WORLD LEADERS GATHER ON CRISIS

Rockets from Gaza strike deep into Israel By BEN HUBBARD, Associated Press Writer NOV 14,08

GAZA CITY, Gaza Strip – Hamas militants bombarded a major southern Israeli city with rocket fire Friday, unleashing their most powerful weapons yet in a week of tit-for-tat fighting that threatens to destroy a five-month-old cease-fire.Both Israel and Gaza's Islamic militant Hamas rulers held out hope the calm would be restored, and Israeli leaders decided against any immediate major military action in retaliation. But the sides also vowed to strike hard at each other if violence persisted.If you want to leave the truce, we are ready. And if you want to continue it, then abide by it, Hamas strongman Mahmoud Zahar said in a Friday sermon.The truce took effect last June, largely halting a cycle of Palestinian rocket attacks on southern Israel and deadly Israel reprisals.The cease-fire has mostly held, but began to deteriorate last week after an Israeli military raid on what the army said was a tunnel that militants planned to use for a cross-border raid. Eleven militants have been killed, and Palestinians have fired some 140 rockets and mortars from Gaza at Israel.

Israel also has shut Gaza's vital border crossings, blocking the entrance of food, humanitarian goods and fuel into the impoverished area.Friday's rocket barrage was one of the heaviest yet. Nearly 20 rockets were fired into southern Israel, including four Grad-type Katyushas that landed in Ashkelon, some 17 miles north of Gaza. One woman in the southern Israeli town of Sderot was lightly injured by shrapnel, the army said.It was the first time that rockets have reached Ashkelon in the current round of fighting.The foreign-made Katyushas are believed to be smuggled into Gaza and have longer ranges than the crude homemade rockets usually fired by militants. With 120,000 people, Ashkelon is the biggest population center in rocket range, and Israel has responded harshly to past attacks on the coastal city.But Israeli defense officials said the government had decided against any major military action for the time being unless the situation deteriorated. The officials spoke on condition of anonymity because they were discussing classified information.The barrage came in response to an earlier Israeli airstrike that wounded two militants as they attempted to fire rockets. Hamas said the longer-range rockets were meant to show Israel what could expect if the truce collapses.We will keep protecting our soldiers and people and keep acting against attempts to interrupt the cease-fire, but if the other side will want or wish to keep the cease-fire alive, we'll consider it seriously, Israeli Defense Minister Ehud Barak responded.Mouin Rabbani, an independent analyst based in Jordan, said Hamas escalated its reaction to send a message to Israel that it cannot break the cease-fire without paying a price.By sundown, the sides appeared to be pulling back, and the area settled into relative calm.Israeli Prime Minister Ehud Olmert held an emergency meeting with Barak and other top security officials to discuss the situation. Afterward, Olmert indicated the border crossings would remain closed and military action would continue if necessary.

The government pressure on Hamas will continue in connection to the operations of the crossings and other means, Olmert said.Israel controls all of Gaza's official cargo crossings. Its decision to close the crossings last week has led to severe shortages of basic goods, caused the United Nations to suspend food aid distribution to tens of thousands of people. It also forced Gaza's only power plant to halt operations.The shutdown has led to blackouts in parts of Gaza, though other areas still receive power directly from Egypt and Israel. About 750,000 people in Gaza — just over half the territory's population — rely on the U.N. for food and the U.N. chief expressed concern. The secretary-general is concerned that food and other life-saving assistance is being denied to hundreds of thousands of people, and emphasizes that measures which increase the hardship and suffering of the civilian population of the Gaza Strip as a whole are unacceptable and should cease immediately, Secretary-General Ban Ki-moon said in a statement.

The sanctions also drew criticism Friday from the European Union.

I call on Israel to reopen the crossings for humanitarian and commercial flows, in particular food and medicines, EU External Relations Commissioner Benita Ferrero-Waldner said. Fuel deliveries for the Gaza power plant should be resumed immediately.
Hamas, which advocates Israel's destruction, has ruled Gaza since routing forces loyal to Palestinian President Mahmoud Abbas in June 2007. Israel continues to battle Hamas, while conducting peace talks with Abbas' government in the West Bank.

Firefighters race to stop blaze before winds erupt By THOMAS WATKINS, Associated Press Writer NOV 14,08

MONTECITO, Calif. – Firefighters struggled to get control of a raging wildfire Friday that destroyed more than 100 homes and injured 13 people in this Mediterranean-style coastal town that has been home to celebrities from Charlie Chaplin to Oprah Winfrey.Firefighters said they had to work fast before the winds picked up. Evening winds known locally as sundowners, gusting up to 70 mph from land to sea, pushed the fire with frightening speed Thursday, chewing up mansions, exploding eucalyptus trees and turning rolling hills into a glowing nightmare.Gov. Arnold Schwarzenegger declared a state of emergency in Santa Barbara County on Friday as residents waited anxiously for word of their homes. Many of them fled flames with just a few minutes' notice.Helicopter pilots worked through the night, using night vision goggles to drop water on the flames. At daybreak Friday, nearly 20copters and air tankers were on the job, emergency officials said.On the ground, fire crews stationed in cul-de-sacs engaged in hand-to-hand combat with the flames on winding residential roads, said Santa Barbara County Fire Chief John Scherrei.

We're going to have a very, very tough day today for firefighting and when the winds kick up this afternoon, we're going to have an incredibly challenging situation, said Santa Barbara City Fire Chief Ron Prince. Control of this fire is not even in sight.Authorities say the fire broke out just before 6 p.m. Thursday and spread to about 2,500 acres — nearly 4 square miles — by early Friday. It destroyed dozens of luxury homes and parts of a college campus in the tony community of Montecito and an unknown number of homes in neighboring Santa Barbara. The cause was not immediately known. There was no estimate for containment for the fire, which more than 500 firefighters were battling.Actor Rob Lowe told KABC-TV he was watching football with his son Thursday night when his wife called to alert him. He said he and his children fled with minutes to spare as the fire burned the entire mountain around his Montecito home.Lowe, 44, said the wind was blowing at 70 miles an hour and it was just like Armageddon. His house was ultimately spared.Montecito, a quiet enclave known for its balmy climate and charming Spanish colonial homes, has long attracted celebrities. Oprah Winfrey also owns a home there, though her publicist told the AP she hadn't been in the area and her home was not destroyed Thursday night. Michael Douglas and his wife, Catherine Zeta-Jones, also have a home in the area.Thousands of feet above the flames, footage shot from television helicopters showed what initially looked like a massive campfire with dozens of glowing embers.When cameras zoomed in, however, what appeared to be flaring coals turned out to be houses — many of them sprawling estates — gutted by flame. Palm trees were lit like burning matches.

That whole mountain over there went up at once. Boom, said Bob McNall, pointing to the black hillside above his home. The 70-year-old said he and his son and grandson used hoses to protect his house and five others, but that firefighters had no chance to contain the blaze Thursday.The whole sky was full of embers, there was nothing that (the firefighters) could do. It was just too much, McNall said.Tom Bain said authorities ordered him to leave his home around midnight. He quickly collected his three cats, work files and computer and was out of his house within five minutes. On his way out, Bain saw at least six mansions on a ridge above his home explode into flames.I saw $15 million in houses burn, without a doubt, the 54-year-old electrician said. They were just blowing up. It was really, intensely hot.Santa Barbara County Sheriff-Coroner Bill Brown, who flew over the burn area early Friday, said the Mount Calvary Benedictine monastery appeared to be completely destroyed and that he counted more than 80 homes burned to the ground, many in the winding streets around Westmont College.Some of the Christian liberal arts college's 1,000 students were caught off-guard by the rapidly moving flames Thursday amid wooded rolling hills. The fire left the air dense with smoke and the scent of burning pine. Beth Lazor, 18, said she was in her dorm when the fire alarm went off. She said she only had time to grab her laptop, phone, a teddy bear and a debit card before fleeing the burning building. Her roommate, Catherine Wilson, said she didn't have time to get anything. I came out and the whole hill was glowing, Wilson said. There were embers falling down.Flames chewed through a eucalyptus grove on the 110-acre campus and destroyed several buildings housing the physics and psychology departments, at least three dormitories and 14 faculty homes, college spokesman Scott Craig said. I saw flames about 100 feet high in the air shooting up with the wind just howling, he told AP Radio. Now when the wind howls and you've got palm trees and eucalyptus trees that are literally exploding with their hot oil, you've got these big, red hot embers that are flying through the sky and are catching anything on fire.Michele Mickiewicz, a spokeswoman with the county emergency operations center, said Friday that 10 people were treated for smoke inhalation and three had burn injuries. Earlier, Santa Barbara Cottage Hospital reported receiving three patients with substantial burns. The fire temporarily knocked out power to more than 20,000 homes in Santa Barbara, a city of about 90,000. About 300 Westmont students fled to a gym where they spent the night sleeping on cots. Some stood in groups praying, others sobbed openly and comforted each other.

Meanwhile, about 200 people spent the night at an evacuation center at a high school in nearby Goleta, but rest was out of the question for Ed Naha, a 58-year-old writer who lives in the hills above Santa Barbara. I don't think we are going to have the house when we go back, Naha said. We are used to seeing smoke because we do have fires up here, but I've never seen that reddish, hellish glow that close, he said. I was waiting for Dante and Virgil to show up.Montecito sustained a major fire in 1977, when more than 200 homes burned. A fire in 1964 burned about 67,000 acres and damaged 150 houses and buildings. The community's popularity among celebrities goes back nearly a century. The landmark Montecito Inn was built in the 1920s by Charlie Chaplin, and the nearby San Ysidro Ranch was the honeymoon site of John F. Kennedy in 1953.

More than 100 homes destroyed in wealthy California enclave
9 hours ago NOV 14,08

MONTECITO, California (AFP) — Firefighters were battling a wind-driven wildfire on Friday that ripped through an exclusive California enclave, forcing celebrities, millionaires and thousands of residents to flee.At least 100 homes in the hillside community of Montecito, 100 miles (160 kilometers) northwest of Angeles, had been gutted by the blaze which was raging in the rugged hills and canyons of the picturesque seaside town.Montecito, ranked by Forbes magazine in 2006 as the seventh most expensive neighborhood in the United States with an average home price of 2.9 million dollars, is a popular retreat for the rich and famous.Celebrities such as talk-show queen Oprah Winfrey and Hollywood actors Michael Douglas, Jeff Bridges and Rob Lowe all own property in the area.The firestorm erupted after flames driven by wind gusts of up to 70 miles per hour, known locally as sundowners, overwhelmed firefighters on Thursday.There have been no reported fatalities but 13 injuries, including three suffering from burns and 10 suffering from smoke inhalation according to figures from Santa Barbara County.Fire officials told reporters Friday that control of the blaze, which had burned more than 2,000 acres (800 hectares) was not even in sight and suggested the number of homes destroyed may have been greater.

Santa Barbara County fire official Kevin Wallace said bluntly: Mother Nature is in control and we aren't.Some 4,500 people have received mandatory evacuation orders while a further 4,500 have been advised to leave their homes, as an army of 1,200 firefighters, including a DC-10 retardant-dropping super-tanker, tackles the flames.

Santa Barbara Fire chief Ron Prince told a press conference that although winds had eased control of this fire is not even in sight.This situation is not over, Prince warned. We're going to have a very, very tough day today of firefighting.When the winds kick up this afternoon it's going to be incredibly challenging and we are not out of the woods by any stretch of the imagination.The next 12 hours is going to tell the tale of what we do with this fire. We have a narrow window of opportunity to put this fire in some kind of containment state.California Governor Arnold Schwarzenegger declared a state of emergency in Santa Barbara County early Friday.

Meanwhile Hollywood star Lowe meanwhile told how he had been forced to flee his home on Thursday after the sudden arrival of flames.I was watching the football game with my son and my wife called and said Montecito's on fire -- get out, Lowe said on Winfrey's chatshow Friday.I thought she was kidding because there was no indication that there would be any problem whatsoever. But we got in the car, pulled out of the driveway and the entire mountain behind us was in flames.Winfrey, who owns a 50-million-dollar 42-acre estate in Montecito, said the flames had not reached her property.Fire chief Prince meanwhile described the loss of property in the fire as huge and said only super-heroic efforts from firefighters had prevented greater destruction.Our hearts go out to all the citizens that lost their homes. We haven't even been able to do a complete assessment yet but we're talking well over 100 homes. It's been a real tragedy in that respect, Prince said.Montecito resident Andrew Bermant, whose home on the millionaire's row of Coyote Road was destroyed, expressed relief that he had been able to safely evacuate his family at dusk.The bottom line is we know the risk of living here and we're always fearful with these sundowner winds. We're glad it didn't happen at two in the morning when everyone was asleep, Bermant said.California is frequently hit by scorching wildfires due to its dry climate, Santa Ana winds and recent housing booms which have seen housing spread rapidly into rural and densely forested areas.The Montecito fire comes just over a year after devastating wildfires that were among the worst in California history that left eight people dead, gutted 2,000 homes, displaced 640,000 people and caused one billion dollars in damage.In June and July this year, a series of about 2,000 fires raged across the state, scorching some 900,000 acres of land, according to officials.

CNN NEWS VIDEO
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YAHOO NEWS VIDEO
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MIDEAST CONFLICT NEWS
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ABC NEWS VIDEO
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FOX NEWS VIDEO
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HOARDING OF GOLD AND SILVER

DOCTOR DOCTORIAN FROM ANGEL OF GOD
then the angel said, Financial crisis will come to Asia. I will shake the world.

JAMES 5:1-3
1 Go to now, ye rich men, weep and howl for your miseries that shall come upon you.
2 Your riches are corrupted, and your garments are motheaten.
3 Your gold and silver is cankered; and the rust of them shall be a witness against you, and shall eat your flesh as it were fire. Ye have heaped treasure together for the last days.

REVELATION 18:10,17,19
10 Standing afar off for the fear of her torment, saying, Alas, alas that great city Babylon, that mighty city! for in one hour is thy judgment come.
17 For in one hour so great riches is come to nought. And every shipmaster, and all the company in ships, and sailors, and as many as trade by sea, stood afar off,
19 And they cast dust on their heads, and cried, weeping and wailing, saying, Alas, alas that great city, wherein were made rich all that had ships in the sea by reason of her costliness! for in one hour is she made desolate.

EZEKIEL 7:19
19 They shall cast their silver in the streets, and their gold shall be removed: their silver and their gold shall not be able to deliver them in the day of the wrath of the LORD: they shall not satisfy their souls, neither fill their bowels: because it is the stumblingblock of their iniquity.

REVELATION 13:16-18
16 And he(FALSE POPE) causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads:(CHIP IMPLANT)
17 And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name.
18 Here is wisdom. Let him that hath understanding count the number of the beast: for it is the number of a man; and his number is Six hundred threescore and six.(6-6-6) A NUMBER SYSTEM

WORLD MARKET RESULTS
http://money.cnn.com/data/world_markets/

HALF HOUR DOW RESULTS FRI NOV 14,2008

09:30 AM -45.56
10:00 AM -46.03
10:30 AM -152.68
11:00 AM -229.54
11:30 AM -222.55
12:00 PM -296.61
12:30 PM -304.81
01:00 PM -261.40
01:30 PM -233.21
02:00 PM -210.90
02:30 PM -104.65
03:00 PM +55.36
03:30 PM -40.22
04:00 PM -337.93 8497.31

S&P 500 873.29 -38.00

NASDAQ 1516.85 -79.85

GOLD 742.0 +37.0

OIL 56.67 -1.27

TSE 300 9033.28 -319.50

CDNX 801.61 -11.98

S&P/TSX/60 544.67 -21.35

MORNING NEWS,STATS

Dow down -161 points in first 3 minutes.
Dow -22 at high today so far.
Dow -161 points at low this morning so far.
Dow has not had consecutive weekly gains since MAY.

AFTERNOON,NEWS,STATS

Dow tumbles on Anniversary of first close above 1,000 points (1972).
Oil down $90 from 2008 high.
PET:Starting to see divergence in dollar to oil trade.
PET:Watch dollar closely as crude volatility trends lower.
PET:Algorithms are trading equity correlation with crude oil.
DEC NYMEX crude options expire on Monday.
Major averages on pace for 2nd straight weekly loss.
Stocks slump as retail sales fall by record 2.8% in OCT.
Dow at high today is -22 points so far today.
Dow at low so far today -346 points so far today.

ON G20 AGENDA IN WSH SATURDAY
-Global financial regulator or regulatory supervisor?
-Coordinated stimulus.
-Early warning system.
-IMF/WORLD BANK REFORM.
-Convergence on accounting rules.
-We could here this weekend about pledges from creditor nations to supplement IMF resources.
-MEMBER NATIONS AT SUMMIT SATURDAY:Argentina,Australia,Brazil,Canada,China,France,Germany,India,Indonesia,Italy,Japan,Mexico,Russia,Saudi-Arabia,South Africa,South Korea,Turkey,United Kingdom,United States,European Union.
-90% of global GDP.
-80% of world trade (including EU intra trade).
-2/3rds of worlds population countries there.
-Established in 1999.
-Created in response to Asian Financial crisis.
KEY ISSUES:
-Financial regulation and Supervision.
-Stabalization of Emerging Economies.
-Reform aid system for poor Countries.
-Importance and significance of WTO.
-Shift Governance to G20 from G8.
-Keep IMF as a center of International finance.

WRAPUP STATS

Dow at high today was +84 points.
Dow at low today was -365 points.
Dow down 3.8% today.
Dow was down 4.1% at days lows.
Dow down 5.0% this week.
S&P down 4.2% today.
S&P down 6.2% this week.
S&P fell as much as 4.5% at session lows.
S&P,Dow were positive one hour before close.
S&P,Dow erase big losses then fall again.
Nasdaq down 5% today.
Nasdaq down 4.9% at days lows.
Nasdaq down 7.9% this week.
Stocks fall for 2nd straight week.
Crude oil down 41% in 2008.
FDIC proposes plan to prevent $1.5 MILLION foreclosures.

HEDGE FUND SCORECARD (OCT returns by strategy)
All Funds -5.43%
Emerging Markets -12.53%
Relative value -10%
Equity Hedge -7.91%
Macro Funds +3.80%
BIDERMAN:ON HEDGE FUNDS
-Hedge funds are bearish on Equities.
-Hedge Funs are keeping loads of Cash to meet redemption requests.
-Redemption triggers out-flows from liquid and profitable Investments.

US laissez-faire to battle European social market at G20
LEIGH PHILLIPS Today NOV 14,08 @ 17:31 CET

EUOBSERVER / BRUSSELS - Ahead of the G20 meeting of the world's leading industrialised and emerging economies this weekend, the president of the United States and the president of the European Commission have laid down their markers for what should be the solutions to save the global economy.On Thursday, US President George W. Bush made an impassioned plea for laissez-faire capitalism and warned against turning away from free markets, while commission President Jose Manuel Barroso extolled the virtues of public intervention and the European welfare state model built at the end of World War Two.In the wake of the financial crisis, voices from the left and right are equating the free enterprise system with greed and exploitation and failure, said the US leader in a speech on Friday (14 November) at the Federal Hall National Memorial.He conceded that there had been failures, but the blame for these should be pinned on borrowers, financial firms and regulators, not capitalism.But the crisis was not a failure of the free market system, he said. And the answer is not to try to reinvent that system. It is to fix the problems we face, make the reforms we need, and move forward with the free market principles that have delivered prosperity and hope to people all across the globe.Mr Barroso, himself a conservative, said that the US has had to catch up with the European lead on all major global issues and now the US is behind on what is necessary to fix the world economy.When our American friends now are ready to embrace a real commitment to fight climate change, this is exactly what we are been saying and promoting for some time. When our American partners are saying they want to engage more in a multilateral world, this is exactly what the EU has been saying and promoting for some time. When our American partners now are saying they should put some rules in a financially unpredictable, sometimes unregulated market, this is exactly what the EU has been supporting for some time, he told a European Network of Foundations conference on democracy promotion in Brussels today. When our American friends now are saying that they should find some ways of promoting some public tools, some public systems, in terms of social security, public education, this is exactly what we Europeans have been doing at least since the end of the Second World War, with the development of our social market economy, he said.

Global governance

European political parties, businesses, and NGOs too have all laid out what they hope to see agreed to.The national chambers of commerce from each of the G20 countries issued a joint declaration calling on world leaders to agree to strengthened national and international supervisory structures and improve the quality of regulatory standards, but warned governments against raising tariffs and protectionism.The World Trade Organisation should be taken as a positive example of global governance, the 20 chambers said in a statement.Meanwhile, the Socialist grouping in the European Parliament on Thursday issued a five-point plan from Manchester where their MEPs had been having a strategising pow-wow, for a rebuilding of the world financial system and how to boost the economy. Their Manchester Declaration, is a largely Keynesian document, calling for a European green investment package to put money in people's pockets and make the shift to a low-carbon economy, targetting in particular vulnerable households and small businesses.

The left-of-centre MEPs call for much greater levels of intergovernmental co-ordination and public spending.The European Union has a key role to play in raising and channelling funds. There should be no taboo, said French Socialist MEP Pervenche Berès, chair of the European Parliament's economic and monetary affairs committee. The member states should discuss the possibility of the EU issuing Eurobonds to invest in European projects.

Priming the global pump

UK premier Gordon Brown, who is likely to play a prominent role in the G20 discusions, having been the architect of the bail-out packages adopted in part or in whole by other EU capitals that saved their banks from a complete credit crunch.

However, despite his also being a member of the Socialist political family, he is expected at the summit to emphasise the need for co-ordinated global tax cuts to prime the global economic pump, although he also supports government spending increases.We need to agree on the importance of co-ordination of monetary and fiscal policy, he said before heading to Washington.There is a need for urgency. By acting now, we can stimulate growth in all our economies. The cost of inaction will be far greater than the cost of any action.The Labour prime minister has also repeatedly warned against new over-regulation in response to the crisis. Nevertheless, Mr Brown is also pushing for international oversight of the world's top 30 banks by a college of supervisors. In a curious twist of fate, French President Sarkozy, who, being of the conservative UMP party, has been perhaps the most dirigiste of EU leaders in the solutions he has embraced both at the European level and what he hopes to see the G20endorse.Mr Sarkozy, who currently chairs the EU's six-month rotating presidency, will argue for the development of cross-border regulation of financial institution lending practices and investment decisions. On Thursday he also used the opportunity of the lead-up to the summit to deliver an obituary for the US dollar as a world currency.

I am leaving tomorrow for Washington to explain that the dollar - which after the Second World War under Bretton Woods was the only currency in the world - can no longer claim to be the only currency in the world. What was true in 1945 cannot be true today, he said.While Germany put up one of the main blocks to French plans for the development of a common European stimulus package at a summit of EU leaders last week, Chancellor Angela Merkel supports Mr Sarkozy's wish to see regulation of hedge funds and an end to excessive remuneration for bank executives. However, despite their differences, the EU leaders head to Washington united on a plan of action they are to take to the meeting that would see greater transparency of financial transactions through revised accounting standards, the construction of an early warning system to tackle risks and a central role for the International Monetary Fund (IMF) in a more efficient financial architecture.Many aspects of the European plan are likely to meet resistance from President Bush, who remains unconvinced that deregulation of financial markets had any role to play in the crash. Thus while Brussels is impatient that action be taken urgently to deal with the crisis, in many ways does not expect much from this first summit, and the French EU presidency has called for a second G20 summit to be held next February in order to involve the Democractic president-elect, Barack Obama, who will only send former Clinton Administration secretary of state Madeleine Albright and and former Iowa Congressman Jim Leach to the Washington meeting.

G20 undemocratic, say NGOs

Development NGOs nevertheless believe that the transatlantic differences are largely superficial, as all G20 leaders, from centre-left to centre-right, have long been convinced of the need for ever greater market liberalisation, if not all to the same degree.A coalition of 630 civil society organisations has criticised the meeting as undemocratic as 170 countries have not been invited even though the decisions reached by the G20 affect everyone. The groups are demanding that future global summits involved all goverments and that the United Nations be the convener, not the United States. They also want to see the engagement of citizens' groups and social movements and full transparency during all discussions.They are particularly worried about giving the World Bank and the International Monetary Fund new powers.The policies of northern governments, the World Bank and the International Monetary Fund pursued for the past thirty years have failed spectacularly, said Vitalis Meja with Afrodad.And now, the response is to bring 20 governments to DC for a new Washington Consensus.Friends of the Earth and the Jubilee Debt campaign criticised the positions of all the leaders heading into the summit.While those that created the crisis have been bailed out (bonus intact) with unprecedented sums of taxpayer money, the poor in developed and developing nations have received nothing, they said in a statement.Let's call time on global greed, they continued. The same systems that create poverty here – unfair trade rules and tax systems, debt burdens, privatisation and attacks on welfare spending – also create poverty in the developing world.

Wall Street ends turbulent week sharply lower By JOE BEL BRUNO and SARA LEPRO, AP Business Writer NOV 14,08

AP – Traders work on the floor of the New York Stock Exchange Friday, Nov. 14, 2008. Wall Street has ended … NEW YORK – Wall Street ended a turbulent week with another astonishing show of volatility Friday, with stocks plunging, recovering and then plunging again as investors absorbed another wave of downbeat economic news. Hedge fund selling in advance of a Saturday deadline contributed to the market's gyrations, which set back the Dow Jones industrials almost 340 points.Some retrenchment was to be expected after a big rally Thursday, when the Dow rallied more than 550 points after falling near its lows for the year. But, there was plenty of discouraging news for investors to focus on, including comments from Federal Reserve Chairman Ben Bernanke that the markets remain under severe strain and a sobering report on October retail sales.Analysts believe the market is still searching for a bottom after last month's huge losses, and that the pattern of volatility will continue for some time — selling, even on technical reasons like looming deadlines for cashing out hedge fund holdings, is still coming against a backdrop of an extremely weak economy.Clearly, the trading crowd like hedge funds can take this market in any direction they want to. Anybody looking to build a position is just not confident, said Joseph V. Battipaglia, chief investment officer at Ryan Beck & Co.

The session saw another stream of bad news. Bernanke said during a speech in Frankfurt, Germany, that he would work closely with other central banks to try to alleviate the global financial crisis and left open the door to a fresh interest rate cut. The Fed is scheduled to meet Dec. 16 at its last regularly scheduled meeting this year.While Wall Street would like to see another rate cut, many investors aren't sure, given the litany of bad economic and corporate news, of how effective a rate reduction would be in the near term. Many investors are still trying to assimilate to the idea that the economy's downturn would be protracted, lasting well into next year and perhaps longer.The economic news continues to be very negative, said Ben Halliburton, chief investment officer of Tradition Capital Management. The realization that 09 is going to be a very bad year for economic activity is starting to dawn on people and they are starting to digest how bad it's going to be.The Commerce Department reported that retail sales plunged by the largest amount on record in October as consumers cut back on spending in the wake of the financial crisis. Retail sales fell by 2.8 percent last month, surpassing the old mark of a 2.65 percent drop in November 2001 in the wake of the terrorist attacks that year.The market got more disappointing consumer news from retailers Abercrombie & Fitch Co. and JCPenney Co. Both warned that profits will come in below Wall Street's already lowered projections as retailers head into a holiday shopping season that could be among the slowest on record.The great fear on the Street is that Americans' reluctance to spend will extend what is already a serious economic downturn. A barrage of negative consumer news sent stocks tumbling earlier in the week.But the market drew some comfort in the afternoon from comments from Treasury Secretary Henry Paulson, who told CNBC that capital injections in the banking sector will help stimulate lending. He also defended the decision to not buy toxic assets from banks, saying that it would not work as quickly; the move helped send stocks falling earlier this week.There was disquieting news from the tech sector that weighed on the Nasdaq composite index. Sun Microsystems Inc. said it will cut up to 6,000 workers, or about 18 percent of global staff, as part of a massive restructuring plan. And handset maker Nokia Corp. warned the global economic slowdown will weigh on sales next year.

According to preliminary calculations, the Dow fell 337.93, or 3.82 percent, to 8,497.31 at its lows of the day. The Dow fell more than 300 in early trading, recovered to a slim advance and then turned sharply lower at the end of the day as hedge funds cashed out. Fund investors had a Nov. 15 deadline for withdrawing their money.The Standard & Poor's 500 index fell 38.00, or 4.17 percent, to 873.29, and the Nasdaq stumbled 79.85, or 5.00 percent, to 1,516.85.The Russell 2000 index of smaller companies fell 34.71, or 7.07 percent, to 456.52.Declining issues outpaced advancers by about 4 to 1 on the New York Stock Exchange, where volume came to 1.4 billion shares.On Thursday, the Dow's surge was the third-largest single-session point gain on record, following the 889-point rise on Oct. 28 and the 936-point surge on Oct. 13. The rally came after three days of selling that wiped out about $1 trillion in shareholder value.Wall Street's violent swings in recent weeks are part of the market's ongoing bottoming process, analysts say, in which the market retests the lows hit last month. The market is expected to remain volatile, as evidenced by past recoveries from a bear market. Some analysts said investors were also positioning themselves ahead of a meeting of Group of 20 international leaders in Washington this weekend. The meeting could bring decisions on how to help the troubled global financial system. Bernie McGinn, chief executive of McGinn Investment Management, said the market needs to have a sustained rally for a couple of days to lure buyers back into the market. For the moment, he believes the market will continue to fluctuate based on events like earnings or government reports.

We're in the middle of chaos,he said.That's what it is, pure and simple.The volatility helped send government bond prices higher as investors looked for safety. The three-month Treasury bill's yield fell to 0.14 percent from 0.20 percent late Thursday, and the yield on the benchmark 10-year Treasury note fell to 3.72 percent from 3.85 percent late Thursday. Lower yields indicate higher demand. Meanwhile, the price of a barrel of light, sweet crude fell $1.20 to settle at $57.04 a barrel on the New York Mercantile Exchange. Oil has been falling for the same reason as stocks — the fear of a deep global recession. Shares of major retailers fell as the string of disappointing earnings and outlooks continued. JCPenney lost $2.01, or 10.4percent, to $17.27. Abercrombie & Fitch tumbled $4.65, or 20.7 percent, to a 52-week low of $17.79. The dollar rose against other major currencies. Gold prices also rose. Overseas, Japan's Nikkei closed up 2.72 percent and Hong Kong Hang Seng rose 2.43 percent. In European trading, London's FTSE 100 was up 1.53 percent, Germany's DAX rose 1.31 percent, and France's CAC-40 added 0.98 percent. On the Net:
New York Stock Exchange: http://www.nyse.com Nasdaq Stock Market: http://www.nasdaq.com

Eurozone to enter first ever recession
RENATA GOLDIROVA Today NOV 14,08 @ 10:02 CET

The global financial crisis is taking an increasingly heavy toll on Europe's economy as fresh economic projections - to be officially confirmed by the European Commission on Friday (14 November) - show that the 15-strong euro area has entered recession, its first in the structure's history. The eurozone's economy contracted by 0.2 percent between July and September 2008, following a 0.2 percent decline during the second quater of this year, the BBC reports. Two consecutive quaters of contraction amounts to a definition of recession. The pesimistic outlook follows Germany's announcement on Thursday (13 November) that its economy has officially plunged into recession. The EU's most powerful economy shrunk by 0.4 percent in the second quarter and by 0.5 percent in the third quarter of 2008, with the Federal Statistics Office saying A negative effect on gross domestic product came from foreign trade, with a strong increase in imports and weakening exports.We will definitely get a further contraction in the fourth quarter, probably of a similar order, Klaus Schruefer at SEB was cited as saying.It seems, however, that France has succeeded to escape recession for now, with the country's economy expanding by 0.14 percent growth in the third quater of this year. The figure is astonishing because everyone was expecting a negative figure and preparing for a recession, French finance minister Christine Lagarde said, according to the BBC, adding that stable consumption and company investment helped to support the economy. Experts predict this is just a last gasp before France slips into recession also.

Domino effect

Data on Italy and Spain are now being awaited. Rome is expected to announce that its economy shrank by 0.5 percent in the third quater of this year, while Spanish economy is reported to shrink by 0.2 percent during the same period. The Organisation for Economic Co-operation and Development (OECD) has also put the official stamp of recession on its 30-member area, bringing together countries committed to democracy and the market economy. According to the OECD data, economic activity is expected to fall by 0.9 percent in the US next year, by 0.5 percent in the eurozone and by 0.1 percent in Japan. Against this backdrop, additional macroeconomic stimulus is needed, Jorgen Elmeskov, director of policy Studies in the OECD's Economics Department, said when presenting a gloomy outlook (13 November).

G20 financial summit

The grim economic picture is leaving leaders of major developed and emerging economies with a heavy meal to digest when they meet on Saturday (15 November) to discuss the deepening crisis. The G20 summit hosted by the US is set to primarily focus on a reform of the financial sector. Speaking on Thursday, outgoing US president George W. Bush defended the free market principles that have delivered prosperity.While reforms in the financial sector are essential, the long-term solution to today's problems is sustained economic growth, he said, according to Reuters, adding that the surest path to that growth is free markets and free people.

He suggested to improve accountancy rules, co-ordination of national laws and regulations as well as to make the World Bank and the International Monetary Fund more representative. It would be a terrible mistake to allow a few months of crisis to undermine 60 years of success, president Bush added, labelling capitalism not perfect, but by far the most efficient.

TOPWRAP 9-Europe in recession, US in pain as world leaders meetReuters, Friday November 14 2008By Bill Rigby

NEW YORK, Nov 14 (Reuters) - Europe officially fell into recession on Friday and the U.S. economy suffered further blows as world leaders headed to Washington to address the worst financial crisis in 80 years.Leaders of the world's 20 richest nations are not expected to make any breakthroughs at the meeting in the U.S. capital, given the absence of U.S. President-elect Barack Obama, whose involvement will be key to any global initiatives.The financial crisis continues to wreak havoc on the world's major economies, with official data showing the 15-nation euro zone economy had shrunk by 0.2 percent for the second quarter in a row, meaning it technically is in recession.

The United States is probably already in recession, most economists agree, but official data showing that will not come out until January.Frankly, we at Dow are looking at an 09 that looks like a pretty protracted global recession, probably going into 2010, Andrew Liveris, the chief executive of Dow Chemical Co, the largest U.S. chemical maker, told Reuters.Signs for the U.S. economy worsened on Friday. Retail sales fell a record 2.8 percent in October, according to government data, the biggest decline since comparable numbers were first collected in 1992.Citigroup Inc, one of the hardest-hit financial companies, will soon announce job cuts of up to 10 percent of its staff, according to a source familiar with the the matter, which could affect more than 30,000 employees.

Sun Microsystems Inc said it would slash up to 6,000 jobs, or 18 percent of its workforce, as it looks to save money while demand wanes for its high-end business computers.Freddie Mac, the second-largest provider of U.S. home loan financing, reported a $25 billion quarterly loss as the housing slump worsened, forcing it to draw on a $100 billion Treasury Department lifeline.Meanwhile, chances of a bailout for the big U.S. automakers seemed to recede, increasing the possibility of a wave of mass layoffs at General Motors Corp, Ford Motor Co and Chrysler LLC.The U.S. Senate plans on Monday to take up a bill that would provide emergency aid to automakers, but it remained unclear if there was enough support for it to pass.
The only glimmer of optimism was that U.S. consumer optimism rose slightly, helped by lower gasoline prices.Confidence might be raised further by comments that the Treasury is aggressively looking at ways to reduce skyrocketing home foreclosures, according to Treasury Interim Assistant Secretary Neel Kashkari in testimony to a U.S. House of Representatives committee.More help is on the way for ailing banks, too. Friday is the deadline for public banks to apply for funds under the capital injection program that is part of the $700 billion bailout plan passed by Congress last month. The Treasury expects to approve another 20 banks to receive federal funds. Kashkari added.

U.S. stocks fell, after strong gains on Thursday. European and Asian stocks rose, while oil fell to around $57 a barrel.U.S. Federal Reserve Chairman Ben Bernanke said central banks worldwide were ready to do more to support faltering growth and European Central Bank policymakers signaled further interest-rate cuts were likely.
Policymakers will remain in close contact, monitor developments closely, and stand ready to take additional steps should conditions warrant, Bernanke said at an ECB conference in Frankfurt.With Europe as well as parts of Asia and North America suffering, leaders of the G20 developed and emerging countries traveled to Washington to try to find ways to solve the crisis, started by a U.S. housing market crash, and avoid another one.But agreement among the G20, which represents 85 percent of the world's economy and two-thirds of its population, is unlikely over whether more regulation of markets can protect consumers, savers and companies from the fallout.The administration of President George W. Bush says there should be no return to greater state control of financial markets. Much of Europe says without more regulation, a repeat of the last year's turmoil is inevitable. (Additional reporting by Reuters bureaus worldwide; Editing by Brian Moss)

Canada enters G-20 in strong fiscal position: Harper
3 hours ago NOV 14,08

WINNIPEG — Prime Minister Stephen Harper twice referred to past policy mistakes that contributed to the Great Depression on Friday before heading to Washington for a key economic summit of global leaders.Harper said repetition of those past mistakes - unregulated financial markets and trade protectionism - threaten to exacerbate what he has described as a dire global financial crisis that has yet to bottom out.The prime minister said Canada will be asking leaders of the G-20 countries to consider permitting international peer review of their national financial regulations, while acknowledging the notion is the most contentious issue on the table.We think that's a reasonable part of being part of an integrated global financial market.He noted Canada has submitted to international peer review of its financial system in the past and those comments and criticisms have been helpful in making reforms.The point, said Harper, is not to impose solutions.We want to respect national sovereignty. But that we get good, objective evaluations that we're able to act on.

Harper, in Winnipeg for a Conservative party policy convention, has been tied by his political adversaries to the unpopular administration of George W. Bush. But on Friday the prime minister was sharply critical of the Republican president's push for deregulated financial markets.Unregulated financial markets do not work, Harper bluntly stated.Canada has known that for a long time. I thought, frankly, we all knew that from events of many decades ago - but obviously the United States went on a different path.It was Harper's second reference of the day to the Depression of the 1930s.He also raised the prospect in the context of international trade protectionism, which could be seen as an oblique criticism of president-elect Barrack Obama and his Democratic party.I think the worst possible thing we could do at this particular time would be to follow the problems we're having in the economy with a series of measures that closed our economies or began to throw up protectionist trade barriers, said Harper.I think that would be a devastating mistake. It would really repeat the errors of the 1930s.Obama campaigned in the Democratic primaries on a promise to reopen the North American Free Trade Agreement in order to protect U.S. jobs. But there was relatively little talk of NAFTA during the presidential campaign this autumn and many U.S. observers say it is likely to be a low priority for the incoming administration given the other economic concerns the United States is facing.In a speech to party faithful on Thursday evening, Harper warned that the global economic crisis is going to get worse before it gets better, and Canada is not immune.

There are much more difficult times ahead.On Friday, he once again declined to rule out running a budgetary deficit.The government of Canada will do its best to stay out of deficit and will also ensure we do not have structural deficits under any circumstance, said Harper.As for a sale of government property announced a day earlier by Finance Minister Jim Flaherty, Harper said the government will never engage in a fire sale of assets - but it is reviewing all expenditures and assets in a period of great uncertainty.Still, Harper used his Winnipeg news conference to tout Canada's relative strengths heading into the Washington meeting.Canada's monetary policy is keeping inflation in check and steps his government has taken to reduce taxes and the federal debt bode well in the face of a global economic crisis, Harper said.We are in an inter-related world, he said. No country can allow itself to be isolated or to try, even, to settle this issue alone.Canada can be a model for the efforts that have been deployed to bring back confidence and put back the world economy on the road to growth.Harper said it's no secret the global crisis began in the United States with completely inadequate regulation of the financial sector and spread due to trade and fiscal imbalances around the world.A healthy system of national regulation has proven successful at protecting Canada from the extremes of the crisis in the United States and elsewhere, he added.We have not had the cascading effects on our financial sector that we have seen in other countries. . . . Canada's position in this crisis is a good one.On Thursday, President Bush delivered a vigorous defence of free-market capitalism and easier global trade to frame his approach to the high-level gathering.Bush invited representatives of some of the G-20 to Washington to start developing a more co-ordinated world response to the economic woes that have millions of people struggling to keep their jobs, their homes and their hopes.With the severe economic downturn threatening to end Bush's tenure on a sour note before Obama takes over, he was hosting the leaders at a White House dinner Friday before reviewing causes and solutions for the financial mess Saturday.The summit is the first in a series intended to deal with the enormity of the economic meltdown. The next meeting won't be until after Bush leaves office on Jan. 20.Besides the United States, the countries represented will be Canada, Argentina, Australia, Brazil, Britain, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea and Turkey.Those countries and the European Union make up the so-called G-20.

Eastern Europe leaders to push for new energy routes NOV 13,08

^DJI 8,835.25 +552.59
^GSPC 911.29 +58.99
^IXIC 1,596.70 +97.49
BAKU (AFP) – Eastern European leaders gather in the Azerbaijani capital Baku on Friday for a summit aimed at promoting energy supply routes from the Caspian region to Europe that bypass Russia.Leaders of the Baltic nations, Azerbaijan, Georgia, Poland, and Ukraine will be joined by Turkish President Abdullah Gul for the first time to discuss joint energy projects, including proposed oil and gas pipelines.

Turkey has become a growing player in the Middle East and Caucasus energy trade and has pushed for a greater diplomatic role in the volatile Caucasus region, scene of an armed conflict between Russia and Georgia in August.A US delegation led by Energy Secretary Samuel Bodman will also attend. On Thursday, he said Washington wanted to encourage diversity of supply and said there were difficulties with a Russian plan for a new gas pipeline to Europe.Bodman said Russia's South Stream project to build a gas pipeline under the Black Sea to Bulgaria and on to southern and central Europe is a very complicated project and requires more financing.We support projects which are being implemented by suppliers, transit countries and energy consumers that will contribute to global energy security, Bodman told reporters in Baku.Washington has strongly backed routes for delivering Caspian oil and gas to Europe that bypass Russia including the European Union's flagship Nabucco gas pipeline and a proposed gas pipeline under the Caspian from Central Asia.Russia has long insisted it is the dominant power in the Caucasus and fought a brief war with Azerbaijan's neighbour Georgia in August, raising concerns about the security of supplies through the Caucasus.The summit follows the unveiling by the European Commission on Thursday of a new plan to boost energy supply security and cut back EU dependency on Russia.

The European Union's executive body said it wanted to strengthen crisis mechanisms and boost oil and gas stocks to respond to any disruption in supply.The plan emphasised developing a southern gas corridor to transport supplies from the Caspian Sea and Middle East regions, bypassing Russia, as well as an energy ring linking Europe and southern Mediterranean countries.

Economic turmoil to hit right across Canada: report Thu Nov 13, 3:55 pm ET

TORONTO (Reuters) – Global financial turmoil is expected to hit every one of Canada's province's and put Ontario -- the country's main manufacturing region -- on the brink of a recession this year and into 2009, the Conference Board of Canada said in a report on Thursday.The research organization said a phenomenal series of events brought on by recent financial turmoil, sliding commodity prices and tighter credit conditions has dampened Canada's economic prospects.Of all the 10 provinces, Ontario will likely bear the brunt of the fallout the Conference Board said, because of its heavy reliance on trade with the United States, which is itself being battered by an economic downturn.The slowdown in financial and consumer activity in the United States will take its toll on Ontario, which will produce economic growth of just 0.2 percent this year and 0.8 percent next year, Marie-Christine Bernard, the board's associate director of provincial forecasts, said in a statement.In 2009, Ontario will post its first trade deficit since the province began keeping records almost thirty years ago. Ontario consumers will also tighten their belts, weakening growth in the domestic economy, Bernard said.The board said Ontario's economy is reeling from the U.S. slowdown. The automotive sector, which accounts for roughly a quarter of the province's exports, is expected to contract significantly for a second straight year in 2009 as U.S. vehicle sales stall, the board said.Ultimately, the going will be tough across Central Canada until the U.S. economy recovers, though Quebec's economic prospects are more encouraging than Ontario's.

Real GDP for Quebec is expected to grow 0.9 percent in 2008 and 1.5 percent next year, helped by an optimistic outlook for the province's aerospace industry.The Prairie provinces will remain on a strong footing next year as the resource-rich region largely avoids the economic turbulence, the board said.Saskatchewan is poised to lead the country in GDP growth due to its diversified mix of natural resources and agricultural commodities. Growth is seen at 5.2 percent this year and 3.6 percent in 2009.Manitoba is expected to be relatively unscathed by the economic turmoil and growth is forecast at 2.7 percent in 2008 and 2.4 percent next year.

Alberta, the center of Canada's energy sector, has lost some steam, the report said, as has the Pacific Coast province of British Columbia. In 2008, both Alberta and British Columbia will grow 1.2 percent and will see economic growth next year of 2.6 percent and 1.8 percent, respectively.The Atlantic region has been hit hard by the U.S. downturn with tiny Prince Edward Island seen showing only modest GDP growth of 0.7 percent this year 1.3 percent in 2009. New Brunswick will advance by 1 percent in 2008 and 0.8 percent next year, the report said.Nova Scotia's growth is expected to be 1.5 percent in 2008 and 1 percent in 2009 as output in mining and manufacturing decline, the board said.Newfoundland and Labrador is forecast to grow by 1.5 percent this year, but its real GDP will contract 0.7 percent next year as oil production tumbles, the board said.Earlier this month, the board said Canada would barely skirt a recession as slumping trade with the United States, softer prices for commodities such as oil and metals, and tighter credit markets dim its growth prospects in 2009.(Reporting by Jennifer Kwan; editing by Rob Wilson)

World leaders to gather on crisis, no quick fix seen
Thu Nov 13, 5:09 PM By Glenn Somerville

WASHINGTON (Reuters) - A bid by global leaders to push forward plans this weekend to erect a firewall against future financial crises like the one now threatening the world economy will quickly run into tough political realities that will limit progress.Leaders from the Group of 20 advanced and emerging economies are being hosted on Friday night and on Saturday by a U.S. president who will be out of office in little more than two months and who is under pressure from Europe to agree to stricter market regulation than he prefers.Such key questions of global finance were once largely the domain of the rich Group of Seven nations, but the doors this time are thrown open more widely in recognition of the growing clout of other nations.

However, bringing emerging-market members into the gathering carries its own tension as wealthy nations seek a new role for institutions like the International Monetary Fund, which is viewed with reservation by many developing nations.But as the world sinks into a recessionary funk, political chiefs are under strain to show they at least know why fortunes turned so severely and what must be done to ease the worst financial crisis since the 1930s Great Depression.U.S. President George W. Bush on Thursday sought to keep a focus on measures for spurring growth rather than scrutiny of inadequacies in U.S. regulation, which European officials see as a root cause of crisis.While reforms in the financial sector are essential, the long-term solution to today's problems is sustained economic growth, Bush told a New York audience. He said critics were equating the free enterprise system with greed, exploitation and failure and objected to it.The answer is not to try to reinvent that system, Bush said. It is to fix the problems we face, make the reforms we need, and move forward with the free-market principles that have delivered prosperity and hope to people around the world.

AIRING DIFFERENCES

Improving regulation is a broad topic for G20 leaders but there are long-standing differences, especially between European officials and the Bush administration, about the degree to which markets should be subject to stiffer rules.German officials said before the meeting that it will discuss a new balance between market and state, possibly a more ambitious aim than the Bush administration favors.At a briefing on Wednesday, the White House's deputy national security adviser for international economic affairs, Dan Price, said market turmoil shows the need for some changes in today's regulatory structures but within limits.We are unaware of any support from any quarter for empowering a single global authority to regulate the world's financial markets, Price said, without referencing where he had heard such a suggestion made.French President Nicolas Sarkozy sounded an aggressive note on Thursday as he prepared to head for the summit.I am leaving for Washington to explain that the dollar, which after the Second World War was the only currency in the world, can no longer claim to be the only currency in the world, he said. What was true in 1945 cannot be true today.Bush, in a spirited defense of the free-enterprise system, pushed back against the idea that more government regulation was the answer to current woes.It would be a terrible mistake to allow a few months of crisis to undermine 60 years of success, he said in New York.

GLOBAL POWER SHIFT

Among other issues for the participants is how to give key emerging market countries, especially China, which is now the world's fourth-largest economy, more say in global councils.The so-called BRIC countries -- Brazil, Russia, India and China -- said at a meeting in Sao Paulo, Brazil, last weekend that they wanted more say in global policy-making to supplant the dominance of the Group of Seven industrial countries.The G7 can no longer be a little club on its own, said South Africa's finance minister, Trevor Manuel. Manuel was scheduled to attend the Washington summit as well.This weekend's summit is intended as the first in a series, with another possible in next year's first quarter. It will produce a communique indicating some agreement on causes of the current crisis and possibly some specific actions for countries to apply within their national economies.

British Prime Minister Gordon Brown claimed on Wednesday there was growing support for increased fiscal measures globally to help weather the crisis and indicated he might press that theme at the summit.Another area scheduled for discussion is how to step up the role of global institutions, especially the IMF, as monitors of financial system activity and lenders to nations when they get in trouble.But countries from Asia to Latin American countries have some bitter memories of when the IMF imposed stiff conditions on receiving its help. It is unclear whether countries that have large shares, or quotas, in IMF governance will yield to let emerging-market countries take a bigger stake.Canada's finance minister, Jim Flaherty, wrote in the Financial Times on Thursday that dynamic new economic players ... must be full participants at the global table and said Canada had given up some of its quota share.Flaherty left unsaid that many regard European countries as holding a greater IMF quota share than they merit, and none has expressed a willingness to let their power wane.

UN: Clouds of pollution threaten glaciers, health By TINI TRAN and JOHN HEILPRIN, Associated Press Writers NOV 13,08

AFP BEIJING – A dirty brown haze sometimes more than a mile thick is darkening skies not only over vast areas of Asia, but also in the Middle East, southern Africa and the Amazon Basin, changing weather patterns around the world and threatening health and food supplies, the U.N. reported Thursday.The huge smog-like plumes, caused mainly by the burning of fossil fuels and firewood, are known as atmospheric brown clouds.When mixed with emissions of carbon dioxide and other gases blamed for warming the earth's atmosphere like a greenhouse, they are the newest threat to the global environment, according to a report commissioned by the U.N. Environment Program.All of this points to an even greater and urgent need to look at emissions across the planet, said Achim Steiner, head of Kenya-based UNEP, which funded the report with backing from Italy, Sweden and the United States.Brown clouds are caused by an unhealthy mix of particles, ozone and other chemicals that come from cars, coal-fired power plants, burning fields and wood-burning stoves. First identified by the report's lead researcher in 1990, the clouds were depicted Thursday as being more widespread and causing more environmental damage than previously known.

Perhaps most widely recognized as the haze this past summer over Beijing's Olympics, the clouds have been found to be more than a mile thick around glaciers in the Himalaya and Hindu Kush mountain ranges. They hide the sun and absorb radiation, leading to new worries not only about global climate change but also about extreme weather conditions.All these have led to negative effects on water resources and crop yields, the report says.Health problems associated with particulate pollution, such as cardiovascular and respiratory diseases, are linked to nearly 350,000 premature deaths in China and India every year, said Henning Rohde, a University of Stockholm scientist who worked on the study.Soot levels in the air were reported to have risen alarmingly in 13 megacities: Bangkok, Beijing, Cairo, Dhaka, Karachi, Kolkata, Lagos, Mumbai, New Delhi, Seoul, Shanghai, Shenzhen and Tehran.Brown clouds were also cited as dimming the light by as much as 25 percent in some places including Karachi, New Delhi, Shanghai and Beijing.The phenomenon complicates the climate change scenario, because the brown clouds also help cool the earth's surface and mask the impact of global warming by an average of 40 percent, according to the report.Though it has been studied closely in Asia, the latest findings, conducted by an international collaboration of scientists, reveal that the brown cloud phenomenon is not unique to Asia, with pollution hotspots seen in North America, Europe, South Africa and South America.More specifically, researchers found, brown clouds are forming over eastern China; northeastern Pakistan, India, Bangladesh and Myanmar; Cambodia, Indonesia, Thailand, and Vietnam; sub-Saharan Africa southward into Angola, Zambia and Zimbabwe; and the Amazon Basin in South America.The enormous cloud masses can move across continents within three to four days. Although they also form over the eastern U.S. and Europe, winter snow and rain tend to lessen the impact in those areas.An international response is needed to deal with the twin threats of greenhouse gases and brown clouds and the unsustainable development that underpins both, said the lead researcher, Veerabhadran Ramanathan, a professor of climate and ocean sciences at the University of California in San Diego.One of the most serious problems, Ramanathan said, is retreat of the glaciers in the Himalaya and Hindu Kush and in Tibet. The glaciers feed most Asian rivers and have serious implications for the water and food security of Asia, he said.

Monsoon rains over India and southeast Asia decreased between 5 and 7 percent overall since the 1950s, the report says, naming brown clouds and global warming as a possible cause. Likewise, they may have contributed to the melting of China's glaciers, which have shrunk 5 percent since the 1950s. The volume of China's nearly 47,000 glaciers has fallen by 3,000 square kilometers (1,158.31 square miles) in the past 25 years, according to the Chinese Academy of Sciences.Soot winds up on the surface of the glaciers that feed the Ganges, Indus, Yangtze and Yellow rivers, which makes the glaciers absorb more sunlight and melt more quickly and also pollutes the rivers, the researchers say. But the U.N., which began studying the problem six years ago, still finds significant uncertainty in understanding how brown clouds affect conditions regionally, Ramanathan cautioned. Associated Press Writer John Heilprin contributed to this report from the United Nations.

Prince Charles turns 60 waiting for throne By GREGORY KATZ, Associated Press Writer –Thu Nov 13, 4:28 pm ET

LONDON – Talk about an apprentice. By the time he turns 60 Friday, Prince Charles will have spent a lifetime in line to become king.That's put him in quite a bind. The longest-waiting heir in British history only ascends to the throne when his beloved mother dies or decides to step down.Queen Elizabeth II was hosting a birthday party for her son Thursday at Buckingham Palace. The Philharmonia Orchestra, of which the prince is patron, is due to play for invited members of the extended royal family and assorted society figures. Charles' wife Camilla was throwing a more private bash on Saturday at the prince's rural estate, complete with a performance by sexagenarian rocker Rod Stewart.But the queen won't be giving Charles the present many believe he craves most — the crown. The queen has indicated informally that she plans to keep the job for life and some people think the 82-year-old monarch intends to live forever, or at least as long as her mother, who died at 101.It can't be easy, said historian Andrew Roberts. Most of us can look forward to our new jobs, but the circumstances under which her reign comes to an end means that he can't, emotionally and psychologically.If the queen remains in good health, Charles may be nearing 80 — or past it — when he fulfills the unique destiny that was his at birth.Britain's next-longest monarch-in-waiting was Queen Victoria's eldest son, who became King Edward VII in 1901, aged just over 59 years and two months.But shed no tears for old Charles and his predicament. He has made being Prince of Wales a pretty good thing.Experts, associates and friends say he realized decades ago that he would make his mark as Prince of Wales rather than as an octogenarian king, and so decided to expand that undefined role and use it to pursue causes dear to his heart.Roberts said Charles has transformed the traditionally weak role of Prince of Wales — which the historian compared to the vice-presidency of the United States — by using it as a bully pulpit.He's made a real job of it, Roberts said. He's spoken out on what matters most to him, championing organic food over genetically modified crops, backing architecture that is human in scale, pursuing better relations between the Islamic world and other faiths, and starting the Prince's Trust, which has helped many young people in trouble.The princely role offers a few advantages over being monarch. Some say the money is better, because the Prince of Wales controls the lucrative Duchy of Cornwall, the 55,000-hectare (136,000-acre) estate established in 1337 by King Edward II to provide income for his heir. Official accounts show the prince's property and investments brought in 16 million pounds (US$24 million) last year.

And a prince is much more able to speak his mind than a king or queen because of constitutional restraints placed on the person heading the House of Windsor.Patrick Jephson, former private secretary to Princess Diana, said Charles' income from the Duchy of Cornwall allows him to spend a colossal amount of money building his empire and pursuing his interests and causes.In effect, he is king now in his own kingdom, said Jephson. He has all the trappings and enjoys all the perks and one might argue none of the responsibility. This takes some of the sting out of having to wait. You can say it's awful because your promotion depends on your mother's death, but we've all had parents die and not benefited so spectacularly from it.Jephson finds Charles arrogant in many ways. But he has some sympathy for the aging prince.He is trapped between an immovable object, his mother, and the ever rising profile of his photogenic and sexy children, Jephson said. That's all the more reason to feather your nest while you can and enjoy being master of all you survey.There is no doubt that Charles is less popular than the queen, who commands wide respect throughout Britain for her unswerving devotion to duty for more than half a century. She became queen on the death of her father George VI in 1952. Charles, the eldest of her four children, was not yet 4 years old. Charles' many detractors see him as a slightly potty eccentric who talks to his plants and is so committed to environmental causes that he converted his vintage Aston Martin to run on surplus wine. Some still fault him for the spectacular flameout of his marriage to Princess Diana and his not-too-carefully-concealed extramarital affair with Camilla Parker Bowles, now his second wife. His image has been hurt by unauthorized leaks about his gilded lifestyle, including reports that one of his aides squeezes his toothpaste onto his toothbrush for him. This negative view has led a boomlet of support for the idea that Charles should forgo the chance to become king at an elderly age and instead pass the crown to Prince William, his dashing eldest son. But that idea will never fly, said Vernon Bogdanor, a professor of government at Oxford University who has written extensively about constitutional matters. That's not possible without legislation in Britain and 15 other Commonwealth monarchies, he said. The monarchy is not seen as something you can choose to accept or not.Bogdanor concedes that Charles' reputation was at a low point after his disastrous divorce from Diana, and polls show he remains less popular than the queen. The Daily Mirror newspaper summed up many Britons' feelings Thursday in an editorial. Happy birthday, Charles, it said, but long may the queen reign over us.But Bogdanor said the public view of the prince has improved since then. Charles has lectured around the world on the environment, championed interfaith dialogue and channeled millions to good causes through his Prince's Trust charity, which helps young people get education, work and training. He's the first heir to the throne to find a role for himself, Bogdanor said. He's connected with outsiders the politicians sometimes ignore. I think now people appreciate what he's done. He could have sat back and done nothing.

Czechs unveil playful logo for their turn at EU presidency
LUCIA KUBOSOVA 13.11.2008 @ 17:48 CET

EUOBSERVER / BRUSSELS - Colourful and playful - just like our nation, was how the Czech government described its official logo for their country's upcoming chairmanship of the six-month rotating presidency of the European Union, set to start in January 2009.The logo incorporates a short version of the website of the EU's forthcoming six-month chairmanship by the first new Central European country, EU2009.cz.It should symbolise colourfulness, openness and a sort of playfulness. These are strong features of our country, the Czech vice-premier, Alexander Vondra, told reporters when presenting the logo on Wednesday (12 November), the Czech press reported.Each letter and number of the web-address-cum-logo comes in a different colour. Czech designer and author of the winning design Tomas Pakost (34) suggested that the colours, described as somewhat more eccentric than has been used by some commentators, in fact correspond to the flags of the EU's member states. The logo was chosen out of 350 submissions by a jury that included government officials.

Prague has already ruffled feathers with its video presenting the Czech presidency with sugar cubes under the motto, We will sweeten it for Europe.Some critics argued the video could be interpreted as portraying the Czechs as Europe's troublemakers.

The Christian Democrats (KDU-CSL), a coalition partner of the main government party, the Civic Democrats (ODS) of Prime Minister Mirek Topolanek, originally also protested against the video and its ambiguous message to the outside world.
Commenting on the logo, Cyril Svoboda, a KDU-CSL deputy and a cabinet minister said: It's simply a European logo. Nobody will open champagne or buy a rope to hang themselves because of it.More openly critical, the main opposition leader Jiri Paroubek, chair of the Czech Social Democrats, views the design chosen by his political rivals as a bad joke. It's really this? That's not turned out well, he said. The Czech Republic will be the second new EU member state to chair the bloc, after Slovenia in the first half of 2008.Prague's plans and ambitions have been threatened - at least symbolically - at least twice before the country even started presenting its symbols.First due to the Lisbon Treaty - originally scheduled to come into effect by January 2009 – as it would leave the Czechs as the first presidency co-existing with the bloc's newly introduced permanent president of the European Council [representing the member states] as well as a common EU foreign policy chief.

However, after the rejection of the treaty by the Irish citizens in a June referendum, these two leading tasks will be still now performed by the Czech prime minister and foreign minister.More recently, French President Nicolas Sarkozy sparked a debate about a possible French intervention in the running of the EU's business during the Czech term at the bloc's helm, when he suggested setting up an economic government of the 15-strong eurozone (plus Slovakia as its 16th member as of 2009).Insiders at the time said Mr Sarkozy was perhaps interested in leading the new body, allowing him in effect to remain at the bloc's steering wheel instead of the Czech presidency taking over the task, but he strongly denied such speculations.

Commission backs Norwegian perspective on Arctic: No new treaty
LEIGH PHILLIPS 13.11.2008 @ 17:46 CET

EUOBSERVER / BRUSSELS - No new treaty is necessary to protect the Arctic, according to the European Commission. The current Law of the Sea is sufficient.Commission President Jose Manuel Barroso on Wednesday offered the European Union's support for Norway's position that the melting pole does not mean that the region requires a document similar to the Antarctic Treaty, which set aside Antarctica as a scientific preserve, banned territorial claims and prohibited military activities. As a matter of principle, we can say that the Arctic is a sea, and a sea is a sea. This is our starting point, Mr Barroso told reporters on Wednesday after a midday meeting with Norwegian Prime Minister Jens Stoltenberg, while underscoring that he could not go into any detail ahead of the release of an EU communication on the Arctic, expected to be issued next week.It's important to both Norway and the EU that the [UN Convention on the] Law of the Sea applies, Mr Stoltenberg added. Of course there is a need for more regulations from the International Maritime Organisation, but the fundamental approach must be the Law of the Sea.In October, the European Parliament overwhelming passed a resolution demanding the European commission to push for international negotiations that would lead to the adoption of an international treaty for the protection of the Arctic. The chamber does however support the commercial development of high north resources so long as done in a sustainable manner. Environmental groups too support the passage of an Antarctic-Treaty-like framework, although they vary in their perspectives on fossil fuel extraction in the region.Later, speaking to the EUobserver, Mr Stoltenberg said of the parliament's resolution: What we were told today was that the European Commission agrees that the Law of the Sea applies for the Arctic.The Arctic is a sea with ice on top, he insisted. It's completely different from Antarctica.With six ministers in tow, Mr Stoltenberg headed his country's largest, most high profile delegation ever to the EU, arriving in Brussels yesterday for a series of meetings with President Barroso and a slew of commissioners that continued on Thursday. The talks cover almost all aspects of EU-Norway relations, from energy and development of the Arctic to the transposition of the EU's service directive.Norway is not a member of the EU, but with its direct land and sea access to the Arctic that the union lacks and to the rich stores of oil and gas that lie beneath, Oslo is increasingly playing a central role in Brussels' plans for energy security.The prime minister said the reason for such a high-profile trip to the EU capital by much of his cabinet was an expression of the very close relations with the European Union.

No other country in the world has closer relations with the EU than Norway.Norway to increase gas exports to EU.Separately, Mr Stoltenberg announced a rise in exports of natural gas to Europe. You can count on Norway when it comes to energy supplies to Europe, he said, adding that he expected exports to increase from 100 billion cubic metres per year to between 125 and 140 billion cubic metres by 2020. He also warned against an armed scramble for resources in the region between the polar powers.It is important to avoid a militarisation of the Arctic, he said. We are in favour of disarmament and we will do whatever we can to avoid an arms race in the Arctic.

Russia has increased its military activities in the Norwegian Sea and the Barents Sea. That's just an expression of a stronger economy, more presence of Russia in many different areas.While in the European capital, Mr Stoltenberg and his foreign minister also met with met with Jap de Hoop Scheffer, the general secretary of NATO and the EU's chief diplomat, Javier Solana.West coast CCS project should be EU project.The Norwegian leader also tried to allay environmental concerns about further development of high north fossil fuel resources. The Arctic is home to as much as a quarter of the globe's remaining undiscovered oil and gas reserves.The paradox, the challenge of the world today is that we need both more energy and a better environment, plus the world needs fossil fuels to fight poverty. Hundreds of millions of people really are in need of more economic growth and development. For that we need more energy. At the same time, we need to reduce greenhouse gases. So the question is not to choose between energy and environment, development or tackling climate change, but how can we reconcile them? Mr Stoltenberg said that the way to square the circle was through the use of controversial carbon capture and storage (CCS) technology - scrubbing power plant emissions of their carbon and storing the CO2 underground or under the seabed.Carbon capture allows us to access fossil fuels, but reduce emissions. We are developing the first full-scale carbon capture facility on the west coast of Norway for a gas-fired power station.During his meeting with the commission president, he said that one of Norway's key messages for the EU was to push further on carbon capture and storage. Without CCS, Europe will not manage big enough reductions in CO2 emissions.We want our climate capture project on Norway's west coast to be an EU project.As well as his foreign minister, Norway's finance, energy, environment, fish, transport and communications ministers accompanied Mr Stoltenberg on his trip.

Pan-European referendum impossible,expert says
VALENTINA POP 13.11.2008 @ 09:25 CET

EUOBSERVER / BRUSSELS - Recently I sat at a table with 20 top constitutional lawyers from different countries asking if a pan-European referendum was possible and the answer was no way, because of all the different constitutional arrangements. It's more complicated than any other solution, Stefano Bartolini from the European University Institute in Florence said at a conference organised by the EU parliament ahead of the 2009 elections.Asked if this was the case with a non-binding referendum as well, he replied that this was the type of plebiscite he referred to, a binding one being unthinkable.The chairman of the recently registered Libertas party, Daclan Ganley, who was one of the Irish No-campaigners on the Lisbon treaty, has been advocating a pan-European referendum on the rejected document.But the idea sparked some virulent remarks from British liberal MEP Andrew Duff.I think if you are seeking to destroy a parliament and political parties, then you resort to plebiscite. And you have populism, xenophobia, ultra-nationalism and racism.He said he was in favour of holding referendums on local matters, for instance on building a casino in a town, but not on constitutional questions.It's insulting the intelligence of the people to ask them if they agree with this extraordinarily obscure text they are not going to read or understand. What do we have MPs for? Why do we pay their salaries? he argued.Another expert from the European University Institute, Mark Franklin, also said referendums were extremely dangerous because they could be misused by unscrupulous politicians.Mr Franklin, who studied voter behaviour during the past decades, said people use treaty referendums to express feelings on unconnected EU issues, such as immigration, where they normally have no say.It's really hard to control that you will actually get an answer on the specific question you're asking and not on something else, he said.A Swiss citizen in the audience noted that in her country, people are very well informed when they go to a referendum and answer precisely on the particular matter they are being asked about, however.Low turnout debates, a masochistic exercise.

With turnout in the European elections constantly decreasing in the past decades, debates in the parliament on this phenomenon were a bit of a masochistic exercise, the legislature's vice-president Alejo Vidal-Quadras told the audience in his opening remarks.It seems to be one of the laws of nature now, that every time we have elections, we get fewer voters. We spend more and more money in trying to get people to vote, but in every European election we see the parliament acquiring less power from the ballot box, he said. While to Mr Vidal-Quadras, the explanations of the low turnout were still a mystery, in Mr Franklin's view, this phenomenon was easily explained by the fact that EU elections were not real elections, where voters could influence policy making.Voters know perfectly well that they won't have any influence on EU policy making in the European elections, because the ultimate decision maker is the EU Council, not the parliament, Mr Franklin said.Give voters some real elections, then they will come to the ballot box.

Rise of fringe parties

The absence of strategic voting in EU elections - voting for big parties because they are likely to get power - should also lead to good scores for extreme parties, both on the right and the left side of the political spectrum, the Italian-based expert added.To Mr Duff, a strong promoter of the Lisbon treaty, the rise in nationalism and even xenophobia and racism was all because of the rejection of the text. With big parties reluctant to bring up EU topics such as the Lisbon treaty, since they were usually internally split on the issues, it was up to the fringe parties to talk openly about such things in the upcoming election campaign, Mr Duff explained. This would only put more pressure on mainstream party discipline, which could ultimately fail to suppress the quarrel about the federalist and nationalist wings, he said.It should be a fairly bloody campaign. And at least if it's exciting, it might induce a higher turnout, Mr Duff concluded.

The Saudi King's vision for interfaith dialogue By Abdul Rahman H. Al-Saeed Abdul Rahman H. Al-saeed – Thu Nov 13, 3:00 am

New York – History tells us that extremist ideologies surface, thrive, and proliferate in times of crisis. What ails us is much more than financial failure. It is a failure of moral values. Greed and violence have replaced generosity and compassion. The drift seems all encompassing. There is hardly a sitcom or drama on TV that does not (in varying degrees) appeal to some extreme in the moral universe.

The ground is thus more fertile for extremism and violence than it has ever been. And in this, we are together. We can no more speak of us versus them. From Marshall McLuhan's global village to Thomas L. Friedman's flat world, we are told that we have finally arrived at the point of sharing pain and joy. Unfortunately, we seem to be sharing more pain than joy these days.But that is not the whole story. Luckily, many wise leaders (and the world surely needs more of them) sense the dangers this drift poses to our common future. They recognize the nexus between globalization and mutual intolerance. One such leader is trying to do something about the impasse.

The Custodian of the Two Holy Mosques – King Abdullah of Saudi Arabia – began this journey in Mecca three years ago. He called on all 57 Muslim heads of state to meet in Islam's holiest city to ponder the issues of extremism and call for a Muslim renaissance. He called on his fellow heads of state to lead a new age of scientific, economic, and cultural achievements that would echo the golden age of Islam from the 9th through the 13th century, and reach out to other faiths to avoid a clash of civilizations.The king reiterated that message in words and deed, ultimately leading in June 2008 to a historic meeting of Islamic scholars that called for more robust dialogue with the outside world, shortly thereafter followed by a gathering in Madrid that the king hosted alongside King Juan Carlos of Spain. At an impressive and heartwarming moment in human history, he met with priests, rabbis, Hindu luminaries, and a wide range of leaders from the major philosophies of the world.In a cogent and moving speech that decried religious extremism and called for renewed efforts at serious dialogue, he stated: Mankind is suffering today from a loss of values and conceptual confusion, and is passing through a critical phase which, in spite of all the scientific progress, is witnessing a proliferation of crime, an increase in terrorism, the disintegration of the family, subversion of the minds of the young by drug abuse, exploitation of the poor by the strong, and odious racist tendencies. There is no solution for us other than to agree on a united approach, through dialogue among religions and civilizations.King Abdullah's initiative at Madrid has set the stage for a historic meeting at the United Nations this week.

It aspires to open a sincere, respectful, and frank interfaith and intercultural dialogue. The King's hope is that this gathering can begin to lay (or renew and repair) the foundation for the values needed to render globalization beneficial to all mankind.There is no reason to despair that it cannot. History, Islamic history in particular, informs us that interaction based on mutual tolerance between the followers of the three main religions can galvanize major advances in human culture and knowledge. This is what occurred in the Omayyad and Abbasi Caliphates. The earliest period in Islam was one of moral discovery, spiritual and scientific enlightenment, and interfaith dialogue. The meeting in New York proves beyond doubt that this spirit has not lost its redemptive power. Some (from many faiths) would prefer to close rather than open minds, to deny rather than accept what we are learning about God's miraculous design of our universe, and to reject rather than acknowledge how those of different religious heritages could receive God's mercy. The process that King Abdullah has launched effectively rebuts their distorted vision. To be sure, most people are alarmed by the current state of drift and polarization. But, like Victor Hugo, they know that more powerful than the march of mighty armies is an idea whose time has come. Let us all pray and work for this brave and generous idea.Abdul Rahman H. Al-Saeed is a Saudi academic whose articles appear in a number of Arabic newspapers.

Archaeologists unearth 8th century church in Syria By ALBERT AJI, Associated Press Writer – Thu Nov 13, 4:19 pm ET

DAMASCUS, Syria – Archaeologists in central Syria have unearthed the remnants of an 8th century church, an antiquities official said Thursday. A Syrian-Polish archaeological team recently discovered the church in the ancient city of Palmyra, said Walid al-Assaad, the head of the Palmyra Antiquities and Museums Department. He did not say specifically when the church was discovered or the exact date the church was built.He said the church is the fourth and largest discovered so far in Palmyra —an ancient trade center that is now an archaeological treasure trove.The church's base measures 51-by-30 yards, and archaeologists estimate its columns stood 20 feet tall and its wooden ceiling would have been about 50 feet high, al-Assaad said.A small amphitheater also was found in the church's courtyard where experts believe Christian rituals were practiced, al-Assaad said.In the northern and southern parts of the church there are two rooms that are believed to have been used for baptisms, religious ceremonies, prayers and other rituals, he said.Ancient Palmyra, located some 150 miles northeast of Damascus, was the center of an Arab servant state to the Roman empire and thrived on caravan trades across the desert to Mesopotamia and Persia.Under the 3rd century Syrian Queen Zenobia, the city rebelled against Roman rule and briefly carved out an independent desert Arab kingdom before being reconquered and razed by the Romans.(This version CORRECTS RECASTS to TIGHTEN and RAISE 8th century reference; corrects that church is believed to be largest discovered in Palmyra, not the whole country; MINOR edits thruout.)

RUSSIA IS FIRST TO TEST NEW PRESIDENT By Georgie Anne Geyer Georgie Anne Geyer – Thu Nov 13, 6:43 pm

WASHINGTON -- If the new administration is thinking about relations with Russia, as it should be, a rare personal story of an American scholar's recent talk with the Russian president offers some substantive insights. Andrew Kuchins told a small group of us at the Center for Strategic and International Studies fall meeting about how President Dmitry Medvedev described his phone conversation with President Bush last summer during the nasty little war between Georgia and its former imperial power, Moscow. Medvedev told the small group of scholars in the Valdai Discussion Club that Bush had asked him, You are a young government -- what do you need this war for? And Medvedev told him, George, you would have done the same thing, only more brutally. ... And, remember, if you continue your support of the Georgian regime, you do so at our own risk.Kuchins, a young Eurasian specialist at CSIS, then used this unusual opportunity of hearing what Russians really think to catapult to his deep concerns about American/Russian relations and Russian intentions today. For years since the Cold War, he said, I have believed that the chance of war with Russia was close to zero. Today, that probability seems, while obviously difficult to quantify, between 2 and 3 percent -- and rising. I never saw (Russian and American) narratives about the world so diametrically opposed.

Then he recalled how President Medvedev also told them at the meeting, with unmistakable meaning, We will not tolerate any more humiliation -- and we are not joking! Now, I have covered the Soviet Union, and later the Russian Federation, regularly since 1967, and I can say that that one word, humiliation, plus the fear of it, are largely behind virtually all Russian actions and statements. Gen. Brent Scowcroft, respected Russian specialist and co-author of the new book, America and the World, Conversations on the Future of American Foreign Policy, told us at the same CSIS meeting: The Russians are still searching for their soul. Are they really Europeans, who didn't enjoy the Enlightenment, or are they Asians? ... We've never had a strategy for dealing with the Russians after the Cold War ... (W)e left the impression that it didn't matter.So, where are we now? Well, when Vice President-elect Joe Biden warned earlier this fall that the world would test the new president, the first to step up to the plate was Moscow. Within mere days of the election, that same Russian president had thrown out the first ball: With bristling words, he warned he would co-opt the Bush administration's plan to put missile defenses in Poland and the Czech Republic by saying that Moscow would respond by placing short-range missiles on Russia's Western border in Kaliningrad. These were all forced measures, he said, in place of the positive cooperation that Russia wanted to combat common threats.Was this a new Cold War in the making, as many analysts have warned?

There is no new Cold War, Dr. Zbigniew Brzezinski, co-author of the book, said at that same CSIS meeting. They have no reason to fear us. But Russia has not gone through that period that all former empires have gone through -- including us, in Vietnam. Russia today has to accept that nationalism has to accept interdependence.

But if there is no Cold War, there is surely a cooling-off period that will challenge the new president.Until the present collapse of world economies, growth in Russia had been an impressive 6 percent. Per capita annual income has grown to between $12,000 and $14,000, with goals, by 2020, of per capita incomes of $30,000, close to America's, and of Russia's becoming the fifth largest economy in the world. Former President Vladimir Putin even outlined a group of plans called The Concept 2007, which would put his country in the lead in technological innovation and global energy infrastructure, as well as being a major international financial center.Such changes rule out the old Russia of tanks crossing the borders of Western Europe while NATO stands ready to strike. Instead, Russia's threats are subtle, modern, 21st-century, and NATO is increasingly confused by them. The attack on Georgia was less a classic invasion than a declaration that Russia was not giving up all of its former empire. New weapons, such as a kind of passport stuffing (modern ballot stuffing?), in which Moscow gives Russian passports to people in the Crimean parts of Ukraine and in pro-Russian parts of Georgia, are means of gradually bringing these regions back to Mother Russia politically without violence.And so we circle 'round and arrive back at the old-old problem, the Russian fear of humiliation, the need for pride, and the need for Mother Russia to be seen as a responsible and respected player on the world stage.But, unfortunately, we missed the opening. After the Soviet Union collapsed -- implicitly with the fall of the Berlin Wall in 1989 and formally with the dissolution of the Soviet state in 1991 -- the Clinton administration ignored the great opportunity to ease the Russians out of their sorrowful history. Very little was done, except to send thousands of American experts to tell the Russians what to do (exactly the wrong way to handle someone humiliated) and then leave. Then came real, palpable threats from the U.S., like the anti-missile system in Eastern Europe which, though ostensibly against Iran, is effectively useless against just about anybody and only serves to needlessly enrage the Russians.Kuchins calls this empathy deficit disorder, i.e., not understanding the essential forces that move a historic nation like Russia. Understanding them does not mean either forgiving or condoning them, as Bush's arrogant neocons always thought; it simply means knowing how to successfully manipulate them instead of driving them to new wars against us.

Russia, Abkhazia in talks over naval base
Published: Nov. 13, 2008 at 4:50 PM

MOSCOW, Nov. 13 (UPI) -- Russia and Abkhazia are in talks that could lead to a permanent Russian naval presence in the disputed Georgian republic, an official said Thursday.RIA Novosti reported that Communist Party lawmaker and former Black Sea Fleet Commander Vladimir Komoyedov said Russia was considering opening a base in the Georgian seaside town of Ochamchira.This (Ochamchira) is a very comfortable place for basing naval forces. We have spoken about it on many occasions and if Russia makes a relevant decision we will be definitely interested in it. The talks on the issue are under way, Abkhazian Foreign Minister Sergei Shamba was quoted by the Russian news service as saying.Currently, Russia's Black Sea Fleet uses naval facilities in Ukraine's Crimea as part of a 1997 agreement in which Ukraine agreed to lease the bases to Russia until 2017.Ukrainian President Viktor Yushchenko announced in the summer that Ukraine would not extend the lease beyond 2017. He urged Russian military officials to start preparations for a withdrawal.United Press International.