Video-Sharing Site Sues Universal Music

Abstract: Veoh, an online video-sharing site, has pre-emptively sued the Universal Music Group, asking a federal judge to prevent the giant music company from filing its own copyright infringement action. Veoh Networks, based in San Diego, filed the federal lawsuit yesterday, asking a judge to declare that the company has no liability to Universal even if individuals upload videos to the Veoh site that may contain music, used without permission, from Universal artists. Veoh argued that it was entitled to protection under the safe harbor provision of United States copyright law because it does not encourage its users to infringe copyrights and goes beyond current legal requirements to investigate and remove infringing material when notified to do so. The company said it was notified in July by Universal that the music label was considering suing Veoh because it was “massively infringing” its copyrights. The lawsuit claims Universal did not provide any details about the alleged infringement that would allow the company to investigate. “It is unfortunate that U.M.G. prefers to take actions that are designed to stifle innovation, shut down new markets and maintain the status quo instead of working to change and evolve models for today and the future,” Veoh’s chief executive, Steve Mitgang, said in a statement. Universal had previously threatened to sue the video-sharing site YouTube, which is owned by Google, but the two sides struck a licensing deal before any legal action was taken. “Universal Music Group is enthusiastic about using technology to build communities, as evidenced by our deal with YouTube,” the company said yesterday. “But that’s not what Veoh is all about. Rather, it’s about trying to build a business on the backs of our artists and songwriters without fairly compensating them for the use of their works.”

Universal Music Group
Veoh
Recordings and Downloads (Video)
Suits and Litigation
Copyrights


Arrest Dredges Up N.F.L.’s Ugly History

Abstract: When the North Attleborough, Mass., police chose the high-profile route of arresting Aaron Hernandez by dragging him out of his suburban oasis in handcuffs Wednesday, they did more than just trumpet their own case-cracking and give the world something to gawk at on 24-hour news channels. They were also pulling the N.F.L.'s biggest nightmare out of the closet for everyone to watch, slack-jawed, as another one of its athletes plunged into an unfathomable spot. As prosecutors then read the case to a judge, and by extension, the world, jaws slackened more. A tight end with a $40 million contract accused of murdering a friend in a plot straight out of a cheesy 1970s gangster movie? There was no sense to be made of this, just like there was no sense to be made of the Jovan Belcher murder-suicide last year in Kansas City, nor Ray Lewis’s involvement in a murder case in 2000, nor Rae Carruth’s contract hit on his pregnant girlfriend in 1999. This is why it was the N.F.L.'s nightmare rerun Wednesday, not because there is any real connection we can conclusively draw between the cases, but because Hernandez drags them all back out for us to poke over and wonder about the connection, as Mike Freeman writes on CBSSports.com . As Mark Bradley writes in The Boston Herald , this same scene plays itself out in all walks of life and not just football. But still, it’s the image of football that took a beating, and as Les Carpenter writes on Yahoo.com , it is why the Patriots cut him so fast. It’s the image the N.F.L. so desperately needs to protect, billions of dollars worth of image. The Patriots could not get the word “former” in front of “Patriots tight end” fast enough. The details of the case will be played out in public for the 24-hour endless news crowd — Lester Munson of ESPN.com outlines some of the legal issues to get you started — but Wednesday was a day to stare at a seemingly emotionless Hernandez, as Dan Wetzel describes on Yahoo.com , and try to figure out how to think about it. The N.F.L. has kindly requested you forget how many times you have been here before. (It would also like you to ignore the news of Cleveland Browns linebacker Ausar Walcott’s being arrested — he was released by his team, too — and charged with attempted murder in New Jersey after a bar fight. Yes, holy cow.) The other puzzling sports news of the day happened an ocean away and was thankfully confined to on-court happenings, but Wimbledon certainly did allow you to keep your head in that tilted-to-the-side position. That’s because players slipped, slid, thudded and pirouetted out of the tournament in such a bizarre parade of injuries that the whole sport seemed to have gone crazy. And then Roger Federer lost a second-round match to someone you have probably never heard of (Sergiy Stakhovsky). At Wimbledon. The tournament he has won a gazillion times (O.K., seven). Before Federer lost, the howling about the dangerous state of the Wimbledon grass was reaching a peak, but, as Simon Briggs writes in The Telegraph , the blame is more aptly placed on the tour, whose season is too long and its grass portion too short. One of those doing some of the howling was the upset victim Maria Sharapova, which cost the tournament more drama because of her latest fight with Serena Williams, Greg Couch writes on Foxsports.com . In the end, though, it was hard not to fixate on Federer because, as Greg Garber writes on ESPN.com , it feels like an era ending. His loss was more shocking than Rafael Nadal’s first-round face plant, Jon Wertheim argues on SI.com , and it does seem to be dwindling the Big Four down to the Big Two, as Paul Newman writes in The Independent . No one is happier about this right now than Andy Murray, who would love to win his home empire championship, and was one of the few to avoid any drama in his win Wednesday. College sports chipped in its own head scratcher to round out the day with the N.C.A.A. penalties levied against Oregon for its recruiting shenanigans, although they are more accurately described as a wrist tap . And while you could argue that the N.C.A.A. got this one largely right, as Andy Staples writes on SI.com , the problem is no one trusts anything the N.C.A.A. does these days. Dennis Dodd writes on CBSSports.com that the N.C.A.A. whiffed on an opportunity to take a stronger stand, and Pat Forde writes on Yahoo.com that Chip Kelly is the latest coach to skate out of a mess unscathed. In the admittedly professional ranks of sports, the N.B.A. offers up its draft Thursday night — you can check out the 10 burning questions courtesy of SI.com’s Chris Mannix — and the N.H.L. prompts you to take stock of its staggering playoff injury toll. After learning the Bruins’ Patrice Bergeron also had a punctured lung along with his broken rib and separated shoulder and heaven knows what else, Nicholas Cotsonika writes on Yahoo.com that perhaps we should all be examining the N.H.L.'s play-through-it ethos and stop glorifying it so much. The other side of glory often gets ugly. We have the N.F.L. to remind us of that. Repeatedly. Follow Leading Off on Twitter: twitter.com/zinsernyt

Football
Maria Sharapova
Patrice Bergeron
Serena Williams
Chip Kelly
Rafael Nadal
Roger Federer
Hernandez
Aaron


For Japanese Parts Not Yet Scarce, Fear of Shortages to Come

Abstract: SAN FRANCISCO — Tremors from the strong Japanese earthquake continue to rattle American businesses, even those companies that have experienced no disruptions in parts or supplies. Businesses in a number of industries are trying to adapt to a new reality. No longer can they count on reliable access to critical supplies, a fact prompting frantic phone calls, contingency planning and product redesigns. For instance, film and television producers, along with the companies that support them, are scrambling to stock up on commercial-grade videotape. A major supplier, the Sony Corporation , closed its factories in Japan. Many studios say they face no shortage now, but there is a fear of a shortage — and that is all it takes to put companies on edge. “Folks everywhere know there will be a shortage and are buying as much as they can,” said Thomas Engdahl, chief executive of Advanced Digital Services, which archives Hollywood shows and is among the many companies frantically calling videotape distributors. “It’s creating panic buying.” Short of parts, automakers including General Motors have slowed or stopped production at some plants. Other manufacturers like Nokia, the Finnish cellphone maker, have said they expect disruptions. But even companies that have maintained relatively normal operations have had to hustle. In San Jose, Calif., just hours after the earthquake, employees of Echelon, which sells smart meters that monitor electricity consumption, held an emergency meeting to discuss the potential effect on their supply chain. Identifying every supplier from Japan was the top priority, said Russell Harris, Echelon’s senior vice president for operations. Echelon and the contractor that builds its smart meters quickly came up with a list of 25 suppliers that were responsible for more than 50 components. Within a few days, they had contacted each one and found, to their relief, that none of those factories had been damaged. “We got lucky,” Mr. Harris said. But that is no guarantee the luck will hold. Suppliers depend on basic materials to keep their factories running, and any disruption to that spigot — a particular chemical or tiny part that has become scarce, for example — could shut down the entire chain. Production delays would be painful for Echelon. Contracts with utilities often require it to pay financial penalties for late deliveries. Because of the high stakes, Echelon had never embraced the strategy of just-in-time manufacturing, whereby companies keep just a small amount of inventory on hand. Rather, Echelon usually keeps a few months of supplies — at least for components that are available from only one source. The approach, which had lost favor among speakers at management conferences and authors of business books, turned out to be a blessing after the earthquake, Mr. Harris said. Still, he got approval to buy even more components on the spot market to tide the company over through the summer. Meanwhile, Echelon started a search for alternate suppliers outside of Japan, just in case. For some components like microcontrollers, tiny microchip-like devices, there are no other options, Mr. Harris said. For now, Echelon’s production is normal, as it tells customers who have been calling. But there remain many unknowns — how quickly Japan’s factories come back online, when transportation is restored or when the danger of nuclear contamination is over — that could still affect the supply chain. “The particular impact from this disaster is still unfolding,” Mr. Harris said. A number of companies that make circuit boards — the electronic nerve center inside computers — are also in upheaval. The earthquake caused a huge swath of Japan’s semiconductor industry to close along with the factories that make a quarter of the world’s silicon wafers, the raw material used in semiconductors, according to IHS iSuppli, a market research firm. Typically, manufacturers or distributors have stockpiled enough semiconductors and most other computer parts to feed production for several months. But to be safe, circuit board makers are starting to redesign their products so that they can more easily switch components if there is a shortage, said Paul J. Reilly, an executive vice president at Arrow Electronics, a technology supply chain company based in Melville, N.Y. “While a replacement part may function similarly, it may not have the same shape,” Mr. Reilly said. “You may not be able to squeeze it on the same computer board.” Computer board makers may never put the redesigns into production, he said. But money spent coming up with new designs is minor compared with the potential cost of stopping the assembly line. “Everyone is looking at their contingency plans,” Mr. Reilly said. In Hollywood, companies that use and sell commercial-grade videotape for television and movies are also sweating. Whether there is a shortage or simply a lot of hoarding is unclear. Filming has not been disrupted. But Sony produced several formats of videotape used by Hollywood, primarily from its Sendai plant, which was closed because of damage after the quake. Word of the plant’s problems immediately drew attention in the entertainment industry because Sony represents a big part of the market for commercial-grade videotape. Supplies of one commonly used format, HDCAM-SR, are particularly vulnerable because Sony is the only manufacturer. Buyers quickly tried to scoop up as much as possible for fear that the tape would be unavailable in the future. Fuji, Maxell and other companies also make videotape. But if a crew has to switch formats, it may need to buy new equipment or forgo some capabilities. David Cohen, chief executive of Edgewise Media, which sells film equipment to production companies involved in shooting reality shows, among others, said he had scoured the world for stock since the earthquake. To cover the extra shipping costs and mark-ups by suppliers, he has raised prices as much as 25 percent. “We’re buying as much as we can — buying at a premium to take care of our customers,” said Mr. Cohen, whose company is based in Orange, Calif. “I can’t have someone starting a show knowing that they are going to have to stop after six or seven episodes.” Sales are limited to his regular customers, and then only for the short term, he said. People planning to resell the tape at a higher price would otherwise buy out everything he has. “We don’t want people buying tape from us and sticking it on eBay and charging 10 times more for it,” Mr. Cohen said. Mr. Engdahl, from the Hollywood archiving and postproduction company, proposed to his customers that they switch to his firm’s digital archiving service instead of storing their shows on tape. After the panic dies down, he said his company could copy those clips onto tape. “We believe that with some folks going digital, we will be O.K.,” Mr. Engdahl said. “But we are having to put a lot of effort into finding tape.”

Japan Earthquake and Tsunami (2011)
Shortages
Japan
International Trade and World Market
Sony Corporation


Larry Sanders, Bernie’s Brother, Is Running for David Cameron’s Seat in Parliament

Abstract: LONDON — Larry Sanders, the brother of Senator Bernie Sanders, is running to fill the seat being vacated by David Cameron, the former prime minister, in the British Parliament. Mr. Sanders, 82, was chosen on Thursday night by the Green Party as its nominee in an Oct. 20 special election in the constituency of Witney, about 67 miles west of London. Like his younger brother, Mr. Sanders grew up in New York City and attended James Madison High School and Brooklyn College. In 1969, after graduating from Harvard Law School, he moved to Oxford, England, where he has devoted his career to social work and the law and been an advocate in areas like mental health and education. The brothers are close and share progressive political views. At an emotional moment during the Democratic National Convention in Philadelphia in July, Larry Sanders, as a delegate representing Democrats who live abroad, cast a vote for his brother , saying their parents would have been “immensely proud” of him. Larry Sanders — not to be confused with the fictional late-night television host played by Garry Shandling in an HBO comedy that ran from 1992 to 1998 — has already served in public office; he was elected in 2005 to a seat on the Oxfordshire County Council, and re-elected in 2009. He is nonetheless a long shot for Mr. Cameron’s seat, which the Conservative Party has held nearly continuously since 1974; the Conservatives have chosen a 37-year-old lawyer, Robert Courts, as their candidate in what the party considers a safe seat. In interviews on Friday with Buzzfeed UK and with the radio program LBC , Mr. Sanders acknowledged that he was unlikely to win. “The underlying issues will be the one that Bernard raises, which is the fact that we’ve had growing inequality for the last 30 or 40 years, which means the bulk of the wealth and income has gone to the very richest people,” Larry Sanders told Buzzfeed UK. He added that he would also work against efforts to privatize parts of the country’s much-loved National Health Service. Mr. Cameron, who led Britain for six years, stepped down as prime minister on June 24, the day after British voters decided to leave the European Union. He initially vowed to remain in Parliament, but on Sept. 12 he resigned his seat, saying he did not want to be a distraction for his successor as prime minister, Theresa May. The Conservative Party, now led by Mrs. May, controls 329 of the 650 seats in the House of Commons, while the main opposition, the Labour Party, holds 230 seats. The Green Party holds one.

Great Britain
Election
House of Commons
Larry Sanders


Los Angeles Prepares for Clash Over Marijuana

Abstract: LOS ANGELES — There are more marijuana stores here than public schools. Signs emblazoned with cannabis plants or green crosses sit next to dry cleaners, gas stations and restaurants. The dispensaries range from Hollywood-day-spa fabulous to shoddy-looking storefronts with hand-painted billboards. Absolute Herbal Pain Solutions, Grateful Meds, Farmacopeia Organica. Cannabis advocates claim that more than 800 dispensaries have sprouted here since 2002; some law enforcement officials say it is closer to 1,000. Whatever the real number, everyone agrees it is too high. And so this, too, is taken for granted: Crackdowns on cannabis clubs will soon come in this city, which has more dispensaries than any other. For the first time, law enforcement officials in Los Angeles have vowed to prosecute medical marijuana dispensaries that turn a profit, with police officials saying they expect to conduct raids. Their efforts are widely seen as a campaign to sway the City Council into adopting strict regulations after two years of debate. It appears to be working. Carmen A. Trutanich, the newly elected city attorney, recently persuaded the Council to put aside a proposed ordinance negotiated with medical marijuana supporters for one drafted by his office. The new proposal calls for dispensaries to have renewable permits, submit to criminal record checks, register the names of members with the police and operate on a nonprofit basis. If enacted, it is likely to result in the closing of hundreds of marijuana dispensaries. Mr. Trutanich argued that state law permits the exchange of marijuana between growers and patients on a nonprofit and noncash basis only. Marijuana advocates say that interpretation would regulate dispensaries out of existence and thwart the will of voters who approved medical cannabis in 1996. Whatever happens here will be closely watched by law enforcement officials and marijuana advocates across the country who are threading their way through federal laws that still treat marijuana as an illegal drug and state laws that are increasingly allowing medicinal use. Thirteen states have laws supporting medical marijuana, and others are considering new legislation. No state has gone further than California, often described by drug enforcement agents as a “source nation” because of the vast quantities of marijuana grown here. And no city in the state has gone further than Los Angeles. This has alarmed local officials, who say that dispensary owners here took unfair advantage of vague state laws intended to create exceptions to marijuana prohibitions for a limited number of ill people. “About 100 percent of dispensaries in Los Angeles County and the city are operating illegally,” said Steve Cooley, the Los Angeles County district attorney, who is up for re-election in 2012. “The time is right to deal with this problem.” Mr. Cooley, speaking last week at a training luncheon for regional narcotics officers titled “The Eradication of Medical Marijuana Dispensaries in the City of Los Angeles and Los Angeles County,” said that state law did not allow dispensaries to be for-profit enterprises. Mr. Trutanich, the city attorney, went further, saying dispensaries were prohibited from accepting cash even to reimburse growers for labor and supplies. He said that a recent California Supreme Court decision, People v. Mentch, banned all over-the-counter sales of marijuana; other officials and marijuana advocates disagree. So far, prosecutions of marijuana dispensaries in Los Angeles have been limited to about a dozen in the last year, said Sandi Gibbons, a spokeswoman for Mr. Cooley. But Police Department officials said they were expecting to be called on soon to raid collectives. “I don’t think this is a law that we’ll have to enforce 800 times,” said one police official, who declined to speak on the record before the marijuana ordinance was completed. “This is just like anything else. You don’t have to arrest everyone who is speeding to make people slow down.” Don Duncan, a spokesman for Americans for Safe Access , a leader in the medical marijuana movement, said that over-the-counter cash purchases should be permitted but that dispensaries should be nonprofit organizations. He also said marijuana collectives needed more regulation and a “thinning of the herd.” “I am under no illusions that everyone out there is following the rules,” said Mr. Duncan, who runs his own dispensary in West Hollywood. “But just because you accept money to reimburse collectives does not mean you’re making profits.” For marijuana advocates, Los Angeles represents a critical juncture — a symbol of the movement’s greatest success, but also its vulnerability. More than 300,000 doctors’ referrals for medical cannabis are on file, the bulk of them from Los Angeles, according to Americans for Safe Access. The movement has had a string of successes in the Legislature and at the ballot box. In the city of Garden Grove, marijuana advocates forced the Highway Patrol to return six grams of marijuana it had confiscated from an eligible user. About 40 cities and counties have medical marijuana ordinances. But there have also been setbacks. In June, a federal judge sentenced Charles C. Lynch, a dispensary owner north of Santa Barbara, to one year in prison for selling marijuana to a 17-year-old boy whose father had testified that they sought out medical marijuana for his son’s chronic pain. The mayor and the chief of police testified on behalf of Mr. Lynch, who was released on bail pending appeal. And last month, San Diego police officers and sheriff’s deputies, along with agents from the Drug Enforcement Administration , raided 14 marijuana dispensaries and arrested 31 people. In an interview, Bonnie Dumanis, the district attorney for San Diego County, said that state laws governing medical marijuana were unclear and that the city had not yet instituted new regulations. Ms. Dumanis said that she approved of medical marijuana clubs where patients grow and use their own marijuana, but that none of the 60 or so dispensaries in the county operated that way. “These guys are drug dealers,” she said of the 14 that were raided. “I said publicly, if anyone thinks we’re casting too big a net and we get a legitimate patient or a lawful collective, then show us your taxes, your business license, your incorporation papers, your filings with the Department of Corporations.” “If they had these things, we wouldn’t prosecute,” she said. Marijuana supporters worry that San Diego may provide a glimpse of the near future for Los Angeles if raids here become a reality. But many look to Harborside Health Center in Oakland as a model for how dispensaries could work. “Our No. 1 task is to show that we are worthy of the public’s trust in asking to distribute medical cannabis in a safe and secure manner,” said Steve DeAngelo, the pig-tailed proprietor of Harborside, which has been in business for three years. Harborside is one of four licensed dispensaries in Oakland run as nonprofit organizations. It is the largest, with 74 employees and revenues of about $20 million. Last summer, the Oakland City Council passed an ordinance to collect taxes from the sale of marijuana, a measure that Mr. DeAngelo supported. Mr. DeAngelo designed Harborside to exude legitimacy, security and comfort. Visitors to the low-slung building are greeted by security guards who check the required physicians’ recommendations. Inside, the dispensary looks like a bank, except that the floor is covered with hemp carpeting and the eight tellers stand behind identical displays of marijuana and hashish. There is a laboratory where technicians determine the potency of the marijuana and label it accordingly. (Harborside says it rejects 80 percent of the marijuana that arrives at its door for insufficient quality.) There is even a bank vault where the day’s cash is stored along with reserves of premium cannabis. An armored truck picks up deposits every evening. City officials routinely audit the dispensary’s books. Surplus cash is rolled back into the center to pay for free counseling sessions and yoga for patients. “Oakland issued licenses and regulations, and Los Angeles did nothing and they are still unregulated,” Mr. DeAngelo said. “Cannabis is being distributed by inappropriate people.” But even Oakland’s regulations fall short of Mr. Trutanich’s proposal that Los Angeles ban all cash sales. “I don’t know of any collective that operates in the way that is envisioned by this ordinance,” said Mr. Duncan, of Americans for Safe Access. Christine Gasparac, a spokeswoman for State Attorney General Jerry Brown , said that after Mr. Trutanich’s comments in Los Angeles, law enforcement officials and advocates from around the state had called seeking clarity on medical marijuana laws. Mr. Brown has issued legal guidelines that allow for nonprofit sales of medical marijuana, she said. But, she added, with laws being interpreted differently, “the final answer will eventually come from the courts.”

Marijuana
Medical Marijuana
Drug Abuse and Traffic
Los Angeles (Calif)
Drug Enforcement Administration
Cooley Steve
Lynch Charles C
Brown Edmund G Jr
Regulation and Deregulation of Industry
Lynch Charles C (1962- )


Persistent Unemployment, Without Lingering Pain

Abstract: CÁDIZ, Spain — Beyond its pink-hued Atlantic light and the distinction of being the oldest city in Europe, this Andalusian outpost is best known for two things: its famous carnival , which wraps up Monday after two raucous weeks, and its chronic unemployment. Both were on vivid display on a rainy recent afternoon, as a group of roving musicians called “I’ll Start Monday” belted out a “chirigota,” or satiric song. A crowd cheered, drinks in hand, as the group sang of an angel on the narrator’s shoulder telling him to “grow up” and get a job; while a devil on the other said: Why bother? Go have fun. The song explains a lot about the situation here in Cádiz, in southern Spain just north of Gibraltar. Joblessness has climbed to 19 percent in Spain, the highest in the euro zone, after the collapse of a housing bubble. But here in Cádiz, it is at a staggering 29 percent — and has been in double digits for decades. Elsewhere in Europe, such high numbers would lead to deep social unrest. Not so in Cádiz. Here, as across the Mediterranean, life remains puzzlingly comfortable behind the dramatic figures, thanks to a complex safety net in which the underground economy, family support and government subsidies ensure a relatively high quality of life. “This is a place where you can live well, even when unemployed,” said Pilar Castiñeira, 30, as she attended a performance of carnival skits in a downtown theater. “Life is four days long,” she added, recounting a Spanish saying. “On one you’re born, on another you die, and in the two in between, you have to have fun.” That was certainly the case during carnival. People walked around the city’s colorful and cheerily shabby downtown, which has been used in movies as a stand-in for Havana, drinking, listening to the roving musicians dressed in outlandish costumes and eating fried fish out of paper cones. The party even continued for nearly a week after the start of Lent. Yet beyond the bar hopping, there were other realities. Over lunch in a restaurant with a view of the port, Miguel Cervera García, a grizzled 47, explained how he made ends meet. He said he had picked olives and worked as a plumber, but never officially. “I’ve always worked, but without a contract,” he said amiably. He added that jobs with contracts were better, “since you get social security and paid sick days.” Payroll taxes and unemployment benefits are high in Spain, and many people avoid them by hiring workers under the table or by offering them temporary contracts that avoid the high costs of hiring and firing. Always popular in the Mediterranean, tax fraud has grown during the economic crisis, to the point that many experts see it as the biggest reason why high unemployment has not translated into mass protests. Officials say that one-third of Cádiz Province’s 170,000 unemployed people are no longer receiving state unemployment subsidies, indicating that the underground economy and families must be taking care of the rest. Officials estimate that Spain’s underground economy equals at least 20 percent of the official economy. In Andalusia, it is believed to be higher. Families remain a strong support network. Home ownership is highly valued, and even out-of-work Spaniards often live on the cheap in homes their families paid off long ago. “If one person in the family works, he’s a net for the whole family,” said Juan Bouza, Andalusia’s point-person for employment in Cádiz. Mr. Bouza reiterated a central tenet of Prime Minister José Luis Rodríguez Zapatero’s approach to the crisis: extending unemployment benefits even as the state deficit is growing. “We don’t think that people will find a job more easily if we remove help,” Mr. Bouza said. “We think the weakest people need help.” To some, the cultural acceptance of unemployment is part of the problem. “For most people here being unemployed and — while it lasts — living off state benefits is perfectly natural,” said David Pantoja, 36, an out-of-work carpenter who founded an association for the unemployed in Cádiz. “It’s just a fact of life, like love or death.” Indeed, for decades Andalusia has had the highest unemployment levels in Spain. The jobless rate here was 13 percent four years ago, when levels elsewhere in Spain were at a near-historic low. But there were signs of improvement. In early 2008 local politicians made campaign promises to bring full employment to Andalusia, but with the collapse of the housing bubble that is not looking likely, and joblessness in the region is now at 26 percent. History explains some of the problems. During the 36 years of Franco’s dictatorship, Andalusia was Spain’s breadbasket. After the transition to democracy in the 1970s, it never fully developed into an industrial region. In recent decades it has lost a lot of ship-building jobs to Asia. Today, it draws 40 percent of its revenue from tourism, especially on the popular Mediterranean coast around Málaga. Cádiz is on the windier Atlantic side. In an office with a stunning ocean view, Mr. Bouza spoke of the region as a centerpiece in the government’s plan to turn Spain into a hub for renewable energy projects. “This will be the Silicon Valley of renewable energy,” he said. He added that 75 cents of every euro the region spends on unemployment is for courses to help train the workforce for its future in renewable energy. But not everyone is buying it. “They said that by 2012, Cádiz would be a bedroom community” for nearby industrial areas, said Esteban Vias Casais, 58, a retired factory worker who lives on a disability pension. But the city already is one, he added with a wink. “Here, everyone sleeps, and no one works!” Mr. Pantoja was not convinced by the courses, either. Sitting in a cafe after a children’s carnival parade wrapped up nearby, he said he had taken courses on business management and computer literacy, but that new skills were not the issue. After two years without work, “Enough training,” he said, “we want jobs.”


Containers Wall Off a Newark Housing Project

Abstract: NEWARK , Nov. 7 — Tasha Solomon opened the grimy plastic blinds of her first floor-apartment in the Millard E. Terrell Homes, a housing project hard by the Passaic River. She need not have bothered. Although the river is only 100 yards from her apartment, Ms. Solomon, a 25-year-old mother of two, cannot see it from her window. Her view is a wall of rusty shipping containers that rises more than four stories, taller than any of the 12 buildings in the rundown housing complex. “Is there a river over there?” she asked one recent afternoon. Like drugs and gangs and poverty, the containers have simply become another unavoidable fact of life here, residents say. For decades the project, operated by the Newark Housing Authority, has been flanked by storage depots where thousands of corrugated, trailer-size containers — a byproduct of the brisk commerce at the port in Newark and Elizabeth — sit stacked one atop the other in the barren cityscape. There used to be some daylight. An expanse of concrete between Ms. Solomon’s building and the murky river once served as the complex’s recreation area. Older residents recall mother-daughter kickball tournaments, dance contests, and summer evenings spent watching the lights from downtown shimmer in the distance. “This is where we used to let it all hang out,” said Valerie Hall, who moved to the project in the mid-1960s and is one of the few who remember life before the containers. “When you’d look at those lights, it was like you could go downtown, and all you had to do was stand here.” But about 15 years ago the housing authority, a troubled agency that barely avoided a takeover by the federal government in 2005, leased the gritty three-acre recreation area to a private container storage company. What once was a baseball field is now an expanse littered with shards of glass. And a patch of open space that allowed residents to look out on the river now provides a view of ripped and rusted cargo containers. Keith Kinard was appointed executive director of the housing authority 16 months ago after a federal investigation called the agency “absolutely dysfunctional” for much of its 70-year history. Initially, a spokesman for Mr. Kinard said there was no record of a lease or rent payments to allow containers to be stored on the premises, but two weeks later he said the agency had discovered an agreement in perpetuity in 1993 with the container storage company, Palmer Industries. The agreement allowed Palmer, which had stored containers on each side of the housing project, to let them spill over onto the baseball field for $650 a month, linking its properties together with rows of containers. Now Mr. Kinard says he intends to have the containers removed, although other problems must be addressed first. “I want them off my property,” he insisted. But residents are not ready to break out the barbecue grills just yet. “The city won’t do anything about them,” said Claire Johnson, 80 years old, who said the containers had been there for as long as she could remember. “They don’t care. Besides, they get a lot of money to park them there.” While the few dozen containers on agency property are only a tiny fraction of the more than 27,000 that tower over this hardscrabble section of Newark, they were enough to seal residents off from the river. Today, waist-high weeds stab upward through the concrete, and the homeless who make this neighborhood their home string clotheslines between broken container doors. One man, known by friends in the project as Florida, was found dead last month, the police said, locked inside a container in the depot alongside the homes. The death is still under investigation. High up in the stacks, a container overflowed with trash, evidence of someone’s precarious third-story dwelling. Reaching the complex requires trekking through some of the most dense and polluted industrial corridors of urban America. Every several minutes, the roar of jets taking off from nearby Newark Liberty International Airport drowns out any hope of conversation. The rancid smell of garbage — perhaps from the Newark incinerator a mile away — permeates the air at the slightest gust of wind. Just down the road is a dioxin-tainted Superfund site, where about a million gallons of Agent Orange was produced during the Vietnam War. But with a price tag of $25 million to bring the deteriorated buildings — two of which have broken heating systems — along with their mildewed hallways and 1940s-era electrical system, up to safety and sanitation standards — $8 million more than the housing agency’s maintenance budget for the entire city — containers are not high on Mr. Kinard’s list of priorities. “I’ve got homeless people squatting inside the apartments themselves,” he said. “If containers were my worst problem, this job would be a walk in the park.” Last month, Mr. Kinard said, he asked the agency’s legal department to find a way to terminate the agreement with Columbia Container Services, which took over Palmer’s storage depots in 2003. He said negotiations would begin in the coming weeks. Two directors of Columbia Container, John Armstrong and Bruce A. Fenimore, did not respond to repeated requests for an interview. One tenant, a 20-year-old bank teller, who declined to give his name for fear of being associated with the project, said he gave up looking out his window years ago. “It’s an asbestos river anyway,” he said. For Mayor Cory A. Booker, the plight of Terrell Homes is yet another test in the effort to revitalize this long-struggling city. As Newark begins to explore ways to develop its waterfront for recreational and residential uses, officials have to figure out what to do with thousands of containers that land at Port Newark-Elizabeth — the third largest port in the United States — and line long swaths of the Passaic. “The city can’t come to us and ask for jobs with the port and then say it wants to take the land these businesses are located in and turn it into parks or condominiums,” said Randy Brown, a spokesman for the New York Shipping Association, which represents Newark’s three storage depots. The port and the network of trucks, warehouses, and storage lots that service it account for about 300,000 jobs, Mr. Brown said, one of the largest sources of employment in New Jersey. He said a vast majority of containers stayed in the region for only 12 days before being shipped out on barges. The abandoned ones sit in the depots until they are repurchased, increasingly for scrap metal, Mr. Brown said, although he acknowledged that the industry did not keep track of the number of derelict containers stacked along the river. But officials say the city, which recently began work on a public park along the waterfront from Newark Penn Station to the edge of the storage depots — including the Terrell Homes — is determined to find out just how many there are. Joel Sonkin, counsel to the deputy mayor for economic development, said the city had enlisted researchers from Rutgers and the New Jersey Institute of Technology to investigate the question. For now, residents of the Terrell Homes remain in their walled city. Older women chat away the afternoon, and teenage boys in bandannas cluster around the cars in the benchless complex, their voices smothered by the drone of planes. Children dare one another to scale the fence that separates them from the container-choked lot. “It looks like some kind of scrap yard or recycling plant,” said Denise Suver, 46. “This is a place for people to live, not a garbage dump.”


Growth of Indonesian Airlines Strains the Infrastructure

Abstract: JAKARTA, Indonesia — Indonesian airlines are poised for rapid growth, but a lack of critical infrastructure and trained personnel may keep the industry from reaching anticipated heights, experts say. The total number of fliers is expected to double within five years, record growth for a nation with a history of poor safety standards. If improvements do not keep pace with demand, “this growth, which they could take advantage of, will come to a halt,” said Shukor Yusof, an aviation analyst at the credit ratings agency Standard & Poor’s in Singapore. Last year, 60 million Indonesians took to the skies, a 15 percent increase from 2010, according to the Ministry of Transportation. International passenger traffic in the country grew 23 percent, to eight million. In 2001, the Ministry of Transportation loosened the rules for starting an airline, in part to help bolster the economy after the Asian financial crisis. The number of operating licenses rose sharply between then and 2004, when the ministry issued a second round of revisions. According to the Directorate General of Civil Aviation, part of the ministry, the new rules required only two planes for an operator to start a commercial airline, reduced limitations on the type and age of those planes and allowed airlines to deviate from their business plans, encouraging them to explore the market. At that time, “it’s possible we concentrated more on developing the market and were not so focused on safety concerns,” said Hemi Pamuraharjo, the deputy director for scheduled flight services at the Ministry of Transportation. Jakarta’s main hub, Soekarno-Hatta International Airport, was built to handle 22 million passengers. Last year, it served more than 50 million, and it is the fastest-growing airport in the world, according to the Airports Council International. In some places music stations and phone calls interfere with radio frequencies used by airports and aircraft, causing communication breakdowns with the air traffic control authorities. “They have a very old system,” said one pilot with Lion Air, who spoke on condition of anonymity out of fear that he would lose his job. Sometimes the air traffic control radar fails, as it did in Bali on July 15, creating delays and potentially dangerous confusion. “They know who you are, but they don’t know where you are,” the pilot said. He also said the increase in demand for air travel had created flight crew shortages. Last month he worked more than his allotted 110 airtime hours. “Now, I am working always,” he said. “Our biggest concern is with airport facilities, crew and human resources,” like air traffic controllers, Mr. Pamuraharjo said. There are now 18 airlines offering regularly scheduled flights, up from 13 in 2001. Garuda recently spun off Citilink, a low-cost subsidiary, and Lion Air is set to introduce a premium carrier, Batik Air, early next year. And the number of charter airlines has grown 33 percent in just four years. All are rapidly expanding to take advantage of a middle class that has grown rapidly in the last eight years, to 130 million from 80 million. “It’s kind of perfect for the airline market, particularly the low-cost segment,” said Brendan Sobie, a senior analyst for Southeast Asia at the Center for Asia Pacific Aviation, a consulting firm. And in a country of 17,500 islands, flying looks a lot better than the alternatives. Away from the main island of Java, road and rail networks are underdeveloped. Ferry rides often involve dangerous sea crossings on dilapidated ships. Sinkings are common. Air travel’s increasing popularity and accessibility seem to have emboldened airlines, despite infrastructure problems and overcrowding. “If my passengers complain about delays, I say, ‘Go by bus, go by train,’ ” said Rusdi Kirana, the chief executive of Lion Air, the low-cost Indonesian carrier. “We need them, and they need us.” The Malaysian airline Air Asia is rapidly expanding in Indonesia and last month agreed to buy the Indonesian low-cost carrier Batavia Air for $80 million. “Indonesia is like a planet,” said Tony Fernandes, Air Asia’s chief executive. “There is lots of room to grow.” Garuda, which went public last year but is majority-owned by the government, plans to increase its fleet to 194 aircraft from 95 by the end of 2015. It had $88 million in profits last year, even as other major carriers in the Asia-Pacific region, like Qantas of Australia and Cathay Pacific of Hong Kong, had an earnings dip. The most notable growth has come at Lion Air, the largest private Indonesian carrier. It recently signed a record $22.4 billion order for 230 Boeing 737s. Unlike many carriers in the Asia-Pacific region, Indonesian airlines have concentrated on increasing their domestic share. Garuda says it will cut back on flights to Europe this year because of high costs for fuel and sagging demand but will expand its routes to serve more remote areas in Indonesia. “For now, there’s a tremendous amount of opportunity to grow the domestic market,” said Mr. Sobie of the Center for Asia Pacific Aviation. But many airlines face staff shortages, and some have started pushing pilots to fly the maximum allowable number of hours to increase flight frequencies. The Ministry of Transportation has also come under pressure as demand has outstripped the capacity of airports and airlines. In 2007, an aircraft flown by the low-cost operator Adam Air crashed into the sea off northern Sulawesi Island, killing all 102 aboard. An investigation of the plane’s flight data recorder determined poor maintenance to have been a main cause. Months later, a Boeing 737-400 flown by Garuda overshot a runway in Central Java Province and burst into flames, killing 21 of the 140 on board. The pilot was later convicted of criminal negligence; the sentence was later overturned. Regulations were tightened in 2008 after a decision by the European Union to ban all Indonesian airlines from entering its airspace from 2007 to 2009 because of lax safety standards. The ban was lifted on only a handful of airlines, including Garuda. The Ministry of Transportation says it has made strides toward improving the safety record. The Directorate General of Civil Aviation is establishing runway safety teams to monitor airstrips for damage and obstructions. It plans to train as many as 180 new inspectors by the end of the year. “But implementation needs coordination with other ministries, and of course there is the budget limitation,” said Arfiyanti Samad, a secretary at the directorate. Much of the ministry’s budget of 6 trillion rupiah (more than $630 million) for 2012 will go toward improving airports, she said. But according to Mr. Yusof of S.& P., the country will need to invest as much as $5 billion in maintenance, repair and infrastructure before 2015, when the region’s aviation sector will come under an “open skies” agreement among members of the Association of Southeast Asian Nations. “Indonesia as a whole has a lot to do to improve their culture of safety,” he said. Gerry Soejatman, an airline analyst at Dini Nusa Kusuma, an information technology business that provides satellite service to Indonesia, said that intensifying competition within Indonesia would push local airlines to improve their service and safety records. “There will be a drive to provide a better experience,” he said. “And new technology will provide the edge.”

Indonesia
Airlines and Airplanes
Accidents and Safety
Infrastructure (Public Works)
Labor and Jobs


California: Assessor Is Accused of Taking Bribes

Abstract: The Los Angeles County assessor, John Noguez, and a top aide and a campaign contributor were arrested Wednesday in an investigation into influence peddling and slashing of property taxes for political allies. District Attorney Steve Cooley called it the most significant case of public corruption he had seen in four decades in the office. Mr. Noguez was arrested along with his chief appraiser, Mark McNeil, and an Arizona tax consultant, Ramin Salari, accused of conspiring to cut property values and save millions in taxes for clients of Mr. Salari, a campaign contributor. Mr. Cooley declined to comment on whether owners of the properties, primarily on the west side of Los Angeles, knew of the conspiracy. He said that there could be further arrests. Charges against Mr. Noguez include conspiracy, bribery and corruption. The complaint charged that he accepted $185,000 in bribes from Mr. Salari. The others were charged with conspiracy and misappropriation of public funds. A defense lawyer for Mr. Noguez said Mr. Cooley was engaged in a one-sided inquiry aimed at “getting” Mr. Noguez.

Bribery and Kickbacks
Frauds and Swindling
California
Property Taxes
Los Angeles (Calif)
Noguez John


U.S. Intelligence Puts New Focus on Afghan Graft

Abstract: WASHINGTON — The military’s intelligence network in Afghanistan , designed for identifying and tracking terrorists and insurgents, is increasingly focused on uncovering corruption that is rampant across Afghanistan’s government, security forces and contractors, according to senior American officials. Military intelligence officers in Afghanistan are scouring seized documents and interrogating captured fighters and facilitators — but not just to learn about insurgent networks that plan attacks, plant roadside explosives and send out suicide bombers. They are also looking for insights on how to combat a widespread perversion of authority by Afghan power brokers, which senior officials describe as “a plague” on the American-backed effort to build an effective and competent government and win the support of the Afghan people. It is a remarkable but perilous military undertaking in a sovereign country, particularly in a place of conspiracy theories and constantly shifting alliances, where it is hard to know who can be trusted and where many people are historically skeptical of what they see as intrusiveness by outsiders, this time by the Americans. The United States and its NATO allies may find themselves following leads that point to the top levels of government, because even close family members of President Hamid Karzai have been accused of engaging in the drug trade and enriching themselves with lucrative business deals. American contractors are among those accused of wrongdoing, and some in the United States government have been known to look the other way rather than upset Mr. Karzai. The new military anti-corruption effort is a joint operation with Afghan law enforcement and judicial authorities. But on Saturday, The New York Times reported that some in Afghanistan, including one of Mr. Karzai’s former top intelligence aides, complained that the Afghan president himself was increasingly mistrustful of the United States and had talked of cutting his own agreement with the Taliban. A central goal in the Obama administration’s counterinsurgency campaign in Afghanistan, which is commanded by Gen. Stanley A. McChrystal, is to win over the country’s population. That goal requires persuading the Afghan people to support the central government in Kabul and not shadow Taliban governments that exist in many provinces. To that end, anti-corruption efforts are every bit as important as killing or capturing militants, if not more so, according to senior officers involved in the effort. “Where once our whole network was to capture and kill Al Qaeda and the Taliban, now the information we’re trying to get is the information for the networks of corruption and government and influence,” said a senior American military officer in Afghanistan. “The intelligence we were focused on before was just to drive the next target we were going to get,” he said. “Now our targeting is much more focused on the government: How do you control for corruption? How does the process work for security contracts?” Top NATO officials in Afghanistan drove the creation of a new anti-corruption task force last October, and it has already succeeded in forcing out a number of provincial security officials suspected of significant wrongdoing, many of whom have been brought to trial. The task force, whose senior NATO leader is Maj. Gen. Michael T. Flynn, the alliance’s director of military intelligence in Afghanistan, gathered information that allowed Afghan officials to arrest, try and convict a border police commander who was pocketing salaries from ghost personnel on his payroll as well as stealing money meant for widows of officers killed in action. Other provincial-level police chiefs have been removed from their posts because they were involved in corrupt activities uncovered by the task force’s intelligence operations, although they were not brought to trial because of a lack of the kind of evidence that could be presented in Afghan courts, officials said. These actions, while still limited in scope, have served as “a shot across the bow” of the security ministries, said another senior American military officer. “The word is out that we are going to continue to look at corrupt behavior in the police and that we have an effort under way,” the officer said. “In a counterinsurgency fight, we cannot afford to have abusive behavior by police, and we cannot afford to have corrupt behavior by police.” That officer, like other the others who discussed the effort, spoke on the condition of anonymity because of the sensitivity of military intelligence operations. The military is focused on battling corruption at the local and provincial levels in ways that illustrate a commitment to good governance for the population to see in their day-to-day lives. Yet, Pentagon officials acknowledge that this localized effort must be supported by a more senior-level, political decision by the Obama administration on how to deal with corruption at the uppermost echelons of the Afghan government. American military officials have worked closely with Afghan law enforcement authorities and developed information that local prosecutors have used in newly established trials at the detention center for detainees accused of corruption or drug charges. Ultimately, this kind of information could also be used to help the Afghan government weed out corrupt governors. American officers are cognizant that some Afghans may make false accusations to use the anti-corruption effort to take down political opponents. The antidote for such abuse, officials say, is to demand multiple sources of information, with multiple sources of confirmation, before making taking action. “It’s a lesson we learned from Iraq — to ‘mass’ intelligence against one individual,” said the senior American officer. “We mass the analysts, we mass the interrogators and we mass the exploiters of the information before making a move.” Weeding out corruption is not the only significant adjustment of military intelligence activities in Afghanistan as the Defense Department shifts the bulk of its attention from Iraq. In Iraq, a relatively well-educated and high-tech society with a similarly well-organized insurgency, American troops seized computer hard drives and cellphones that provided a trove of information about militant networks, including detailed accounting of foreign fighters flowing into the country. In Afghanistan, by contrast, there is a much lower level of technical sophistication with far fewer computers, hard drives and other communications equipment to exploit. In addition, insurgent networks in Afghanistan are far more fractured and decentralized than in Iraq. More than 90 percent of detainees from recent security sweeps in Afghanistan are from their local areas, and are not foreign fighters or insurgents from other districts within Afghanistan. Thus, they have little information about the broader insurgent network that can be exploited. Interrogations of these recent detainees yield a “good news, bad news” version of events, officials said. According to senior American officers, many detainees expressed deep frustration at the Taliban leadership in exile inside Pakistan. These detainees — even the group aged 35 to 55 and who are in leadership ranks of the provincial insurgency — tell interrogators that they are short of money and tired of taking orders from leaders who remain at a safe distance from the fight. At the same time, these detainees still express a lack of confidence in the Kabul government, and remain unwilling to reintegrate and stop fighting, officials said. The troop increase ordered to Afghanistan by President Obama has brought with it increases in the intelligence-gathering and exploitation effort, as well. The American military operation in Afghanistan is operating with significantly increased numbers of sophisticated surveillance aircraft and a growing number of analysts to exploit the widening stream of information. The number of American military and civilian interrogators has doubled since last summer, to about 75 people, a senior military officer said. And “fusion cells” — teams of people who gather and assess information from the battlefield to quickly pinpoint a likely target for a follow-on raid — have been pushed from the large headquarters in Kabul out to military outposts across the country.

United States Defense and Military Forces


Tesco to Spend $1.6 Billion to Revive U.K. Business

Abstract: LONDON — The British supermarket chain Tesco announced a £1 billion investment program Wednesday that it hopes will revive earnings in its home market by expanding its online business while adding fewer large stores. Tesco, the world’s third-largest supermarket chain after Wal-Mart Stores and Carrefour, is trying to reverse a decline in profit in Britain, where it had been growing for 20 years. The spending program, the equivalent of $1.6 billion, follows criticism from investors that Tesco neglected its base as it focused on expansion abroad, including in the United States, where it started the Fresh & Easy chain of grocery stores. Over the past two decades, Tesco grew into a retail behemoth and a darling of investors, with earnings increasing by at least 5 percent almost every year since 1994. But a recession in Britain, a costly expansion in the United States and China, and ventures into banking and selling used cars turned Tesco into the worst-performing stock on the FTSE 100 index this year. A shift in consumer behavior toward online shopping further hurt Tesco, which must maintain a network of large and costly stores. Traditional retailers are increasingly under pressure as online purchases erode their sales. Some, like Wal-Mart, have started buying small start-up companies or competing online retailers to better cope with the migration of customers to the Internet. Philip Clarke, Tesco’s chief executive, said Wednesday that he planned to invest £200 million to add more products to the company’s online stores while reducing the pace of expansion for its brick-and-mortar stores. Tesco would add about 38 percent less retail space in Britain in the 2012-13 fiscal year than in 2011-12, he said. The company will also slow its expansion in the United States, Europe and Asia, where it has already decided to exit the Japanese market. “As customers go more to convenience and online, we reduce our store expansion,” Mr. Clarke said. “The plan makes sense,” said Freddie George, an analyst at Seymour Pierce in London. “Over the last couple of years they’ve taken their eyes off the ball in the U.K.” But some investors were not convinced and Tesco’s shares fell 2.1 percent Wednesday in London. The retail environment in Europe remains difficult because of the continuing economic crisis and households are reluctant to spend, said Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers. Following in Amazon’s footsteps, Tesco has started to allow other retailers to sell their products through Tesco’s Web site. Tesco has started out by allowing two retailers — Crocus, which sells plants and gardening supplies and equipment, and Maplin, which sells batteries, electronics and electrical goods — to sell their wares through Tesco.com . The strategy is intended to drive more customer traffic to the site, and Tesco gets a cut from every sale. Tesco said it planned to add more retailers. The company said it planned to expand the products it sold online to 200,000 by the end of the year from 80,000 now. It also plans to increase the number of “click and collect points” — locations where customers can collect purchases they have ordered online, rather than waiting for delivery — to 1,600 by the end of this year from 770 now. Although Tesco plans to slow its overseas expansion, Mr. Clarke said, the company is not giving up on its Fresh & Easy stores in the United States. Tesco now expects the business to break even about a year later than initially expected, but the company projects that Fresh & Easy will have some profitable months in 2013. “The U.S. is moving in the right direction but I’d like it to move faster,” Mr. Clarke said. “I need to demonstrate to shareholders, who have been very patient with us, that we can do it.” When Tesco started its Fresh & Easy brand, it saw a chance to fill what it saw as a need for convenient grocery stores in certain areas of the Western United States. But about five years later, only 30 of the 186 stores are making a profit. Mr. Clarke said losses at Fresh & Easy narrowed for the first time in fiscal 2012 but that Tesco would slow down the opening of new stores in the chain and be more cautious about how to expand the business. Instead, Tesco is remodeling the stores it has and will try to attract more customers with fresh flowers, wooden floors, closed refrigerator doors and in-store bakeries. “There’s undoubtedly frustration about what is happening in the U.S.,” said Clive Black, an analyst at Shore Capital. “Not pressing on as aggressively with store openings is positive but patience is being tested.” Tesco also plans to slow the pace of its expansion in China, where it said it is not immune to the impact of rising wages. It is also halting the expansion of Tesco Bank, which offers financial products like credit cards and insurance. The company has already announced it will close Tesco Cars, which sells second-hand automobiles and began just a year ago.

Tesco PLC
Shopping and Retail
Great Britain
Amazon.com Inc
Wal-Mart Stores Inc
Carrefour SA
Supermarkets and Grocery Stores


In Reversal, Safe Is Risky, Risky Is Safe

Abstract: For a long time, if there was a problem on Wall Street, Credit Suisse was not far away. From its high-flying mortgage desk that blew up in 1998 to its superstar technology team that promoted Internet stocks in the late 1990s, Credit Suisse could be counted on as an example of problems on Wall Street. UBS , its crosstown rival in Zurich, has typically taken a more conservative approach, avoiding seemingly risky markets like leveraged lending while relying instead on its huge wealth management unit. But when the markets fell apart this summer, it was UBS, not Credit Suisse, holding the bag. Some of the Street’s safest institutions — or those that hoped to be perceived as safe — turned out not to be, while some perceived as risky are so far sailing through. And it was not the giant loans to buyout clients that so many Wall Street players had warned of that brought the party to an end. It was the subterranean world of mortgage-related debt — securities that were backed by the American dream of homeownership — that laid bare inadequate risk controls. Conventional wisdom, it turns out, has not been very reliable in the topsy-turvy world that has emerged from the credit market meltdown. Just as some investors were starting to believe that Wall Street could produce more consistent growth in profit, the banks there delivered a stark reminder of why they tend to trade on such low earnings multiples. Through the third quarter, UBS won the title as European market write-down leader, taking a $4.4 billion hit in mortgage-related products and an additional $400 million on leveraged loans. Analysts expect $7 billion more in mortgage-related write-downs for UBS. Credit Suisse paled in comparison, with a write-down of only $947 million on mortgage-related securities and $875 million on leveraged loans. Among the American firms, investors might have expected Merrill Lynch to weather the storm as a result of its huge and stable brokerage business. Citigroup, meanwhile, has a large retail bank and sufficient global diversification that could have provided a buffer. Instead, they’ve both buckled under a business — mortgages — that accounted for a relatively small portion of profits. The two managed to write down an astonishing $20 billion or so, with the vast majority coming from mortgage-related products. Lehman Brothers, which investors might have expected to suffer because of its huge mortgage business, has so far taken one of the smallest losses on the Street. Goldman Sachs, with its hefty appetite for risk, could easily have ended up on the wrong side of wildly gyrating markets. Instead, it has generated record profits so far this year after it positioned itself against the collapse. The global tally of pain has been about $50 billion, according to a Merrill Lynch analyst, Guy Moszkowski, with more expected. No wonder financial stocks have been jettisoned. And while the agony has been concentrated among those who built and sold the financial fairy tale of structured credit products (creating low-risk investments from high-risk securities), virtually all the banks’ shares have suffered. Warren E. Buffett, quoted by a Lehman analyst, Jon Peace, said it best: “One of the lessons that investors seem to have to learn over and over again, and will again in the future, is that not only can you not turn a toad into a prince by kissing it, but you cannot turn a toad into a prince by repackaging it.” Alongside Goldman and Lehman, there were others who avoided the mess in subprime loans and collateralized debt obligations, known as C.D.O.’s. JPMorgan wrote down a meager $339 million on C.D.O.’s. It also made a modest profit on its subprime positions and seems to have avoided the problem with structured investment vehicles, or SIVs, which has racked Citigroup. JPMorgan’s investment bank, a leader in leveraged lending, took a $1.3 billion hit on the value of leveraged loans, but almost all of the players in that business did also. Even Goldman wrote down $1.5 billion in leveraged loans. The trouble is, even the winners, few as they may be, can take little solace in the pain of their competitors. To the extent the mortgage debacle will slow overall economic growth, everyone will suffer. And the eye-popping write-downs prove what the skeptics have always said: that the attractive profits made by Wall Street’s opaque trading businesses are unpredictable and worth much less when it comes to assigning price to earnings multiples at the investment banks. Goldman Sachs today trades at almost nine times trailing 12-month earnings. But shares of traditional asset managers like T. Rowe Price, which are less likely to risk billions of dollars to build expertise in an area riddled with acronyms (A.B.S., C.D.O., SIV), trade at more than 20 times earnings. That means that even though some firms have so far shown that they are good risk managers, others on the Street proved once again that you can never count too heavily on sophisticated systems, armies of Ph.D.’s or confident managers who have it all under control (and appear to play a lot of bridge or golf). The failure of many means that none, not even the market leader, will be given the benefit of the doubt.

Stocks and Bonds
Banks and Banking
Brokers and Brokerage Firms
Credit Suisse Group
UBS AG


Obama Hails Enforcement on Trade Deals to Win Support for T.P.P.

Abstract: WASHINGTON — The Obama administration has used a flurry of tough-sounding trade enforcement announcements in recent weeks to counter complaints from the left and right that free trade is not fair trade — and to assist President Obama in the struggle to win approval of his trade pact with 11 Pacific Rim nations. As evidence that past trade agreements are being policed, Mr. Obama and his cabinet members have trumpeted new complaints filed against nations alleged to be cheating, as well as the administration’s latest victories in previous cases taken to the World Trade Organization, the referee of global commerce. Days apart in September, for example, actions were taken against Chinese grain exports, India’s barriers to solar-power parts, European subsidies for airliner manufacturing and foreign fishing subsidies. On Monday, the administration announced that it would press the W.T.O. for a special hearing demanding “the rapid enforcement” of the organization’s favorable rulings on exports of airliners and solar products. With each announcement, administration officials have added a good word for the pending Trans-Pacific Partnership agreement, arguing that it would raise trade standards and provide more tools to enforce them. Even opponents of trade agreements have said positive things about the administration’s enforcement record, though they say they will not be won over to the Pacific pact. Whether fence-sitting lawmakers can be persuaded is the question. Yet it might never be answered if Mr. Obama cannot get Congress’s Republican leaders — lashed by antitrade sentiment during this campaign season, especially from the party’s presidential nominee, Donald J. Trump — to hold a vote on the pact in a postelection lame duck session. Since Mr. Obama took office in 2009, his trade office has lodged 23 challenges at the World Trade Organization and won or settled favorably all 16 cases decided so far. Fourteen of the 23 cases have been against China, three against India and others have involved the European Union, Argentina, the Philippines and Indonesia. “In previous administrations, the enforcement record was basically miserable,” Representative Sander M. Levin, a Michigan Democrat who opposes the Pacific pact, told the Council on Foreign Relations last week. “Now I think there’s been an improvement in enforcement,” he added, “except it isn’t nearly enough.” Thea Lee, deputy chief of staff at the A.F.L.-C.I.O., said she saw “a mixed record.” She praised administration efforts against maneuvers by other nations to underprice their manufacturers’ exports, which have harmed American manufacturing. But she criticized the record on enforcing labor rights and on combating nations that hold down the value of their currencies to lower the cost of their exports. “On certain issues like antidumping and subsidies, and some of the issues dealing directly with China, the administration has done a good job, has been aggressive in bringing cases, winning cases and getting relief for workers and businesses that have been affected by unfair trade practices,” Ms. Lee said. “But,” she added, “I think the failure to enforce has been egregious with respect to workers’ rights and currency.” In their first debate, Mr. Trump initially had Hillary Clinton, the Democratic nominee, on the defensive about trade , as he questioned her sincerity in opposing the Pacific agreement. Mrs. Clinton restated her opposition and added a promise that as president she would name “a special prosecutor” for trade. “We’re going to enforce the trade deals we have, and we’re going to hold people accountable,” she said. What Is TPP? Behind the Trade Deal That Died On his first full workday in office, President Trump delivered on a campaign promise by abandoning the enormous trade deal that had became a flashpoint in American politics. Vice President Joseph R. Biden Jr., stumping for the agreement at the port of San Diego in July, said the administration had been enforcing trade pacts “more aggressively than any administration in the past.” He added, however, “One of the reasons so many Americans are upset about trade is because we have not adequately enforced them” over time. A desire for vigorous enforcement is perhaps the one thing that unites trade skeptics and pro-trade business groups. John G. Murphy, senior vice president for international policy at the U.S. Chamber of Commerce, said he often speaks to state and local chambers, “and when I say that the agreements we sign aren’t worth the paper they’re written on if they aren’t enforced, I regularly get applause.” The administration has “a strong record,” Mr. Murphy said, and he criticized trade opponents who favor tough enforcement but oppose the trade agreements that established the policing regimes. In mid-September, the president took the unusual step of personally announcing the administration’s newest complaint to the W.T.O. against China — the country Mr. Trump has excoriated most — rather than leaving it to his trade representative, Michael B. Froman. The United States alleged that China excessively subsidizes rice, wheat and corn, encouraging farmers to grow more and distorting world markets. “We have to ensure America plays a leading role in setting the highest standards for the rest of the world to follow,” Mr. Obama said, before adding, “That’s what the Trans-Pacific Partnership, or T.P.P., is all about.” Image A man protesting the Transatlantic Trade and Investment Partnership (T.T.I.P.), a trade deal being negotiated between the United States and the European Union, during a demonstration last month in Berlin. Credit Clemens Bilan/Getty Images As part of the promotion, Mr. Froman and Tom Vilsack, the agriculture secretary, wrote a column for an Iowa newspaper last month. Mr. Vilsack is the state’s former governor, and its congressional delegation includes Senator Charles E. Grassley, a senior Republican on the panel responsible for trade. The column’s headline : “Protecting Iowa’s Access to International Markets.” In the same week, the United States and a dozen other nations united in a campaign to ban government subsidies blamed for overfishing. China is considered a main culprit. That announcement, too, included a plug for the Pacific accord — for “including the first enforceable prohibitions on harmful fishing subsidies” in a trade pact and eliminating foreign taxes on American fish exports. The W.T.O. also handed the administration two victories that it was quick to broadcast. First, an appellate panel of the trade organization upheld a ruling that backed America’s complaint against India’s ban on imports of solar-power parts . The prohibition was blamed for a sharp drop in American exports of such products. The administration seized the moment to laud the potential benefits of the Pacific trade agreement for American exporters of clean energy products. In the second decision, the W.T.O. ruled against European nations’ subsidies of Airbus , the aircraft manufacturer, finding that they had cost billions in sales for the American rival Boeing. Such actions against other countries’ subsidies, dumping and market barriers, however, do not address two big concerns of trade skeptics: currency manipulation and workers’ rights. Currency practices are tricky to police; other nations could counter with complaints about the monetary policies of the independent Federal Reserve, which affect the value of the dollar. Instead of writing mandates into the Pacific accord, negotiators attached a side agreement spelling out disclosure requirements and a consultation process for disputes between nations. On workers’ rights, Ms. Lee of the A.F.L.-C.I.O. said, “People’s lives are at stake.” The administration did require Colombia to change its labor practices before the United States-Colombia trade pact could be approved, but Ms. Lee said improvements have come slowly or not at all. In Guatemala, where union organizers have suffered violence and assassinations, she said a case filed by the A.F.L.-C.I.O. and local unions was ignored in the George W. Bush administration and, despite some attention, has languished under Mr. Obama. The Pacific agreement includes concessions from Vietnam, Malaysia and Brunei on labor and human rights. But, Ms. Lee asked, “Can we stop and figure out how to get that piece of it right before we take the leap of tying our economies together permanently?”

International trade
Trans-Pacific Partnership
US Politics
World Trade Organization
Barack Obama


Fair Play, It Turns Out, Isn't Dead

Abstract: Sometimes, the solutions to the ills so manifest and so obvious in the global game lie completely within the players, big and small. The World Cup draw in Cape Town on Friday was stigmatized by the shrug of indifference by which the sport’s overlords have implied that if a player gets away with cheating on the pitch, there is nothing officialdom can do about it. Adding irony to insult, FIFA’s president, Sepp Blatter, pronounced that Ireland might be afforded “moral compensation” for losing out in World Cup qualification to the blatant handball from Thierry Henry to set up the winning goal for France. But on Saturday, the players of Ascoli, a team struggling at the foot of the Italian second division, demonstrated fair play to a man. It led at 14 minutes, after a controversial goal that came directly from an injured opponent, Carlos Valdez of Reggina, trying to boot the ball out of play to receive treatment. Ascoli intercepted his clearance and scored its goal. In the heat of Reggina’s protests, its defender Andrea Costa was red-carded by the referee. But when calm was restored, Ascoli’s players did the right and proper thing. They stood aside and allowed Reggina to equalize, unopposed. That act, alone, is worth the FIFA so-called Fair Play Trophy at the end of this season. It may not get it because Ascoli Piceno is a mere Serie B club, off the radar of the headliners like Lionel Messi, Cristiano Ronaldo and, well, Thierry Henry. For what it’s worth, this column salutes the team. Fair Play in soccer, however, might yet have repercussions for Ascoli. The equalizer led to a 3-1 home defeat, and the points lost Saturday could be critical when the relegation places are settled at the end. Way above Ascoli’s pretensions, the Serie A title in Italy is warming toward a three-way contest. AC Milan, after its slow start under a new coach, Leonardo, won 3-0 on Saturday against Sampdoria — and we should take with a pinch of salt the obsequious suggestion by the club’s vice president, Adriano Galliani, that the praise should go to his boss, and Italy’s boss, Silvio Berlusconi. “We were a great Milan,” Galliani said after the game. “Berlusconi came to the dressing room at halftime. He told the players to keep the ball, and that’s what they did. We never showed Samp the ball.” But maybe the fact that Milan had killed off the game with goals from Marco Barriello, Clarence Seedorf and Alexandre Pato in the first 23 minutes had something to do with the victory. And there is no team in Italy more experienced or more adept at playing keep-ball than Milan. The victory takes it to within four points of the league leader, its neighbor Inter, which lost a fractious encounter against third-placed Juventus, 2-1, in Turin. The features of that match were an opening goal for Juve that was over the line off a defender; Inter’s coach, José Mourinho, getting himself ordered to the stand for his petulance on the touchline; and an equalizer from Samuel Eto’o. And then the pièce de résistance in the game winner. Claudio Marchiso, at 23, is young by Italian standards and showed wonderful composure and marvelous footwork just to stay on his feet as he danced through the Inter defense to steal the vital goal at 58 minutes. Serie A, seemingly the preserve of Inter ever since the 2006 match-fixing scandal demoted Juventus to Serie B and knocked points off AC Milan, is suddenly and refreshingly a real competition again. And whatever Mourinho thinks of that, he is keeping to himself. He not only ducked the postgame news conference, but his captain, Javier Zanetti, told reporters, “He didn’t even speak to us.” From Italy to England, where the Premiership also was revitalized by the top team’s losing. Chelsea’s progress under the former Milan trainer Carlo Ancelotti seemed imperious as it overpowered Arsenal a week ago and had also beaten Manchester United. But Chelsea fell at Manchester City, the new force empowered by money from the Abu Dhabi government. City’s squad was a match for Chelsea in a tense, physical encounter, and its 2-1 triumph came despite Chelsea’s taking a fortuitous early lead through an own-goal off Emmanuel Adebayor. The big Togo international knew nothing about the mishap as his goalie, Shay Given, pushed the ball into his back, but he was motivated to score at the other end, and then Carlos Tévez struck what turned out to be the decisive second goal. City won because it matched Chelsea’s outstanding quality, its redoubtable team spirit. And it won because Given, the Irish keeper still traumatized by that dastardly Henry trick in Paris last month, brought off the first penalty save anyone has made against Frank Lampard in three seasons. So, in Italy and in England, the leagues opened up a little at the top this weekend. In Spain, not so. Real Madrid came from a goal down to overpower Almería, 4-2, at the Bernabéu stadium on Saturday evening, but a couple of hours later the champion and still the league leader, Barcelona, showed even finer class in outplaying Deportivo la Coruna, 3-1, in Coruna’s fortress, the Riazor. Those two games demonstrated something about the best player in the world in 2009. Cristiano Ronaldo, last year’s leading man and this year’s €100 million, or $148 million, purchase by Real Madrid, is being eclipsed at the moment by Barça’s Messi. Messi has just been awarded France Football’s Ballon d’Or as the top player in the sport. Journalists from 93 countries voted him overwhelmingly their No. 1, and he is certain to win all the other global awards as the season of accolades begins. Ronaldo, just back from ankle injury, had a mixed match Saturday. He set up a goal, he scored one and he had a penalty saved. He received a yellow card for baring his chest to celebrate his goal, then was sent off for a rash kick at a defender who had cuffed the back of his head. Messi was on the pitch the whole 90 minutes. He scored twice — through marvelously quick movement of foot for the first goal and then with a leaping header. But Messi was a whole lot more, defending when he felt the need, constantly changing position, the star who sublimates himself to the team. And keeps his shirt on. Messi turned a difficult and fascinating game. “That,” said Dani Alves, his Barcelona teammate, “is why he’s the Ballon d’Or.”


Risky Throw Allows the Yankees to Escape the Giants

Abstract: The San Francisco Giants’ decade of success has been largely defined by the devious pitching of their ace, Madison Bumgarner, and the nearly immaculate defense of Brandon Crawford at shortstop . For the Yankees this season, their best success has come when they hold a lead entering the seventh inning, giving them the ability to pass the game over to relievers Dellin Betances, Andrew Miller and Aroldis Chapman. On Friday night at Yankee Stadium, all of those pillars collapsed. With chaos mounting, the Yankees needed heads-up base running by Chase Headley to steal a 3-2 win over the Giants. After Betances and Miller each allowed a run in relief, relinquishing a 2-0 lead, Headley led off the eighth inning with an infield single, beating out a throw off a slow roller that was fielded by third baseman Ramiro Pena. Mark Teixeira, who entered the game in the seventh as a defensive replacement, walked. With a rally brewing, Austin Romine failed at two unsuccessful attempts at a bunt. Forced to swing, Romine grounded to shortstop, where Crawford did something quite rare: He made a questionable decision. Cleanly fielding the ball, Crawford took a difficult angle to second base instead of tossing the ball for a forceout. Teixeira was out at second, but Crawford had to turn his body awkwardly before throwing to first base. His throw sailed high, and Brandon Belt was unable to catch it. Headley alertly sprinted home, beating the throw and giving the Yankees the lead again. “I just knew that the way that the ball was hit that it was going to be a close play,” Headley said. “It wasn’t going to be an easy double play. Just trying to anticipate something going wrong, and it did.” While Crawford misfired under pressure, Yankees starter Masahiro Tanaka thrived with his back against the ropes. That in itself was a slight quirk, given that Tanaka was pitching on four days’ rest. After a five-pitch first inning, Tanaka put multiple runners on base in each of the next three innings. The most perilous situation came in the fourth, when the Giants loaded the bases with one out. But Ramiro Pena flew out in foul territory, and after falling behind on a 3-1 count to Gregor Blanco, Tanaka fought back for a strikeout. After firing a fastball past Blanco, Tanaka, in a rare display of emotion, turned around, flexed and yelled with exhilaration. The Yankees were relying on Tanaka’s pitching even more than usual because Manager Joe Girardi decided to sit Teixeira, Brian McCann, Jacoby Ellsbury and Didi Gregorius. When asked why, Girardi replied, “Bumgarner.” Bumgarner had particular trouble, however, against Starlin Castro, who doubled in Brett Gardner to put the Yankees ahead, 1-0, in the first inning. Castro finished 3 for 4 off Bumgarner, and now has 14 hits in 30 at-bats against him. Castro’s .467 average against Bumgarner is the highest of any player with at least 20 at-bats against him. “That’s what I was wondering: Is he hitting me like that before?” Bumgarner said when asked about Castro’s success against him. “I don’t know the numbers. Not a whole lot stuck out, but yeah, I mean, he swung the bat tonight for sure.” The Yankees also received an unexpected contribution from the seldom-used reserve Ronald Torreyes. Starting in place of Gregorius at shortstop, Torreyes collected a single in his first career plate appearance against Bumgarner, and later scored the Yankees’ second run. Girardi said that he especially wanted to rest Gregorius, even though Gregorius had a .366 average against left-handed pitchers, which led the major leagues among left-handed hitters, entering Friday’s game. Resting a core of his lineup was not Girardi’s only risky move. Throughout the week, he had to defend planning to start Tanaka on only four days’ rest. This season, Tanaka has often struggled whenever he has pitched on four days’ rest. Before Friday’s game, Tanaka was 1-2 with a 5.33 E.R.A. on four days’ rest, with eight home runs allowed and 10 walks in 49 innings pitched. He is 4-0 with a 1.05 E.R.A., one home run and five walks in 51⅓ innings on five days’ rest. “It’s good to go out there and be able to perform, regardless of the days in between,” Tanaka said through an interpreter. He seemed to put his troubles behind him after getting out of the fourth inning unscathed. During the next two innings, Tanaka retired the Giants in order. It was the final time Yankees pitchers could breathe easily against the Giants. After the game, although obviously pleased with the outcome, the Yankees were still trying to assess the atypical script that played out on Friday. “You don’t see it very often, so when it happens, I think we’re a little bit shocked, but I’m going to bet on them every time,” Girardi said of his bullpen losing a lead. Discussing the deciding run, Headley added: “I’ve played against Brandon Crawford for forever it seems like, and I don’t remember seeing him throw any balls away. In my opinion, he’s as good a defensive shortstop as there is in the game. It’s just a strange game sometimes.”

Baseball
Yankees
San Francisco Giants
Brandon Crawford
Chase Headley


Ron the Greek Is Out of Classic

Abstract: Ron the Greek will not run in the $5 million Breeders’ Cup Classic on Saturday because he has a hoof injury. The trainer Bill Mott said an abscess in the right front hoof was not a major problem, but the timing of it will keep the 6-year-old Ron the Greek from competing.


Iraq Report Prompts More Defensiveness Than Regret From Tony Blair

Abstract: LONDON — His voice sometimes close to cracking, his expression strained and grim, former Prime Minister Tony Blair spent much of the past two days responding to the damning judgment of an inquiry into how he led Britain into the Iraq war, engaging in an extraordinary public mix of soul searching, regret and defensiveness. Judging by much of the media reaction, he would have done better to save his breath. “A Monster of Delusion,” read the headline over a picture of Mr. Blair in The Daily Mail on Thursday. The Sun, another British tabloid, described him as a “Weapon of Mass Deception,” a reference to the incorrect assertions by Mr. Blair and President George W. Bush before the invasion that Iraq had an arsenal of unconventional weapons. Nine years after stepping down from office, Mr. Blair — the most successful politician of his generation, who led the Labour Party to three consecutive general election victories with a centrist message — is widely loathed in Britain, his legacy defined overwhelmingly by the Iraq war and its bloody aftermath. He has few defenders, especially within his own party, which was split at the time by his support for the war and has since shifted leftward again, repudiating much of what he stood for. Mr. Blair is such a pariah on the left, said Steven Fielding, director of the Center for British Politics at the University of Nottingham, that “if he says ‘black,’ almost everyone else will say ‘white.’ ” Mr. Fielding added, “In the party he once led, to be described as Blairite is the greatest insult that can be leveled.” More broadly, Mr. Blair has failed to rehabilitate his image since leaving office, and in some ways has added to his problems. Though he set up the Tony Blair Faith Foundation, intended to counter religious conflict and extremism, its work has been overshadowed by his business interests. Mr. Blair’s wealth, and his willingness to advise nations with poor human rights records such as Kazakhstan, has fueled another strand of criticism: that he was always too impressed by those with power and money. And his diplomatic work, trying to bring peace to the Middle East, ran up against the intractability of the conflicts in that region. Image A demonstration in London on Wednesday against Mr. Blair and his decision to go to war in Iraq. Credit Paul Hackett/Reuters “There will not be a day of my life where I do not relive and rethink what happened,” Mr. Blair said, referring to the Iraq war. “People ask me why I spend so much time in the Middle East today. This is why. This is why I work on Middle East peace, on the dialogue between faiths on how we can prevent young people growing up with hatred in their hearts towards those who look, think or believe differently from them.” The 2.6-million-word report released on Wednesday was a savage indictment of Britain’s involvement in Iraq, condemning it as ill prepared and poorly executed, and concluding that it was based on flawed and unchallenged intelligence. In confronting the charges against him, Mr. Blair spoke sometimes in confessional terms, acknowledging those failings with “more sorrow, regret and apology and in greater measure than you can know or may believe.” But what he did not do was to accept the fundamental premise of many of his critics: that he had been wrong to sanction military action against Saddam Hussein. The view of many of the protesters who gathered on Wednesday waving placards reading “BLIAR,” and of relatives of some of those who died in the conflict, is that he is culpable for taking Britain into a disastrous war on false pretenses. There have been attempted citizens’ arrests of him on war crimes charges. As one of his Labour Party critics, Diane Abbott, said on Thursday, Mr. Blair’s reputation had “bled to death in the sands of Iraq.” Mr. Blair was always unpopular among the left of the party, who felt he had gone too far in abandoning core principles for the center ground while embracing central elements of Thatcherism. Even they would admit that he was good at winning elections: He scored his third victory in 2005, after the invasion of Iraq. Mr. Blair presided over a generally healthy economy and helped build peace in Northern Ireland. But many Britons found it inexplicable that he chose to go to war alongside Mr. Bush. In 2003, Mr. Bush was unpopular in Britain, and so was going to war in Iraq. Mr. Blair has sought to address his critics previously, but not at such length and with such public emotion as he has since the publication of the new report on Wednesday. The gist of his response was that his job as prime minister was to make tough decisions and that while he regretted many of the consequences of this one, he stood by it as the best available option at the time. “The world is better off without Saddam,” Mr. Blair told reporters in London, adding that had the Iraqi leader been left alone, he would have remained a threat to peace. And, had Mr. Hussein survived until the Arab Spring of 2011, he would have clung to power “with the same deadly consequences as we see in the carnage of Syria,” Mr. Blair suggested. “I will never agree that those who died or who were injured made their sacrifice in vain,” said Mr. Blair, while acknowledging that some of the families of those casualties “cannot and do not accept this is so.” In that he is correct. After the report’s publication, Sarah O’Connor, the relative of one victim, called Mr. Blair “the world’s worst terrorist.” Reg Keys, another victim’s relative, described Mr. Blair as a “consummate actor” and said that his long public statement resembled “the ramblings of a madman.” While the report, seven years in the making, provides a damning indictment of sloppy decision-making, cataloging a host of policy and other failings, it does not accuse Mr. Blair of lying — a point to which the former prime minister returned frequently. Over the years, Mr. Blair has been accused by critics of deceiving Parliament and the public, and on Wednesday he said accusations of “bad faith, of lying or deceit or deliberate misrepresentation” should be laid to rest. “I did not mislead this country,” Mr. Blair said. “I made the decision in good faith on the information that I had at the time.” His unequivocal support for Mr. Bush was essential to prevent the United States from pursuing a unilateral foreign policy, Mr. Blair argued, rejecting the characterization of himself as the president’s “poodle.” He defended a message sent to Mr. Bush, before the decision to invade, including the phrase: “I will be with you, whatever.” That statement was, Mr. Blair said, “not a blank check.” Yet 13 years after Mr. Blair ordered British troops into action, his response to the latest inquiry is unlikely to bring closure because he is not budging on one central point. “What I cannot do and will not do,” Mr. Blair said, “is say we took the wrong decision.” Mr. Fielding said history’s judgment on Mr. Blair’s premiership may be more positive, but that Mr. Blair has refused to do the one thing that might soften the damning verdict of his contemporaries. “If he was ever going to, this was the moment for him to apologize and say, ‘We should not have done this,’ ” Mr. Fielding said. “If he isn’t going to say this now, he will take this to his grave.”

Tony Blair
Iraq War
Great Britain
Labour Party Great Britain
George W Bush
US Foreign Policy