighbors collaborate on the intelligent use of scarce water. That is just what the atomic energy agency is doing in the blistering heat of the Eastern Sahara desert, with Libya, Chad, Egypt and Sudan. They have joined together to map the shared water resources of the Nubian aquifer, a vast subterranean body whose lobes range over nearly a million square miles, an area bigger than Iran and Iraq combined. 'We're trying to elucidate the connections,' said Mokdad Maksoudi, an expert on African technical cooperation at the agency. 'Some parts of the aquifer are very old, with fossil water. Some are recharged through the Nile. 'We're trying to understand the recharge, so the countries can precisely gauge the best policies,' he said. The stakes are high because areas of fossil water are vulnerable to quick depletion. A main goal of isotope hydrology is to discover the age of groundwater, defined as the last time it had contact with the atmosphere. This is calculated in many ways. Cool temperatures, for example, lower the concentrations of oxygen 18, and thus, unusually low amounts of the atom in groundwater imply that the body of water arose long ago, during ice ages and cooler climatic eras. A more exact way to determine age is to measure carbon 14, a radioactive isotope that water bears in minute quantities and that, with clocklike precision, steadily decays into other substances, allowing researchers to calculate the elapsed time. Scientists have used such methods to address a humanitarian crisis in Bangladesh that the World Health Organization calls the 'largest mass poisoning of a population in history.' Millions of people in Bangladesh, one of the world's poorest countries, drink arsenic-contaminated water, the poison gradually debilitating its victims before spawning cancers that kill them. Good intentions lay behind this horror. For decades, the government and aid groups had urged people to give up pond water, often a carrier of lethal disease, and instead to dig shallow wells. But no one tested the aquifers for arsenic. For years, the atomic energy agency and its isotope hydrologists, using the carbon 14 and oxygen 18 methods, have worked closely with the Bangladeshis to help them map aquifer mazes and identify safer water supplies. The news is mixed. The scientists have found that the arsenic tends to reside in shallow aquifers, and that deeper levels bear none of the deadly poison. In some cases, however, these deep aquifers have connections to the shallower ones, and pumping them out could draw in the contaminated water. 'So you can have water at 100 meters that is arsenic-free today, but could become polluted in the future,' Dr. Aggarwal said. He added that the teams have discovered even deeper waters that are unconnected to the surface and will probably stay pure. But the isotope-dating methods show that these very deep aquifers are old and not undergoing renewal, calling for careful conservation. 'If you pump it out in a major way,' he said, 'it will hurt.' The flow of detailed hydrological information, he said, has been 'a tremendous boost' to the government's understanding and has helped it make substantial changes in policy. 'Part of solving the problem,' Dr. Aggarwal said, 'is to understand its origin and extent.' Experts agree that hydrology will become even more important in the future, as growing water shortages intensify conflicts between states, whether or not they result in water wars. Some analysts see clean water as poised to supplant oil as the world's most contested natural resource. Dr. Burkart of the atomic energy agency said that reliable information about the hidden world of water could only help dissipate international tensions. 'The more you know,' he said, 'the better.'

Subject: Two Exercises From: Emma To: All Date Posted: Tues, Jul 26, 2005 at 13:07:14 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/26/health/nutrition/26exer.html Two Exercises Help Older People Stay on Their Feet By NICHOLAS BAKALAR Two Chinese exercise techniques - the ancient martial art of tai chi and exercising by walking on cobblestones - may improve the balance of older people and help prevent falls, according to two new studies. In the tai chi study, published in the July issue of The Journal of Advanced Nursing, 59 men and women with an average age of 78 were divided into two groups, one participating in a 12-week tai chi course, the other maintaining its usual activities without exercise classes. The tai chi group members did 10 minutes of warm-up followed by 20 minutes of walking while moving the hands and arms. Then they did moderate range-of-motion exercises for the neck, shoulders, trunk, hip, knees and ankles. The classes were held three times a week. Rhayun Song, the senior author on the study and an assistant professor of nursing at Chungnam National University in Daejeon, South Korea, said that keeping joints and muscles moving was essential for older people, and that 'tai chi can do it without causing pain and stiffness since it's slow circular movements without external impact.' Tai chi's breathing elements, called qi-gong, are also important, Dr. Song said. 'We emphasize breathing exercise during the movements so that individuals maintain aerobic metabolism in their body during exercise,' she added. Measures of muscle strength showed that the physical fitness of the exercise group improved significantly. Balance, as calculated by how long a person could stand on one foot with her eyes open, also improved by the end of the program. Thirty-one percent of the people in the tai chi exercise group experienced falls during the period, compared with 50 percent of the non-exercisers, although this difference was not statistically significant. The other study, a randomized trial that was published online last month and will appear in a future issue of The Journal of the American Geriatrics Association, involved two groups of 54 healthy men and women age 60 and older. Each group participated in an exercise session consisting of 30 minutes of walking 3 times a week for 16 weeks. One group walked on a flat surface while the other walked on mats that replicated the uneven pattern of cobblestones that are common on walkways in Chinese parks. The intensity of the exercise was carefully tracked to make sure members of the two groups were using the same amount of energy. Participants in each group improved on several measures of physical health. But compared with those in the ordinary walking group, the mat walkers had better balance (tested by several different standing and reaching tasks), lower blood pressure and faster times in walking 50 feet at the end of the exercise program. They also did better in a test of how fast they could rise from a chair, walk 10 feet and then sit down. K. John Fisher, a research scientist at the Oregon Research Institute and a co-author of the article, said that people had to get used to walking on the mats, and that a few participants experienced some discomfort at the beginning of the training. But few people dropped out, and there were no exercise-related injuries, suggesting that the program is suitable and safe for older adults. Even though walking on the cobblestone mats proved the more beneficial exercise, Fuzhong Li, the lead author on the study and a senior research scientist at the Oregon Research Institute, said he did not recommend that older people give up ordinary walking in favor of the cobblestone program. 'Regular walking is the most popular physical activity in this country,' Dr. Li said, 'and it has multiple health benefits. Cobblestone mat walking may provide additional physical and physiological benefits.'

Subject: Eritrean Struggles From: Emma To: All Date Posted: Tues, Jul 26, 2005 at 12:59:30 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/26/books/26grim.html The Never-Ending Struggle of a Forgotten Bit of Africa By WILLIAM GRIMES Eritrea has not been in the news lately. That statement has pretty much been true for as long as newspapers have existed, even after the opening of the Suez Canal in 1869, when the European powers first noticed that the little kingdom to the north of present-day Ethiopia had a coastline that made it worth seizing. Italy seized it and set up colonial rule, and Eritrea has been a plaything of Western politics ever since, as Michela Wrong argues, angrily and persuasively, in 'I Didn't Do It for You,' her splendid account of modern Eritrean history. The book's title refers to an apocryphal incident after the battle of Keren in 1941, when a British captain, marching at the head of his victorious men, was met by an old Eritrean woman who trilled a celebratory greeting. The officer took one look at her and said, 'I didn't do it for you,' tacking on a crass racial epithet at the end. The Italians were out, but Eritrean aspirations had nothing to do with it, and that, in a nutshell, has been Eritrea's fate for most of the modern era. Ms. Wrong, an Africa correspondent and the author of 'In the Footsteps of Mr. Kurtz: Living on the Brink of Disaster in Mobutu's Congo,' does her utmost to put Eritrea back on the map. The task is daunting. A Pakistani businessman in the Cairo airport, asking her about her work, furrows his brow when he hears the subject. Did she mean Algeria? Nigeria? Or perhaps Al-Jazeera? Finally he throws up his hands. 'I'm sorry,' he says. 'But I've simply never heard of the place.' The place, as Ms. Wrong depicts it, is fascinating, a strange Shangri-La whose cities high above the clouds look over sizzling coastal plains, and whose people seem rather Swiss in manner and outlook. The national style, Ms. Wrong writes, is diffident, self-reliant and resolute, with a premium placed on self-control. These qualities served the Eritreans well throughout the 30-year guerrilla war they waged against Ethiopia before gaining independence in 1991. When it came time to erect a victory monument, the rebels, rather than putting up a statue of their charismatic leader, Isaias Afwerki, opted for an oversize metal version of the plastic sandal worn by rebel forces. 'Ridiculously cheap, washable, long-lasting, the Kongo sandal - as it was known - was the poor man's boot, perfect symbol for an egalitarian movement,' Ms. Wrong writes. 'It must be the world's only public monument to an item of footwear.' Anyone suspecting a strain of subversive wit in the statue would be incorrect. Humor, Ms. Wrong points out, is not part of the Eritrean character. 'Dour intensity' is more the style. Ms. Wrong races quickly through ancient history to arrive at her real starting point, the arrival of the Italians, and the peculiar economic, linguistic and visual legacy they left behind. The Italians built railroads up impossible cliffs, laid the foundations of a modern economy and, under Mussolini, left the capital city of Asmara with a stunning collection of modernist buildings: Art Deco movie palaces, streamlined apartment buildings, 'petrol stations that looked like aircraft in midflight and office blocks that resembled space rockets surging into orbit.' In the 1930's, the city had more traffic lights than Rome. Eritreans regard the Italian experience with a mixture of pride and anger. The railroads, in particular, fused the national identity, but righteous anger is directed at colonial educational policy, which, in Italian hands, achieved almost perfect absurdity. Blacks could not be allowed to study with whites, or to attend school for more than four years because, in the opinion of Ferdinando Martini, the colonial governor, they were smarter than whites. Black attendance would undermine 'the white man's superiority, the basis of every colonial regime.' Although Ms. Wrong, as a reporter, stepped into Eritrean history during the heady days of independence, her most gripping pages deal with the colonial period and the battle of Keren, which she recounts in pulse-pounding prose. Badly outnumbered, British forces managed to take the citadel-like Keren, suffering appalling losses. This was a turning point. For the first time, Ms. Wrong argues, the Allies showed that the Axis war machine could be beaten; yet, typically, Keren ranks as one of the least-celebrated engagements of the Second World War. Ms. Wrong writes acidly of the postwar era, when the United Nations cynically delivered Eritrea into the hands of Ethiopia, which the United States and the Soviet Union treated as a pawn in the great cold war game. Her sense of moral indignation occasionally gets the better of her, especially when it comes to writing about the decades-long Eritrean insurgency. She describes the rebels in adoring terms and does not seem to realize, in describing the outdoor ideological training sessions, the cultural classes and piano recitals conducted at night under the trees, that a similarly idyllic picture could be drawn of the Khmer Rouge or the Chinese Communists in their days of struggle. It comes as a terrible shock to her when, as always in Eritrea, triumph very quickly gives way to tragedy. Who would have imagined that the victorious rebels, nourished on Lenin and Mao, would impose a one-party state, or that their leader, Mr. Afwerki, would prove to be an ideologue and an autocrat? Today, Eritrea and Ethiopia, two of the poorest and most militarized regimes on earth, face each other in a tense standoff that, without the presence of United Nations troops, would lead to all-out war. Ms. Wrong, a scrupulous and honest writer, regroups. Subjecting herself and her fellow believers to some salutary criticism, she looks deeper into the insurgency for evidence of the evil that was to come, and she finds it. Like the former rebels she so admires, many of them now in exile, she now sees with a clearer eye. Fortunately, she still feels with the same sympathetic heart. 'I Didn't Do It for You,' eloquent and impassioned, is her plea before an indifferent world that, like the Pakistani businessman, has never heard of the place.

Subject: China Rides the Wind From: Emma To: All Date Posted: Tues, Jul 26, 2005 at 11:48:14 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/26/international/asia/26turbine.html In Search of a New Energy Source, China Rides the Wind By HOWARD W. FRENCH HUITENGXILE, China - From the distance the turbines look almost forbidding, looming very large on the horizon like some clawed space invaders. But one must get up close, very close, to hear the slightest hum as their blades spin, harvesting power from the wind. Apart from the random bleating from a huge herd of sheep, the loudest noise in this open, rolling grassland of Inner Mongolia is the buzz from the transformers that dot the plain, collecting electricity from this small army of 96 metallic monsters with their spinning blades. Blessed with vast, empty countryside and a seemingly permanent stiff breeze blowing across the steppes, the buzz of transformers is growing steadily louder in this far northern province as investors pour money into the wind farm. It is already huge, and may soon be getting much larger. 'Today we're producing 68 megawatts, but by 2008, we'll generate at least 400 megawatts,' boasted Li Yilun, the director of the Huitengxile power plant. 'By then, we will be the biggest wind farm in all of Asia.' China's skyrocketing energy needs have recently grabbed the world's attention through its bold efforts to take over foreign oil companies like the American oil independent Unocal. It has also made big investments in petroleum production in countries as far-flung as Sudan and Venezuela. But at home, with petroleum growing scarce, coal choking the air of major cities and coal mining killing 6,009 people last year, the Chinese government is moving just as aggressively to develop alternative energy supplies. By 2020, starting from a minuscule base that it has established only recently, China expects to supply 10 percent of its needs from so-called renewable energy sources, including wind, solar energy, small hydroelectric dams and biomass like plant fibers and animal wastes. So far, wind power is making the most impressive strides, so much so that even if Mr. Li's boast of soon having the largest wind farm in Asia comes true, he will have plenty of competition within China alone. Already, large wind farms are sprouting up in much more heavily populated provinces, like Guangdong, Fujian and Hebei, and with Chinese and foreign turbine manufacturers competing furiously for this fast-expanding market, the cost per kilowatt is becoming increasingly competitive with China's abundant coal. Many coastal provinces, meanwhile, are developing plans to build wind farms just offshore, where winds are strong and land use is not an issue. Projects like these are expected to deploy huge new turbines with 87-yard-long blades, each capable of generating 1.2 megawatts of electricity, enough to power hundreds of homes, if not more. 'We have huge goals for wind power development,' Wang Zhongying, director of China's Center for Renewable Energy Development. 'By 2010, we plan to reach 4,000 megawatts, and by 2020 we expect to reach 20,000 megawatts, or 20 gigawatts.' If anything, Mr. Wang said, these targets are too conservative, and may be easily surpassed. The biggest limitations, he said, were not in China's wind-power potential, or in its generating technology, but rather in the country's antiquated power grid, which cannot automatically reroute power from one region to another as demand and supply rise and fall. That makes it difficult to take full advantage of wind power, whose output vacillates according to the weather. China's wind-power program has roots in a visit to the United States 18 years ago, early in the country's economic takeoff. A Chinese delegation witnessed modern wind turbines at work in Utah, then came back determined to adopt the technology at home. 'We bought some turbines and brought them to Urumqi to see how they performed, and the production data was very, very good,' said Wu Gang, a member of the delegation who was fresh out of engineering school at the time. What followed is a story that encapsulates some of the main ingredients of China's economic miracle, including the disciplined marshaling of intellectual and financial resources by a state determined to solve a problem and establish a sector it deems strategic. After his return from the United States, Mr. Wu was put in charge of a state-financed wind farm in the western province of Xinjiang, where he was able to master all the technical aspects of the business. Later, the government provided the seed money for the business he now directs, the Goldwind Science and Technology Company. It is China's largest producer of wind turbines, and remains 55 percent state owned. China has backed wind power and other alternative sources in other ways. It has provided tax incentives for developers, imposed standardized electricity rates that amount to a subsidy for power sources like wind, which remain more expensive than coal, and has imposed equipment requirements that help local manufacturers. In February, the Chinese government passed a nationwide renewable energy law that formalizes many of those incentives and mandates clear targets for increased power generation from alternative energy sources. China's provinces will be required to buy electricity from alternative providers, even when the cost per kilowatt is substantially higher. The outcome has been a real boom among suppliers of wind power equipment. 'We're expecting the sector to grow 50 to 75 percent a year between now and 2020,' said Jens Olsen, the chief representative of Vestas, a Danish turbine manufacturer that is the leading equipment supplier in China. 'The problem here now is the sector is growing so fast that the equipment producers can't keep up,' said Mr. Wu of Goldwind. 'China has a strong industrial base, and last year, more than 10 Chinese companies came into the market, but they will find that wind energy is not so easy. It involves so many different kinds of knowledge: aerodynamics, computer science, turbines, gear boxes.'

Subject: Re: China Rides the Wind From: Pete Weis To: Emma Date Posted: Tues, Jul 26, 2005 at 12:33:12 (EDT) Email Address: Not Provided Message: Problems aside, China appears to have a much more aggressive energy policy and is much more visionary when it comes to energy, than the US at the moment!

Subject: Re: China Rides the Wind From: Emma To: Pete Weis Date Posted: Tues, Jul 26, 2005 at 13:01:08 (EDT) Email Address: Not Provided Message: Why does this comment bother me so, for I agree. Where is our vision? Really shocking when we think of how lacking we are.

Subject: Loss of infrastructure From: johnny5 To: Emma Date Posted: Wed, Jul 27, 2005 at 01:30:23 (EDT) Email Address: johnny5@yahoo.com Message: First off Mr. China concerns me about investment over there, he lost hundreds of millions, the beauracracy is a nightmare and legal protections to westerners is a joke. Remember when England was funding the build out of America in the 19th century ultimately they were left with no return on investment and the USA had all these great roads and bridges and canals they built with English financing. It was so bad charles dickens wrote about it in his tale the christmas carol. This concerns me of China, after greatly increasing all their infrastructure say the government just doesn't repay us - what can we do? 55% of this company is state owned. What could the English do to get thier investment dollars back? Across national borders it seems there is little you can do. but rather in the country's antiquated power grid, This concerns me, I read many reports that our own infrastructure here in the USA is facing serious challenges, not just financial ones, but the workforce we have replacing our retirees just arent getting the skills passed on to them from the people that built and engineered our national infrastructure - certainly however our infrastructure is better than most. Infrastructure is falling into disrepair in many areas and although the fallacy of the broken window may make sense to bush - I think most serious economists recognize it for the restraint it is to progess to the next level. Certainly this problem is facing the chinese too if it faces us here. Then there is this quote : ' It involves so many different kinds of knowledge: aerodynamics, computer science, turbines, gear boxes' http://www.palmbeachpost.com/business/content/business/epaper/2005/07/17/a1f_workershort_0717.html Reading this article here thinking about the infrastructure problem concerns me not just in China but in America too. Lastly I have read many articles from engineers that wind, solar, and all the rest combined just can't do the trick to replace the amount of energy that is contained in gasoline. Nuclear is the only serious alternative - I would hope China would pour more resources into the pebble bed reactors I recently read they were investigating. That can be applied anywhere it seems, maybe even lots of third world poor places that don't have a lot of wind or great infrastructure to transport energy across great distances - a nice little pebble bed reactor next to the village and straw huts should do wonders for progress.

Subject: Re: Loss of infrastructure From: Pete Weis To: johnny5 Date Posted: Wed, Jul 27, 2005 at 11:23:37 (EDT) Email Address: Not Provided Message: Wind and solar can actually meet all of America's electric power demand - the technology regarding storage of these two 'irregular' sources is being solved. The problem with wind and solar has to do with their location restrictions. You can locate a fossil fuel power plant almost anywhere you please subject to local resident acceptance. You can't locate a windfarm where a power plant used to be unless it's on the plains of the Dakotas. This creates a problem - the power grid must come to the windfarm and that won't be cheap. At the moment, wind farms are the fastest developing new energy source in the world and are used in the US as supplemental sources on the fringes of the power grid. There are a number of problems with nuclear power plants - the cost of the plants, location restrictions, security concerns in today's terrorist world, and who wants the radioactive waste by-products buried in their state(?). Furthermore, a big problem with our power grid, as it exists, is its lack of de-centralization and interdependency. Remember the recent power failure which knocked out portions of the Midwest and Northeast and the 'brownouts' of the 70's. We are vulnerable to large regions being affected by the failure of one small portion of the grid. IMO, it's time to begin breaking up our power grid and to re-feed it with alternative sources such as wind and solar farms. It will be expensive but it will be more expensive not to do this years down the road.

Subject: The french From: johnny5 To: Pete Weis Date Posted: Wed, Jul 27, 2005 at 18:58:12 (EDT) Email Address: johnny5@yahoo.com Message: Seem to do fine with nuclear - why don't they share the negative concerns you eloquently post? Have they eaten so much cheese and wine they are drunk with stupidity? hehe

Subject: Re: The french From: Pete Weis To: johnny5 Date Posted: Wed, Jul 27, 2005 at 22:01:14 (EDT) Email Address: Not Provided Message: Johnny, I'm not a member of Greenpeace, but they make a good point here. Since 2003 a lot more progress has been made with wind turbine generators and the technology of power storage. A 2003 Greenpeace article: Wind: more jobs and power for same investmentGreenpeace says no to new French nuke with wind turbines (04 December 2003). Greenpeace activists display 10 model wind turbines on the premises of a nuclear power plant in Penly, France in protest at the French government's decision to build another reactor on the site. Penly, France — Since the French power authority has refused to build wind farms, we built our own this morning on the grounds of a nuclear power plant in Penly, France. We put ten wind turbines up to protest the French government decision to build another nuclear reactor on the site, despite a large nuclear energy overcapacity and the far more environmentally and economically sane option of investing in wind energy. Franc for franc, wind is the better investment. As detailed in a report published today, 'Wind vs Nuclear 2003' the same money spent on wind power generates 5 times more jobs and 2.3 times more electricity than a nuclear reactor. The cost of the proposed French reactor is officially estimated at some 3-3.5 billion Euros. If this amount of money were invested in wind power, some 7616 megawatts of wind capacity could be built, compared to 1550 megawatts in the nuclear case. Wind would generate a massive 24 terrawatts per year, the equivalent of 6.5 million households. Nuclear would only deliver 10 terrawatts. In recent years wind power has gone from the hippy fringe to economic viability. In Germany, over 3,200 megawatts of wind power were installed in the last year alone, supplying electricity to more than 2 million households. In the EU, a massive 75,000 megawatts of wind capacity is expected to be online by 2010, tripling the current power and adding the equivalent electricity production of 14 large nuclear reactors. Of course this worries the nuclear industry, especially given the current decline in nukes: no single reactor has been connected to the grid in the last four years, and it would take at least another 10 years before a new reactor could come online. A growing number of old reactors have reached the end of their life expectancies and should be shut down. In reality, wind has already taken the lead and left nuclear far behind. 'Greenpeace is urging state owned EdF, Electricity de France, not to impose yet another dangerous and uneconomic nuclear reactor on Europe. The EPR [European Pressurized Reactor] is nothing new, it is an outdated and unsafe design, to be fuelled by plutonium and will produce extremely radioactive waste,' said our campaigner on site, Jan Vande Putte. 'Europe is at a crossroad and we refuse to let the nuclear lobby dictate our energy future regardless of the opinion, the environment and the security of people. Greenpeace asks EDF to make the right choice.'

Subject: Re: The french From: johnny5 To: Pete Weis Date Posted: Thurs, Jul 28, 2005 at 01:32:57 (EDT) Email Address: johnny5@yahoo.com Message: If true it is saddening that a major western power then is making the dumb choice compared to the smart one - how large entities continually keep making dumb choices give me great pause for the eternal optimists.

Subject: Interesting employment observations From: Pete Weis To: All Date Posted: Tues, Jul 26, 2005 at 11:42:46 (EDT) Email Address: Not Provided Message: From VIEW FROM SILICON VALLEY: July 23, 2005 View from Silicon Valley- What the employment numbers tell us (c) View from Silicon Valley, 2005. All rights reserved. Another round of Silicon Valley employment cheerleading is gushing forth from the media the last few weeks. This is despite July's layoff announcements from the likes of Hewlett Packard, PalmSource and a couple less-known local companies. Topping off the hosannas, at least for the moment, was today's paper pronouncing 'the first quarter (of 2005) may be the low point for employment.' Oh really? Surely I can't be the only one to observe today's article contradicts itself, not to mention flies in the face of everyday experience. In quick succession, with zero hard evidence presented, today's article claims: the bottom is in, the second half has to look better eBay, Yahoo and Google earnings are up substantial business investment consumer spending on electronics is healthy the online service economy is going gangbusters I can take each of these points apart, and in several cases already did in previous missives, but that gets away from today's point. Mostly starting in the very next paragraphs, the same article then admits: -Silicon Valley still has 1,800 fewer jobs year-over-year -the usual link between profits and jobs hasn't kicked in -productivity is so high companies don't need to hire -Hewlett-Packard announced 14,500 layoffs -PC sales jumped 50% in three years with zero employment growth -we're not a low-cost region -work is being sent overseas -doing more with fewer employees is the wave of the future -sales gains aren't enough to require new workers So how do we balance this list against the positives and conclude things are getting better? Not to worry, the paradox is neatly solved by 'smaller companies that will create jobs' (for once the reporter didn't resort to 'hot new start-ups'). Sorry, even if this was true, it amounts to damning with faint praise. The reality is many big employers have been cutting heads. (Or at least doing so passively via policies similar to Intel's long-standing mandate not to hire in Silicon Valley except when it's unavoidable.) Maybe we're over-reacting? Maybe this is 'balanced' reporting? Maybe we are just being empowered to consider both sides of the argument? If so, then why do the headline, opening paragraph and conclusion only reference the the positive side of the 'spin'? How about an example of a company happy, but not hiring in Silicon Valley? How about an engineer-on-the-street view of how difficult, or easy, it is to get a new job in this so-called recovery? OK, now we're going to stop the rant and get back to today's point. (I mean it this time!) Looking at local jobs and number of unemployed in May over the last few years you find: 'New benchmark' (invented early-2005, combines Santa Clara with San Benito County): Jobs Employed Unemployed Rate 2000 926,500 897,300 29,200 3.1% 2001 937,800 900,900 36,900 3.9% 2002 889,800 818,400 71,400 8.0% 2003 849,100 777,100 72,000 8.5% 2004 820,400 767,000 53,400 6.5% 2005 817,400 776,300 41,100 5.0% 'Old benchmark,' (Santa Clara County only): Jobs Employed Unemployed Rate 2000 986,500 966,600 20,000 2.0% 2001 998,900 965,200 33,700 3.4% 2002 942,400 866,600 75,800 8.0% 2003 892,000 818,700 73,300 8.2% 2004 867,000 815,100 51,900 6.0% 2005 867,300 800,600 42,800 5.8% We could put you all to sleep (maybe we already have?), with a litany of reasons why the 'new' benchmark seems especially contrived. (For example, how could stats from two counties show fewer jobs, employed and unemployed than single-county stats?) We'll depart from this topic with the simple observation there is a wealth of political advantage to be gained from making these numbers appear as strong as possible and now, finally(!), get to today's point. Using the old benchmark, between 2003 and 2004, we 'lost' -21,400 unemployed on top of losing -3,600 employed residents in Santa Clara County. Accompanying this implied -25,000 decline in the workforce, the unemployment rate fell from 8.5% to 6.5%. This is hard to stomach but more or less explainable as people are assumed to be leaving the county for better lob prospects and/or a cheaper cost of living. The really interesting insight is when you compare hard numbers with the following: Santa Clara County total population: 2000: 1,682,585 2003 1,678,421 2004 1,685,188 In other words, by 2004 Santa Clara County had more people than in 2000, let alone in 2003. Using the Santa Clara County-only benchmark, the implied employment and workforce participation rates are: Employed% Participation% 2000: 57.4% 58.6% 2003: 51.6% 53.1% 2004: 48.4% 51.4% (Unfortunately, we were unable to find reliable county population figures for 2001, 2002 or 2005.) People may no longer 'count' as unemployed once they give up looking, but they are clearly not leaving the county. With housing prices up 16 -18% each(!) of the last two years, the anecdotal claims people are living off their housing wealth seem to have a bit of hard evidence in support. Conclusion: The employment numbers tell us less than they seem. People who claim to be giving us 'news' and making projections based on these numbers are telling us even less.

Subject: Our biggest long term problem From: Pete Weis To: All Date Posted: Tues, Jul 26, 2005 at 10:49:08 (EDT) Email Address: Not Provided Message: Analysts: Bill won’t wean U.S. off foreign oil Demand expected to rise despite measures in proposed legislation By Justin Blum The Washington Post Updated: 7:35 a.m. ET July 26, 2005 WASHINGTON - Despite repeated calls by President Bush and members of Congress to decrease U.S. dependence on oil imports, a major energy bill that appears headed for passage this week would do nothing to reduce the country's need for foreign oil, according to analysts and interest groups. The United States imports 58 percent of the oil it consumes. Federal officials project that by 2025, the country will have to import 68 percent of its oil to meet demand. At best, analysts say, the energy legislation would slightly slow that rate of growth of dependence. 'We'll be dependent on the global market for more than half our oil for as long as we're using oil, and the energy bill isn't going to change that,' said Ben Lieberman, who follows energy issues for the conservative Heritage Foundation in Washington. 'There's a few measures to increase domestic production . . . and that would not do much.' Negotiators worked into the night yesterday to iron out differences between the House- and Senate-passed versions of an energy bill that has been high on the president's agenda since shortly after he took office in 2001 and created an energy task force headed by Vice President Cheney. The legislation would create billions of dollars' worth of tax breaks and other federal subsidies to encourage oil and gas production, to reduce pollution at coal-burning power plants, and to encourage energy conservation. The bill also would require the use of billions of gallons of ethanol and other fuels derived from agricultural products. Lawmakers appeared close to resolving a dispute over whether to protect producers of the gasoline additive methyl tertiary-butyl ether (MTBE) against product-defect lawsuits. Senate negotiators have refused to support the House-backed provision. The Senate blocked final passage of an energy bill in 2003 after a similar provision was added. No new fuel-efficiency standards But the emerging package does not do what some analysts said would have the greatest impact on reducing U.S. oil demand and cutting imports: a requirement to increase fuel-efficiency standards for trucks and cars. Under strong pressure from the automobile industry, the House and Senate rejected higher efficiency standards. Lawmakers argued that doing so would require redesigns that would make vehicles unsafe and result in a loss of manufacturing jobs — arguments sharply disputed by advocates of fuel efficiency. 'The single biggest step that Congress could take to reduce our oil dependency is to significantly increase the fuel economy standards of the cars and trucks that Americans buy and drive,' said Kevin Knobloch, president of the Union of Concerned Scientists, which works on environmental issues. As oil prices soared during the past year, and remained above $50 a barrel for weeks, lawmakers have raised increasing concern about being reliant on foreign oil, particularly from the Middle East. High oil prices have pushed the price of gasoline to well over $2 a gallon. Selling energy as a security issue From the start, Bush and GOP lawmakers have sold their energy policies as a means of reducing U.S. dependence on foreign oil. 'Our dependence on foreign oil is like a foreign tax on the American dream, and that tax is growing every year,' Bush said in May. During the Senate debate on the energy bill last month, Majority Leader Bill Frist (R-Tenn.) said: 'We must take steps to reduce our dependence on foreign countries and thereby enhance our energy security at home. When we rely on other nations for more than half our oil supply, we simply put our security at risk.' Some lawmakers say there will be plenty in the legislation to address the problem of dependence on foreign oil. The White House has not analyzed how the legislation would affect reliance on imports, spokeswoman Dana M. Perino said. 'Both bills will improve the nation's energy security by expanding the use of new technologies, increasing the diversity of renewable energy sources and reducing energy consumption through greater conservation and energy efficiency,' she said. The United States consumes more than 20 million barrels of oil a day, an amount forecast to grow steadily. The Senate version of the legislation included a provision calling on the president to reduce oil consumption by 1 million barrels a day by 2015, but the measure is nonbinding. The Bush administration opposed the provision, saying it would require increasing fuel-efficiency standards beyond what technology would allow at an affordable price. Bill would boost gas alternatives The provision that would have the biggest impact, analysts agreed, is a requirement for the United States to increase the amount of ethanol and other agriculture-derived fuels. That would offset some gasoline use, they said. The Senate version, which requires more ethanol or agriculture-derived fuels than the House bill, would cut oil imports by 80,000 barrels a day by 2012, according to government estimates. That would mean oil imports would be about 0.8 percent less than they otherwise would have been in 2012. The energy legislation would provide tax breaks and other subsidies that supporters say would encourage increased domestic oil production to further reduce reliance on foreign oil. Domestic production has been declining for years. ANWR drilling remains on the table Bush has pushed to open Alaska's Arctic National Wildlife Refuge to oil drilling, to tap what geologists say is one of the few remaining areas of the country that hold promise for major new production. Without that new drilling, net oil imports would be 68 percent in 2025, according to the Energy Department's Energy Information Administration. With drilling in the refuge, net oil imports would account for 64 percent of consumption in 2025, according to the EIA. A provision to open the refuge — a highly contentious issue because of the strong opposition from environmentalists and many Democrats — is unlikely to be included in the final version of the energy bill. But such a measure has been included in budget language, and final votes are expected in Congress in September. The energy legislation also calls for money to be spent on research into hydrogen, alternative fuels, efficiency and technology, which supporters said could ultimately help reduce oil consumption. The Senate version of the legislation calls for tax breaks for hybrid vehicles, which supporters said would help reduce oil demand. Environmentalists cited a provision of both the House and Senate bills that they said would result in more oil consumption and greater imports: extension of a provision designed to encourage auto manufacturers to produce vehicles that can run on either gasoline or a fuel blend of 85 percent ethanol. The provision allows automakers to receive fuel economy credit — and increase production of less-fuel-efficient vehicles — even if owners use only gasoline, environmentalists said. Few gas stations sell the ethanol blend, and many of the cars end up being fueled by gasoline, they said.

Subject: South Africa Restores Land and Water From: Emms To: All Date Posted: Tues, Jul 26, 2005 at 09:18:25 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/26/science/earth/26afri.html South Africa Puts the Unemployed to Work, Restoring Land and Water By AMANDA HAWN CAPE TOWN - On a red-dirt road in the Baviaanskloof Nature Reserve in South Africa, Mike Powell suddenly hit the brakes and jabbed a finger in the direction of an innocuous-looking clump of pink flowers. 'That is an alien,' he said. 'All these aliens are going ballistic.' Baviaanskloof means Valley of the Baboons in Afrikaans, but Mr. Powell, program manager for a government project called Working for Woodlands, was not reaching for a pun on 'Planet of the Apes.' 'It is called mother of millions,' he said of the flower. 'It's an invasive succulent from Madagascar.' Alien invasive plants are a serious concern in South Africa, displacing native vegetation and sucking up water needed by humans. They are one of many environmental problems that have prompted programs like Mr. Powell's to pioneer a new ecological approach in Africa: conservation farming. In 1995, the South African government started a program called Working for Water, in which unemployed people were hired to clear thirsty alien trees from important watersheds around Cape Town. A single eucalyptus consumes up to 100 gallons of water in a day, so removing the trees is like putting water back in the system. 'Rivers that hadn't run in 30, 40 years began to run again,' said Guy Preston, the founder of Working for Water. That program now operates in every South African province, has an annual budget of $60 million and has inspired a group of sister programs that may change the face of conservation across the continent. Their aim is not just to restore ecosystems but to put them to use for human benefit. Healthy marshlands, for example, serve to purify the water that runs through them. So Working for Wetlands was spun off from Working for Water five years ago and is now employing teams throughout the country to restore marshes. Working on Fire has been dispatching crews since 2003 to prevent and control wildfires. And in Baviaanskloof, Mr. Powell is overseeing Working for Woodlands, a pilot project to reforest subtropical thickets to capture carbon from the atmosphere and support biodiversity on the land. Japie Buckle, a technical adviser at a wetlands restoration site in Agulhas National Park, says some of these benefits are both quick and tangible. 'The nice thing about wetlands is that you start helping the system and it will start helping itself,' he said. 'Within two years you won't believe it is the same area.' Another goal is to provide people with skills to help them get jobs in the private sector. All of the programs require that workers be recruited from 'the poorest of the poor,' and in an effort to raise participation by single parents, 6 of every 10 must be women. Arnold Viegeland, a tall man with a reflective gaze and an easy smile, said he was unemployed when he joined the Working for Water program seven years ago. Today, he oversees 109 workers in two programs and has a bright office at the new Agulhas National Park headquarters. Maps adorn the wall and a new computer hums in the corner. The conservation farming programs' goal of helping people help themselves 'is not just a nice story,' he said. Still, in South Africa, there is no quick fix when it comes to curing poverty. A Working for Woodlands team leader, Colette Zealand, said she was sick of managing people and would just as soon work on a citrus farm - though her grin made it hard to tell if she was serious or just fed up after five of her workers had failed to show up because they had been drinking in the local pub, known here as a shebeen. The growth of the conservation farming programs poses a different challenge: stable financing. 'When it comes to operating costs, the financing of a program like this is similar, in some ways, to funding a war,' said Mr. Powell of Working for Woodlands. 'The cars are going out, the crews are going out, and if you don't come up with some way of financing all that in a sustainable way, your funding sources are going to experience battle fatigue at some point.' So he is eager to see conservation farming evolve beyond Baviaanskloof onto private farms, where landowners might be compensated for providing services like water filtration, carbon sequestration and fire suppression in much the same way they are paid for oranges, hay and cattle. Timber companies might pay for fire protection, hydroelectric companies for erosion control to keep silt from clogging their turbines, and municipalities for the restored groundwater that ends up in drinking glasses and irrigation ditches. Nonprofit groups and outside governments might even use the emerging worldwide 'carbon trading' market to pay the programs for taking carbon out of the atmosphere. Driving outside the western edge of the reserve, Mr. Powell pointed out one piece of private property in particular: his own grandfather's farm, one of many where once productive land was devastated by agricultural methods of the past. 'It would be quite ironic someday if I made some money, bought back the very farm that my grandfather stuffed up and fixed it,' he said. Things are already coming full circle on the Agulhas Plains, where Mr. Buckle and Mr. Viegeland began restoring wetlands on several hundred acres of old farmland last year. 'The farmers are shaking their heads because the state paid them to drain these fields 40 years ago,' Mr. Buckle said. 'Now the state is paying us to put the water back.' And so it was that on an early winter morning at the southernmost tip of Africa, two conservationists from very different backgrounds strode out across a flooded plain to measure their restoration progress in mud so thick and wet it threatened to snatch the boots off their feet. The rains had returned to drench the land after several years of drought; a common padloper tortoise ambled in the muck, and in the distance a blue crane coasted in to land. Mr. Buckle sank a boot into the burping mud and smiled. 'You can just hear the difference,' he said.

Subject: Magic Pill for Dieting? From: Emma To: All Date Posted: Tues, Jul 26, 2005 at 09:04:16 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/26/health/nutrition/26brod.html? Magic Pill for Dieting? Wait for It on the Treadmill By JANE E. BRODY Summer has long been a time of renewed efforts to lose excess pounds that are hard to hide under skimpy hot-weather clothing. And to be sure, some people (rarely those significantly overweight) manage to shed 5 or even 10 pounds before the Fourth of July. But having just driven from New York to Minnesota and back, at every rest stop I saw evidence of what health experts are calling a national crisis - an epidemic of obesity, especially life-limiting, health-robbing morbid obesity. No doubt most of the extremely overweight people I encountered had tried and ultimately failed to keep their weight under control before tipping the scales at 300-plus. In recent decades, they had hundreds of diets to choose from, and many probably lost an encouraging number of pounds on fleetingly fashionable schemes, only to regain the weight and more when they tired of the diet of the day. Now some experts are saying that bariatric surgery to shrink the stomach and to bypass part of the intestines is the most effective solution for such people, permitting a loss of half their body weight. But even this radical, risky and costly operation sometimes fails to keep people trim. Can Medication Help? Enter - or I should say, re-enter - drugs that promote weight loss. You may recall the many desperate souls who years ago sought to curb their appetites with amphetamines, drugs that caused extreme nervousness, insomnia and addiction. Among other diet drug fiascos were thyroid hormone, which caused hyperthyroidism; fenfluramine, linked to heart valve abnormalities; and ephedra and phenylpropanolamine, associated with heart problems. Now a host of other medications, several already on the market and others in the pharmaceutical pipeline, are being cited as safer alternatives. However, these too have limitations, and before you ask your physician for a prescription or try to buy the drugs online, you should know just how effective and safe they really are. In the June issue of The Journal of the American Dietetic Association, Susan B. Moyers of the University of South Florida College of Medicine reviewed drugs that had been studied as weight-loss aids. But before I provide the details, you should know Dr. Moyers's bottom line: 'Whereas the evidence may support the use of medications to enhance weight loss, medication alone without diet/lifestyle change is not effective.' In other words, there is no drug currently available or likely to be available soon that facilitates weight loss without also cutting back on calories consumed. And there is no drug that can help people maintain a weight loss unless they continue to limit calories or increase exercise. Furthermore, there is as yet no drug that enables the morbidly obese, even with a reduced-calorie diet, to lose 100 or more pounds. Typical losses average 5 to 10 percent of initial weight, which can significantly improve health but won't turn the obese into normal-weight individuals. In the same issue of the dietetic journal, Dr. Frank Greenway, medical director of the Pennington Biomedical Research Center at Louisiana State University, noted that obesity was a chronic disease, not unlike diabetes or high blood pressure, that requires continuing treatment. 'No one expects a person with hypertension to maintain a normal blood pressure if he stops his medication, but there is still a bias that medication for treatment of obesity should be time-limited,' he wrote. But medical insurance rarely covers the cost, which can exceed $100 a month. In addition, side effects of the drugs prompt many people to stop taking them. The two leading prescription weight-loss aids are Meridia (sibutramine) and Xenical (orlistat). Meridia acts on the brain to reduce hunger and enhance satiety. It reduces between-meal snacking and limits the drop in metabolic rate that accompanies weight loss. Typical weight losses of 5 to 10 percent (10 to 14 pounds in six months) have been reported. The drug should not be used by those with a history of heart disease or stroke or people who take antidepressants called MAO inhibitors or S.S.R.I.'s. Xenical interferes with the enzyme that digests fat and can reduce by a third the amount of dietary fat a person absorbs. In a large four-year study, one quarter of patients who stayed on the drug kept off 10 percent of their initial body weight (about 13 pounds in a year), compared with 16 percent of patients on a placebo. Xenical is not a drug for fat lovers. If more than 20 grams of fat a day are consumed, the drug can cause oily stools, flatus with discharge and fecal urgency. It also interferes with the absorption of fat-soluble vitamins. Another group of diet drugs are appetite suppressants that result in losses of about one pound a week. Phentride and Ionamin (phentermine), Tenuate (diethylpropion), Didrex (benzphetamine), and Obezine, Bontril and Adipost (phendimetrazine) are all relatives of amphetamines and approved only for short-term use, which precludes their use in treating a chronic disorder like obesity. Tolerance to these drugs develops within a few weeks and side effects are common, including nervousness, insomnia, rapid heart rate, anxiety and high blood pressure. Another appetite-suppressing drug, Mazanor and Sanorex (mazindol) is sold only online (lack of medical supervision is considered risky) and must not be taken with MAO inhibitors or S.S.R.I.'s. Overcoming Bad Habits Several other drugs approved for other uses are sometimes prescribed 'off-label' for weight control. They include Glucophage (metformin), Precose (acarbose) and Glyset (miglitol), which are approved to control blood sugar in people with Type 2 diabetes; the anti-seizure drugs Topamax (topiramate) and Zonegran (zonisamide) and the antidepressants, Prozac (fluoxetine) and Wellbutrin (bupropion). All have an array of side effects, though millions of people with the disorders the drugs were licensed to treat have managed to stay on them for years. Their effectiveness as weight-loss aids is somewhat less than that of drugs designed for that purpose. Among drugs in the pipeline, Dr. Greenway said, are four that 'seem to give no greater weight loss than the currently available obesity drugs.' One is Acomplia (rimonabant), which blocks brain receptors that stimulate the 'munchies' in marijuana smokers. Daily treatment for a year has resulted in average losses of 19 pounds and 3.5 inches around the waist. So what's the bottom line? For the foreseeable future, drugs are not likely to be the solution to obesity, at least not by themselves. As Dr. Moyers put it, 'There is no quick fix for a complex problem, and there is no evidence that drug therapy helps to re-educate faulty exercise and eating habits.' 'However,' she added, 'evidence does seem to support a hybrid approach consisting of behavior modification and pharmacotherapy in some patients. There must be a strategy to maintain the loss over many years, and such a strategy requires nutrition and physical activity as its anchors.'

Subject: Eating Properly From: Emma To: All Date Posted: Mon, Jul 25, 2005 at 15:54:10 (EDT) Email Address: Not Provided Message: When I look about me I am always struck by either the extent of heaviness or the lack of concern for diet. Though I have taken to always bringing fruit for myself and the office, fruit is simply no match for doughnuts which are always around. Since I am continually finding out that people I know have health problems, I wonder at why proper nutrition is not a bigger topic of interest. Diet books are always the rage, but not so nutrition guides as far as I can tell, and though diet books obviously help people there is apparently much more needed.

Subject: Follow the money From: johnny5 To: Emma Date Posted: Tues, Jul 26, 2005 at 00:04:46 (EDT) Email Address: johnny5@yahoo.com Message: Beef - its whats for dinner! Look at the restaurants that serve animals - the money they are making - the silly people that beat each other to get in there on a friday night for the activity/entertainment/social value. Who wants to sit at home and eat a fresh salad grown in their private garden with a few close friends - how antiquated! Let's all pack up into the Ford Expidition - drive around for hours looking for smokey bones BBQ or red lobster to sit with a bunch of strangers we don't give one flip about. Then send those cholesterol levels to the moon Alice on the extra helping of shrimp and ribs - and then when we are done - who wants to walk around the park and look at silly birds like those dummies on pkarchive and get exercise - bump that - I want to go to the theater and sit down and let those arteries suck in all that fat and cholesterol I just ate and watch tom cruise blow up some green men from mars - GO AMERICA! The chinese sit around with thier family and have a bowl of rice that they walk to the store to get or grow themselves - our culture is not sustainable - Jared Diamond wrote about this as Emma posted I believe, our national average for cholesterol is 200 while theirs is less than 100 I believe. But then our drug companies are going to make a fortune with cholesterol drugs - even Terri is telling me to buy healthcare because that is where the value is keeping the wheel turning!! Those stupid chinese and indians who are vegetarians - they will never have the drug industry we have in America. I just saw an interview with the CEO of Pfizer - he never once mentioned a more healthy diet - or giving up large helpings of meat as a national security issue - oh no - that would be less sales of his cholesterol medicine - pathetic. Go Dr. Atkins diet. Terri if you wake up all the sheeple to the sillyness of thier national diet - healthcare may not be the good investment you think it will be - shhh - don't rock the boat - some of the seagulls might fall into the water.

Subject: Re: Follow the money From: Setanta To: johnny5 Date Posted: Tues, Jul 26, 2005 at 06:43:42 (EDT) Email Address: Not Provided Message: Johnny, very entertaining and unfortunately very close to the truth. There is an industry out there that's sole purpose is to make people feel unhappy about themselves. Its models walk the catwalks while being impossibly tall and thin for most people to aspire to. The diet industry is a multi-billion industry ready to pick up the pieces for its partner in crime. Nutrition is not sexy; atkins, neutron and GI diets are. Unfortunately these diets (with the possible exception of GI) need a health warning as much as a pack of cigarettes. I have a mandarin, banana, and a red and green apple on my desk in front of me as i type. All provided by the company i work for. The HR dept have told us that sick days are down and management have told us that productivity is up, all this given increased work loads and pressure (my overtime jumped from 200 hours last year to 370 and counting this year!). Coincidence? You can still have your scone/biscuit and tea/coffee but, with juice and fruit provided in addition, it is amazing to see that almost everyone has opted for the healthy alternative.

Subject: Another take on health From: David E.. To: Setanta Date Posted: Tues, Jul 26, 2005 at 13:14:10 (EDT) Email Address: Not Provided Message: Johnny and Setana, because I am concerned about your health, here is a hint(from the low-carb view-Protein Power and Atkins view). Eating low-fat, whole grains, and lots of fruit might negatively impact your blood profiles. The profile change could be declines in HDL and increases in triglycerides. The resulting increase in your Triglyceride/HDL ratio means more than an increase in LDL cholesterol. Watch your TG/HDL ratio closely and if your TG/HDL ratio rises, consider moving to the Protein Power low-carb diet. This hint would have saved me a lot of health problems, so I am passing it on for you to consider and avoid the trouble I have had. This hint is prompted by 25 years experience on a low-fat, high levels of whole grain, low protein diet. I was an early adopter of this low-fat nonsense and have paid the price. Thankfully, using low-carb I don't need migraine medicine, blood pressure medicine and statins any more. One thing we can agree on though- doughnuts are bad, very bad. Lots of wheat carbs, sugar carbs, and large amounts of hydrogenated fat.

Subject: Re: Another take on health From: Setanta To: David E.. Date Posted: Wed, Jul 27, 2005 at 05:54:06 (EDT) Email Address: Not Provided Message: David E, You're absolutely right about the HDL/LDL ratio. i am very conscious of this. unfortunately i cannot consume natural sources of protien (i have a condition called PKU) so source it from suppliments. i have been supplimenting my diet with hemp oil (the best ratio of omega 6 to omega 3 you can find) which does reduce the triglycerides and HDL/LDL ratio. the best thing you can do is stay away from fried foods, heat changes the nature of oils and converts them into LDL's (see Fats that Heal, Fats that Kill on amazon). even when frying with olive oil, only cook with the oil for a few minutes. otherwise find alternatives to cook with, non oil based (i can't think of any examples).

Subject: Watch out for soy too From: johnny5 To: David E.. Date Posted: Wed, Jul 27, 2005 at 00:37:17 (EDT) Email Address: johnny5@yahoo.com Message: Thanks for the great diet tips - cutting carbs and eating sensible levels of protein has done a lot for me personally. What did your high fruit low fat diet do to you after 25 years?? As we read from emma about the people being told to drink water laden with arsenic - so did some older friends I know eat lots of tofu and soy milk from recommendations by people with the best of intentions in the past - they have advanced stages of mental problems now induced by overconsumption of these things. Soy protein was not good for thier mind - I also have a friend that drank excessive levels of green tea for many decades - her body is in great shape for her age - no blood pressure problems, cholesterol is very low - etc etc - definitely will live to be 100 - but her mind seems to already be slipping. It seems right after she has her megadose of morning green tea it is hard for her to remember things.

Subject: There is No Problem From: Emma To: johnny5 Date Posted: Wed, Jul 27, 2005 at 12:07:04 (EDT) Email Address: Not Provided Message: There is absolutely no problem with eating soy unless you are a rare person with a specific food allergy. Nor is there a problem with fruits and vegetables as decades of research can show. Nor a problem with moderate or low fat balanced diets. Any diet or food however can be overdone.

Subject: Absolutely misinformed From: johnny5 To: Emma Date Posted: Wed, Jul 27, 2005 at 19:58:36 (EDT) Email Address: johnny5@yahoo.com Message: Emma have you eaten a lot of soy? What kind of soy? Here is some information on why SOY is bad for you Emma. You are absolutely wrong and misinformed when you say there is absolutely no problem with eating soy. Certain soy is dangerous and will destroy you - other soy can be safe and healthy - do you know about methionine? http://www.bodybuildingforyou.com/health-nutrition/soy-protein-benefits-use-1.htm http://www.campaignfortruth.com/Eclub/230304/CTM-soy.htm http://www.health24.com/dietnfood/General/15-742-775,32081.asp http://www.healingdaily.com/detoxification-diet/soy.htm http://www.mercola.com/2000/feb/13/more_on_soy.htm http://news.australiandoctor.com.au/articles/4e/0c032a4e.asp SOY PROTEIN BENEFITS NOT SO GREAT Benefits claimed for soy protein include a beneficial effect on cardiovascular risks, but a Danish study has found no improvement in lipids, inflammatory markers or insulin sensitivity from 24 weeks of dietary supplementation (European Journal of Clinical Nutrition 2005; 59:843-50). The results were based on 100 healthy subjects who had high cholesterol. A substudy in 32 subjects showed no difference in arterial endothelial function. To get you started - These links will get you informed on the negatives of SOY - I diligently read all your posts and since you are spreading this dangerous misinformation request you read all the ones I post here. Remember it use to be classified as industrial and they had lots left over - where can we sell it?? hehe I will post more links later to the negatives of soy - if you disagree with the negative information please tell me why you think SOY is perfectly ok?

Subject: Re: Another take on health From: Terri To: David E.. Date Posted: Tues, Jul 26, 2005 at 17:24:08 (EDT) Email Address: Not Provided Message: Thank you David. Since I too eats low fat foods, with lots of fruits and vegetables, I will be careful to watch my tests. I do have lots of protein however, and of course fiber is not problem with such a diet. Also, I take a multivitamin and a multimineral supplement.

Subject: Food Food Food From: Terri To: Terri Date Posted: Tues, Jul 26, 2005 at 17:28:49 (EDT) Email Address: Not Provided Message: Shopping at Whole Foods, I find organic bread high in protein and fiber. I eat Kashi cereal which is espceially high in protein and fiber. Also, I eat lots of fish and chicken or turkey for protein. I like most of all tuna, salmon and white fish, though a Jewish friend has introduced me to herring salad which is tasty.

Subject: Re: Food Food Food From: Terri To: Terri Date Posted: Tues, Jul 26, 2005 at 17:33:50 (EDT) Email Address: Not Provided Message: Trader Joe's is a great market and is cheaper than Whole Foods. But, remember with Whole Foods, if you buy their brand the prices are fine and their brand is excellent. Slowly the food sections in the regular markets are improving in nutritious products.

Subject: Mortgages From: Terri To: All Date Posted: Mon, Jul 25, 2005 at 15:41:44 (EDT) Email Address: Not Provided Message: Reconsidering, I am more struck by the security offered by fixed rate mortgages especially with the lower costs that we have gradually seen over 20 years for refinancing as the mortgage market has become more price efficient and competitive. I am however firmly convinced that the GSEs, Fannie Mae and Freddie Mac, have been essential in broadening home ownership in America, and wish to see them protected.

Subject: CEO turnover From: johnny5 To: Terri Date Posted: Tues, Jul 26, 2005 at 00:07:51 (EDT) Email Address: johnny5@yahoo.com Message: I think the last ceo of one of these organizations had that same attitude and was making very inefficient decisions because he really believed failure was not an option that would ever be allowed by the government. I drive much more slowly and carefully along those cliffs I have travelled in italy than those long stretches of hwys in the USA where I suck the gas away - hehe.

Subject: The Housing Bubble From: Terri To: All Date Posted: Mon, Jul 25, 2005 at 13:57:35 (EDT) Email Address: Not Provided Message: http://cepr.net/pressreleases/housing_2005_07_07.htm July 7, 2005 THE ABC’S OF THE HOUSING BUBBLE: A new publication by the Center for Economic and Policy Research explains some of the basic facts about the current housing market. “The Housing Bubble Fact Sheet,” by economist Dean Baker, describes why the rise in housing prices constitutes a housing bubble and what can be expected when it inevitably collapses. Over the last 8 years, the United States has seen an unprecedented rise in housing prices that has created $5 trillion in bubble wealth. Like the late-1990s stock bubble, this run up in home prices cannot be explained by the fundamentals of supply and demand. It is a speculative bubble that will inevitably collapse and almost certainly throw the economy into a recession when it does. The “Housing Bubble Fact Sheet” provides an overview of the housing market and its implications for the economy: Over 2 million housing units are being built annually, while the number of households is only growing by 1.4 million a year. Some regions of the U.S. have experienced a 60 percent increase in real home prices, while the average for the country as a whole is 45 percent. Historically, real home prices have not increased, as house prices have just kept pace with the overall rate of inflation. The collapse of the housing bubble will have a larger impact than the collapse of the stock bubble, since housing wealth is far more evenly distributed than stock wealth. The collapse of the housing bubble will likely throw the economy into a recession and require a federal bailout of the mortgage market. It could lead to a loss of 3.6 to 4.5 percentage points of GDP. Given how far out of line house prices have grown from fundamentals, there is no way to avoid enormous economic damage when the bubble collapses. However, the sooner house prices drop, the less damage there will be.

Subject: Re: The Housing Bubble From: Pete Weis To: Terri Date Posted: Tues, Jul 26, 2005 at 10:35:50 (EDT) Email Address: Not Provided Message: From the Dallas Morning News: Danielle DiMartino: Bubble's fallout? Two views 09:02 PM CDT on Monday, July 25, 2005 There's a good chance the housing bubble carries severe macroeconomic implications, a point Alan Greenspan disputed in his congressional testimony last week. If prices fall, he said, 'they likely would be accompanied by some economic stress, though the macroeconomic implications need not be substantial.' Let's start with some factoids from Merrill Lynch: •Real estate accounts for 70 percent of the rise in household net worth since 2001. •Forty percent of private-sector jobs created since then are housing-related. •Consumer spending and residential construction have accounted for 90 percent of U.S. economic growth. 60 percent bubble Merrill's analysis concluded that 60 percent of the country is in a housing bubble. I don't see how the other 40 percent escapes the fallout. Dean Baker, founder of the Washington think tank Center for Economic and Policy Research, has also studied the housing market. The regions of the country he qualifies as bubbly include the East Coast north of and including Washington, most of the West Coast, and many pockets in between. 'The bubble areas are far too large to be explained merely by the fact that they have become more attractive relative to other regions,' Mr. Baker said. He also noted that homebuilders are adding 2 million units annually, far outpacing household formation of 1.4 million. This imbalance may be the bogeyman that pops the bubble despite low interest rates. GDP decline The inevitable pullback in construction speaks directly to housing's risks. A similar 40 percent decline in construction to that of the 1981-82 recession implies a decline of 2 percentage points in GDP. And then there's the wealth effect. The housing bubble has added $5 trillion to household net worth, equating to about $70,000 for a family of four. 'The large wealth effect associated with the housing bubble, which has spurred a consumption boom in the last few years, will go into reverse as housing prices plummet,' Mr. Baker predicted. This dent in consumption would whack an additional 1.6 to 2.5 percentage points off GDP growth. Totaled out, that GDP retreat about equals current GDP growth. Maybe I'm being obtuse, but a recession is about as macro as you can get, economically speaking. Maybe the best thing to do is respectfully agree to disagree with Mr. Greenspan and let time render its own decision.

Subject: Pockets of bubbles From: johnny5 To: Pete Weis Date Posted: Wed, Jul 27, 2005 at 00:46:00 (EDT) Email Address: johnny5@yahoo.com Message: It will be interesting to see how it plays out, I hear some economists talk about monetary deflation, some talk about monetary inflation. Several friends I know in palm beach florida are 1031 out of residential real estate to areas in colorado and salt lake city - what confuses me is that these areas have also been identified as potential bubble areas - if you were going to diversify real estate holdings - why go from a bubble area into another bubble area? Some assure me the bubbles in south florida and the northeast and west coast will drop far more severely than colorado or utah. In the land busts of the past I wonder where the smart money decided to move real estate holdings.

Subject: Re: Pockets of bubbles From: Setanta To: johnny5 Date Posted: Wed, Jul 27, 2005 at 09:26:02 (EDT) Email Address: Not Provided Message: there is only one cure for this housing bubble. increase your population. open the borders to the latinos and you may get the soft landing experianced in the UK and IRL. it may be unpalatable to some, but by the tone of the comments over the last few weeks it may be the lesser of two evils. by increasing the demographics you increase the demand for housing, and it will be a real increase not one spurred by cheap money. it may be simple, but like alexander faced with the gordian knot, the simplest, most decisive action may be the correct one. what are your thoughts on this?

Subject: Supply and demand From: johnny5 To: Setanta Date Posted: Wed, Jul 27, 2005 at 18:31:25 (EDT) Email Address: johnny5@yahoo.com Message: You are absolutely right, we need more sustainable population! I have been arguing with the ayn rand types for years in new york city that yes indeed we need more population, we need less career woman choosing to reject their natural gift of child production in favor of other interests - that we needed population sustainability - but they all just called me a male pig - haha. That we needed population from the already established here - who were already at high education levels and culturally meshed - we needed them having more children. Instead it seems now we get to import a much less qualified parent to bring up the new generations than the ayn rand type in new york city. Instead of a college or highschool level bringing up the new kids - we get migrants who dont even have elementary level education - abuse and violence is higher in these homes - skills of science and reasoning and math and logical thought is not as easily passed to the children in these homes - but they sure can learn how to farm some crops!! First they must mesh to the new culture, that burns through one generation right there, then they must come up to higher education levels - that burns through another generation!! There is another cure for oversupply in housing, reduce the supply is also another solution besides increasing the demand. Maybe a few hurricanes in florida will help that state - hehe. Opening the borders to just any ole latino's wide open as you suggest is not in the interests of america I fear. I visit with friends in palm beach florida, the towns next to it, lake worth, west plam beach, once known for thier awesome landscaping and beautiful architecture and cleanliness and well rounded educated cultured citizens - have fallen into serious disrepair since the floodgates of uneducated third worlders were let in. The pier in lake worth is in shambles, the roads dirty and the landscaping not maintained, it seems poorer uneducated latinos do not keep the maintenance of the city to the same levels as the educated rich they replaced. The children of these thirdworlders form gangs that shoot and rob and murder to have fun - something the denizens children of palm beach 30 years ago did not do before the latino influx. Services in the city are a nightmare, its hard enough getting things done with uneducated non adapting third worlders to begin with, but then when there is language barriers it is even more difficult - more population and more houses are not the answer - already I go into homes and turn on the faucet and a cup of sand and mud is pumped into my glass before water starts flowing - yet you would tell me to bring MORE people into this area. An illegal cuban who just came to the area told me he wishes jeb bush would stop all these damn illegal haitians from coming in - they are ruining the city - HAHA - what a hyprocrite. AN illegal haitian last week told me he wishes jeb bush would stop any more haitians from coming in - HAHA - its so funny to me. I think you should read emma's post about Jared Diamond and cultural sustainability before you suggest increasing population levels are the only solution - for that is incorrect I feel for that particular city. In the past when america was agricultural we needed a lot of uneducated farmers coming over to work the land, that was good, and when we were building our war machine we needed a lot of educated europeans coming over perhaps too so that we could build bombs and businesses. Now that the future is about science and technology how does influxing a lot of uneducated citizens that will take several generations to bring up to snuff and for probaly 20-40 years will set back the cities they dominate help? Assuming the resources are even enough for the current population - which when sand comes out of my faucet and the roads have become death suicide missions I feel they are not enough. Personally I feel if lake worth and west palm beach had not allowed all the uneducated unskilled third worlders in at the levels they did the city would still be beautiful, the crime low, the people happy and not stressed and the standard of life for everyone there much higher than what it has descended into. If the new population could have come from the already established, we would not be returning to the starting line to keep the race going - but it seems that is the way of humanity, the educated rich have less children when they should have more, and the uneducated poor have more children when they should have less. Nationally I do not know, but I do know the roads and city government in this area of florida is so strained and all the people are so stressed - more people is not the solution to this one particular bubble market - already influxing population has caused loan standards to become a total joke but for the banks to remain competetive they must take on more and more risky clients. Certainly I think jeb bush and george bush keep the floodgates open though because up in their ivory towers they don't have to sweat the middle class nightmares affecting all this unrestrained influx. Letting in tons of uneducated thugs may keep the houses full - but setanta - would you rather live in alcatraz prison where all the cells are full or would you rather live at camp cupcake where only you and martha stewart were staying??

Subject: Klee-esque Spirit of Visionary From: Emma To: All Date Posted: Mon, Jul 25, 2005 at 13:12:40 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/25/arts/design/25sola.html Klee-esque Spirit of Argentine Visionary Shines Anew By LARRY ROHTER BUENOS AIRES - The Argentine writer Jorge Luis Borges, who was perhaps his closest friend, once described him as 'our William Blake.' Oscar Agustín Alejandro Schulz Solari, who called himself Xul Solar, was indeed a visionary, painter and poet, but only now, 40 years after his death, is the full scope of his imagination being fully appreciated. A flurry of books about Xul Solar, often pointing to his importance as an influence on his more famous friend Borges, have been published in recent years. But the real breakthrough may be represented by a new and rapturously received exhibition devoted to the artist at the Buenos Aires Museum of Latin American Art, known as Malba. The show contains 130 works by Xul Solar, who died in 1963 at age 75 - mostly small watercolors, some of them being exhibited publicly for the first time. There are paintings of alternative universes, cities floating in the sky or on lakes, creatures that are half man and half airplane, angels, pyramids and whatever else came to him in his reveries. The exhibition, entitled 'Xul Solar: Visions and Revelations,' opened here in June and will continue through Aug. 15. In September, it will travel to São Paulo and, early next year, to the Museum of Fine Arts in Houston for what will be Xul Solar's first individual show ever in the United States. 'When it comes to Latin American art of the 1920's and 1930's, people tend to think of the Mexican muralists and Frida Kahlo and stop there,' said Mari Carmen Ramírez, the Houston museum's chief curator of Latin American art. Xul Solar, by contrast, 'is not the kind of artist who is easily absorbed into the fine-arts milieu of any country,' because he did not conform to a single medium or pattern of expression. Recognizing Xul Solar's growing stature, the Houston museum recently acquired three of his works. The most celebrated is 'Jefa,' a 1923 watercolor of a woman's head, adorned with cat's whiskers and surrounded by arcane symbols, that critics regard as the culmination of an especially fecund period of the artist's 50-year career. Xul Solar's art has usually been viewed as part of the Latin American avant-garde of the early 20th century. But the curator of the Malba show, Patricia Artundo, has chosen to give equal weight to the mystical aspects of his work: the first painting visitors see on entering the gallery is a painting Xul Solar did of his own horoscope in 1953. 'His was a spiritual search, but not in a straight line,' Dr. Artundo said. 'Occult sciences, the Kabbalah, astrology, the I Ching, the tarot, Aleister Crowley, they all flow together along with his vanguard tendencies and play a role in his desire to unify Latin America on a spiritual basis.' Critics and art historians often compare Xul Solar to Paul Klee, whose work he saw and admired during the dozen years he spent in Europe before returning in 1924 to Argentina. Like Klee, Xul Solar often included letters, numbers and other symbols in his paintings. The color schemes the two artists adopted was often similar too, as was the underlying spirit of their work and their interest in primitive and archaic art. 'There is a lot of kinship in their formal visual language, their refusal to paint in a traditional way and in the almost childlike quality of Xul Solar's work, the way he uses schematic figures like the sun, the moon and snakes,' Dr. Ramírez said. 'He absorbed German Expressionism and Paul Klee as his starting point, though what he did with them later was very different.' In addition to the paintings, the exhibition contains tarot cards painted by Xul Solar, a pair of masks and several objects he invented. These 'heirlooms from another cosmos,' as he once referred to them, include a harmonium with three rows of colored keys and a board game he called 'pan-chess,' with 13-by-13 squares (instead of 8-by-8). At a panel discussion here in early July, Jorge Schwartz, a critic and professor of Spanish-American literature at the University of São Paulo, talked of Xul Solar's 'desire to make corrections,' citing pan-chess and the artist's plan to modify soccer to use up to five balls simultaneously. But he also tried to improve his native tongue by inventing two new languages, Neo-Criollo and Pan-Lengua, that he incorporated into his work. One of his many notebooks, written in Neo-Criollo, is on display as part of the exhibition. Many of the paintings were also given titles in Neo-Criollo, or Neo-Creole, a mixture of Spanish and Portuguese with a smattering of English. The artist's playfulness with language extended even to the pseudonym he adopted while living in Europe, at the suggestion of an Argentine friend and fellow painter who thought his real name too ponderous for an artist. Though based on his birth name, Xul Solar can be interpreted to mean 'solar light' or 'light from the south.' Many of the works in the exhibition are on loan from the Xul Solar Museum here, which opened in 1993, one floor below the apartment where the artist lived for most of his adult life. The museum contains the largest collection of his paintings, along with much of his correspondence and manuscripts. 'Xul used to say that he painted reality, the reality of his own visions,' said Jorge Natalio Povarche, director of the Xul Solar Foundation, which runs the museum, and the artist's dealer during the later stages of his career. 'Other painters were easier to read, and that is why so much of his work ended up here. There was no market for him because they didn't understand him.' Borges, though, was a frequent visitor to the apartment at 1212 Laprida Street, often arriving for breakfast and then, if conversation had taken wing, returning to his own apartment for lunch with Xul Solar in tow. In the living room of Xul Solar's apartment even now is a pinkish-purple chair that only Borges was allowed to use. Xul Solar was a dozen years older than Borges, and introduced him to some areas of esoteric literature. But those who knew them described their relationship as one of intellectual equals. 'It is too bad that videotape and audiotape didn't exist in those days, because recordings of their dialogue could have enriched culture the way that their letters do,' Mr. Povarche said. 'They talked of everything, and some of their conversations were conducted at such a high level, were so dazzling, that anyone listening in would be left almost in a state of levitation.' During Xul Solar's lifetime, few of his works were sold. He did illustrations for some Borges books and for magazines that the writer edited, but earned a living mainly as a translator of books in Italian, German, English and French. As Dr. Artundo noted, 'One of the most peculiar things about him is that he had more friends who were writers than artists, and most of them were younger than he.' Xul Solar appears as a character or is referred to in several novels and stories, the most notable being Borges's 'Tlon, Uqbar, Orbis Tertius' and 'A Universal History of Infamy.' 'A man versed in every field of knowledge, curious about everything arcane, father of writings, of languages, of utopias, of mythologies, a guest in hells and heavens,' was the way Borges described his friend in an essay he wrote while Xul Solar was still alive. After the artist's death he added: 'Predictably, Xul Solar's utopias failed, but that failure is ours, not his. We have not known how to deserve them.'

Subject: Editors Tackle Taboos With Girlish Glee From: Emma To: All Date Posted: Mon, Jul 25, 2005 at 09:45:37 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/25/international/asia/25filip.html Editors Tackle Taboos With Girlish Glee By RAYMOND BONNER MANILA - 'I'm sorry, but I just can't control those girls.' That is how one of this country's tycoons is said to deflect complaints about articles in Newsbreak, a magazine he founded. 'Those girls' are the women who edit and manage the magazine, which, with its spunk and spice, has more than demonstrated its independence from the privileged and powerful. Newsbreak has brought down a senator, set off an investigation into corruption in the military, and - most daring of all - exposed the fault lines inside this country's most influential institution: the Roman Catholic Church. This month, with the presidency of Gloria Macapagal Arroyo on the brink, 'those girls' put out a special edition: an account of a meeting of the council of bishops, during which the papal nuncio told them - 'scolded them,' the magazine said - to stay out of politics. What stunned most Filipinos, accustomed to the past involvement in politics by the church, was that the bishops neither endorsed Mrs. Arroyo, nor called for her resignation. 'Those girls' are the editor, Marites Danguilan Vitug, a 50-year-old with an infectious laugh that punctuates every conversation, and the managing editor, Glenda M. Gloria, just turned 40, a former senior editor at one of the country's major daily newspapers. Ten of Newsbreak's 14 senior editors and writers are women. Since the end of Ferdinand E. Marcos' dictatorial rule in 1986, the Philippine press has been free. But being free doesn't necessarily mean being responsible, and the newspapers in this archipelago of 87 million people are as raucous as the politics. Businesses in the region still pay journalists under the table, and powerful people routinely file libel suits that get favorable hearings. Such suits have nearly destroyed the high quality Indonesian magazine Tempo, which has worked with Newsbreak to report on Islam in Southeast Asia. In Newsbreak's first issue - Jan. 24, 2001 - the editors advised readers: 'The magazine's staff is composed of journalists who believe in honest, incisive, and spunky reportage.' Few would doubt it has succeeded in that. The editors added, 'We like to believe that good journalism sells.' That is questionable here. Newsbreak has barely 1,000 paid subscribers, and about 2,000 newsstand sales. But the subscriber list includes more than half of the Philippine Congress, and just about every embassy in Manila. The magazine was conceived in 2000, when two venture capitalists, members of the country's elite, unhappy with the superficiality, sensationalism and lack of balance in the coverage of the country's mainstream dailies, approached Ms. Vitug and Ms. Gloria. The two women, both of whom studied at the London School of Economics, had just finished a book, 'Under the Crescent Moon: Rebellion in Mindanao,' about the rise of the Islamic movement, including the terrorist group Abu Sayyaf, on the southern island of Mindanao. It is a book that foreign diplomats here have on the shelf as essential reading about a region where the United States has had a military presence since 2002. The men were thinking of a Web site. The women thought a weekly magazine would be better. (It is now biweekly, for lack of money, and many of the articles appear on the Web site of The Philippine Daily Inquirer - www.inq7.net.) The men insist on remaining behind the scenes and the episode about 'those girls' was related by the women themselves. The magazine's first major challenge to entrenched power was almost its demise. In February 2003, the cover story was about a Catholic bishop, one of the country's most powerful, who had carried on an affair with a married woman and had fathered a child by her. The magazine found the woman and interviewed her for three hours, unearthing details about the affair and documents in which the bishop, Crisostomo Yalung had acknowledged paternity. In a country that is 80 percent Catholic, 'un-Christian' was among the nicer epithets thrown at the editors. Ms. Gloria's mother, a staunch Catholic, told her daughter she disapproved. Church leaders were furious, and under pressure, one member of the magazine's board resigned. 'We thought we wouldn't survive,' Ms. Vitug recalled. Instead, it was a turning point. 'It put us on the map,' Ms. Vitug said, with her laugh. (The bishop left the country, and is believed to be in the United States, Ms. Gloria said.) Four months later, the magazine ran another cover story about a bishop accused of out-of-town trysts and sexual harassment. It has been equally uncompromising in looking at corruption in the military. One cover had the photograph of a general superimposed over a $100 bill. Using various property search services they found on the Internet, the reporters had discovered that the general owned a condominium in Trump Tower and other property in the United States. (The general is under house arrest as authorities investigate.) The property searches cost $100, Ms. Gloria said - a not insignificant sum for the magazine, whose offices are four small rooms on the fifth floor of an apartment building. It still gets some money from its wealthy founders, but as venture capitalists they had intended for the publication to support itself eventually rather than to continue to be subsidized. Asked what magazines are the models for Newsbreak, Ms. Vitug said, 'Vanity Fair' and 'Mother Jones' - the former for covers that sell, and the latter because it raises money from foundations and even other governments. For more reporting in Mindanao, the magazine has received $42,000 from the United States Institute of Peace, a Congressionally funded nonpartisan organization based in Washington that promotes the prevention and resolution of conflicts. For a story about how federalism might work in the Philippines - currently, virtually all power in the sprawling archipelago resides in Manila, with little authority in the provinces - the editors approached the Swiss Embassy, which gave them $10,000. The editors know they must pay more attention to getting subscribers and selling advertising. But they don't want to stop being reporters themselves. 'When you're small, you have fun,' Ms. Gloria said. 'That's why we don't want to get too big.'

Subject: Re: Editors Tackle Taboos With Girlish Glee From: Setanta To: Emma Date Posted: Mon, Jul 25, 2005 at 10:35:31 (EDT) Email Address: Not Provided Message: there is something very endearing about those irreverend and impertinent women that has upset the paternalistic establishment within the Philipines!!!

Subject: Re: Editors Tackle Taboos With Girlish Glee From: Emma To: Setanta Date Posted: Mon, Jul 25, 2005 at 13:13:38 (EDT) Email Address: Not Provided Message: Paternalistic estavblishments need to be upset :) Nice.

Subject: 'Filthy' computer games From: Setanta To: All Date Posted: Mon, Jul 25, 2005 at 09:32:06 (EDT) Email Address: Not Provided Message: That's it. Lock up your kids, throw away the television, burn your Playstation and sue the nearest computer-game manufacturer you can find. Because Grand Theft Auto San Andreas has a hidden sex scene. It's a measure of how successful computer games have become that the Grand Theft Auto series - which has sold more than 40 million copies since the first game in the franchise emerged in 1998 - has managed to horrify so many people. On the flip side, the hysteria is also proof that, no matter how much they may fulminate against such titles, most critics of gaming culture simply don't know what they are talking about. For many people, computer games ended with Pacman and Space Invaders, and the notion of something like San Andreas, which invites the player into an entire cityscape and then offers them a bewilderingly vast array of possibilities and opportunities, seems confusing and intimidating. You have the web, which we all know is a vast repository of corrupting filth joining forces with the moral vacuum of computer games. Throw in rap music - as featured in the game - and you have yourself an unholy trinity that everyone can be outraged by. Even Hillary Clinton - who was never as much a social liberal as her supporters liked to believe - has hopped on the bandwagon, saying in a letter to the Federal Trade Commission that: 'We should all be deeply disturbed that a game which now permits the simulation of lewd sexual acts in an interactive format with highly-realistic graphics has fallen into the hands of young people across the country.' Of course it makes a good soundbite but it ignores the reality of the matter. Computer games, like movies, are rated for suitability and nobody in their right mind would suggest that kids should be playing GTA San Andreas. Just as nobody in their right mind would allow their child to watch a violent and sexually-graphic movie. Most parents who have no problem allowing their kids to spend hours on their Playstation - here in Ireland we are second in the world only to Japan in terms of Playstations owned per head of population - would be absolutely horrified if someone were to suggest that they allow their precious little sprog to while away his morning watching Henry: Portrait Of A Serial Killer. This kind of ignorance of the reality of modern gaming is understandable but it's still not excusable. In last Friday's edition of this newspaper, GTA was referred to as a 'kids' game'. Of course, the Indo is not alone in making the presumption that all games are for kids. But until people realise that games, like movies, appeal to different ages and tastes, we're going to face a repetitive tedious cycle of hype and panic. As for me? Well, I'd long become bored with GTA San Andreas, being more of a Medal Of Honour chap myself. But I have the sneakiest suspicion that it will be brought back out of its case and given another spin in the next few days. If you want an indication of how civilised a society is, then look at the way it treats its convicted criminals. America certainly doesn't stand up well to close scrutiny, nor does Russia. But when it comes to the truly barbarous, we need only look to our Iranian friends to see just how savage a culture can be. Last week two young men (one of whom was under 18) were executed in Iran after they had been found guilty of raping a 13-year old boy. Regardless of the fact that the guilty verdict was patently unsound, regardless of the fact that they were tortured into confessing and regardless of the fact that most observers simply see the verdict as another excuse by Iranian authorities to persecute gay people, the manner in which these two people were killed is sickening. First they were given 200 lashes of the whip, and then, crying and plainly terrified, they were interviewed by State media as they were driven to the gallows where they had a noose tightened around their necks which was then attached to a crane. The pair were then hoisted slowly into the air so the gathered crowd could watch them as they 'danced' - the jerky movements of their final death throes as they were slowly strangled by their own body weight. It's at times like this you realise that we are not witnessing a clash of cultures - rather we are witnessing a clash of centuries. Here in the West we are, however flawed, a 21st Century society. In places like Iran and other hell-holes across the Muslim world they are still stuck in the 15th century and the idea that such a country should ever be allowed to possess any nuclear technology is a truly terrifying one. No doubt the previous paragraph will have irked some people. After all, is it not racist to accuse an entire society of being centuries behind us? Is it simply Western arrogance which permits me to say that we are more advanced, sophisticated and moral than that society? Well then, consider the case of 16-year-old Atefeh Rajabi who was hanged in Tehran last year. Her crime? She was caught having sex before marriage. Oh, by the way, she was also mentally retarded. Atefeh's was by no means an isolated incident. How can anyone read about this and not feel that the hate-filled, superstitious savages who form the Iranian cleritocracy which runs the country should be dismantled, by force if necessary? Maybe then we will see the vigorous - and persecuted - liberal and student wings given a chance to elevate Iranian society to a level its citizens deserve. They sure as hell can't do any worse. iodoherty@unison. independent.ie

Subject: Re: 'Filthy' computer games From: RL To: Setanta Date Posted: Tues, Jul 26, 2005 at 07:43:25 (EDT) Email Address: rafaelloring@yahoo.es Message: What really surprises me in the San Andreas controversy is that people can find the sex scene to be outrageous but don't speak about the thousand games with extremely violent contents. looks like we are more worried that people can go around having sex carelessly than going around killing people. This is the same with movies. I find so surprising that movies like terminator or alikes with extremely violent contents go rated 13 or less and when a quite normal movie has for example a female brest or a very limited sexual content gets a higher rating in the US. RL

Subject: Are we scaring ourselves to death? From: Setanta To: All Date Posted: Mon, Jul 25, 2005 at 09:28:00 (EDT) Email Address: Not Provided Message: Bad science peddled by campaign groups is creating widespread paranoia about our food and health. Aideen Sheehan, Agriculture and Food Correspondent, reports on a new book that debunks the myths Could the ban on the pesticide DDT have been responsible for as many deaths as Hitler and Stalin? Could a new generation of children be plagued by measles because of hysteria against immunisation? From obesity to overdosing on salt, barely a week goes by without another food or health scare creating the impression that we live in a world fraught with ever-growing danger and leading to shrill calls for the state to protect us. Now in a new book called Panic Nation a collection of eminent scientists and doctors aims to debunk modern myths about food and health. The authors argue that organised paranoia, especially post 9/11, has become our society's defining characteristic. This propensity to panic, fueled by campaign groups, has lead to ludicrously extravagant reactions to minor threats such as SARS, where whole cities were quarantined and people wandered around in useless paper masks, a 'modern equivalent of the medieval amulets used to ward off evil'. This is more than just harmless over-reaction, they say, because the prevailing mood of risk-aversion is becoming mankind's major barrier to social, scientific and technological advance. 'Risk is seen not as something we can handle or perhaps even turn into opportunity, but as something that we suffer from and must be guarded against.' If the same precautionary approach had always been in place scientists could never have made a huge range of breakthroughs from aspirin to X-rays. Yet the fact that we're living longer, healthier lives than ever before thanks to these and other discoveries seems to be no consolation for the prevailing mood of suspicion and fear. The 1960s campaign against DDT is given as an example of misguided environmentalism. Malaria deaths in Sri Lanka rocketing from just 17 in 1963 to an astounding 2.5 million in 1968 after the pesticide was banned over unsubstantiated fears it caused cancer and hepatitis. Panic Nation makes for fascinating and provocative reading. But the authors, though immensely well-qualified, aren't always as independent as you'd like. For example, while Dr Sandy McNair makes a strong case against the prevailing wisdom of lower-salt diets, a Google search reveals he was Medical Advisor to the Salt Manufacturing Association. The moral of the story: moderation in all things and don't swallow anything you read whole. DEBUNKING SOME OF THE MYTHS Genetically modified food is dangerous With 'Frankenstein foods' have long been public enemy number one for the environmental foodie brigade. But the anti-GMO campaign sometimes reaches levels of mass hysteria when GM food is portrayed as not just undesirable but actually 'evil'. The level of fanaticism even led famine-struck Zambia in 2003 to reject GM food aid from America because, in the words of a government spokesman, 'we would rather let our people starve than feed them toxic food'. Eminent scientist Sir Peter Lachmann argues that millions of people have been eating GM food worldwide for years without any ill-effects. One headline-grabbing study suggesting that rats fed GM potatoes contracted immune-system damage was comprehensively repudiated. And fears of breeding lethal super-viruses in GM crops are a scientifically unlikely fantasy, says Sir Peter. Instead, he argues, GM technology enhances the nutritional quality of crops and in the future could slash world hunger by boosting yields, enabling plants to grow on arid, salty land. By potentially increasing photosynthesis levels in plants we could feed the whole world and meet all our energy needs. Organic food is better than 'pesticide-filled' normal produce 'Organic food good, pesticide-filled conventional produce bad' goes the modern dictum. Anxious mothers flock to farmers' markets to buy high-priced organic veg for their children. But are we really dosing our bodies with dangerous toxins if we don't go this route? The reality is that the maximum amount of pesticide which is permitted in any EU food is stringently monitored. It is based on calculations of its effects on human and animal bodies, taking the dose level safe for the most sensitive species - then reducing it 100-fold to get an Acceptable Daily Intake. The separate Maximum Residue Level (MRL) of pesticide that can be left on crops after spraying is less than this Acceptable Daily Intake. Consultant Toxicologist Dr Lakshman Karalliedde says this means that even in the occasional cases where the MRL is exceeded, consumers have nothing to fear because it will still be less than one-100th of the amount that causes even a slight reaction in the most sensitive species. Dr Stanley Feldman argues that the reason people pay up to 50% more for organic food is brought on by rose-tinted nostalgia for those hazy days of our youth when the sun always shone and the tomatoes were juicy. In fact, blind tasting has failed to reveal any consistent difference between organic and non-organic supermarket produce. And organic producers have been frequently forced to retract untrue claims their produce is healthier, although the conventional food industry could do themselves some favours by making sure fruit and veg is ripe and tasty when it goes on the shelves. MMR causes autism The misguided belief that MMR (Measles, Mumps and Rubela) vaccination can cause autism in children tapped into the anxieties and 'suburban rage' of a middle class sceptical of science and convinced the government must be lying to them. Dr Andrew Wakefield's assertions of a link between MMR and autism have been discredited by the evidence and revelations that he was getting money from anti-MMR lawyers, which led even his co-authors to disassociate themselves from his unproven findings. The upshot of the scare, however, is that vaccination rates have plummeted by as much as 70% in some parts of the UK, posing a serious risk of measles outbreaks. The paranoia lives on as a new five-in-one immunisation jab for babies was greeted with howls of hostility from some quarters instead of the welcome you'd expect for something offering protection against meningitis, polio and other life-threatening illnesses. Passive smoking will kill you The wave of public smoking bans sweeping out from Ireland across Britain and beyond is now unstoppable. But GP and author Dr James Le Fanu says the belief that passive smoking causes cancer is a smoke screen erected for a 'good cause' and therefore unassailable. While a collection of 37 studies worldwide suggests a 26% increased risk of lung cancer in those exposed to passive smoke, Dr Le Fanu argues that many of the cases identified were from countries such as Japan and China where there are high rates of a type of lung cancer, called adenocarcinoma, that is totally unrelated to smoking. By contrast major studies by the American Cancer Society and the World Health Organisation involving hundreds of thousands of people found little or no association between the risk of lung cancer and passive smoking. High cholesterol intake causes heart disease Current medical wisdom says that too much cholesterol or saturated fat in your diet causes blockages in your arteries leading to heart attacks and strokes. This belief has led people to view bacon and eggs as dangerous killers while questioning the theory is like declaring yourself to be a flat-earther, says long-time sceptic Dr Malcolm Kendrick. A US study of 350,000 men at high risk of heart disease revealed that major cuts in cholesterol and saturated-fat consumption had no impact on heart-disease rates while numerous other studies failed to show any heart benefits - and some risks - from lower-fat diets. Contradictory findings, such as rising cholesterol levels in Japanese men at the same time as their heart-disease rates fell, have been ignored because the cholesterol hypothesis is simply too big to ditch. The fact that taking statins which reduce cholesterol levels has been found to be immensely protective against heart disease has given the theory a new lease of life, but this may be down to some other effect of statins on the body apart from lowering cholesterol, argues Dr Kendrick. Overall the cholesterol theory, which he has been dubbed 'the greatest scam in the history of medicine', is in a mess as scientists seek more implausible explanations for why it must work. The only certain thing about it is that it wrong, says Dr Kendrick. Monosodium Glutamate is unnatural and bad for you Flavour enhancer monosodium glutamate or MSG has had a bad press because of links to a supposed condition known as 'Chinese restaurant syndrome' said to cause numbness of the neck, palpitations and headaches, and leaving many consumers with a vague notion that they should avoid it. However in tests sufferers were given different drinks with and without MSG and showed the same symptoms after each. Author Maurice Hanssen concedes that while some Chinese takeaways overdo the amount of MSG used, meaning we're taking in too much sodium, our taste for glutamates is quite natural. In fact, mother's milk contains 22mg glutamate per 100ml - 10 times as much as cow's milk - and we love foods such as tomatoes and Parmesan cheese because they are naturally rich in it. Glutamates were only isolated in 1908 in Japan where it was found that they are a separate taste to the familiar sweet, sour, salt, and sugar. This taste was given the term 'umami' meaning deliciousness. 'Panic Nation', edited by Stanley Feldman and Vincent Marks, John Blake Publishing, £9.95

Subject: Re: Are we scaring ourselves to death? From: Emma To: Setanta Date Posted: Mon, Jul 25, 2005 at 13:18:31 (EDT) Email Address: Not Provided Message: Nutrition is indeed a tough subject to study with precision, but we are gaining in knowledge and I am trying to eat with increasing care though weight is not a problem. I will set out more of what we can be more sure of about nutrition.

Subject: The Way We Eat: Bleu-Plate Special From: Emma To: All Date Posted: Sun, Jul 24, 2005 at 13:55:28 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/24/magazine/24FOOD.html The Way We Eat: Bleu-Plate Special By AMANDA HESSER There is a culinary tussle under way in France. Old-guard chefs, whose restaurants were once seen as temples, are being challenged by new-guard diners, who would like to do away with Michelin stars, polished silver and the amuse-bouche. As you might expect in a country that debates everything from the meaning of work to the merits of a president who practically lives with his mistress, the standoff has become a popular topic. France's restaurant establishment has been under assault for years. Spain has captured the world's attention, and even America, with chefs like Thomas Keller, has gained credibility. But the traditionalists of haute cuisine have held firm, maintaining their massive cheese carts, stools for diners' purses and silent, bowing waiters. Still, a number of unfortunate events have occurred within France: in 2003, Bernard Loiseau, the chef of La Côte d'Or, who was rumored to be concerned that his business was flagging, committed suicide. Earlier this year, Alain Senderens announced that he would close Lucas Carton, his venerable three-star restaurant, and reopen it as a bistro. ''When I thought about what the stars represented,'' Senderens said, ''I realized they were really just supporting my ego, and that was stupid.'' Other chefs have simply fled the country. Two of France's top chefs, Joel Robuchon and Guy Savoy, will soon be opening restaurants in Las Vegas. But what has been most troubling is that the next generation in France is showing signs of disillusionment. In the 1990's, some young and promising chefs, like Yves Camdeborde at Le Comptoir, Bertrand Bluy at Les Papilles and Thierry Breton at Chez Michel (all in Paris), deserted the fine-dining track to open smaller restaurants where they could cook serious food in a more casual atmosphere. Then there is the movement started by two young journalists, Alexandre Cammas and Emmanuel Rubin, who wanted to promote a new way of thinking about food. They call it Le Fooding. They hold events, some outdoors with people eating with their hands and drinking wine from plastic cups, and they also started giving out Le Fooding awards to restaurants they deemed spiritually sound. ''Fooding is the fusion of food and feeling,'' Cammas explained recently. ''Because, you know, gastronomy is a strange word. Because nomy'' -- the Greek suffix -- ''means 'regulation and administration,' and we didn't like this. It doesn't include feeling.'' But fooding apparently does. Cammas and Rubin say that the codification of French cuisine -- the very reason it was easy to export around the world -- has kept chefs on a short leash. Many chefs, cooking teachers and critics, Cammas said, ''have forgotten that Brillat-Savarin and Escoffier were very modern in their time.'' Cammas said they would like for today's chefs to stop giving ''the Americans and Japanese tourists what they want and expect when they come to France.'' Cammas told me by phone in late spring that they were organizing a ''fantastic picnic'' in each of four cities -- Marseille, Nantes, Montpellier and Paris -- with top young chefs slated for each event. ''They are going to cook with Weber barbecue grills,'' Cammas exclaimed. Liberated and experimental food would abound! At the picnic in Montpellier, they would serve lamb Marrakesh. In Paris, Eric Frechon, the chef at Le Bristol, would be preparing veal hot dogs. Meanwhile, Le Fooding seems to baffle most chefs, who dismiss it as they would a bad piece of fish. Camdeborde, who is one of Le Fooding's pet chefs, tried to explain the resistance: ''In France we tend to consider what's young and what's coming up as not good, and Le Fooding is one of those things.'' When I asked Yannick Alléno, the chef at Le Meurice in Paris, he paused for a moment, then said he didn't know what Le Fooding was. Senderens had a more direct response. Asked what he thought of Le Fooding, he slapped his face in mock horror, rolled his eyes, then offered this comment: ''Eating with your fingers is a bad habit. It doesn't have to do with the quality of the food. There are many places in the world where people eat with their hands; however, in our culture it denotes a lack of civility.'' Which brings us to the fantastic picnic. Shortly after 6 p.m. in June, outside an old factory in Marseille, a crowd gathered for Le Fooding's first event of the summer. People arrived on motorcycles. Toddlers arrived on parents' shoulders. Inside the gates, Le Fooding's staff were frantically cutting squares of fabric for blankets, while a band warmed up on a stage. Soon the lines for the barbecue -- grilled veal with fig chutney, beef scented with bonito and chives -- were snaking around the factory courtyard. The food was very good, even if it wasn't groundbreaking fare. And the feeling was swell -- jovial and a bit unnerved, like the feeling you have the first time you get up on water skis. More than 1,600 people came for the party, and more than 4,000 attended the three other picnics. Le Fooding, which has often been dismissed as a passing trend, may just be for real.

Subject: Fannie Mae, Freddie Mac From: Terri To: All Date Posted: Sun, Jul 24, 2005 at 10:07:25 (EDT) Email Address: Not Provided Message: Republicans have long sought to limit the ability of Fannie Mae and Freddie Mac to compete in mortgage financing with purely commercial lenders. I have very serious reservations. Fannie and freddie have allowed for immense amounts of morgage cost saving for middle income households and reducing the portfolios carried would raise middle class mortgage costs and offer no gain in safety since othjer mortgage extenders have far more questionable records than Fannie and Freddie.

Subject: Re: Fannie Mae, Freddie Mac From: Pete Weis To: Terri Date Posted: Sun, Jul 24, 2005 at 11:37:52 (EDT) Email Address: Not Provided Message: Fannie Mae and Freddie Mac, because of the size of their mortgage security portfolio's, set the standards for selling mortgages on the secondary market. They have relaxed their standards tremendously and have gotten themselves as well as the US economy in deep do-do. Aside from their very weakened standards, they have gotten themselves in trouble in the derivative markets. I believe Fannie Mae has some $12 billion in losses in recent years, which they were hiding. IMO, there is a lot of inevitable damage headed our way from the actions of these two GSE's and the lack of supervision of their management activities. Now it's a matter of limiting the damage.

Subject: Running for the exits From: johnny5 To: Pete Weis Date Posted: Tues, Jul 26, 2005 at 00:16:47 (EDT) Email Address: johnny5@yahoo.com Message: You have been trying to warn of this for awhile Pete - finally people are starting to listen to your forewarning. Well warren may win very big after all with his dollar short, terri is seeing value in healthcare and utilities - jennifer talks about gold - I dont see anyone excited about goog 300 or tech in general - of course I am a XOM man. What do you see Pete for the safest way to exit the burning theater that will consume our friends and countrymen? Are you still heavily weighted in oil? Still long the permanent portfolio? or are you starting to overweight the prudent bear short fund? I keep looking for a reason to not buy more XOM and really diversify but I have a hard time finding them.

Subject: Re: Running for the exits From: Pete Weis To: johnny5 Date Posted: Tues, Jul 26, 2005 at 12:22:31 (EDT) Email Address: Not Provided Message: Don't know if anyone is listening to my stuff, Johnny. This board is just a way to 'get it off my chest'. I'm certainly no investment guru. Don't know what oil will do in the short term (the coming year), but with no affective energy policy, (which emphasizes conservation), in the works, I expect rising oil prices over the next 5-10 years and perhaps beyond. The most authoritative information (by geologists who have worked in the oil industry and have run the numbers) indicates that we are at or close to peak global oil production. We also know from these same geologists and recent articles in news outlets such as the BBC that both OPEC members and oil companies have significantly overstated their 'proven oil reserves'. Wall Street has an agenda to downplay the impact of oil and to push the idea that it's headed downward in price. This agenda is meant to soothe the worries of investors who might think that higher future oil prices will hurt corporate profits. In 5 years we will think of $60 per barrel as very, very cheap oil! Paul Krugman stated recently that he expects the dollar to decline with the housing market and Robert Shiller says that is not far off. I like Shiller's track record. Permanent Portfolio hedges the fall in the dollar and is a conservative allocation fund which has faired very well over the last five years and has been in existance for 20. Shorting the market involves speculating on when the irrational exuberance (in stocks like Google) will end. I don't like speculation on short term human behaviour so I'm not investing in shorting funds like Prudent bear. I see higher oil, as well as commodities prices, over the long run, and a falling dollar as overpowering trends which I can expect to benefit from over the next 5-10 years or more. The investment choices are narrowing. I believe anyone who is invested in a broad index fund such as the S&P will lose considerable money over the next five years. Rising energy costs, a falling dollar, and a falling housing market (and its reverse wealth effect) will crush the S&P.

Subject: Re: Running for the exits From: johnny5 To: Pete Weis Date Posted: Wed, Jul 27, 2005 at 01:06:57 (EDT) Email Address: johnny5@yahoo.com Message: I always read with anticipation all the wonderful posts of yours, terri, emma and the rest. Bogle recenlty said stocks were not terribly overvalued like 2000, but not undervalued either. Buffet backs this up saying the returns are not going to be there like the past and he sees little great value anymore. Swedroe over on diehards.org board says stock returns for the next decade or 2 may be nothing special. Terri says the protection with bonds may be gone and jennifer worries of housing. I can always move out of the mcmansion to a trailer and turn off the tv to cut taxes and payouts and utilities. I can shower 1 time a month instead of 1 time a week - hehe - and save water. Alas everytime I pull up to that gas pump I don't know that many ways to cut my fuel bill by as large a percentage as the other things I consume. It seems from what terri posted above we are already several years into a secular bear market if you look at holding the sp500 index. Already down for 5 years and who knows how much longer it will fall - but when buffet and his ilk dont see great value - that is very important to take notice.

Subject: Re: Running for the exits From: Terri To: Pete Weis Date Posted: Tues, Jul 26, 2005 at 16:44:05 (EDT) Email Address: Not Provided Message: Everything you write is read and considered carefully. I agree with you in general or looking further ahead, though I am sanguine at present.

Subject: Greenspan Era Taught People to Gamble From: Emma To: All Date Posted: Sun, Jul 24, 2005 at 09:58:01 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/22/business/22norris.html?8dpc Greenspan Era Taught People to Gamble By Floyd Norris THE Alan Greenspan era, which is drawing to an end, deserves to be remembered as the era in which many millions of Americans were forced to become gamblers. That it was also an era when many of those gambles paid off should not obscure the fundamental change. When Mr. Greenspan took over the Federal Reserve from Paul A. Volcker in the summer of 1987, the stock market was hot and there were warnings of a price collapse. The crash arrived, but what seems remarkable now is just how unimportant that was. No recession followed. One reason for the mild economic impact was that the world of 1987 was still largely one in which people who played the stock market wanted to play the stock market. Those who did not could lock in perfectly reasonable returns without taking much risk, for example by investing in Treasury bills. As Mr. Greenspan took office, banks were advertising one-year certificates of deposit at more than 8 percent, more than double the annual inflation rate. But the most important fact for average Americans was that they were likely to have defined-benefit pension plans from their employers. In such pensions, the company put money into stocks and bonds to pay for benefits, and it took the risk that the investments would not work out. All that has changed, as was demonstrated this week by Hewlett-Packard. It plans to cut 14,500 jobs and will no longer contribute to defined-benefit pension plans for those who are left. The pension plans that remain tend to be, as Bradley D. Belt, the executive director of the federal Pension Benefit Guaranty Corporation, told Congress last month, 'in our oldest, most mature industries.' The agency now assumes that most of the workers covered by its insurance are no longer working for the companies where they earned pensions, having retired or taken jobs elsewhere. Within the Standard & Poor's 500-stock index, three-quarters of the companies still have defined-benefit plans, but more and more of them are legacy plans, closed to new employees and no longer accumulating benefits for workers who are in the plans. S.& P. reports that only 191 companies in its index had pension plans with assets of $1 billion or more at the end of last year. The majority of the nearly $1.3 trillion in assets in S.& P. 500 pension funds are in just 22 companies. MOST private-sector workers now have defined-contribution plans. Such plans can work out well, but there are no guarantees. Workers may or may not make wise (or lucky) investment decisions. They may choose to cut back on contributions when times are tight, making an adequate retirement income even less likely. In his testimony this week, Mr. Greenspan warned that while Social Security traditionally provided workers with around 40 percent of their preretirement income, that was unlikely to continue, leaving them even more dependent on savings and pensions. President Bush thinks putting some Social Security money into private accounts would benefit the workers, but if it does, it would be because the gamble on stocks worked out, something it might not do. What all this has meant is that workers whose parents viewed the stock market as something for rich people to play now find themselves forced to take part in it. Is it good for them? One answer comes from investor attitudes toward companies that have pension plans. Over all, plans in S.& P. 500 companies ended last year with assets worth $164 billion less than their liabilities, and that scares investors, who tend to applaud companies that do what Hewlett-Packard is doing - shifting the risk to the workers.

Subject: Good article From: Pete Weis To: Emma Date Posted: Sun, Jul 24, 2005 at 11:45:28 (EDT) Email Address: Not Provided Message: Greenspan's tenure will go down as a failed chairmanship and economists in the future will examine his many mistakes and lack of action when the party began getting out of hand. His statement that 'one can not tell whether one is in a bubble while in the bubble' will go down in history as the most infamous statement by a fed chairman in history.

Subject: Re: Good article From: Poyetas To: Pete Weis Date Posted: Mon, Jul 25, 2005 at 06:21:15 (EDT) Email Address: Not Provided Message: Agreed, What I don't understand is the constant overreaction by markets that creates bubbles. We had it with the new economy in the 1990's and now again with the housing bubble. Irrational expectations that the American economy is both perfect and indistructable. The funny thing about the current GOP leadership is that they keep on positioning themselves as progressive thinkers but the truth is just the opposite. Their methods are archaic (did I spell that right?) and ideas too traditional. Why not use tax revenues to start off government funded programs in things like the environment. Create laws so that favour a market for these products and then spin them off into private companies.

Subject: Looking into the future From: Pete Weis To: Poyetas Date Posted: Mon, Jul 25, 2005 at 11:14:05 (EDT) Email Address: Not Provided Message: Poyetas. One saying which I hate - 'no one has a crystal ball'. IMO, it's just an excuse to stick out heads in the sands (of the Middle East)! It's a give-up attitude - 'just except fate and the things which have made us successful for the last century will eventually carry the day once again'. Here in America we keep talking about how we've succeeded because of 'hard work' and 'good o'l American ingenuity' and our 'superior economics' and these are the things which will carry us through to the top once again. It's simply not being honest with ourselves. Asians work just as hard, if not harder, and Europeans certainly work hard. Then there are those who say 'it's not about working harder but, rather, smarter'. But there are plenty of smart people in Asia, Japan, Europe and elsewhere. American ingenuity has a lot to do with our ability to attract the world's 'best and brightest' - hopefully this will continue, but in today's world of fear of illegal aliens it's not a given. Then there is this idea that American economics is superior to everyone else's. Right now, the way American economics is being practiced, the driving force of the American economy, the middle-class, is being bled to death. The American consumer is clinging to the gutter of his/her house and eventually it will give way. We need to take a hard, honest look at why we succeeded in the past and ask ourselves is it still there for us. Once, we set a goal to send a man to the moon and return him safely to earth again. That effort helped America lead the world into the computer age with the integrated circuits which were developed by a federally sponsored program to reach the moon. Today, a federally sponsored program, of serious proportions, could help America lead the world in an effort to free ourselves from dependency on fossil fuels. And we could attract the world's 'best and brightest' to help us achieve this. We are no longer the Saudi-like, natural resource shieks and Chinese-like, blue collar manufacturing force we were back in the 50's and 60's. We no longer have the advantage of being the only major industrial power whose plants were still left standing after the most destructive war in history. Now we must depend on developing the best crystal ball we can and to focus our efforts through governmental programs to develop what we and the world most desparately need - a clean and cheap source of energy. It will be expensive to get there, but sitting around and waiting for intangible American advantages which were never really there in the first place will fail us.

Subject: Re: Looking into the future From: Terri To: Pete Weis Date Posted: Mon, Jul 25, 2005 at 15:43:22 (EDT) Email Address: Not Provided Message: Interesting comments to think about carefully.

Subject: Who's Afraid of China Inc.? From: Emma To: All Date Posted: Sun, Jul 24, 2005 at 09:48:51 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/24/business/yourmoney/24oil.html Who's Afraid of China Inc.? By STEVE LOHR WILLIAM A. REINSCH, an avowed free trader, welcomes China's rising stature in the international economy. After all, he is the president of the National Foreign Trade Council, an organization founded in 1914 to promote an 'open world trading system.' Indeed, when he was a senior trade official in the Clinton administration, Mr. Reinsch was chided by some security analysts who said he was being soft on China by placing matters of commerce ahead of national security. But even Mr. Reinsch is uneasy about China's attempt to buy Unocal, a midsize American oil company. The outcome of the takeover contest for Unocal is uncertain, and last week its board embraced an improved offer from Chevron. Yet Cnooc, a government-backed Chinese oil company, still has the higher offer - and it could up the ante. If the Chinese bid proceeds, Mr. Reinsch wants to see a thorough national security review of the deal, one that goes beyond the usual focus on weapons technology to include energy security. 'Our Army, Navy and Air Force run on oil,' he explained. Oil is the ultimate geopolitical commodity - it is 'The Prize,' as Daniel Yergin titled his epic history of petroleum and international politics. And even if Cnooc fails to grab Unocal, the pursuit has pushed the two sides of the Chinese challenge together and into the spotlight of public debate. For China is both an engine of economic globalization and an emerging military power. In symbolic shorthand, it is Wal-Mart with an army. The two sides aren't neatly divided. But those who focus on economics tend to see partnership, cooperation and reasons for optimism despite tensions, while security experts are more pessimistic and anticipate strategic conflict as the likely future for two political systems that are so different. In China, there are also two camps - the security hawks and the economic modernists, according to China analysts. The modernists see China joining the United States as the second great economic power of the 21st century, and the two nations sharing the gains from increased trade ties and global growth. The hawks regard that view as naïve, and fret that American policy is to remain the world's only superpower and to curb China's rise. So China's response, the hawks say, is to try to erode United States hegemony and reduce America's power to hold China down. Both faces of China have been evident recently. Two weeks ago, a senior Chinese military official, Maj. Gen. Zhu Chenghu, said China should use nuclear weapons against the United States if the American military intervenes in any conflict over Taiwan. Then, bowing to pressure from the United States and other trading partners, China announced last Thursday that it would no longer peg its currency tightly to the dollar. It is a measured step, and it will not do much to moderate China's huge trade surplus with the United States anytime soon. But the move is a sign of flexibility and accommodation. 'Do we see each other inevitably as antagonists, or do we see a world of globalization from which both sides benefit? That is the big issue,' said Kenneth Lieberthal, a senior official in the National Security Council during the Clinton administration. 'And that framework, one way or another,' added Mr. Lieberthal, a China analyst and a professor at the University of Michigan business school, 'will drive an enormous number of policy decisions.' So that is the China question: Is it an opportunity or a threat? If nothing else, the Cnooc bid for Unocal has shown how unsettled American thinking is on China and how deep the anxieties run, both in matters of national security and trade. It is easy to dismiss Washington as a hot-air factory, but the scope of the outcry in Congress is significant. Resolutions and legislative proposals, all critical of Cnooc's takeover bid, have piled up in the House and Senate, from Republicans and Democrats. A resolution presented last month by Representative Richard W. Pombo, a California Republican, declared that permitting the Chinese company to buy Unocal would 'threaten to impair the national security of the United States.' It passed, 398 to 15. Senator Byron Dorgan, a North Dakota Democrat, has drafted three pieces of anti-Cnooc legislation that range from calling for a six-month Congressional inquiry into the bid to a bill that would prohibit the deal. Mr. Dorgan objects to the Chinese move on fair-trade grounds. The Chinese government, he says, would not allow an American company to buy a Chinese oil company. 'So why on earth should they be able to buy an American oil company?' Mr. Dorgan said. Yet the Chinese takeover bid taps into a deeper concern about trade and globalization for Mr. Dorgan. He talks of manufacturing jobs lost to China, intellectual-property pirates in China illegally copying American movies and software, and a trade deficit with China that is rising astronomically with no end in sight. 'Trade should be mutually beneficial, and it is certainly not with China,' Mr. Dorgan said. The tempest in Congress has increased the political risks surrounding the Cnooc bid. At $18.5 billion, the bid remains higher than Chevron's sweetened offer of $17 billion. But Wall Street analysts say Cnooc will have to go higher to have a chance to win, offering a sizable premium over the Chevron bid to compensate for delays of a government review of the Chinese offer or even the possibility that Washington may block a Chinese deal. It would be an extreme step, but Congress has the power to 'regulate commerce with foreign nations,' under Article I, Section 8 of the Constitution. 'My sense is that Congress is not going to stand still for a Cnooc takeover being approved,' said C. Richard D'Amato, chairman of the United States-China Economic and Security Review Commission, an advisory group to Congress. 'That is the political reality.' Cnooc and its advisers misread the political environment in Washington. Fu Chengyu, the Cnooc chairman who earned a graduate degree from the University of Southern California, has said he was surprised by the intensity of political criticism. Cnooc's path would have been smoother if it had joined with an American oil company as a partner in its bid, an option that was considered briefly but rejected, according to a person close to the company. The idea, the person said, would have been that the American company would acquire Unocal's assets in the United States, while Cnooc took the main prize in the deal - Unocal's offshore natural gas fields in Asia and its expertise in offshore exploration and production. The gas reserves and skill are considered strategic to China's goal of moving away from coal and generating 20 percent of the nation's electricity from natural gas by 2020. 'It would have been better to have not made this big move a head-on attack, to have linked up with an American partner so the deal would have been less threatening and less a lightning rod for China politics in the United States,' the person said. Perhaps, but many economists and trade specialists contend that the American angst over the Cnooc bid says more about the United States than it does about China or Cnooc's tactics. 'All this really points to the anxieties about globalization in our own society,' said Clyde V. Prestowitz, a trade official in the Reagan administration and president of the Economic Strategy Institute in Washington. 'We are so economically interdependent with China now and we chose that path.' Washington pushed for China's integration into the international economy and its entry into the World Trade Organization in 2001. American companies have farmed out much of their manufacturing to Chinese factories. American consumers have been on a Chinese shopping spree for years, buying everything from clothes to computers made there. That is why the United States had a record $162 billion trade deficit with China last year. China sits on $700 billion in foreign exchange reserves, mostly in dollars. It recycles those funds in good part by investing in United States Treasury bonds; that keeps American interest rates low, fueling the real estate boom. 'We handed China the money they are using to try to buy Unocal,' said Mr. Prestowitz, author of a new book on the shift of wealth and power to Asia, 'Three Billion New Capitalists' (Basic Books, 2005). 'And now we're telling the Chinese, please keep investing in our bonds but you can't invest what amounts to a sliver of their surplus in an oil company. That's really confused and hypocritical on our part.' Where others see muddle, R. James Woolsey, director of the Central Intelligence Agency in the Clinton administration, sees strategic clarity in challenging the Cnooc bid. Oil is a globally traded commodity, Mr. Woolsey concedes, but it is also a strategic resource in a market that is tightening because of rising demand from fast-growing nations like China and India. That, Mr. Woolsey says, is before one begins thinking of the possible impact of, say, an act of terrorist sabotage in a crucial Middle East oil field. 'China is realistically assuming there may be a shortage of oil,' said Mr. Woolsey, a vice president in the Booz Allen Hamilton consulting firm. In China, Mr. Woolsey sees a nation with military ambitions to challenge the United States, and a political system with little regard for human rights and free speech. Cnooc, in Mr. Woolsey's view, is the corporate vehicle of 'a Communist dictatorship.' The Cnooc move, according to Frank Gaffney Jr., a senior Defense Department official in the Reagan administration, is a step to ensure that China has the resources for its overarching national design. 'China's strategy is to supplant the United States as the premier economic power in the world and, should it become necessary, defeat us militarily,' said Mr. Gaffney, president of the Center for Security Policy. The strategic concern was much narrower at William Blair & Company. Until recently, William Blair, the investment firm in Chicago, was the largest outside shareholder in Cnooc, which is majority-owned by the Chinese government. But William Blair sold off its stake, worth about $160 million, in recent weeks because of worries that Cnooc was behaving too much like a state-owned company and not enough like a capitalist enterprise trying to maximize returns to shareholders, explained David Merjan, a fund manager at the firm. The pricey bid for Unocal, Mr. Merjan said, raised doubts about how independent Cnooc really was from the Chinese government. 'If China is going to sell shares in a company like Cnooc to outside shareholders, it should not be run for the benefit of Chinese economic policy,' Mr. Merjan said. CNOOC and its pursuit of Unocal, it seems, are part of China's evolutionary path. Cnooc is playing its hand with plenty of government help, about $7 billion in loans on terms Western oil companies could not hope to get. Accordingly, Cnooc may be willing and able to overpay. Yes, China is hunting for oil and gas assets around the world as a national priority. Still, that is happening in a nation that is drifting steadily toward a market economy, though one with more central control than Americans view as a free-market economy. The Chinese Communist Party, with 60 million members - more than the population of France - does guide the economy, if less and less over time. 'But think of it as the Chinese bureaucratic capitalist party,' said Mr. Lieberthal of the University of Michigan. 'It has nothing really to do with Communism.' Mr. Lieberthal counts himself as among the optimists on China. Globalization, he says, and continued integration of the Chinese and American economies can work to mutual benefit. The spread of middle-class affluence and education across more of the Chinese population should eventually be a force for democratic liberalization, following the pattern of Taiwan and South Korea. 'Am I a hundred percent sure I'm right? No, but that's the long-term bet I'd make,' Mr. Lieberthal said. 'And if you let the pessimists - the people who believe that the U.S. and China will inevitably be enemies - drive policy, then the outcome will be the one they predict.'

Subject: The Internal Deficit From: Terri To: All Date Posted: Sun, Jul 24, 2005 at 09:20:08 (EDT) Email Address: Not Provided Message: This is a deceptive year in which the strong growth we are experiencing along with measures such as the partial tax holiday for profits earned abroad will bring in more revenue than had been estimated, but supply side economics is not 'working.' The structural deficit is real, and there will come a time when taxes will have to be raised to meet our debt. There will be a difficult political and possibly economic time to say the least. No matter how fast we grow we can not grow as fast as China or India, and we can not grow out of our structural deficit.

Subject: Where is There a Housing Substitute? From: Jennifer To: All Date Posted: Sat, Jul 23, 2005 at 10:04:56 (EDT) Email Address: Not Provided Message: Should we be asking what will or can replace housing as an economic driver? I can not imagine that housing and housing related gains can continue at anywhere near such levels as in the last 5 to 10 years. The problem is imagining what might substitute for a slowing housing sector.

Subject: 19th century America From: johnny5 To: Jennifer Date Posted: Sat, Jul 23, 2005 at 14:14:44 (EDT) Email Address: johnny5@yahoo.com Message: The third world must bring domestic demand and living standards closer to thier first world brethern - as america had to come up to the standards of england in years past - what other option for growth is there? Will resources keep pace?

Subject: Re: 19th century America From: Emma To: johnny5 Date Posted: Sat, Jul 23, 2005 at 17:12:12 (EDT) Email Address: Not Provided Message: Excellent questions. I would suggest there is no other option than convergence of living standards in a peaceful world. As for sufficient resources, until we know differently we can suppose the answer is 'yes.'

Subject: Re: 19th century America From: Emma To: Emma Date Posted: Sat, Jul 23, 2005 at 17:15:16 (EDT) Email Address: Not Provided Message: Convergence is what finally appears to be happening with China and hopefully India. I hedge about India because there are difficult pockets of poverty, probably more so than in China. Still there must be an evenness of development to some extent in China and India.

Subject: Re: 19th century America From: Jennifer To: Emma Date Posted: Sat, Jul 23, 2005 at 17:28:50 (EDT) Email Address: Not Provided Message: Johnny, I too agree completely with the need for more growth in poorer countries. As for resources, so far that is not the problem but conservation is essential and hard hard hard to come by.

Subject: Re: 19th century America From: Jennifer To: Jennifer Date Posted: Sat, Jul 23, 2005 at 17:54:54 (EDT) Email Address: Not Provided Message: We can only be aided if China and India continue their growth surge for many years to come. This would be a fine subject for Paul Krugman to explore, but can can do so as well.

Subject: To understand what's... From: Pete Weis To: Jennifer Date Posted: Sun, Jul 24, 2005 at 11:52:26 (EDT) Email Address: Not Provided Message: ahead for America, we must understand why we were so successful in the past and ask ourselves - is what made us economically successful in the past still there, and can we get it back if we have lost it (?).

Subject: Where Does Our Income Go? From: Terri To: All Date Posted: Sat, Jul 23, 2005 at 09:39:56 (EDT) Email Address: Not Provided Message: Much of the problem with the continual trade deficit is not that it will foster a crisis, but that we continually lose control of the proceeds of our assets so we have to pay more and more of a share of national income abroad rather than collect income from abroad.

Subject: Whether or not.... From: Pete Weis To: Terri Date Posted: Sun, Jul 24, 2005 at 11:57:00 (EDT) Email Address: Not Provided Message: our trade deficit becomes a 'crisis' is not in our hands, but rather, in the hands of our creditors.

Subject: China and the U.S. Embark From: Emma To: All Date Posted: Sat, Jul 23, 2005 at 08:26:27 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/23/business/worldbusiness/23dollar.html? China and the U.S. Embark on a Perilous Trip By LOUIS UCHITELLE The dollar may be on a healthier course for now, but that does not silence the prophets of doom who fear a collapse of the currency or some other economic crisis as Americans continue to buy far more abroad than they sell. The question is, Are those who see catastrophe ahead Cassandras accurately foretelling the future or Chicken Littles, wrong yet again about the dangers of a falling dollar? The announcement from China on Thursday that it would, at long last, raise the value of the yuan against the dollar and continue to do so gradually quiets the alarmists for the moment. Thanks to the revaluation, no one can claim that the sky is falling - at least this weekend. 'The Chicken Littles are really wrong,' said James Glassman, chief domestic economist at J. P. Morgan Chase. But such criticism hasn't stopped the Cassandras from pressing their case. Even gradually reducing the value of the dollar by an amount large enough - say 30 percent to 40 percent - so that Americans are finally discouraged from buying increasingly expensive Asian goods, may have unpleasant consequences. Among other dangers there is the risk that China will cut back on its purchases of American government securities, contributing to a sharp rise in long-term interest rates. The Cassandras who hold this view are a distinct minority, like their original in ancient Greece. Still, the most prominent, like Paul A. Volcker, the former Federal Reserve Board chairman, are hard to ignore. 'The circumstances seem to be as dangerous and intractable as any I can remember,' Mr. Volcker said Thursday, repeating an earlier warning in a February speech. 'If people lose confidence in the dollar as a store of value, or lose confidence in the political strength of the United States relative to other countries, there is going to be trouble. I'm not saying a crisis is inevitable or that an orderly adjustment is impossible, but at some point big adjustments will have to be made.' The problem stems from America's persistent buying of much more from other countries, particularly China and Japan, than those countries purchase from the United States. The payment for the imports is in dollars, and because the foreigners do not use all of the dollars to make offsetting purchases here, they lend the excess back to Americans, who then use the loans to purchase more from abroad. That satisfies this country's desire to consume and Asia's desire to step up production and employment for its vast population. But America's indebtedness to the rest of the world is rising at an annual rate approaching $700 billion. Everyone agrees that this indebtedness cannot continue to go up indefinitely. But while the pessimists see a sharp painful correction in the not-so-distant future, the optimists, a camp that includes the Bush administration and much of Wall Street, argue that the present arrangement is quite sustainable. 'The Asians have no choice but to hold onto our dollars,' Mr. Glassman said. 'If they dumped them, they would be jeopardizing their own development.' To which Stephen S. Roach, chief economist at Morgan Stanley - whom many on Wall Street view as too pessimistic - replies: 'Because nothing bad has happened yet, there is a growing conviction that nothing bad will happen.' The revaluation that the Chinese initiated Thursday, even if it is the first step in what turns out to be an orderly devaluation of the dollar against the yuan and other Asian currencies, is not by itself enough to resolve the imbalance in America's international accounts. The challenge will come once the price of imports begins to rise. At that point, Americans will have to produce for themselves much more of what they consume - or pay a lot more for the privilege of importing. Ideally, the process would involve America's becoming a much bigger producing nation, even stepping up its exports to Asia, while Asia - and especially China - takes on more of the role of consumer. That is essentially the view of the Bush administration as outlined by Ben S. Bernanke, the newly appointed chairman of President Bush's Council of Economic Advisers. 'We probably have little choice except to be patient as we work to create' the necessary conditions for a reversal of roles, he said in a recent speech. That is not an easy transformation. Americans now produce only about 75 percent of the merchandise they purchase, importing the rest. That is down from 90 percent or so a decade ago, according to various studies. The percentage was even higher in the late 1980's, the last time the dollar went through a long, similarly managed decline - in those pre-euro days - against the German, French and Japanese currencies. As the dollar fell, manufacturing did revive in the United States. Exports jumped and the trade deficit shrank, but the interest rate manipulation involved in managing the currency helped to produce the stock market crash in October 1987, or so some economists argue. This time the housing bubble could burst if the flow of dollars lent from Asia were to slow too abruptly. The result would be a shortage of money to lend and a rise in mortgage interest rates, which are tied to the yields on the Treasuries that the Japanese and Chinese often buy in the lending process. That would not be a happy ending, but Henry Kaufman, the economist and money manager - reflecting the optimism on Wall Street that revaluation and gradual adjustment will work - argues that China and Japan benefit in other lucrative ways from lending to the United States. For the Chinese, acquiring Treasuries strengthens the capital base of their shaky banking system. The Japanese government, for its part, turns a profit. 'It has a budget deficit of, say, $300 billion, which it funds by borrowing from the Japanese people at 1 percent,' Mr. Kaufman said. 'That money is reinvested in Treasuries at 3 percent or so, giving the Japanese two percentage points' profit. If the dollar were to weaken they would lose money. Why would they want to lose money?'

Subject: Analysts or Economists From: Terri To: Emma Date Posted: Sat, Jul 23, 2005 at 09:12:14 (EDT) Email Address: Not Provided Message: Wall Street is sanguine but I am certainly not. If ever there was a time to be cautious with a portfolio, this is such a time. We are in a fine bull market but realizing the gains has fortunately taken a conservative approach. So, I invest and worry.

Subject: Housing Speculation From: Terri To: All Date Posted: Fri, Jul 22, 2005 at 22:22:29 (EDT) Email Address: Not Provided Message: How long can houses bought for speculation either keep rising in price or bring enough rent to pay for the mortgage? The answer here may be gained in watching the performance of the Vanguard REIT Index, as I have suggested. REITs are making gains based almost solely on price increases for real estate, not on operating earnings or rents. There is the problem.

Subject: What are Dollar Reserves Worth? From: Terri To: All Date Posted: Fri, Jul 22, 2005 at 17:54:26 (EDT) Email Address: Not Provided Message: The problem with a substantial decline in the value of the dollar is that China will lose a vast amount in value of its dollar reserves, but Paul Krugman indicated that dollar reserves are being wasted now when they need to be used for development. What a dilemma.

Subject: Affect on China's reserves and on the dollar From: David E.. To: Terri Date Posted: Sat, Jul 23, 2005 at 23:23:42 (EDT) Email Address: Not Provided Message: My understanding is that dollar reserves of China is close to $1 trillion. If the dollar is 40% overvalued(a number used by some). The chinese stand to lose $400 billion. This market basket thing is very clever, purchase of dollar reserves will not drop only 2%. If the currency market basket is 1/3 US dollars, the demand for dollars will drop by two thirds. This means that if the chinese demand for dollars is $300 billion (kinda close to current chinese purchases) - purchases of dollar bonds will drop by $200 billion a year. That is a 60% drop in US govt dollar bond purchases. I think the effect is going to be much more dramatic than the 2% everybody is talking about. President Bush is finally going to feel budget pressure. $200 billion will chew up the current one-time up blip of $100 billion. And a $200 billion a year additional shortfall in the years to come should put pressure on rates.

Subject: Re: What are Dollar Reserves Worth? From: Jennifer To: Terri Date Posted: Fri, Jul 22, 2005 at 21:21:43 (EDT) Email Address: Not Provided Message: The markets accepted the apparent but slight policy change by China with a flurry of adjustment then the same sort of stability we have grown used to. There is just no volatility to these markets. Nonetheless this reinforces my sense of a need to be highly conservative, highly value oriented, in investing. I ask myself how will my portfolio fare with a 5% long term Treasury bond, for instance.

Subject: Re: What are Dollar Reserves Worth? From: Pete Weis To: Jennifer Date Posted: Fri, Jul 22, 2005 at 22:24:59 (EDT) Email Address: Not Provided Message: The only reason for the Chinese to increase their dollar reserves by buying more US treasuries is the US consumer and his/her relative importance to the Chinese economy. The US consumer is primarily being propped up by the US housing market from which he/she can extract money to hold their spending above their aggregate earnings. Once the US housing market begins to 'fall of its own weight' as Robert Shiller puts it, the US consumer begins to pack it in. As the US consumer begins to be less and less important to the Chinese they begin to spend more and more of their dollar reserves on things which are more tangible like increasing oil reserves or locking up the rights to more and more of the world's dwindling natural resources or. This causes the dollar to fall more steeply making it ever less desirable to hold onto. The world is flooded with US dollars - much of it borrowed.

Subject: Re: What are Dollar Reserves Worth? From: Jennifer To: Pete Weis Date Posted: Sat, Jul 23, 2005 at 11:38:19 (EDT) Email Address: Not Provided Message: I understand the danger you so well describe, though I do not think the world is flooded with dollars or I am not certain how to know whether this is so. Please keep thinking all of this through, as I am.

Subject: Flooding the world with US$ From: Pete Weis To: Jennifer Date Posted: Sun, Jul 24, 2005 at 15:47:12 (EDT) Email Address: Not Provided Message: US dollars represent about 70% of global reserve currency. In the early 90's the US dollar represented around 50%. The US produces about 12% (in dollar value) of the world's exports and consumes just over 18% of the world's imports which represents most of the approximately 6% current account deficit. This 6% gap which is getting larger over time, is increasing the worldwide volume of dollars relative to US production.

Subject: Where Can We Go From Here? From: Terri To: All Date Posted: Fri, Jul 22, 2005 at 17:35:40 (EDT) Email Address: Not Provided Message: Paul Krugman is arguing that China is acting as it is because the currency peg was successful during the Asian crisis and China has been growing well since, but the peg is not in China's interest. Then we are simply getting along through a policy error, and in time there must be a reckoning. I wish I could argue with Krugman, but I agree. We are troubled. The stock and bond markets threw off the announcement by China in a day, but this does not ease the problem in the slightest.

Subject: Housing Housing From: Jennifer To: Terri Date Posted: Fri, Jul 22, 2005 at 17:46:53 (EDT) Email Address: Not Provided Message: Remember too that Krugman is concerned about housing prices and accepts that we have a bubble in housing prices. I watch REIT prices bounce around when there is any instability in interest rates and I fear we will have problems if rates ever do rise significantly.

Subject: Re: Housing Housing From: Pete Weis To: Jennifer Date Posted: Fri, Jul 22, 2005 at 21:49:55 (EDT) Email Address: Not Provided Message: From Forbes: The Prick That Bursts The Housing Bubble A. Gary Shilling, 07.21.05, 1:00 PM ET The housing bubble is not local, but national—not surprising since it's driven by economy-wide forces: investor zeal for high returns but skepticism over stocks, ample cheap mortgage money and lax lending standards. Indeed, these forces and the housing boom are global. Earlier U.S. housing booms-busts were driven by local business cycles such as the rise and fall of the oil patch along with oil prices in the 1970s and 1980s. Since houses are much more widely owned than stocks, the bubble's likely demise will shake the economy more than the early 2000s bear market. It could change the good deflation of excess supply we foresee to the bad deflation of deficient demand. The most likely bubble-pricking pin is massive speculation itself, and as prospective buyers stand aside, mounting inventories will precipitate a downward price spiral. Signs of a peak in housing are significant and growing. Just as The Economist’s Dec. 4 to 10, 2004 cover story on the dollar’s demise triggered our forecast that the buck was about to rally (see “2005 Investment Themes,” Feb. 2005 Insight), the Time magazine June 13 cover story, “Home $weet Home,” is a superb indicator that the housing play is about over. By the time the editors of Time realize that a fad or the popularity of an individual is important enough to warrant a cover story, the end is nigh. In any event, investors remain complacent, apparently convinced that there is no bubble or, if there is one, that it will continue to expand for some time—and even then not burst but rather slowly deflate. Witness the persistent upward trend in conventional home builder stocks (see chart below). Sure, these stocks sell at low price-to-earnings ratios and may appear cheap, but if home building slows substantially, their earnings will evaporate. Special Offer:Economist and Forbes columnist A. Gary Shilling makes money for his subscribers by going against the grain—and he's usually right! He was out of tech stocks by 1999. He caught the bond rally in 2004 and in the first half of 2005, and last December he called the dollar's rally in 2005. Click here for Shilling's major global investment themes for the second half of 2005. A spike in mortgage rates, reversing their long and housing-friendly decline, would kill housing, and most housing bears assume this will be the bubble’s downfall. True, the Fed is raising the short-term interest rates it controls, but we expect a recession and a Fed reversal within a year or so. Meanwhile, the many adjustable-rate mortgages that don’t adjust for several years after inception will not have moved up to painful interest levels. And we don’t look for big leaps in long-term interest rates with a softer economy ahead and deflation looming, but quite the reverse (see “There’s Still Time, Brother,” June 2005 Insight). So, contrary to widespread opinion, we don’t see rising interest rates as the cause of the housing bubble’s demise. The housing bubble could end if the low-end first-time home buyerswho made down paymentsof3% or less under government-sponsored programs engineered by Fannie Mae (nyse: FNM - news - people ) and Freddie Mac (nyse: FRE - news - people ) lost their jobs and consequently were frozen out of the market. Then their plight would ripple up the move-up market, as those planning to buy more expensive houseswouldn't be able tosell their existing abodes at their hoped-for prices. Already, the delinquency rates of these low-income, minority and young folks, most of whose mortgages are insured by the Federal Housing Authority, have jumped. It probably would take a recession, spawned elsewhere, however, to create the unemployment needed to activate this housing bubble pricking pin. Finally, extreme speculation and excessive investment may finally sink the housing ship. During speculations, the participants see nothing but shortages and insufficient inventories. Housing today is no exception. Publicly-owned home builders assure stockholders that they build only to firm orders, with virtually no inventories. Note, however, that home builder Toll Brothers’ (nyse: TOL - news - people )CEO recently bragged about the firm’s high level of non-binding deposits—essentially reservations for new houses that prospective buyers can cancel and reclaim their money. Speculators assure themselves and all who will listen that they are long-term real estate investors, but many of those houses are rented at less than profitable returns, and only make economic sense if prices continue to rise rapidly. AnNational Association of Realtorseconomist said that “house price appreciation over the last three years has been nearly 20% nationwide in each of the years, and that implies there is a housing shortage.” Well, sure, a shortage relative to insatiable and self-feeding speculative demand. Special Offer: The Prudent Speculator TechValue Report focuses squarely on timely opportunities in the technology sector, using the same principles of value investing that have made the Prudent Speculator the top-ranked investment newsletter over the past 20 years. Click here for TechValue's 25-stock Buy List. But in past bubbles, even the starry-eyed speculators finally realized that huge excesses had been built, and shortages became surpluses overnight as they dumped their holdings on the market, depressing prices in a self-feeding cycle. In addition, when buyers disappear, the supply chain can never be shut off fast enough to avoid huge inventories. And remember that inventory problems are never fully understood by buyers and sellers until they’re huge. What’s different about housing? And even if major builders have avoided excess inventories, how about all those small builders with their pickups who each build only a few houses a year but constitute the bulk of that fragmented industry? Has human nature so changed that they’re resisting the urge to build extra houses amidst the multiyear surge in prices? Inventories of new homes for sale—or existing homes for sale, either—have yet to move up to alarming rates. But what will happen when housing buying dries up while supply increases continue to roll and inventories come out of the woodwork? Many of the houses bought in recent years as investments and now rented at unprofitable rates will be dumped on the market. Look for mounting inventories to precipitate a downward price spiral. During a full-blown housing retreat, the bulls’ argument about strong demographic underpinnings will also be seen as hype, not reality. Indeed, demographics will be rough on housing in the years ahead, at least on primary residences. A large percentage of the population, the postwar babies, now in their 40s and 50s, are all housed. Meanwhile, people in their 20s and 30s, the prime first home buyers, are fewer in number. Special Offer: The war on terror is far from over and security stocks should have a place in your portfolio. For the latest updates on which security stocks to buy and which to avoid, check out the current 'buy' list in Spear's Security Industry Analyst. Trying to predict the timing of any bubble’s end is normally a waste of time, but for the demise of housing mania there are some straws in the wind. In some of the nation’s more tony suburbs, high-priced houses aren’t moving. Also, house prices have gotten so high and rents are so cheap that a number of people are renting apartments. In Chicago, several new luxury condos are suffering weak sales that have forced lenders to pump in new money and developers to reduce their prices. Meanwhile, construction of new condo buildings and conversion of rental apartments continue strong, guaranteeing plenty of supply. Prices of a downtown condo are up 34% in five years to $349,000, and Chicago ranks only behind Miami and San Diego in the number of units to be added this year. Incidentally, we continue to see rental apartments and manufactured house builders as attractive investments because a big decline in single-family house prices will convince many that a huge house and a great investment are no longer one and the same.

Subject: Whoops! From: Pete Weis To: Pete Weis Date Posted: Sat, Jul 23, 2005 at 00:48:23 (EDT) Email Address: Not Provided Message: Neglected to remove the advertising in the middle of the article regarding the 'special offer'!

Subject: wow! From: DYlan To: All Date Posted: Fri, Jul 22, 2005 at 16:07:34 (EDT) Email Address: focusdylan@aol.com Message: Hey, this is a great website. Thank you for your honesty Paul

Subject: Re: wow! From: Jennifer To: DYlan Date Posted: Fri, Jul 22, 2005 at 17:38:08 (EDT) Email Address: Not Provided Message: Please then join us and we can try to learn together. Paul Krugman is a terrific teacher, and there are others here from whom I always learn. Krugman ranges from food to foreign affairs. How exciting.

Subject: Re: wow! From: Emma To: Jennifer Date Posted: Fri, Jul 22, 2005 at 19:24:11 (EDT) Email Address: Not Provided Message: Welcome. Please do contribute.

Subject: Is There a Debt Problem? From: Terri To: All Date Posted: Fri, Jul 22, 2005 at 15:23:34 (EDT) Email Address: Not Provided Message: Paul Krugman thinks back to the Spain of Philip II, but we are not really the Spain of any era, yet I can not imagine a world power that in several hundred years has left itself dependent on international financing to meet its obligations. We have a serious internal and external debt problem. We may continue accumulating foreign debt for years to come, but basically what we are doing as Warren Buffett has pointed out is selling off assets internationally to support current consumption levels and there must be a limit somewhere.

Subject: Yes and..... From: Pete Weis To: Terri Date Posted: Sat, Jul 23, 2005 at 00:53:02 (EDT) Email Address: Not Provided Message: 'we may continue accumulating foreign debt for years to come' only if American consumers can continue to service the debt they already have and take on more debt 'for years to come'.

Subject: Chinese and American Investment From: Terri To: All Date Posted: Fri, Jul 22, 2005 at 14:56:28 (EDT) Email Address: Not Provided Message: The investment relationship between China and America is astonishing. American households save little, the Chinese save a lot. The Chinese are using their household saving to finance our spending even though we are far more developed than China. We should be investing heavily in China and the Chinese should be investing at home as well as the gulf in development between our countries is narrowed. Now there is American investment in China, since corporate saving is high and corporations are investing in China. Also, there is substantial infra-structure investment in China by the communist government. But, there is this curious purchase of dollars by the Bank of China that would seem to run counter to her own interests and still no telling how long such purchases will go on.

Subject: Perriconology From: Emma To: All Date Posted: Fri, Jul 22, 2005 at 14:22:05 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/02/06/magazine/06PERRICONE.html?ex=1265432400&en=373276db61a5b6ec&ei=5090&partner=rssuserland Perriconology By ALEX WITCHEL How old do you think I am?'' This is the kind of question Nicholas V. Perricone M.D. is often asked -- but only by women convinced they look good enough to ask it. There were more than a few of them at a recent book-signing at the Barnes & Noble store on Fifth Avenue in Manhattan, and by now this dermatologist knows enough to aim low. ''Forty-two,'' he guessed, somewhat charitably. ''Fifty-three in April,'' she trilled. ''This is really prescient that you're here today, because I have the hots for someone 20 years younger than me. My grandfather died at 99, and his doctor said he looked like a man of 60.'' Perricone, 56, signed her copy of his latest best seller, ''The Perricone Promise,'' which explains his three-tiered anti-aging program -- diet, topicals and nutritional supplements -- and allowed himself a small smile. ''If you're going to live till 99, maybe you should go for someone 30 years younger,'' he suggested. A middle-aged blond woman was next, clutching a piece of paper that listed the products she uses on her face. She leaned across the table toward Perricone, her voice pitched low. ''I would do anything to get an appointment with you,'' she said intensely. The doctor seemed alarmed until she giggled. ''Well, almost anything,'' she amended. He looked at the paper and shook his head. ''Go across the street to Sephora,'' he said. ''My products are over there, and someone will help you get this straightened out.'' She ran. O.K., so who doesn't want to look younger, especially without resorting to the risks and expense of plastic surgery? As the French say, after 40 a woman has to choose between her face and her fanny, and Perricone maintains that a little weight makes the face look younger. There is no starvation on his diet, though you do have to balance among fruits and vegetables high in antioxidants; protein, which for Perricone means an inordinate amount of wild salmon (''I've got gills now,'' one woman told him); and nuts and oils -- and still more salmon -- for essential fatty acids. And though you can't pile on the pasta, you can eat dark chocolate and cheat on Fridays. Along with the diet, which he has flogged in all three of his best-selling books (2.4 million in print), including ''The Perricone Prescription'' and ''The Wrinkle Cure,'' he discusses his theories about aging, which have proved controversial in the academic medical community. Perricone says that aging is a progressive inflammatory disease that occurs at the cellular level of the body but that it can be controlled by what you eat. ''Wrinkled, sagging skin is not the inevitable result of growing older,'' he writes. ''It's a disease, and you can fight it.'' Statements like these have set some doctors wondering if Perricone's scientific research is as expert as his marketing department. In addition to changing what you eat, he advocates using the topical treatments and nutritional supplements he has formulated through the years, both of which contain anti-inflammatory peptides and neuropeptides. He writes that these are proteinlike substances with the ability to ''increase production of collagen and elastin,'' ''repair scars and wrinkles'' and ''increase circulation, resulting in breathtaking radiance and glow.'' The products are sold in more than 230 outlets, everywhere from Neiman Marcus to QVC, and Perricone says 70 percent of the people who use them are women. A flagship store at 791 Madison Avenue, scheduled to open last fall, was delayed because of construction problems and is to open next month. Perricone already has the West Coast glowing with customers like Jennifer Lopez, Julia Roberts and Jennifer Aniston. And internationally, the line is sold in six countries, with four more scheduled for later this year. People certainly seem to like what he makes: annual sales have grown from $3 million in 2000 to $50 million in 2004. So, what's his big secret? Hard to say, exactly, but a two-pronged television campaign has been an enormous factor in fueling sales. The show-biz part of his pitch is an illustration of the three-day version of his diet that shows before and after shots of people willing to switch from cheeseburgers and beer to salmon, lettuce and water for 72 hours. The camera shows an inevitable loss of bloating, including a firmer jaw line and a usually recognizable radiance that Perricone says comes from the salmon. This demonstration has earned oohs and aahs on ''Oprah,'' the ''Today'' show and ''Good Morning America.'' The pseudo-intellectual part is the lectures he has given on PBS during its national fund-raising drives since 2001, in which he discusses his anti-aging theories. He got that gig, he said, after a PBS producer saw him tape the talk show ''Open Book'' for A&E. Then there's the doctor himself. The second of five children born to a bricklayer in a small town near New Haven, he has not even a whiff of the snob about him. Though his belief in his theories borders on the monomaniacal (his science experiments began at age 6), his social manner is low-key and unfailingly pleasant. At 5-foot-10 and a solid 200 pounds, he favors the kind of custom-made suits worn by professional athletes, cut to accentuate the broad shoulders of a weight lifter. The collars on his shirts are as stiff and snowy as a nurse's cap, the cuff links are golden and so is the watch. The shoes are a rich, shining leather (even in an ice storm), and the hair is filled with product. If he owned a Super Bowl ring, he would be dais-ready for the Heisman Trophy dinner. With the book signing finished, Perricone, with at least a dozen of his employees who had come for no apparent reason and stood around doing nothing for a full hour, headed across the street to Sephora, the retail beauty chain. This took some time, actually. When others started to cross against the light, one of Perricone's two bodyguards put a restraining arm in front of the doctor's chest, holding him in place. When Perricone did enter the store, he was greeted by rousing applause. One saleswoman placed her hand over her heart. ''I love all your products, but I especially love your lip plumper,'' said a woman with lips to rival Mick Jagger's. ''I use it all the time.'' Perricone was quickly surrounded by Sephora staffers and customers. Among the white women at least, there was a uniform look to their faces: a pinkness in the skin and an unmistakable glow that conjured memories of prom night. Granted, these women were not past their 40's, but the effect was pronounced. The twice-divorced Perricone posed for photographs amid a considerable display of swinging hair and gleaming teeth. The blond woman who had given him her list of products now held two Sephora bags. ''I've got an appointment in three weeks with a plastic, but I want to try him first,'' she confided. ''He's got the reputation to be the best.'' And how does she know that, exactly? She shrugged. ''Oprah. Reading online at his Web site.'' Her friend interjected: ''A lot of it is common sense. But it doesn't hurt you, and it's fun.'' The blond woman nodded. ''Besides,'' she added, ''why would all the celebrities use his products if they didn't love him?'' n a snowy January morning, Perricone gave me a tour of the Stony Creek section of Branford, Conn., where he grew up. ''Our house is demolished,'' he said. ''There's a Stop & Shop in its place.'' His parents, Vincent, 81, and Mary, 80, have been married for 59 years and live nearby. One sister, a lawyer, is general counsel to Perricone's corporation. He pointed to another house. ''I mowed that lawn for $3.25, a huge amount of money then. And that's the church where I made my confirmation.'' We also passed what used to be the Stony Creek School, which he attended before going on to East Haven High School and graduating as an English major from the University of New Haven. He gestured toward a low green building. ''That was a garage, and my brother and I used to sneak in there and sit in the Bentleys and Rolls-Royces,'' he said. ''That leather smelled so great.'' A beat later, as he realized the conversation was poised to turn toward his newfound wealth, he shifted focus to his two pet projects. The first is a $5 million gift to his medical-school alma mater, Michigan State University, to endow a nutritionally oriented dermatology department. The second is a pledge of $1.2 million to the Catholic World Mission to establish a community center, school and health clinic on the outskirts of S-o Paulo, Brazil, to house and educate children and pregnant teenagers and protect them from the violent drug culture there. His involvement in this program earned him an audience with the pope. We soon arrived at Perricone headquarters in Meriden, a squat, modern building that has been home to 50 employees for only six months. (Perricone still sees a handful of patients, but his focus is now on his business.) As he walked through the office, you could see the tiny jolts in the spines of his workers as they spotted him in residence, walking down long hallways lined with framed copies of his patents. In his own captain-of-industry corner office, Perricone discovered that his new wooden desk, inlaid with physics formulas etched in gold leaf, had just arrived. The only personal touches were photographs of his two grown sons from his first marriage and his 8-year-old daughter, Caitlin, from his second. When Perricone talks about his success, the tale often carries the slightly disingenuous ring of the Hollywood starlet, the one who picks up the phone and gets an instantaneous offer, or shows up somewhere and is plucked immediately from the crowd. Upon closer listening, the story emerges of a man driven by zeal -- and a bulletproof ego -- who believes his personal mission in life is to be a wellness messiah, spreading the good word about his nutritional theories and the products he has created based on them. ''I was going to self-publish the book that became 'The Wrinkle Cure,' '' he began. (Its original title, he says, was ''Antioxidants as Natural Anti-Inflammatories for Improvement of Cellular Function.'') ''I thought it would be a book for doctors. I was the only one in the country doing topical antioxidant work, and another doctor heard me speak at a seminar and introduced me to his agent. That took me down a different road.'' At the time of the book's publication in 2000, Perricone was an assistant clinical professor of dermatology at the Yale School of Medicine, a title he put on its cover. This bothered some on the Yale faculty, as it seemed to suggest a scientific basis for his findings, even though he had not followed the standard practice of making his research available to his peers for their review. Instead, he relied on his own research on diet, topicals and supplements over a 15-year period, seeing clinical results within his patient base of 15,000 in his general dermatology practice. When I called Dr. Richard Edelson, chairman of dermatology at Yale School of Medicine, for comment, I was referred to the Yale Office of Public Affairs, which gave this statement: ''Dr. Nicholas Perricone held an unpaid appointment as assistant clinical professor of dermatology at Yale School of Medicine. In that capacity he provided oversight to medical students in a clinical setting several times per year. His appointment expired in June 2002.'' I was also told that no one from the medical school would be available to talk about Perricone's theories of aging. It in fact seemed impossible to find any doctor, dermatologist or otherwise, in four different cities, to go on the record when talking about Perricone, pro or con. That he used his medical credentials to sell his diet and products while skipping the peer-review process, seemed, in that world at least, a significant breach. An academic hematologist who has done research for almost 30 years said: ''There is a Pygmalion complex in research where you fall in love with your own work. But the gold standard is, are there objective observers who can verify it? What is the data to support that diet switches off or retards inflammation? Where is the controlled, randomized, independent-observer study? Or is this anecdotal?'' Perricone defended the use of his Yale affiliation on the book's cover, citing other clinical faculty who had done the same. But he acknowledged that it made him a lightning rod for criticism. ''That title of 'Wrinkle Cure' trivialized the contents,'' he said. ''Thousands of academic dermatologists were out there gunning for it.'' Perricone also acknowledged that he had no peer-reviewed research to support his claims for the diet. ''I am not a Ph.D. nutritionist and should not be doing research on nutrition,'' he said. ''I'm standing on the shoulders of other scientists and translating for people. I've gotten the message to millions that eating makes a huge difference in the way you feel. If you're eating salmon now, or taking fish-oil capsules, I've helped you.'' We had settled at a round table in his office where we were served lunch: grilled wild salmon, green salad, mixed vegetables and jasmine green tea. One of Perricone's promises is that you can lose 10 pounds in six weeks just by quitting coffee, which he says boosts insulin and causes inflammation, and drinking green tea instead, which he says speeds the metabolism. Whatever the questions about his scientific methodology, no one has criticized the content of the diet itself. Marion Nestle, professor of nutrition at New York University, had told me: ''The diet is based on scientific ideas that are very current, right at the cutting edge. But to say that food choices are directly responsible for wrinkles? I'm not aware of any nutritional evidence for that. What's so disturbing about 'The Perricone Promise' is the conflict of interest, because he's selling his products at a very high cost.'' When I relayed this to Perricone, he was annoyed. ''The logic doesn't flow,'' he said. ''If I'm recommending lettuce to you and I'm selling creams, what's the conflict?'' Well, just that he is using a diet that looks like many others, the emphasis on salmon excepted, to get people to buy his products. These belong to a relatively new category known as cosmeceuticals and nutriceuticals. Though the terms imply the use of a prescription pharmaceutical, neither one falls under the umbrella of the F.D.A. as a drug. ''We're trying to connote the fact that there's serious scientific research here,'' Perricone said, ''even though it's a cosmetic or a vitamin. Buzzwords like these give people a way to identify products that are moving in the direction of science-based rather than marketing-based.'' One identifying feature is price; a month of Perricone's supplements costs $120. And a two-ounce bottle of a neuropeptide serum costs $570. ''That's only one article that I sell out of 40, which is very effective in terms of making you look more youthful,'' he said. ''The products start as low as $30, but none of them are going to do anything to your internal organs, O.K.? That's why diet is the most important thing, and the rest is optional. You can go to the pharmacy and get an anti-aging cream for $15 or $20. But if it doesn't work, isn't it infinitely expensive?'' It took Perricone 10 years to get his products on the market, beginning with the idea of licensing them. ''I went to every major corporation in the world and presented my research,'' he said, his food forgotten on the plate. ''But no one was willing to utilize it in their products. Finally, a very nice man took me aside and said: 'We make products with oil and water and perfume and we're making outrageous profits. We don't care about efficacy. We don't have to. You're asking me to take expensive components and put them in our products, but it's not going to make a damn difference in the performance of our bottom line.'' Soon after that encounter, in 1996, a discouraged Perricone gave a lecture in Washington about the future of skin-care treatment. Buyers from Nordstrom heard him speak, took his lab samples and asked if they could carry his product line. ''I said, You don't understand; I don't have a line,'' he recalled. He got one soon enough, designing the packaging at his kitchen table. ''It went from 1 to 8 to 16 stores and kept growing,'' he said. ''So that's how I got sucked into the business end. Licensing would have been easier. But I basically feel that I was forced to do it. Otherwise I'd throw away everything I worked on. ''And oh, by the way,'' he added, ''since I became a success, many companies became interested in licensing the technology. Because now they have to compete against something that truly works, and their hype is not going to do it. Over the past four or five years, I'd say I've been approached by 10 major companies to buy my company, offering me hundreds of millions of dollars. The best Ph.D. research people the companies can buy have told me: 'You're the only one that's discovered this. How come you?' But I feel once the company would be taken over, it would be destroyed. They would start diluting the contents and not focus on the diet aspect. And so my whole being would be changed.'' He has certainly had the last laugh, for now. Which has done nothing to mitigate his peers' animosity. One dermatologist said: ''There is so much jealousy in this field. If he wasn't making $50 million and having a star-studded clientele, no one would care. Do you know how many people try to do the same thing and never pull it off? What makes him different is that he did it better.'' Perricone was quick to agree. ''It doesn't make anyone angry that dermatologists are injecting Botox or Restylane into people and making several million dollars a year in their practices,'' he told me. ''But let's complain about Perricone, who's recommending a balanced diet, getting enough sleep, not smoking, doing moderate exercise, taking nutritional supplements and using topicals rather than going for cosmetic surgery.'' He pushed back from the table. ''I appeal to people's vanity because the results of my program are visible, positive. Everything else will happen automatically. You will decrease your risk of heart disease and cancer. Your weight will normalize. Your mood will be elevated. You'll have less need for medications. So that should be our goal. As a physician, you've got to keep people healthy rather than treat the sick.'' He looked distracted for a moment, seeming to mull the criticisms of his work. But glumness isn't his way. ''You know,'' he recalled, ''once, after I had given a lecture at a conference, a fellow scientist told me: 'I just want you to remember one thing. You can always recognize the pioneers by the number of arrows in their back.' '' Perricone's gaze was steady. ''I always keep that in mind.''

Subject: Don't Get Fresh With Me! From: Emma To: All Date Posted: Fri, Jul 22, 2005 at 13:34:40 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/22/opinion/22powell_cm.html?ei=5070&en=a5d61f99d78935cc&ex=1122177600&pagewanted=all Don't Get Fresh With Me! By JULIE POWELL SOME are depressed by the sun deprivation of winter; my anxiety peaks instead at the height of summer. This isn't some sort of seasonal affective disorder-in-reverse. My worsening temper can be calibrated precisely not to the longer days but rather to another unrelenting symbol of the season: the blossoming farmers' market I walk through in Manhattan's Union Square. I confess that half an hour browsing in that utopia of produce - or the new Whole Foods Market at the square's south end - often leaves me longing for the antiseptic but nonjudgmental aisles of low-end supermarkets like Key Food or Western Beef. Don't get me wrong: I love a big, ugly tomato as much as the next girl. I buy my fair share of pencil-thin asparagus and micro-greens, and I'm sure if ever I were to stand in an orchard and taste a peach picked during one of its two days of succulent perfection, I would find it one of life's greatest joys. Perhaps one day I will - if I move to California, where life is apparently just one great organic cornucopia. But even in that exceedingly unlikely event, I'll remain a bit suspicious of this cult of garden-freshness. Through the work of passionate chefs and food advocates like Alice Waters, our anxieties about Frankenfood and rampant obesity have been transformed into a positive movement of pleasurable eating, based on a menu of local, organic foods and a strong support of sustainable agriculture. This style of cuisine, which first cropped up in California and has spread like kudzu across the nation, has caused the proliferation of 'seasonal menus' in restaurants from Washington State to Palm Beach, Fla. The key principle of the movement is to 'treat fine ingredients with respect.' A worthy goal, surely, as is providing healthful food for children and resistance to genetic engineering, antibiotics and hormones. It seems churlish and wrong-headed to mock this dedication; it's like sneering at puppies or true love or democracy. And yet, as admirable as these efforts are, there remains buried in this philosophy two things that just get my hackles up. The first and most dangerous aspect is the temptation of economic elitism. Of course, food has always been about class. In his classic meditation 'The Physiology of Taste,' first published in 1825, Jean-Anthelme Brillat-Savarin suggested a series of three 'gastronomical tests,' menus designed to expose the culinary sensitivity - or lack thereof - of one's dining companions. These are organized according to economic status: you can expect your wealthy friends ('Presumed income: 30,000 francs and more') to salivate at the sight of 'a seven-pound fowl, stuffed round as a ball with Périgord truffles'; while your stevedore buddies will be perfectly satisfied by good sauerkraut. This sort of garden-variety condescension is eternal, and relatively harmless. What makes the snobbery of the organic movement more insidious is that it equates privilege not only with good taste, but also with good ethics. Eat wild Brazil nuts and save the rainforest. Buy more expensive organic fruit for your children and fight the national epidemic of childhood obesity. Support a local farmer and give economic power to responsible stewards of sustainable agriculture. There's nothing wrong with any of these choices, but they do require time and money. When you wed money to decency, you come perilously close to equating penury with immorality. The milk at Whole Foods is hormone-free; the milk at Western Beef is presumably full of the stuff - and substantially less expensive. The chicken at Whole Foods is organic and cage-free; the chicken at Western Beef is not. Is the woman who buys her children's food at the place where they take her food stamps therefore a bad mother? 'That's not cooking, that's shopping.' This epigram has been attributed to Julia Child and several other chefs of an older generation, in reference to the tenets of California Cuisine. It is sometimes used - often pronounced in a snooty French accent or Childean warble - by devotees of the organic movement (like Doug Hamilton, writer and director of the documentary 'Alice Waters and Her Delicious Revolution') to mock these fusty old-school cooks. For the newer generation, a love for traditional fine cuisine is cast as fussy and snobbish, while spending lots of money is, curiously, considered egalitarian and wise. I object to this equation. Shopping is the province of the privileged; fine cooking is not. Indeed, great cuisine arose from privation. The techniques of smoking, drying, salting and roasting were all developed to preserve foods past the 'perfect peach' stage, past the day the vegetable was harvested or the animal butchered, to save for a time of less bounty. Preserved foodstuffs led directly the development of culinary traditions, as people who wanted nothing more than to feed themselves well and with pleasure taught themselves how best to combine ingredients artfully, to create something more than the sum of its parts. (Not to mention that salted fish and smoked meats made possible the ocean voyages that, for instance, introduced Europeans to California.) Classic French sauces were conceived to ennoble less-than-prime beef. A burrito is nothing more than a delicious disguise for inelegant leftovers. Cooking is one of the few actions that verifiably separates us from other animals, and its universality brings us together. This is a sentiment that's been treasured since the dawn of cuisine by people who value the art of eating. And it's not only the ingredients - be they delicate heirloom tomatoes or the stalwart hothouse kind - that we share when we eat well together. There is also the love and creativity and work we combine them with - those human qualities that transform food into cuisine, and eating into a pleasure. WITH his gastronomic tests, Brillat-Savarin sought to find others like himself, of whatever economic status, who truly enjoyed food. It's easy to do the same today, but the method isn't to assume that everyone at Whole Foods is wise and everyone at the Western Beef benighted. Instead, look in their carts. Some shop at Western Beef for nothing more than diet cola and frozen bagels; some at Whole Foods for premade sushi and overdesigned bottles of green tea. These people have much in common. So, too, do the professorial types poring over the sweet corn and dewy blueberries at the greenmarket and the Honduran family at the discount grocery, piling their cart high with rice and dried beans and canned tomatoes and all the other stuff you need to make something out of nothing much.

Subject: The Vanishing From: Emma To: All Date Posted: Fri, Jul 22, 2005 at 12:49:05 (EDT) Email Address: Not Provided Message: http://www.newyorker.com/critics/books/?050103crbo_books January 3, 2005 The Vanishing By MALCOLM GLADWELL In “Collapse,” Jared Diamond shows how societies destroy themselves. A thousand years ago, a group of Vikings led by Erik the Red set sail from Norway for the vast Arctic landmass west of Scandinavia which came to be known as Greenland. It was largely uninhabitable—a forbidding expanse of snow and ice. But along the southwestern coast there were two deep fjords protected from the harsh winds and saltwater spray of the North Atlantic Ocean, and as the Norse sailed upriver they saw grassy slopes flowering with buttercups, dandelions, and bluebells, and thick forests of willow and birch and alder. Two colonies were formed, three hundred miles apart, known as the Eastern and Western Settlements. The Norse raised sheep, goats, and cattle. They turned the grassy slopes into pastureland. They hunted seal and caribou. They built a string of parish churches and a magnificent cathedral, the remains of which are still standing. They traded actively with mainland Europe, and tithed regularly to the Roman Catholic Church. The Norse colonies in Greenland were law-abiding, economically viable, fully integrated communities, numbering at their peak five thousand people. They lasted for four hundred and fifty years—and then they vanished. The story of the Eastern and Western Settlements of Greenland is told in Jared Diamond’s “Collapse: How Societies Choose to Fail or Succeed” (Viking; $29.95). Diamond teaches geography at U.C.L.A. and is well known for his best-seller “Guns, Germs, and Steel,” which won a Pulitzer Prize. In “Guns, Germs, and Steel,” Diamond looked at environmental and structural factors to explain why Western societies came to dominate the world. In “Collapse,” he continues that approach, only this time he looks at history’s losers—like the Easter Islanders, the Anasazi of the American Southwest, the Mayans, and the modern-day Rwandans. We live in an era preoccupied with the way that ideology and culture and politics and economics help shape the course of history. But Diamond isn’t particularly interested in any of those things—or, at least, he’s interested in them only insofar as they bear on what to him is the far more important question, which is a society’s relationship to its climate and geography and resources and neighbors. “Collapse” is a book about the most prosaic elements of the earth’s ecosystem—soil, trees, and water—because societies fail, in Diamond’s view, when they mismanage those environmental factors. There was nothing wrong with the social organization of the Greenland settlements. The Norse built a functioning reproduction of the predominant northern-European civic model of the time—devout, structured, and reasonably orderly. In 1408, right before the end, records from the Eastern Settlement dutifully report that Thorstein Olafsson married Sigrid Bjornsdotter in Hvalsey Church on September 14th of that year, with Brand Halldorstson, Thord Jorundarson, Thorbjorn Bardarson, and Jon Jonsson as witnesses, following the proclamation of the wedding banns on three consecutive Sundays. The problem with the settlements, Diamond argues, was that the Norse thought that Greenland really was green; they treated it as if it were the verdant farmland of southern Norway. They cleared the land to create meadows for their cows, and to grow hay to feed their livestock through the long winter. They chopped down the forests for fuel, and for the construction of wooden objects. To make houses warm enough for the winter, they built their homes out of six-foot-thick slabs of turf, which meant that a typical home consumed about ten acres of grassland. But Greenland’s ecosystem was too fragile to withstand that kind of pressure. The short, cool growing season meant that plants developed slowly, which in turn meant that topsoil layers were shallow and lacking in soil constituents, like organic humus and clay, that hold moisture and keep soil resilient in the face of strong winds. “The sequence of soil erosion in Greenland begins with cutting or burning the cover of trees and shrubs, which are more effective at holding soil than is grass,” he writes. “With the trees and shrubs gone, livestock, especially sheep and goats, graze down the grass, which regenerates only slowly in Greenland’s climate. Once the grass cover is broken and the soil is exposed, soil is carried away especially by the strong winds, and also by pounding from occasionally heavy rains, to the point where the topsoil can be removed for a distance of miles from an entire valley.” Without adequate pastureland, the summer hay yields shrank; without adequate supplies of hay, keeping livestock through the long winter got harder. And, without adequate supplies of wood, getting fuel for the winter became increasingly difficult. The Norse needed to reduce their reliance on livestock—particularly cows, which consumed an enormous amount of agricultural resources. But cows were a sign of high status; to northern Europeans, beef was a prized food. They needed to copy the Inuit practice of burning seal blubber for heat and light in the winter, and to learn from the Inuit the difficult art of hunting ringed seals, which were the most reliably plentiful source of food available in the winter. But the Norse had contempt for the Inuit—they called them skraelings, “wretches”—and preferred to practice their own brand of European agriculture. In the summer, when the Norse should have been sending ships on lumber-gathering missions to Labrador, in order to relieve the pressure on their own forestlands, they instead sent boats and men to the coast to hunt for walrus. Walrus tusks, after all, had great trade value. In return for those tusks, the Norse were able to acquire, among other things, church bells, stained-glass windows, bronze candlesticks, Communion wine, linen, silk, silver, churchmen’s robes, and jewelry to adorn their massive cathedral at Gardar, with its three-ton sandstone building blocks and eighty-foot bell tower. In the end, the Norse starved to death. Diamond’s argument stands in sharp contrast to the conventional explanations for a society’s collapse. Usually, we look for some kind of cataclysmic event. The aboriginal civilization of the Americas was decimated by the sudden arrival of smallpox. European Jewry was destroyed by Nazism. Similarly, the disappearance of the Norse settlements is usually blamed on the Little Ice Age, which descended on Greenland in the early fourteen-hundreds, ending several centuries of relative warmth. (One archeologist refers to this as the “It got too cold, and they died” argument.) What all these explanations have in common is the idea that civilizations are destroyed by forces outside their control, by acts of God. But look, Diamond says, at Easter Island. Once, it was home to a thriving culture that produced the enormous stone statues that continue to inspire awe. It was home to dozens of species of trees, which created and protected an ecosystem fertile enough to support as many as thirty thousand people. Today, it’s a barren and largely empty outcropping of volcanic rock. What happened? Did a rare plant virus wipe out the island’s forest cover? Not at all. The Easter Islanders chopped their trees down, one by one, until they were all gone. “I have often asked myself, ‘What did the Easter Islander who cut down the last palm tree say while he was doing it?’ ” Diamond writes, and that, of course, is what is so troubling about the conclusions of “Collapse.” Those trees were felled by rational actors—who must have suspected that the destruction of this resource would result in the destruction of their civilization. The lesson of “Collapse” is that societies, as often as not, aren’t murdered. They commit suicide: they slit their wrists and then, in the course of many decades, stand by passively and watch themselves bleed to death. This doesn’t mean that acts of God don’t play a role. It did get colder in Greenland in the early fourteen-hundreds. But it didn’t get so cold that the island became uninhabitable. The Inuit survived long after the Norse died out, and the Norse had all kinds of advantages, including a more diverse food supply, iron tools, and ready access to Europe. The problem was that the Norse simply couldn’t adapt to the country’s changing environmental conditions. Diamond writes, for instance, of the fact that nobody can find fish remains in Norse archeological sites. One scientist sifted through tons of debris from the Vatnahverfi farm and found only three fish bones; another researcher analyzed thirty-five thousand bones from the garbage of another Norse farm and found two fish bones. How can this be? Greenland is a fisherman’s dream: Diamond describes running into a Danish tourist in Greenland who had just caught two Arctic char in a shallow pool with her bare hands. “Every archaeologist who comes to excavate in Greenland . . . starts out with his or her own idea about where all those missing fish bones might be hiding,” he writes. “Could the Norse have strictly confined their munching on fish to within a few feet of the shoreline, at sites now underwater because of land subsidence? Could they have faithfully saved all their fish bones for fertilizer, fuel, or feeding to cows?” It seems unlikely. There are no fish bones in Norse archeological remains, Diamond concludes, for the simple reason that the Norse didn’t eat fish. For one reason or another, they had a cultural taboo against it. Given the difficulty that the Norse had in putting food on the table, this was insane. Eating fish would have substantially reduced the ecological demands of the Norse settlements. The Norse would have needed fewer livestock and less pastureland. Fishing is not nearly as labor-intensive as raising cattle or hunting caribou, so eating fish would have freed time and energy for other activities. It would have diversified their diet. Why did the Norse choose not to eat fish? Because they weren’t thinking about their biological survival. They were thinking about their cultural survival. Food taboos are one of the idiosyncrasies that define a community. Not eating fish served the same function as building lavish churches, and doggedly replicating the untenable agricultural practices of their land of origin. It was part of what it meant to be Norse, and if you are going to establish a community in a harsh and forbidding environment all those little idiosyncrasies which define and cement a culture are of paramount importance. “The Norse were undone by the same social glue that had enabled them to master Greenland’s difficulties,” Diamond writes. “The values to which people cling most stubbornly under inappropriate conditions are those values that were previously the source of their greatest triumphs over adversity.” He goes on: To us in our secular modern society, the predicament in which the Greenlanders found themselves is difficult to fathom. To them, however, concerned with their social survival as much as their biological survival, it was out of the question to invest less in churches, to imitate or intermarry with the Inuit, and thereby to face an eternity in Hell just in order to survive another winter on Earth. Diamond’s distinction between social and biological survival is a critical one, because too often we blur the two, or assume that biological survival is contingent on the strength of our civilizational values. That was the lesson taken from the two world wars and the nuclear age that followed: we would survive as a species only if we learned to get along and resolve our disputes peacefully. The fact is, though, that we can be law-abiding and peace-loving and tolerant and inventive and committed to freedom and true to our own values and still behave in ways that are biologically suicidal. The two kinds of survival are separate. Diamond points out that the Easter Islanders did not practice, so far as we know, a uniquely pathological version of South Pacific culture. Other societies, on other islands in the Hawaiian archipelago, chopped down trees and farmed and raised livestock just as the Easter Islanders did. What doomed the Easter Islanders was the interaction between what they did and where they were. Diamond and a colleague, Barry Rollet, identified nine physical factors that contributed to the likelihood of deforestation—including latitude, average rainfall, aerial-ash fallout, proximity to Central Asia’s dust plume, size, and so on—and Easter Island ranked at the high-risk end of nearly every variable. “The reason for Easter’s unusually severe degree of deforestation isn’t that those seemingly nice people really were unusually bad or improvident,” he concludes. “Instead, they had the misfortune to be living in one of the most fragile environments, at the highest risk for deforestation, of any Pacific people.” The problem wasn’t the Easter Islanders. It was Easter Island. In the second half of “Collapse,” Diamond turns his attention to modern examples, and one of his case studies is the recent genocide in Rwanda. What happened in Rwanda is commonly described as an ethnic struggle between the majority Hutu and the historically dominant, wealthier Tutsi, and it is understood in those terms because that is how we have come to explain much of modern conflict: Serb and Croat, Jew and Arab, Muslim and Christian. The world is a cauldron of cultural antagonism. It’s an explanation that clearly exasperates Diamond. The Hutu didn’t just kill the Tutsi, he points out. The Hutu also killed other Hutu. Why? Look at the land: steep hills farmed right up to the crests, without any protective terracing; rivers thick with mud from erosion; extreme deforestation leading to irregular rainfall and famine; staggeringly high population densities; the exhaustion of the topsoil; falling per-capita food production. This was a society on the brink of ecological disaster, and if there is anything that is clear from the study of such societies it is that they inevitably descend into genocidal chaos. In “Collapse,” Diamond quite convincingly defends himself against the charge of environmental determinism. His discussions are always nuanced, and he gives political and ideological factors their due. The real issue is how, in coming to terms with the uncertainties and hostilities of the world, the rest of us have turned ourselves into cultural determinists. For the past thirty years, Oregon has had one of the strictest sets of land-use regulations in the nation, requiring new development to be clustered in and around existing urban development. The laws meant that Oregon has done perhaps the best job in the nation in limiting suburban sprawl, and protecting coastal lands and estuaries. But this November Oregon’s voters passed a ballot referendum, known as Measure 37, that rolled back many of those protections. Specifically, Measure 37 said that anyone who could show that the value of his land was affected by regulations implemented since its purchase was entitled to compensation from the state. If the state declined to pay, the property owner would be exempted from the regulations. To call Measure 37—and similar referendums that have been passed recently in other states—intellectually incoherent is to put it mildly. It might be that the reason your hundred-acre farm on a pristine hillside is worth millions to a developer is that it’s on a pristine hillside: if everyone on that hillside could subdivide, and sell out to Target and Wal-Mart, then nobody’s plot would be worth millions anymore. Will the voters of Oregon then pass Measure 38, allowing them to sue the state for compensation over damage to property values caused by Measure 37? It is hard to read “Collapse,” though, and not have an additional reaction to Measure 37. Supporters of the law spoke entirely in the language of political ideology. To them, the measure was a defense of property rights, preventing the state from unconstitutional “takings.” If you replaced the term “property rights” with “First Amendment rights,” this would have been indistinguishable from an argument over, say, whether charitable groups ought to be able to canvass in malls, or whether cities can control the advertising they sell on the sides of public buses. As a society, we do a very good job with these kinds of debates: we give everyone a hearing, and pass laws, and make compromises, and square our conclusions with our constitutional heritage—and in the Oregon debate the quality of the theoretical argument was impressively high. The thing that got lost in the debate, however, was the land. In a rapidly growing state like Oregon, what, precisely, are the state’s ecological strengths and vulnerabilities? What impact will changed land-use priorities have on water and soil and cropland and forest? One can imagine Diamond writing about the Measure 37 debate, and he wouldn’t be very impressed by how seriously Oregonians wrestled with the problem of squaring their land-use rules with their values, because to him a society’s environmental birthright is not best discussed in those terms. Rivers and streams and forests and soil are a biological resource. They are a tangible, finite thing, and societies collapse when they get so consumed with addressing the fine points of their history and culture and deeply held beliefs—with making sure that Thorstein Olafsson and Sigrid Bjornsdotter are married before the right number of witnesses following the announcement of wedding banns on the right number of Sundays—that they forget that the pastureland is shrinking and the forest cover is gone. When archeologists looked through the ruins of the Western Settlement, they found plenty of the big wooden objects that were so valuable in Greenland—crucifixes, bowls, furniture, doors, roof timbers—which meant that the end came too quickly for anyone to do any scavenging. And, when the archeologists looked at the animal bones left in the debris, they found the bones of newborn calves, meaning that the Norse, in that final winter, had given up on the future. They found toe bones from cows, equal to the number of cow spaces in the barn, meaning that the Norse ate their cattle down to the hoofs, and they found the bones of dogs covered with knife marks, meaning that, in the end, they had to eat their pets. But not fish bones, of course. Right up until they starved to death, the Norse never lost sight of what they stood for.

Subject: The Peg is Inherently Unstable From: Emma To: All Date Posted: Fri, Jul 22, 2005 at 11:45:54 (EDT) Email Address: Not Provided Message: Paul Krugman 'Some economists think there is a deep rationale for this seemingly perverse policy. I think it's something the Chinese government stumbled into as it tried to protect itself from the 1997-1998 crisis, and it is reluctant to change because the Chinese economy has been doing well. That is, China's leaders don't want to mess with success. 'But pressures against China's dollar purchases are building. By keeping the yuan down, China is feeding a trade surplus that is creating a growing political backlash in America and Europe. And China, which is still a poor country, is devoting a lot of resources to the accumulation of a basically useless pile of dollars instead of to higher living standards. 'The question is what happens to us if the Chinese finally decide to stop acting so strangely.' We still have to assume China will come to understand that it is not in her interests to support the American deficit, at least not to the extent it has done so. The peg is inherently unstable over time.

Subject: Another terrorist attack prevented From: Setanta To: All Date Posted: Fri, Jul 22, 2005 at 11:11:11 (EDT) Email Address: Not Provided Message: http://news.bbc.co.uk/1/hi/uk/4706787.stm what can be done to stop this menace to our way of life? a shoot to kill policy is an undesired policy but how can you deal with a suicide bomber bent on murder? it disturbs me to live with this clear and present threat. ‘The only thing necessary for the triumph [of evil] is for good men to do nothing.’ Edmund Burke

Subject: There Will be More Unity From: Jennifer To: Setanta Date Posted: Fri, Jul 22, 2005 at 11:21:26 (EDT) Email Address: Not Provided Message: Britain will gain complete control of the situation in a short time. These terrible attacks will have failed miserably be creating more of a sense of unity than ever.

Subject: The Currency Effect From: Terri To: All Date Posted: Fri, Jul 22, 2005 at 10:05:26 (EDT) Email Address: Not Provided Message: Essentially nothing has happened. China would prefer not revalue the Yuan against the dollar, and evidently have only pretended to do so. That should leave interest rates low, which is a relief, but leave the balance of trade deficit intact and growing rapidly as before. Should we be relieved? I am.

Subject: Internal and External Deficits From: Emma To: All Date Posted: Fri, Jul 22, 2005 at 07:26:02 (EDT) Email Address: Not Provided Message: How vulnerable our budget deficit makes us could not be more clear. The problem of the internal and resulting external deficits will not be a loss in relative value of the dollar, but rising long term interest rates. Darn.

Subject: The Dollar and the Yuan From: Terri To: All Date Posted: Fri, Jul 22, 2005 at 05:57:23 (EDT) Email Address: Not Provided Message: There is no obvious effect from the 2% increase in value of the Yuan against the dollar, but the rise in long term interest rates on the day is a sharp warning of what can happen if foreign central banks whether Chinese or Japanese or several others begin to limit the purchase of Treasury bonds.

Subject: Re: The Dollar and the Yuan From: johnny5 To: Terri Date Posted: Sat, Jul 23, 2005 at 02:20:47 (EDT) Email Address: johnny5@yahoo.com Message: From moslers people: http://www.frbsf.org/publications/economics/letter/2005/el2005-08.html FRBSF Economic Letter 2005-08; April 29, 2005 The Long-term Interest Rate Conundrum: Not Unraveled Yet? In congressional testimony on February 16, 2005, Federal Reserve Chairman Greenspan characterized the recent behavior of long-term interest rates as a 'conundrum.' Typically, long-term rates tend to rise as monetary policymakers raise short-term rates. But not in the current episode. Despite steady monetary tightening beginning in the middle of 2004, the yields on long-term U.S. Treasury securities actually have declined since then by about 50 basis points. As a consequence, the current level of long-term interest rates seems to be well below what one would expect on the basis of economic fundamentals. A number of explanations of the 'conundrum' have surfaced, and this Economic Letter will focus on one in particular, namely, the tremendous increases in purchases of U.S. Treasury securities by foreign central banks (especially by those in East Asian countries). Some estimate that during the past two years, such purchases have depressed the 10-year Treasury yield by as much as 40 basis points. This argument, if true, implies risks to long-term interest rates and to the U.S. economy going forward. If foreign governments were to decide to 'diversify' their foreign currency reserves (Koizumi 2005) and reduce their demand for U.S. Treasury securities, the yields on these and other long-term instruments, such as mortgages, would move up. This could have a negative impact on the economic outlook. In this Economic Letter, I examine this argument and find that it fails to account for a number of significant issues surrounding long-term rates and foreign official purchases of long-term U.S. Treasury securities. I then show that, given the structure of the market for U.S. Treasuries, a sharp hike in rates would be unlikely even if foreign governments were to reduce their purchases substantially. What is wrong with a 'simple' analysis of the conundrum Long-term interest rates are closely linked to long-run inflation expectations and long-term real interest rates, which, in principle, are determined by macroeconomic fundamentals, such as long-run productivity growth and possibly fiscal deficits. Therefore, by regressing long-term interest rates on inflation expectations and macroeconomic fundamentals, one can assess how far today's long-term yields deviate from what the fundamentals suggest they would otherwise be. The results from one such regression are shown in Figure 1. The solid line shows the difference between the actual 10-year Treasury rate and the rate predicted by this regression, that is, the prediction error. The significantly negative error in the most recent period points up the conundrum the model predicts long-term interest rates that are noticeably higher than actual (other models also lead to qualitatively similar results). The dotted line in the figure plots net foreign official purchases of U.S. Treasuries (summed over 12 months) as a percentage of the U.S. GDP. A glance at just the current episode shows that the significantly negative prediction error for the 10-year rate coincides with a very rapid increase in foreign official purchases of U.S. Treasuries since 2002. Indeed, some analysts include foreign purchases in the regression and find results implying that the $235 billion foreign official purchases of U.S. Treasuries in 2004 lowered the 10-year yield by about 40 basis points. However, Figure 1 also shows that these two series do not always move in the opposite direction. Indeed, in most of 1980s and 1990s, they appeared to move in the same direction. For instance, when net foreign purchases declined from about 1% of U.S. GDP in July 1988 to -0.14% in December 1989, the 10-year Treasury yield actually dropped by 120 basis points, about 90 basis points of which was unjustified by the macro fundamentals. Another striking example happened during the period from 1993 to 1996, when foreign purchases surged (from 0.5% to 1.5% of U.S. GDP), but the 10-year yield did not decline substantially. Indeed, the correlation between our measures of the 10-year rate prediction errors and the foreign purchases is 0.3 between 1987 and 2000, in contrast to the negative correlation since 2002. This clearly indicates an unstable relationship between them. Moreover, the observations during the 1980s and 1990s also indicate an important but often overlooked econometric problem embedded in running simple long-rate regressions: causality can go either way. In other words, long-term yields may respond to foreign purchases, but foreign purchases also may respond to long-rate movements; for example, when long-term yields rise and long-term Treasuries become more attractive, foreign central banks may be more willing to purchase them. To evaluate the impact of foreign purchases on long-term yields, then, one needs a more sophisticated model than the simple (yet popular) single-equation regression model. An alternative approach Rather than running a regression, one can analyze the structure of the market for U.S. Treasury securities to help evaluate whether foreign official purchases might have a significant and persistent influence on it. The hypothesis that foreign official purchases hold down yields on long-term U.S. Treasuries relies on two premises: (1) foreign official purchases (and holdings) of U.S. Treasuries must be predominantly concentrated in securities with long-term maturities (10-years and longer), so that a reduction in foreign official holdings would translate into a similar reduction in demand for long-term Treasuries; and (2) foreign official demand must account for a substantial part of the overall demand for long-term Treasuries. In addition, both premises assume that the long-term Treasury market is heavily segmented from the shorter-term Treasury market and from other financial markets such as the corporate bond market; only in that case will reduced demand from foreign central banks cause long-term rates to rise abruptly, because it creates a vacuum that cannot be easily filled by other investors in any of those markets. As for the first premise, foreign governments' holdings are not concentrated in long-term Treasuries. As Chairman Greenspan (2004) pointed out, ' (foreign) central bank reserves are heavily concentrated in short-term maturities.' For instance, as of December 2004, foreign official institutions held $1.173 trillion in U.S. Treasury securities, with $245 billion, or 21%, in the form of Treasury bills whose maturities are less than one year. Moreover, the Treasury notes and bonds they bought in the past gradually mature (for instance, the 10-year Treasury bought nine years ago will mature next year), so the actual maturity of their Treasury portfolio is even shorter. As Figure 2 shows, as of June 2003, over half of foreign central banks' holdings of Treasuries would mature in two years or less, and only 27% had an actual maturity of five years or longer by then. In short, foreign central banks' U.S. Treasury portfolios are quite diversified and are not concentrated in long-term maturities. To illustrate what this information about the structure of foreign central banks' portfolios of U.S. Treasuries implies, consider what happens when foreign central banks want to reduce their holdings of U.S. Treasuries by $100 billion while keeping the same maturity structure as in Figure 2. They will not choose to reduce their holdings of long-term U.S. Treasuries by $100 billion, because doing so will substantially shorten the average maturity of their Treasury portfolios. Rather, they will need to reduce their holdings of both long-term and short-term Treasuries proportionally. Thus the reduction in demand for long-term Treasuries will be much less than $100 billion. The second premise also is questionable. It is true that foreign official purchases have accounted for a substantial part of the newly issued Treasuries in the past two years. However, foreign central banks are not the only players on the field. Foreign individual investors are at least as active and important as their central banks (Figure 3). Thus, even if the foreign official purchases of long-term Treasuries decline, the vacuum could well be filled by foreign individual investors in the first place. Moreover, even though U.S. investors' relative holdings have been declining, they are still the biggest holders of U.S. Treasuries (Figure 4). They would also be likely to step in once foreign central banks were to retreat. Finally, we examine the assumption that the long-term Treasury market is heavily segmented from the short-term Treasury market and other financial markets, so that even when long-term Treasury prices decline and become relatively more attractive, investors from other markets will not be able to jump in and push them back up. There are reasons to question this assumption, too. The U.S. Treasury market is highly developed and very liquid, and numerous investors trade both short- and long-term securities every day for hedging and other purposes. Even if there is some degree of segmentation that isolates the long-term Treasuries, how much price discrepancy it can generate is still questionable. The short-term Treasury market is, in fact, much larger than the long-term Treasury market, and the corporate bond and equity markets are larger yet. Therefore foreign official purchases account for only a small fraction of the overall credit flow in the U.S., and any substantial misalignments in the asset prices caused by foreign official purchases will be quickly corrected by other kinds of investors. Notice that a 40-basis-point discrepancy in 10-year Treasury yield implies a 4% bias in the bond price (assuming zero coupons), and foreign official purchases do not appear to be large enough to induce such a bias and sustain it. To sum up, this analysis suggests that there is more to solving the conundrum of the recent low long-term interest rates than pointing to the behavior of official foreign purchases of U.S. Treasury securities. Indeed, there is little solid evidence suggesting a persistent relationship between the two. Furthermore, the structure of the Treasury market does not support the projection of a rapid rate hike in the event that foreign central banks retreat from the U.S. Treasury market.

Subject: Re: The Dollar and the Yuan From: Ari To: Terri Date Posted: Fri, Jul 22, 2005 at 07:18:53 (EDT) Email Address: Not Provided Message: So I guess this is a trial move by the Chinese in response to pressure from us. If the Chinese however begin to cut back on bond purchases in dollars, we will have a sharp jump in long term yields and that would be most dangerous.

Subject: Weight-Loss Theory is Losing Strength From: Emma To: All Date Posted: Thurs, Jul 21, 2005 at 17:21:27 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/21/fashion/thursdaystyles/21Fitness.html?pagewanted=all Weight-Loss Theory Is Losing Some of Its Strength By MARTICA HEANER BARBARA WOODWORTH, 35, a social worker in Seattle, wanted to drop 40 pounds. Alisa Rivera, 39, a college adviser at the University of California, Los Angeles, also wanted to lose weight. She also wanted to build long, lean muscle. So the two women routinely began to lift weights. But like many of the other 36 million women nationwide who each year pick up dumbbells hoping to lose pounds or develop a sculptured body, both Ms. Woodworth and Ms. Rivera ended up disappointed because the strategy is not as simple - or as effective - as it sounds. Personal trainers, fitness instructors, magazines and books have sold a double-barreled promise that any strength training builds muscle and that having more muscle dramatically speeds metabolism, increasing the calories a person burns while at rest. With all that extra calorie burning, the story goes, excess weight comes off effortlessly. The story is wrong in two ways, researchers say. First, muscle is not such an amazing calorie burner. 'Even if weight training increases muscle and metabolism, there is little evidence showing that it is enough to cause weight loss,' said Joseph Donnelly, the director of the Energy Balance Laboratory at the University of Kansas, who has extensively reviewed studies on the link between resistance training and weight loss. And second, many who try weight training - especially women - fail to do what it actually takes to build more muscle. They lift too light a weight, or they neglect to progress to heavier weights as they grow stronger. And often, women who take up weight lifting also diet. In fact, it is nearly impossible to increase muscle while cutting calories. Regular resistance training, done correctly, has many benefits. It can prevent some of the muscle loss that occurs with weight loss. It can also lower body fat levels and even help preserve bone mass. But the idea that it can magically increase calorie-burning is 'a very big stretch,' said Edward Melanson, an assistant professor in the division of endocrinology, diabetes and metabolism at the University of Colorado Health Sciences Center in Denver. Claims that resistance training can send metabolism skyrocketing are easy to find. A Google search using the terms 'metabolism' and 'weights' produces thousands of Web sites, many of which say that anyone can lose weight and build muscle through strength training, even doing routines that aren't particularly strenuous. Books like Kathy Smith's 'Lift Weights to Lose Weight' also perpetuate the myth that building muscle supercharges metabolism and quickly leads to weight loss. In 'Smart Girls Do Dumbbells,' Judith Sherman-Wolin claims that resistance-training can 'melt away those stubborn pounds you've been trying to lose all your life.' And Jorge Cruise's best seller, '8 Minutes in the Morning,' advises readers to forget aerobics or grueling workouts because doing his two strength-building exercises a day 'will help you firm up five pounds of lean muscle within the first few weeks, allowing your body to burn an extra 250 calories per day.' Ms. Woodworth of Seattle said, 'Practically every fitness book and magazine I ever read said strength training boosts metabolism so you lose weight easier and faster.' Before taking up weight lifting, she had already lost 15 pounds in about three months by cutting calories and walking and running for an hour three times a week. With 40 pounds still to shed, she turned to what she had heard was the magic bullet. Her trainer advised her to lift four times a week, cut her cardiovascular exercise to less than 30 minutes but still keep dieting. After six weeks, she was frustrated to find she had gained two pounds. That added weight probably wasn't muscle. Decreasing her high-calorie-burning walks and runs was the more likely culprit. Lifting weights burns few calories - 'at least the way the average nonathlete does it and certainly the way most women tend to do it, using relatively low weights and few sets,' Dr. Donnelly said. The same time spent an aerobic workout could double the calorie burn. Once Ms. Woodworth increased her time on cardio, she lost the added weight. Proponents of the theory that weight lifting leads to weight loss argue that it is the long-term effect of gaining more muscle, which burns more calories at rest, that causes weight loss. Still, that has never been proven in studies. Studies show that even women who do what it takes to get stronger develop only two to four pounds of muscle after six months of progressive lifting. Given that one pound of muscle burns between 7 to 13 calories a day (as determined by studies that measured oxygen and blood flow to tissues), that means the average boost in metabolism is only 14 to 52 calories a day, said Dympna Gallagher, the director of the body composition unit at the New York Obesity Research Center in Manhattan. The effect of weight lifting 'on metabolism is minor and certainly not the savior of dieters,' said William Kraemer, a professor of physiology and neurobiology at the University of Connecticut. A recent yearlong study of 59 sedentary women at the University of Pittsburgh demonstrated what little difference weight training can make in weight loss. About a third of the women lifted weights three times a week, another third did yoga three times a week, and the last third did neither. All the women followed a daily diet of 1,200 to 1,500 calories for the entire year and walked five days a week. In the end, those who had lifted weights or practiced yoga lost as much weight and fat - but no more - than those who only dieted and walked. Surprisingly, many of the women became no stronger. 'We were looking at whether women would stick to the routine, and if so, would they resistance train intensely enough,' explained Kara Gallagher, the lead researcher. 'It appears that many did not.' When people lift light weights and fail to progressively increase the load, they only increase endurance, Dr. Kraemer said. After turning 'doughy,' Ms. Rivera of Los Angeles followed a few workouts using five-pound weights that she'd seen in Glamour and Shape magazines. 'After three months the scale hadn't budged,' she said. 'I didn't see much of a difference in muscle tone.' Eventually she realized that light weights were not enough. 'When I progressed from a five-pound dumbbell and began to lift heavier, my arms and butt got firmer within three weeks, although I still did not lose weight,' she said. For those looking to build a more sculptured body, dieting may be counterproductive. 'To create new muscle tissue you need to eat enough, not cut calories, to fuel the process,' said Karen Reznik Dolins, the director of nutrition at Altheus, a sports center in Rye, N.Y., and a nutrition adviser to the New York Knicks. Genetics can also help determine the impact that weight lifting can have on muscle development and metabolism. Researchers at the University of Massachusetts at Amherst looked at almost 600 men and women who did a strenuous, progressive resistance routine for three months, according to a study in this month's Medicine & Science in Sports & Exercise. Three percent were 'high responders,' some of whom doubled their strength. One percent were 'low responders,' who became only 1 percent stronger than they were when they started. The majority of men and women increased muscle size 15 to 25 percent; and most men improved their muscle strength 40 percent while women increased theirs 65 percent. Shannan Catlett, a fashion sales executive in Manhattan, said lifting heavy weights helped tone her slimmer body. After she lost 50 pounds by using the elliptical machine and treadmill and by following a healthier diet, she improved her muscle definition with weights. 'I never lost weight from strength training, but my butt got smaller and I got stronger and firmer all over,' Ms. Catlett, 41, said. 'I still have to make sure that I'm always fit in regular cardio to maintain my weight.'

Subject: National Index Returns [Dollars] From: Terri To: All Date Posted: Thurs, Jul 21, 2005 at 16:29:01 (EDT) Email Address: Not Provided Message: http://www.msci.com/equity/index2.html National Index Returns [Dollars] 12/31/04 - 7/21/05 Australia 5.8 Canada 11.5 Denmark 7.4 France 4.8 Germany -0.1 Hong Kong 8.2 Japan -6.7 Netherlands 4.0 Norway 15.1 Sweden 0.6 Switzerland 1.9 UK -0.9

Subject: National Returns [Domestic Currency] From: Terri To: All Date Posted: Thurs, Jul 21, 2005 at 16:20:28 (EDT) Email Address: Not Provided Message: http://www.msci.com/equity/index2.html National Index Returns [Domestic Currency] 12/31/04 - 7/21/05 Australia 10.0 Canada 13.7 Denmark 22.0 France 18.6 Germany 13.1 Hong Kong 8.2 Japan 3.5 Netherlands 17.7 Norway 26.0 Sweden 19.1 Switzerland 16.6 UK 10.1

Subject: The Dollar and Bond Yields From: Terri To: All Date Posted: Thurs, Jul 21, 2005 at 11:46:21 (EDT) Email Address: Not Provided Message: There has to be a long term interest rate effect caused by the end of the peg. There is no reason for the volume of Asian dollar bond purchases to remain as high as they have been. Well, now for more serious worry. As Robert Rubin advised, watch the bond market.

Subject: What Will be the Effect? From: Terri To: Terri Date Posted: Thurs, Jul 21, 2005 at 15:31:54 (EDT) Email Address: Not Provided Message: Should the effect simply be a 2.1% increase in value of the Yuan against the dollar, then there is no effect at all. If the Yuan is allowed to drift up in a controlled series of steps, then we may have an interest rate problem. Be careful what we wish for, but we are not careful.

Subject: Re: What Will be the Effect? From: Terri To: Terri Date Posted: Thurs, Jul 21, 2005 at 15:52:36 (EDT) Email Address: Not Provided Message: Notice that the effect of the Chinese currency peg revision has at first been to leave the dollar strong against the Euro and the Yen, but to cause a rise in long term bond yields.

Subject: Dollars and Yuan From: Terri To: All Date Posted: Thurs, Jul 21, 2005 at 09:16:22 (EDT) Email Address: Not Provided Message: China has abandoned the Yuan-dollar currency peg. Most interesting and possibly more important.

Subject: Re: Dollars and Yuan From: Terri To: Terri Date Posted: Thurs, Jul 21, 2005 at 10:03:58 (EDT) Email Address: Not Provided Message: The question now becomes what happens to the dollar and to long term interest rates. Now we get to find out how calm the markets really are.

Subject: Re: Dollars and Yuan From: Terri To: Terri Date Posted: Thurs, Jul 21, 2005 at 10:12:02 (EDT) Email Address: Not Provided Message: There will be significant effects all through Asia, effects that may ripple to our long term bond market. China will still have currency exchange controls, but no matter how the currency basket is structured there will be less dollar accumulation by China, Malaysia and South Korea at the least. Though I have thought of such a change, I will not be surprised by any one of a number of outcomes.

Subject: Excellent comments Terri From: Pete Weis To: Terri Date Posted: Thurs, Jul 21, 2005 at 10:30:22 (EDT) Email Address: Not Provided Message:

Subject: The major benefit From: Pete Weis To: Pete Weis Date Posted: Thurs, Jul 21, 2005 at 10:34:56 (EDT) Email Address: Not Provided Message:

Subject: Re: The major benefit From: Pete Weis To: Pete Weis Date Posted: Thurs, Jul 21, 2005 at 10:37:53 (EDT) Email Address: Not Provided Message: Preventing protectionist trade policies (at least for now).

Subject: Watching the REIT Index From: Jennifer To: All Date Posted: Thurs, Jul 21, 2005 at 06:00:26 (EDT) Email Address: Not Provided Message: There may be every reason to believe that the Vanguard REIT Index will continue to provide a helpful reflection of the strength or weakness of the commercial real estate and housing market. Right now the index appears both remarkably expensive and remarkably stable. The index appears to be largely dependent on the movement of long term interest rates. But, it must be noted the index has been remarkably stable through difficult bond and stock market periods since 1972.

Subject: Vanguard Returns From: Terri To: All Date Posted: Wed, Jul 20, 2005 at 18:33:34 (EDT) Email Address: Not Provided Message: http://flagship5.vanguard.com/VGApp/hnw/FundsByName Vanguard Returns 12/31/04 to 7/20/05 S&P Index is 2.9 Large Cap Growth Index is 3.0 Large Cap Value Index is 4.3 Mid Cap Index is 9.0 Small Cap Index is 6.6 Small Cap Value Index is 7.0 Europe Index is 2.0 Pacific Index is -2.5 Energy is 27.9 Health Care is 8.7 Precious Metals 9.8 REIT Index is 11.4 High Yield Corporate Bond Fund is 1.5 Long Term Corporate Bond Fund is 5.8

Subject: Sector Stock Indexes From: Terri To: All Date Posted: Wed, Jul 20, 2005 at 18:26:55 (EDT) Email Address: Not Provided Message: http://flagship2.vanguard.com/VGApp/hnw/FundsVIPERByName Sector Indexes 12/31/04 - 7/20/05 Energy 26.9 Financials 1.0 Health Care 7.3 Info Tech 1.0 Materials -1.6 REITs 11.5 Telecoms 0.7 Utilities 16.4

Subject: Real Estate From: Terri To: All Date Posted: Wed, Jul 20, 2005 at 15:53:20 (EDT) Email Address: Not Provided Message: Remember, though I think the real estate market will continue to grow for a while longer, I am no longer buying property and am content to watch the market from here. I would like to see mortgage financing more tightly controlled, but that is a legislative job, and not a job for the Fed. Right now, the Fed is comitted to raising rates in moderate steps as long as fair growth continues and Alan Greenspan expects such growth to continue.

Subject: Re: Real Estate From: Pete Weis To: Terri Date Posted: Wed, Jul 20, 2005 at 19:31:48 (EDT) Email Address: Not Provided Message: washingtonpost.com U.S. Warns Lenders To Elevate Standards Agencies Cite Risks In Home Equity Loans By Kirstin Downey Washington Post Staff Writer Tuesday, May 17, 2005; A01 Federal banking regulators yesterday warned banks and other lenders to be more selective about who can get home equity loans and lines of credit because rising interest rates may make it harder for people to repay their loans. Government officials said that while mortgage defaults remain rare, many institutions are loading up on high-risk loans. They urged lenders to review interest-only loans, which allow borrowers to delay principal payments for years, and 'no-doc' loans, which don't require documenting borrowers' assets and income. They also suggested that lenders that refuse to do so may find themselves facing heightened federal oversight. For consumers, it could become tougher to get some kinds of home equity loans, such as those that amount to 100 percent of a home's value. 'It may curtail the appetite of some lenders for taking risks and if it does, it would reduce the credit supply to some consumer groups,' said Douglas G. Duncan, chief economist for the Mortgage Bankers Association. 'I think this is a policy that's long overdue,' said John H. Vogel Jr., a professor of real estate at Tuck School of Business at Dartmouth University. 'We've built an entire housing finance structure based on the belief that housing will always keep going up, and people are using home equity loans with the assumption they can always repay them when they sell their houses at an increased value.' The regulators' warning came in what is called a 'guidance' to the lending institutions, issued jointly by the Office of the Comptroller of the Currency, the Federal Reserve, the Federal Deposit Insurance Corp., the Office of Thrift Supervision and the National Credit Union Administration. They told the lenders they regulate that the institutions' 'credit risk management practices have not kept pace with the products' rapid growth and easing of underwriting standards.' The regulators urged banks, thrifts and credit unions to use particular caution in making loans originated by mortgage brokers, who are not bank employees and who are paid by commission based on the volume of loans they complete. 'For control purposes, the financial institutions should retain appropriate oversight of all critical loan-processing activities, such as verification of income and employment and independence in the appraisal and evaluation function,' the guidance said. Similarly, lenders were also warned to be wary of loans purchased from financial institutions called 'correspondents,' which make loans on their own for resale to other lenders. Banking regulators noted that correspondents, too, 'have an incentive to produce and close as many loans as possible.' Meanwhile, lending institutions should be monitoring the financial health of their home equity customers by periodically checking their credit scores, assessing the way people use their loans, monitoring home values in the neighborhood and using behavioral scoring to identify potential problem accounts. When such problems arise, lenders should refuse to extend additional credit or even reduce the credit limit available, the agencies said. Some lenders do not see a looming problem. 'As long as the housing bubble doesn't burst, home equity lines should remain strong and remain safe,' said Scott Stern, chief executive of Lenders One, a St. Louis-based cooperative of 60 mortgage companies that originate home-equity lines, including some that feature 100 percent loan-to-equity ratios. 'As long as the bubble doesn't burst, there should be no serious problem.' Whether some or all of the country is experiencing a real estate price bubble, in which speculation causes prices to rise to a level that is unsustainable, continues to be debated among economists. At issue is the fast-growing market for home equity lending, which rose to $881 billion at the end of 2004 from $492 billion at the end of 2000, up 79 percent, according to the Federal Reserve. Overall mortgage indebtedness nationwide climbed 57 percent, to $7.54 trillion at the end of 2004 from $4.8 trillion at the end of 2000. With average wages growing less than inflation, many homeowners have turned to home equity loans or lines of credit to make purchases, renovate their residences, consolidate credit card debt and pay bills they otherwise couldn't afford, such as medical expenses. High home-price appreciation, low interest rates and the deductibility of the interest have made such loans especially attractive to consumers at a time when two-thirds of all households own homes -- leading to a rush to spend burgeoning home equity. Veteran banking consultant Bert Ely said the warning comes at a time when a growing number of industry observers think the real estate price appreciation bubble 'can't expand further.' He added that whenever home prices rise for a long time, 'some lenders go overboard.' Lenders need to take the message seriously, Ely said. 'Banks are learning that 'guidance' is increasingly a code word for 'regulation,' ' he said. The government warning was issued on the same day that the National Association of Realtors called for increased consumer education on the dangers of what the trade group called 'toxic' loans with predatory terms that hurt homeowners, such as high-interest-rate loans that could cause them to lose their homes if they lost their jobs. The group said that banking regulators were doing little to protect homeowners. 'Consumers are also at risk, and the possibility exists that they could lose their homes' to foreclosure, said JoAnne Poole, president of the Maryland Association of Realtors.

Subject: China Has an Ancient Mariner From: Emma To: All Date Posted: Wed, Jul 20, 2005 at 15:44:52 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/20/international/asia/20letter.html?8hpib=&pagewanted=all China Has an Ancient Mariner to Tell You About By JOSEPH KAHN NANJING, China - The captivating tale of Zheng He, a Chinese eunuch who explored the Pacific and Indian Oceans with a mighty armada almost a century before Columbus discovered America, has long languished as a tantalizing footnote in China's imperial history. Zheng He (pronounced jung huh) fell into disfavor before he completed the last of his early 15th-century voyages, and most historical records were destroyed. Authorities protected his old family home in Nanjing, but it was often shuttered, its rooms used to store unrelated relics. Now, on the 600th anniversary of Zheng He's first mission in 1405, all that is changing. Zheng He's legacy is being burnished - some critics say glossed over - to give rising China a new image on the world stage. Books and television shows, replicas of Zheng He's ships and a new $50 million museum in Nanjing promote Zheng He as a maritime cultural ambassador for a powerful but ardently peaceful nation. Officials have even endorsed the theory, so far unproven, that one of Zheng He's ships foundered on the rocks near Lamu island, off the coast of today's Kenya, with survivors swimming ashore, marrying locals and creating a family of Chinese-Africans that is now being reunited with the Chinese motherland. The message is that Zheng He foreshadowed China's 21st-century emergence as a world power, though one that differs in crucial respects from Spain, Britain, France, Germany, Japan and, most pointedly, the United States. 'In the heyday of the Ming Dynasty, China did not seek hegemony,' says Wan Ming, a leading scholar of the era. 'Today, we are once again growing stronger all the time, and China's style of peaceful development has been welcomed all over the world.' The Communist Party hopes to signal to its own people that it has recaptured past glory, while reassuring foreign countries that China can be strong and non-threatening at the same time. Even within China, though, the use of poorly documented history as modern propaganda prop has generated a backlash. Several scholars have publicly criticized the campaign as a distortion, saying Zheng He treated foreigners as barbarians and most foreign countries as vassal states. His voyages amounted to a wasteful tribute to a maniacal emperor, some argue. Zheng He resonates, favorably or not, in Asia. Arguably for the first time since his final voyage in 1433, China is vying to become a major maritime power. Beijing has upgraded its navy with Russian-built Sovremenny-class guided missile destroyers, Kilo-class diesel submarines and a new nuclear submarine equipped to carry intercontinental ballistic missiles. It has flirted with the idea of building an aircraft carrier, according to conflicting reports in state media. Sustained double-digit increases in defense spending have helped make China one of the largest military powers in the world, though still well behind the United States. China says it aims only to defend itself. But others are skeptical. 'Since no nation threatens China, one wonders: why this growing investment?' Defense Secretary Donald H. Rumsfeld asked recently in a speech on China's buildup during a visit to Singapore last month. Beijing clearly hopes history will help answer the question. Zheng He was a Chinese Muslim who, following the custom of the day, was castrated so he could serve in the household of a prince, Zhu Di. Zhu Di later toppled the emperor, his brother, and took the throne for himself. He rewarded Zheng He, his co-conspirator, with command of the greatest naval expedition that world had ever seen. Beginning in July 1405, Zheng He made port calls all around Southeast Asia, rounded India, explored the Middle East and reached the eastern coast of Africa. The three ships Columbus guided across the Atlantic 87 years later, the Niña, Pinta and Santa María, could fit inside a single large vessel in Zheng He's armada, which at its peak had up to 300 ships and 30,000 sailors. Some of China's maritime innovations at the time, including watertight compartments, did not show up on European vessels for hundreds of years. Zheng He was China's first big ocean trader, presenting gifts from the emperor to leaders in foreign ports and hauling back crabapples, myrrh, mastic gum and even a giraffe. In time, though, the emperor turned against seafaring, partly because of the exorbitant cost, partly because of China's religious certitude that it had nothing to learn from the outside world. By the latter part of the 15th century the country had entered a prolonged period of self-imposed isolation that lasted into the 20th century, leaving European powers to rule the seas. For Chinese officials today, the sudden end of China's maritime ambitions 600 years ago conveniently signals something else: that China is a gentle giant with enduring good will. Zheng He represents China's commitment to 'good neighborliness, peaceful coexistence and scientific navigation,' government-run China Central Television said during an hourlong documentary on the explorer last week. Earlier this month, authorities opened a $50 million memorial to Zheng He. Tributes to him fill courtyard-style exhibition halls, painted in stately vermillion and imperial yellow. A hulking statue of Zheng He, his chest flung forward as in many Communist-era likenesses of Mao, decorates the main hall. As the Zheng He anniversary approached, delegations of Chinese diplomats and scholars also traveled to Kenya to investigate the claims that islanders there could trace their roots to sailors on Zheng He's fleet. On one remote island, called Siyu, the Chinese found a 19-year-old high school student, Mwamaka Sharifu, who claimed Chinese ancestry. Beijing's embassy in Nairobi arranged for her to visit China to attend Zheng He celebrations. Beijing has invited her back to study in China, tuition-free, this fall. 'My family members have round faces, small eyes and black hair, so we long believed we are Chinese,' Ms. Sharifu said in a telephone interview. 'Now we have a direct link to China itself.' The outreach effort has generated positive publicity for China in Kenya and some other African countries, as well as around Southeast Asia, where Zheng He is widely admired. But Zheng He has been more coolly received by some scholars in China and abroad. Geoff Wade, a China specialist at the National University of Singapore, argued in an academic essay that Zheng He helped the Ming state colonize neighboring countries. His far-flung expeditions aimed at enforcing a 'pax Ming' through Southeast Asia, allowing China to wrest control of trade routes dominated at that time by Arabs, he wrote. Several Chinese experts also questioned whether Zheng He's legacy is as salutary as government officials hope. Ye Jun, a Beijing historian, said the official contention that Zheng He was a good-will ambassador is a 'one-sided interpretation that blindly ignores the objective fact that Zheng He engaged in military suppression' to achieve the emperor's goals. 'These matters should be left to scholars,' Mr. Ye said.

Subject: The Urban Migrants From: Emma To: All Date Posted: Wed, Jul 20, 2005 at 13:47:09 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/20/business/20immigrants.html?pagewanted=all The Urban Migrants By ROBEN FARZAD RIVERHEAD, N.Y. - Eight years ago, Sister Margaret Rose Smyth had to go out of her way to find illegal immigrants who might need her help, listening for Spanish conversations at the Kmart on the North Fork of Long Island. Now every day, Sister Margaret, a Roman Catholic nun who is the director of the North Fork Spanish Apostolate, typically sees off two early-morning buses filled with laborers seeking work along the Long Island Expressway, giving them business tips and moral support. By the time her workday ends 12 hours later, she has met with scores of other workers seeking her advice on everything from alcoholism and burial arrangements to documents and wages. 'The housing and construction boom has more people working,' Sister Margaret said, noting that now she sees 1,000 immigrants from Mexico and Central America, most of them undocumented, at church each week. 'Somebody made it to Riverhead and got the word out,' she said. Indeed, the housing boom, with its promise of consistent and better-paying work, has in the last five years attracted undocumented laborers not just to Long Island, but also to hot housing markets across the country - among them the areas around Chicago; Washington; Freehold, N.J.; Raleigh, N.C.; and Jupiter, Fla. But unlike the agricultural work that traditionally drew immigrant laborers to little-populated areas of the country, construction labor is conspicuously in the heart of the suburbs, with laborers gathering in Home Depot parking lots, outside convenience stores and on street corners. Many are remaining in the suburbs afterward to do landscaping, painting, kitchen renovations and other home improvement work. In the process, longtime residents are being forced to confront the issue of illegal immigration as never before, dotting the national map with dozens of new battlefronts in the debate on workers living in the United States without legal status. While the nature of illegal immigration makes exact numbers hard to come by, the Pew Hispanic Center, a nonpartisan research organization, estimates that the unauthorized migrant population jumped by 25 percent from 2000 to 2004, to at least 10.3 million. About 20 to 25 percent of the entire construction work force in this country, the center estimated, is undocumented. Abel Valenzuela Jr., a professor of urban planning at the University of California, Los Angeles, who has canvassed more than 80 worker sites nationwide, estimates that 75 to 85 percent of all day labor is in home construction, repair and landscaping. 'The housing boom and construction is driving the day labor issue into the suburbs,' said Mark Krikorian, executive director of the Center for Immigration Studies, a research organization that favors tighter immigration controls. The growing presence of illegal immigrants has been burden on local hospitals and schools and is 'sparking political activism at the local level,' he said. 'Until now,' he added, 'there hasn't been enough of a catalyst to get local people speaking out.' But Rakesh Kochhar, associate director for research at the Pew Hispanic Center, said that it would be unfair to characterize illegal immigrants as a drain on society, noting that many of them pay taxes but are ineligible for government services. Moreover, he said, they contribute to a critical sector of the economy. 'Construction day laborers are responding to a demand, and definitely filling a need,' he said. 'If you took away that labor force, I doubt it would have a positive effect.' Freehold, N.J. - the subject of the Bruce Springsteen song 'My Hometown' - is one place the debate has surfaced, as local residents cope uneasily with the growing number of immigrant workers who seek construction and landscaping jobs in western Monmouth County. 'Freehold is being used as day labor central,' said Marc LeVine, a former councilman in the blue-collar borough who founded Pressing Elected Officials to Protect Our Living Environment - with the acronym People - to campaign against illegal immigration. 'There's a culture clash and animosity toward not just the workers, but the wealthy people who demand the day labor.' Mr. LeVine estimates that Freehold is now home to at least 3,000 to 4,000 illegal immigrants, a significant fraction of the borough's recognized population of 11,000 people who were counted in the 2000 census. That off-the-books population increase, Mr. LeVine said, has strained schools and hospitals and driven up taxes. 'Nobody is sending us money to help us with these costs,' he said. 'This cannot be a free-for-all.' Accordingly, Freehold has become a nationally recognized hot spot in the immigration debate. In April, the United Patriots of America, a group that recruits what it calls minutemen to locate and report illegal immigrants, was blocked by protesters from holding a meeting in Freehold. When it tried to reconvene at a nearby sports arena in June, dozens of protesters showed up. Police in SWAT gear stood by. One point of contention is the formalization and public financing of locations where day laborers gather to get employment from contractors who increasingly rely on them for spot work like painting, roofing and marble cutting. Advocates of immigrant rights are petitioning municipalities to pay for these formal hiring centers - which may vary from a large tent with a portable toilet to an air-conditioned trailer to a whole building - to address the complaints of loitering and littering and the danger of workers chasing after vans. 'Day laborer sites are the visible face of the immigration issue,' said Pablo Alvarado, a former day laborer who now runs the National Day Laborer Organizing Network, an umbrella organization for such work sites. 'One hundred men in the street is a very real thing.' But proponents of immigration control argue that formal hiring centers amount to an official sanctioning of illegal labor that will only draw more workers to an area, creating inevitable overflows and a return to street corner congregations. In Jupiter, Fla., a popular destination for homeowners fleeing north from the sprawl of South Florida, construction permits have increased 50 percent in the last two years. Not coincidentally, so many day laborers have come to the area in recent years that the town is moving forward with plans for a municipally financed hiring center. 'I call it an illegal hiring hall,' said John Slattery, a mortgage broker who founded Jupiter Neighbors Against Illegal Labor in response to what he said has been an influx of 5,000 illegal immigrants over the last three years. 'We're talking about a sleepy little town here that now has an illegal barrio with drugs and gangs,' he said. 'Now, the government wants to facilitate it instead of stopping it.' Similar debates are taking place in the Washington metropolitan area, where, according to the National Association of Realtors, the median price for a single-family home surged 22.7 percent into the first quarter of this year. A survey commissioned last year by Fairfax County in Northern Virginia found that at least 80 percent of the area's day laborers, not all of them illegal, were doing construction work. 'There's a boom in construction here and willing' workers, said Gustavo Torres, who heads Casa de Maryland, a hiring site in another Washington suburb, Takoma Park, Md. 'It's a perfect match.' The county has reserved nearly $400,000 for at least three new day labor sites. In Herndon, Va., about 30 miles west of Washington, day laborers have been gathering in the parking lot of a local 7-Eleven store. Town officials are now considering a proposal for a formal site with restrooms, parking for contractors and even English classes and social services for men who do not get hired in the morning. 'Our tax money should be used to protect our borders,' said Dennis Baughan, a realtor and retired schoolteacher in Herndon who has organized a group of 150 residents opposed to the day laborer hiring centers. 'If you build a formal site it sends a message to Mexico and South America to show up.' Mr. Baughan said that he had observed the Casa de Maryland center numerous times. The site, he said, typically assists 70 laborers a day, but he said he had seen 500 men soliciting construction jobs on the streets surrounding it. 'That will happen here, too,' he said. The economic rewards of construction-related day labor are obvious. Workers who have known the instability of agricultural wages and tip-driven food delivery say they can clear $500 in cash on good weeks; higher-skilled laborers, like tile cutters and electricians, earn more. In addition, construction work often lasts for several weeks, and subcontractors tend to reward the best workers with repeat job offers. Mr. Alvarado said that while visiting gathering spots in the Chicago and Atlanta area, he saw police officers parking their cars in front of sites and ticketing laborers for jaywalking and littering. 'They basically do this to discourage the men from showing up,' he said. 'Where are their civil rights?' A recent survey of day labor in the Washington area by the Center for the Study of Urban Poverty at the University of California, Los Angeles, found that more than half of workers questioned reported that they had been cheated out of wages and one-quarter reported being injured on a job. Sister Margaret of the North Fork Spanish Apostolate said she has a 'logjam' of cases of laborers not being paid. She carries a box of more than 40 reports of abuse, like a contractor who slaps his workers and bosses who deduct sums as 'taxes' that they then pocket. Sister Margaret says she worries that she is only seeing a fraction of the true total. 'Many of the men,' she says, 'would rather tolerate abuse and injury than get deported.'

Subject: The Growth Cycle and Employment From: Emma To: All Date Posted: Wed, Jul 20, 2005 at 10:42:58 (EDT) Email Address: Not Provided Message: Notice that the projection from Alan Greenspan is for enough growth to justify continuing the Federal Reserve tightening cycle for some time. Any improvement in the labor market for the rest of this cycle will be no more than marginal. This is not meant as a criticism of the Fed, but rather a criticism of fiscal policy is intended for the employment effect of fiscal policy expansion since 2001 has been startling little.

Subject: Stephen Roach From: Terri To: All Date Posted: Wed, Jul 20, 2005 at 07:13:42 (EDT) Email Address: Not Provided Message: Stephen Roach of Morgan Stanley is always interesting, but always bearish on stocks and as such almost always wrong. Basically, Roach would always like to have the Federal Reserve act more conservatively and I just as basically never agree. I hope however that long term interest rates do stay low, though with Roach finally in that camp I am now far more cautious.

Subject: Re: Stephen Roach From: Pete Weis To: Terri Date Posted: Wed, Jul 20, 2005 at 11:55:32 (EDT) Email Address: Not Provided Message: Terri. Stephen Roach has been one of the few voices out there (another being Paul Krugman) suggesting that the US and global economies are not built on a healthy foundation. He has warned repeatedly that much of the present global economy is built on two powerful forces - Chinese production and US consumption with the related build-up of debt needed to keep it going. His bearishness is based on the fact that this global economic foundation will, at some point, will begin to crumble. The major borrowing force for the US consumer has been the housing asset. Once the housing market begins to go flat, the housing 'ATM' will fade and consumption, in the absence of significantly rising wages and job production, will drop (what else will replace the housing boost?). Dropping consumption will hit corporate profits. It is just a matter of when. Housing markets are still rising, but how much longer? HP is laying off 14,500, IBM 13,000, Kodak 10,000, GM & Ford are laying off thousands, the airlines have been laying off, etc. Much of the new job production is related to residential housing construction - either directly or indirectly. Most of us hate to listen to bearers of 'doom & gloom'. That's why it's called 'doom & gloom'. We're constantly told to 'accentuate the positive' and reduce the negative. We have been trained to think a certain way. Now if one is in a desparate, life threatening situation, it does no good to think negatively - positive thinking is the only way out (even if the odds are not particularly good). But maybe a little early 'negative' thinking might have prevented the life threatening situation in the first place. Stephen Roach has been trying to tell us that we are digging ourselves a deeper and deeper hole of debt which will be more and more difficult from which to escape. Once we have all come to this realization, I'm betting Stephen Roach turns 'positive' with suggested ways of puting humpty dumpty back together.

Subject: Re: Stephen Roach From: Terri To: Pete Weis Date Posted: Wed, Jul 20, 2005 at 12:07:54 (EDT) Email Address: Not Provided Message: More than a decade I have found Roach continually wrong in his projections about the economy. Roach comes from the no pain, no gain school. The idea that the Fed should forever be controlling asset prices by limiting growth for the sake of some imagined ideal of balanced growth. I simply do not agree with his pain pain pain approach, though I almost always agree with Paul Krugman.

Subject: What? From: Pete Weis To: Terri Date Posted: Wed, Jul 20, 2005 at 12:32:48 (EDT) Email Address: Not Provided Message: Terri. We started to have trouble with the economy during the very end of the 90's - the tail end of the stock craze and accounting fraud helped to mask the problems. Those problems are still with us including a large and growing current account deficit. The Fed has used truely extraordinary means to hold things together - much of it allowing a tremendous loosening of credit standards. A number of folks, including Richard Russell, Robert Shiller and Stephen Roach, were warning of trouble ahead and the possibilty of a collapse in the stockmarkets. But few of us paid any attention - apparently, few of us even remember. Once again they're telling us we are still not out of the woods and to expect a housing bust and all of the fallout which would ensue from that. Once again most of us aren't paying attention. You say you 'agree' with Paul Krugman, but he has been saying much of the same. While in Asia recently (we posted the article on this message board), he stated he expects a downturn in the housing markets and expects the dollar to begin to fall with it.

Subject: Re: What? From: Terri To: Pete Weis Date Posted: Wed, Jul 20, 2005 at 14:22:17 (EDT) Email Address: Not Provided Message: I understand, but the Federal Reserve does not and I think should not target asset prices. I find no weakness in growth at this time, but I too think we will run into trouble when the housing market finally slows. What I expressly do not want to see is the Fed raising rates to get at housing.

Subject: Re: Stephen Roach From: Jennifer To: Terri Date Posted: Wed, Jul 20, 2005 at 11:38:56 (EDT) Email Address: Not Provided Message: Ever since Bill Gross and Stephen Roach became bullish on long term bonds, the bond mnarket has been slowly selling off.

Subject: Earnings From: Terri To: All Date Posted: Wed, Jul 20, 2005 at 06:00:38 (EDT) Email Address: Not Provided Message: Earnings growth still continues to be excellent, and is keeping stock market valuations attractive especially in light of the gradual and moderate advance. This is promising. As always, we need low long term interest rates to continue to grow solidly and for the market to progress. So far, fine.

Subject: new article by krugman From: rlkinnard To: All Date Posted: Tues, Jul 19, 2005 at 16:55:05 (EDT) Email Address: nozdrev1@hotmail.com Message: hi, there is a new article in the Atlantic - or is it harper's this month with a discussion by hubbard and krugman about a potential currency crisis. will this be avaiable here? thanks for your postings

Subject: Re: new article by krugman From: Bobby To: rlkinnard Date Posted: Tues, Jul 19, 2005 at 17:03:06 (EDT) Email Address: robert@pkarchive.org Message: I will check it out and see if it's available online.

Subject: Trading poll number points From: Pete Weis To: All Date Posted: Tues, Jul 19, 2005 at 12:06:47 (EDT) Email Address: Not Provided Message: Editorial from the Boston Globe: Link to Cheney deepens ‘leak-gate’ scandal By Derrick Z. Jackson, Globe Columnist | July 19, 2005 THE NEWS that Vice President Dick Cheney’s chief of staff was the second possible source in the leaking of the identity of a CIA agent to Time magazine elevates the scandal to a whole new level. It is bad enough for Karl Rove to be accused of being a leaker, since he is President Bush’s chief political strategist. But if Time’s story holds, I. Lewis Libby’s involvement represents an even more insidious abuse of power. The Bush administration is being accused of leaking the name of Valerie Plame in retribution for a New York Times op-ed article written by her husband, diplomat Joseph Wilson. Wilson wrote that he never found any evidence in a 2002 trip to Africa, contrary to claims made by President Bush in his 2003 State of the Union address, that Saddam Hussein was procuring uranium from Niger for nuclear weapons. Bush would invade Iraq over weapons of mass destruction that were never found. But Libby, Cheney, and the other influential right-wing hard-liners, such as Donald Rumsfeld, Paul Wolfowitz, Richard Armitage, Richard Perle, and Douglas Feith, saw their dreams come true. Back in the administration of the senior President Bush, Cheney was defense secretary and Libby and Wolfowitz were two of his aides who, after the first Gulf War left Saddam in power, drafted a document advocating ‘‘preemptive’’ war against possible threats. They said the United States should be ‘‘postured to act independently when collective action cannot be orchestrated.’’ Such provocation was kept at bay when President Clinton beat Bush in 1992 and took office for eight years. But when the junior Bush became president in 2000, the hard right on foreign policy took the helm. They used the terrorist attacks of Sept. 11 as an excuse for invading Iraq, even though President Bush’s own 9/11 Commission found no tie between Saddam and 9/11. Libby was in the thick of whipping up fear over the thinnest of evidence. The level to which Libby and Cheney stooped to get their war was highlighted by the momentous presentation of Saddam’s ‘‘threat’’ before the United Nations Security Council by then Secretary of State Colin Powell. Powell gave a presentation six weeks before the war where he said, ‘‘every statement I make today is backed up by sources, solid sources. These are not assertions.’’ Those assertions resulted in grudging acceptance of the war from many Democrats. Virtually all of Powell’s solid sources fell apart when the United States turned Iraq upside down, killing thousands of Iraqi civilians in the process. He would have looked much worse had he listened to everything Libby and Cheney tried to feed him. It was Cheney’s staff who wrote the first draft of Powell’s UN speech. It was Libby who suggested, in strategy meetings at the White House, playing up every possible, conceivable threat of Saddam — with the emphasis on the word ‘‘conceive.’’ A US News and World Report story in the summer of 2003 quoted a senior administration official as saying Libby’s presentation ‘‘was over the top and ran the gamut from Al Qaeda to human rights to weapons of mass destruction. They were unsubstantiated assertions, in my view.’’ Powell, according to both US News and Vanity Fair, was so irritated by Libby’s hodgepodge of unsubstantiated facts that he threw documents into the air and said, ‘‘I’m not reading this. This is bull ...’’ Libby, whose nickname is Scooter, was particularly unhappy that Powell had thrown out sections of the presentation that would have attempted to link Al Qaeda to Saddam, including a discredited report that top 9/11 Al Qaeda airline hijacker Mohamed Atta had a meeting with an Iraqi intelligence official in Prague. According to Vanity Fair, ‘‘Cheney’s office made one last ditch effort to persuade Powell to link Saddam and Al Qaeda and to slip the Prague story back into the speech. Only moments before Powell began speaking, Scooter Libby tried unsuccessfully to reach [Larry] Wilkerson by phone. Powell’s staff chief, by then inside the Security Council chamber, declined to take the call. ‘Scooter,’ said one State Department aide, ‘wasn’t happy.’’’ According to Vanity Fair, Cheney himself urged Powell to go ahead and stake his national popularity on the nonexistent evidence by saying to Powell, ‘‘Your poll numbers are in the 70s. You can afford to lose a few points.’’ America and Iraq would go on to lose more than a few points. Libby may end up as a symbol of a government so driven to ignore the truth it was willing to resort to dirty tricks to stop anyone from telling it.

Subject: When bills come due From: Pete Weis To: All Date Posted: Tues, Jul 19, 2005 at 10:54:29 (EDT) Email Address: Not Provided Message: From The Wall Street Journal: July 17, 2005 SUNDAY JOURNAL When the Bills Come Due, Then What? By KELLY K. SPORS Staff Reporter of THE WALL STREET JOURNAL July 17, 2005; Page D2 Thanks to rock-bottom interest rates and easy ways to borrow, consumers have been on an all-out spending spree for several years. Now, though, there are signs that the bills may be piling up too high. The portion of Americans' disposable income devoted to paying off debt hit a record high recently, even though interest rates have stayed at record lows. That could put a financial squeeze on many households if and when long-term interest rates finally start to go up. U.S. consumers are more vulnerable than ever to rate increases because they've taken on more adjustable-rate debt in recent years -- meaning monthly payments fluctuate when interest rates change. Nearly half of all consumer debt and 26% of all mortgage debt is now adjustable, estimates Joe Abate, senior economist at Lehman Brothers. That's a stark change from the early 1980s when nearly all debt had fixed rates. Other estimates peg adjustable-rate debt at closer to 20% of all consumer debt. Adjustable-Rate Crunch 'When all these [adjustable-rate] mortgages reset soon, some of these people are going to see their monthly payments rise by a few hundred dollars a month,' Mr. Abate says. 'That's a real significant bump for all those people complaining now that gas prices have risen over $2 a gallon.' And recent data suggest the debt burden on households is growing heavier, despite low interest rates. The 'debt service ratio,' the Federal Reserve's estimate of the ratio of debt payments to after-tax income, hit 13.4% in the first quarter of this year, an all-time high since the Fed began tracking it in 1980. The financial obligations ratio, which adds automobile lease and rent payments, homeowners insurance and property-tax payments to the debt service ratio, was 18.45% last quarter, near the record high of 18.84% in late 2002. Overall, U.S. consumers now owe roughly $11 trillion, nearly double what they owed a decade ago. The vast majority of that debt growth came from people taking out big mortgages and tapping their escalating home equity. Total household debt grew 11.2% in 2004, the largest year-to-year increase since 1986. 'We're still in the midst of this consumer debt binge,' says Kathy Bostjancic, U.S. senior economist at Merrill Lynch & Co. As long as the housing boom continues, 'it's going to give consumers a false sense of security.' Many economists including Ms. Bostjancic predict that if mortgage rates see a noticeable rise from the 6% of recent months, many housing markets will slow and prices will flatline, or even drop in some especially hot markets. Oddly, long-term rates have stayed low despite the Fed's steady short-term rate increases that started last summer -- a phenomenon that Fed Chairman Alan Greenspan recently dubbed a 'conundrum.' Here's the impact rising rates can have on household finances: A family with a 30-year adjustable-rate mortgage with a 5% interest rate would see its monthly payment jump from $1,074 to $1,468 -- a 37% leap -- if mortgage rates rose to 8%. Couple this with rises in other debt payments such as credit cards, home-equity loans and such, and households may struggle to pay all the bills each month. The rise in payments due could be exacerbated if job growth and incomes don't keep pace. For consumers, this means it's high time to make a serious dent in their debts, especially those with adjustable-rate debts such as many mortgages, home-equity loans and credit cards. While it may not be realistic to pay off some debts entirely (easier said than done), borrowers can at least make more than the minimum payments each month -- and cut back or stop buying on credit. After all, most analysts still think that long-term rates have nowhere to go but up, and that there will be a modest increase by year end. Once rates rise, all the consumers who have overloaded themselves with adjustable-rate debt on mortgages, home-equity loans and credit cards will probably see their minimum monthly payments climb. And if housing prices stop rising, they'll be less able to tap their home equity to help cover the swelling bills. In severe cases, if consumers can no longer afford their monthly payments, this could mean more defaults and foreclosures in some cases. Already, affordability concerns are popping up. A recent analysis of jumbo mortgages, those with loans above $359,650, by Bear Stearns showed that the average initial mortgage payment on mortgages rose to $2,338 in the first quarter of this year, up from $2,060 late last year. It suggests home buyers might be struggling to keep the price of their home low. Consumers who have taken advantage of innovative loan products like interest-only loans also will feel the pinch of rising rates, since those loans require only interest payments early on, no principal, but require heftier payments later on. And that number has risen significantly during the past couple years: About 27% of all new mortgages so far this year (excluding refinancings) were interest-only, according to LoanPerformance, a unit of First American Corp. that tracks 46 million mortgages monthly and provides information to lenders and others in the industry. Only 1.6% of all new mortgages were interest-only in 2001. Much of the debt spree reflects unusual market trends in recent years, particularly the housing boom. Even as the U.S. economy sputtered and jobs fizzled in 2001 and 2002, consumers continued to borrow and spend as they did during the raging 1990s bull market. But as home prices surged and interest rates hit record lows, consumers took out bigger mortgages and started tapping their escalating home equity like a credit card. U.S. regulators kept interest rates low to keep the economy chugging. 'We'll Probably Regret It' 'It was a good strategy in that we needed something to boost the economy in the economic downturn,' says Dean Baker, founder of the Washington think tank Center for Economic and Policy Research. 'But it sets us up for an even worse crash when housing' cools. 'In the long term, we'll probably regret it.' What's more, consumers' attitude about debt is changing, says Robert D. Manning, a finance professor at Rochester Institute of Technology. While older generations are more debt-averse and cut spending during economic downturns, younger generations rely on debt for spending money. 'What we're seeing here is really a deferral of the financial responsibility and consequences,' Mr. Manning says. 'We may be heading into a very gut-wrenching period.'

Subject: Inflation Convergence From: Pancho Villa To: All Date Posted: Tues, Jul 19, 2005 at 06:53:05 (EDT) Email Address: nma@hotmail.com Message: Inflation Convergence Stephen Roach (New York) Is inflation global or local? That is a key aspect of the macro debate, which is now moving to center stage in financial markets. Generations of economists, policymakers, and investors are trained to look at inflation as a closed-economy phenomenon, driven by the “cost mark-up” models of yesteryear. However, as an unmistakably powerful convergence of inflation rates around the world suggests, globalization argues for a different approach. Country-specific inflation calls are increasingly becoming global inflation calls. The evidence on geographic inflation convergence is compelling. As recently as 1990, CPI-based inflation in the so-called advanced economies was running at a 5% rate, whereas the median inflation rate for developing countries was slightly above 15%. According to the IMF’s latest estimates, inflation in the developed world is likely to average around 2% in 2005 and 4.8% in the developing world. That means over this 15-year time period, annualized inflation differentials between these two categories have narrowed from slightly over ten percentage points to just under three percentage points. Powerful convergence trends are evident within virtually every major subset of the mix of global inflation. With the notable exception of Japan’s protracted deflation, inflation rates throughout the developed world have converged uniformly toward 2-2.5% over the past five years. Country-specific inflation differentials have all but vanished in the Euro area: For example, over the 1987-96 period, inflation in Italy and Spain averaged 5.3%, double the 2.6% average for Germany and France; our 2005 estimates point to approximately 2.5% in the once high-inflation economies of economies of Italy and Spain, only slightly faster than our estimates of 1.8% in Germany and France. Convergence is even evident in inflation-prone Latin America: For example, over the 1987-96 period, inflation surged at a 656% average annual rate in Brazil -- about 18 times Mexico’s 37% average; for 2005, our latest estimates put inflation at 5.9% in Brazil and 4% in Mexico. This is hardly a statistical accident. Equally compelling is the global breakdown of the linkage between labor costs and inflation in recent years. According to calculations by the BIS (the Basel-based Bank for International Settlements), the correlations between annualized changes in the CPI and unit labor costs have dropped sharply in every major region of the developed world in the last 15 years (see Chapter IV of the 75th Annual Report published by the BIS in June 2005). In the US, the BIS calculates that the so-called wage-inflation correlation fell from 0.76 over the 1965-79 period to 0.28 over the 1991-2004 interval. Moreover, significant reductions in the wage-inflation correlation were evident over the same timeframe in Japan, Germany, France, Italy, and the UK. Within this sample of six major developed economies, the sharpest reduction in this correlation was evident in France (0.75 over the 1965-79 period versus 0.11 during 1991-2004) whereas the smallest reduction occurred in the UK (0.71 over the 1965-79 period versus 0.56 during 1991-2004). These results drive a stake into the heart of the classic cost-mark-up models that have long played a central role in explaining country-specific inflation trends. Throughout the developed world, the wage-price linkage has lost its power in explaining the ups and downs of inflation cycles in individual economies. It’s not hard to figure out why. At work, in my view, are the all-powerful forces of globalization. Courtesy of ongoing trade liberalization, in conjunction with sharply declining communication and transportation costs, there has been a sharp increase in the tradable goods portion of world output over the past 15 years. At the same time, a veritable explosion in e-based connectivity since 1995, together with the emergence of an entirely new global IT outsourcing industry, has led to the networking of service providers around the world. As a result, rapidly expanding trade in both goods and services has become an increasingly powerful engine in driving the global growth dynamic. This trend has accelerated in recent years. Over the 1997 to 2004 period, global exports of goods and services, combined, expanded by 60% -- fully four times the 15% cumulative increase in world GDP over the same seven-year interval (as calculated at market exchange rates). According to IMF statistics, gains were equally vigorous in goods (61%) and services (57%). As a result, global trade has now climbed to nearly 30% of world GDP -- nearly double the 17% share prevailing as recently as 1986. In my view, the globalization of pricing trends is a perfectly logical outgrowth of a world economy that is now being increasingly powered by a rapidly growing cross-border trade dynamic. These results are not meant to imply that the increasingly powerful trends of inflation convergence dictate the global result for each and every economy around the world. Japan’s bout of persistence deflation is certainly a glaring example of an important exception to the global price rule. Similarly, the dispersion of energy-efficiency characteristics -- with Asia ex Japan being the most energy-intensive region in the world -- suggests that oil shocks could affect inflation rates very differently around the world. Moreover, to the extent that individual economies get themselves into serious trouble, inflation can certainly deviate from increasingly powerful global norms. Policy blunders, supply-demand imbalances, or asset bubbles and their debt-deflation consequences are all important reasons to look for persistent differentiation on the inflation front. Barring developments such as these, however, I believe that an increasingly powerful globalization overlay makes it very hard to for breakaway trends of divergent inflation to emerge as endogenous characteristics of individual economies. A realignment of foreign exchange rates has long been associated with shifting inflation differentials around the world. In that vein, I have long argued that a weaker dollar should be seen as a critical outgrowth of America’s current account adjustment -- central to the shifts in the world’s relative price structure that might be expected from a full-blown global rebalancing. While the dollar has moved up sharply so far this year, I would characterize this upturn as nothing more than a rally in the midst of a structural downtrend. What’s especially noteworthy is that despite the 13% depreciation in the broad trade-weighted dollar since February 2002, the US inflation rate hasn’t budged. Non-oil import prices are up a total of only 6.4% over this 41-month period -- literally half the decline that has occurred in the broad dollar index over the same time frame. Meanwhile, the core CPI has actually decelerated from 2.5% in February 2002 to 2.0% in June 2005 -- hardly the result that would have been expected of a rapidly growing US economy in the midst of a currency depreciation. Many have argued that convergent forces of globalization are neutralizing the once powerful connection between currency realignments and inflation (see Chapter II of the 75th Annual Report of the BIS, Chapter III of the IMF’s April 2005 World Economic Outlook, as well as Rakesh Mohan, “Challenges to Monetary Policy in a Globalising Context,” Reserve Bank of India Bulletin, January 2004). I couldn’t agree more. All this is not to say that inflation convergence sits all that well with the global body politic. Recent protectionist rumblings are particularly disconcerting in this regard -- especially US-led China bashing. Needless to say, if the Washington consensus succeeds in repricing US-Chinese trade flows -- either by the imposition of trade sanctions or by forcing China’s hand on an RMB revaluation -- the US cost of Chinese imports will go up. For reasons just noted, however, America’s diminished currency elasticity doesn’t necessarily spell a large enough surge in US import prices that would then spill over to pricing of domestically produced goods. Instead, Chinese producers or US distributors could temper the import price pass-through and elect to take the hit through profit margins. For these reasons, I do not think that intensified trade frictions would precipitate a reversal of global pricing convergence. Only in the worst-case scenario of frictions morphing into a full-blown trade war, would globalization, itself, start to reverse. Under those extreme circumstances, it would then be possible to speak of a shift from homogeneous worldwide pricing to a more fragmented global price-setting mechanism. Notwithstanding the intensification of US-China trade frictions, the odds of such a dire outcome remain exceedingly low, in my view. Central to the financial market debate is the case for accelerating US inflation. With slack being absorbed by labor and product markets, unit labor costs apparently on the rise, the dollar arguably in the midst of a multi-year decline, oil prices near $60, and the growth outlook still solid, fears of a cyclical pick-up in US inflation are understandable. However, the increasingly powerful forces of worldwide pricing convergence suggest that domestic attempts to exercise pricing leverage will encounter stiff global headwinds in a climate where non-US world inflation is likely to remain subdued. Consequently, barring the unlikely reversal of globalization, I continue to believe that persistently low global inflation will prevent a meaningful deterioration on the US inflation front. Needless to say, that has especially important implications for Fed policy and fixed income markets -- underscoring what I still believe could be a surprisingly bullish outlook for bonds. http://www.morganstanley.com/GEFdata/digests/latest-digest.html

Subject: Chapters 9 and 10 From: Yann To: All Date Posted: Tues, Jul 19, 2005 at 04:18:25 (EDT) Email Address: Not Provided Message: by Krugman and Wells (macroeconomics textbook) are available at http://www.worthpublishers.com/krugmanwellsnew/pdf/KRUGMAN_WELLS_MACRO_CHAPTER09.pdf and http://www.worthpublishers.com/krugmanwellsnew/pdf/KRUGMAN_WELLS_MACRO_CHAPTER10.pdf Don't find them in the 'Economic theory' section...

Subject: Re: Chapters 9 and 10 From: Bobby To: Yann Date Posted: Tues, Jul 19, 2005 at 16:50:38 (EDT) Email Address: robert@pkarchive.org Message: Thanks, Yann!

Subject: BBC article on oil reserves From: Pete Weis To: All Date Posted: Mon, Jul 18, 2005 at 13:47:28 (EDT) Email Address: Not Provided Message: How much oil do we really have? By Adam Porter In Perpignan, France As oil prices remain volatile the markets do their best to forecast future prices. Unfortunately this is not an easy task. While it may appear extraordinary to outsiders one of the main problems in the oil market is the reliability of basic statistics. The oil industry calls the problem 'data transparency'. As an example this week is a 'revision' to oil demand growth in the United States in 2004. Previously the growth in oil demand was thought to be 2.4%, about 484,000 barrels per day. In fact it was 697,000 barrels per day or 3.5%. That is in fact 46% more than was previously stated - a huge revision. 'Oil market data is generally a black art like using a set of chicken bones,' says Paul Horsnell of Barclays Capital. 'If Columbus had thought he'd hit India when in fact he was in the Caribbean, that's about the level of oil market data.' 'The revisions to US demand growth are small in percentage terms, they are generally 99% accurate. But the change is huge in barrel terms, and this is from the USA who have the best oil data in the world.' Suggestions that oil consumption will grow to up to 120m bpd by 2020 and that automobile and airline traffic will increase at extraordinary rates are futile and damaging Dr Michael Smith, Energy Files The barrel difference was in fact 213,000 per day. Added up that is 77.75 million extra barrels per year, about one day of global production. 'Oil data is like paint thrown across a canvas, you get the broad outline of the situation. But even then it's not just a Jackson Pollack painting, the paint actually moves of it's own accord after it has been applied,' says Mr Horsnell. Phantom reserves One of the major problems surrounding oil data is in reserves. CLAIMED OPEC OIL RESERVES Kuwait: 92bn (64bn) UAE : 92bn (34bn) Iran : 93bn (64bn) Iraq: 100bn (48bn) Saudi Arabia: 258bn (170bn) Claimed oil reserves, bn barrels 1990s/1970s These are the basins of crude oil that lie underground. They are either held by governments or the 'oil majors' like BP, ExxonMobil or Shell, or a combination of both. Many countries simply do not allow outsiders to audit the size of these fields. This is especially true of the major Middle East oil producers of OPEC and the countries of the former Soviet Union. Some believe that reserves stated by OPEC countries such as Kuwait and Saudi Arabia are not accurate. 'There are a lot of questions to answer over OPEC reserves,' says Bruce Evers of Investec Bank. 'The quality of overall oil market data is poor, but with OPEC there remains considerable debate over the reliability of their reserve estimates.' Sudden revisions One of the main reasons is that in the 1980s OPEC decided to switch to a quota production system based on the size of reserves. The larger the reserves a country said it had the more it could pump. The more it could pump the more money it could make. As a result in 1985 Kuwait revised its reserve estimates by 50% overnight. It was soon followed by United Arab Emirates, Iran, and Iraq. In 1988 Saudi Arabia became the last to join the revised reserve estimates party, adding a whopping 88bn barrels. Unexplained changes 'Something needs to be done,' says Mr Evers. 'OPEC have never fully explained the reasons behind these changes, they have never issued any guidelines. The market needs to know.' Although previous estimates may have been conservative, what troubles some analysts is that twenty years later, these reserve estimates are unchanged, in fact some have increased. Whilst it is obviously possible to add reserves by new field discoveries it can seem a perplexing situation to market makers. Kuwait for example still claim exactly the same reserve level as they had in 1985 despite pumping millions of barrels every day since then. Nor are company estimates any better, with Shell forced to make four revisions downwards of its official reserves since 2002, losing around 4.8bn barrels and damaging its share price. Unclear figures Even current figures for OPEC production are unclear. OPEC say they are producing exactly 28 million barrels a day (mbpd). This includes their latest 500,000 barrels per day increase announced at their last quarterly meeting by Kuwaiti oil minister Al-Sabbah. But OPEC have also admitted that their members break their own quotas to take advantage of high prices. So is it really 28mbpd? The International Energy Agency says OPEC pumped 29.3 mbpd in May 2005. The IEA say this is actually a fall from April 2005 of 55,000bpd. Who is correct? 'There is no official OPEC output data,' says Mr Horsnell. 'they just kind of pass on the data they are given by their member countries. It is really not that easy for OPEC, you can't blame them, it is down to their members.' Forecasting demand 'I don't rate IEA data either,' says Mr Evers. 'they have horrendously underestimated demand in the past, it is one of the reasons we are where we are now. They are little more than a data collection agency, and the data they are given is already tarnished.' It is no easier to forecast the future demand for oil, and analysts are growing increasingly sceptical of oil company attempts to do so. Energy Files director Dr Michael Smith said 'it is no longer appropriate to accept glib demand forecasts from oil companies, financial institutions and governments¿suggestions that oil consumption will grow to up to 120 million barrels per day by 2020 and that automobile and airline traffic will increase at extraordinary rates are futile and damaging.' But Paul Horsnell says that gaps between data-sets can in fact show up areas of the oil market that need careful study. 'Take Russian production as an example,' he says. 'There are all kinds of rosy forecasts and then there are people like me who think it's all rather bad news. But there are many reasons about why it is impossible to measure oil, it's a liquid for a start. 'There are huge margins of error with oil data and it has to be treated as such. It's the nature of the product. Thinking you can measure it to the eighth decimal point, well, it's just a waste of time.' As oil prices continue to soar, the lack of accurate data could make it harder for the oil market to predict its future direction. Story from BBC NEWS: http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/4681935.stm Published: 2005/07/15 06:54:23 GMT

Subject: Re: BBC article on oil reserves From: Terri To: Pete Weis Date Posted: Tues, Jul 19, 2005 at 05:37:47 (EDT) Email Address: Not Provided Message: There is no obvious resolution to these reserve estimation problem, alas.

Subject: Housing Lending Standards From: Terri To: All Date Posted: Mon, Jul 18, 2005 at 09:32:15 (EDT) Email Address: Not Provided Message: The slight general inflation, no matter those who challenge every statistic, speaks well to Krugman's caution on interest rates. I share the caution and wish that housing speculation could be curbed simply by tougher lending standards, by there are no tougher lending standards in the offing.

Subject: China to Support the regime of Zimbabwe From: Mik To: All Date Posted: Mon, Jul 18, 2005 at 09:29:16 (EDT) Email Address: Not Provided Message: Business Day - 18 July 2005 With only China among the five permanent UN Security Council members not expressing outrage over the evictions, it is increasingly likely the issues will be taken up at security council level. In what is understood to be a plea for help and effort to forestall any attempt to take the country to the security council and expel it from the IMF, Mugabe is to visit Beijing soon. Mugabe has had a stated “look east” policy since the European Union and the US ascribed pariah status to his regime. But in return for its extensive economic aid, Beijing has insisted on large mining and other concessions. China could be Mugabe’s last ally to forestall his country being taken to the security council now that Russia has condemned him as a “dictator”. In the face of accusations that it is preventing more forceful international action in the Darfur province of the Sudan, Beijing could pay a heavy price if it were to protect Zimbabwe on the security council.

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Subject: China to Support the regime of Zimbabwe From: Mik To: All Date Posted: Mon, Jul 18, 2005 at 09:29:16 (EDT) Email Address: Not Provided Message: Business Day - 18 July 2005 With only China among the five permanent UN Security Council members not expressing outrage over the evictions, it is increasingly likely the issues will be taken up at security council level. In what is understood to be a plea for help and effort to forestall any attempt to take the country to the security council and expel it from the IMF, Mugabe is to visit Beijing soon. Mugabe has had a stated “look east” policy since the European Union and the US ascribed pariah status to his regime. But in return for its extensive economic aid, Beijing has insisted on large mining and other concessions. China could be Mugabe’s last ally to forestall his country being taken to the security council now that Russia has condemned him as a “dictator”. In the face of accusations that it is preventing more forceful international action in the Darfur province of the Sudan, Beijing could pay a heavy price if it were to protect Zimbabwe on the security council.

Subject: As China Raises Its Arts Profile From: Emma To: All Date Posted: Mon, Jul 18, 2005 at 08:01:31 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/18/arts/design/18chiart.html?adxnnl=1&adxnnlx=1121684433-Xu1TSeNZmMRWnrA4gF6Slg As China Raises Its Arts Profile, Officials Try to Catch Up By LYNETTE CLEMETSON WASHINGTON - Zhou Ping joined the Shanghai Symphony Orchestra five years ago as a librarian, cataloging its scores and recordings. A sharp, plain-spoken former music major, she was promoted last August to performance and promotions manager. With a nine-person staff and no management experience, Ms. Zhou, 30, suddenly found herself with a mandate to raise the 126-year-old orchestra's public profile - and by extension, its profits. In a conference room at the John F. Kennedy Center for the Performing Arts, the struggling new manager stood and asked a simple and pointed question of Michael M. Kaiser, the center's president: 'How do you run a marketing department with no marketing budget?' A room full of her peers looked up eagerly for an answer. As China races toward a more market-driven economy, it is building new theaters, concert halls and museums nearly as fast as it is erecting Western-style shopping malls, hotels and business complexes. But the government is also decentralizing control of the arts industry, cutting the full subsidies long provided to companies and performers. Now scrambling to staff and operate a slew of increasingly independent arts organizations, the government has turned for help and advice to the Kennedy Center, which just concluded a two-week arts management seminar for the Chinese. During the program, a group of newly appointed managers and government officials charged with overseeing the arts in China sought the counsel of Mr. Kaiser and his staff on tricky concepts like courting donors, developing operating budgets and projecting and sustaining ticket sales. Chinese officials said they hoped the seminar would become an annual event. During the opening session on strategic planning and mission statements, Mr. Kaiser referred to the cultural development boom with a note of caution. 'This concerns me a great deal in China,' he said. 'You're building so much, there is a fear I have that if your missions are not complete you're going to try to have every organization doing everything.' Although many of China's current global ambitions engender fear and suspicion among some American political and corporate leaders, the belief that cultural exchange can soften hostility between nations may make the growing superpower's artistic modernization less threatening. The management seminar is not the only major collaboration between the Kennedy Center and the Chinese government this year. In October, the Kennedy Center will present a monthlong Festival of China that it is promoting as 'the single-largest celebration of Chinese performing arts in American history.' With 20 companies and 600 artists, the festival will showcase a wide range of performances and exhibitions, including traditional Beijing opera, modern dance, a display of Qin dynasty terra-cotta warriors and a fashion exhibition celebrating the designs of Vivienne Tam and other Chinese-born designers. For the Chinese, the festival is as much study-abroad program as international tour. While Americans are taking in performances, Ministry of Culture officials said, managers traveling with the companies will have a chance to observe everything from press relations and electronic ticketing systems to coordinating ushers. According to the most recent figures available from China's Ministry of Finance, government spending on the arts - a broad category that includes performing arts, sports, film, television and radio - rose to $6 billion in 2003 from $3.6 billion in 2000. But while overall spending on the arts has increased, much of the additional financing for the performing arts is being directed toward building new venues like the National Grand Theater, a 6,000-seat, egg-shaped, glass and titanium complex under construction in central Beijing near Tiananmen Square. Current cost estimates for the ultramodern project, which will include an opera house, concert hall and theater, are roughly $360 million. Arts companies art not only competing for funds with such special projects, but also grappling with new fiinancing structures. China has a long history of supporting the arts. But for decades the Communist government ran its opera companies and orchestras essentially the same way it did steel factories and other enterprises - it paid for and controlled virtually everything. The government covered the salaries of performers, directors, designers and stagehands alike. Ticket sales and donor support were nonissues, because company costs were fully underwritten. 'When I started there was no such thing as marketing,' Ms. Zhou said. 'The government gave us a performance plan and we did it. Things are changing very fast. There is a lot of opportunity, but we all have to figure out how it will all work.' Only over the past five years has government decentralization of industry spread on a large scale to artistic organizations. In 2003, according to Li Dongwen, minister-counselor for cultural affairs at the Chinese Embassy in Washington, the Chinese government instituted a new policy to gradually reduce direct financing to arts organizations. Unlike in Eastern Europe, where government support of the arts was cut in the midst of economic crisis, China's cultural restructuring is happening during an economic boom. Indeed, Mr. Li and other officials insist that the central government is not so much cutting funds to the arts as it is redistributing resources. Some of the apparent reduced financing actually includes money that is being held in reserve in the form of incentive programs, they say. Mr. Li said that about $2.5 million was set aside for performing arts companies to be used over a five-year period from 2003 to 2007 as bonuses to companies that produce successful, audience-drawing programs. Some artists in China have criticized the bonus program, saying it encourages overly commercial art. 'Performing companies now have to find the market,' Mr. Li said. 'They must be concerned with marketing and box office. The market is the fundamental lifeline for everyone now.' The group of keen but largely inexperienced managers visiting Washington this month included a marketing executive charged with creating his organization's first customer database and the director of a research company responsible for designing a management focused Web site for cultural groups. Pan Yong, an assistant director of performance administration for the yet unfinished National Grand Theater, left the session on writing mission statements exhilarated and overwhelmed. His responsibilities include developing fund-raising, education, marketing, exhibition and international promotions plans for the complex, which the government hopes will become the country's premier performance venue. If his title obscures the breadth and weight of his responsibilities, his proposed mission statement did not. 'To be the leading performing arts institution in China,' he told the group. 'To preserve, develop and help to flourish the continued development of classical and traditional Chinese performing arts, while using all possible resources to create and promote the highest quality of modern performing to be among the best both in China and internationally.' Mr. Kaiser, who listened with raised eyebrows, smiled and responded: 'That's very ambitious. Good luck.' Though Kennedy Center staff led sessions on topics including sales services, customer relations, grants and scholarships, and program development, Mr. Kaiser taught the majority of the course himself. His industry handbook, 'Strategic Planning in the Arts: A Practical Guide,' published in 1995, was translated into Chinese two years ago by Mr. Pan, who had participated in a yearlong management fellowship at the Kennedy Center in 2002. The book has become a prized resource for the new cultural management class in China, and Mr. Kaiser is regarded as a demigod of sorts. Students took copious notes as he referenced his personal experiences as case studies. In a session on marketing strategy, he detailed the campaign he waged as executive director of the Alvin Ailey American Dance Theater to bring the company out of bankruptcy in the early 1990's. For a segment on fund-raising, he spoke of the donor strategies he employed in the late 1990's when he ran the Royal Opera House in England, to pay for a beleaguered building project. For artistic strategy he discussed his ongoing mission to broaden the reach and significance of Kennedy Center programs - the Festival of China being an example of an ambitious new programming schedule. He wrote the three strategic areas - artistic, marketing and fund-raising - on a notepad and connected them in the shape of a three-legged stool. 'In a market economy,' he told the group. 'It's not supportable to have just one leg of the stool.' At a wrap-up session, managers and bureaucrats alike vowed new approaches. Ms. Zhou said she would set firm fund-raising targets and begin compiling data on her symphony's patrons. A Culture Ministry official said she was going to propose to her government leaders a new policy of tax deductions for contributions to nonprofit organizations. In the past decade, Mr. Kaiser told the group, China had, in his opinion, done better than any country in the world at training young artists. With a polite nod to the government officials in the room, he urged China's leaders to invest the same resources training arts managers. 'Your country is very good at creating miracles,' he said. 'This would be a miracle. And I hope it happens.' Around the conference table, heads nodded back.

Subject: Value and Growth From: Terri To: All Date Posted: Sun, Jul 17, 2005 at 17:52:09 (EDT) Email Address: Not Provided Message: There is discussion of a movement to growth stocks as the market strengthens. Goldman Sachs is telling clients to reduce value issue such as public utilities and add growth to portfolios. Other than large drug company stocks, which are growth issues, I am neutral on growth and value just now.

Subject: NYT's on Mortgages From: Pete Weis To: All Date Posted: Sat, Jul 16, 2005 at 20:40:30 (EDT) Email Address: Not Provided Message: July 15, 2005 A Hands-Off Policy on Mortgage Loans By EDMUND L. ANDREWS WASHINGTON, July 14 - For two months now, federal banking regulators have signaled their discomfort about the explosive rise in risky mortgage loans. First they issued new 'guidance' to banks about home-equity loans, warning against letting homeowners borrow too much against their houses. Then they expressed worry about the surge in no-money-down mortgages, interest-only loans and 'liar's loans' that require no proof of a borrower's income. The impact so far? Almost nil. 'It's as easy to get these loans now as it was two months ago,' said Michael Menatian, president of Sanborn Mortgage, a mortgage broker in West Hartford, Conn. 'If anything, people are offering them even more than before.' The reason is that federal banking regulators, from the Federal Reserve to the Office of the Comptroller of the Currency, have been reluctant to back up their words with specific actions. For even as they urge caution, officials here are loath to stand in the way of new methods of extending credit. 'We don't want to stifle financial innovation,' said Steve Fritts, associate director for risk management policy at the Federal Deposit Insurance Corporation. 'We have the most vibrant housing and housing-finance market in the world, and there is a lot of innovation. Normally, we think that if consumers have a lot of choice, that's a good thing.' At the Federal Reserve, officials face issues similar to those posed by the stock market bubble of the late 1990's. Alan Greenspan, the chairman of the Federal Reserve, warned about 'irrational exuberance' in the stock market but did not try to pop the bubble. Today, Mr. Greenspan acknowledges that housing prices in some areas are 'frothy,' but he and other top regulators do not think it is their job to push them back down. The main issue for regulators is whether banks and other lenders are properly managing their own risk, and the lenders are looking good. They have hedged their risks by bundling mortgages into securities that are then sold to investors around the world. And if interest rates go higher, they have shifted much of the risk onto consumers because a growing share of home buyers have taken on adjustable-rate mortgages. At the same time, they have built sturdier financial institutions through mergers and the breakdown of barriers to interstate banking. Bert Ely, an independent banking analyst who was among the first to recognize the crisis at savings and loan institutions in the 1980's, said the banks are far sounder today. 'It's a night-and-day difference,' Mr. Ely said. 'No comparison.' But consumers - and perhaps the broader economy - are taking on more risk. About 60 percent of mortgages last year had adjustable interest rates, many with artificially low teaser rates that expire after the first few years. If a mortgage rate jumps from 4 percent to 6 percent, just slightly above current levels, the monthly payment can jump by roughly 30 percent when the teaser rates come to an end. The jolt can be higher for people with interest-only loans. In addition to facing higher rates, borrowers also have to start paying down the amount they owe after about five years. People who put no money down face a different risk: if housing prices decline, even slightly, owners who need to sell their homes may have to come up with thousands of dollars beyond the sale price to pay off their loans. Indeed, because the main risks are to consumers rather than to financial institutions, some critics say regulators have been too timid. 'The prevailing attitude is that if you're taking on a risky mortgage, you're an adult and you're taking on the risk yourself,' said Representative Barney Frank, Democrat of Massachusetts and a co-sponsor of a bill that would impose tougher rules against so-called predatory lending practices. 'If you are the comptroller of the currency or the Federal Reserve, you're looking out for the system of the world,' Mr. Frank added. 'You're making macroeconomic policy. It's much more fun than looking out for consumers.' Even as federal regulators try to reinforce what they say are standard practices for proper underwriting, a growing number of state banking regulators worry that more may be necessary. 'The issue is suitability,' said Joseph A. Smith Jr., the state banking commissioner of North Carolina. 'If you are a stockbroker, you don't put grandma into a hot tech stock. In the mortgage market, you may have a product that is perfectly O.K. for a thoracic surgeon or a professional basketball player, but is not appropriate for a nurse at Baptist Hospital in Winston-Salem.' Unconventional mortgages have soared in popularity in recent years. About a third of home buyers in the last 18 months did not put any money down, according to a recent survey of home purchasers by the National Association of Realtors. Over 25 percent of all new mortgages in the last year have been interest-only loans, which allow buyers to postpone principal payments for three to five years but which become much more expensive afterward. Perhaps the hottest new loan is the so-called option adjustable-rate mortgage, or option ARM, which gives borrowers the choice of paying interest and principal, interest only, or even less than the normal interest. If the home buyer picks the lowest possible payment, the mortgage debt goes up rather than down. Despite their hands-off approach, some regulators are worried that banks and other mortgage lenders may not have properly judged the risks to themselves. They warn that speculative buying has increased, with many people hoping to quickly resell houses and condominiums before the construction is even finished. 'There is a lot of pressure on banks to build market share, and consumers are looking for a quick response,' said Barbara J. Grunkemeyer, deputy comptroller for credit risk at the Office of the Comptroller of the Currency. 'With respect to these new mortgage products, they are new and have taken off rapidly. We are still in the process of understanding the risk-management systems that surround them.' Led by the comptroller's office, which oversees nationally chartered banks, federal banking regulators published guidance in May that gave lenders more detailed instructions on how to evaluate the risks in home-equity loans. The move was a warning shot to lenders. The value of home-equity loans shot up 40 percent in 2004, to $398 billion. Almost all of those loans are at adjustable interest rates, which could rise sharply, and many were extended to people who had just borrowed money to buy a house. Regulators say they plan to raise many of the same concerns this fall that they have already raised about home-equity loans. The areas they find worrisome include granting loans equal to 100 percent of the value of the homes; granting large loans without due attention to the likelihood of higher monthly payments in the future; and granting 'no-doc' (no documentation) or 'low-doc' loans that require little or no proof of income or assets. Such 'guidance' is part of a joint effort by the federal regulators involved with banks and savings and loans: the Office of the Comptroller, the Federal Reserve, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision and the National Credit Union Administration. Ms. Grunkemeyer said she would push for better assessment of a potential buyer's capacity to repay a loan. Even if the applicant qualifies for a loan based on a teaser rate of 4.25 percent, for example, banks will be asked to judge whether that borrower will be able to make payments if the rate jumped to 6 percent. Regulators also want to take a tougher stance toward no-documentation loans. 'You have to ask yourself, why would he be willing to pay a quarter-percent more when he could have gotten a lower rate by giving a copy of his pay stub and a W-2 form,' Ms. Grunkemeyer said. 'There's a reason they've been called 'liar's loans.' ' The guidance is tougher than it sounds, because bank examiners use it when they scrutinize an institution's loan portfolio and underwriting practices. But even advocates of stricter scrutiny, like Susan Bies, a governor of the Federal Reserve, say regulators are merely telling banks what most of them already know. 'We're not trying to set off alarms that we see broad issues,' Ms. Bies said in a recent interview. 'We are seeing examples of practices that need to be tightened down a bit.' Most regulators, including Mr. Smith in North Carolina, are against issuing edicts against particular kinds of loans, even relatively risky ones, if both home buyers and lenders are eager to have them. But many state regulators want to go further than the federal government. State banking regulators are locked in a long-running power struggle with Washington over so-called predatory lending: deceptive mortgage loans that have extremely high fees and are usually offered to people with poor credit. Complaints about predatory lending are heavily concentrated among subprime borrowers, or people with spotty credit records and erratic incomes who probably could not have obtained a mortgage 10 years ago. The volume of subprime mortgages has soared from about $35 billion in 1994 to about $530 billion in 2004 - more than 20 percent of all new mortgages last year. That growth helped propel the homeownership rate to a record 69 percent in 2004. The foreclosure rate on subprime mortgages remains modest, only 3.5 percent in the first quarter of 2005, but that is nine times the rate for prime borrowers. The Bush administration and Republican lawmakers in Congress are seeking to pre-empt state laws on predatory lending, saying that consumers and lenders need a coherent set of national rules. But many states, including New York and North Carolina, contend that the federal guidelines are weaker than their own and that federal agencies are not equipped to handle consumer complaints from 50 states. 'When I started out, the biggest complaints were about denial of credit,' Mr. Smith of North Carolina said. 'Today, none of our complaints are about denial of credit. They are all about what happened after the credit was given.'

Subject: In Love With Harry, Over and Over Again From: Emma To: All Date Posted: Sat, Jul 16, 2005 at 18:09:14 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/15/books/15sala.html?ex=1122091200&en=9b51d461c8cabad6&ei=5070&emc=eta1 In Love With Harry, Over and Over Again By JULIE SALAMON While the world tends to focus on the next new thing, devoted readers often return to the beloved familiar, again and again. For some, the draw is complexity, the why of the whale in 'Moby-Dick.' For others, the lure is to rekindle the pleasure of a juicy tale read at a particular moment in time. But perhaps no group today rereads more faithfully (make that compulsively) than the young fans of Harry Potter. And nothing inspires them to look backward more than the prospect of a new volume. So, anticipating the publication tonight after midnight of 'Harry Potter and the Half-Blood Prince,' sixth in the series, Nancy Chen, 16, of Tulsa, Okla., took its immediate predecessor to camp with her. No matter that 'Harry Potter and the Order of the Phoenix' is 870 pages long and she had read it at least a dozen times. 'Some books you don't have the need to read more than once, but others have this mystery and power to make you fall in love with it every time you read it,' she explained. She would have taken all five volumes with her, but her mother wouldn't let her, she said. That's because just after 'Order of the Phoenix' was published two years ago, Ms. Chen's parents took her on a trip to China. Ms. Chen did not take just her new Harry Potter book with her; she packed all five volumes of the series into her suitcase, so she could reread the old as she absorbed the new. Ms. Chen's mother, she said, 'was kind of mad' that her daughter spent so much of her China trip reading instead of touring. This time around, a limit was set. Ms. Chen's mother is not the only parent concerned about her child's Harry Potter addiction. Francie Alexander, senior vice president of Scholastic Inc., which publishes the series, writes an advice column on the company's Web site (scholastic.com/schoolage/experts/learning) for the parents of 9-to-12 year-olds. She told of a mother who was worried that her child was neglecting other books by rereading the Harry Potter series four times. 'I said to her, be happy, I get so many letters saying my child doesn't read at all,' Ms. Alexander said. 'And rereading has value. The first time you're just caught up in the story, hyperventilating when the chapters end. You want to know. The next time you can slow down. You can savor the language, a wordplay you might have missed.' The urge to reread books is nothing new, whether returning to 'The Chronicles of Narnia' by C. S. Lewis, or Dr. Seuss or Nancy Drew or the Hardy Boys. It may be most common among very young children (or at least, most vociferously expressed, as in: 'Read it again, Mommy. Now!'). In the early stages of development, the desire for repetition, until book pages crumble, may be primal. 'In the womb, we live in an iambic world, hearing the rhythm of our mother's heartbeat,' said John Cech, director of the Center for the Study of Children's Literature and Culture at the University of Florida in Gainesville. 'It begins with that. We love rhythm because it offers a sense of security in a very basic way. It's where we get our language.' As children get older, they revisit familiar books and movies for another kind of security, Professor Cech added. 'This offers enormous consolation,' he said. 'And that is more important in a world that's much more fragmented and more fragile.' Rereading Harry Potter has become a particularly noticeable phenomenon, in part because we are in the middle of it. Teenagers today were children when they first read the story of the orphan boy who discovers he is a wizard. During the time it takes J. K. Rowling to produce the next book in the series, which she has said will total seven volumes, these readers will want to refresh their memories or simply whet their appetites. Like Nancy Chen, Susannah Colt, 15, about to become a junior at Deerfield Academy in western Massachusetts, lugged a suitcase full of Harry Potter books abroad when the fifth book was about to come out. 'It wasn't that I had forgotten what had happened, but I wanted to prepare myself for the fifth one,' said Ms. Colt, who was on a school trip to France at the time. When she arrived home, her parents were waiting at the airport with a copy of the latest installment, which Ms. Colt began reading on the car trip home. She said she has read all the Harry Potter books at least five times, and 'Harry Potter and the Chamber of Secrets,' the second in the series, as many as 20 times. 'It got to the point where I wasn't rereading them to remind myself of certain things, because I knew by heart what happened and what the next chapter was,' she said. 'But I love them so much I wanted to recreate the atmosphere of when I first read them, to recapture what I felt the first time I read the book.' She was not so open about her affection when she read her first Harry Potter book. She was 9, and a friend of her mother's sent a copy to camp. 'Everyone thought it was popular, and I wanted to be really original so I told everyone I hated it, that it was one of the worst books I ever read,' Ms. Colt recalled. 'But it wasn't.' As it happens, Ms. Colt's mother, Anne Fadiman, has become something of an expert on the rereading phenomenon. Ms. Fadiman, an author and former editor of The American Scholar magazine, is the editor of 'Rereadings,' a collection of essays on the subject by 17 authors, to be published by Farrar, Straus & Giroux in September. The book resulted from a standing feature in American Scholar, in which writers took another look at books they had loved when they were young. 'I expected the most frequent response to be, 'Gosh, I missed so much the first time around!' ' Ms. Fadiman said in an interview. 'But the rereading experience turned out more often to be one of loss: the unrecapturable ecstasy of first love. So the tone was often elegiac.' For children, and Harry Potter fans in particular, the missed-so-much aspect is significant, in part because they have grown older since the series began. For some, those few years mark a large chunk of a lifetime. Daniel Boyce, for example, who lives outside of Los Angeles, began reading the series when he was in first grade. Now he is 10 and has already reread the books two or three times. 'The second time you find more stuff that you missed,' he said. 'It sort of gives you a clearer picture.' A second time around (and a third, and a fourth) allows a reader to savor favorite passages and skip the rest. 'The first time you really want to know what's going to happen,' said Rachel Mandelbaum, a 13-year-old who lives in Westchester County, outside New York City, who has read the books 'about five times.' 'The second time there are parts that aren't as good, and you want to go through them quicker to get to the better parts, the little adventures in between,' she said. While youngsters turn to other books besides Harry Potter again and again, the Rowling series has become a culture all its own. The books serve as the Rosetta Stone of Harry Potter knowledge and lore, which is the subject of vast inquiry and speculation. 'There's a lot of discussion online, where kids are going through the text with a fine-tooth comb and finding every little thing and discussing it at length,' said Kathleen T. Horning, director of the Cooperative Children's Book Center at the University of Wisconsin in Madison. 'You'll find children in the United States discussing Harry Potter with children who live in Norway or Indonesia. One of the children might bring up a point that is new to another child, who will go back and reread.' That obsession can extend beyond rereading. Many children interviewed for this article have won Harry Potter essay writing contests. Sometimes they reread in another language. Angela Wyse, 16, of Tecumseh, Mich., is about to spend a year as an exchange student in Belgium. She has already read the entire series five times and has reread three of the books in French. 'Some things are really cool in French, new little plays on words,' she said. 'But the quaint British style doesn't translate that well.' As Ms. Wyse's experience indicates, some Harry Potter fans rely on the familiarity of the series to help them accommodate their own widening interests and capabilities. Nancy Chen, for example, was in elementary school when the first Harry Potter book was published. Now she is about to become a senior at the Oklahoma School of Science and Mathematics, a boarding school (like Hogwarts, Harry's school) in Oklahoma City. 'I'm not really fond of math or science, I just ended up there,' Ms. Chen said. 'Harry Potter made it seem really cool. I thought, 'Maybe my school would end up teaching me magic.' That hasn't happened, but I've learned about calculus.' For some, though, the early magic wears off with age. Brittany Hawkrigg, 18, of Bohemia, N.Y., read the first Harry Potter novel two or three times. But as she got older and schoolwork intensified, and the Harry Potter books got longer, she found repeated readings to be impossible. 'Later on,' she said, 'once was enough.'

Subject: Re: In Love With Harry, Over and Over Again From: Terri To: Emma Date Posted: Sat, Jul 16, 2005 at 19:12:15 (EDT) Email Address: Not Provided Message: Soon I will be in Harry's world again. I love these books as I have loved Tolkien.

Subject: Employment and Housing From: Jennifer To: All Date Posted: Sat, Jul 16, 2005 at 16:47:43 (EDT) Email Address: Not Provided Message: Always pay attention to Ben Bernanke, for even though I usually disagree I learn much from him. Weaker employment in any market will surely mean weaker housing prices no matter other conditions. So, there is a relation between employment strength and housing prices as Denver appears to show well as employment is sluggish there, but strengthening employment is what Bernanke is arguing is generally sustaining housing prices.

Subject: Denver's Cautionary Housing Tale From: Emma To: All Date Posted: Sat, Jul 16, 2005 at 15:08:39 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/17/national/17denver.html?hp&ex=1121572800&en=e0858c9b7c5442e0&ei=5094&partner=homepage Frothy to Flat: Denver's Cautionary Housing Tale By MOTOKO RICH PARKER, Colo. - Tom Woods, a 37-year-old defense industry consultant, wanted to build a nest egg for one of his young sons' college tuition. Inspired by rising prices for homes in this Denver suburb, three years ago he invested in a new three-bedroom townhouse for $155,000. His hopes were that renters would cover most of his mortgage and that the property's value would appreciate by at least $10,000 a year. But last October, when Mr. Woods put the townhouse up for sale to help pay some unforeseen medical bills, there was more pain than gain: the house sat on the market for eight months. He finally found a buyer in June, but to seal the deal he had to make big concessions, including paying the buyer's closing costs. After handing over the keys on Friday, he ended up with a profit of just $10,000 for his three-year investment. Even as prices for homes in frothy markets like Las Vegas; Riverside, Calif.; Miami; and Washington are still jumping by more than 20 percent a year, Denver's homeowners are learning the hard way about living through the real estate doldrums. Five years ago, median house prices were rising at an annual clip of nearly 17 percent. By the first quarter of 2005 the increase had slipped to 3 percent, according to an analysis by Economy.com, a research firm. Still, some Denver homeowners have read reports in the news media of skyrocketing prices elsewhere and assume they are accumulating wealth in their homes at the same rapid pace. 'I was surprised,' Mr. Woods said. 'My expectations were higher.' Although sellers continue to profit, houses are sitting on the market longer, buyers are negotiating harder, and some owners, particularly young buyers who may have been counting on rapid appreciation, are postponing dreams of renovations, moves to larger homes and big savings for their families. With economists warning that prices in hot markets cannot continue to rise as sharply as they have in the past few years, the experience of Denver's homeowners may foreshadow what could happen if those markets start to cool. Denver's circumstances are in some ways particular to the area, driven largely by job losses in the telecom sector, but they illustrate how a moderate slowdown could play out for homeowners in other parts of the country and stand as a potent reminder that galloping price appreciation is not the norm. Economists are divided as to whether certain markets will simply cool off, or whether they will actually melt and send prices plummeting, as happened in parts of California, New England and New York in the 1980's and early 1990's. Earlier this year, Federal Reserve Chairman Alan Greenspan cited some analysts' concern that the housing market might 'implode' and later said some metro areas were showing signs of 'froth.' Optimists point to Denver as a model of an adjusting real estate market. 'I think it's a good example of when a market softens, what happens,' said David Lereah, the chief economist of the National Association of Realtors, a trade association. 'You see double-digit price appreciation go down to 4 percent or even 1 percent, and then it starts coming back to a historical norm of between 4 and 6 percent. That's very healthy. That's wonderful. It beats inflation.' But many analysts take a gloomier perspective, suggesting that the most heated markets could suffer more than Denver's so-called soft landing, with prices that actually fall. 'I think Denver is a best-case scenario,' said John H. Vogel Jr., adjunct professor of real estate at the Tuck School of Business at Dartmouth College. In the case of markets like Naples, Fla.; Miami; Chicago; and New York, he said, 'I think you'll see dramatic price decreases because I think the prices have become artificially inflated by trading and speculation.' Denver's housing boom never quite reached the heights of Las Vegas's, for example, where home prices increased by nearly 33 percent in the first quarter of this year, according to Economy.com. But from 1998 through the third quarter of 2001, homeowners in sprawling Denver enjoyed double-digit appreciation as telecom employers like Qwest Communications International and Level 3 Communications added jobs - and homebuyers - to the market. From December 2000 to September 2003, however, Denver lost about 74,000 jobs, about 6 percent of its job base, according to Economy.com. Increases in home prices stalled, then started to taper off. Houses lingered on the market, and sellers were forced to cut prices. Touring a development last week in Castle Rock, a southeastern suburb, Tom Santilli, an agent with Re/Max Alliance, pointed out a four-bedroom house that he had been unable to sell for five months, despite its impeccable condition. The price had been lowered to $396,500 from $419,000, but because of a few flaws - a smallish family room, and white kitchen cabinets instead of wood and glass - the sellers had 'not even had a low-ball offer' after showing it to 65 prospective buyers, Mr. Santilli said. Where buyers here had few properties to choose from in the late 1990's, today they can afford to be picky. Inventories of available homes have tripled from 8,010 in January 2000 to 25,817 in June, according to Gary Bauer, a real estate broker and consultant in Denver. Sellers are also competing with homebuilders, who are offering incentives like discounted mortgage rates, free air-conditioning, and upgrades on floor coverings and fireplaces in their developments. At Sapphire Pointe, a subdivision in Castle Rock, huge beige and cream houses, dubbed prairie palaces by local residents, are clustered along curving lanes and cul-de-sacs. Last week the builder, D. R. Horton Continental Series, was touting steep discounts: a four-bedroom, 4,371-square-foot house was being offered for $489,697, $40,000 below the listed price. The builder had added upgrades that included fireplaces in the family room, living room and master bedroom; granite countertops; and metal banister pickets on the curving staircase. The master bathroom was bigger than some studio apartments in Manhattan. Many sellers of existing homes are offering incentives of their own. When Mary Ann and Brian Kuklinski put their mocha-colored three-bedroom house on the market in May for $275,000, they knew that a house nearby had languished on the market for eight months. After five weeks and 30 showings, they reached a deal by lowering their price to $270,000 and throwing in their washer and dryer, the refrigerator, and a swing set in the backyard. The Kuklinskis, who have three sons, ages 11, 7 and 5, paid $197,000 for their home in 1999 and ended up with enough appreciation to help with a down payment on a house they are building nearby, a $385,000 four-bedroom with a three-car garage. But for other homeowners, the calculus of the 1990's that might have led them to trade up quickly no longer applies. 'When the market was strong, somebody would move up to a nicer home in two years because they had so much equity,' said Karen Snyder, an owner of Metro Brokers Right Realty in Centennial, a suburb southeast of Denver. Now, she said, 'they're just staying put.' Those who had hoped to tap increased equity to pay for home improvements are also scrapping their plans. Gustavo Salazar, a high school math teacher, bought a small house with his fiancée, her sister and her boyfriend two years ago for $232,000. Earlier this year they decided to refinish the basement. But when they checked with their mortgage lender, they learned that they only had about $9,000 of equity in the house, less than the estimated $15,000 they would need for the project. Mr. Salazar, 30, said he was shocked that the house had appreciated so little. 'I was thinking the market was going up because this is such a nice area,' he said. Michelle Konishi and her husband, Jeff Konishi, were living in a four-bedroom, four-bathroom house not far from Mr. Salazar when they filed for divorce. They paid about $350,000 in 1999 to build their house, and put it on the market at $474,900 in April 2003. Five price cuts and 10 months later, they sold it for $405,500. Because they had invested in landscaping, a deck, carpeting and custom window coverings, Ms. Konishi said, the couple just about broke even. Local analysts say it was inevitable that surging prices would not last. 'Now we're back to what I would portray as a normal market,' said Mr. Bauer, the real estate consultant. 'Historically we had 5 percent appreciation, and now we have 5 percent appreciation.' While many homeowners have adjusted to the new reality, others pine for the good times. Anita and Lewis Kelley bought their home in central Denver for $110,000 in 1998, as the market was booming, and put $50,000 more into building a deck and adding a master suite in the basement. Two years later they bought and moved to another house, renting out the first. After adding $29,000 to their mortgage to cover costs incurred when renters left a mess, they talked to a real estate agent about selling the house; but when the agent told them they could get no more than $262,000, they decided against it. Even at that price, a $73,000 profit, Mr. Kelley, a firefighter, and Ms. Kelley, who runs a travel agency, thought it was not enough to cover their other debts. 'We're just not getting as much money as we thought we'd like to get out of it,' Ms. Kelley said. When sellers come in with high expectations, Chad Ochsner, a managing broker with Re/Max Alliance, said he reminds them that 'just because it's like that in Las Vegas or Phoenix, that doesn't necessarily mean it's going to be the same way here in Denver.' If some of those places follow Denver's lead, it may be for reasons other than those that softened Denver's conditions, economists say. 'The thing that weighed on Denver's housing market was its job market,' said Mark Zandi, chief economist at Economy.com. He added, 'The concern now is that interest rates rise and suck the wind out of housing demand.' In fact, analysts say the Denver market has remained as healthy as it has because of low mortgage rates as well as creative financing, including no-money-down, adjustable-rate and interest-only loans. Interest-only loans have accounted for a high rate - 42 percent - of purchase loans over $360,000 in Denver this year, according to LoanPerformance, a mortgage data firm. That unnerves some economists, who say that even with appreciation of less than 5 percent, Denver's housing prices may be overvalued. 'I think it is a very frothy market,' said Tucker Hart Adams, the chief economist of the Rocky Mountain region for U. S. Bank, adding that those who have stretched to buy homes with interest-only or variable-rate mortgages could be vulnerable. 'When rates start moving up, they're going to see their payments go up,' she said. 'When people start getting nervous and start to sell, it's a downward spiral.' Despite the warnings, some of those like Mr. Woods, who have seen less than stellar returns, say they have not soured on real estate. Mr. Woods said he still hopes to invest in real estate and pay for his three children's college educations. 'If I had the cash available to invest in a rental property, I would do it,' he said. 'It's a pain, but I still think, over time, that there are some real good benefits to it.'

Subject: Harry Potter Works His Magic Again From: Emma To: All Date Posted: Sat, Jul 16, 2005 at 12:58:09 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/16/books/16choc.html?ei=5070&en=5ca5a5b524fdad28&ex=1122177600&emc=eta1&pagewanted=all Harry Potter Works His Magic Again in a Far Darker Tale By MICHIKO KAKUTANI In an earlier Harry Potter novel, Sibyll Trelawney, divination teacher, looks at Harry and declares that her inner eye sees past his 'brave face to the troubled soul within.' 'I regret to say that your worries are not baseless,' she adds. 'I see difficult times ahead for you, alas ... most difficult ... I fear the thing you dread will indeed come to pass ... and perhaps sooner than you think.' In 'Harry Potter and the Half-Blood Prince,' that frightening prophecy does in fact come true - in a thoroughly harrowing denouement that sees the death of yet another important person in Harry's life, and that renders this, the sixth volume of the series, the darkest and most unsettling installment yet. It is a novel that pulls together dozens of plot strands from previous volumes, underscoring how cleverly and carefully J. K. Rowling has assembled this giant jigsaw puzzle of an epic. It is also a novel that depicts Harry Potter, now 16, as more alone than ever - all too well aware of loss and death, and increasingly isolated by his growing reputation as 'the Chosen One,' picked from among all others to do battle with the Dark Lord, Voldemort. As the novel opens, the wizarding world is at war: Lord Voldemort and his Death Eaters have grown so powerful that their evil deeds have spilled over into the Muggle world of nonmagic folks. The Muggles' prime minister has been alerted by the Ministry of Magic about the rise of Voldemort. And the terrible things that Ms. Rowling describes as being abroad in the green and pleasant land of England read like a grim echo of events in our own post-9/11, post-7/7 world and an uncanny reminder that the Hogwarts Express, which Harry and his friends all take to school, leaves from King's Cross station - the very station where the suspected London bombers gathered minutes before the explosions that rocked the city nine days ago. Harry, who as an infant miraculously survived a Voldemort attack that killed his mother and father, is regarded as 'a symbol of hope' by many in the wizarding world, and as he learns more about the Dark Lord's obsession with his family, he realizes that he has a destiny he cannot escape. Like Luke Skywalker, he is eager to play the role of hero. But like Spider-Man, he is also aware of the burden that that role imposes: although he has developed romantic yearnings for a certain girl, he is wary of involvement, given his recognition of the dangers he will have to face. 'It's been like ... like something out of someone else's life, these last few weeks with you,' he tells her. 'But I can't ... we can't ... I've got things to do alone now.' Indeed, the perilous task Professor Dumbledore sets Harry in this volume will leave him with less and less time for Quidditch and hanging out with his pals Ron and Hermione: he is to help his beloved teacher find four missing Horcruxes - super-secret, magical objects in which Voldemort has secreted parts of his soul as a means of ensuring his immortality. Only when all of these items have been found and destroyed, Harry is told, can the Dark Lord finally be vanquished. There are a host of other unsettling developments in this novel, too: the Dementors, those fearsome creatures in charge of guarding Azkaban Prison, have joined forces with Voldemort; Draco Malfoy, Harry's sneering classmate who boasts of moving on to 'bigger and better things,' appears to vanish regularly from the school grounds; the sinister Severus Snape has been named the new teacher of defense against the dark arts; two Hogwarts students are nearly killed in mysterious attacks; and Dumbledore suddenly turns up with a badly injured hand, which he declines to explain. One of the few bright spots in Harry's school life appears to be an old textbook annotated by its enigmatic former owner, who goes by the name the Half-Blood Prince - a book that initially supplies Harry with some helpful tips for making potions. The early and middle sections of this novel meld the ordinary and the fantastic in the playful fashion Ms. Rowling has patented in her previous books, capturing adolescent angst about boy-girl and student-teacher relations with perfect pitch. Ron and Hermione, as well as Harry, all become involved in romantic flirtations with other students, even as they begin to realize that their O.W.L. (Ordinary Wizarding Level) grades may well determine the course of their post-Hogwarts future. As the story proceeds, however, it grows progressively more somber, eventually becoming positively Miltonian in its darkness. In fact, two of the novel's final scenes - like the violent showdown between Obi-Wan Kenobi and Anakin Skywalker in the last 'Star Wars' movie, 'Revenge of the Sith' - may well be too alarming for the youngest readers. Harry still has his wry sense of humor and a plucky boyish heart, but as in the last volume ('Harry Potter and the Order of the Phoenix'), he is more Henry V than Prince Hal, more King Arthur than the young Wart. He has emerged, at school and on the Quidditch field, as an unquestioned leader: someone who must learn to make unpopular decisions and control his impetuous temper, someone who must keep certain secrets from his schoolmates and teachers. He has become more aware than ever of what he and Voldemort have in common - from orphaned childhoods to an ability to talk Parseltongue (i.e., snake speech) to the possession of matching wands - and in one chilling scene, he is forced to choose between duty to his mission and his most heartfelt emotions. In discovering the true identity of the Half-Blood Prince, Harry will learn to re-evaluate the value of first impressions and the possibility that his elders' convictions can blind them to parlous truths. And in embracing his own identity, he will discover his place in history. As in earlier volumes, Ms. Rowling moves Harry's story forward by chronicling his adventures at Hogwarts, while simultaneously moving backward in time through the use of flashbacks (via Dumbledore's remarkable Pensieve, a receptacle for people's memories). As a result, this is a coming-of-age story that chronicles the hero's evolution not only by showing his maturation through a series of grueling tests, but also by detailing the growing emotional wisdom he gains from understanding more and more about the past. In addition to being a bildungsroman, of course, the Harry Potter books are also detective stories, quest narratives, moral fables, boarding school tales and action-adventure thrill rides, and Ms. Rowling uses her tireless gift for invention to thread these genres together, while at the same time taking myriad references and tropes (borrowed from such disparate sources as Shakespeare, Dickens, fairy tales, Greek myths and more recent works like 'Star Wars') and making them her own. Perhaps because of its position as the penultimate installment of a seven-book series, 'The Half-Blood Prince' suffers, at moments, from an excess of exposition. Some of Dumbledore's speeches to Harry have a forced, summing-up quality, and the reader can occasionally feel Ms. Rowling methodically setting the stage for developments to come or fleshing out scenarios put in play by earlier volumes (most notably, 'Harry Potter and the Chamber of Secrets,' with its revelations about the young Voldemort, a k a Tom Riddle). Such passages, however, are easily forgotten, as the plot hurtles along, gaining a terrible momentum in this volume's closing pages. At the same time, the suspense generated by these books does not stem solely from the tension of wondering who will die next or how one or another mystery will be solved. It stems, as well, from Ms. Rowling's dexterity in creating a character-driven tale, a story in which a person's choices determine the map of his or her life - a story that creates a hunger to know more about these people who have become so palpably real. We want to know more about Harry's parents - how they met and married and died - because that may tell us more about Harry's own yearnings and decisions. We want to know more about Dumbledore's desire to believe the best of everyone because that may shed light on whom he chooses to trust. We want to know more about the circumstances of Tom Riddle's birth because that may shed light on his decision to reinvent himself as Lord Voldemort. Indeed, the achievement of the Potter books is the same as that of the great classics of children's literature, from the Oz novels to 'The Lord of the Rings': the creation of a richly imagined and utterly singular world, as detailed, as improbable and as mortal as our own.

Subject: China and America From: Emma To: All Date Posted: Sat, Jul 16, 2005 at 12:12:05 (EDT) Email Address: Not Provided Message: China has always played a rough tough game of international affairs when this was possible. The vulnerability of China to foreign influence and even periodic domination has dictated Chinese toughness and also sensitivity to when to accede. There is every reason to believe China will adjust the value of the Yuan against the dollar, since the adjustment can be controlled and there has to be a desire to continue cordial relations with America. China has already agreed to institute selected export taxes as well. But, there will need to be a sense that America in turn is responsive. The visit shortly to America by China's President should be a time of refining a set of mutual strategic, political and economic interests. Acknowledging the mutual dependence of the countries can prove highly promising as present relations are so promising.

Subject: Research and Creativity From: Poyetas To: All Date Posted: Sat, Jul 16, 2005 at 05:48:37 (EDT) Email Address: Not Provided Message: In going over one of Krugman's debates with O'Reilly (I think that was his name), the idea of tax breaks for R D came up. What I'm getting at is the conservative concept of giving subsidies for the job makers. Apparently there seems to be an assumption that money and creativity go hand in hand. I would like to argue the opposite. Creativity is a product of the human mind which is not correlated to the amount of investment that is given. This was the reason for the overvaluation of new economy stocks up to 2000. Future earnings growth was derived as a function of investment. These assumptions are generalistic and dangerous. And if they were true, Brittney Spears would be producing the most progressive music possible. The fact of the matter is that the 'market' is grossly imperfect. There is no such thing as being perfectly informed.

Subject: Re: Research and Creativity From: Emma To: Poyetas Date Posted: Sat, Jul 16, 2005 at 11:52:05 (EDT) Email Address: Not Provided Message: This is an interesting argument, and I agree on the whole, nonetheless this is no reason to limit spending on education or on research and development. We need such spending emphasis, though the productivity results may never be as highly correlated as we wish. The correlation should however be there.

Subject: A Chinese Currency Value Increase From: Jennifer To: All Date Posted: Fri, Jul 15, 2005 at 16:39:37 (EDT) Email Address: Not Provided Message: My guess along with the Financial Times is that China will soon increase the value of its currency against the dollar to diffuse trade pressure. Whether this effects long term interest rates in turn will be interesting.

Subject: The dollar and Yen From: Terri To: Jennifer Date Posted: Fri, Jul 15, 2005 at 17:53:56 (EDT) Email Address: Not Provided Message: Notice that the dollar is gaining strength against the Yen. The effect of the strong dollar should it continue will be to further offset any change in the value of China's currency. A peculiar problem that was not expected at the beginning of this year.

Subject: Inflation Appears to be Easing From: Terri To: All Date Posted: Fri, Jul 15, 2005 at 16:28:52 (EDT) Email Address: Not Provided Message: The Producer Price Index confirms the trend that inflation has already peaked this cycle and is heading lower. Producer prices as consumer prices can be argued about as to incidence or extent, but the indexes are consistent and it is clear that inflation is just not going to be a problem anytime soon.

Subject: We Need a National Television Network From: Aden To: All Date Posted: Fri, Jul 15, 2005 at 05:23:31 (EDT) Email Address: Not Provided Message: Now. We need a response to Fox news and MSNBC and all of the right wing press and spin and punditry that's all over the place....Paul's last column's question can be answered by: 'powerful spin doctors and a well organized right wing media'. We need a strong voice on the left which DOESN'T pander to the constant, obnoxious, hypocritical and (let's admit) strong chorus from the right. We need a patron who has the skill to set something up nationally and can follow through the first few years which will probably be very tough. But I think over time the network would get the Left wing energized.

Subject: Sector Stock Indexes From: Terri To: All Date Posted: Thurs, Jul 14, 2005 at 17:35:26 (EDT) Email Address: Not Provided Message: http://flagship2.vanguard.com/VGApp/hnw/FundsVIPERByName Sector Indexes 12/31/04 - 7/13/05 Energy 25.0 Financials 0.8 Health Care 5.3 Info Tech -0.8 Materials -4.4 REITs 10.8 Telecoms 0.5 Utilities 17.1

Subject: Great Egret in Flight From: Terri To: All Date Posted: Thurs, Jul 14, 2005 at 16:26:21 (EDT) Email Address: Not Provided Message: http://www.calvorn.com/gallery/photo.php?photo=5184&u=186|5|... Great Egret in Flight New York City--Central Park, Harlem Meer.

Subject: A More Promising Labor Market From: Emma To: All Date Posted: Thurs, Jul 14, 2005 at 12:57:28 (EDT) Email Address: Not Provided Message: There has lately been a gain in hiring in more desirable, better paid and better benefit jobs. The recovery according to labor economists is still gaining strength and is really becoming more promising.

Subject: Compensation for a Strong Dollar From: Terri To: All Date Posted: Thurs, Jul 14, 2005 at 11:55:12 (EDT) Email Address: Not Provided Message: The dollar has in fact strengthed dramatically against a basket of currencies this year. Levels are about where they were a decade ago. Just now owning dollars has been a fine hedge, but that is now. Notice that international stock markets have adjusted to declining domestic currency levels. There is a strong bull market in stocks in domestic currency terms in most major markets, though as usual Japan is an exception. The Morgan Stanley Europe Index is up over 13% in domestic currency terms this year, while up about 1% in dollars. But, then look at the dollar against the Euro. This compensation of stock values is interesting and comforting.

Subject: Economic Stability From: Terri To: All Date Posted: Thurs, Jul 14, 2005 at 11:54:19 (EDT) Email Address: Not Provided Message: Crises are made of many elements, not the least of which are political, and though there are fierce government and trade deficits, and though the dollar will in time weaken significantly for the trade deficit will insure this, we cannot guess when. The Euro which may have seemed an alternative to the dollar as an exchange currency 8 months ago, now appears politically less stable than the dollar. Japan is not about to allow a currency value increase, and China.... The dollar may well hold for an extended period, but nonetheless our debt problems are real and will eventually worsen in the absence of novel fiscal policy.

Subject: Robust Markets From: Terri To: All Date Posted: Thurs, Jul 14, 2005 at 11:53:24 (EDT) Email Address: Not Provided Message: What is impressive is the strength of international stock markets including increasingly our own given the growth weakness in Europe, housing weakness in Britain and Australia, and a Federal Reserve tightening cycle that has extended over a year and will continue. Middle capitalization and value stocks are especially robust, and several sectors including REITs have gained sharply. A fair number of international markets are up well over 10% in domestic currency terms so far this year.

Subject: Vanguard's REIT Index From: Terri To: All Date Posted: Thurs, Jul 14, 2005 at 10:19:01 (EDT) Email Address: Not Provided Message: The Vanguard REIT Index shows astonishing strength through this Fed tightening cycle. The index is up well over 10% so far this year no matter the warnings on real estate and no matter the difficulty REITs are haing with operating earnings. Property prices increases and REIT values increase along.

Subject: Welcome back from your vacation Emma From: Mik To: All Date Posted: Thurs, Jul 14, 2005 at 08:35:03 (EDT) Email Address: Not Provided Message: Welcome back. Did you by any slight chance watch the Daily Show last night (Wednesday 13)? The show is normally good but last night John Stewart had a good go at some conservative who wrote a book about America's 100 most irritating people. The book only listed 3 conservatives (the rest were liberals) and, as John Stewart pointed out, it missed some seriously core issues. We almost had a full out argument on TV. John Stewart is an intellectual Giant. Oh and how can I miss it - the 'Rove affair'. Who needs reality TV when simply watching the US news is just so much more fun. The Republicans are pushing to make this a bi-partisan issue and evening questioning the facts. I just couldn't believe it when this one republican starts questioning whether or not it is illegal to give out the identity of a CIA operative. Hey this is not a CIA public relations person - this is a full blooded spy whos identity has been released. That is treason!! I'm sorry but I found this hilarious. The pity is that the republicans may well get away with convincing the public that this is a party issue and not a national security issue.

Subject: Re: Welcome back from your vacation Emma From: Emma To: Mik Date Posted: Thurs, Jul 14, 2005 at 09:18:07 (EDT) Email Address: Not Provided Message: Thank you Mik, but I am not back yet. Likely Sunday. Than I will recover from vacation :) John Stewart is astonishing, and you are entirely right that we have lost the very sense of what is party politics and what affairs of state.

Subject: Puzzle regarding reported jobs no.s From: Pete Weis To: All Date Posted: Wed, Jul 13, 2005 at 19:37:53 (EDT) Email Address: Not Provided Message: Someone correct me if I've got this wrong, but most of the monthly jobs reported by the government as being created for a given month are assumed based on population growth and the size of GDP - not actual hardcore data. Now if you went back in time to, say, the 50's and early 60's in the US, manufacturing jobs, white collar, and service sector type jobs were certainly increasing along at a strong rate right along with GDP while inflation remained very tame. So, at that time a link between population growth and GDP could be safely assumed. GDP is adjusted downward with increasing inflation - this would reduce the number of assumed jobs downward. However in today's world, cheap labor markets overseas are attracting jobs away from US labor markets at the same time they are having a deflationary effect on the cost of goods in the US. So while IBM is laying off 13000 employees recently (and hiring more in India), US auto manufacturers are laying off, and manufacturing jobs continue to leak to China, inflation remains low which increases the GDP number. This inflates the assumed job numbers, does it not? So how many of the recently 148,000 new jobs reported for June actually were created? Why do economists put any stock in the reported jobs numbers? There must be something I'm missing.

Subject: Re: Puzzle regarding reported jobs no.s From: Terri To: Pete Weis Date Posted: Thurs, Jul 14, 2005 at 08:30:36 (EDT) Email Address: Not Provided Message: Sorry, this is not correct. The jobs creation number is indeed an actual net count of hirings at tens of thousands of companies. The number is highly accurate and reliable when adjusted over a 3 month period. We do indeed have fine economic statisticians and data sets though statistical problems are always tricky in macro-economics.

Subject: Re: Puzzle regarding reported jobs no.s From: Pete Weis To: Terri Date Posted: Thurs, Jul 14, 2005 at 11:45:17 (EDT) Email Address: Not Provided Message: Terri. No need to say you're sorry. I have posted articles here in the past about how the BLS calculates their monthly jobs numbers. They use a household survey which surveys a very small portion of the 100 million or so households in the US and they also survey a limited portion of total US employers. To these surveys they make adjustments. The following was written by Alan G. Nasser in COMMON DREAMS on 9/29/2004: 'Based on data gathered employing the 'net birth/death adjustment,' BLS announced in April that the long-awaited jobs recovery had finally arrived. Nonfarm payrolls had allegedly surged by a whopping 308,000 in March. The birth/death model uses business deaths to 'impute' employment from business births. Thus, as more businesses fail, more new jobs are imputed to have materialized through business births. This improbable statistical artefact accounts for about half of the reported 308,000 March payroll increase. The birth/death model is based on statistics covering 1998-2002. This was a period of explosive telecom and dot.com startups, quite unlike today's flat economic landscape. Thus, two thirds of the 947,000 new jobs BLS 'imputed' for March-May were never actually counted by BLS and never reported by any firm. BlS's household and establishment surveys tell a more sobering story. March employment by private industry actually fell by 175,000, and the number of self-employed workers declined by 288,000. Without the simultaneous increase of 439,000 government jobs, the March job announcement would have been a calamity. And both average weekly hours and total hours worked declined markedly, even as (according to the dubious birth/death findings) the work force increased. This is the first time ever that net job growth has been negative 26 months into a recovery.'

Subject: Re: Puzzle regarding reported jobs no.s From: Terri To: Pete Weis Date Posted: Fri, Jul 15, 2005 at 13:30:16 (EDT) Email Address: Not Provided Message: The household survey can be quite imprecise for 3 to 6 months, but the employer survey is always more precise and is thoroughly precise within 2 or 3 months. We are finally in a generally improving period, and it appears sustainable. The labor market recovery has been slow and worrying, but there is reason to be relatively hopeful now.

Subject: Re: Puzzle regarding reported jobs no.s From: Pete Weis To: Terri Date Posted: Fri, Jul 15, 2005 at 22:02:09 (EDT) Email Address: Not Provided Message: Terri. I was totally wrong about GDP and birth/death rate being factored into the jobs data. It's a 'business' birth/death rate averaged over a period of years. The survey represents one third of approximately 400,000 businesses which participate in the government's unemployment insurance program. The other two thirds are imputed and adjusted. The only thing that might throw it off would be if a lot more businesses were 'dying' rather than being 'birthed' when compared to the yearly average used.

Subject: Re: Puzzle regarding reported jobs no.s From: Terri To: Pete Weis Date Posted: Sat, Jul 16, 2005 at 11:54:21 (EDT) Email Address: Not Provided Message: Excellent points, and we can see well how careful the civil service statisticians have to be and try to be.

Subject: What I'm missing? From: Pete Weis To: Pete Weis Date Posted: Thurs, Jul 14, 2005 at 11:51:46 (EDT) Email Address: Not Provided Message: As I look for articles relating to BLS monthly job reports, I can't find anything regarding the use of GDP to adjust these numbers. So projected GDP numbers may be used for projected future job creation but it may not be used to adjust monthly jobs reports. So much for the 'paradox'.

Subject: Re: Puzzle regarding reported jobs no.s From: Emma To: Terri Date Posted: Thurs, Jul 14, 2005 at 09:13:44 (EDT) Email Address: Not Provided Message: There is a problem in the middle and low income labor market with too little demand, slight wage increases and benefits that are more costly to workers. There is much to be said here, but the figures can be trusted though allow for a 3 month adjustment.

Subject: Correction! From: Pete Weis To: Pete Weis Date Posted: Wed, Jul 13, 2005 at 21:34:35 (EDT) Email Address: Not Provided Message: 'So, at that time a link between population growth and GDP could be safely assumed.' should read 'So, at that time a link between population growth, GDP and Job growth could be safely assumed.'

Subject: A paradox? From: Pete Weis To: Pete Weis Date Posted: Wed, Jul 13, 2005 at 21:44:07 (EDT) Email Address: Not Provided Message: A factor (cheap overseas labor markets) which has an actual negative effect on job increases in the US has a positive effect on reported job increases in the US by decreasing inflation and thereby increasing reported GDP - hence higher job numbers. Kind of an interesting and unusual paradox.

Subject: European Stocks From: Terri To: All Date Posted: Wed, Jul 13, 2005 at 12:29:06 (EDT) Email Address: Not Provided Message: The MSCI Europe Index is now up 12.6% in domestic currencies and 1.9% in dollars. What is interesting and comforting is just how stocks internationally have adjusted to currency changes. A stronger dollar, has meant increasing stock prices everwhere in Europe other than Portugal and Ireland which have small stock exchanges going through specific troubles and even these market are about flat in Euros. International investors have been faring well indeed through this period even with a strong dollar.

Subject: Interest Rates From: Terri To: All Date Posted: Wed, Jul 13, 2005 at 11:58:22 (EDT) Email Address: Not Provided Message: Federal Reserve governors are emphasizing there will be more short term interest rate increases. the economy simply seems strong enough to continue to raise and the more the Fed can raise in this cycle the easier it will be to reverse in future. So far this cycle has been a Fed success as far as I can judge.

Subject: Chapter 8... From: Yann To: All Date Posted: Wed, Jul 13, 2005 at 07:20:42 (EDT) Email Address: Not Provided Message: by Krugman and Wells (macroeconomics textbook) is available at http://www.worthpublishers.com/krugmanwellsnew/pdf/KrugmanMacroCh08_pp18_95A70.pdf Don't find it in the 'Economic theory' section...

Subject: Re: Chapter 8... From: Bobby To: Yann Date Posted: Wed, Jul 13, 2005 at 19:38:11 (EDT) Email Address: robert@pkarchive.org Message: Thanks, Yann!

Subject: Krugman appears to be speculating From: Mik To: All Date Posted: Tues, Jul 12, 2005 at 16:20:21 (EDT) Email Address: Not Provided Message: I have just read Krugman's latest article and although I have many of my own reservations on the US government's fiscal responsibility, I do believe that Krugman is making some flawed speculative statements. In his article he give the following two reasons as to why the latest increase in tax revenue are only minor 'blimps': Statement 1 It turns out that all of the upside surprise in tax receipts is coming from two sources. One is tax payments from corporations, up both because last year corporate profits grew much more rapidly than the rest of the economy and because the effective tax rate on corporations went up when a temporary tax break, introduced in 2002, expired. Both are one-time events. Statement 2 The other source of increased revenue is nonwithheld income taxes - taxes that aren't deducted from paychecks but are instead paid by people receiving additional, nonsalary income. The bounce in nonwithheld taxes probably reflects mainly capital gains on stocks and real estate, together with bonuses paid in the finance and real estate industries. Again, this revenue boost looks like a temporary blip driven by rising stocks and the housing bubble. My comments on his statements: Statement 1 Is it not possible that the tax breaks given by the Bush administration (primarily to individuals) has resulted in improved profits for companies (above the economic growth rate) and in turn improved tax revenue which will be an ongoing occurrence? And considering that the temporary tax break has been removed, we will not continue to see high tax revenue streams? (I fail to see the logic of how this is a once off). Statement 2 Does the 'bounce' in nonsalary income really reflect capital gains on stocks and real estate together with bonuses paid in the finance and real estate industries?(why only now?) Is it not possible that it reflects an increase in small businesses or sole proprietorships? Many people have lost their jobs and may well have started small businesses or sole proprietorships that don't need a company registration but they have paid taxes on their income/profit. And then his last statement: Again, this revenue boost looks like a temporary blip driven by rising stocks and the housing bubble. -That's a bit pessimistic. Do I have it wrong here or is Paul Krugman being overly simplistic?

Subject: Re: Krugman appears to be speculating From: Poyetas To: Mik Date Posted: Fri, Jul 15, 2005 at 22:46:40 (EDT) Email Address: Not Provided Message: Statement 1: ' Is it not possible that the tax breaks given by the Bush administration (primarily to individuals) has resulted in improved profits for companies (above the economic growth rate) and in turn improved tax revenue which will be an ongoing occurrence?' This is supply side economic theory. The tax breaks to individuals were reeped by the top 15% income earners whose spending habits, i.e. imports, do not create enough demand for such a substantial increase in corporate sales. The expiry of the tax break does mean increased tax revenue, but not at a rate that will change the marginal deficit into a surplus. Cost of Iraq??? Statement 2: ' Many people have lost their jobs and may well have started small businesses or sole proprietorships that don't need a company registration but they have paid taxes on their income/profit. ' Thats an awful lot of new businesses emerging. Why do you think that this number would be greater than what the new business generation rate was before?

Subject: Re: Krugman appears to be speculating From: Mik To: Poyetas Date Posted: Mon, Jul 18, 2005 at 09:25:21 (EDT) Email Address: Not Provided Message: Statement 1: I agree with you. And I am not trying to justify Supply-Side economics. I'm just saying that Krugman's analysis of current figures may have other reasons (which may not be sustainable into the future - doesn't matter). Statement 2: You ask 'Why do you think that this number would be greater than what the new business generation rate was before?' well simply because there are so many more people un-employed, than before. Un-employed people are known to come up with small businesses of their own. Again, I am not giving a final answer but am only showing how there are many reasons other than Krugman's definitive answers.

Subject: Re: Krugman appears to be speculating From: Emma To: Mik Date Posted: Wed, Jul 13, 2005 at 10:53:39 (EDT) Email Address: Not Provided Message: We have a structural budget deficit and whether profits and economic growth or even spending limits slow the growth of the deficit for a period, the deficit will grow over time faster than we can grow and there will have to be more revenue in time. That means tax increases, but obviously not now. Krugman appears to me correct in analysis, simple as the analysis is. But, we will not see the results of the structural budget changes that have been enacted for a while.

Subject: I agree with your principle From: Mik To: Emma Date Posted: Wed, Jul 13, 2005 at 18:44:20 (EDT) Email Address: Not Provided Message: I totally agree with your principle about a widening deficit and reduced tax revenue only aggrevates the situation. Granted the increase tax revenue is not enough. The only argument I have against Krugman is his 'jump to conclusions' on issues such as a 'blimp due to the housing bubble or capital gains tax'. I do believe Krugman can easily be wrong on these 'statements' he has made and puts himself up to be discredited. If he had chosen more diplomatic wording that raises warning I would feel a whole lot more comfortable rather than reading the bold statements quickly pointing to his speculative conclusions. It sounds like his is facing mounting evidence against his previous concepts (which I believe are correct). Evidence which appears to jsutify the Laffer Curve (which I think is incorrect) and he is already moving to 'battle stations' in generating a counter argument. Anyhow, that's my two cents worth.... uhmm can I get some change please?

Subject: Re: I agree with your principle From: RL To: Mik Date Posted: Fri, Jul 15, 2005 at 07:46:02 (EDT) Email Address: rafaelloring@yahoo.es Message: Mik ,I don't know about this particular subject but the 'jump to conclusions' is a great point . In fact I had the same thought about PK in other issues. He has become careless as to what kind of arguments he uses, even though he could be right in the main dicussion. And as you say this puts himself up to be discredited. Its a pitty.

Subject: Re: I agree with your principle From: Jennifer To: RL Date Posted: Fri, Jul 15, 2005 at 13:31:51 (EDT) Email Address: Not Provided Message: I differ. Paul Krugman is strikingly precise column after column.

Subject: Re: I agree with your principle From: Emma To: Mik Date Posted: Wed, Jul 13, 2005 at 19:02:18 (EDT) Email Address: Not Provided Message: Your comments are always worth the while. Always. I agree with you and will think about this issue more clearly as I rest a bit from a rather exhausting vacation.

Subject: The five-year effort is less than ... From: Pancho Villa To: All Date Posted: Tues, Jul 12, 2005 at 04:14:32 (EDT) Email Address: nma@hotmail.com Message: JEFFREY SACHS Hope and generosity can triumph over hate The Gleneagles G8 summit last week raised the trajectory of global ambition to end extreme poverty. By combining the world's technological prowess with the long-standing promise of the rich countries to devote 0.7 per cent of national income to official development assistance, extreme poverty can be ended by 2025, with the Millennium Development Goals of halving poverty a midway success in 2015. Despite foot-dragging by the Americans, Tony Blair, UK prime minister, who hosted the summit, nudged the world closer to this prospect. With the backdrop of the bombs in London, the Gleneagles communiqué marked a triumph of hope and generosity over hate, offering an important, if incomplete, boost to the development prospects of the poorest countries. The rich countries agreed to increase annual aid flows by at least $50bn (€42bn) as of 2010. At least half the increase is to be directed to Africa, raising annual aid to Africa from $25bn to $50bn within five years. Europe provided the impetus for this breakthrough, demonstrating that Europe is the champion of globalisation based on international co-operation, development aid and environmental stewardship. Roughly four-fifths of the $50bn increase will come from the European Union, though Europe represents but two-fifths of the GNP of the donor countries. Notably, the pro-enlargement EU-15 have set a bold timetable to reach 0.56 per cent of GNP in aid by 2010 and the internationally agreed target of 0.7 per cent of GNP by 2015. Canada and Japan gave a nod to 0.7, but refused to commit to a timetable. The US did worse, denying repeatedly in recent weeks it had ever pledged 0.7, although Mr Bush signed on to the March 2002 Monterrey Consensus to 'make concrete efforts towards the target of 0.7 per cent'. Instead, the US cobbled together some small programmes backed by big spin. The new US effort against malaria is welcome, but $1.2bn over five years is paltry when $3bn each year is needed to fight the disease in Africa. The US five-year effort is less than one day of Pentagon spending, and two cents of every $l,000 of US national income. Mr Blair struggled for months to bring the US into the fold not only on aid but also climate change. He could obscure the failure to win more from the US on aid because Europe proved ready to shoulder a disproportionate share of the burden. Mr Blair could not, however, paper over the failure on climate change. Here the Gleneagles communiqué is a clunker. Bland reconfirmations of the UN Framework Convention on Climate Change and the Intergovernmental Panel on Climate Change are notable only because they are made necessary by so much US intransigence. For ending poverty, the challenge is to translate the Gleneagles promises into life-saving action. The day after the summit finished, I was in Ghana, one of the best governed and most hopeful of Africa's young yet poverty-ridden democracies. More than 100 of every thousand Ghanaian children die before their fifth birthday, at least 10 times the rate of the rich countries. These deaths are preventable, but the health budget is only one quarter of what is needed to tackle the crisis. The austerity budget supervised by the International Monetary Fund and World Bank constitutes a death warrant that results from Ghana's poverty and the lack of sufficient donor aid. The IMF and World Bank have a responsibility to help mobilise the required aid. Rather than tell Ghana to keep its health budget low to preserve macroeconomic stability, the IMF should tell donors to honour their commitment to Ghana, so that it can save its children and break free of the disease-hunger-poverty trap. The executive boards of the IMF and World Bank should address this critical question when approving programmes for low-income countries: Is the programme sufficiently supported by donor aid and domestic budgetary commitments to enable the country to achieve the Millennium Development Goals? The $50bn a year in official aid for Africa translates into around $75 to $100 per African, depending on each country's needs and commitments to use the aid effectively. Donor support for African health should be reaching $20 or more per capita per year, not the typical $5 or so on offer now. Donor support for agriculture and rural infrastructure should reach roughly the same amount. With suitable investments in farming systems, African food production can be tripled in a 21st century African green revolution. Increased aid for schooling, urban water and sanitation and other core infrastructure is also vital. The aid should be mainly spent on investments and service delivery, not rich-country consultants or food shipments. When world leaders gather at the United Nations summit in September, they can build quickly on the Gleneagles achievements. They should insist that donor countries that still lack a timetable to 0.7 per cent announce one in order to complete the financing package for Africa and other poor regions; that the IMF, World Bank, and other international organisations set their work plans according to the Millennium Development Goals; and that the new donor commitments to double aid start now. The leaders should be guided by the spirit of London that was on display last week, which showed that hope and generosity are the greatest bulwarks against terror and hate. The author is director of the Earth Institute at Columbia University and author of 'The End of Poverty' FT Monday July 11 2005

Subject: Re: The five-year effort is less than ... From: Setanta To: Pancho Villa Date Posted: Tues, Jul 12, 2005 at 05:21:32 (EDT) Email Address: Not Provided Message: this is the reason i studied economics. i could think of no better way to help than to try to improve the lot of an entire country through its economic health. sadly, my idealism gave way to the harsh realities of life. in order to progress, i forgot my reasons for studying economics in the first place and concentrated on my career. someday, i am going to have to return to my original intention and see what i can do.

Subject: Re: The five-year effort is less than ... From: Poyetas To: Setanta Date Posted: Tues, Jul 12, 2005 at 05:59:27 (EDT) Email Address: Not Provided Message: Unfortunatelly, economics holds no answer when it expresses the egocentrical views of the ruling class. Last weekend I went into a tank station to buy a beer and was one euro short. Who gave me that euro? Not the guy behind me who was waiting to jump back into his bmw, but a street bum who was also waiting to buy his daily drink. What I mean is that economic well being has nothing to do with generosity or attitude. These things are developed through family, culture and life experiences. Economics has the potential to make people wealthy, but also extremely greedy. After living in Mexico and Miami, I tend to find that on the road to progress the most selfish people are the nouveau riche. Money with no culture is useless....

Subject: Re: The five-year effort is less than ... From: Pancho Villa To: Poyetas Date Posted: Tues, Jul 12, 2005 at 07:22:44 (EDT) Email Address: nma@hotmail.com Message: 'Money with no culture is useless....' Culture is one thing, among others, money can't buy...

Subject: Stock Markets are Broadly Strong From: Jennifer To: All Date Posted: Mon, Jul 11, 2005 at 18:06:02 (EDT) Email Address: Not Provided Message: Slowly markets everywhere are strengthening, and we appear headed for a fine investing year. The movement in stocks is especially broad and slow enough to stay right in line with earnings. Middle cap and value stocks are everywhere leading, and the sectors that began the year strong continue strong.

Subject: Jared Diamond From: Jennifer To: All Date Posted: Mon, Jul 11, 2005 at 17:55:53 (EDT) Email Address: Not Provided Message: Jared Diamond is on PBS beginning this evening. The programs are repeated, and should be a real treat for all of us. Diamond is the foremost ecological economist we have.

Subject: Wood-thrush Fledgling From: Terri To: All Date Posted: Mon, Jul 11, 2005 at 12:51:21 (EDT) Email Address: Not Provided Message: http://www.calvorn.com/gallery/photo.php?photo=5539&u=4|16|... Wood-thrush Fledgling New York City--Central Park, The Ramble.

Subject: Interest Rates, Dollars, and Oil From: Jennifer To: All Date Posted: Mon, Jul 11, 2005 at 12:30:13 (EDT) Email Address: Not Provided Message: As long as oil prices stay contained, I think we can count on contained long term interest rates, and the gradual international climb in stocks can continue. Investors abroad seem to like a strong dollar. A strong dollar in turn will ease price pressure for imported products in America.

Subject: Investing From: Terri To: All Date Posted: Mon, Jul 11, 2005 at 06:47:44 (EDT) Email Address: Not Provided Message: Though we have economic problems from government and trade deficits to low savings levels and a housing price boom that can be frightening to compare in historical terms, we remain in a bull market in bonds that began in January 2000 and a bull market in stocks that began in October 2002. The need is to take advantage of bull markets even with a knowledge of the worrisome problems that may surround. I have found that looking for relative value has been a correct answer to investing especially through these last 5 years. That has meant being aware of a few sectors in the market and judging value levels and adding and staying with what is most attractive. But, we do have international bull markets in stocks and I prefer to be part of this.

Subject: Mallard Duckling Makes a Big Splash From: Terri To: All Date Posted: Sun, Jul 10, 2005 at 17:57:33 (EDT) Email Address: Not Provided Message: http://www.calvorn.com/gallery/photo.php?photo=5568&u=4|1|... Mallard Duckling Makes a Big Splash After Missing a Blue Dasher New York City--Central Park, Model Boat Pond.

Subject: New York City From: Jennifer To: All Date Posted: Sun, Jul 10, 2005 at 16:43:15 (EDT) Email Address: Not Provided Message: Wandering about Manhattan this weekend. I am struck by how vibrant New York City is. New York really does appear to have gained much from the housing boom; neighborhood after neighborhood has been renewed. If the gains can simply be held in place for a long period now, we may have gained much during this last decade. The guess is everything will come down to long term interest rates staying low.

Subject: Re: New York City From: Mik To: Jennifer Date Posted: Tues, Jul 12, 2005 at 16:37:04 (EDT) Email Address: Not Provided Message: Sorry but I disagree with your statement: 'The guess is everything will come down to long term interest rates staying low.' To put it simply, if you buy a house worth 100,000 at an interest rate of 8% your repayment is $733.36 per month. If interest rates drop (as they have) to say 6%, that same house loan of 100,000 has a monthly repayment schedule of 599.55… GREAT BUT!!! What if the house value goes up by say 25% to 125,000 loan on the low interest rate of 6%, the monthly payment schedule will be $749 per month which is more than you were originally paying. In other words I have just shown that a 2% decrease in interest rates can only sustain an increase of 25% in property value. Now ask yourself, in the last, say 10 years, how much has the interest rate dropped and how much has the property values gone up? (hey what about the last 5 years?) Need I say more? What you are witnessing is not the positive side of low interest rates, the property market has annulled that advantage a long time ago. What you are seeing is a pure bubble that has over inflated based on the perception value distorting supply and demand to the point that it has disconnected from affordable and basic common sense. Hhhmm didn't we witness something similar in the IT industry not so long ago?

Subject: Re: New York City From: Emma To: Mik Date Posted: Wed, Jul 13, 2005 at 19:03:46 (EDT) Email Address: Not Provided Message: Yes, affordability is a worrying problem, most worrying.

Subject: Ireland's Garbage Secrets Come to Light From: Emma To: All Date Posted: Sat, Jul 09, 2005 at 18:41:43 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/10/international/europe/10garbage.html?hp&ex=1120968000&en=cc45e2124f9b0051&ei=5094&partner=homepage Ireland's Garbage Secrets Come Glaringly to Light By BRIAN LAVERY BRAY, Ireland - The earthen cliffs near this seaside harbor town have been sporting colorful decorations recently: erosion by the gentle waves of the Irish Sea has exposed the scraggly remnants of hundreds of blue, black and yellow trash bags. The shredding plastic flutters in the wind alongside jutting scraps of rusted metal; the twisted wrecks of unidentifiable junked machines already lie on the rocky beach below. Some 200,000 tons of rubbish was buried over generations at this municipal landfill, half an hour south of Dublin, until it was closed in the early 1980's. Now that the dump is falling into the sea, the mess on the beach has become the symbolic tip of another iceberg: this tiny island nation's historic inability to deal with its garbage. Bray, some say, is the forefather of a waste-management situation that has spiraled out of control. Ireland's 'Celtic Tiger' economy generated a vast increase in garbage over the last decade. This unpleasantly tangible side effect met with Ireland's inadequate capacity, expensive landfill fees and lax oversight to create a roaring black market in garbage collection. Construction companies and even homeowners paid unscrupulous truckers to cart away rubble and trash. Carting industry executives say as much as one million tons of waste, or 15 percent of the national total, still disappear illegally each year, and the money changing hands over it may reach up to $120 million. 'It was like 'The Sopranos,' ' said Liz McManus, a Labor Party member of Parliament who lives in Bray. 'It was hugely lucrative, very large scale, and some people were simply bought off.' The government is struggling to find alternatives. It has managed to get zoning and environmental approval for a huge incinerator near Cork, and hopes to build six more in what one newspaper called a 'necklace of incineration' around Ireland. But every month the devastation of another scenic spot comes to light, littered with broken refrigerators and shattered televisions. Illegal dumps are unearthed so often that they barely warrant a headline. Some illegal landfills, with tens or even hundreds of thousands of tons of material, have been found in abandoned quarries; several have been found to contain untreated hazardous material - like hospital waste - that could contaminate watersheds and conservation areas, like spawning grounds for wild salmon. The seaside dump in Bray, while not an illegal site, has taken on symbolic significance because Dick Roche, the environment minister, lives here, and because Wicklow County, which contains Bray and several of the country's most egregious dumps, proudly calls itself 'the Garden of Ireland.' Geography, psychology, politics and tradition helped to lay the groundwork for the waste management problem, which has been described as a 'crisis' for a decade, and has been turning up at the European Court of Justice as the European Union's executive branch tries to make Ireland meet its environmental standards. The Irish sense of living in a land apart - from Europe in general and Britain in particular - helped foster an independent streak in the national psyche, and an insistence that things here work differently. For a long time, they did. Many of the world's pressing environmental concerns have passed Ireland by. The country has no nuclear power and imports much of its electricity. Until the multinational pharmaceutical industry arrived 20 years ago, there was little hazardous waste to worry about. With Ireland's complicated zoning, there were also few places to put it. As demand has grown, fees to use the legal landfills are high: about $180 per metric ton of waste, compared with about $54 in Britain. 'It's a chicken and egg situation,' said Steve Cowman, chief executive of Greenstar, Ireland's largest waste management company. 'We're trying to catch up, but we just don't have the infrastructure. We're moving from the dark ages.' Now that Ireland plays a larger role on the world stage - with one of the world's fastest-growing economies, and holding key positions in European politics - it has started to develop a more Continental-style environmental consciousness. For instance, it signed the Kyoto Protocol and is struggling to meet the ensuing commitments, though it will never contribute more than a drop in the global bucket of carbon dioxide emissions. But Nimbyism has made a real national garbage policy impossible, some analysts say. Politicians pushing for change find themselves hamstrung by an electoral system that gives favored status to local concerns - like constituents' refusal to have a dump or incinerator built near their neighborhoods. 'Our political system leads in many cases to the individual interest being put ahead of the collective interest, and consistently puts the local interest ahead of the national,' said Peter Clinch, a professor of environmental policy at University College Dublin. 'It makes it extremely difficult to site landfills and incineration.' Professor Clinch said he knew a government minister - the equivalent of an American cabinet secretary - who spent time campaigning to move a speed bump in his parliamentary constituency when residents complained. The Irish have also tended to tolerate illegal dumps because they fit in with traditional practice in rural societies, according to Frank Convery, an economist and professor who wrote a book with Professor Clinch on the topic. Farmers often designate the corner of a field as a dumping ground, and have long simply burned their garbage. Complaints that runoff from illegal dumps has tainted aquifers prompted two recent judgments by the European Court of Justice that Ireland had not fulfilled its environmental commitments even after earlier scoldings. The judgments may be followed by hefty fines. The rulings have prompted some changes. The environment minister created a special enforcement team and ordered the local authorities to crack down on illegal dumping; several criminal prosecutions are under way. One weekend in May, spot checks on trucks were carried out at police roadblocks to stop garbage smugglers in the poorly patrolled area around the border with Northern Ireland. Officials in Kerry, a popular tourist destination in the southwest, have occasionally rented helicopters to search for unauthorized landfills. But for the foreseeable future, garbage will bedevil the isle. 'We have a third world attitude in Ireland to the whole issue of waste,' said Deirdre de Burca, the Green Party's spokeswoman on waste management. 'Once it's out of sight, it's out of mind. There's no sense of responsibility.'

Subject: Cedar Waxwing From: Terri To: All Date Posted: Sat, Jul 09, 2005 at 17:33:03 (EDT) Email Address: Not Provided Message: http://www.calvorn.com/gallery/photo.php?photo=5145&u=347|6|... Cedar Waxwing New York City--Central Park, The Ramble

Subject: Recently Fledged House Wren From: Terri To: All Date Posted: Sat, Jul 09, 2005 at 17:05:59 (EDT) Email Address: Not Provided Message: http://www.calvorn.com/gallery/photo.php?photo=5560&exhibition=7&pass=public&size=default&lang=eng Recently Fledged House Wren New York City--Central Park, Maintenance Field.

Subject: Boom in Jobs, Not Just Houses From: Emma To: All Date Posted: Sat, Jul 09, 2005 at 16:47:44 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/09/realestate/09complex.html?pagewanted=print Boom in Jobs, Not Just Houses, as Real Estate Drives Economy By DAVID LEONHARDT FREDERICK, Md. - Danilo Molina has never flipped a house to make a quick profit from rising real estate values. He has not refinanced a mortgage. He does not even own a home. Nonetheless, the decade-long housing boom has been very good to Mr. Molina, a slight 21-year-old with a shy smile. He has been working on construction crews since he arrived in this country from El Salvador six years ago, and today he supplies workers, including himself, to build new houses in this fast-growing county roughly 50 miles northwest of Washington. 'I saw my friends - they make money,' he said on a sun-baked recent afternoon in front of a half-finished house, describing his career choice. 'Now I've got a small company.' Mr. Molina is one small part of what might be called the real estate industrial complex, the economic engine that has become one of the few reliable sources of growth in recent years. Encompassing everything from land surveyors to general contractors to loan officers, the sprawling sector has added 700,000 jobs to the nation's payrolls over the last four years, according to an analysis by Economy.com, a research firm. Combined, the rest of the economy has lost nearly 400,000 jobs over the same span, which stretches back to the start of the most recent recession, in 2001. For all its benefits, the newfound power of real estate has also left the country vulnerable to a housing slowdown, which many economists expect over the next few years. Residential housing now makes up 16 percent, or $1.9 trillion, of the gross domestic product and is the economy's largest single sector, slightly bigger than the industries and services that supply health care, according to Economy.com. Frederick, an old farming area not far from the Antietam, Gettysburg and Harpers Ferry battlefields, is a typical housing-dependent community, where new homes are sprouting from the ground even as the values of existing ones are still soaring. Much of the interior West and less crowded parts of California and Florida have also been adding real estate jobs by the thousands. In suburban office buildings, like the ones run by Citigroup and Wells Fargo here in Frederick, mortgage companies have hired back-office workers to handle the crush of loans generated by low-interest rates. Planned communities in the nation's expanding exurbs employ carpenters, plumbers and garbage haulers. Laid-off workers from other industries are trying their hand at selling real estate. 'We've been building since the Pilgrims landed,' said Joe L. Beynon, 52, who became a project manager for a home builder here after the music school he was helping to found failed to get off the ground. 'I don't think you'd ever run out of a source of work in this industry.' In Frederick and the surrounding parts of suburban Maryland, one of every nine jobs is in real estate. The share would be even greater, builders say, if worries about overcrowding in schools and on roads had not caused county officials to reduce the number of building permits they have granted. Naples, Fla., a growing area in southwestern Florida that has had to rebuild in the wake of recent hurricanes, leads the country with one out of every six jobs in a housing-related business. [The Labor Department reported Friday that the economy added 146,000 jobs in June, roughly 30,000 of them in housing.] The economic growth of the real estate industrial complex has only added to its longstanding political clout. The housing and construction industries gave $167 million to campaigns during the 2004 election cycle, more than the agribusiness, defense, energy and computer industries put together, according to the Center for Responsive Politics in Washington. Republicans received about 65 percent of the industries' contributions during the 2004 election cycle. In recent months, Hillary Rodham Clinton, Democrat of New York, and George Allen, Republican from Virginia - senators often mentioned as 2008 presidential candidates - have been among the biggest recipients. Beyond money, the housing complex has the benefit of a constituency that numbers in the tens of millions: American homeowners. When President Bush appointed a commission to study tax changes, he suggested that only two provisions, the tax breaks for charitable contributions and for payments of mortgage interest, were untouchable. Unlike other industries that have boomed recently - health care and technology in particular - real estate has the advantage of relatively low barriers to entry. A college degree, let alone one from a medical or business school, is not a prerequisite for a middle-class income, as Mr. Molina has discovered. A few months ago, he was helping build a house at Worman's Mill, a 1,500-house development just north of the city of Frederick, when he noticed a carpenter putting up a gazebo on some grass in the middle of a road. Mr. Molina walked over and said he wanted to learn how to do that kind of detailed work. Today, he is a subcontractor for that carpenter, Ronald Malatak, and makes probably $1,500 in a typical week after paying the other workers on the crew, Mr. Malatak said. Working 10 hours a day, Monday through Saturday, they earn $12.50 to $17 an hour. 'Make no mistake about it - it is labor,' Mr. Malatak said, as one of the men walked across the sloped roof of a wood-frame house. 'But they make good money.' Mike Muren is only a year older than Mr. Molina and is benefiting even more from the boom. He began answering phones at the offices of Mackintosh Realtors, amid the painted row houses of downtown Frederick, when he was still in high school. Rather than go to college, he decided to stick around and get his license to sell real estate. 'I thought, 'This doesn't look too difficult. I could probably do this,' ' said Mr. Muren, tall and lanky, with a cellphone microphone clipped to the collar of his deep blue shirt. After high school, he passed his Realtor's test, traded in his Camaro for a Toyota Camry and began selling houses. Last year, he made about $250,000 and, to the great amusement of his colleagues, now drives a Cadillac CTS. 'A Cadillac?' Betsy Cain, another agent in the office and the mother of one of Mr. Muren's high school classmates, remembers asking him when he brought her out to the parking lot to see it. 'You're 22 years old!' To Mr. Muren, it is all part of the job. 'I could probably go to six years of college and not make as much in five years of work as I did last year,' he said. Across the real estate sector, though, incomes are lower on average - about $38,000 - than they are in the rest of the economy, where the typical yearly pay is about $41,000. While mortgage brokers, architects and some real estate agents do much better, call-center employees at banks and janitors tend to make relatively little. Parts of the business have also become far more productive, requiring many fewer workers than were once needed for the same amount of output. Mortgage bankers, for example, no longer have to sort through the mounds of paper they once did and their software for assessing risk is much more powerful. The First Horizon Home Loan Corporation, which has a branch in Frederick, employs about 5,900 people today, up from 4,000 five years ago, said Jerry Baker, the chief executive. But the volume of loans the company handles has more than doubled over the same period. 'The story here is twofold,' Mark Zandi, chief economist of Economy.com, said. 'Real estate has been an important job creator in bad times, but it's also a reason we haven't created a lot of jobs' elsewhere in the economy since the recession ended in late 2001. That is because growth in the housing industry does not put as many people to work as does growth in other industries. 'It's this bright shining light in the economy,' he said, 'that doesn't create a lot of jobs.' Today, the biggest concern is that the light will dim as long-term interest rates rise or, at the very least, stop falling. Fixed mortgage rates are now barely above their lowest point in more than a generation. Moreover, if housing prices in the hottest markets actually begin falling, as some economists fear, the vast real estate sector could act as a drag on the entire economy. About 40 percent of housing booms in rich countries over the last three decades have ended in busts, according to a recent study by the International Monetary Fund. Busts almost inevitably led to recessions, the study found. Federal Reserve officials, like many analysts, are hoping that other industries will take up any slack created by a housing slowdown and start to expand more quickly. People in Frederick are hoping that a slowdown, if it comes, will be a lot gentler than the real estate slump that hit in the late 80's, around the time that the housing markets in New York, New England and California also started struggling. 'If we were to go back to a market like we had in '89,' said Buzz Mackintosh, an owner of Mackintosh Realtors, 'there would be a lot of cold slaps to the face.'

Subject: We Have a Bull Market From: Terri To: All Date Posted: Fri, Jul 08, 2005 at 18:02:49 (EDT) Email Address: Not Provided Message: The American stock market has turned decidedly positive, with meaningful gains in middle cap and small cap stocks and value stocks in general. With several sectors have fine years from energy and utilities to REITs and health care to consumer non-durables. International stock markets are thoroughly strong in domestic currency terms, with the usual exception of Japan. Value stocks lead through the world. While long term bond yields are constrained, I think we can make nice progress. I am encouraqed.

Subject: Re: We Have a Bull Market From: Jennifer To: Terri Date Posted: Sun, Jul 10, 2005 at 12:22:30 (EDT) Email Address: Not Provided Message: This is another year to be led by sectors. Energy will move with price but I do not worry about giving away gains for the gains have been ample. Utilities should hold unless long term interest rates spike, and likely even if they do. I love regulated utilities. Large capitalization drug and medical equipment companies are sttractively priced. This is the sort of market I enjoy.

Subject: Re: We Have a Bull Market From: Kruggy To: Terri Date Posted: Sat, Jul 09, 2005 at 14:48:12 (EDT) Email Address: pkrugman@nytimes.com Message: Don't be a silly little twit, Terri!

Subject: Economic Pattern From: Terri To: All Date Posted: Fri, Jul 08, 2005 at 10:49:25 (EDT) Email Address: Not Provided Message: Notice another month of decidedly mediocre job creation, though there is job creation enough for population growth and a declining unemployment level. Inflation from labor cost increases is nowhere in evidence. The same moderate growth and easing inflation pattern continues, which should be healthy for stock and bond markets. Neither Britain nor Australia have lowered short term interest rates even though growth is slowing. I am suprised these central banks have not acted.

Subject: Eastern Kingbird Building a Nest From: Terri To: All Date Posted: Fri, Jul 08, 2005 at 07:49:14 (EDT) Email Address: Not Provided Message: http://www.calvorn.com/gallery/photo.php?photo=5446 Eastern Kingbird Building a Nest New York City--Central Park, Harlem Meer.

Subject: 51st State From: Pancho Villa To: All Date Posted: Thurs, Jul 07, 2005 at 21:03:46 (EDT) Email Address: nma@hotmail.com Message: 51ST STATE Look out of your windows, watch the skies Read all the instructions with bright blue eyes We're W.A.S.Ps, proud American sons We know how to clean our teeth and how to strip down a gun We're the 51st state of America Our star-spangled Union Jack flutters so proud Over the dancing heads of the merry patriotic crowd Tip your hat to the Yankee conqueror We've got no reds under the bed with guns under our pillows We're the 51st state of America Here in the land of opportunity, watch us revel in our liberty You can say what you like but it doesn't change anything Because the corridors of power are an ocean away We're the 51st state of America

Subject: Brown Thrasher From: Terri To: All Date Posted: Thurs, Jul 07, 2005 at 10:31:55 (EDT) Email Address: Not Provided Message: http://www.calvorn.com/gallery/photo.php?photo=3243&u=178|301|... Brown Thrasher New York City--Central Park, Azalea Pond.

Subject: Loving London and Crows From: Jennifer To: All Date Posted: Thurs, Jul 07, 2005 at 09:04:14 (EDT) Email Address: Not Provided Message: This is a time to think with love for London and to make sense of all by regarding the birds we find wonderfully here. I remember the wonderful crows of London Tower, standing guard. Crows are ever so smart.

Subject: Re: Loving London and Crows From: Emma To: Jennifer Date Posted: Thurs, Jul 07, 2005 at 09:43:27 (EDT) Email Address: Not Provided Message: I will always love London and crows.

Subject: Re: Loving London and Crows From: Pancho Villa To: Emma Date Posted: Thurs, Jul 07, 2005 at 11:32:44 (EDT) Email Address: nma@hotmail.com Message: I will always love London and its subway (no matter what else will or could happen! I'm not a coward)

Subject: Re: Loving London and Crows From: Emma To: Pancho Villa Date Posted: Fri, Jul 08, 2005 at 06:07:39 (EDT) Email Address: Not Provided Message: You are a lovely soul, Dear Pancho.

Subject: Political will, not just aid From: Pancho Villa To: All Date Posted: Thurs, Jul 07, 2005 at 07:30:03 (EDT) Email Address: nma@hotmail.com Message: JAGDISH BHAGWATI and IBRAHIM GAMBARI Political will, not just aid, can lift Africa out of despair We can draw comfort from the fact that marginalised Africa is, at last, at centre stage: Kofi Annan, the United Nations secretary-general, attended the African Union summit in Tripoli yesterday, and the Group of Eight summit this week features Africa prominently on the agenda. But why is this important? And what should be done to turn our enhanced sense of urgency into action? The excellent report of the Commission on Africa is titled 'Our Common Interest'. Perhaps this is why we should aid Africa. Princeton Lyman, a former US Ambassador to Nigeria, recently argued that there is 'a growing recognition that you just can't leave an entire continent behind ... without a lot of problems that come back to harm us'. But these 'enlightened self-interest' arguments for extending a hand to Africa are a bit of a stretch. They are similar to tenuous arguments used since the 1960s to sell the idea of aid to the electorates of rich countries - that communism would spread unless poverty were reduced. Today communism has been replaced by terrorism. When we look at Africa today, it is simply our common humanity that we must affirm. Africa, unique among continents in the postwar period, has not progressed but gone backwards in many ways. It contains 32 of the world's 48 poorest countries. It has the lowest primary school completion rates of any continent today while life expectancy has declined from 50 to 46 years since 1990. Since the 1980s, per capita income has fallen by 13 per cent and the number of people estimated to be living in 'extreme poverty' has doubled. Compounding these tragic numbers are the images that incessantly flash across our screens: of slaughter in Darfur, the genocide in Rwanda, the civil wars in Ethiopia, Angola and Liberia, the collapse of governance and human rights in Zimbabwe, and the masses of malnourished and hapless refugees in camps. Writing in 1760, Adam Smith observed that a 'man of humanity' in Europe, while losing sleep over the loss of his little finger, would 'snore with the most profound security' through the ruin of a hundred million of his brethren in China since he had not seen them. Today, this is impossible for he cannot avoid seeing the famine, the plague and the poverty. As we witnessed with the outpouring of public and private money for tsunami relief, the men and women - indeed, their children - have pushed governments and civil society organisations into asserting their common humanity in Africa. But when we get down to the task of assisting Africa, the very afflictions that compel us to help are likely also to produce the pessimistic belief that nothing can be done to produce any real results. We must transcend that despair by reminding ourselves of the ways Africa has changed for the better. One way is the manner in which Africans manage their own affairs. Perhaps the greatest change in governance has come in the shape of the African Union. African governments have established the African Peer Review Mechanism, signed by 23 countries and with three more in the queue, that provides for periodic and impartial reviews of governance in the member countries. Many signatories are already under review. This transparency can help bring corruption into the light, thereby eradicating it. The AU has also created the Peace and Security Council aimed at the prevention, management and resolution of conflicts in the continent. The AU is also moving to double the number of its troops in Darfur to 7,000. In short, the problems of bad governance and raging conflicts are beginning to be addressed, replacing decades of neglect and despair. Civil society has also grown in many countries; Wangari Maathai's Nobel Peace Prize last year for her environmental work was possibly a recognition of this important development. But effort is still needed on many fronts. This does not mean that nothing can be done unless everything else is in place. Lots of things can be done that all add up. Yet, a focus on a few strategic areas is necessary. Five are critical. First, debt relief for the very poor nations makes sense. It should be extended regardless of bad governance. Would you collect a pound of flesh from a dictator if the flesh is actually going to come from his emaciated and oppressed subjects? Second, new aid must be used productively. Aid spent in Africa can be increased beyond its current levels in countries with good governance but a graduated - rather than substantially accelerated - increase to double current aid flows is prudent. This aid should be increased according to carefully devised projects and programmes. Third, aid to Africa must stand firmly on two legs - the aid spent in Africa and that directed towards Africa but not spent there. Spending aid funds productively poses fewer problems in the latter case. Several programmes can be thought of immediately. Given Africa's dire shortage of skilled labour, which handicaps all kinds of developmental efforts, a Grey Peace Corps has been suggested. This would enlist retired volunteers from a range of professions to work in Africa in the manner of the Peace Corps. Very large sums of money could be spent on developing new vaccines and cures for diseases particularly afflicting Africa. Fourth, African nations need to reduce their own trade barriers while seeking the removal of the subsidies and tariffs of rich countries in products where they have demonstrated export advantage: cotton and sugar being principal examples. A country's own trade barriers discourage the development of its export industry: markets opened by the rich countries may then not be taken advantage of. Finally, programmes to make the private sector the backbone of development are necessary. They include micro-credit institutions which enable the poor to borrow without collateral. But more might be accomplished through establishing clear property rights that would turn the assets of the poor, often tenuous in their legal title, into effective collateral. Growing political will, favourable institutional changes and thoughtful policy prescriptions are changing the landscape for Africa's future. Despair must yield to hope and hope must lead to action. Jagdish Bhagwati is university professor, economics and law, at Columbia University and senior fellow at the Council on Foreign Relations. Ibrahim Gambari is under-secretary-general at the UN and special adviser for Africa FT Tuesday July 5 2005

Subject: With Love for All From: Terri To: All Date Posted: Thurs, Jul 07, 2005 at 07:28:53 (EDT) Email Address: Not Provided Message: http://www.calvorn.com/gallery/photo.php?photo=5279&u=2|13|... Prothonotary Warbler Taking Flight New York City-Central Park Lake.

Subject: Re: With Love for All From: Terri To: Terri Date Posted: Thurs, Jul 07, 2005 at 07:32:28 (EDT) Email Address: Not Provided Message: All my heart and thoughts are with Londoners.

Subject: London bomb attacks From: Setanta To: All Date Posted: Thurs, Jul 07, 2005 at 06:02:00 (EDT) Email Address: Not Provided Message: turn on the news or go to www.bbc.co.uk or www.sky.co.uk. london has been hit with 'multiple explosions' on both the tube and busses.

Subject: Re: London bomb attacks From: Terri To: Setanta Date Posted: Thurs, Jul 07, 2005 at 06:16:40 (EDT) Email Address: Not Provided Message: Dear Europeans, dear Britains, dear dear Londoners. Thank you, Setanta.

Subject: Re: London bomb attacks From: Setanta To: Terri Date Posted: Thurs, Jul 07, 2005 at 06:33:00 (EDT) Email Address: Not Provided Message: just heard from a friend in Bank of America in London that UBS have left their dealing room and the GBP is weakening.

Subject: Re: London bomb attacks From: Setanta To: Setanta Date Posted: Thurs, Jul 07, 2005 at 07:27:12 (EDT) Email Address: Not Provided Message: reports of british troops on the street. armed checkpoints all over the city. unconfirmed report of a suicide bomber shot dead by army on russell square. goddamn cowards....they knew that lots of police and emergency services personnel were up in scotland for the g8 summit. scum.

Subject: Right On From: Stephanie To: All Date Posted: Thurs, Jul 07, 2005 at 01:14:37 (EDT) Email Address: Not Provided Message: Just wanted to say 'Thank You!' for the columns here. I especially agree that the base of all our problems seems to be stemming from the corrupt link between politics and money. Let's get rid of the lobbying machine. Let's create campaign reform that really allows candidates equal time at the mic, equal time at the resources, etc. Until we start here, we will never be able to make sustainable progress in our democracy both here, and abroad. And let's get the hell out of Iraq (and impeach the president too).

Subject: Sector Indexes From: Terri To: All Date Posted: Wed, Jul 06, 2005 at 22:01:21 (EDT) Email Address: Not Provided Message: http://flagship2.vanguard.com/VGApp/hnw/FundsVIPERByName Sector Indexes 12/31/04 - 7/6/05 Energy 25.9 Financials -1.2 Health Care 4.1 Info Tech -5.1 Materials -7.5 REITs 7.9 Telecoms -1.6 Utilities 13.8

Subject: A Strong Strong Dollar From: Terri To: All Date Posted: Wed, Jul 06, 2005 at 18:01:55 (EDT) Email Address: Not Provided Message: There is an international bull market in which every major market is positive for the year so far other than America. Most markets are already up over 10%. But, this data is all in domestic currencies. In dollar terms, most major international markets are still positive but much less so because of the surprisingly strong dollar. The dollar has gained about 15% against the Euro, and is now trading where it did in 1995. Essentially what has happened is that international stock values have compensated for the declines of domestics currencies against the dollar. Value stocks are stronger internationally than growth.

Subject: National Index Returns - Dollars From: Terri To: All Date Posted: Wed, Jul 06, 2005 at 17:25:13 (EDT) Email Address: Not Provided Message: http://www.msci.com/equity/index2.html National Index Returns [Dollars] 12/31/04 - 7/5/05 Australia 4.0 Canada 6.6 Denmark 7.1 France -0.0 Germany -4.8 Hong Kong 3.1 Japan -6.1 Netherlands 3.2 Norway 14.8 Sweden -2.1 Switzerland -1.8 UK 0.2

Subject: National Index Returns - Domestic From: Terri To: All Date Posted: Wed, Jul 06, 2005 at 17:20:33 (EDT) Email Address: Not Provided Message: http://www.msci.com/equity/index2.html National Index Returns [Domestic Currency] 12/31/04 - 7/5/05 Australia 10.1 Canada 10.8 Denmark 22.5 France 14.1 Germany 8.7 Hong Kong 3.1 Japan 2.4 Netherlands 17.8 Norway 25.8 Sweden 16.4 Switzerland 12.5 UK 9.7

Subject: Prothonotary Warbler in Flight From: Terri To: All Date Posted: Wed, Jul 06, 2005 at 15:45:25 (EDT) Email Address: Not Provided Message: http://www.calvorn.com/gallery/photo.php?photo=5290&u=2|10|... Prothonotary Warbler in Flight New York City-Central Park Lake.

Subject: Basics for Keeping Bones Healthy From: Emma To: All Date Posted: Wed, Jul 06, 2005 at 13:06:21 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/10/19/health/19bone.html?ex=1255924800&en=f66b20a3d9a4622c&ei=5090&partner=rssuserland October 19, 2004 The (Often Neglected) Basics for Keeping Bones Healthy By GINA KOLATA n surveys and focus groups, most Americans say they know what to do to protect themselves against osteoporosis, the disease of fragile bones that often occurs in the elderly: eat lots of calcium-rich foods or take a calcium supplement. Many say they are doing just that, or plan to. But this response worries osteoporosis researchers like Dr. Joan McGowan, chief of the musculoskeletal diseases branch at the National Institute of Arthritis and Musculoskeletal and Skin Diseases. Consuming calcium, she and others note, can at best make a small difference in osteoporosis risk, while other methods that can have a more substantial effect are often ignored. Dr. McGowan is one of two scientific editors of the surgeon general's report on bone health that was released last week. The report has an ambitious goal: to educate doctors and the public so that they can put into practice what researchers know about preventing and detecting the bone disease. The lack of this knowledge, Dr. McGowan said, often leads to bad practice. For example, she said, doctors should routinely evaluate people over 50 who break a bone, for any reason, to see if they have osteoporosis. But such evaluations are seldom ordered. Doctors should also make sure that older people get enough vitamin D, because deficiencies greatly increase fracture risk, Dr. McGowan said. But this, too, is rarely done. Osteoporosis, the most common bone disease, is grimly serious, afflicting 10 million Americans over age 50 annually. Each year, the report found, about 1.5 million Americans break bones because of osteoporosis, costing the health care system $18 billion. Often, the bone that is broken is the hip. And a hip fracture can set off a spiral leading to a nursing home and death: 20 percent of people who break a hip die within a year, the report said. Osteoporosis can be prevented and treated with drugs that keep bones from breaking down - if people realize that they have it. The report urges that doctors and patients pay attention to bones throughout life. Children and adolescents need a proper diet and exercise to stimulate bone growth. For adults, eating properly and staying active can maintain bone strength. The report recommends that people over 50 who are at high risk for osteoporosis - women with a strong family history of the disease, for example - and anyone over 65 have a bone density test. Older people should also take simple measures to prevent falls, like removing small rugs from their homes. But paying close attention to fractures is near the top of most experts' list of largely ignored medical interventions. 'When you see people over 50 who fall and break a wrist bone, you need to stop and take a look,' said Dr. Richard H. Carmona, the surgeon general. 'We need to take one step back and say, 'Why should that bone have broken from a simple fall?' ' That advice is not just for broken wrist bones, Dr. McGowan added. 'One of the ideas that people have is that you earned your fracture,' she said. 'You tripped, or you were ice skating with your granddaughter and you fell and broke your arm. Well, how many times did your granddaughter fall and not break an arm?' Dr. McGowan said that a fracture was 'really a sentinel event in an older person - any fracture.' 'I don't care if you got it falling off a bike or even in a traffic accident,' she continued. Yet too often, she said, doctors do not send patients with broken bones to be evaluated to see why the bone broke in the first place. The American Academy of Orthopaedic Surgeons agrees. In a position statement last year, it urged members to do more than just repair fractures in older people. 'There is a terrific information gap,' said Dr. Laura Tosi, an orthopedic surgeon at George Washington University and a member of the academy's board. 'Orthopods know how to put metal in and get people up and going, but if you don't prevent future fractures, people will end up disabled.' It is not just orthopedists who often miss opportunities. In a paper published last year in The Journal of Clinical Endocrinology & Metabolism, Dr. Ethel Siris, director of the Toni Stabile Osteoporosis Center at New York-Presbyterian Hospital/Columbia University Medical Center in New York, and her colleagues reviewed the data and found it depressing. 'In virtually all the reports that have been published in the past few years, physicians who deal directly with the fracture event rarely take appropriate action,' they wrote. 'This includes radiologists who review X-rays that include the spine, orthopedic surgeons who treat acute fractures, physiatrists who oversee rehabilitation after the fracture, and primary care physicians to whom the patients return for overall care once the fracture has healed.' For example, in one study reviewed in the paper, of 934 women over age 60 who had routine chest X-rays, 132 had visible moderate to severe vertebral fractures. But only 17 of them had these fractures noted on their discharge statements. Another underappreciated problem, osteoporosis experts say, is a lack of vitamin D, which bones need to absorb calcium and phosphorus. Vitamin D deficiencies greatly increase the risk of fractures. Yet a new national study by Dr. Michael Holick of Boston University, of about 1,500 postmenopausal women with osteoporosis, found that half had vitamin D levels below what is considered ideal. Vitamin D is made in the skin in response to sun exposure, but many people do not get enough sunlight, Dr. Siris said, noting that there is a concern about skin cancer. 'People today are sun-averse,' she said. 'And in the elderly, who don't go outdoors, this is a real issue.' She added that the deficiency was easily corrected by vitamin D supplements that cost as little as $3.40 for 100 pills. Osteoporosis is a real problem, Dr. Siris said. 'This is not something made up by the pharmaceutical industry.' But for people who are worried about ending their days bent over with the disease, or with a broken hip in a nursing home, Dr. Carmona has a message. 'You don't have to be a hunched over old lady or old man,' he said. 'If you pay attention to bone health.'

Subject: Common Grackle Feeding Moth to Fledgling From: Terri To: All Date Posted: Wed, Jul 06, 2005 at 12:43:03 (EDT) Email Address: Not Provided Message: http://www.calvorn.com/gallery/photo.php?photo=5535 Common Grackle Feeding Moth to Fledgling New York City--Central Park, The Ramble.

Subject: F.D.A. Says Yes, but Insurers Say No From: Emma To: All Date Posted: Wed, Jul 06, 2005 at 12:34:35 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/06/business/06disk.html?pagewanted=all When F.D.A. Says Yes, but Insurers Say No By BARNABY J. FEDER Medical device makers devote years and millions of dollars to winning regulatory approval for new products. But all that work does not necessarily produce the kind of data that persuades insurers to pay for the products once they hit the market. Take what has happened since the Food and Drug Administration gave Johnson & Johnson clearance last fall to sell an implantable spinal disk called the Charité (shar-ee-TAY). The initial reaction was just what the company had hoped. The few surgeons trained during clinical trials to implant the disk were peppered with calls from would-be patients who had been putting off the hazards of spinal fusion for years in the hope of getting a new disk. Hundreds of surgeons signed up for Johnson's three-day sessions to learn how to perform the demanding procedure. Eight months later, though, most private insurers still refuse to cover the cost of the procedure, which is generally $30,000 to $45,000 for a single disk. And while Medicare does provide some coverage, its reimbursement level for hospitals is far less than the cost of the disk, which Johnson lists at $11,500 but sells at discounts of as much as 20 percent to its high-volume customers. The insurers, including the government, say that they need to see more clinical studies documenting the disk's durability and performance for various types of patients. The data that Johnson provided to the Food and Drug Administration to win approval to sell the disk followed patients for just two years after the implant. Insurers say that young and middle-aged adults make up such a large percentage of the patients getting the disk that they need to know more about how it will wear over decades and the health impact on patients when it fails. Laboratory tests submitted to the F.D.A. suggested that the disk can last 80 years. But critics say that conclusion does not square with the condition of some disks retrieved from ailing European patients or with X-rays showing relatively rapid deterioration of the disks in some patients. 'The lab tests do not represent what happens in the body,' said Dr. Steven Kurtz, a biomechanics expert who has analyzed wear and tear in five failed Charité disks for Exponent, a consulting firm. 'Some patients might go 20 years or more with no problems but I wouldn't advise anyone to count on more than 10. And some could be less.' Johnson and supporters of the disk say that nearly all the problems to date have been in cases where the wrong size disk was used or the disk was not properly centered. The F.D.A. required Johnson to show that the Charité matched spinal fusion in terms of safety and pain relief over the two-year study period. But as insurers saw it, that just meant that the device was no better than spinal fusion. And many insurers consider the fusion surgery to be overprescribed and of little long-term value. Moreover, some insurers and doctors said, the form of spinal fusion surgery adopted in the late 1990's as the point of comparison in the clinical trials no longer represents the state of the art in fusion surgery. 'Charité needs to show substantial improvement in the patients' quality of life and clinical outcomes,' said Michael Chee, a spokesman for Blue Cross Blue Shield of California, a unit of WellPoint that is one of many large Blue Cross insurers that has denied coverage for Charité. The insurers' resistance has already cost Johnson hundreds of implant sales, according to analysts like Robin R. Young, a consultant and orthopedics newsletter publisher in Wayne, Pa. Mr. Young said that the number of disks implanted in the United States since last October - about 1,500 - was 25 percent lower than what he had projected through the end of May. And some surgeons said such figures understated the challenge. 'About 80 percent of my patients who could be candidates for the disk aren't covered for it by their insurance,' said Dr. Scott G. Tromanhauser of the Boston Spine Group. Some patients end up feeling forced into spinal fusion surgery, however reluctant they may be. 'It's very depressing,' said John Lech, a computer programmer for the Wachovia Corporation in Winston-Salem, N.C., whose back pain restricted him to working at home. Mr. Lech, 38, said he had sought coverage, beginning last November, to have the lowest disk in his back replaced. He said he gave up hope after a May 2 hearing in which Wachovia's work benefits committee accepted the recommendation of United Health Care, the bank's insurer, that the procedure not be reimbursed. Mr. Lech underwent spinal fusion on May 17. But that was a step that Andy Sethi of Duncanville, Tex., could not bear to take. Last winter after Aetna turned down his second appeal, Mr. Sethi, a 28-year-old registered nurse, said he borrowed $40,000 on three credit cards and $30,000 from friends and relatives to cover all the costs associated with an operation. In January, at the Texas Back Institute in Dallas, he received two Charité disks. Mr. Sethi said that he was back at work within two months. At about the same time Aetna became one of the first national insurers to begin covering disk implants. But it was too late for Mr. Sethi, who said in a recent interview that he would be filing for bankruptcy protection this month to clear his debts. The insurance issues surrounding the artificial disk are hardly unique. Insurers are also taking a cautious stance toward a treatment that is used as an alternative to neck surgery as a way of clearing blockages in the carotid arteries leading to the brain; Guidant is the domestic pioneer in the alternative treatment, which involves balloon angioplasty and stents inserted via a catheter. Doctors have been criticizing both Medicare and private insurers for restricting the classes of heart patients the insurers deem eligible to receive implanted heart rhythm management devices from companies like Medtronic, St. Jude Medical and Guidant. Such insurance battles can take years to play out. Seven years after Oratec Interventions, based in Menlo Park, Calif., gained F.D.A. clearance to sell a device that treats back disk pain by heating damaged tissue through a catheter, the device continues to be categorized as experimental and not reimbursable by most insurers. Oratec sold itself to Smith & Nephew in 2002. Johnson is so large and diversified that delays in gaining insurance coverage for a new product are less burdensome than they would be for a start-up. Still, during a conference call on April 19 to discuss first-quarter earnings, Johnson found it necessary to reassure analysts that it was confident most insurers would eventually follow the lead of companies that have already decided to pay for the disk implant. Those include Aetna, Kaiser Permanente and Horizon Blue Cross Blue Shield. Johnson is hoping to gain more support after the publication on July 15 of two articles on the F.D.A. trial data in Spine, a peer-reviewed medical journal. 'We expect that will lead to a new round of policy reviews,' said John Argiro, director of reimbursement for DePuy Spine, the Johnson subsidiary that makes the disk. Mr. Young, the orthopedics consultant, said that failure to gain traction with major insurers could force Johnson to cut its prices and eventually lead analysts to reduce sharply their estimates of the potential artificial disk market. At the time the disk was approved, analysts said that Johnson's revenue from Charité sales this year could be as much as $100 million and that the total market for such disks from Johnson and others could top $1 billion by 2010. The insurance picture could become more complicated if, as expected, the F.D.A. gives Synthes of Switzerland clearance to sell its Pro-Disc by the end of this year. Maverick from Medtronic and FlexiCore from Stryker may also reach the domestic market in the next few years. These and other companies are also developing artificial disks for the upper, or cervical, spine that could be implanted with a much simpler operation. Some insurance industry critics say that the industry moves slowly because insurers profit from delaying decisions to cover new technology. 'Insurers don't really care about the science as long as the answer comes out that they don't have to pay for it,' said Dr. John Peloza, a Dallas spine surgeon. He describes Charité as flawed in its design, but says he worries that the same arguments the insurers use to deny coverage will be extended to other disks that receive regulatory approval. Device makers are not so cynical about the insurers - in public at least - but part of their argument for coverage invariably includes claims that their new technology saves insurers' money. Although the disks themselves cost more than the cages, screws and bone-growth promoters used in fusion, disk patients tend to leave the hospital sooner and recover fully in half of the three or four months common for fusion patients. Some research suggests that disk patients also retain more range of motion, and that the artificial disk is less likely than fusion to accelerate the deterioration of adjacent disks. So far, though, while Johnson and rival disk makers have plenty of individual success stories based on more than 20 years of sales in Europe, they have no compelling long-term research studies to support their cost comparisons.

Subject: House Wren Chicks In Their Nest From: Terri To: All Date Posted: Wed, Jul 06, 2005 at 10:37:41 (EDT) Email Address: Not Provided Message: http://www.calvorn.com/gallery/photo.php?photo=5528&u=4|11|... Four House Wren Chicks In Their Nest New York City--Central Park, Maintenance Field.

Subject: Life at the Top in America is Longer From: Emma To: All Date Posted: Wed, Jul 06, 2005 at 10:04:02 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/16/national/class/HEALTH-FINAL.html?ex=1273896000&en=a359d260fbff6171&ei=5090&partner=rssuserland&emc=rss May 16, 2005 Life at the Top in America Isn't Just Better, It's Longer By JANNY SCOTT Jean G. Miele's heart attack happened on a sidewalk in Midtown Manhattan last May. He was walking back to work along Third Avenue with two colleagues after a several-hundred-dollar sushi lunch. There was the distant rumble of heartburn, the ominous tingle of perspiration. Then Mr. Miele, an architect, collapsed onto a concrete planter in a cold sweat. Will L. Wilson's heart attack came four days earlier in the bedroom of his brownstone in Bedford-Stuyvesant in Brooklyn. He had been regaling his fiancée with the details of an all-you-can-eat dinner he was beginning to regret. Mr. Wilson, a Consolidated Edison office worker, was feeling a little bloated. He flopped onto the bed. Then came a searing sensation, like a hot iron deep inside his chest. Ewa Rynczak Gora's first signs of trouble came in her rented room in the noisy shadow of the Brooklyn-Queens Expressway. It was the Fourth of July. Ms. Gora, a Polish-born housekeeper, was playing bridge. Suddenly she was sweating, stifling an urge to vomit. She told her husband not to call an ambulance; it would cost too much. Instead, she tried a home remedy: salt water, a double dose of hypertension pills and a glass of vodka. Architect, utility worker, maid: heart attack is the great leveler, and in those first fearful moments, three New Yorkers with little in common faced a single, common threat. But in the months that followed, their experiences diverged. Social class - that elusive combination of income, education, occupation and wealth - played a powerful role in Mr. Miele's, Mr. Wilson's and Ms. Gora's struggles to recover. Class informed everything from the circumstances of their heart attacks to the emergency care each received, the households they returned to and the jobs they hoped to resume. It shaped their understanding of their illness, the support they got from their families, their relationships with their doctors. It helped define their ability to change their lives and shaped their odds of getting better. Class is a potent force in health and longevity in the United States. The more education and income people have, the less likely they are to have and die of heart disease, strokes, diabetes and many types of cancer. Upper-middle-class Americans live longer and in better health than middle-class Americans, who live longer and better than those at the bottom. And the gaps are widening, say people who have researched social factors in health. As advances in medicine and disease prevention have increased life expectancy in the United States, the benefits have disproportionately gone to people with education, money, good jobs and connections. They are almost invariably in the best position to learn new information early, modify their behavior, take advantage of the latest treatments and have the cost covered by insurance. Many risk factors for chronic diseases are now more common among the less educated than the better educated. Smoking has dropped sharply among the better educated, but not among the less. Physical inactivity is more than twice as common among high school dropouts as among college graduates. Lower-income women are more likely than other women to be overweight, though the pattern among men may be the opposite. There may also be subtler differences. Some researchers now believe that the stress involved in so-called high-demand, low-control jobs further down the occupational scale is more harmful than the stress of professional jobs that come with greater autonomy and control. Others are studying the health impact of job insecurity, lack of support on the job, and employment that makes it difficult to balance work and family obligations. Then there is the issue of social networks and support, the differences in the knowledge, time and attention that a person's family and friends are in a position to offer. What is the effect of social isolation? Neighborhood differences have also been studied: How stressful is a neighborhood? Are there safe places to exercise? What are the health effects of discrimination? Heart attack is a window on the effects of class on health. The risk factors - smoking, poor diet, inactivity, obesity, hypertension, high cholesterol and stress - are all more common among the less educated and less affluent, the same group that research has shown is less likely to receive cardiopulmonary resuscitation, to get emergency room care or to adhere to lifestyle changes after heart attacks. 'In the last 20 years, there have been enormous advances in rescuing patients with heart attack and in knowledge about how to prevent heart attack,' said Ichiro Kawachi, a professor of social epidemiology at the Harvard School of Public Health. 'It's like diffusion of innovation: whenever innovation comes along, the well-to-do are much quicker at adopting it. On the lower end, various disadvantages have piled onto the poor. Diet has gotten worse. There's a lot more work stress. People have less time, if they're poor, to devote to health maintenance behaviors when they are juggling two jobs. Mortality rates even among the poor are coming down, but the rate is not anywhere near as fast as for the well-to-do. So the gap has increased.' Bruce G. Link, a professor of epidemiology and sociomedical sciences at Columbia University, said of the double-edged consequences of progress: 'We're creating disparities. It's almost as if it's transforming health, which used to be like fate, into a commodity. Like the distribution of BMW's or goat cheese.' The Best of Care Mr. Miele's advantage began with the people he was with on May 6, when the lining of his right coronary artery ruptured, cutting off the flow of blood to his 66-year-old heart. His two colleagues were knowledgeable enough to dismiss his request for a taxi and call an ambulance instead. And because he was in Midtown Manhattan, there were major medical centers nearby, all licensed to do the latest in emergency cardiac care. The emergency medical technician in the ambulance offered Mr. Miele (pronounced MEE-lee) a choice. He picked Tisch Hospital, part of New York University Medical Center, an academic center with relatively affluent patients, and passed up Bellevue, a city-run hospital with one of the busiest emergency rooms in New York. Within minutes, Mr. Miele was on a table in the cardiac catheterization laboratory, awaiting an angioplasty to unclog his artery - a procedure that many cardiologists say has become the gold standard in heart attack treatment. When he developed ventricular fibrillation, a heart rhythm abnormality that can be fatal within minutes, the problem was quickly fixed. Then Dr. James N. Slater, a 54-year-old cardiologist with some 25,000 cardiac catheterizations under his belt, threaded a catheter through a small incision in the top of Mr. Miele's right thigh and steered it toward his heart. Mr. Miele lay on the table, thinking about dying. By 3:52 p.m., less than two hours after Mr. Miele's first symptoms, his artery was reopened and Dr. Slater implanted a stent to keep it that way. Time is muscle, as cardiologists say. The damage to Mr. Miele's heart was minimal. Mr. Miele spent just two days in the hospital. His brother-in-law, a surgeon, suggested a few specialists. Mr. Miele's brother, Joel, chairman of the board of another hospital, asked his hospital's president to call N.Y.U. 'Professional courtesy,' Joel Miele explained later. 'The bottom line is that someone from management would have called patient care and said, 'Look, would you make sure everything's O.K.?' ' Things went less flawlessly for Mr. Wilson, a 53-year-old transportation coordinator for Con Ed. He imagined fleetingly that he was having a bad case of indigestion, though he had had a heart attack before. His fiancée insisted on calling an ambulance. Again, the emergency medical technician offered a choice of two nearby hospitals - neither of which had state permission to do an angioplasty, the procedure Mr. Miele received. Mr. Wilson chose the Brooklyn Hospital Center over Woodhull Medical and Mental Health Center, the city-run hospital that serves three of Brooklyn's poorest neighborhoods. At Brooklyn Hospital, he was given a drug to break up the clot blocking an artery to his heart. It worked at first, said Narinder P. Bhalla, the hospital's chief of cardiology, but the clot re-formed. So Dr. Bhalla had Mr. Wilson taken to the Weill Cornell Center of NewYork-Presbyterian Hospital in Manhattan the next morning. There, Dr. Bhalla performed an angioplasty and implanted a stent. Asked later whether Mr. Wilson would have been better off if he had had his heart attack elsewhere, Dr. Bhalla said the most important issue in heart attack treatment was getting the patient to a hospital quickly. But he added, 'In his case, yes, he would have been better off had he been to a hospital that was doing angioplasty.' Mr. Wilson spent five days in the hospital before heading home on many of the same high-priced drugs that Mr. Miele would be taking and under similar instructions to change his diet and exercise regularly. After his first heart attack in 2000, he quit smoking; but once he was feeling better, he had stopped taking several medications, drifted back to red meat and fried foods, and let his exercise program slip. This time would be different, he vowed: 'I don't think I'll survive another one.' Ms. Gora's experience was the rockiest. First, she hesitated before allowing her husband to call an ambulance; she hoped her symptoms would go away. He finally insisted; but when the ambulance arrived, she resisted leaving. The emergency medical technician had to talk her into going. She was given no choice of hospitals; she was simply taken to Woodhull, the city hospital Mr. Wilson had rejected. Woodhull was busy when Ms. Gora arrived around 10:30 p.m. A triage nurse found her condition stable and classified her as 'high priority.' Two hours later, a physician assistant and an attending doctor examined her again and found her complaining of chest pain, shortness of breath and heart palpitations. Over the next few hours, tests confirmed she was having a heart attack. She was given drugs to stop her blood from clotting and to control her blood pressure, treatment that Woodhull officials say is standard for the type of heart attack she was having. The heart attack passed. The next day, Ms. Gora was transferred to Bellevue, the hospital Mr. Miele had turned down, for an angiogram to assess her risk of a second heart attack. But Ms. Gora, who was 59 at the time, came down with a fever at Bellevue, so the angiogram had to be canceled. She remained at Bellevue for two weeks, being treated for an infection. Finally, she was sent home. No angiogram was ever done. Comforts and Risks Mr. Miele is a member of New York City's upper middle class. The son of an architect and an artist, he worked his way through college, driving an ice cream truck and upholstering theater seats. He spent two years in the military and then joined his father's firm, where he built a practice as not only an architect but also an arbitrator and an expert witness, developing real estate on the side. Mr. Miele is the kind of person who makes things happen. He bought a $21,000 house in the Park Slope section of Brooklyn, sold it about 15 years later for $285,000 and used the money to build his current house next door, worth over $2 million. In Brookhaven, on Long Island, he took a derelict house on a single acre, annexed several adjoining lots and created what is now a four-acre, three-house compound with an undulating lawn and a 15,000-square-foot greenhouse he uses as a workshop for his collection of vintage Jaguars. Mr. Miele's architecture partners occasionally joked that he was not in the business for the money, which to some extent was true. He had figured out how to live like a millionaire, he liked to say, even before he became one. He had worked four-day weeks for the last 20 years, spending long weekends with his family, sailing or iceboating on Bellport Bay and rebuilding cars. Mr. Miele had never thought of himself as a candidate for a heart attack - even though both his parents had died of heart disease; even though his brother had had arteries unclogged; even though he himself was on hypertension medication, his cholesterol levels bordered on high and his doctor had been suggesting he lose weight. He was a passionate chef who put great store in the healthfulness of fresh ingredients from the Mieles' vegetable garden or the greengrocers in Park Slope. His breakfasts may have been a cardiologist's nightmare - eggs, sausage, bacon, pastina with a poached egg - but he considered his marinara sauce to be healthy perfection: just garlic, oil, tomatoes, salt and pepper. He figured he had something else working in his favor: he was happy. He adored his second wife, Lori, 23 years younger, and their 6-year-old daughter, Emma. He lived within blocks of his two sisters and two of his three grown children from his first marriage. The house regularly overflowed with guests, including Mr. Miele's former wife and her husband. He seemed to know half the people of Park Slope. 'I walk down the street and I feel good about it every day,' Mr. Miele, a gregarious figure with twinkling blue eyes and a taste for worn T-shirts and jeans, said of his neighborhood. 'And, yes, that gives me a feeling of well-being.' His approach to his health was utilitarian. When body parts broke, he got them fixed so he could keep doing what he liked to do. So he had had disc surgery, rotator cuff surgery, surgery for a carpal tunnel problem. But he was also not above an occasional bit of neglect. In March 2004, his doctor suggested a stress test after Mr. Miele complained of shortness of breath. On May 6, the prescription was still hanging on the kitchen cabinet door. An important link in the safety net that caught Mr. Miele was his wife, a former executive at a sweater manufacturing company who had stopped work to raise Emma but managed the Mieles' real estate as well. While Mr. Miele was still in the hospital, she was on the Internet, Googling stents. She scheduled his medical appointments. She got his prescriptions filled. Leaving him at home one afternoon, she taped his cardiologist's business card to the couch where he was sitting. 'Call Dr. Hayes and let him know you're coughing,' she said, her fingertips on his shoulder. Thirty minutes later, she called home to check. She prodded Mr. Miele, gently, to cut his weekly egg consumption to two, from seven. She found fresh whole wheat pasta and cooked it with turkey sausage and broccoli rabe. She knew her way around nutrition labels. Ms. Miele took on the burden of dealing with the hospital and insurance companies. She accompanied Mr. Miele to his doctor's appointments and retained pharmaceutical dosages in her head. 'I can just leave and she can give you all the answers to all the questions,' Mr. Miele said to his cardiologist, Dr. Richard M. Hayes, one day. 'O.K., why don't you just leave?' Dr. Hayes said back. 'Can she also examine you?' With his wife's support, Mr. Miele set out to lose 30 pounds. His pasta consumption plunged to a plate a week from two a day. It was not hard to eat healthfully from the Mieles' kitchens. Even the 'junk drawer' in Park Slope was stocked with things like banana chips and sugared almonds. Lunches in Brookhaven went straight from garden to table: tomatoes with basil, eggplant, corn, zucchini flower tempura. At Dr. Hayes's suggestion, Mr. Miele enrolled in a three-month monitored exercise program for heart disease patients, called cardiac rehab, which has been shown to reduce the mortality rate among heart patients by 20 percent. Mr. Miele's insurance covered the cost. He even managed to minimize the inconvenience, finding a class 10 minutes from his country house. He had the luxury of not having to rush back to work. By early June, he had decided he would take the summer off, and maybe cut back his work week when he returned to the firm. 'You know, the more I think about it, the less I like the idea of going back to work,' he said. 'I don't see any real advantage. I mean, there's money. But you've got to take the money out of the equation.' So he put a new top on his 1964 Corvair. He played host to a large family reunion, replaced the heat exchanger in his boat and transformed the ramshackle greenhouse into an elaborate workshop. His weight dropped to 189 pounds, from 211. He had doubled the intensity of his workouts. His blood pressure was lower than ever. Mr. Miele saw Dr. Hayes only twice in six months, for routine follow-ups. He had been known to walk out of doctors' offices if he was not seen within 20 minutes, but Dr. Hayes did not keep him waiting. The Mieles were swept into the examining room at the appointed hour. Buoyed by the evidence of Mr. Miele's recovery, they would head out to lunch in downtown Manhattan. Those afternoons had the feel of impromptu dates. 'My wife tells me that I'm doing 14-hour days,' Mr. Miele mused one afternoon, slicing cold chicken and piling it with fresh tomatoes on toast. 'She said, 'You're doing better now than you did 10 years ago.' And I said, 'I haven't had sex in a week.' And she said, 'Well?' ' Just one unpleasant thing happened. Mr. Miele's partners informed him in late July that they wanted him to retire. It caught him off guard, and it hurt. He countered by taking the position that he was officially disabled and therefore entitled to be paid through May 5, 2005. 'I mean, the guy has a heart attack,' he said later. 'So you get him while he's down?' Lukewarm Efforts to Reform Will Wilson fits squarely in the city's middle class. His parents had been sharecroppers who moved north and became a machinist and a nurse. He grew up in Bedford-Stuyvesant and had spent 34 years at Con Ed. He had an income of $73,000, five weeks' vacation, health benefits, a house worth $450,000 and plans to retire to North Carolina at 55. Mr. Wilson, too, had imagined becoming an architect. But there had been no money for college, so he found a job as a utility worker. By age 22, he had two children. He considered going back to school, with the company's support, to study engineering. But doing shift work, and with small children, he never found the time. For years he was a high-voltage cable splicer, a job he loved because it meant working outdoors with plenty of freedom and overtime pay. But on a snowy night in the early 1980's, a car skidded into a stanchion, which hit him in the back. A doctor suggested that Mr. Wilson learn to live with the pain instead of having disc surgery, as Mr. Miele had done. So Mr. Wilson became a laboratory technician, then a transportation coordinator, working in a cubicle in a low-slung building in Astoria, Queens, overseeing fuel deliveries for the company's fleet. Some people might think of the work as tedious, Mr. Wilson said, 'but it keeps you busy.' 'Sometimes you look back over your past life experiences and you realize that if you would have done something different, you would have been someplace else,' he said. 'I don't dwell on it too much because I'm not in a negative position. But you do say, 'Well, dag, man, I should have done this or that.' ' Mr. Wilson's health was not bad, but far from perfect. He had quit drinking and smoking, but had high cholesterol, hypertension and diabetes. He was slim, 5-foot-9 and just under 170 pounds. He traced his first heart attack to his smoking, his diet and the stress from a grueling divorce. His earlier efforts to reform his eating habits were half-hearted. Once he felt better, he stopped taking his cholesterol and hypertension drugs. When his cardiologist moved and referred Mr. Wilson to another doctor, he was annoyed by what he considered the rudeness of the office staff. Instead of demanding courtesy or finding another specialist, Mr. Wilson stopped going. By the time Dr. Bhalla encountered Mr. Wilson at Brooklyn Hospital, there was damage to all three main areas of his heart. Dr. Bhalla prescribed a half-dozen drugs to lower Mr. Wilson's cholesterol, prevent clotting and control his blood pressure. 'He has to behave himself,' Dr. Bhalla said. 'He needs to be more compliant with his medications. He has to really go on a diet, which is grains, no red meat, no fat. No fat at all.' Mr. Wilson had grown up eating his mother's fried chicken, pork chops and macaroni and cheese. He confronted those same foods at holiday parties and big events. There were doughnut shops and fried chicken places in his neighborhood; but Mr. Wilson's fiancée, Melvina Murrell Green, found it hard to find fresh produce and good fish. 'People in my circle, they don't look at food as, you know, too much fat in it,' Mr. Wilson said. 'I don't think it's going to change. It's custom.' At Red Lobster after his second heart attack, Ms. Green would order chicken and Mr. Wilson would have salmon - plus a side order of fried shrimp. 'He's still having a problem with the fried seafood,' Ms. Green reported sympathetically. Whole grains remained mysterious. 'That we've got to work on,' she said. 'Well, we recently bought a bag of grain something. I'm not used to that. We try to put it on the cereal. It's O.K.' In August, Ms. Green's blood pressure shot up. The culprit turned out to be a turkey chili recipe that she and Mr. Wilson had discovered: every ingredient except the turkey came from a can. She was shocked when her doctor pointed out the salt content. The Con Ed cafeteria, too, was problematic. So Mr. Wilson began driving to the Best Yet Market in Astoria at lunch to troll the salad bar. Dr. Bhalla had suggested that Mr. Wilson walk for exercise. There was little open space in the neighborhood, so Mr. Wilson and Ms. Green often drove just to go for a stroll. In mid-October he entered a cardiac rehab program like Mr. Miele's, only less convenient. He would drive into Manhattan after work, during the afternoon rush, three days a week. He would hunt for on-street parking or pay too much for a space in a lot. Then a stranger threatened to damage Mr. Wilson's car in a confrontation over a free spot, so Mr. Wilson switched to the subway. For a time, he considered applying for permanent disability. But Con Ed allowed him to return to work 'on restrictions,' so he decided to go back, with plans to retire in a year and a half. The week before he went back, he and Ms. Green took a seven-day cruise to Nassau. It was a revelation. 'Sort of like helped me to see there's a lot more things to do in life,' he said. 'I think a lot of people deny themselves certain things in life, in terms of putting things off, 'I'll do it later.' Later may never come.' Ignoring the Risks Ms. Gora is a member of the working class. A bus driver's daughter, she arrived in New York City from Krakow in the early 1990's, leaving behind a grown son. She worked as a housekeeper in a residence for the elderly in Manhattan, making beds and cleaning toilets. She said her annual income was $21,000 to $23,000 a year, with health insurance through her union. For $365 a month, she rented a room in a friend's Brooklyn apartment on a street lined with aluminum-sided row houses and American flags. She used the friend's bathroom and kitchen. She was in her seventh year on a waiting list for a subsidized one-bedroom apartment in the adjacent Williamsburg neighborhood. In the meantime, she had acquired a roommate: Edward Gora, an asbestos-removal worker newly arrived from Poland and 10 years her junior, whom she met and married in 2003. Like Mr. Miele, Ms. Gora had never imagined she was at risk of a heart attack, though she was overweight, hypertensive and a 30-year smoker, and heart attacks had killed her father and sister. She had numerous health problems, which she addressed selectively, getting treated for back pain, ulcers and so on until the treatment became too expensive or inconvenient, or her insurance declined to pay. 'My doctor said, 'Ewa, be careful with cholesterol,' ' recalled Ms. Gora, whose vestigial Old World sense of propriety had her dressed in heels and makeup for every visit to Bellevue. 'When she said that, I think nothing; I don't care. Because I don't believe this touch me. Or I think she have to say like that because she doctor. Like cigarettes: she doctor, she always told me to stop. And when I got out of the office, lights up.' Ms. Gora had a weakness for the peak of the food pyramid. She grew up on her mother's fried pork chops, spare ribs and meatballs - all cooked with lard - and had become a pizza, hamburger and French fry enthusiast in the United States. Fast food was not only tasty but also affordable. 'I eat terrible,' she reported cheerily from her bed at Bellevue. 'I like grease food and fast food. And cigarettes.' She loved the feeling of a cigarette between her fingers, the rhythmic rise and fall of it to her lips. Using her home computer, she had figured out how to buy Marlboros online for just $2.49 a pack. Her husband smoked, her friends all smoked. Everyone she knew seemed to love tobacco and steak. Her life was physically demanding. She would rise at 6 a.m. to catch a bus to the subway, change trains three times and arrive at work by 8 a.m. She would make 25 to 30 beds, vacuum, cart out trash. Yet she says she loved her life. 'I think America is El Dorado,' she said. 'Because in Poland now is terrible; very little bit money. Here, I don't have a lot of, but I live normal. I have enough, not for rich life but for normal life.' The precise nature of Ms. Gora's illness was far from clear to her even after two weeks in Bellevue. In her first weeks home, she remained unconvinced that she had had a heart attack. She arrived at the Bellevue cardiology clinic for her first follow-up appointment imagining that whatever procedure had earlier been canceled would then be done, that it would unblock whatever was blocked, and that she would be allowed to return to work. Jad Swingle, a doctor completing his specialty training in cardiology, led Ms. Gora through the crowded waiting room and into an examining room. She clutched a slip of paper with words she had translated from Polish using her pocket dictionary: 'dizzy,' 'groin,' 'perspiration.' Dr. Swingle asked her questions, speaking slowly. Do you ever get chest discomfort? Do you get short of breath when you walk? She finally interrupted: 'Doctor, I don't know what I have, why I was in hospital. What is this heart attack? I don't know why I have this. What I have to do to not repeat this?' No one had explained these things, Ms. Gora believed. Or, she wondered, had she not understood? She perched on the examining table, ankles crossed, reduced by the setting to an oversize, obedient child. Dr. Swingle examined her, then said he would answer her questions 'in a way you'll understand.' He set about explaining heart attacks: the narrowed artery, the blockage, the partial muscle death. Ms. Gora looked startled. 'My muscle is dead?' she asked. Dr. Swingle nodded. What about the procedure that was never done? 'I'm not sure an angiogram would help you,' he said. She needed to stop smoking, take her medications, walk for exercise, come back in a month. 'My muscle is still dead?' she asked again, incredulous. 'Once it's dead, it's dead,' Dr. Swingle said. 'There's no bringing it back to life.' Outside, Ms. Gora tottered toward the subway, 14 blocks away, on pink high-heeled sandals in 89-degree heat. 'My thinking is black,' she said, uncharacteristically glum. 'Now I worry. You know, you have hand? Now I have no finger.' If Mr. Miele's encounters with the health care profession in the first months after his heart attack were occasional and efficient, Ms. Gora's were the opposite. Whereas he saw his cardiologist just twice, Ms. Gora, burdened by complications, saw hers a half-dozen times. Meanwhile, her heart attack seemed to have shaken loose a host of other problems. A growth on her adrenal gland had turned up on a Bellevue CAT scan, prompting a visit to an endocrinologist. An old knee problem flared up; an orthopedist recommended surgery. An alarming purple rash on her leg led to a trip to a dermatologist. Because of the heart attack, she had been taken off hormone replacement therapy and was constantly sweating. She tore open a toe stepping into a pothole and needed stitches. Without money or connections, moderate tasks consumed entire days. One cardiology appointment coincided with a downpour that paralyzed the city. Ms. Gora was supposed to be at the hospital laboratory at 8 a.m. to have blood drawn and back at the clinic at 1 p.m. In between, she wanted to meet with her boss about her disability payments. She had a 4 p.m. appointment in Brooklyn for her knee. So at 7 a.m., she hobbled through the rain to the bus to the subway to another bus to Bellevue. She was waiting outside the laboratory when it opened. Then she took a bus uptown in jammed traffic, changed buses, descended into the subway at Grand Central Terminal, rode to Times Square, found service suspended because of flooding, climbed the stairs to 42nd Street, maneuvered through angry crowds hunting for buses and found another subway line. She reached her workplace an hour and a half after leaving Bellevue; if she had had the money she could have made the trip in 20 minutes by cab. Her boss was not there. So she returned to Bellevue and waited until 2:35 p.m. for her 1 o'clock appointment. As always, she asked Dr. Swingle to let her return to work. When he insisted she have a stress test first, a receptionist gave her the first available appointment - seven weeks away. Meanwhile, Ms. Gora was trying to stop smoking. She had quit in the hospital, then returned home to a husband and a neighbor who both smoked. To be helpful, Mr. Gora smoked in the shared kitchen next door. He was gone most of the day, working double shifts. Alone and bored, Ms. Gora started smoking again, then called Bellevue's free smoking cessation program and enrolled. For the next few months, she trekked regularly to 'the smoking department' at Bellevue. A counselor supplied her with nicotine patches and advice, not always easy for her to follow: stay out of the house; stay busy; avoid stress; satisfy oral cravings with, say, candy. The counselor suggested a support group, but Ms. Gora was too ashamed of her English to join. Even so, over time her tobacco craving waned. There was just one hitch: Ms. Gora was gaining weight. To avoid smoking, she was eating. Her work had been her exercise and now she could not work. Dr. Swingle suggested cardiac rehab, leaving it up to Ms. Gora to find a program and arrange it. Ms. Gora let it slide. As for her diet, she had vowed to stick to chicken, turkey, lettuce, tomatoes and low-fat cottage cheese. But she got tired of that. She began sneaking cookies when no one was looking - and no one was. She cooked separate meals for Mr. Gora, who was not inclined to change his eating habits. She made him meatballs with sauce, liver, soup from spare ribs. Then one day in mid-October, she helped herself to one of his fried pork chops, and was soon eating the same meals he was. As an alternative to eating cake while watching television, she turned to pistachios, and then ate a pound in a single sitting. Cruising the 99 Cent Wonder store in Williamsburg, where the freezers were filled with products like Budget Gourmet Rigatoni with Cream Sauce, she pulled down a small package of pistachios: two and a half servings, 13 grams of fat per serving. 'I can eat five of these,' she confessed, ignoring the nutrition label. Not servings. Bags. Heading home after a trying afternoon in the office of the apartment complex in Williamsburg, where the long-awaited apartment seemed perpetually just out of reach, Ms. Gora slipped into a bakery and emerged with a doughnut, her first since her heart attack. She found a park bench where she had once been accustomed to reading and smoking. Working her way through the doughnut, confectioners' sugar snowing onto her chest, she said ruefully, 'I miss my cigarette.' She wanted to return to work. She felt uncomfortable depending on Mr. Gora for money. She worried that she was becoming indolent and losing her English. Her disability payments, for which she needed a doctor's letter every month, came to just half her $331 weekly salary. Once, she spent hours searching for the right person at Bellevue to give her a letter, only to be told to come back in two days. The co-payments on her prescriptions came to about $80 each month. Unnerving computer printouts from the pharmacist began arriving: 'Maximum benefit reached.' She switched to her husband's health insurance plan. Twice, Bellevue sent bills for impossibly large amounts of money for services her insurance was supposed to cover. Both times she spent hours traveling into Manhattan to the hospital's business office to ask why she had been billed. Both times a clerk listened, made a phone call, said the bill was a mistake and told her to ignore it. When the stress test was finally done, Dr. Swingle said the results showed she was not well enough to return to full-time work. He gave her permission for part-time work, but her boss said it was out of the question. By November, her weight had climbed to 197 pounds from 185 in July. Her cholesterol levels were stubbornly high and her blood pressure was up, despite drugs for both. In desperation, Ms. Gora embarked upon a curious, heart-unhealthy diet clipped from a Polish-language newspaper. Day 1: two hardboiled eggs, one steak, one tomato, spinach, lettuce with lemon and olive oil. Another day: coffee, grated carrots, cottage cheese and three containers of yogurt. Yet another: just steak. Ms. Gora decided not to tell Dr. Swingle. 'I worry if he don't let me, I not lose the weight,' she said. Uneven Recoveries By spring, Mr. Miele's heart attack, remarkably, had left him better off. He had lost 34 pounds and was exercising five times a week and taking subway stairs two at a time. He had retired from his firm on the terms he wanted. He was working from home, billing $225 an hour. More money in less time, he said. His blood pressure and cholesterol were low. 'You're doing great,' Dr. Hayes had said. 'You're doing better than 99 percent of my patients.' Mr. Wilson's heart attack had been a setback. His heart function remained impaired, though improved somewhat since May. At one recent checkup, his blood pressure and his weight had been a little high. He still enjoyed fried shrimp on occasion but he took his medications diligently. He graduated from cardiac rehab with plans to join a health club with a pool. And he was looking forward to retirement. Ms. Gora's life and health were increasingly complex. With Dr. Swingle's reluctant approval, she returned to work in November. She had moved into the apartment in Williamsburg, which gave her a kitchen and a bathroom for the first time in seven years. But she began receiving menacing phone calls from a collection agency about an old bill her health insurance had not covered. Her husband, with double pneumonia, was out of work for weeks. She had her long-awaited knee surgery in January. But it left her temporarily unable to walk. Her weight hit 200 pounds. When the diet failed, she considered another consisting largely of fruit and vegetables sprinkled with an herbal powder. Her blood pressure and cholesterol remained ominously high. She had been warned that she was now a borderline diabetic. 'You're becoming a full-time patient, aren't you?' Dr. Swingle remarked.

Subject: Around Ruined Zimbabwe From: Emma To: All Date Posted: Wed, Jul 06, 2005 at 10:02:21 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/06/international/africa/06letter.html?pagewanted=all Around Ruined Zimbabwe, Neighbors Circle Wagons By MICHAEL WINES LILONGWE, Malawi - As leaders of the Group of 8 industrialized nations meet in Scotland, African countries will press them to get involved in the fight against poverty. But when the Western nations asked African leaders to take action against Zimbabwe's forced uprooting of its poorest citizens, they were told to mind their own business. When the Group of 8 foreign ministers urged African leaders in June to confront the demolition of shanties in Zimbabwe, a campaign that has left hundreds of thousands of people homeless, South Africa, Zimbabwe's southern neighbor, had a ready and caustic response. 'I am really irritated by this kgokgo approach,' said Bheki Khumalo, President Thabo Mbeki's spokesman, using a Sotho word that implies scaring a small child into submission. 'South Africa refuses to accept the notion that because suddenly we're going to a G-8 summit, we must be reminded that we must look good and appease the G-8 leaders. We will do things because we believe they are correct and right.' Some Westerners who have watched events in Zimbabwe might find that response astonishing. They blame President Robert G. Mugabe for turning once-prosperous Zimbabwe into a slow-motion train wreck of a nation, penniless, malnourished and cursed with one of the lowest life expectancies on earth - 33 years. With mass hunger looming, some Western leaders see Mr. Mugabe's decision to force hundreds of thousands of people into rural areas by razing their homes and businesses as brutal punishment of his opponents and as a pre-emptive strike against civil unrest. Not long ago, President Bush condemned human rights abuses by Mr. Mugabe's government. And to the Group of 8 ministers - Sherpas for the July meeting in Scotland - there is little correct or right in standing by as a catastrophe unfolds. Yet that is clearly not the way that many African leaders, Mr. Mbeki foremost among them, have chosen to see it. Tanzania, Namibia and Zambia are among those that have praised Mr. Mugabe's economic policies in recent months, or stopped protesters from criticizing them. The African Union, the organization created five years ago to promote continent-wide economic, political and human-rights standards, responded to the Group of 8's recent demand by calling Zimbabwe's crisis an internal matter. Mr. Mbeki, who has long argued that 'quiet diplomacy' is needed to solve Zimbabwe's problems, has been silent on the mass evictions since they began in mid-May. In a brief interview in June, Mr. Khumalo, his spokesman, refused to be drawn into a discussion of Mr. Mugabe. But he said he was puzzled by the West's focus on Zimbabwe as a fix-it project for African rulers. And he added that Western leaders, who have their own long list of neglected tragedies, could be seen as hypocritical in lecturing Africans. That points to an easily forgotten truth: if the West has put colonialism behind it, Africa has not. Many problems that colonial rule created still exist, even though - with the exception of South Africa - most of the continent has been free for at least a quarter century. Bearing a grudge over that legacy is not merely understandable. As Zimbabwe has shown, it can also be exploited with telling effect. Outsiders may see Zimbabwe's fiscal and political collapse as a direct result of Mr. Mugabe's strongman rule and quasi-Marxist economics. But within the country, Mr. Mugabe has cast the crisis as Western punishment for his heroic seizure of the nation's best farmland from the whites who had long controlled almost all of it. Weathering the problems, he has said, is a necessary step toward the independence that Zimbabwe won in name 25 years ago, but which has yet to be fully achieved. In parliamentary elections in March, Mr. Mugabe's opposition, the Movement for Democratic Change, laid the blame for the nation's crisis at the president's feet. Mr. Mugabe labeled the opposition a tool of white colonialists and called the election 'the anti-Blair campaign' - in effect, calling a vote for his critics a vote for a return to British rule. Zimbabwe's neighbors may not share such fervent views. But they must still include them in any calculations about how to address Zimbabwe's woes, for the evils against which Mr. Mugabe says he is waging war are their problems, too. Land is but the best example. Before Mr. Mugabe began taking over commercial farms in 2000, 70 percent of Zimbabwe's most productive farmland was owned by whites. Agriculture is in tatters today, but only a tiny sliver of land remains under white control. Mr. Mbeki is hard put to challenge Mr. Mugabe's management of the land problem, however chaotic: better than 80 percent of South Africa's arable land remains under white ownership today, more than 10 years after white rule ended. And just like Zimbabwe, South Africa faces problems with the urban poor - a series of spontaneous riots in townships and shantytowns took place this year, by mobs angry that the government has yet to deliver promised utilities and jobs. Nigeria, another major player in sub-Saharan Africa, also has difficulty challenging Zimbabwe's mass uprooting of its citizens: in 1990, a previous Nigerian government ousted 300,000 slum-dwellers in one fell swoop to vacate land for offices and shops. Not all Africans subscribe to the kid-gloves approach to Zimbabwe's problems. South Africa's trade-union movement, a shaky part of Mr. Mbeki's governing coalition, has lately vigorously criticized both Mr. Mugabe and South Africa's silence on its troubles. But for now, such criticism is isolated. The most vocal demands that Africa fix Zimbabwe's crisis - from Westerners - are doomed to failure by virtue of their origin, said Peter Kagwanja, the director of the southern Africa project of the International Crisis Group, a nonprofit organization in Washington. 'Mugabe is simply telling them, 'You're pawns of the whites,' ' said Mr. Kagwanja, who is based in Pretoria. 'It's the same card he played in Zimbabwe against the M.D.C.,' the Movement for Democratic Change, during the recent elections.

Subject: Africa Tackles Graft From: Emma To: All Date Posted: Wed, Jul 06, 2005 at 09:59:32 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/06/international/africa/06lagos.html?pagewanted=all Africa Tackles Graft, With Billions in Aid in Play By SHARON LaFRANIERE LAGOS, Nigeria - One of Dora Nkem Akunyili's lowest moments as a corruption fighter came about two years ago when her son told her not to visit his boarding school. Obumneme Akunyili, age 13, did not want anyone to know that she was his mother. It was not out of shame. Since becoming Nigeria's top food and drug regulator in 2001, his mother had broken the back of an illicit trade that had flooded Nigeria with fake medicines. She had taken on importers, distributors and an array of officials willing to risk Nigerian lives for a bribe. But her son feared what might happen should her enemies track him down. So he told everyone that his mother was an aunt. 'That caused me a lot of pain,' Mrs. Akunyili said. 'He denied I was his mother. But the young boy saw the danger.' In Nigeria, even children understand corruption's menace. Increasingly, so do the donors that have poured more than $300 billion into African nations since 1980 - and watched too much of it vanish into a sinkhole of fraud, malfeasance and waste. Now the efforts of reformers like Mrs. Akunyili are being scrutinized at meetings where donor countries consider aid to Africa, as leaders of the Group of 8 industrialized nations will do this week at Gleneagles, Scotland. The summit meeting has been billed as a turning point for Africa, where the billions have begun to flow again. Foreign aid to the continent reached a 17-year low in 1999, but in May, the richest nations agreed to write off $40 billion in loans owed by the world's 18 poorest countries, all but four of them in Africa. No African nation points up the challenge quite like Nigeria, a country that is both hampered by corruption and trying to control it. Awash in oil and gas that has flooded its treasury with $300 billion in the past 20 to 30 years, Nigeria remains utterly destitute, in no small part because of waste and graft. Officials like Mrs. Akunyili have scored some victories, but few corrupt officials have been convicted and millions of aid dollars still go astray. So donors are confronted with the question in Nigeria, as in much of Africa, of how much improvement is enough. Corruption has not only robbed Africa of money to help lift some of the world's poorest people out of poverty. Around the world, it has also stalled economic development and tarnishes people's faith in government and, often, democracy itself. The host of the summit meeting, Prime Minister Tony Blair of Britain, wants to double global aid to Africa to $50 billion a year by 2010. Although he appears unlikely to reach that goal, aid is clearly on the rise: both the European Union and the United States propose to double their assistance during that period because African nations are lagging further behind their industrialized counterparts and richer nations fear that failed states can become breeding grounds for terrorism. And while the United States devotes less of its wealth to foreign aid than the other nations at the talks, it has already tripled aid to Africa since 2000. But this new giving is increasingly dependent on proof that its recipients are controlling corruption and governing wisely. Mr. Blair's Commission for Africa, which he established last year, concluded in a report in March that 'without progress in governance,' including tackling corruption, 'all other reforms will have limited impact.' The United States has been even more blunt: 'Countries like ours are not going to want to give aid to countries that are corrupt or don't hold true to democratic principles,' President Bush said last month after meeting with South Africa's president, Thabo Mbeki. That this tough-love approach is rapidly becoming conventional wisdom is one measure of the turnabout in the approach to foreign aid since the cold war, when both sides showered cash on African allies with scant regard to how much was stolen or wasted. Still, how high to set the good-governance bar - and deciding who clears it - is in the eye of the donor. Jeffrey D. Sachs, a Columbia University economist who wrote a December 2004 report to the United Nations on fighting poverty, said that at least two dozen poor nations, many in Africa, are well-enough run to manage a rapid infusion of aid. The Bush administration's Millennium Challenge Account, set up last year to promote economic growth in poor countries, says just seven impoverished African nations qualify, with another six on the verge. There is ample fodder for pessimists and optimists alike. On the positive side, a growing number of African nations are edging away from crime and autocracy toward democracy and openness. Ghana, which marked its first peaceful democratic transfer of power in 2000, is often cited as a regional model of reform. Tanzania's president, Benjamin Mkapa, claims that an anticorruption campaign has led to a four-fold increase in government revenue in the decade since the nation's first multiparty elections. Zambia is trying its former president, Frederick Chiluba, for stealing $488,000 in state funds - even though he handpicked the successor whose government has charged him. Crucial Role for Donors Yet a May study by the World Bank found that between 1996 and 2004, the quality of governance deteriorated in as many African countries as it improved. Kenya is a painful illustration: a government ushered in two years ago on an anticorruption platform saw its widely respected anticorruption czar quit in frustration in February, apparently because his work was thwarted. The United States and Germany quickly withdrew nearly $10 million in aid. Whether the new wave of African aid avoids the pitfalls of the past depends not just on its recipients, development specialists say, but also on the donors, who have often pushed poorly devised projects, refused to coordinate their efforts or demands with one another and failed to monitor the impact of their largesse. Foreign aid must be tied to teaching poor nations how to build accountability into their governments, development specialists contend. In some countries, it is not even clear whether the executive branch or the parliament controls the budget, said Steven Radelet, a senior fellow for the Washington-based Center for Global Development. He warned, however, that such improvements typically require generations to take root. Nigeria is one of many nations where aid has been wasted, or simply stolen. Lagos, home to 15 million of Nigeria's 137 million people, is among the world's most troubled cities, replete with open sewers, foul tap water, garbage-strewn roads and traffic that perennially seems at a standstill. Not including World Bank loans, which in some years totaled as much as $1 billion, Nigeria took in $3.5 billion in aid from 1980 to 2000. That was a few hundred million less than Sani Abacha has been accused in news reports of stealing in the five years he ruled Nigeria as a military dictator before his death in 1998. Dismayed, donors pulled back or out. Aid in 1999 totaled half the 1990 level. Later audits disclosed scores of botched projects financed with hundreds of millions of dollars in international loans. Nigeria's government never even cleared the site for an $18 million construction project. Millions were spent on paper mills that never produced any paper. Eighteen projects costing $836 million were never completed; another 44 either never operated or were quickly shut down, the Nigerian Finance Ministry reported. Of 20 other projects started between 1985 and 1992, more than half had little impact or were unsustainable, the World Bank concluded. But with the 1999 election of Olusegun Obasanjo, donors' enthusiasm reawakened. Mr. Obasanjo's anticorruption credentials seemed impeccable: he helped found Transparency International, an anticorruption group, and strongly backed a program by African leaders to review each other's adherence to democracy and good governance. Since his election, aid to Nigeria has doubled. Yet Mr. Obasanjo's first term ended with little progress. 'He wanted a second term, and he believed that if he took the anticorruption war too seriously, they would make sure he didn't get a second term,' Jibirin Ibrahim, a political scientist and director of Global Rights, a Nigerian pro-democracy group, said of corrupt officials. 'Which was a strategic mistake, because these people were able to further entrench themselves in the system.' Now, with two years left in his second term, Mr. Obasanjo's crusade appears to have regained steam. In recent months, his education minister was arrested for bribing legislators. His housing minister was fired for selling government property at cut-rate prices. And the police inspector general was led away in handcuffs on charges of money-laundering. Some early initiatives also appear to be bearing fruit. Oby Ezekwesili, a senior aide to the president, said the government had saved $1.3 billion since the start of 2003 by insisting on competitive bidding in awarding contracts. But the list of unfinished business is formidable, including removing the constitutional guarantee of immunity for the nation's most senior officials and opening government records to the public. Bribes and Bottlenecks Other obstacles remain. Although Mr. Obasanjo's first act as president was to establish an anticorruption commission, the office has secured just two corruption-related convictions among the 85 people it has charged in its five years. Mustapha Akanbi, a retired judge who heads the commission, said he suspected that some judges have been paid off to toss out cases. Government officials have also resisted change. After investigators uncovered bribes to a hospital medical director, Mr. Akanbi said, the health minister refused to fire him until Mr. Akanbi complained personally to the president. 'Every single step you take, there are bottlenecks,' said Mike Sowe, the commission's spokesman. When Mrs. Akunyili took over as director of Nigeria's National Agency for Food and Drug Administration four years ago, perhaps four-fifths of her agency's regulators were corrupt, she said in a recent interview. Even worse, two in three drugs sold publicly were either unregistered or unsafe for consumers. Mrs. Akunyili knew the danger well: her sister, Vivian, a diabetic, died in 1988 after what she believes was an injection of fake insulin. Every few weeks, Mrs. Akunyili's agency made a show of burning heaps of fake drugs collected at airports, seaports, illegal factories and distributing houses. A spot check last year showed the impact: only one in eight drugs was unregistered. Major pharmaceutical companies have now returned to Nigeria, and other African nations have agreed to lift their bans on Nigeria's drugs. Doctors were among the most grateful. 'We know the drugs are real now, because the patients don't come back with the same symptoms,' said Sister Josephine Ngama, a senior doctor at Ancilla Catholic Hospital on the outskirts of Lagos. 'People had been trading in these fake drugs for years.' Honored and Imperiled Mrs. Akunyili has been showered with awards, but her family is pressing her to quit. Seven months after she took office, 10 armed men invaded her home, leaving only after learning that she was not there. In December 2003, armed gunmen attacked her car. A driver in a nearby bus was killed. One bullet went through Mrs. Akunyili's blue headdress, grazing her skull. 'It's like a war,' she said. 'They are fighting back.' Reformers like Mr. Akunyili stand out partly because they are so rare. 'Hopefully, they are going to do enough good that people are going to be attracted to them,' said Victoria Kwakwa, the lead economist for the World Bank here. 'It is going to have to start with small groups, because you don't have the base. If you did, you wouldn't have gotten to this point to begin with.'

Subject: Forget Lonely. Life Is Healthy at Top. From: Emma To: All Date Posted: Wed, Jul 06, 2005 at 09:50:29 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2004/05/15/arts/15STAT.html?ei=5007&en=b29b0396fde99352&ex=1400040000&partner=USERLAND&pagewanted=all&position= May 15, 2004 Forget Lonely. Life Is Healthy at the Top. By PATRICIA COHEN If you want to get a sense of how social status affects health, then take a ride on Washington's metro system. Start in the blighted southeast section of downtown. For every mile traveled to tony Montgomery County in Maryland, life expectancy rises about a year and a half. By the time you get off, says Sir Michael Marmot, a British epidemiologist who has been studying the link between social position and health, you will find a '20-year gap between poor blacks at one end of the journey and rich whites at the other.' The notion that status in and of itself — not just as a stand-in for money, education or nutrition, quality of medical care, bad habits or good genes — largely determines how healthy you are has become a cutting edge of public health research. Biologists, neurologists, economists, psychologists, primatologists and more have been trying to pinpoint precisely what links the two. 'The whole issue of health disparities is very hot now,' said Nancy Adler, a professor of medical psychology at the University of California, San Francisco. 'There is a meeting every other minute.' This summer, Sir Michael, a leader in the field, is publishing his first book for the general public, in which he pulls together 25 years of research, declaring that status is more important than genetics, supersize fast food or even smoking. But figuring out that status matters is one thing; figuring out why is another. How does status get under the skin? There are now tens of thousands of papers and research projects offering theories. But the answers are as tantalizing, and controversial, as they are elusive. After all, why should the ability to get a reservation tonight at the exclusive Per Se restaurant instead of Red Lobster or playing golf at Augusta instead of Van Cortlandt Park prolong one's life? Why, as Sir Michael writes in 'The Status Syndrome: How Social Standing Affects Our Health and Longevity' (Times Books), 'should educated people with good stable jobs have a higher risk of dropping dead than people with a bit more education or slightly higher status jobs? Is living in a five-bedroom house with three bathrooms better for your health than `crowding' the spouse and two children into a four-bedroom house with only two?' The answer, Sir Michael said in an interview from London, lies in the psychological effects of inequality: 'Your position in the hierarchy very much relates to how much control you have over your life and your opportunities for full social engagement.' Those feelings, he and others argue, profoundly affect one's health. What transformed the health establishment's thinking about the link between status and health was the Whitehall Studies, long-term research projects that have tracked the health of thousands of British civil servants since 1967. Whitehall provides something pretty close to an ideal real-world laboratory. After all, it is not the gap between the haves and have-nots where one might find the most compelling evidence for the status syndrome, but between the have-a-lots and the have-the-mosts. Civil servants all have office jobs, health care and high job security, but they are sharply classified according to rank. What researchers found is that those in the lowest grade were three times more likely to die at any given age as those in the highest. One explanation might be that people on the lowest rung have unhealthier habits — smoking, not exercising, bulking up on fast food. But researchers who looked more closely at coronary heart disease concluded that risk factors accounted for only one-third of the differences between those at the top of the social hierarchy and those at the bottom. 'A smoker who is low employment grade has a higher risk of heart disease than a smoker who is higher grade,' writes Sir Michael, the former director of the Whitehall study. 'A nonsmoker who is lower grade has a higher risk of heart disease than a nonsmoker who is higher grade.' Whitehall shook the public health establishment. 'Those findings caused me to change my career,' said Ms. Adler, referring to results published in the early 90's. 'It was so dramatic and so puzzling.' Still, researchers in the United States were slow to focus on the subject in earnest, she added, probably because of America's preoccupation with race and ethnicity as opposed to class. Ms. Adler, who directs the John D. and Catherine T. MacArthur Foundation Research Network on Socioeconomic Status and Health, has been looking at how people's own perception of their status affects their health. She found, for instance, that among white women who shared the same socioeconomic level, those who viewed themselves as occupying a higher social rung were in better health than those who did not. Many researchers argue the reason for such results is stress. 'Sustained, chronic and long-term stress is linked to low control over life circumstances,' Sir Michael writes, and low control is related to social position. Stress triggers a higher heart rate, a release of adrenaline, glucose and other neurological responses to help the body respond to a short-term threat. But when extended over long periods of time, they can harm the cardiovascular and immune systems, making individuals more vulnerable to a wide range of conditions including infections, diabetes, high blood pressure, heart attack, stroke, asthma and aggression. Of course, being at the top can be extremely stressful if the hierarchy is unstable. As Robert M. Sapolsky, a professor of biology and neurology at Stanford University, has shown in his groundbreaking work with primates, dominant baboons have much lower rates of stress-related disease — unless they have to fight to maintain their position as the leader of the pack. Then, they have the worst physiology (differences that certainly could not be due to, say, different educational levels or a pack-a-day habit.) As Dr. Sapolsky has said: 'I would not have wanted to have been the czar of Russia in the winter of 1917. You don't want to be on top of a hierarchy if everybody's trying to burn down the castle.' That's why Sir Michael explains that status 'is partly related to how you see yourself and how others see you, but it is also related to our set of social arrangements,' or how a particular community accentuates or buffers differences in social position. Perhaps as important as stress, though, is a network of social support — friends, family and community. Some epidemiologists have done research showing that a strong social network can actually increase someone's resistance to disease. One study has found a connection between life expectancy and a high level of participation in voluntary organizations. Married men and women consistently have lower mortality than singles, even aside from lifestyle differences, said Sir Michael, evidence that perhaps Adelaide was right to lament in 'Guys and Dolls' that 'just from waiting around for that plain little band of gold, a person can develop a cold.' Critics have a different lament. Economists in particular are extremely skeptical that anything besides money and education — and the material advantages and lifestyle they bring — are at work. Angus Deaton, a professor of economics and international relations at Princeton, who says he is probably more sympathetic to the argument than many of his colleagues, still thinks the supposed links between prestige and health are fuzzy. 'I'm sure there's some effect of social status. But I don't know how strong it is.' 'How would we know what the effect of social status was,' he asks, 'having parceled out all these other things,' like education, employment, income and so on? The studies don't take account of differences in childhood experiences, for example, he said. How would one explain what is known as the 'Hispanic paradox,' the fact that Hispanics have lower than average rates of chronic illness than whites in the United States even though many live in relatively poorer social and economic conditions? 'There has been no real attempt to control for all of those things at the same time,' he said. It may be, Mr. Deaton suggests, that health affects social status more than the reverse. 'The major reason that people retire from the work force is that they're sick, he said. 'If you get sick in America, it does terrible things to your social status.' Even advocates concede disentangling causes is tricky. Donald Redelmeier, a professor of medicine at the University of Toronto, explains that higher status could mean that other people who have an investment in maintaining your reputation — an agent or a personal trainer and nutritionist — help enforce a healthier regime. Think of it as the entourage effect. Dr. Redelmeier and a colleague analyzed the lifespans of actors who won Oscars, their co-stars and the losing nominees — 1,649 performers in all. They found that winning an Oscar added nearly four years to actors' life spans. If that figure doesn't sound overly impressive, consider that completely eliminating all kinds of cancer in North America would add only about three and a half years to life expectancy, Dr. Redelmeier said when the study was first published two years ago. Maybe it is purely the prestige or maybe the Oscar effect is a result of peace of mind. 'When a critic gives you a nasty review, it doesn't stick,' Dr. Redelmeier suggested, because 'you have that statuette, an uncontestable marker of peer approval.' Certainly, people deeply value status. Ask yourself which scenario you would prefer: an income of $125,000 when the average of those around you is $100,000; or an income of $175,000 when those around you is $200,000. Most people surveyed chose the $125,000 — a higher relative status — even though they would be worse off in absolute terms. That's been the case for a long time, says Robert Evans, an economist at the University of British Columbia who has studied the link between status and health. Even Julius Caesar remarked, 'I would rather be first in a little Iberian village than second in Rome.'

Subject: Saving the Structure of Aging Bones From: Emma To: All Date Posted: Wed, Jul 06, 2005 at 07:31:40 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/05/health/05brod.html?pagewanted=all Plotting to Save the Structure of Those Aging Bones By JANE E. BRODY Osteoporosis is a serious and costly disease. Nearly 30 million women and 14 million men in the United States already have it or are heading toward it. The numbers continue to rise as the population ages, especially now that far fewer women are taking estrogen, which protects against postmenopausal bone loss. Osteoporosis is also a silent disease, silent, that is, until a bone breaks in response to a relatively minor stress, like tripping on a step. Several drugs in the bisphosphonate class - Fosamax and Actonel taken weekly and Boniva taken monthly - have been shown to stem further bone loss, increase bone density and cut fracture rates in half in women with established osteoporosis. The same effect has been seen in women with somewhat less bone loss who, for other reasons, are at high risk for a fracture. But what about the many postmenopausal women with a lesser degree of bone loss called osteopenia? Should they, too, take a bisphosphonate to protect their bones after menopause? Is this cost-effective, and is it likely to help the women more than it harms them? Specialists across the country are divided in their answers. Nearly all the experts, pro and con, act as consultants or receive research grants from the companies that make the bone-protecting drugs. Weighing the Risks Most experts say the inevitable loss of bone after menopause and the proven ability of these drugs to prevent fractures clearly outweigh the risks stemming from a slowdown in bone renewal. But others fear that long-term use of bisphosphonates can render bones more brittle and more likely to break, even as they increase bone density. Dr. Susan M. Ott, a bone expert at the University of Washington, said studies suggested that old bone that was not renewed lost its elasticity. She likened it to the effects of a very strong wind on a young tree versus a thicker old one. Young tree bend under the stress without breaking; older ones, though denser, are more likely to snap in two. Fracture risk, said Dr. Michael R. McClung of the Oregon Osteoporosis Center in Portland, is complex, and the diagnosis of osteopenia and treatment with bisphosphonates should not be based on bone mineral density (B.M.D.) tests alone. It is clear, Dr. McClung wrote in May in Annals of Internal Medicine in response to a report on cost effectiveness, 'that pharmacologic therapy is not cost-effective in women selected solely on the B.M.D. diagnosis of osteopenia.' What follows should not scare women away from bone-sparing drugs if they are at high risk for fractures because of thinning bones. But before every woman found to be osteopenic on a density test is advised to take a bisphosphonate, it may be wise to consider some early warning signs of possible harm to the architecture of bones after many years on such drugs. Though bones appear to be solid, they are fluid structures that are continually remodeled - broken down by cells called osteoclasts and rebuilt by cells called osteoblasts. When a bone is injured - and injuries called microcracks occur all the time from ordinary stress - bone-resorbing osteoclasts have to remove the damage so that the bone-building osteoblasts can fix it. Bisphosphonates increase bone density by adding minerals to bones. But they are potent inhibitors of bone resorption, drastically slowing bone remodeling. In The Journal of Clinical Endocrinology & Metabolism last March, Dr. Ott noted that 'after prolonged severe suppression of bone formation, bone could become too brittle and/or accumulate microdamage,' which has been shown to occur in animals given high doses of bisphosphonates. Such damage 'could eventually weaken the bone' and result in fractures after minor stresses. A report in the same journal described nine patients on Fosamax with osteoporosis or osteopenia who had nontraumatic fractures. Six patients continuing the drug experienced delayed or no healing of broken bones. The authors said that Fosamax might impair bone healing and that the drug-induced increase in bone minerals could make bones more brittle. Breaking Bones Too Easily The published cases mimic that of a healthy active woman, 59, who after six years on Fosamax for osteopenia in her spine was jolted on a subway and broke her thigh bone. The injury took two years to heal, and the healing occurred only after she had stopped taking Fosamax. A year later, she resumed the drug, only to suffer a nontraumatic fracture in her foot. Dr. Joseph M. Lane, an orthopedic surgeon in New York, described eight other patients who had fractures of the femur, many of them described as hard to heal. All the patients had been on Fosamax for more than five years. While it's not possible to know in any of these cases whether the unusual fractures and delayed healing resulted from Fosamax or patients' existing bone disease, the researchers noted that bone biopsies disclosed 'marked suppression of bone turnover,' which can render bones more brittle and delay repairs. On the other hand, Dr. Lane noted, the drugs clearly preserve the microarchitecture of bones that is otherwise lost in the first few years after menopause, and a long-term Canadian study found a lower than expected rate of hip fractures among women on the drugs. Further, Dr. Robert Recker, an endocrinologist at Creighton University in Omaha, said his bone biopsy studies showed that osteoporotic women taking Fosamax remodeled bone at rates comparable to those of healthy premenopausal women. This finding left him unconcerned about the suppression of bone turnover on Fosamax because premenopausal women rarely suffer nontraumatic fractures. Without the drug, he said, the bone-remodeling rates after menopause rise and reach maximum levels in women with osteoporosis. Dr. Ethel S. Siris, director of the osteoporosis center at NewYork-Presbyterian Hospital, said that bone biopsies of women taking Fosamax for 10 years 'did not show oversuppression of bone turnover' and that in her experience patients who did break bones while on the drug healed normally while continuing to take it. Dr. Siris and Dr. Recker, among others, agree that women with minimal osteopenia (T-score on the density test of minus 1.5 or better) and no other risk factors like smoking, thinness or a previous nontraumatic fracture should not be placed on a drug. They should protect their bones by doing weight-bearing exercise and taking calcium supplements with vitamin D3 (check the label carefully) and have their bone densities rechecked a year later. For those with more advanced osteopenia - a T-score of minus 2, or a score of minus 1.5 plus a risk factor - 'medication is not unreasonable to reduce fracture risk,' Dr. Siris said. Because bisphosphonates stay in bones indefinitely, their benefits are not lost on brief 'vacations' from the drugs. So Dr. Siris stops the drug after five years for a one-year holiday and has patients resume it.

Subject: Quantum Physics Can Teach Biologists From: Emma To: All Date Posted: Wed, Jul 06, 2005 at 06:00:14 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/05/science/05essa.html How Quantum Physics Can Teach Biologists About Evolution By CORNELIA DEAN In the fall of 1900, a young German physicist, Max Planck, began making calculations about the glow emitted by objects heated to high temperature. In retrospect, it seems like a small-bore problem, just the task to give a young scientist at the beginning of his career. But if the question sounds minor, Planck's answer was not. His work led him to discover a new world, the bizarre realm of quantum mechanics, where matter is both a particle and a wave and where the predictable stability of Newton gives way to probabilistic uncertainty. As Dennis Overbye of The New York Times once put it in these pages, Planck had grasped 'a loose thread that when tugged would eventually unravel the entire fabric of what had passed for reality.' Physicists reeled. But physics survived. And once they got over their shock, scientists began testing Planck's ideas with observation and experiment, work that eventually produced computer chips, lasers, CAT scans and a host of other useful technologies - all made possible through our new understanding of the way the world works. Biologists might do well to keep Planck in mind as they confront creationism and 'intelligent design' and battle to preserve the teaching of evolution in public schools. Usually, when confronting the opponents of evolution, biologists make the case that evolution should be taught because it is true. They cite radiocarbon dating to show that Earth is billions of years old, not a few thousand years old, as some creationists would have it. Biologists cite research on microbes, or the eye, or the biology of the cell to shoot down arguments that life is so 'irreducibly complex' that only a supernatural force or agent could have called it into being, as intelligent designers would have it. And when scientists named Steve (hundreds of them by now) decided to advance the cause of evolution in the classroom and honor the evolutionary theorist Stephen Jay Gould by forming 'Project Steve,' the T-shirts they printed said in part, 'Evolution is a vital, well-supported, unifying principle of the biological sciences, and the scientific evidence is overwhelmingly in favor of the idea that all living things share a common ancestry.' The battling biologists are right. But someone uneducated in the scientific method who listens to the arguments over evolution could be forgiven for thinking that they boil down to 'my theory is better than your theory,' with both sides preaching with theological fervor. Scientists don't talk often enough or loud enough about the real strength of evolution - not that it is correct, but that it meets the definition of science. It's not that they ignore the idea - the National Center for Science Education, sponsor of Project Steve, makes the point on its Web site, and organizations like the American Association for the Advancement of Science do, too. But biologists do not emphasize it as they might. Science looks to explain nature through nature (the works of God rather than the words of God, as Darwin himself is said to have put it), and its predictions can be tested by observation and experimentation. Scientists form hypotheses, devise ways to test them, analyze the data that they collect and then decide whether the results support or undermine their hypotheses. This process has produced centuries of useful knowledge and fascinating discovery. But it is messy, a mixed-up dance of two steps forward, one step back; dud ideas; blind alleys; and things that turn out to be not exactly what they seemed. So it is hardly surprising that in the decades since Darwin developed the ideas he outlined in 'The Origin of Species,' other biologists have suggested modifications or new ideas about this or that aspect of his great idea. Still other researchers, making their own observations or conducting other experiments, have refuted them or tried to. For example, biologists argue about the degree to which evolution moves smoothly or progresses in fits and starts, a Gould-ian theory called punctuated equilibrium. This intellectual turmoil is not evidence of the weakness of the evolutionary thinking, as some critics have said. It is proof of the robustness of the scientific method. And if this messy process were to produce an alternative to evolution that better explains nature and better meets the tests of experiment and observation, biologists would have to revise their ideas or even scrap them. That would be a stunning shock, comparable to the shock that swept physics in the post-Planck decades of the 20th century. But biology would deal with it. And whoever initiated this shock would be at least as big a figure in biology as Planck is in physics. 'The supposed 'data contradicting evolution' do not exist,' a Steve, Dr. Steve Rissing, a biologist at Ohio State University, said in an e-mail message. But if they did, Dr. Rissing added, 'I sure would want to be the scientist publishing them. Think of it - the covers of Nature and Science, and Newsweek and Time, too!' It is evolution's acceptance of nature as the only true scientific authority and its capacity to fall in the face of a more effective explanation that make evolution science, far more than its mere correctness. That is the difficulty faced by advocates of creationism and intelligent design. It is possible to believe in evolution and believe in God. Plenty of biologists do. But their deity is not a creator or intelligent agent at work in the material world in ways that transcend nature and its laws. That would be a matter of faith, not science.

Subject: A Slowing in Housing From: Terri To: All Date Posted: Wed, Jul 06, 2005 at 05:59:06 (EDT) Email Address: Not Provided Message: Again, what seems essential for a soft landing in housing and of the economy is continued low long term interest rates. I am hopeful that we can have a soft landing if the speculation in housing slows quite soon. The summer may be most critical. The problem is not home dwellers, but those who are buying purely to speculate by flipping.

Subject: Re: A Slowing in Housing From: Jennifer To: Terri Date Posted: Wed, Jul 06, 2005 at 07:29:42 (EDT) Email Address: Not Provided Message: We will be safe if long term interest rates stay low. Since the year has been fine so far, we can afford to be conservative. Lots of value stocks.

Subject: Britain and Australia and Housing From: Terri To: All Date Posted: Tues, Jul 05, 2005 at 21:37:56 (EDT) Email Address: Not Provided Message: Both Britain and Australia appear to have come to the end of the run in housing prices. So watching these markets and economies may give us a sense of what to expect here. Both markets rely almost completely on rapidly adjustable mortgages, but short term interest rates in both countries are being lowered by the central banks, There is so far considerable stability and I am again encouraged.

Subject: Re: Britain and Australia and Housing From: MikeM To: Terri Date Posted: Thurs, Jul 07, 2005 at 01:07:11 (EDT) Email Address: coriaria_arborea@yahoo.com Message: The Reserve Bank of Australia is not lowering short term rates. Its board met on Tuesday but there was no change announced yesterday. A few expected rates might have gone up. As for housing price stability here, we are still waiting for the other shoe to drop. The Times's report on Tuesday was reasonably accurate, but it's clear from the drop in sales figures that there are many owners holding onto property, rather than accept prices being offered. It could yet become nasty.

Subject: Re: Britain and Australia and Housing From: Terri To: MikeM Date Posted: Thurs, Jul 07, 2005 at 06:14:04 (EDT) Email Address: Not Provided Message: Thank you, Mike. Please let us know how Australia continues to fare, for the economy has been healthy for quite a while and we must hope the central bank can sustain growth.

Subject: Floyd Scrips died out - Remember Baby Sitting CoOp From: Johnny5 To: All Date Posted: Tues, Jul 05, 2005 at 18:02:08 (EDT) Email Address: johnny5@yahoo.com Message: In Era of Credit, ATMs - Some Still Barter Tuesday July 5, 2:03 am ET By Calvin Woodward, Associated Press Writer In Era of Credit Cards and ATMs, There's an Old Way to Get What You Want - Barter FLOYD, Va. (AP) -- They came to Floyd to get back to the land, to be alone, to find community, or to make music. They fit in here because they didn't quite fit in anywhere else. Here the counterculture met the mountain culture and something unique was born. The two lifestyles had something in common, lack of money. The locals wanted it but didn't have it. The newcomers with the tie-dyed shirts didn't care much about the dollar -- some despised it -- but, like everyone else, they had to pay the bills. So together they took something ancient and made it new. It worked, and still does, like this: I'll do this for you if you give that to me. The practice is bartering, defined as trading goods or services with no money involved. Today the barter system courses through Floyd, an Appalachian town that still attracts people who are off the beaten path in life. At Dr. Susan Osborne's Barter Clinic, people have brought in firewood, meat and soap to trade for her medical services. In Floyd, goods tend to be bought the usual way, with cash. But trade has its place. A man dropped by the Harvest Moon natural foods and exotic gifts store, worked for 15 minutes on the grounds, and claimed a few croissants as payment the next day. 'He'll show up for our smoothie test run,' said Tom Ryan, who runs the two-story, cedar-planked store with its founder, his wife, Margie. Out in the country, Dawn Shiner and her family spend a day helping a farmer cut or bale hay, in return for taking all the hay they need back home to their garden, and work at a market for the five pounds of almonds she wants for baking. And when Erika Johnson and her husband wanted to open a restaurant and music place downtown, they got the space by offering the seller a $2,000 worth of food and drink at their place, Oddfellas. Payment in full. Many oddfellas inhabit these hills. Scores of artists have been drawn to a town where many people can't afford what they create. Noses are pierced, a new generation of Earth Shoes is sold. On the other side, the old-time corner hardware store sells Red Flyer wagons and a country store hosts a Friday night bluegrass jamboree. Political extremes tap toes to the same tunes. 'It used to be very rugged,' Ryan said of relations between the farmers in overalls and the alternative crowd. 'Now there's an across-the-board general tolerance. 'The locals have gotten older. The alternative people have gotten older. There's less to fight over. 'The Chamber of Commerce,' added Ryan, a ponytailed vice president of the group, 'is an interesting mix.' Economists believe informal commerce, including bartering, baby-sitting, lawn mowing and unreported moonlighting, make up at least 6 percent and even as much as 20 percent of the national economy, according to an analysis done for the Federal Reserve Bank of Richmond. And that doesn't count criminal transactions. In Floyd, as anywhere else, money still drives the bulk of commerce. But in 2002, Floyd took the leap and created its own labor-based currency, the Floydian Scrip, also known as Floyd Hours, inspired by a pioneering effort in Ithaca, N.Y. Two denominations were printed on recycled denim -- a note that valued one hour of labor at $10, and one that valued 15 minutes of labor at $2.50. In theory, a customer could pay for groceries with a $10 Floyd note. The store could use that note to pay for an hour's worth of service from an electrician. The electrician could then take the note to the local masseuse for a rubdown. And so on. In practice, it didn't turn out that way. Stores found their registers stuffed with blue notes they couldn't pass on. Margie Ryan took up to $500 worth of scrip but was hard-pressed to use it. 'Once my building's built, I don't need carpentry anymore,' she said. Without universal acceptance, a local currency breaks down at the weakest link. And it turned out that informal bartering, a natural development of the hardscrabble economy and the freethinking newcomers, didn't lend itself so well to a formal structure. 'It's like trying to keep track of karma,' said Kalinda Wycoff, 56, running the Blue Mountain Mercantile store and selling the wares of artists and craftsmen. Now the Floyd scrip is a conversation piece, accepted as partial payment at best in a few places. Resourcefulness pays off here. 'It depends on your skills and how much drive you have,' Wycoff said. 'Your beliefs create your reality.' A native Virginian, she was drawn here by the way people pitch in, whether it's a roof-raising event in the community, the parent-run school or the barter. Johnson moved here at age 5 from Michigan, her parents part of the back-to-the-land movement of the 1960s. She grew up in a house down a mile-long road with no electricity or an indoor toilet. They grew much of their own food. 'Floyd was an energy spot,' Johnson said, stopping in a coffee shop to hand out flyers for FloydFest, the multicultural music and arts festival she created with her husband. Now she lives in that house with her husband Kris and their two children. They have power but still no toilet. Her kids hear the same whippoorwill calls she heard as a girl. Shiner, born in Massachusetts, settled here on three dirt-cheap acres and lives in a trailer with her handyman husband and 18-year-old son. She was the driving force behind the scrip, and still barters with enthusiasm. Her ethos: 'Minimum amount of money, maximum amount of good everything else.'

Subject: Energy-Rich Nations Raising Prices From: Emma To: All Date Posted: Tues, Jul 05, 2005 at 17:14:31 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/05/business/worldbusiness/05bolivia.html?pagewanted=all Energy-Rich Nations Are Raising Price of Foreign Admittance By JUAN FORERO LA PAZ, Bolivia - For centuries, this country made it easy for prospectors to mine - from the Spaniards who plundered gold to the tin barons of the 19th century to the multinational energy companies that flocked here in the 1990's to develop Latin America's second-largest natural gas deposits. But like many energy-producing countries these days, Bolivia has pulled back the welcome mat. With an angry population demanding a larger share of the benefits, and some groups even calling for expropriation, the government recently raised royalties and taxes to among the highest levels in Latin America. It might appear to be an exceptional episode of revolutionary zeal translated into energy policy. But Bolivia is just the latest of several oil-and-gas-producing countries in Latin America and beyond that are squeezing energy companies as never before. With prices of crude oil and natural gas at record highs, and ideology increasingly propelling government policy makers, producing nations are demanding a larger part of the mineral wealth. In some cases, they are canceling long-term contracts that gave energy companies highly favorable terms. 'They think that since there is more revenue coming in, they can take a much harder line in negotiations,' said Lawrence J. Goldstein, president of the Petroleum Industry Research Foundation, an industry-financed analysis group in New York. 'In some cases, they don't even need to negotiate.' Many of the world's giant energy producers, among them Saudi Arabia, Kuwait, Iran and Mexico, play no role in the trend because their state-owned companies either fully control or dominate production. But Russia, Venezuela, Kazakhstan, Nigeria and Algeria, together accounting for 20 percent of the world's supply but dependent on foreign and private domestic companies, are another story. They are among the countries that are tightening the terms - sending a message that has reverberated in the industry at a time when supplies are tight. Some industry representatives call the new terms a chokehold that will slow investments, just as consuming nations need more oil to reduce prices. 'Both the tighter terms and the fluidity of contract terms will cause companies to second-guess further investment,' said Michelle Billig, director of political risk at the PIRA Energy Group, a New York consulting firm. 'The willingness of countries to change the terms halfway through the project complicates any type of investment decision because you don't know what terms you're going to have at the end of the project.' To governments, though, the squeeze is justified because of the huge amount of money that oil companies are generating. A barrel of oil traded above $60 last week, before settling Friday at $58.75. Natural gas, which has doubled in price in the United States in five years, is in high demand the world over. 'They've never had earnings of this order,' said Victor Poleo, a left-leaning oil economist in Venezuela. 'So this awakens an insatiable appetite in governments for that income.' The increasing prices have been a windfall for oil companies, which are registering record profits. The Exxon Mobil Corporation saw profit jump 44 percent to $7.86 billion in the first quarter this year, while Royal Dutch/Shell's profit climbed 28 percent. The combined net income of the four biggest oil companies - Exxon Mobil, BP, Shell and ConocoPhillips - increased 39 percent from a year earlier, the companies reported in April. Measured another way, Exxon Mobil's revenue for the first quarter - $82.05 billion - is nearly as much as the $107 billion gross domestic product in Venezuela, which supplies much of its crude oil to the United States. The big profits are not lost on people like Abel Mamani, the leader of Fejuve, an influential antiglobalization group in Bolivia that has fought oil companies. Angry protests against the country's energy policies have already led two presidents to resign in 20 months. The latest resignation came last month after the Bolivian Congress sharply raised taxes on foreign energy companies, but not enough to placate some groups - the protests continued and talk of nationalization was in the air. 'This is a necessity,' Mr. Mamani said in an interview. 'We are tired of these companies taking advantage of our resources.' Energy analysts say such a hard line could backfire in struggling countries like Bolivia or Ecuador, where energy reserves are large, but the industry still needs to be developed. Repsol YPF, a Spanish energy giant whose Bolivia holdings account for a small part of worldwide production, has publicly said that it is considering legal action against Bolivia for changing contracts. 'The problem in Bolivia is companies are just now making investment,' said Ed Miller, the president of Gas TransBoliviano, a pipeline group owned in part by Shell, Petrobras and British Gas, adding, 'This is going to have disastrous effects in the long term.' That may not be the case in most countries that are tightening terms. 'Countries like Venezuela, which are in a class on their own, can be more demanding in pushing for a government take,' said Roger Tissot, director of countries and markets at PFC Energy, a consultant group based in Washington. In a sense, companies are captives of their own success. Big oil may have invested billions in technologically challenging areas, like the Orinoco Belt of Venezuela or the Caspian Sea region, but now they are reaping the benefits, with oil flowing out and petro-dollars flowing in. They are not about to abandon those projects now. Nor do they have unlimited options for new investments, since many of the world's top energy-producing countries restrict foreign investment. 'There are very few countries with attractive reserves that are open to foreign investment,' Ms. Billig of PIRA Energy said. 'Those which are open recognize their bargaining power.' PIRA, which has completed a report on the trend, says some of the toughest new policies are in Russia, by some accounts the world's second-largest oil exporter. In its drive to assert control over the industry, the Kremlin aggressively sought back taxes last year against Yukos, the country's largest private oil company, leading to its sale in a state auction. The move stifled the political ambitions of Mikhail B. Khodorkovsky, the founder of Yukos, who was sentenced in May to nine years in prison. In 2004, Russia increased the production tax rate by 15 percentage points and raised the export tax for crude oil that sells for more than $25 a barrel, while maneuvering to give state-run Gazprom, already the world's largest producer of natural gas, greater reach over the country's energy resources. More ominously for oil companies, Russian legislators are discussing whether to limit foreign participation in certain large-scale projects. Kazakhstan, a former Soviet republic, is also toughening terms, with a new law calling for a 90 percent minimum government share of all profits when oil is selling above $27 a barrel and at least a 50 percent state participation in projects. In Nigeria, Africa's largest oil exporter, the government is levying new royalties, and its new offshore contracts are expected to be far more restrictive than past agreements. No country's energy policies have attracted as much attention as those of Venezuela, whose government has turned the state oil company, Petróleos de Venezuela, into an engine for social change, while increasing taxes and royalties and changing long-term contracts with foreign multinationals. Venezuela's government, led by its leftist president, Hugo Chávez, is planning to spend up to $4 billion of the oil company's budget this year on a range of programs, from clinics to literacy programs to subsidized markets. Foreign companies, which produce 1.1 million barrels a day out of a total of 2.6 million barrels daily, are needed to help generate that revenue. The shift could not be in sharper contrast to the early 1990's, when the government opened the energy sector to foreign investment and offered sweet deals to companies like ConocoPhillips, Chevron, Total of France and Statoil of Norway. In the vast Orinoco Belt, companies paid only a 1 percent royalty, a level intended to overcome concerns about drilling for heavy, poor-quality oil. That all changed last October, when Mr. Chávez's government increased the royalties in the Orinoco region to 16.6 percent, ending a virtual tax holiday. Venezuela is now hoping to raise the income tax rate on the projects in the Orinoco to 50 percent from 34 percent, the country's energy minister, Rafael Ramírez, told reporters recently. In other parts of the country, the government has also toughened terms, seeking as much as $3 billion in back taxes, raising taxes and requiring majority state ownership. Companies are still welcome, officials say, while making clear that the state is in charge. 'The higher prices permit countries to have the higher revenues for development,' said Nicolás Maduro, president of the National Assembly in Venezuela. 'Even with the higher royalties and taxes, the oil company earnings are still enormous.'

Subject: Could Hedge Funds Spoil the Party? From: Emma To: All Date Posted: Tues, Jul 05, 2005 at 16:38:23 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/03/business/yourmoney/03view.html Could a Few Hedge Funds Spoil the Party? By ANNA BERNASEK WHEN the Long Term Capital Management hedge fund was sinking in 1998, leaders of the Federal Reserve were worried. They feared that if the fund failed, a major disruption could be set off in financial markets, with dire consequences for the global economy. Indeed, that worry was the impetus for the hastily arranged bailout of the fund. Since then, the financial system hasn't faced a similar test. At least not so far. Lately, though, there have been signs that hedge funds are again taking on big risks. That's not to suggest that a crisis is imminent, but the situation does raise important questions: While the rewards of hedge fund investing are well known, what about the downside? Could the actions of hedge funds again threaten the economy? The numbers involved are enormous. At its near-collapse in 1998, Long Term Capital Management held $5 billion of its investors' money. In the seven years since then, the hedge fund industry as a whole has nearly tripled in size, now wielding more than $1 trillion in invested funds. With so many more funds and so much more money, it is becoming a lot harder to be confident that the industry is being responsible. And the incentive to take risks with all that money is huge. A typical fee structure, called '2 and 20,' gives managers 2 percent of the assets under management and 20 percent of gains realized by the fund. At large funds, this means that a single year's winnings can set up the managers for life. But as more funds pile into the winning strategies of the past, competition inevitably shrinks profit margins. And that has tempted managers to find new, sometimes riskier ways to maintain their spectacular returns. The crowding effect is visible in some markets, particularly fixed income and convertible arbitrage, which hedge funds have come to dominate. In May, in its latest report on global financial security, the International Monetary Fund found that hedge funds might account for 80 to 90 percent of all participants in those markets. Because of that high concentration of hedge funds, the I.M.F. warns of trouble. It found that those funds, if stressed, might find themselves all selling at once, putting a strain on the entire financial system. How can outsiders judge the risks of hedge funds? Ever since the Long Term Capital bailout, hedge fund leverage has been a concern for regulators and parties dealing with the funds. Leverage is attractive to hedge funds because it lets them make much bigger bets than they could otherwise. By taking large leveraged positions, hedge funds benefit handsomely when things go right. But when things go wrong, losses are similarly multiplied. Return to Long Term Capital for a moment. Starting with just $5 billion in capital, the fund was able to get $125 billion in additional funds. Using that leverage, it took on trading positions with an estimated potential value of $1.25 trillion. Despite the fund's seemingly brilliant strategy, the high leverage meant that it didn't take much of a setback to wipe out the fund's underlying capital. And the potential freezing of $1 trillion worth of positions, even temporarily, was seen as a major risk to the system. What is happening to leverage today? Timothy F. Geithner, president of the Federal Reserve Bank of New York, discussed the issue in a recent speech. In his view, leverage in the industry has decreased, on average, since the 1998 bailout. Over the last year, though, the Federal Reserve and the I.M.F. have noticed that leverage is creeping back in some areas, probably because of heightened competitive pressure. The trouble is that average leverage isn't really a good indication of the risks involved. Even if the industry is generally healthy, a couple of very bad apples could spoil everything. After all, the Long Term Capital Management crisis started with just one fund, not the whole industry. On that score, there has been talk on Wall Street about risky hedge funds. In particular, some traders who deal with hedge funds suspect that leverage in some cases today exceeds that of Long Term Capital Management. And borrowed money isn't the only reason. Traders concern themselves with a broader measure called economic leverage, which takes borrowing into account but also includes risks like those arising from derivatives and other complex financial arrangements. Economic leverage can be high even when borrowing, or balance-sheet leverage, is moderate. Another concern involves hedge funds that invest not in the markets, but in other hedge funds. These 'funds of funds' sometimes employ leverage as well, creating a layering effect. The financial partners who lend to or trade with funds of funds take on some of the extra risk, increasing overall risk to the financial system. Similarly, leverage is created by offering specially constructed products to hedge fund investors. FOR regulators and the public, the available information on leverage is not terribly comforting. Hedge fund research groups rely on voluntary reporting from the funds. This means that the data they collect reflects only a self-selected slice of the industry putting its best foot forward. A 2003 study by the Center for International Securities and Derivatives Markets found balance-sheet leverage at hedge funds ranging from less than one times capital to 25 times capital. But because hedge funds can shift positions or increase leverage almost instantly, it's not clear that a static snapshot conveys the information needed. True economic leverage is nearly impossible to understand without full disclosure of all of a hedge fund's commitments. This means that many decision makers - at banks, in government and on Wall Street - are merely guessing at the risk components they can't see. Individual funds have all the relevant facts pertaining to themselves, but nobody has the complete picture. And that may be the biggest risk of all.

Subject: Germans lLay Foundations for Property Boom From: Terri To: All Date Posted: Tues, Jul 05, 2005 at 12:56:43 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/financialtimes/business/FT20050704_15325_77200.html Germans lay foundations for property-owning boom By FT.COM Early last year, a letter popped through the door of number 25, Am Mühlkanal in the leafy Frankfurt suburb of Sachsenhausen. Christina Schmickl, who rented the flat with her partner, opened the envelope with little enthusiasm, assuming it was another bank statement or some marketing bumph. What she found 'was quite a shock', the 20-something PhD student recalls. 'Deutsche Annington [our landlord] was offering to sell us our flat.' A few months and meetings later, Ms Schmickl was the proud owner of a three-bedroom home in a desirable part of town for just €141,500 (£95,600). It is a tale being repeated across Germany in a trend that is transforming the way the nation lives. Within five to 10 years, property experts believe more than 60 per cent of Germans could own their own homes compared with barely 40 per cent now. Germany's low level of owner occupation has deep cultural roots and was consolidated when the destruction of the second world war prompted the state and the country's big employers to rehouse the nation. But the budgets of federal and regional governments have been squeezed and companies have come under pressure to focus on their core businesses. The result has been a dramatic divestment of property, almost exclusively to foreign financial investors. The pattern began in earnest in 2001 when Guy Hands, the UK entrepreneur who then worked for Japanese financial group Nomura, acquired 64,000 former railway workers' homes from the state. Ms Schmickl's flat was one. Last year came another big deal, when Fortress, a US private equity firm, bought Gagfah, a portfolio of 80,000 flats, from the state pensions administrator. In May, Terra Firma Mr Hands' new vehicle teamed up with Citigroup, the US bank, to do the biggest private equity deal in Germany, acquiring Viterra, a bundle of 150,000 flats, from power group Eon. There has been a clutch of smaller deals. 'This is an unbelievably big structural change for Germany,' says Matthias Moser, head of Fortress's German operations. 'For 100 years, the government and big corporations have controlled the country's housing stock. Now, in a shift that began in 1998, about 40 per cent of Germany's wealth is changing hands.' Deutsche Bank estimates 1m more homes could be bought by private equity groups over the next five years. The new landlords have different aims and business models but all depend to a large degree on selling parts of their portfolios to tenants. The strategy boosts the running yield on a portfolio and generates big capital gains. Deutsche Annington, now part of the Terra Firma fold, originally cost Mr Hands €2bn, or an average €31,000 per property. Ms Schmickl's flat, a typical example, generated a 350 per cent gain. The trend of financial investors breaking up their portfolios is echoed by private landlords who are selling individual homes amid disappointment that capital values have failed to rise much in recent years and vacancy rates in some locations have increased. Although many young Germans with experience of countries where owner occupation is the norm feel emboldened to buy, others need encouragement. So the likes of Fortress and Terra Firma are going about the sales in an almost paternalistic way. Rather than using market values as the measure for the offers they make to tenants, they take the current rent level, convert it into the monthly repayment on a 30-year mortgage and calculate that back into a purchase price. It's all about affordability, says David Pascall, head of Terra Firma's German operations. 'It's always been our experience that people like to own their own homes. They buy for security. And few people are put off if the mortgage costs the same or only a little more than rent.' The firms also make the process simple by partnering with local mortgage providers. Deutsche Annington has a nationwide deal with Sparda, the mutually owned bank. Fortress, which recently began selling Gagfah homes in Nuremberg and Cologne, has teamed with regional Sparkassen, or savings banks. 'This is ideal for us,' says Mr Moser. 'Tenants are never really sure about the value of their flat. But if their local bank tells them it's a good deal and lends them the money to buy it, they feel much more confident about buying.' Ms Schmickl is a clear convert. 'We'd never even considered buying our own flat until we got that letter. But we love it. We get to stay in the same place in the same great neighbourhood but, suddenly, it feels more like a home. We've ripped out all the old floors already.'

Subject: In India, Prosperity Is Spreading From: Emma To: All Date Posted: Tues, Jul 05, 2005 at 11:58:53 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/05/business/worldbusiness/05india.html?pagewanted=all In India, Economic Prosperity Is Spreading Slowly By SARITHA RAI BANGALORE, India - It has been a little more than a year since the government of Prime Minister Manmohan Singh came into power promising to embrace those excluded from the country's new economic prosperity. While the impact of his government's efforts to help the poor - like increasing credit to the country's many farmers and pumping in money for infrastructure, especially in rural areas - will not show for another few years, experts say, the bounty from the expansion in manufacturing and services that has been putting money in the hands of millions of Indians is now noticeably trickling down. 'What is happening is amazing,' said Joe Paul, the founder and chairman of the Uthsaha Society, a networking group that encourages slum dwellers in Bangalore to become financially independent. 'It is a ripple effect.' For now, though, the ripple is largely an urban phenomenon, and seen mostly in the country's more developed regions. Elsewhere, especially in rural India, millions of poor people continue to eke out a living on less than $1 a day. 'Though India's villages desperately want to join in the growth, the changes are not yet enough to wipe out social inequities,' said Chiranjib Sen, an economics professor at the Indian Institute of Management-Bangalore, the country's premier business school. Still, where the new prosperity is percolating, it spans a broad spectrum and reflects much more than an occasional, isolated success story. A big catalyst is the construction boom in high-tech cities like Bangalore and Madras. Besides the demand for construction workers, workers at factories supplying the building materials, and drivers to transport those products, there is a demand for housekeepers, cooks and drivers to cater to the double-income families who live in the new residential complexes and high-rises. Caterers are needed to supply food to the office workers. Security guards are also in demand. Trained nurses are needed to tend to aging parents of workers traveling overseas or living in other cities. 'The last few years of strong growth has facilitated poverty reduction, even though the fruits of growth were not distributed evenly,' said Ping Chew, a sovereign credit analyst at Standard & Poor's in Singapore. 'The middle-income group continues to be the biggest beneficiary and this will ensure that the benefits continue to pass on to the lower-income class.' Economists expect the source of the trickle to continue. After last year's 8.5 percent growth, growth in the year ended in March 2005 was 6.9 percent. That should mean more stories like that of Shobha Shankar. Three years ago, Ms. Shankar, now 28, was a stay-at-home mother of two in Bangalore. With her husband's sari business foundering, she was forced to seek a career. She wanted to learn to ride a scooter so she could market the saris, to supplement her husband's meager monthly income of 3,000 rupees ($69). Instead, at the driving school where she enrolled, she found herself learning to drive a car. She was so good that her instructors roped her in to teach others. Ms. Shankar's new teaching skills coincided with a surge of first-time car owners in the city - other beneficiaries of the ripple. She was soon able to buy herself a used car and set up a branch of a driving school. She now earns about 15,000 rupees ($344) a month and business is expanding fast. 'Three years ago, we didn't have a phone connection at home and I coveted a cellphone,' said Ms. Shankar, who now owns two cellphones, regularly takes her family out to dine, and has bought a refrigerator and a washing machine. Her husband cares for their two daughters and tends to the house. Though India's progress in poverty reduction can slow, a continuing study, Rethinking India's Future, by the Strategic Foresight Group, a research organization based in Mumbai, has tracked upward mobility for an increasing number of Indians, at all economic levels. According to a recent update of the study, the top level, the country's so-called business-class economy - covering those who can afford things like air travel and Internet connections - grew from 20 million Indians in mid-2002 to 24 million this year, or from 2 percent of the population to 2.2 percent. The 'bike economy,' including those who own a motorized two-wheeler and a phone, and can afford to travel by train, increased from 15 percent of the population to 16.8 percent, while the 'bullock cart category,' or those without even basic amenities and who can afford only to ride a cart pulled by a bull or go barefoot, had contracted 2 percentage points, to 81 percent. 'Opportunities are expanding for the lower classes, whether vendors, domestic workers or garment factory workers,' said Santosh Vaz, chairwoman of Janodaya, a Bangalore-based nongovernmental organization that helps place domestic help and factory workers. Ms. Vaz has even been able to negotiate minimum wages of up to three times a worker's previous salary, and standard labor benefits, something unheard-of for domestic labor even a few years ago. Mr. Paul, whose networking group is spread across several Bangalore slums, says housing is one of the best indicators of change, and in the last few years most of the ramshackle huts with plastic sheet roofs in Ejipura, Bangalore's biggest slum, have transformed into one-room concrete houses. Televisions, refrigerators, and cellphones are high on the shopping lists of residents, he said, and in many cases, both husband and wife work 'because they want to have that much more.' Sanjeevi Kumar, 32, is among the Epijura residents hoisting themselves up. Mr. Kumar dropped out of school after third grade, sold kerosene and then was a construction worker for several years at a daily wage of 32 rupees (73 cents). Those were tough times, he said. But two years ago, he won a garbage collection contract from some of Bangalore's booming outsourcing companies, and with money he had managed to save or borrow, he rented a truck to transport the waste. His stable income helped him get a 60,000-rupee ($1,377) loan for a long-term rental of a one-room home in Ejipura, as well as a new TV. 'Our slum has changed in the last couple of years,' Mr. Kumar said. 'Everybody is working hard to catch up with each other.' He hopes to be able to shift his son, 13, and daughter, 11, from a free government school to a private school that could cost 500 rupees ($11.48) a month for tuition and books - a big step in a country where only about half the children their age ever step inside any school. Along with such promising examples, though, disparities in growth have increased among the country's regions. The national government's increased focus on education, communication infrastructure and health care in rural areas should help somewhat, said Vivek Gupta, managing director of the consulting firm A. T. Kearney, India.

Subject: Healing the World by Curing the Poor From: Emma To: All Date Posted: Tues, Jul 05, 2005 at 11:50:56 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/05/health/policy/05conv.html?pagewanted=all Healing the World by Curing the Poor By CLAUDIA DREIFUS BOSTON - Like the champion of jet lag he is known to be, Dr. Paul Farmer dashed into town recently to give a seminar at Harvard Medical School. He had arrived in Boston via Haiti and Rwanda, the central African nation where he has been organizing an campaign to fight AIDS with money from the William J. Clinton Foundation. Dr. Farmer, 45, is a founding director of Partners in Health, a nonprofit agency based at Brigham and Women's Hospital in Boston. The organization provides medical services to the poor of Haiti, Rwanda, Peru, Russia and, yes, even Boston. In the 2003 best seller about Dr. Farmer's life, 'Mountains Beyond Mountains,' the writer Tracy Kidder described him as 'a man who would cure the world.' But sitting with a reporter over a beer and a basket of French fries at a Tremont Street pub, Dr. Farmer, tall and gangly, seems a lot less grandiose than that. 'As I ricochet around the world, I see a lot of idealism,' he said. 'I see it in American high school kids raising money for health care in Haiti. I see it in Haitian health workers willing to go to Rwanda to battle the AIDS epidemic in Africa. These things are motivating.' Q. If the great humanitarian physician Dr. Albert Schweitzer were alive today, what would he think of your work? A. If he walked into our hospital in Cange, in central Haiti, I think he'd be impressed. I mean, our patients are really poor, and this is a really decent medical center. There's no utility infrastructure in rural Haiti - few land line phones, hardly any passable roads. But at Cange, we've got a blood bank, laboratories, a modern operating room. Q. How can you offer modern health services in places so poor that there is no electricity to power equipment? A. We buy our own generators. And that's another thing: I think Dr. Schweitzer would be fascinated by the ways we use technology. He'd probably say, 'E-mail, wow!' But we also do things he'd probably be uncomfortable with. We try to address the deeper causes of the diseases we see in countries like Haiti and Rwanda. A while ago, an official from this giant development bank came to central Haiti. I took him to see kids with typhoid. At that time, there'd been embargo aid and development money for Haiti. So I took him to a kid who was not going to make it because of typhoid. 'I want to know why your institution is blocking clean water loans to Haiti,' I asked. Somehow I have the feeling that Dr. Schweitzer would have thought this outside of the purview of a good 'humanitarian' physician. Q. Haiti is the poorest country in the Western hemisphere. Do you ever feel overwhelmed by all the suffering you see? A. Sure. But you can't allow yourself to be overwhelmed for long because that's going to leave you ineffective. Instead, you say, 'Gee, with the help of some talented doctors, nurses and engineers, we could do a lot here.' When I first went to Haiti in the 1980's, there was a moment that clarified this for me. With a young Haitian man who later became a health worker, we went to see a 7-year-old girl with malaria. The only doctor in the region didn't make house calls. She had 105 fever and was shaking like a leaf. Later, as we walked back many miles to the squatter settlement where we worked, I asked, 'What can we do?' 'About the little girl or the problem of malaria?' he asked me. I said, 'Both.' That moment stays with me. Even in situations that seem overwhelming, you try to focus on the individual patient. At the same time, you develop strategies to change the larger picture. You get others involved, go to people with power and try to get their help. One mustn't assume that people with great power won't help. Q. How have technological advances of the last decade changed your ability to serve the poor? A. Certainly the Internet has made all kinds of new things possible. Central Haiti, as I mentioned, is a place of poor communications. But hey, we've leapfrogged the lack of infrastructure with satellite dishes and laptops. So the other day, we heard about a woman in a remote area who was dying in childbirth; we sent e-mails out to try to get help to her. The Internet has been useful for consults, too. We can now get input from specialists from all around the world. Just yesterday, I got an e-mail from Cange with a digital photograph of a lesion that the doctor there couldn't identify. Did I know what this was? I recognized it immediately as a Kaposi's sarcoma, which we saw frequently at the beginning of the AIDS epidemic. It's become so rare now that this young doctor had no experience with it. Well, thanks to e-mail, I was able to say, 'Start that patient right away on antiretroviral medications.' Of course, this should be confirmed with a biopsy. We couldn't have done this 10 years ago. Q. Antiretroviral medications are expensive. How can your patients afford them? A. We buy Indian generics mostly, and we give them out. We don't sell them. If we're confident that the Indian knockoff is as good, and we can get it at a tenth of the price, why on earth wouldn't we use it? With these lifesaving medications, you start thinking there ought to be another way. AIDS drugs exist. But the people we serve are too poor to be consumers and thus patients. Trying to help them makes you think that health care ought to be thought of as a human right - like the right to free speech or the right to vote. Q. Genomics is transforming health care in much of the West. Will your patients be able to be helped by it? A. Whenever there is some new scientific breakthrough, we start scheming right away about how to use it. Cervical cancer? It's a major killer of women in poor countries. It's routine to screen for cervical cancer with Pap smears. But, the test is problematic in an underdeveloped region because you have to collect specimens, get them to a pathologist, obtain the results and then find the patient again. Because of poor transportation and communications, that's hard. There's this new test out, a DNA serology that can identify the strains of HPV virus that cause the cancer. So now, thanks to technology, there's no need to rely only on Pap smears. Right now, we don't have this test. But six months from now, I'd like to tell you we're screening Haitian women with the HPV/DNA test. We're going to call the company who makes the test and find out if they'll consider giving it to us. If that doesn't work, we'll try to get it at a reduced rate. Q. Do you ever get tired or angry? A. Not long ago, I was coming back to Haiti from Rwanda I'd had a great time at the new project in Africa - all these committed people, all this optimism. But in Haiti, the road to Cange had changed hands, and now there were all these guys with guns everywhere. I started thinking, We've been living with guns in Haiti for some 20-something years. When's it going to end? It got me down. Plus, when I arrived at the hospital, there was a gunshot wound to tend to. Q. So how did you break your mood? A. I read Adam Hochschild's new book about the abolition of the slave trade. The abolitionists, they were pretty effective. Learning that cheered me right up.

Subject: Chevron Ruffles an Asian Partner From: Emma To: All Date Posted: Tues, Jul 05, 2005 at 09:56:50 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/05/business/worldbusiness/05chevron.html?pagewanted=all In Seeking Unocal, Chevron Ruffles an Asian Partner By JAD MOUAWAD and DAVID BARBOZA The last thing Chevron wanted when it made its $16.8 billion offer for Unocal back in April was to be pitted in a takeover battle against the Chinese government. After all, one of the main reasons it went after Unocal, a California-based independent oil company with vast resources in Asia, was to sell oil and gas to the fastest-growing energy market in the world, China. But on June 22, when the state-controlled China National Offshore Oil Corporation, or Cnooc, countered with a higher bid for Unocal, Chevron found itself in a delicate position. Since then, Chevron's managers have gone into overdrive to portray the Chinese government-backed offer as unfair competition and to close their deal as quickly as possible. They have received support from many lawmakers in Washington, who have painted the Chinese offer as a threat to America's national security. Now, Chevron must walk a fine line between fending off Cnooc's $18.5 billion bid for Unocal and the risk of alienating Cnooc, its largest partner in China. There, for example, the two companies have teamed up in a $35 billion agreement to ship liquefied natural gas over the next 25 years from several huge Australian fields where Chevron has part ownership to some of Cnooc's terminals in China. But now, the partners appear to be on a collision course. Much is at stake for Chevron and its cautious chief executive, David J. O'Reilly. Since 2000, Chevron's oil production has declined every year, and the company has had trouble replacing the reserves it pumps out of the ground. On Wall Street, its share price trails its peers. With a Unocal deal, Chevron, the second-largest American oil company after Exxon Mobil, hopes to reverse both trends. Mr. O'Reilly estimates the takeover would increase Chevron's proven reserves by 15 percent, to 13 billion barrels of oil equivalent, and expand its oil and gas production to 3 million barrels a day, up from about 2.5 million barrels a day in 2004. Chevron has said that it expected the merged company to grow by 6 percent a year from 2005 to 2009. 'Chevron wants it badly because they don't have near-term production growth,' said Jay Saunders, an oil analyst at Deutsche Bank. 'The fact they had to do this offer is a reflection of Chevron's challenges that its rivals don't have.' Chevron and Cnooc are now locked in a race against time - and a potentially costly bidding war - before Unocal shareholders vote on the Chevron offer on Aug. 10. Since April 4, when its offer was formally endorsed by Unocal's board, Chevron has managed to secure the approval of both the Federal Trade Commission and the Securities and Exchange Commission in a record time. Cnooc faces an additional level of scrutiny on national security grounds by the Treasury Department's Committee on Foreign Investments in the United States, and last week it asked the government for a fast review of its offer. While Chevron believes it still has the upper hand, its deal is far from assured. Cnooc is negotiating with Unocal on the terms of its offer in a bid to persuade the Unocal board to change its position and reverse its stance that favors Chevron. In the days after Cnooc topped their bid, Chevron officials have used harsh language to describe their longtime partner. Peter J. Robertson, Chevron's vice chairman, said Cnooc's bid was inferior and would not produce as much oil and gas because Cnooc lacked experience in deepwater drilling. Mr. Robertson has also taken a stab at the Chinese government by saying that the bidding war with Cnooc was unfair because it was largely backed by loans from the largest state-controlled bank and Cnooc's government-controlled parent company. The loans are worth about $13 billion. 'Clearly, this is not a commercial competition,' he said two days after the Chinese offer was made. 'We are competing with the Chinese government, and I think that is wrong.' But he also dismissed suggestions that the battle would have any long-term effects on Chevron's relations with Cnooc. 'We are partners with Cnooc, and we expect that to continue,' he said in an interview last week. For years, Chevron officials have become increasingly cozy with the Chinese government, praising its efforts and trumpeting its alliances with Cnooc. Mr. Robertson, in a speech in Beijing last October, said that China needed to ensure a stable and secure supply of affordable energy and that China would have to invest large amounts of its own capital in energy projects, both within China and around the world. Now, analysts said Chevron's new hardball strategy could backfire. Chevron 'developed a very good relationship with both the government and the state-owned companies,' said Han Xiaoping, the chief information officer at Falcon Power, an energy consulting firm in Beijing. 'I think this is a strategic mistake that Chevron has made. It should have kept the whole deal as a normal commercial activity and shouldn't have used politics as an argument.' The battle is turning into a test for Mr. O'Reilly, Chevron's Dublin-born chairman and chief executive since 2000, and his biggest challenge since he successfully marshaled the $45.8 billion takeover of Texaco in 2001. That acquisition came amid a wave of megamergers in the oil industry, after BP's takeovers of both Amoco and the Atlantic Richfield Company and Exxon's purchase of Mobil. 'Dave was a very active rugby player when he was a kid. He's very competitive, but he's also very disciplined,' said J. Robinson West, a friend of Mr. O'Reilly and the chairman of PFC Energy, an oil consultancy that counts both Chevron and Unocal as clients. 'He doesn't want to lose the deal but he doesn't want to do anything silly, like overbidding.' Before securing the assent of Unocal's board, Mr. O'Reilly has had to increase his bid twice already. Some analysts expect he will be forced to raise his offer once more, even if marginally, to clinch the deal. Talks between the two companies started on Jan. 6 when Mr. O'Reilly called Charles R. Williamson, his counterpart at Unocal, to ask if he would consider a friendly takeover offer. The call came hours after the first news reports that China's third-largest government-controlled oil company was set to bid $13 billion for Unocal's Asian assets. The bid was a bombshell in the oil industry that highlighted the emergence of China as a powerful competitor in the global race for oil and gas reserves. For Chevron, though, it was a chance to act. With Unocal on the market, Chevron could strengthen its reach in Asia, reverse its production decline and increase its reserves - all in one quick shot. 'It's a tremendous opportunity for us,' Mr. Robertson said. 'The company has slimmed itself down recently and focused on four or five world-class assets from which a super-major like Chevron can get the most.' The company has had to fight for Unocal. According to regulatory filings Chevron made to the S.E.C. in June, three companies have been quietly competing over Unocal for more than six months. After Cnooc's initial opening to Unocal in December, and Chevron's talks with Unocal the next month, a third company, Eni of Italy, also approached Unocal. During the next four months, Unocal's board rejected four offers, two from Chevron, one from Cnooc and one from Eni, all deemed too low, before finally endorsing Chevron. On Feb. 28, after Unocal's board turned down his first offer, Mr. O'Reilly dropped out of the race. He had offered 0.94 of a Chevron share in exchange for each Unocal share. But on March 28, two days before another board meeting at Unocal, Mr. Williamson contacted Mr. O'Reilly to tell him his board would welcome a new proposal from Chevron if it was still interested. Mr. O'Reilly put his team to work again, and Chevron made a new offer of 1.03 of its shares for each Unocal share. Meanwhile, Eni tentatively offered $58 a share in cash for each Unocal share but never came up with a written proposal. It finally dropped out of the race because some of its executives considered an acquisition too hazardous and the price too high. As for Cnooc, whose first offer of $59 to $62 a share had been turned down informally earlier in March, its chief executive, Fu Chengyu, decided he needed more time to consider a higher offer and withdrew from the bidding - only temporarily, as it turned out. At Chevron, according to the S.E.C. filings, Mr. O'Reilly was told by his negotiating team that Unocal would 'look at his offer more favorably' if it included some cash. So on April 2, just hours before the deadline, Chevron's board met to approve an offer that included both cash and shares. The next morning, executives from the two companies convened to consider Chevron's new proposal: 0.7725 of a Chevron share and $16.25 in cash for each Unocal share. Talks then lasted all day and extended into the night before Unocal's board finally approved the new offer. A merger agreement was signed at 4:30 a.m. Pacific time on April 4. Hours later, the two executives announced the deal. Since then, the value of Chevron's offer has dropped by $400 million because of a 4 percent decline in Chevron's share price.

Subject: In Germany, the Jobless Work From: Emma To: All Date Posted: Tues, Jul 05, 2005 at 09:53:30 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/05/business/worldbusiness/05euro.html?pagewanted=all In Germany, the Jobless Work to Keep Their Benefits By KEVIN J. O'BRIEN MINDEN, Germany - In January, Benjamin Dath's eight-month search for a job in northwest Germany led him back to where he started - the unemployment office, which ordered him to paint classrooms at a local school for just 1.50 euros ($1.89) an hour. Mr. Dath is one of 30 men and women in Minden, a town of 83,000 about 36 miles west of Hannover, who are being forced under a new German law to paint town buildings, make sandwiches, monitor school corridors and maintain public parks to keep on receiving their monthly unemployment benefits. 'This gives me a chance to earn a little money and keep my benefits,' said Mr. Dath, 23, who said he had bounced from a series of low-paying jobs since he dropped out of high school at 16. 'Even for 1.50 euros an hour, it's worth it.' Across Germany, 106,000 people are currently earning 1 to 2.50 euros an hour doing mostly menial jobs, part of the government's program to compel work from the jobless to reduce the nation's 4.9 million unemployed. For 20 hours a week, Mr. Dath applies a roller and brush to the white walls of Minden South High School, earning 126 euros a month, which he uses to augment his 320 euros in monthly jobless benefits and the 300 euros the government pays for his rent. All together, he receives about $940 a month after taxes. 'We're still paying some of the most generous social welfare benefits in the world,' said Wolfgang Clement, Germany's economics and labor minister, in an interview. 'The big change now is we're asking for something in return. And it's overdue.' By the end of this year, Mr. Clement said he hoped to have placed 250,000 Germans in low-paying community jobs limited to six months - during which time the jobless are not counted as unemployed. After their stint, they return to full benefits. Ultimately, Mr. Clement said it may be possible to place 600,000 people in such jobs, roughly the number of jobless under 25 years old who are currently unemployed.Though Mr. Dath may have found a new trajectory through the program, that is hardly the case for everyone. Hermann Dunsky, 58, is a former mechanical engineer who used to sell hydraulic and pneumatic pumps and other equipment to nuclear power plant operators until his employer, Abarle Systems of Wismar, filed for bankruptcy in 2002. Since he lost his job in November 2002, Mr. Dunsky has applied for 'hundreds of jobs' in Germany and even in the Netherlands, without success. When he did get a reply to his applications, Mr. Dunsky said, he was turned down because of his age. In Germany, it is legal to discriminate based on age. Mr. Dunsky receives 660 euros a month in unemployment benefits to pay his monthly living expenses, including rent, in Schwerin, a city 60 miles east of Hamburg in the former East German state of Mecklenburg-Vorpommern, where the jobless rate was 20 percent in June.But in early May, Mr. Dunsky was called and told to report to work at a community school where he would supervise other unemployed people who are teaching 10-year-olds how to observe Schwerin's bicycle-traffic rules. Mr. Dunsky works six hours a day at the government center, earning 1 euro an hour, 6 euros a day, 120 euros a month. He complied, he said, because, the jobless who refuse 1-euro jobs can have their unemployment compensation cut by 30 percent. 'I'm an experienced engineer,' said Mr. Dunsky, who is divorced and lives alone. 'I can tell you that this is not the kind of work that is taxing my abilities. In fact, it is taking away the time that I need to find a real job. But I had no choice. Even so, this has been pretty hard to take.' Gerd-Erich Neumann, the former executive director of the Association for the Unemployed in Mecklenburg-Vorpommern, a charitable group, said the 1-euro jobs were hitting many older adults hard. 'Look, this is demeaning for a lot of people,' Mr. Neumann, who is 69, said. 'There are simply no jobs around here, and now people are being humbled for no good reason.' It is unclear, however, whether Chancellor Gerhard Schröder's Social Democratic coalition will be in office next year to continue its labor market program. In late May, Mr. Schröder called for national elections in September, a year ahead of schedule, after his party lost power for the first time in 39 years during state elections in North Rhine-Westphalia, a poll that was seen as proxy for the national elections. In North Rhine-Westphalia, 1.03 million people were unemployed in June - 152,000 more than a year ago, according to government figures. In Minden and its neighboring city of Lübbecke, 12,530 people are jobless or 9.5 percent, slightly better than the national average of 11.7 percent. Jörg Krämer, chief economist at HypoVereinsbank in Munich, said the one-euro program would do little to cut German unemployment, which Mr. Krämer expects to remain essentially unchanged through 2005. 'This will help a little, but it doesn't address the core problem,' he said. 'This is basically a make-work program.' Political will alone may not be enough to reduce unemployment. In Minden, retraining the community's long-term unemployed is proving costly, and local businesses, already struggling under Germany's stagnant economy, have begun complaining that the cheap labor supplied by the jobless is robbing them of scarce government contracts. Of the 23 million euros the federal government plans to spend this year on Minden and Lübbecke's 15,724 unemployed, only 41 percent, or 9.4 million euros, will be paid out in wages to the unemployed. The majority, roughly 13.6 million euros, will go to pay for administration and to pay trainers like Peter Schwarz, a master painter supervising Mr. Dath and others at Minden South. 'What this will do is hopefully qualify people like Benjamin to be eligible some day for an apprenticeship as a painter,' said Mr. Schwarz, 38. 'He will have a chance, but the job market for painters here at the moment isn't that great.' Even the program's modest success is too much for Sabine and Wolfgang Nöth, who have operated Maler Nöth, a painting business in Minden since 1955 that employs 20 painters. 'Business had been bad enough before this program started,' said Wolfgang Nöth, who said he paid his painters about 13.50 euros an hour. The actual hourly costs, Mr. Nöth said, are about 38 euros an hour when you include the costs of providing seven weeks paid vacation, 10 official paid holidays and Mr. Nöth's mandatory contributions to his employees' state health insurance and pension plans.

Subject: Hole in the Housing Bubble From: Emma To: All Date Posted: Tues, Jul 05, 2005 at 09:48:03 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/05/realestate/05aussie.html?pagewanted=all Hole in the Housing Bubble By RAYMOND BONNER SYDNEY, Australia - For several years, dinner party chatter here did not linger on favorite Australian subjects like rugby, cricket, sailing and surfing or politics. No, all the talk was of real estate: how much a house was worth, how much more this year than last, and how much more valuable it would be next year. It was not just the rich who were getting super-rich, their multimillion-dollar homes with water views rising rapidly in value. Every homeowner was making money, at least on paper, and Australia is a country with one of the highest levels of home ownership in the world. A midlevel office worker, for example, who bought a house in a middle-class Sydney suburb for 188,000 Australian dollars in 1996 was offered 720,000 Australian dollars ($504,000) in 2003. Sound familiar? As in many regions of the United States these days, house prices here seemed to defy gravity. They just kept going up and up and up - in Sydney, by 11 percent in 1997, according to the Real Estate Institute of Australia, followed by a leap of another 21 percent the next year. After more modest increases, prices rose by 16 percent in 2002, and another 23 percent in 2003. It was similar in other major cities. 'It overshot all models, all predictions,' said Rod Cornish, head of property research at Macquaire Bank. In the last two years, though, the Australian housing boom has come to a halt, in a move that many experts see as the first signs of the end to a housing bubble, not just in Australia, but also in the United States as well as several other rich countries around the world. It is impossible to say for sure how the situation will work out here - or in the United States, for that matter. But so far, despite predictions that housing prices in Australia would plummet by as much as 20 to 30 percent, there are no signs of a crash. Prices have leveled off noticeably or dropped slightly, at least in Sydney, Melbourne and Canberra. They continue to rise at a modest rate in Perth, Darwin and Brisbane, the major cities in resource-rich states, where the local economies are being buoyed by China's insatiable demands for raw materials. Nationwide, for the year ending March 31, the rise in house prices was 0.4 percent, the lowest since 1996, according to the Australia Bureau of Statistics. 'It's been an orderly correction,' said Mark Steglick, managing director of Gowings Properties, a Sydney property development company, who said that there had been few foreclosures or forced sales since the boom ended. 'There's not blood on the streets.' Looking ahead, local housing experts expect prices to flatten out, perhaps remaining stagnant for a number of years to allow gradually rising incomes to catch up with the sharply higher level of home values. But there are significant differences within the market that may provide some clues as to how housing booms elsewhere could run out of steam. Prices for investor-owned apartments have fallen considerably more than for owner-occupied houses. Nationwide, prices are down about 10 percent from the peak. The most expensive homes, particularly those along the coast, have held up better than the rest of the market. 'My jaw drops at some sales,' Mr. Steglick said, describing a house in Vaucluse, a posh Sydney suburb, that recently sold for $17 million Australian dollars ($12.7 million). The home does not even have direct access to the beach, though it does have spectacular views of the soaring Opera House and of the Sydney Harbor Bridge. It last sold in 2001 for 12.1 million Australian dollars. Australia is no stranger to booms and busts in housing prices. The latest boom began in the mid-1990's, following a bust brought about by the recession of 1990, one of the worst in Australia's history, and far more severe than the downturn in the United States at the time. Unemployment soared to more than 10 percent as interest rates reached as high as 17 percent. Those high rates knocked many potential buyers out of the market, but even more importantly they also saddled many existing homeowners with a greater debt than they had assumed when they took out their loan. House financing here differs significantly from the United States, where the 30-year fixed rate mortgage has been the norm and most adjustable rate mortgages delay rate increases for several years and then limit them to set annual amounts. In Australia, fixed rate mortgages are very rare. The standard mortgage is a variable, with the rate rising automatically whenever the central bank raises interest rates. So someone who borrowed at 12 percent in 1985 found that his monthly mortgage payments had gone up by nearly 50 percent five years later, when the rate was just over 17 percent. There was 'blood on the streets' then, with thousands of foreclosures and forced sales. The market remained stagnant until around 1996 or 1997, when prices began to rise, first in Melbourne, then in Sydney. As in the United States in the early 2000's, the primary driving force behind the housing boom in Australia was the decline in interest rates, which dropped to about 7 percent here by the end of 1997. Simultaneously, unemployment fell, continuing to shrink to as low as 5.5 percent today. Another factor driving house prices, especially in Sydney, is the quality of life. In surveys of the most desirable cities in the world, Sydney is regularly in the top 10. Moreover, not many major cities offer such a wide variety of beachfront properties, many of them attracting wealthy people from around the world. The increase in home values, and the expanding economy, also sent Sidney residents in search of second homes. In the late 1990's, the housing boom hit Byron Bay, which juts into the ocean, about 500 miles north of Sydney. 'It just flew in here,' Barbara Sexton, a real estate agent, said about the swift rise in interest in a beach community where the rich now mingle with writers, artists, backpackers and hippies, and dolphins frolic with surfers. 'I do believe this is the greatest boom we've had.' People would come to Byron Bay for two-week vacations, Ms. Sexton said, and spend the second week looking at property. The market has now softened, but limits on development in a town where the council is dominated by Greens, who are determined not to let the area go the way of the uncontrolled Gold Coast, an hour north, are likely to keep prices from falling significantly. A 700-square-meter piece of land on the beach recently sold for 1.8 million Australian dollars ($1.3 million), Ms. Sexton said. A modest three bedroom cottage on the water - 'beach shack' in the Australian vernacular - recently sold for 4.1 million Australian dollars ($3 million), double what it sold for five years ago. With interest rates falling and as the value of homes soared, homeowners began borrowing against their equity, whether to renovate or buy the latest flat screen television. It was a lending practice introduced here by Citigroup, and now followed by nearly every bank. The economy has continued to expand - it is now in its 14th consecutive year of growth - and with money and confidence, people not only bought their own homes, but properties for investment as well. In this, they have been actively encouraged by Australia's tax laws. In contrast with the United States, interest payments on an Australian home mortgage are not tax deductible. But for those who invest in property and rent it out, the payment is deductible as an expense against rental income. If total expenses exceed income, the loss can be offset against ordinary income. In a country where the top marginal tax rate is 48.5 percent, that provides a strong incentive to search for ways to reduce taxable income. For example, an investor who has $30,000 a year in rental income, and $40,000 in expenses, including the mortgage, can take a deduction of $10,000. But when the property is sold, the gain, quite substantial in recent years, is taxed as a capital gain at a rate of no more than 24 percent. 'The market was awash with people turning over properties,' said David Edwards, owner of the LJ Hooker real estate franchise in Palm Beach, an hour north of Sydney, where the rich and super-rich have holiday homes. A house, with a view over Whale Beach, sold for $1.7 million in March 2002, Mr. Edwards said. The owner put on a coat of paint, planted a few trees, and sold it four months later for $2.1 million. Nine months later, it sold for $2.5 million. In 2003, the governors of the Reserve Bank of Australia began trying to talk the market down, with speeches about households having too much debt and about the housing bubble. The Reserve Bank, the equivalent of the Federal Reserve in the United States, also went to commercial banks to examine their loan portfolios, and did something called 'stress testing.' Assume unemployment went to X percent, or the interest rates went to Y, regulators asked, could the bank handle it? The central bank found that banks were in pretty good shape, but the exercise made the banks more cautious about lending to property investors, said Mr. Cornish of Macquaire Bank. In late 2004, the central bank started raising interest rates, by a quarter point in November followed by another quarter point in December. There was another quarter point increase in March. 'They hit the brakes, lightly,' said Shane Oliver, head of investments strategy and chief economist at AMP Capital Investors, who estimated that the value of his house on the water in Avalon, a small suburb north of Sydney, has gone to $3 million, from $700,000 in 1995. But no one was sure of what was coming, and the fear was that rates would continue to go up. The psychological impact was just what the central bank wanted and was needed. The median price for a three bedroom house in Sydney has gone up only 0.2 percent so far this year. It has dropped 5.2 percent in Melbourne, according to the Real Estate Institute. The leveling out of housing prices is beginning to have a ripple effect on the rest of the economy. 'Housing equity withdrawal has now ceased,' the governor of the Reserve Bank, Ian Macfarlane, said in a speech in mid-June. That has contributed to a sharp slowdown in consumer spending. Some of the major retail stores, like David Jones and Coles Myer, seem to have been offering almost perpetual sales since November. Now the question on people's minds: is the decline over, or is the worst yet to come? Mr. Oliver thinks Australian house prices are still at least 25 percent overvalued, as measured by their historical values, and as a ratio to wages. It now takes 500 weeks of average wages to buy the typical home in Australia, Mr. Oliver wrote recently in his newsletter, much more than the 350 weeks, on average, required in the United States. Still, he is not predicting a crash. 'It's easier to trigger a panic in the share market than in the housing market,' Mr. Oliver said. 'People get attached to their homes.' While analysts express comfort with their predictions that the market will remain soft but not collapse, they are not cocky about it. A sharp increase in unemployment or interest rates could trigger an even sharper fall in real estate prices, they warn. 'We're still vulnerable to shocks,' Mr. Cornish said.

Subject: A Room With No View From: Emma To: All Date Posted: Mon, Jul 04, 2005 at 18:39:18 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/03/realestate/03cov.html?8dpc=&pagewanted=all A Room With No View By ANNA BAHNEY FOR many apartment dwellers, a home office is an indeterminate breed, a cross between a region of the house and a piece of furniture. Perhaps it begins as a docile desk with computer but grows into an unruly beast, covered in bills and power cords, spreading out from a corner of a room used primarily for something else, like cooking or sleeping. A real office would be nice, but what sense does that make, really, in a city where an extra bedroom can double the price of an apartment and push it beyond $1 million? Increasingly, there is a way to get that extra room, something more than a closet but less than a second bedroom - and much more affordable than paying for a true second bedroom. Call it an office or den, library or study, media room, combo room or guest room. Just don't call it a bedroom. And don't expect a view. Apartments with windowless rooms are becoming more common as office buildings are converted to condos. Because each floor of an office building is typically quite large and not designed to have all of its space windowed, there are rooms that simply cannot command a view, no matter how creative the floor plan. The appearance of this new kind of room has also created a new size of apartment, a half-size between one- and two-bedroom apartments. With some priced nearly $500,000 less than similarly sized two-bedrooms in the same building, they come at a half-size price, too. But searching for such a place is difficult, as it doesn't yet have its own name on even the most evolved real estate search engines. 'I was looking for a two-bedroom, two-bath,' said Monica Mitro, executive vice president for public relations at Victoria's Secret. She was looking for a modicum of the space lost after moving out of a large house in Ohio, and because she had gone through renovations on that house, she wanted new construction in New York. Her friend Donald Mikula, a celebrity hair and makeup artist, told her about apartments available at the Lion's Head Condominium, a former office building at 121 West 19th Street between the Avenue of the Americas and Seventh Avenue in Chelsea, where he was buying. When she arrived on the third day of sales, which began in April, only eight of the 66 apartments were left. 'It reminded me of a Barneys shoe sale,' Ms. Mitro said of the atmosphere, 'although I've spent more time picking out shoes than this apartment.' She signed a contract for a 1,600-square-foot one-bedroom with two baths and a home office. It was not worth it to her to buy the extra window for the few nights a year she has overnight guests or for the little job-related work she would do in the room. She plans to keep it from being too 'officey' by creating a music room for playing her cello. 'This, to me, is the ultimate one-bedroom,' she said. Mr. Mikula and his wife, Mary Catherine, are trading in their two-bedroom, two-bath in Chelsea for a one-bedroom with a den at Lion's Head. It is about 100 square feet smaller but more affordable and, he said, more flexible. 'Our whole feeling is about making it seamless,' Mr. Mikula said of the den, where he plans to put a pullout sofa, a computer with wireless Internet connection and a flat-screen television with mini surround sound. His 11-year-old daughter, Sofia, will stay there when she visits several times a year from Europe. 'It's a treat for her,' he said. 'She's in the media room, and she gets the best TV.' The list of backup buyers for the 20 apartments at Lion's Head with extra rooms like Ms. Mitro's and Mr. Mikula's stretched 100 deep with people attracted to the chance to get a full room at a reduced price. Indeed, a 1,553-square-foot two-bedroom, two-bath went for $1.525 million and a one-bedroom with home office and two baths (one has a shower but no tub) went for $1.17 million. That's $355,000 for a window and the legal right to call it a bedroom. At the Grand Madison, a 192-unit condominium at 225 Fifth Avenue in the former Gift Building, at the northwest corner of Madison Square Park, the gap can be even greater. There is a $485,000 difference between a 1,280-square-foot two-bedroom unit available for $1.81 million on a high floor and a slightly larger 1,320-square-foot one-bedroom with a den on a middle floor. Both have two baths and neither has a park view. The difference in price on those same two apartments on a middle floor would be $285,000. Of course, from a developer's perspective - in this case Elad Properties - a one-bedroom with an office garners $385,000 more than a similarly sized straight one-bedroom. It is a rare meeting of the minds between developers and buyers, with home offices solving the odd problem of a surfeit of space: developers are able to create apartments out of buildings designed for commercial use and buyers have a space for the entertainment system or computer that have virtually become members of the family. Kenneth S. Horn, president of Alchemy Properties and developer of Lion's Head, said that the home office presented itself as an option because the floor plates of the building were so deep - 100 feet front to back. 'Twenty-five by 25 feet, that is a huge living room; there was no reason to make it 35 by 35,' Mr. Horn said. 'I know it sounds crazy. It is loft-type housing, but it gives people a lot more flexibility to have a separate room.' Mr. Horn sees such a demand for these multipurpose rooms that 13 of the 45 apartments in a new construction condo he's building at 199 State Street in Brooklyn will have windowless dens. When sales start in the late fall, every apartment, including the two-bedroom, two-and-a-half-bath with a den, will be priced under $1 million. Still, most home offices are found not in new construction but in conversions of buildings from the turn of the 20th century. Steven Kratchman, an architect working on a condo conversion called the Morgan Lofts, at 11 East 36th Street, said that the solution usually presents itself when a building is more than 65 feet deep, the length of a typical apartment. But it isn't easy, because dens are discretionary and require approval from the Department of Buildings. 'Everything that is discretionary raises a question,' Mr. Kratchman said. 'Everything that is as of right is straightforward and approvable.' According to the New York City building code, he explained, the windowless rooms are classified as occupiable rooms, like bathrooms and kitchens with their own set of rules for ventilation and light, rather than habitable rooms, like living rooms and bedrooms. (Mr. Kratchman, by the way, knows firsthand about windowless rooms. He uses the one in his Hoboken, N.J., apartment for desk space, a library and a guest room. 'I have my closet in there, because my wife uses the one in our bedroom,' he said.) 'It can be seen as an exaggerated one-bedroom or an ersatz two-bedroom, but we can't sell it as a bedroom,' said Richard Cantor, a principal at the residential sales firm Cantor & Pecorella, which handles sales in several buildings that offer home offices. His current properties include the O'Neill Building, a 49-unit condo in the cast-iron O'Neill department store built in 1887 at 655 Avenue of the Americas between 20th and 21st Streets; the Downtown Club, a 288-unit condo in the 45-story former Downtown Athletic Club, built in 1930 at 20 West Street in Lower Manhattan; and the Grand Madison. 'It is a neglected category,' Mr. Cantor said of the space he calls a jack-of-all-trades room. 'A large number of people are not looking for a second bedroom, but they want a place where they can get away and do whatever they do in an office, whether it's clutter it or just have a computer and a clear space to think about things.' Elena Compton, a 21-year-old investment banker who is finishing her final year at Duke University, bought one of the one-bedrooms with a home office at the O'Neill Building last month. While she doesn't plan to work much at home, she said, 'it will be nice to have a space for the computer and not be staring at it from bed.' The developer of the Downtown Club, the Moinian Group, has designed that tower for people like Ms. Compton - young professionals climbing up the financial industry ladder. The building will have only one-bedrooms and studios, but more than a quarter of them will have one home office, some will have two and many will be loftlike. They will be priced at $400,000 to $1.5 million when sales begin this fall. The building will also have a 12,000-square-foot fitness center and a social club atmosphere with a lounge and pool tables. Joseph Moinian, the president of the development group, said that the extra room is naturally appealing to people with hobbies. Or, he said, 'maybe I like a lot of Italian suits; I could make it a closet, or books - I've seen the most magnificent libraries.' But there is a fiscal bonus for people who use it for business, Mr. Moinian said. The zoning for some loft conversions, particularly in the lower reaches of Manhattan, allows for up to 49 percent of the residence to be used for a home occupation. 'Zoning in Midtown only allows you to use 25 percent,' he said. The economic benefits of home offices in the resale market are only beginning to become apparent, but if Jeff McLaren's experience is any indication, appraisers may have to start a separate statistic for apartments with windowless rooms. In 2000, Mr. McLaren, a partner at a health care management consulting firm, bought a one-bedroom with a den in the Chelsea Mercantile building, at 252 Seventh Avenue, at 25th Street, an early conversion in that area that turned a 1906 building into 354 condos. Now, only five years later, his apartment recently went into contract at $1,270 a square foot, more than double the $460 a square foot he paid. What's more, his sale is higher than similarly sized one-bedrooms in the building without home offices. 'The building's belief at the time it was converted was that the more open units would be worth more,' he said, describing other apartments with fewer but larger rooms. 'I disagreed with them. I bought the cheapest one in the building - the one with a home office. So far I appear to be right.'

Subject: Dr. Johnson's Revolution From: Emma To: All Date Posted: Mon, Jul 04, 2005 at 16:15:37 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/02/opinion/02lynch.html?ex=1121054400&en=2bccfded95fe5a7b&ei=5070&emc=eta1 Dr. Johnson's Revolution By JACK LYNCH New Brunswick, N.J. AS the nation celebrates one anniversary on Monday, the English language is celebrating another. Samuel Johnson's Dictionary of the English Language was published 250 years ago. And it is fair to say that the book and the nation have grown up together, and that the one can help us understand the other even today. Johnson may seem an unlikely guide to America's history; early Americans had what can be charitably described as a love-hate relationship with him. He lived from 1709 to 1784, during which time America transformed itself from a few insignificant colonies on the far side of the planet to an independent nation that defeated the world's most powerful military and began a daring experiment in popular democratic representation. While Americans were proud of all this, Johnson was unimpressed. He disliked the rebel colonists for their hatred of authority, their unseemly scramble for money, and especially their dependence on slaves. 'I am willing to love all mankind, except an American,' he wrote. 'They are a race of convicts, and ought to be thankful for anything we allow them short of hanging.' Likewise, many colonists saw in Johnson everything they disliked about the mother country - and yet they continued to read, and even admire, the work of this propagandist for King George III. George Washington's copy of Johnson's dictionary survives, his signature prominent on the title page. Thomas Jefferson owned one; in 1771, when he gave a friend a list of books to 'fix us in the principles and practices of virtue,' the dictionary was on it. Benjamin Franklin met Johnson in London in 1760, at a monthly meeting of the Associates for Founding Classical Libraries and Supporting Negro Schools, a group founded by the abolitionist Thomas Bray. Soon after, Franklin gave this advice to a friend: 'It would be well for you to have a good dictionary at hand, to consult immediately when you meet with a word you do not comprehend.' As these members of the founding generation relied on Johnson when they wrote their most important works - the Declaration of Independence, the Constitution, the Bill of Rights and the Federalist Papers - we would be wise to look to Johnson when we read them. But why Johnson's dictionary instead of its many rivals? One reason is timing. The dictionary was first extensively revised in 1773, so it was the most influential and up-to-date language guide at that pivotal time. But it was more than an accident of chronology - the very method Johnson used to put his book together undoubtedly appealed to the American founders. Johnson wrote his gigantic dictionary, with some 42,000 entries, nearly single-handedly, giving him the reputation of a linguistic dictator, an egotistic tyrant out to 'fix' the language. But this view misreads the man; he was in many ways more enlightened than any of his predecessors. Johnson approached each entry with the same overarching question: What does a word mean? You can answer this question many ways. You can turn to Latin roots, consult a committee of authoritative scholars, or follow logical principles about things like double negatives. But Johnson's answer was simpler: a word means whatever the best writers say it means. He was convinced that no one - no emperor, no king and certainly no dictionary writer - had the authority to rule on meanings. Our language is the common property of all who have used it, and meanings come not from fiat but from precedent. So before writing his definitions, Johnson spent years reading the great authors of the English tradition. And it is these (mostly) men who did the real work: they told him what the words meant, and he in turn told us. They are the ones who 'fixed' the language, and what is often called a tremendous act of egotism on Johnson's part in fact turns out to be one of humility. Thus this dictionary, written by a man who detested American democratic principles, is paradoxically almost democratic in its organization. It is fitting that a young nation trying to shake off a king would be attracted to a lexicographer who rejected a tyrannical vision of the language. The other advantage of Johnson's view of the language as an evolving entity is that his dictionary remains a living document, even today. Since at least 1785, according to federal court records, American lawyers and legal scholars have been using it to unpack the meanings of our founders' most important documents. In the last few years, Justices Ruth Bader Ginsburg, John Paul Stevens, Clarence Thomas and Chief Justice William H. Rehnquist of the Supreme Court have quoted Johnson in their opinions. For example, when the court debated in 1998 whether the Constitution mandated that census-takers count every citizen, the justices turned to Johnson to determine what the framers had in mind when they wrote the word 'enumerate.' In the copyright dispute at the center of Eldred v. Ashcroft of 2003, the plaintiff argued that the extension of copyrights went beyond the language in the Constitution, which called for 'limited' terms. Justice Ginsburg ruled against him: 'The word 'limited,' however, does not convey a meaning so constricted. At the time of the framing, that word meant what it means today.' She attributed her definition to 'S. Johnson.' America's first native-born lexicographer, Noah Webster, had Johnson in his sights when he wrote his overtly patriotic American Dictionary of the English Language in 1828, insisting that the need for 'a dictionary suited to the people of the United States is obvious.' In some matters, like the American tendency to use the suffix '-ize' rather than the British '-ise,' Webster has prevailed. But his terse work is little more than a utilitarian spelling guide. Samuel Johnson's dictionary, as well as his theory of language, is not only far more entertaining, but also remains an invaluable guide to what our founders had in mind when they set the democratic experiment in motion. Jack Lynch, a professor of English at Rutgers University, is the editor of 'Samuel Johnson's Dictionary: Selections from the 1755 Work That Defined the English Language.'

Subject: Who is borrowing to Zimbabwe? From: Mik To: All Date Posted: Mon, Jul 04, 2005 at 16:07:45 (EDT) Email Address: Not Provided Message: Who is irresponsible enough to borrow to the government of Zimbabwe? In the wake of the G8 summit focused on Africa, one of the key issues is good governance. Africa has 53 countries and many are showing signs of good governance. But Zimbabwe is the big spoiler. Their recent act of displacing 1 million people is simply unbelievable. The fact that we allow this to happen and not focus our leaders to be more strict with these governments (and other governments who support this action) is even more unbelievable. I was stunned to read the article (below) and actually read that the government of Zimbabwe is borrowing in a big way. Who is irresponsible enough to lend money to this gruesome dictator? Financial Mail 1 July 2005' Spare a thought for Anna Tabaijuka, Tanzanian economist and UN secretary-general Kofi Annan's special envoy to Zimbabwe. She has the task of writing a report on the impact of President Robert Mugabe's Operation Murambatsvina (Drive Out Trash). Whatever her report says, she will be in trouble. On Monday, British prime minister Tony Blair, describing the situation in Zimbabwe as 'a disgrace', said he hoped her report would be the basis of referring the matter to the UN security council. In other words he, along with some UN top brass, is hoping for a sufficiently damning assessment to force at least some African leaders to abandon their support for Zimbabwe's government. For his part, in announcing a Z$3 trillion (US$320m) urban regeneration programme, Mugabe hopes he has stolen the initiative in the clean-up controversy by promising that the 250 000-300 000 people who lost their homes and, in many instances, their livelihoods, will in fact be better off. Last weekend, he promised a 'positive and corrective campaign' to provide 'more decent accommodation and business shells and stalls'. The government says it will provide 1,2m new homes and residential plots by 2008. Except for 'a few negative people', he says, the operation has been 'well-received by the majority of our people'. With hundreds of African and international and human rights organisations putting forward a very different picture last week - describing the campaign as one of 'gross and widespread human rights violations and appalling human misery' - Tabaijuka will find it impossible to produce a report that both sides will accept as objective. That she is in Zimbabwe at all is a measure of the pressure on Annan from the West to 'do something' about Zimbabwe. But because the African Union believes the clean-up campaign is a purely internal matter that has nothing to do with the UN, or for that matter with the New Partnership for Africa's Development, Annan has little leverage. Even were Tabaijuka to produce a damning report, which is unlikely, the probability is that the operation will soon fade from the headlines and public consciousness. Nor is Zimbabwe likely to feature as more than a footnote at next week's G8 summit at Gleneagles in Scotland. British foreign secretary Jack Straw and EU Commission president Manuel Barroso have already been warned off by Pretoria, while for all his Downing Street bluster on Zimbabwe this week, Blair has put his personal reputation on the line to secure a deal of 100% debt cancellation and the doubling of aid to Africa's poorest countries. Neither he nor President Thabo Mbeki can allow events in Zimbabwe to derail their grand design for Africa. Though all this might suggest yet another victory for Mugabe, it overlooks his Achilles heel - the economy. No-one knows just how much the 'clean-up' is costing. Mugabe has put a value of Z$3 trillion over three years on his reconstruction programme, but the longer-term cost of unemployment, reduced spending power, and an estimated 300 000 pupils no longer attending school has not been assessed. There is no official estimate of the size of the informal sector in Zimbabwe, but a 2002 World Bank study suggested informal activity made up 59% of GDP - the highest in sub-Saharan Africa. Some economists believe that, at most, the informal economy is no more than half that, putting a value - at current exchange rates - of around US$1,8bn on informal activity. Yet even on the most conservative estimate the campaign could cost 7% of GDP, compared with the 5% government promises to spend on reconstruction - in a year in which the IMF team that visited Zimbabwe this month believes GDP could fall by as much as 7%. The surge in government spending and borrowing comes at a time when government's domestic debt has quadrupled in six months and when - in one day last week - the central bank tried to float Z$2,3 trillion in treasury bills, equivalent to almost 4% of GDP, at interest rates of 140%-156%. Inflation, at 144%, is forecast to accelerate, while the economy slows in the aftermath of the drought and Murambatsvina. Even if Mugabe manages to salvage a political victory from Tabaijuka's visit, his economic problems are steadily worsening.

Subject: Re: Who is borrowing to Zimbabwe? From: Emma To: Mik Date Posted: Tues, Jul 05, 2005 at 06:15:42 (EDT) Email Address: Not Provided Message: Governments can sell debt to financial institutions in their own countries, or buy debt with money they create. The financial institutions are in no position to refuse government requests. Even though creating money may cause self-defeating inflation, governments can do so. The situation in Zimbabwe is terribly saddening.

Subject: An Island, A House, A Family, Summer From: Emma To: All Date Posted: Mon, Jul 04, 2005 at 14:02:36 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/03/realestate/03habi.html?pagewanted=all July 3, 2005 An Island, A House, A Family, Summer By PENELOPE GREEN JILL NELSON'S family home, in the town of Oak Bluffs on the island of Martha's Vineyard, is at the corner of Ocean and Beach. So placed, it is the very embodiment of the word 'summer,' especially when used as a verb - the tang of its interiors as much a madeleine to sandy childhoods as a whiff of Coppertone. It faces east over Nantucket Sound and north toward the neatly clipped turf of Ocean Park (that's the 'Amity' town green you'll remember from 'Jaws,' and it still flaunts a lacy white gazebo at its center). The house is a town landmark, rangy, matronly and shingled, 12 rooms with a broad porch skirt and a dainty white fence, the leader of the ring of the more girlish and diminutive gingerbread houses that circle the park. Like 'The Big House,' the star of George Howe Colt's 2003 memoir of summers past, it is an archetype and an idea as much as it is board, shingle and lathe. Colt's Cape Cod house held a history of fading WASP fortunes; Ms. Nelson's house, a major character in her gentle memoir, 'Finding Martha's Vineyard: African-Americans at Home on an Island' (Doubleday; $27.50), frames a parallel tale of privilege, but with a happier ending. Within it, Ms. Nelson, the author of the rather more feisty memoirs 'Volunteer Slavery: My Authentic Negro Experience,' a hilarious and deadpan account of her years as a reporter at The Washington Post, and its follow-up, 'Straight, No Chaser: How I Became a Grown-Up Black Woman,' weaves her own family history on the island with the reminiscences of other African-American regulars, like the writer Bebe Moore Campbell, the Washington power broker Vernon Jordan and Tonya Lewis Lee - a lawyer, television producer and relative Vineyard newcomer who first arrived with her husband, Spike Lee, in 1992. 'Here, we were not the only one,' writes Ms. Nelson, 'or one of the very few, as was so often the case where we lived, worked and went to school. There was no need to be the exemplary Negro here, or to show white people that we were as good or better than they were, to conduct ourselves as ambassadors for integration and racial harmony.' Ms. Nelson's book is also a coming-of-age tale - or a coming-to-terms tale - about how life in a family home goes on without its matriarch. Ms. Nelson, the third of four children, writes about how her mother, A'Leila Ransom Nelson, a large personality in a tiny frame and Jackie O. sunglasses, had ruled the family's island summers beginning in 1955. Since her mother's death in 2001, Ms. Nelson, 53, is finding her own way here. Not that she's having any trouble. In the last week of June, Ms. Nelson, ever competent, always feisty, was simultaneously reminiscing, painting a wicker table, reading the directions for and assembling a mini Weber grill, and swinging gently on the wicker swing on the covered front porch - her mother's favorite perch. 'I used to tease her that I'd have her stuffed when she died and sit her right here,' Ms. Nelson said; she described her mother's backhanded wave, which snagged most passers-by. Instead, Ms. Nelson bought a bench from the Friends of Oak Bluffs and had it inscribed with her mother's name and the words 'A Queen Among Women.' It is planted square in the frame of the porch's ocean-facing window. That afternoon, it was host to a constant stream of ocean gazers, while its sisters to the left and right remained empty. 'My daughter, Misu, says, 'It's popular, just like Grandma,' ' Ms. Nelson said. Ms. Nelson's mother was named for A'Leila Walker, daughter of the famous hair-care millionaire Madame CJ Walker, for whose company Ms. Nelson's grandfather was the general manager. Early advertisements for the company fill an upstairs hall here. When they were teenagers, Ms. Nelson, her sister and their two brothers began to address their mother as 'Leil.' In 1968, Leil bought this house with her husband, Stanley Earl Nelson, a dentist turned spiritual seeker, for $35,000, Ms. Nelson said. Ms. Nelson's father had proclaimed it his since their first summer here in 1955. 'He is as large of a personality as my mother,' Ms. Nelson said. When Ms. Nelson's parents separated in the early 1970's, her father spent the winters here, inhabiting just the back two bedrooms (there are six), the kitchen and the lofty attic. The attic is now filled with a few beds - a teenage crash pad - and a pair of undulating and strangely hairy lime green chaises, relics from the 1970's that face north toward Buzzards Bay. Mrs. Nelson, the president of the Madame CJ Walker Manufacturing Company, based in Indianapolis, and a librarian at City College, came every summer from New York City with their four children. When her parents finally divorced in the late 1970's, Ms. Nelson said, her mother bought her father out of the house, then valued by a judge at $90,000. In a gesture that speaks volumes about Ms. Nelson's mother's personality, and her commitment to her family, her will dictates that the house can be sold at market rate only if three of the four children agree, and that if one child wishes to sell his or her interest the value of that share not exceed $22,500, or one quarter of the figure dictated by that judge so many decades ago. (The house's market value is now more than $1.5 million, with annual taxes of $15,000.) Ms. Nelson raised an eyebrow and her paintbrush and said dryly, 'She's ruling us from the grave.' A big house and a long summer can accommodate four grown children and their families, said Ms. Nelson, whose grandchild, Busayo, is 3 and who will arrive in August with his mother and his father, Yohance Maqubela. Though Ms. Nelson lives in New York City with her partner, Flores Forbes, chief strategic officer of the Abyssinian Development Corporation, she is mostly here without him. 'He's not that into the opening-up ritual,' Ms. Nelson said, referring to her annual spring visit to the house, the first of the year, once performed with her mother. Mr. Forbes is not the handyman type, Ms. Nelson said. 'I had to confront my own sexism,' she said. 'I want all men to be handy. But he's not and that's O.K.' She flipped the new grill, now fully assembled, onto its new legs. Ms. Nelson is certainly handy enough. In the last decade, while her mother was still alive, Ms. Nelson's father returned to the house, too, coming for a few weeks every summer. 'My mother was a serious cook, she'd make baby back ribs or lamb, the sort of meal with one starch and the vegetables, and there were always leftovers,' Ms. Nelson said. 'And my father, the wheatgrass drinker, would get up in the night and eat those leftovers.' After more than half a century and four children together, these things happen. A big house, like a long life, can accommodate many contradictions.

Subject: Spotted Sandpiper From: Terri To: All Date Posted: Mon, Jul 04, 2005 at 12:54:51 (EDT) Email Address: Not Provided Message: http://www.calvorn.com/gallery/photo.php?photo=4695&u=13|9|... Spotted Sandpiper New York City--Central Park, The Pool.

Subject: Immature Summer Tanager From: Terri To: All Date Posted: Mon, Jul 04, 2005 at 08:35:47 (EDT) Email Address: Not Provided Message: http://www.calvorn.com/gallery/photo.php?photo=4427&u=5745|15|... Immature Summer Tanager New York City--Central Park, North Woods.

Subject: Vanguard Returns From: Terri To: All Date Posted: Thurs, Jun 30, 2005 at 18:23:05 (EDT) Email Address: Not Provided Message: http://flagship5.vanguard.com/VGApp/hnw/FundsByName Vanguard Returns 12/31/04 to 6/30/05 S&P Index is -0.9 Large Cap Growth Index is -1.5 Large Cap Value Index is 1.3 Mid Cap Index is 4.0 Small Cap Index is 0.9 Small Cap Value Index is 1.7 Europe Index is -0.7 Pacific Index is -3.4 Energy is 22.7 Health Care is 5.4 Precious Metals 5.6 REIT Index is 6.2 High Yield Corporate Bond Fund is 0.8 Long Term Corporate Bond Fund is 7.7