December 30, 2006

"It won't change anything"

 
 
Americans cheer Saddam death, but see little change

By Andrea Hopkins

CINCINNATI (Reuters) - Americans welcomed the execution of Saddam Hussein as justice served but the hanging did little to shift focus from the debate over America's future in Iraq.

"I guess it's one less person in the world we have to deal with, but it's kind of sad that this is still at the forefront with all the worse things that are going on," Cincinnati university student Erin Faulk, 20, said Friday night.

"I don't know if it will change anything. I don't think it will," she added.

Saddam was executed by hanging shortly before 10 p.m. EST Friday/(0300 GMT Saturday). The former Iraqi president was convicted in November of crimes against humanity for the killings of 148 Shi'ite villagers from Dujail after a failed assassination bid in 1982.

A poll this week showed 82 percent of Americans supported the execution, the highest support of six nations surveyed. The Harris Interactive online poll, conducted November 30 to December 9, found 69 percent support for the execution in Britain, 58 percent in France and 53 percent in Germany.

U.S. television showed scenes of cheering and flag-waving Iraqi-Americans in the Detroit suburb of Dearborn, Michigan, home to the largest U.S. Arab-American community.

In the dusty town of Douglas, Arizona, on the border with Mexico, Saddam's death was welcomed.

"I wouldn't mind hanging Saddam myself, I think it's a good thing," said Lynn Kartchner, a Vietnam veteran and gun shop owner.

"I think there will be less long-term violence in Iraq now as there is no chance of him coming back to power -- they have cut off the head of the snake and his followers have no leadership," Kartchner added.

President George W. Bush called the execution an important milestone on Iraq's path to democracy but said it would not end the violence there.

It was also unlikely to ease Americans' concern about U.S. involvement in Iraq, where scores of civilians are killed daily and nearly 3,000 U.S. troops have died.

"It was long overdue. Saddam was certainly guilty and he got what he had coming," said Trini Valencia, a 39-year-old banker in Cincinnati. "But other people should be standing next to him. Bush should be standing right next to him, because he's doing the same thing -- killing his own people."

Cincinnati student Alyssa Garrett, 18, said Saddam's death would not stem the bloodshed in Iraq.

"Sure we got him and all that, but we were there for all the wrong reasons," said Garrett. "It won't change anything."

(Additional reporting by Tim Gaynor in Phoenix)

 
 
 
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December 27, 2006

Democrats point to America's Health Care needs,...


 
Shift in Congress Puts Health Care Back on the Table
 
 
Expecting a Mixed Reaction Across the Aisle,
Democrats Plan to Offer Ideas on Drug Cost, Safety

By Christopher Lee
Washington Post Staff Writer


Health care is set to return to the national political stage in 2007, setting up partisan clashes in Congress that could end with rare vetoes from President Bush and help to define the 2008 presidential campaigns.

After years in which Iraq and national security dominated the debate -- and memories of the 1994 Clinton health plan debacle made major health-care changes politically radioactive -- the return of Democratic control in the House and Senate and the ramping up of the presidential campaigns are expected to bring health policy back into the legislative mix.

Two of the House Democrats' top priorities in their "Six for '06" campaign agenda involved health care. Within the first 100 hours of the new Congress, Democratic leaders intend to pass bills in the House that would lift restrictions on federally funded embryonic stem cell research and require the government to negotiate for lower prescription drug prices for Medicare beneficiaries. Their counterparts in the Senate, where it takes 60 votes to keep a bill moving, say those issues will be on the agenda there, too, but are unlikely to advance as quickly.

Key lawmakers and their aides in both parties say other health-policy initiatives likely to surface include renewing funding for the state-federal health-insurance program for children of the working poor, expanding access to health insurance generally, and beefing up drug-safety efforts at the Food and Drug Administration. Also in the works are efforts to promote electronic medical records, ease restrictions on the importation of low-cost prescription drugs from Canada, devise a better way of paying doctors under Medicare and improve the subsidized drug coverage for low-income Medicare beneficiaries.

"There is really a lot of excitement on our side of the aisle in Congress," said Wendell Primus, senior policy adviser on budget and health issues to House Speaker-elect Nancy Pelosi (D-Calif.). "The members are ready to get down to work."

Sen. Charles E. Grassley (R-Iowa), the top Republican on the Senate Finance Committee, said that several issues are ripe for bipartisan compromise but that others, such as drug-price negotiations, will be more contentious. Expanding coverage for the uninsured also will be difficult, he said, "because Democrats don't like the small-business-insurance reform that Republicans do, and they are never going to be able to get a universal plan because it gets right back to Hillary Care, and everybody knows what a debacle that was."

Kevin Smith, spokesman for incoming House Minority Leader John A. Boehner (R-Ohio), said Republicans would try to work with Democrats, but "if they start charting a path that we believe is not right for the American people, then there are going to be some very interesting battles on Capitol Hill."

Passage of the initiatives in many instances is far from certain. A few face strong opposition from the White House and in some cases would require significant new funding at a time when Democrats say they want to demonstrate fiscal responsibility by reining in the federal budget deficit.

Still, even measures that do not win approval can be recycled into political grist for the 2008 presidential campaign, in which health care is expected to be a major issue. When Sen. Ron Wyden (D-Ore.) said this month that he would introduce legislation in the next Congress to create a centrally financed system of private health insurance for every American, his goal seemed as much to influence the presidential debate as to win passage of a bill that many analysts consider a long shot.

"Medical costs are hitting every part of this nation like a wrecking ball," Wyden said. "The last time America tried to fix health care was in 1993 and 1994. . . . Getting this on the presidential agenda so that candidates of both political parties have got to get beyond position papers is an especially important point."

The debates will unfold against a backdrop of growing dissatisfaction with the health-care system and mounting frustration over rising costs. Fifty-nine percent of 1,000 people surveyed by the Employee Benefit Research Institute between May and June rated the nation's health care system as "poor" or "fair."

Census figures show that a record 46.6 million Americans, including 8.3 million children, had no health insurance in 2005, up from 45.3 million in 2004. Meanwhile, premiums for those with coverage were up 7.7 percent in 2006, to $11,480 for a family of four in employer-sponsored plans.

A poll by the Harvard School of Public Health and the Kaiser Family Foundation found that majorities of Democrats, Republicans and independents want government to help lower health-care costs.

The question is whether and how such public sentiments will translate into political action. Here is a look at some of what will be on the agenda in the new Congress:

? Medicare prescription drug price negotiations. Proponents, mainly Democrats, argue that repealing a provision in the 2003 Medicare drug benefit law and forcing the Bush administration to haggle with drug companies over prices could save billions of dollars a year. But Democrats no longer say the savings would be enough to fill the "doughnut hole," the gap in coverage during which beneficiaries are responsible for all drug costs.

Opponents favor the current system, in which private insurers negotiate prices with drug companies. They say government negotiations would amount to price controls and be logistically difficult and might reduce seniors' choice of drugs. Prospects for passage are better in the House than the Senate, where incoming Senate Finance Committee Chairman Max Baucus (D-Mont.) has committed only to holding hearings on the idea. Bush opposes government negotiations, and some Democrats expect him to veto any bill to create them.

? Stem cell research. In July, Bush used the only veto of his presidency so far to quash a bill that would have lifted federal funding restrictions on embryonic stem cell research. Scientists say embryonic cells are more versatile than adult stem cells and are promising in the treatment of paralysis and many diseases because they have the potential to develop into any tissue or organ. Bush said that the bill "would support the taking of innocent human life in the hope of finding medical benefits for others" and that it "crosses a moral boundary that our decent society needs to respect." Advocates in both parties say the bill will pass again -- but many expect another veto.

? State Children's Health Insurance Program. There is bipartisan support for reauthorizing this 10-year-old program that provides health coverage to more than 4 million children whose families do not qualify for Medicaid but cannot afford insurance on their own. The fight will be over how much money to add to the $5 billion annually that the federal government now spends on the effort. Experts say at least $12.7 billion more is needed over the next five years just to keep covering the same number of children. Some Democrats have discussed using the program to expand coverage to some uninsured adults -- a move that would add billions more in costs and bring stiff opposition from Republicans, who say the program should focus on attracting more eligible kids.

? Health information technology. Both the House and Senate approved bills in the last Congress to promote the use of electronic health records and other information technology, in part by setting in motion efforts to develop standards for data storage and ensure that different systems can communicate with one another. But disputes over privacy concerns and potential financial conflicts of interest if hospitals were to sell such technology to their doctors scuttled attempts to reconcile the two bills. Lawmakers say they are confident they can overcome those hurdles and win bipartisan final approval in the 110th Congress.

? Drug safety. Lawmakers of both parties have complained that the FDA has fallen short in monitoring drug safety. They cite the 2004 withdrawal of the painkiller Vioxx because it raised the risk of heart attacks as one example. Leaders of the Senate health committee have signaled that they will push for changes on that front when the panel considers reauthorizing a law that allows the FDA to collect fees from drug companies to speed the new drug-approval process.

 

© 2006 The Washington Post Company
 
 
 
 
 
 
 
 
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December 24, 2006

Remember Christ at Christmas,....


 
Remember Christ at Christmas: Pope

By Philip Pullella


VATICAN CITY - Pope Benedict urged the world on Sunday not to shut Christ out of Christmas.

Speaking at his Sunday blessing the Pope returned to a theme that has preoccupied him -- the commercialization of Christmas.

"May his birth not find us busy celebrating Christmas forgetting that he (Jesus) is the very person at the center of the feast," he told thousands of pilgrims and tourists in St. Peter's Square on Christmas Eve.

Ahead of the second Christmas of his pontificate he urged his listeners to remember the many people around the world who would pass it "in solitude, in sickness and in suffering".

The real spirit of Christmas was a commitment to "overcome prejudices, break down barriers and eliminate situations that pit individuals and people against each other in order to build a world of justice and peace together", the Pope said.

In recent weeks he has spoken out against the decision by some state schools in Italy not to build the traditional nativity scene for fear of offending non-Christians in a multi-racial population.

The Vatican's own larger-than-life nativity scene -- featuring figures of the baby Jesus, Mary, Joseph, shepherds, animals and three kings bearing gifts -- was due to be unveiled in St. Peter's Square on Sunday afternoon.

The Pope will celebrate midnight mass in St. Peter's Basilica, Christendom's largest church, for thousands of people. Large television screens have been put up in the square for those who do not find room inside.

On Monday he will deliver his traditional "Urbi et Orbi" (to the city and the world) message and blessing to crowds in St. Peter's Square.

 

 Related Article 


 

 
 
 
 
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December 18, 2006

Hungry and Homeless in America

 
More Americans Hungry, 
Homeless in 2006- Mayors

By Lisa Lambert

More Americans went homeless and hungry in 2006 than the year before and children made up almost a quarter of those in emergency shelters, said a report released on Thursday by the U.S. Conference of Mayors.

"The face of hunger and homelessness right now ... is young children, young families," said the conference's president, Douglas Palmer, the mayor of Trenton, New Jersey.

The survey of 23 cities found civic and government groups received, on average, 7 percent more requests for food aid in 2006 than in 2005, following a 12 percent jump in 2005.

Requests for shelter rose by an average of 9 percent in 2006, with requests from families with children rising by 5 percent. More than half the cities said family members often had to split up to stay in different shelters.

As the numbers who could not buy their own food grew, more than half the cities, including Los Angeles and Boston, said groups spread resources farther by giving less food to individuals or cutting the number of times people could receive help. The group estimated 23 percent of requests for emergency food assistance simply went unmet.

Franklin Cownie, the mayor of Des Moines, Iowa, who worked on the study, said he was troubled that more than a third of the adults asking for food aid were employed.

"If you look at the data, you'll find folks that have jobs that don't have enough money to feed themselves," he told reporters.

People remained homeless for an average of eight months in 2006, the report said. Trenton had the longest span, with those in poverty spending an average of 22 months in cars and shelters or on the street.

The survey relied on census statistics along with data that city officials collected from local agencies.

Calling the report "not so much science as perception," the United States Interagency Council on Homelessness, which includes state and federal agencies, said in a statement nearly 30 cities were reporting reduced homelessness due to a federal program run in partnership with the Conference of Mayors.

It said the Bush administration was also working to help connect homeless people to government agencies and private aid groups.

In the mayors' report, Cleveland was one of the cities that saw demand for food assistance drop in 2006. Officials said it was still much higher than in 2000, before the city experienced an economic downturn.  From 2000 to 2005, the number of people using food stamps, or federal subsidies to cover groceries, increased there by 29 percent.

Food stamps and other public nutrition programs account for 60 percent of the U.S. Agriculture Department's spending. The USDA said almost 11.2 million U.S. households received food stamps in 2005.

Congress is expected to consider changes to the food stamp program as part of broad-ranging agriculture legislation in 2007.


Additional reporting by Charles Abbott

Copyright 2006 Reuters
 
 
 
 
 
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December 16, 2006

iEarth,...

NASA overwhelmed by climate data


NASA's climatologists have an enormous problem: when it comes to data on the atmosphere, they have too much of it.

To help understand climate change, NASA has created its Earth Observing System (EOS), made up of a dozen satellites plus a host of weather balloons and ground-based sensors that collect data such as air temperatures, water-vapour densities and aerosol concentrations. Terabytes of such measurements have been streaming in each day, and the agency was quickly swamped with so much data that all it could do was dump it on disc drives.

Now it has hit on a simple way to make that data accessible: software that superimposes it on the global 3D maps provided by Google Earth.

Called iEarth, the NASA software scours EOS databanks for information and converts it into a file that can be viewed via Google Earth. Choosing a spot on the planet's surface will prompt iEarth to display ground-based measurements for that location, as well as data relating to the atmosphere and space above it.

"This is the first time we've been able to do multi-instrument atmospheric science," says Brian Wilson of NASA's Jet Propulsion Laboratory in Pasadena, California, who demonstrated a prototype of iEarth at this week's meeting of the American Geophysical Union in San Francisco. "You can pick a specific spot on the planet and, starting with the surface, move up in altitude through the troposphere and stratosphere," he says.

The iEarth system will be available for anyone to use in April, NASA says.



New Scientist

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December 13, 2006

can you hear me?,...how 'bout now?

 
 
FBI taps cell phone mic
 as eavesdropping tool
  

The FBI appears to have begun using a novel form of electronic surveillance in criminal investigations: remotely activating a mobile phone's microphone and using it to eavesdrop on nearby conversations.

The technique is called a "roving bug," and was approved by top U.S. Department of Justice officials for use against members of a New York organized crime family who were wary of conventional surveillance techniques such as tailing a suspect or wiretapping him.

Nextel cell phones owned by two alleged mobsters, John Ardito and his attorney Peter Peluso, were used by the FBI to listen in on nearby conversations. The FBI views Ardito as one of the most powerful men in the Genovese family, a major part of the national Mafia.

The surveillance technique came to light in an opinion published this week by U.S. District Judge Lewis Kaplan. He ruled that the "roving bug" was legal because federal wiretapping law is broad enough to permit eavesdropping even of conversations that take place near a suspect's cell phone.

Kaplan's opinion said that the eavesdropping technique "functioned whether the phone was powered on or off." Some handsets can't be fully powered down without removing the battery; for instance, some Nokia models will wake up when turned off if an alarm is set.

While the Genovese crime family prosecution appears to be the first time a remote-eavesdropping mechanism has been used in a criminal case, the technique has been discussed in security circles for years.

The U.S. Commerce Department's security office warns that "a cellular telephone can be turned into a microphone and transmitter for the purpose of listening to conversations in the vicinity of the phone." An article in the Financial Times last year said mobile providers can "remotely install a piece of software on to any handset, without the owner's knowledge, which will activate the microphone even when its owner is not making a call."

Nextel and Samsung handsets and the Motorola Razr are especially vulnerable to software downloads that activate their microphones, said James Atkinson, a counter-surveillance consultant who has worked closely with government agencies. "They can be remotely accessed and made to transmit room audio all the time," he said. "You can do that without having physical access to the phone."

Because modern handsets are miniature computers, downloaded software could modify the usual interface that always displays when a call is in progress. The spyware could then place a call to the FBI and activate the microphone--all without the owner knowing it happened. (The FBI declined to comment on Friday.)

"If a phone has in fact been modified to act as a bug, the only way to counteract that is to either have a bugsweeper follow you around 24-7, which is not practical, or to peel the battery off the phone," Atkinson said. Security-conscious corporate executives routinely remove the batteries from their cell phones, he added.

FBI's physical bugs discovered

The FBI's Joint Organized Crime Task Force, which includes members of the New York police department, had little luck with conventional surveillance of the Genovese family. They did have a confidential source who reported the suspects met at restaurants including Brunello Trattoria in New Rochelle, N.Y., which the FBI then bugged.

But in July 2003, Ardito and his crew discovered bugs in three restaurants, and the FBI quietly removed the rest. Conversations recounted in FBI affidavits show the men were also highly suspicious of being tailed by police and avoided conversations on cell phones whenever possible.

That led the FBI to resort to "roving bugs," first of Ardito's Nextel handset and then of Peluso's. U.S. District Judge Barbara Jones approved them in a series of orders in 2003 and 2004, and said she expected to "be advised of the locations" of the suspects when their conversations were recorded.

Details of how the Nextel bugs worked are sketchy. Court documents, including an affidavit (p1) and (p2) prepared by Assistant U.S. Attorney Jonathan Kolodner in September 2003, refer to them as a "listening device placed in the cellular telephone." That phrase could refer to software or hardware.

One private investigator interviewed by CNET News.com, Skipp Porteous of Sherlock Investigations in New York, said he believed the FBI planted a physical bug somewhere in the Nextel handset and did not remotely activate the microphone.

"They had to have physical possession of the phone to do it," Porteous said. "There are several ways that they could have gotten physical possession. Then they monitored the bug from fairly near by."

But other experts thought microphone activation is the more likely scenario, mostly because the battery in a tiny bug would not have lasted a year and because court documents say the bug works anywhere "within the United States"--in other words, outside the range of a nearby FBI agent armed with a radio receiver.

In addition, a paranoid Mafioso likely would be suspicious of any ploy to get him to hand over a cell phone so a bug could be planted. And Kolodner's affidavit seeking a court order lists Ardito's phone number, his 15-digit International Mobile Subscriber Identifier, and lists Nextel Communications as the service provider, all of which would be unnecessary if a physical bug were being planted.

A BBC article from 2004 reported that intelligence agencies routinely employ the remote-activiation method. "A mobile sitting on the desk of a politician or businessman can act as a powerful, undetectable bug," the article said, "enabling them to be activated at a later date to pick up sounds even when the receiver is down."

For its part, Nextel said through spokesman Travis Sowders: "We're not aware of this investigation, and we weren't asked to participate."

Other mobile providers were reluctant to talk about this kind of surveillance. Verizon Wireless said only that it "works closely with law enforcement and public safety officials. When presented with legally authorized orders, we assist law enforcement in every way possible."

A Motorola representative said that "your best source in this case would be the FBI itself." Cingular, T-Mobile, and the CTIA trade association did not immediately respond to requests for comment.

Mobsters: The surveillance vanguard

This isn't the first time the federal government has pushed at the limits of electronic surveillance when investigating reputed mobsters.

In one case involving Nicodemo S. Scarfo, the alleged mastermind of a loan shark operation in New Jersey, the FBI found itself thwarted when Scarfo used Pretty Good Privacy software (PGP) to encode confidential business data.

So with a judge's approval, FBI agents repeatedly snuck into Scarfo's business to plant a keystroke logger and monitor its output.

Like Ardito's lawyers, Scarfo's defense attorneys argued that the then-novel technique was not legal and that the information gleaned through it could not be used. Also like Ardito, Scarfo's lawyers lost when a judge ruled in January 2002 that the evidence was admissible.

This week, Judge Kaplan in the southern district of New York concluded that the "roving bugs" were legally permitted to capture hundreds of hours of conversations because the FBI had obtained a court order and alternatives probably wouldn't work.

The FBI's "applications made a sufficient case for electronic surveillance," Kaplan wrote. "They indicated that alternative methods of investigation either had failed or were unlikely to produce results, in part because the subjects deliberately avoided government surveillance."

Bill Stollhans, president of the Private Investigators Association of Virginia, said such a technique would be legally reserved for police armed with court orders, not private investigators.

There is "no law that would allow me as a private investigator to use that type of technique," he said. "That is exclusively for law enforcement. It is not allowable or not legal in the private sector. No client of mine can ask me to overhear telephone or strictly oral conversations."

Surreptitious activation of built-in microphones by the FBI has been done before. A 2003 lawsuit revealed that the FBI was able to surreptitiously turn on the built-in microphones in automotive systems like General Motors' OnStar to snoop on passengers' conversations.

When FBI agents remotely activated the system and were listening in, passengers in the vehicle could not tell that their conversations were being monitored.

Malicious hackers have followed suit. A report last year said Spanish authorities had detained a man who wrote a Trojan horse that secretly activated a computer's video camera and forwarded him the recordings.


 
 
 
 
 
 
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December 10, 2006

And YOU thought nobody knew,...


Industry Group Urges

CAUTION

On U.S. Plan for RFID-Enabled

 ID Cards

By Jaikumar Vijayan



A government plan to use radio frequency identification (RFID) chips in a proposed passport card program for U.S. citizens is drawing fire from some quarters. The identification cards would be needed by residents who don't have passports for verifying their identity at land and sea border crossings.

The Smart Card Alliance, a nonprofit industry body representing several large vendors of smart-card and RFID technologies, this week formally urged the government to reconsider a decision to use RFID technology in personal ID verification cards. The alliance cited security and privacy concerns for its stance.

It was responding to an Oct. 17 notice in the Federal Register in which the U.S. Department of State announced plans to use RFID chips for a proposed new passport card to be issued as part of the Western Hemisphere Travel Initiative, or WHTI.

Under WHTI, all Americans traveling to Mexico, Canada, the Caribbean and Bermuda will be required to show some form of personal identification approved by Department of Homeland Security when entering the U.S. The identification could be in the form of a passport or the proposed new passport card and is intended to shore up security at the nation's borders. Passengers traveling by air between the different countries will be required to show such proof of identity starting Jan. 1, 2007, while those traveling by land and sea have until January 2008.

In its notice, the State Department said it would use "vicinity read" RFID technology in the cards rather than the "proximity read" contactless smart-card technology being incorporated into new ePassports. The goal is to have credit-card-size passport cards that can be read from at least 20 to 30 feet away by customs and border-protection officials to speed up the authentication process.

There are several problems with that approach, said Randy Vanderhoof, executive director of the Smart Card Alliance in Princeton Junction, N.J.

For instance, long-range RFID technologies are vulnerable to snooping and forgery, Vanderhoof said. Cards built using such chips will have no built-in security features for verifying their authenticity, he added. In contrast, the contactless smart cards used in ePassports support encryption and digital certificate technologies for securing data and verifying authenticity. Because that technology differs from what is being used in the ePassports, U.S. border infrastructures will need to be updated, Vanderhoof explained.

An equally big concern is the potential privacy threat posed by RFID-enabled cards, said David Williams, vice president for policy at Citizens Against Government Waste (CAGW) in Washington.

While there is a need to enhance border security, "we do not believe RFID is the best way to do this," Williams said. People carrying such RFID-enabled identity cards could unknowingly be exposed to greater surveillance, he said. Individuals with such cards are also likely to have less control over when they want to be identified and what information is read, stored and shared.

"With other forms of identification, you literally have to pull your card out of your wallet. With RFID, you don't know when it is being accessed," Williams said.

Those concerns prompted CAGW to send a letter to the DHS this week urging its Data Privacy and Integrity Advisory Committee to pass an earlier subcommittee draft report that recommends against the use of RFID for personal identification. In that report, released in May (download PDF), the DHS subcommittee had argued that RFID use could marginally reduce delay times at borders and checkpoints but carried several risks, including the potential for increased surveillance and erosion of privacy and anonymity.

"In a visual ID-check environment, a person may be briefly identified but then forgotten, rendering them anonymous for practical purposes," the report noted. "In a radio ID-check environment, by contrast, a person's entry into a particular area can easily be recorded and the information permanently stored and repeatedly shared."

The DHS subcommittee is scheduled to meet Wednesday to discuss the issue.

In reality, it is unlikely that individuals carrying the cards will be tracked, said Tres Wiley, director of e-documents at Texas Instruments, which manufactures both RFID and proximity-read smart-card technologies. However the mere possibility is likely to scare people off, he said. "Citizen acceptance is going to be very important to the use of this card," and that's not going to be easy to get, he noted.

 

 
 
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December 05, 2006

As the US economy slows,...

 
Plunging Dollar Will Set World Markets Reeling
 
By Heather Stewart
 Economics Correspondent

The slowdown in the US economy, which has sent the dollar into freefall over the past fortnight, will have devastating knock-on effects in markets around the world, analysts warn.

As the US slows, and consumers in the world's biggest economy feel the buying power of the dollar in their pocket declining, global growth will be hit hard, economists say. The greenback took yet another turn for the worse on Friday, after a survey of the US manufacturing sector showed output declining for the first time in more than three years.

Wall Street is now betting that Federal Reserve chairman Ben Bernanke will slash interest rates to stave off a recession. The dollar ended the week at $1.98 against the pound, and $1.32 to the euro, but analysts say there is further weakness to come. 'I think the dollar's going to hell in a handbag,' said David Bloom, currency strategist at HSBC. '

Some analysts have argued that a more balanced global economy, with strong growth in Asia and Europe, means the impact of a US slowdown will be limited; but Stephen Roach, chief economist at Morgan Stanley, believes China - and in turn the rest of Asia - will follow.

'America is China's largest export market, accounting for 21 per cent of its total exports over the past five years,' he said, adding that economies such as Japan, Korea and Taiwan, which export directly to the US but also sell components to China that are assembled before being sent on to the US, will be hit.

Eurozone finance ministers have expressed alarm at the strength of the euro against the dollar, fearing that their exporters will suffer; but the European Central Bank is expected to push up interest rates by another quarter-point on Thursday, as it frets about inflation.

Despite increasing signs of weakening demand in the world's biggest economy, ECB chairman Jean-Claude Trichet has insisted the 12-member single currency zone can shrug off a US slowdown.

'The ECB's in a complete state of denial,' said Paul Mortimer-Lee, global head of market economics at BNP Paribas. 'Quite a lot depends on how Trichet plays it at the ECB press conference next week. They're hankering after raising rates again next year.'

Wall Street will also be watching Bernanke for signals of a change. The Fed has left rates on hold at 5.25 per cent since the summer, after increasing them 17 times over the previous two years as the US economy recovered from the post-dotcom downturn. Bernanke sought to reassure the currency markets last week by stressing that the Fed is still concerned about inflation, but his words failed to stem the sell-off. 'It's as though the markets are saying, "you central bankers are worrying about inflation, we're worrying about the reality of life",' said Bloom.

Mortimer-Lee said the Fed would wait for definitive evidence before making a move. 'At the end of the tightening cycle, you know you've got an inflation problem, and it's only when the evidence is overwhelming that you move.' However, he believes that evidence will come soon: with investment in construction already falling as the housing boom turns to bust, BNP Paribas is predicting that a million jobs will be lost in the building industry alone over the coming 18 months.

Equity markets are already wobbling as investors weigh the cost of a US slowdown. Graham Turner of GFC Economics said a shake-out would raise questions about this year's merger frenzy.

'We have had an absolute monster year in terms of leveraged transactions,' he said. 'A lot of them looked quite dubious in terms of their economic value. Once the market starts to retreat, all the suspect things that went on come out of the woodwork.'


© Guardian News and Media Limited 2006

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December 04, 2006

"Peace on Earth" in da hood,...

 
Know thy Neighbor
Know thy Hood
 
Colorado Subdivision OKs Christmas Wreath  
 
 
DENVER - A subdivision has withdrawn its threat of $25 daily fines against a homeowner who put a Christmas wreath shaped like a peace sign on the front of her home.

Homeowner Lisa Jensen told The Associated Press on Monday that the board of directors of the Loma Linda Homeowners Association had apologized, called the incident a misunderstanding and had withdrawn its request for the wreath's removal.

Jensen was ordered to take the wreath down when some residents in her 200-home subdivision saw it as a protest of the Iraq war. Bob Kearns, president of the board, also said some saw it as a symbol of Satan.

The homeowners' association demanded Jensen remove the wreath from her house, saying it doesn't allow flags or signs that are considered divisive.

None of the three members of the board in the scenic town 270 miles southwest of Denver was available for comment late Monday. Kearns and colleague Jeff Heitz both had their phone numbers changed to unlisted numbers Monday. Tammy Spezze, the third board member, did not return a call seeking comment.

Jensen, a past association president, said she was overwhelmed with hundreds of calls of support and offers to help her pay the $1,000 fine that would be due if she kept the wreath up until after Christmas.

"We would like to thank everyone who has contacted us with moral support and offers of financial support. We are grateful to hundreds of complete strangers who felt so moved by this story they contacted us," she said.

"It seems whenever someone tries to say 'Peace on Earth' it is met with so much resistance," she said. "The incredible amount of support we have received over the last couple of days really is proof to us of how many people believe in peace and in our right to say it."

© 2006 The Associated Press

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