Saturday, December 30, 2006

Financial Times Editorial - The nasty taste left by Apple’s options

Financial Times Editorial - The nasty taste left by Apple’s options
Copyright The Financial Times Limited 2006
Published: December 29 2006 22:05 | Last updated: December 29 2006 22:05

Investors in Apple breathed a sigh of relief on Friday when the company largely exonerated Steve Jobs, its chief executive, from blame in the backdating of share options at the company. But the way in which Apple conducted, and disclosed details of, its inquiry leaves a lot to be desired.

Other US chief executives have had to resign because they knew about options backdating at their companies. Options were adjusted in order for the recipients to gain from a lower strike price, while allowing companies favourable tax and accounting treatment. It was a widespread form of deception that reflects badly on US attitudes towards corporate governance.

One of Apple’s priorities, after it uncovered options backdating between 1997 and 2001, was to retain Mr Jobs as its chief executive. More than any other executive involved in options backdating, Mr Jobs personifies his company. He co-founded it and it languished after he was forced out in 1985. Only after he returned in 1997 did it start the recovery culminating in the success of the iPod music player.

The special committee of directors, chaired by Al Gore, the former US vice-president, put the blame on two unnamed former officers of the company. This was announced in October after a three-month inquiry, along with the resignation as a director of Fred Anderson, Apple’s former chief financial officer. Apple also said that Mr Jobs had been “aware” of some options backdating but had not received or benefited from these grants.

That seemed clear enough until on Friday when Apple amended its story in two respects. First, it said that Mr Jobs had been “aware [of] or recommended” some backdating of options that were awarded to others. In other words, he was not simply the passive observer of misconduct by others but an active participant himself. Even if he did not know that this was illegal, it was an error of judgment.

Second, Apple disclosed details of a backdated option grant that Mr Jobs received himself – but never exercised. He got a grant of 7.5m options that was finalised on December 18 2001 but was backdated to October 19. Not only did this happen, but the grant was recorded as having been approved at a special board meeting that never took place. In fact, Apple’s board had provisionally approved Mr Job’s options grant that August.

The get-out clause is that Mr Jobs did not know that his own grant had been backdated. This casts a better light on his behaviour than if he had rewarded himself by amending options, but it leaves questions unanswered. Why, for example, was none of Apple’s directors aware that a board meeting had been made up? At the least, it suggests that they do not read the board minutes very carefully.

It also makes Apple’s October statement seem disingenuous. The company’s options practices are being investigated by the Securities and Exchange Commission and it was making a closely watched statement to investors. So it might have found room in its summary of the “key points” for Mr Jobs’ own backdated grant and that he had recommended some backdating.

It is characteristic of Apple in its every day affairs to guard information closely and to say as little as possible about its products until the time and place of its choosing. Mr Jobs likes to announce everything himself. There is nothing wrong with that, but investors deserve greater openness and timeliness when it comes to Apple’s finances and corporate governance.

The final aspect of the affair that leaves a nasty taste is the singling out of two individuals to take the blame. It may be that they were at fault but Mr Jobs is hardly someone who delegates control easily and the company has admitted that he was actively involved in some option repricing. At other companies, chief executives have had to resign because of their involvement in similar financial abuses.

On the facts disclosed by Apple so far, Mr Jobs can stay. Investors in the company would clearly suffer if he were to resign and he was not found knowingly to have broken the law. But he came close to doing so and the company’s board must now ensure that nothing of the sort is allowed to occur again on his watch, no matter how valuable he happens to be.

Saddam Hussein executed in Baghdad

Saddam Hussein executed in Baghdad
By Demetri Sevastopulo in Washington and Steve Negus, Iraq correspondent
Copyright The Financial Times Limited 2006
Published: December 29 2006 12:04 | Last updated: December 30 2006 09:44

Saddam Hussein, the former Iraqi dictator, was put to death at dawn on Saturday, Baghdad time, just days after an Iraqi appeals court refused to commute his execution.

Before he was taken to the gallows in Baghdad, the former Iraqi president was reportedly handed a “red card” signalling his imminent death - a reminder of the red cards dealt to those he had condemned to death during his time in power.

Iraqi state television said Mr Hussein’s execution was captured in still photographs and on video.

Muaffak al-Rubbaie, the Iraqi national security adviser who witnessed the event, told CNN that Mr Hussein, who declined to wear a hood for his execution, appeared “really, really broken” as he awaited his death and appeared to show no remorse.

Mr Rubbaie added he was “proud” of the way the Iraqi government conducted the execution, saying it conformed with international, Iraqi, and Islamic standards. He said Mr Hussein had been treated with respect before and after the event.

President George W. Bush welcomed his death, saying it came after a “fair trial - the kind of justice he denied the victims of his brutal regime”.

“Saddam Hussein’s execution comes at the end of a difficult year for the Iraqi people and for our troops,” Mr Bush said in a statement. “Bringing Saddam Hussein to justice will not end the violence in Iraq, but it is an important milestone on Iraq’s course to becoming a democracy that can govern, sustain, and defend itself, and be an ally in the war on terror.”

US officials on Friday said they had been unaware of when Mr Hussein would be executed. But a White House spokeswoman later said Stephen Hadley, the White House national security adviser, had informed Mr Bush at 7.15pm Washington time that Mr Hussein was expected to be executed within hours. Mr Hadley received the news from Zalmai Khalilizad, the US ambassador to Iraq, who had been informed of the pending execution by Mr Maliki.

Margaret Beckett, the UK’s foreign secretary, said in a statement she welcomed “the fact that Saddam Hussein has been tried by an Iraqi court for at least some of the appalling crimes he committed against the Iraqi people”.

“He has now been held to account,” Mrs Beckett said. “The British government does not support the use of the death penalty, in Iraq or anywhere else. We advocate an end to the death penalty worldwide, regardless of the individual or the crime. We have made our position very clear to the Iraqi authorities, but we respect their decision as that of a sovereign nation.”

Mr Hussein, who was captured by US forces in December 2003, was sentenced to death last month for ordering the massacre of Iraqi Shia civilians more than two decades ago.

While the execution of the former Iraqi strongman was long expected, it will be an emotional jolt to many Iraqis to hear that the man who dominated their nation’s public life with an iron fist for nearly three decades has finally been put to death.

“It is a moment of remembrance for the victims of Saddam Hussein,” Feisal al-Istrabadi, deputy Iraqi ambassador to the United Nations, told CNN. “This is a man who history will record as responsible for the deaths of two million Iraqis.”

Mr Hussein’s two sons, Uday and Qusay, were killed by US forces in 2003.

US officials on Friday were careful to avoid any appearance that they had played any role in the decision to proceed with his hanging. But the US military was placed on heightened alert ahead of the execution in case his death resulted in more attacks on US troops, or a spike in the sectarian violence that has engulfed Baghdad.

Sunni Arabs may view his hanging as yet another aspect of Iraq’s long national humiliation, even though many did not condone his regime’s excesses. Some Iraqis fear that his execution will set back the chances of a political settlement between Iraq’s Shia-led government and the country’s Sunnis that could undercut support for the country’s insurgency.

But the execution may bolster the government’s standing among militant Shia groups, many of whom suspected that the former dictator might be able to strike a last-minute deal with the Americans to escape the gallows.

President George W. Bush justified the 2003 invasion of Iraq on the basis that Mr Hussein possessed weapons of mass destruction. After US forces failed to find those weapons, the Bush administration argued that the invasion had still been justified because it had removed the dictator from power.

The execution comes as the Bush administration prepares to unveil a new policy to help stop the violence that has claimed the lives of tens of thousands of Iraqis and almost 3,000 US troops.

Iraqis had braced themselves for the execution of their former ruler on Friday following mounting speculation that Mr Hussein would be sent to the gallows before the Muslim holiday of Eid al-Adha, which began on Saturday morning.

Nouri al-Maliki, Iraqi prime minister, on Friday said nothing could overturn the death sentence.

“Our respect for human rights requires us to execute him, and there will be no review or delay in carrying out the sentence,” he said.

Mr Hussein, 69, was sentenced to death by an Iraqi special tribunal on November 5 for his role in a campaign of reprisals ordered against the Shia village of Dujail, where he suffered a 1982 assassination attempt. The campaign led to scores being executed and many others subjected to torture and long-term detention.

His trial was marked by allegations of political interference and procedural errors, and some international organisations had called on the government not to go through with Mr Hussein’s execution.

In Washington late on Friday night, a federal judge rejected a last-ditch petition by lawyers for Mr Hussein to block the US military from handing the former president over to Iraqi officials.

Democratic Senator Edward Kennedy said Mr Hussein had been “a brutal tyrant and murderous dictator”. “Now it is time for the people of Iraq to work to reconcile their differences and to heal the wounds of the past. Only that process will end the violence that has prevented Iraq from moving forward,” he said.

Pete Hoekstra, the outgoing Republican chairman of the House intelligence committee, said: “I do not support the death penalty, but Saddam Hussein’s fate was determined by an Iraqi judicial system that was created by the free Iraqi people. His sentence was delivered swiftly and the pain was minimised - the same cannot be said for his many hundreds of thousands of victims.”

International Herald Tribune Editorial - Under-the-rug oversight

International Herald Tribune Editorial - Under-the-rug oversight
Copyright by The International Herald Tribune
Published: December 29, 2006

The wondrously named Privacy and Civil Liberties Oversight Board conducted its first public hearing the other day on the U.S. National Security Agency's illegal eavesdropping program. If you expected it to discover any truths about the secret program, you can forget it. The board spent its time explaining why it was more important to work from within the administration than to challenge it. Thus wags the tail of a watchdog with neither bark nor bite.

The board was created two years ago by the White House and the Republican Congress as a pale substitute for the independent monitor recommended by the Sept. 11 commission. Its members (four Republicans and one lone Democrat) serve at the pleasure of the administration. It has a paltry budget and no subpoena power, and any requests for documents can be vetoed by the attorney general.

It's so low on the totem pole that it didn't even get a formal briefing on the administration's eavesdropping on American citizens until October — almost a year after the warrantless surveillance program had been uncloaked by the news media.

Right now, the panel is best suited to polishing up the handles on the White House doors. But its members make the point that the board is no more than Congress created it to be. All the more reason to repair the damage as Americans wonder precisely how many liberties they have already sacrificed.

A bill to remake the board as an independent entity with subpoena power and a credible claim to oversight has been submitted by Representatives Carolyn Maloney, Democrat of New York, and Christopher Shays, Republican of Connecticut. It deserves a full and open review — which is more than the American public has been getting from its toothless watchdog.

Friday, December 29, 2006

Euro notes cash in to overtake dollar

Euro notes cash in to overtake dollar
By Ralph Atkins in Frankfurt
Copyright The Financial Times Limited 2006
Published: December 27 2006 22:07 | Last updated: December 27 2006 22:07

The US dollar bill’s standing as the world’s favourite form of cash is being usurped by the five-year-old euro.

The value of euro notes in circulation is this month likely to exceed the value of circulating dollar notes, according to calculations by the Financial Times. Converted at Wednesday’s exchange rates, the euro took the lead in October.

The figures highlight the remarkable growth in euro notes since their launch on January 1 2002, three years after the start of Europe’s monetary union, which in January welcomes its 13th member – Slovenia, the former Yugoslav republic.

“After the launch, we expected growth to stabilise – but it has continued over five years,” Antti Heinonen, head of the European Central Bank’s bank notes directorate, told the Financial Times.

Although the ECB does not deliberately promote the international use of the euro, it has become popular in official foreign exchange reserves – even if it is far from challenging the dollar’s lead as the most popular reserve currency.

News that euro notes are challenging the dollar may cheer eurozone politicians – even if it partly reflects the currency’s strength – but it may have a dark side too. Fast growth in the highest denomination notes, especially the €500 note, has raised suspicions that they are popular among criminals, although the ECB plays down this factor.

By the end of October the $759bn-worth of US dollar notes in circulation was only a fraction ahead of the value of euro notes, converted at exchange rates at that time.

But since October the euro has risen strongly against the dollar and this month the value of euro notes has risen to more than €610bn, or in excess of $800bn at the latest exchange rates. That level is unlikely to have been beaten by the greenback.

US home sales rise more than expected

US home sales rise more than expected
© Reuters Limited
December 27, 2006

Sales of new US homes rose a higher-than-expected 3.4 per cent in November, but they were down 15.3 per cent from a year ago, a government report on Wednesday showed.

New single-family home sales rose to an annualized rate of 1.047m units from an upwardly revised rate of 1.013m units in October, the Commerce Department said.

Analysts polled by Reuters were expecting November sales to rise to 1.018 million rate from the previously reported rate of 1.004 units in October. The department also revised its figure for September sales higher.

After release of the report, stocks were little changed, US treasury bond prices fell and the dollar rose against major currencies.

In November, the median sales price of a new home rose 3.2 per cent to $251,700 from $243,800 in October.

The supply of homes available for sale at the current sales pace fell in November to 6.3 months’ worth from 6.7 months’ worth in October. There was a total of 545,000 homes available for sale at the end of November, down slightly from the 553,000 reported in October.

Some analysts read the new home sales data as a sign of growing health in the housing sector.

“The new home sales report did beat the consensus forecast, and that, I think, provides further evidence to support the view that the worst of the housing downturn may have passed,” said Alex Beuzelin, senior market analyst for Ruesch International in Washington DC.

A separate report on Wednesday showed US mortgage applications fell last week by 14.2 per cent to their lowest level since early August. The Mortgage Bankers Association said demand slipped both for home purchase loans and mortgage refinancings.

In the Northeast, new home sales rose 22.5 per cent. They were up 22.4 per cent in the Midwest, and they gained 19 per cent in the West. Sales fell 9.3 per cent in the South, the biggest region covered in the report.

Other reports suggested retail sales were lackluster in the week ahead of the Christmas holiday.

The International Council of Shopping Centers and UBS Securities said the year-on-year gain in U.S. chain stores sales slipped last week for a second straight time to stand just 1.7 per cent above year-ago levels. It was the weakest year-over-year reading since February 12, 2005.

Separately, Redbook Research said chain store sales were down 1.6 per cent this month through December 23 when compared with the same period in November.

“The Christmas week was on target for most, but no better,” Redbook Research said.

US says food from cloned animals safe

US says food from cloned animals safe
By Clive Cookson in London
Copyright The Financial Times Limit
Published: December 28 2006 17:25 | Last updated: December 28 2006 18:15

The US Food and Drug Administration on Thursday took a big step towards approving the sale of meat and milk from cloned animals and their offspring without special labelling.

A draft FDA risk assessment found that food from clones of cattle, pigs and goats was as safe to eat as food from conventionally bred animals.

However, cloned meat and milk is unlikely to reach the shops before late 2007, at the earliest. Agricultural biotechnology and livestock companies will continue to observe a moratorium on their commercial introduction until the FDA has assessed public comments on the draft assessment and issued a final ruling.

The agency will receive hostile comments from some influential groups, such as the Center for Food Safety and the Consumer Federation of America, which accused the FDA of “imposing these products on a public that opposes cloning technology and does not want to consume cloned foods”.

But the Biotechnology Industry Organisation welcomed the long-awaited FDA assessment. Jim Greenwood, BIO president, said: “Animal cloning is the latest step in a long history of reproductive tools for farmers and ranchers, and can effectively help livestock producers deliver what consumers want: high-quality, safe, abundant and nutritious foods in a conscientious and consistent manner.”

Stephen Sundlof, director of the FDA’s Center for Veterinary Medicine, said: “Based on FDA analysis of hundreds of peer-reviewed publications and other studies on the health and food composition of clones and their offspring, the draft risk assessment has determined that meat and milk from clones and their offspring are as safe as food we eat every day. Cloning poses no unique risks to animal health when compared to other assisted reproductive technologies currently in use in US agriculture.”

If given final approval, the ruling would allow the sale of food from cloned cattle, pigs and goats, but not sheep, for the first time in the United States.

“No unique risks for human food consumption were identified in cattle, swine or goat clones,” the FDA said in a draft risk assessment, which now enters a public comment period before the agency makes its final decision.

Bush silent on Iraq after meeting advisers

Bush silent on Iraq after meeting advisers
By Demetri Sevastopulo in Washington
Copyright The Financial Times Limited 2006
Published: December 28 2006 20:38 | Last updated: December 28 2006 20:38

President George W. Bush gave no details about a change of policy on Iraq, after convening a meeting with his top national security advisers on Thursday, following the recent visit to Baghdad by Robert Gates, his new defence secretary.

After the meeting at his Texas ranch, Mr Bush said nothing concrete about policy. Flanked by Condoleezza Rice, secretary of state, General Peter Pace, the chairman of the joint chiefs, and Vice-President Dick Cheney, he said only that he was “making progress” in developing a new policy.

The president was speaking just days after an Iraqi court rejected an appeal by Saddam Hussein, the former Iraqi leader, to commute his death sentence. The Baghdad government is expected soon to announce when the former dictator will be executed.

Separately, it emerged that Gerald Ford, the former US president who died this week, opposed the Iraq war. In a previously unpublished 2004 interview with the Washington Post, Mr Ford criticised Mr Bush, saying the decision to invade Iraq was contrary to US national interests.

In the face of mounting evidence, Mr Bush this month acknowledged for the first time that the US was “not winning” in Iraq. Next month he will unveil a new Iraq policy in an attempt to halt the violence that has claimed the lives of tens of thousands of Iraqis.

The beleaguered president has come under intense pressure to change course in Iraq since the Democrats routed the Republicans last month in mid-term congressional elections, and as the US military death toll in Iraq approaches 3,000.

A recent CNN poll found that a record 67 per cent of Americans opposed the war.

Mr Bush on Thursday repeated his mantra that success in Iraq was “vital” for the security of Americans. But a recent ABC News/Washington Post poll found that 51 per cent of Americans believed the Iraq war had not contributed to the long-term security of the US.

While the White House insists all options are being considered, Mr Bush is reported to be leaning towards approving an increase in US troop numbers in Iraq. The temporary “surge” could involve as many as 30,000 troops in an attempt to provide more time for action against sectarian death squads.

The Iraq Study Group, the bi-partisan commission led by James Baker, the former secretary of state, recently urged Mr Bush to refocus the US military campaign in Iraq on training local forces to allow most US combat troops to leave by early 2008.

The 10-member group said it would support a surge if recommended by US commanders. But John Abizaid, the top commander in the Middle East, who last week announced he would step down in the spring, opposes an increase. At his year-end press conference last week, Mr Bush sidestepped a question about whether he would endorse a policy that was opposed by his top military commanders.

Colin Powell, the secretary of state during the first four years of Mr Bush’s presidency, took the unusual step of publicly opposing any surge, saying the US military was “about broken”.

International Herald Tribune Editorial - Pulling back from war in the Horn of Africa

International Herald Tribune Editorial - Pulling back from war in the Horn of Africa
Copyright by The International Herald Tribune
Published: December 28, 2006

It is tempting to wink at Ethiopia's stunningly successful offensive in Somalia. It pushed back a hateful Islamic militia that was defying the United Nations, threatening to impose religious tyranny and, according to Washington, harboring international terrorists. The Bush administration quickly succumbed to temptation, lauding Ethiopia's attacks as a legitimate response to "aggression."

But if there's anything we should have learned over the past few sad years, it is that this kind of unilateral pre-emptive attack seldom solves anything, particularly when the country doing the invading is regarded as a longstanding enemy.

Somalia is a familiar kind of mess, with a weak official transitional government composed of a collection of regional clan leaders and warlords, pitted against radical Islamists who control their own militias, who have spread Taliban-like terror among the populace and who recently surrounded the seat of the transitional government at Baidoa. To halt their advance, Ethiopia's armed forces crossed an international border and routed the Islamists, who have largely disappeared from public view.

It's hardly surprising that there was little international outcry. But while moderate forces in Somalia have been appalled by the brutal intolerance of Islamist leaders who have threatened to behead people for not praying five times a day, they are unlikely to embrace Ethiopian soldiers as a good alternative. Ethiopia and Somalia have long been rivals, and went to war in the late 1970s over a land dispute. If the transitional government seems propped up by foreign invaders, it would lose whatever popular support it has now.

America squandered its influence in Somalia by supporting some particularly horrible warlords to challenge the Islamist radicals. But it still has considerable sway over Ethiopia.

Washington should use that influence to push for a swift cessation of hostilities, lest the conflict pull in neighboring countries and explode over the entire region. The resulting chaos would create a refugee crisis and open a new terrorist recruiting hub. The Islamists have threatened suicide attacks and called for help from foreign fighters in a "holy war" that has already drawn thousands of Muslim fighters from Eritrea, Yemen, Libya and Syria.

The United Nations is unhappy about the Ethiopian incursion, but it needs to demonstrate that it has a good alternative. The Security Council must meet urgently to find ways to replace Ethiopian troops with a neutral international force and keep the violence from spreading to other countries.

Rather than trying to marginalize the Islamic militias and the huge clan they represent, the international community should try to harness this moment to push for unity talks while the Islamists are weak and the transitional government has attained a more equal standing.

Saddam's death sentence exposes a rift - Opposition to execution builds in Europe, while U.S. is for it

Saddam's death sentence exposes a rift - Opposition to execution builds in Europe, while U.S. is for it
By Doreen Carvajal
Copyright by The International Herald Tribune
Published: December 28, 2006

PARIS: While Saddam Hussein faced death with a letter of farewell, the former Iraqi dictator's looming execution has exposed a deep divide between the United States and Europe, with opposition building in the Continent's major capitals.

Prime Minister Romano Prodi of Italy deplored the decision to execute Saddam, and Renato Martino, the cardinal who heads the Catholic Church's council for justice and peace, warned that "nobody can give death, not even the state." Opposition has also come from the governments of Britain, Denmark, France, Portugal, Spain and Germany.

But in most cases the criticism is qualified opposition directed at the morality of capital punishment rather than sympathy for Saddam or doubts about the fairness of his trial, an issue raised by groups like Human Rights Watch.

Saddam's chief lawyer on Thursday implored world leaders to prevent the United States from handing him over to the Iraqi authorities for execution, saying he should enjoy protection from his enemies as a "prisoner of war," The Associated Press reported from Baghdad.

"According to the international conventions, it is forbidden to hand a prisoner of war to his adversary," said the lawyer, Khalil al-Dulaimi.

Richard Dicker, director of the international justice program for Human Rights Watch, said he doubted that the opposition would create enough pressure to halt Saddam's sentence.

"I think that the imperative that has been driving the Iraqi leadership to execute Saddam is such that this train has left the station," said Dicker, who noted that the criticism of capital punishment was important "to take into account principled opposition to the death penalty regardless of the individual involved."

In Berlin, the German government rejected the death penalty, which is banned there and in the rest of the European Union. But Chancellor Angela Merkel's deputy spokesman, Thomas Steg, called a legal coming to terms with Iraq's past "necessary," saying that "there are no signs that both the trial and the appeal did not take place in accordance with the country's legal principles and rule of law."

In Italy, politicians from the center- right and left coalition found a rare issue for agreement and were almost unanimous in their opposition to the death sentence.

Marco Pannella, leader of Italy's Radical Party, offered Thursday to head to Baghdad to secure a pardon as he fasted on the third day of a hunger strike to protest the sentencing. A demonstration outside the Iraq Embassy in Rome is also being organized by the Green Party.

On Thursday, Prodi repeated his opposition to capital punishment after his year-end news conference, but denied a report that he intended to lead an international campaign against the sentence.

"The decision to condemn Saddam to death has in itself more risk of negative effects than positive for the stabilization of the country. I don't believe that the execution of Saddam will help even minimally the pacification of the country," said Prodi, who defeated Bush's close ally Silvio Berlusconi last April, and withdrew Italian troops from Iraq. "I don't believe that any solution of this type can resolve the questions of the Middle East."

The Vatican also generally opposes the death penalty, but in this case the church has not issued a formal statement about Saddam's sentence, and a church spokesman, the Reverend Federico Lombardi, said he did not expect one to be forthcoming.

"There are unfortunately many death penalty cases in the world, and the church has over time matured our position, which is in opposition to the death penalty, but it isn't like every time we will intervene," Lombardi said.

Not all of Europe shares the same doubts about capital punishment. In Eastern Europe, President Lech Kaczynski of Poland, who has sought to revive the death penalty in the European Union, has characterized Saddam's execution as the "only possible verdict."

And the Continent's citizens also appear to take a harsher view. In a survey of 12,570 people in six countries by the new French international broadcaster France 24 and Novartis/Harris Interactive, most participants favored the death sentence for Saddam. With the exception of Italians, participants from Britain, France, Germany and Spain supported the execution, as did those from the United States.

That position was strongest in Britain and the United States, where 82 percent of the Americans polled supported the penalty, followed by 69 percent of the British, 58 percent of the French, 53 percent of the Germans and 51 percent of the Spanish.

"I am a bit stupefied," Carla Del Ponte, the United Nations war crimes prosecutor, said on the France 24 program "The Talk of Paris," where the poll results were discussed last week. "I think this comes more out of a spirit of vengeance, as the death penalty is naturally the final word to every story."

Thursday, December 28, 2006

Homelessness among U.S. gay youth an “epidemic”

Homelessness among U.S. gay youth an “epidemic”
Copyright by The Associated Press and Gay Chicago Magazine
December 26, 2006

NEW YORK, NY (AP) - When Angelika Santiago was 18 and changing her identity from male to female, her mother issued an ultimatum: Cut her hair and dress as a boy or leave their apartment.

Santiago left their Manhattan home and ended up in a shelter for lesbian, gay, bisexual and transgender, or LGBT, youths.

“She wanted me to be a boy, deny who I was inside,” Santiago recalled.

Santiago eventually gained her independence, landing a receptionist job and renting a room for $165 a week. But after losing the job and the room a few weeks ago, she found herself staying at another shelter.

Santiago, now 20, is part of an “epidemic” of homelessness among LGBT youth, according to a new report released by the National Gay and Lesbian Task Force and the National Coalition for the Homeless.

Up to 42 percent of the 575,000 to 1.6 million youths who are considered homeless or runaway are lesbian, gay or transgender, according to the report, “An Epidemic of Homelessness.”

In New York, no one knows how many homeless youths there are let alone how many of them are LGBT, city officials acknowledged. But the estimate is that there are 30,000 homeless youths, of whom 8,400 are LGBT.

“Now that we have a report that sadly documents how big a problem the issue of homelessness among young LGBT people is,” City Council Speaker Christine Quinn said, “it will make it much more difficult for government to ignore or walk away from that problem.”

Solutions mentioned at the announcement included increasing the number of shelter beds for LGBT young people and expanding services designed for them to help them become self-sufficient.

Quinn and Councilmen Lewis Fidler and Alan Gerson noted that $1.2 million of the $2.6 million set aside in the budget passed this year for beds for at-risk, runaway and homeless youth is for LGBT homeless youth services.

The budget also calls for $50,000 for an independent count and demographic breakdown of the city’s homeless youth population. That count will be conducted in the spring, city officials said.

More than a quarter of the LGBT youth who came out to their parents or guardians were kicked out, and once on the street they’re particularly vulnerable to mental health problems and diseases such as AIDS, said the report, which relies mostly on government statistics and existing studies on that population.

Nicholas Ray, an analyst who authored the report for the task force’s Policy Institute, said Danny, a gay homeless youth he met in Colorado, denied he was engaged in prostitution.

“He said, ‘I go to the library and get on (Internet gay sites) just to find a place to sleep for the night. Not for money. I’d sleep with them just so I had a place to stay,”’ Ray recalled.

In New York, there are three or four shelters specifically for homeless LGBT youth with a total of about 65 beds, and each often has a waiting list, said officials from those shelters, who attended the announcement.

Also, openly gay homeless youth often recount stories of being mistreated, harassed or turned away from other shelters, particularly faith-based ones, city and shelter officials said.

Santiago, who is living in another shelter, is looking for a job. She wants her own place eventually.

“This needs to stop,” Santiago said of homelessness among LGBT youth. “These kids cannot live like this, and they are kids. They can range from 12 and on, and it’s not fair, and it’s not right.”

Ideas for 2007 by Paul Varnell

Ideas for 2007 by Paul Varnel
Copyright by Paul Varnell and The Chicago Free Press

The coming year will provide an all-too-brief respite from all-too-many people’s focus on politics. We do not have to face threats from a GOP Congress, but we aren’t going to get much out of a Democratic Congress since they don’t want to give the GOP ammunition to attack them with in 2008.

Instead it is an opportunity for community building, for attention to promoting social acceptance of gays and heading off future assaults from the religious right. Here are some possibilities. If you don’t like these, create your own.

We need far stronger gay organizations at the state level. Because of America’s federal system, many gay issues are and even more can be determined at the state level—marriage, civil unions, child custody, adoption, non-discrimination, etc. For years the national organizations appealed for funds to fight the GOP hegemony in Congress, starving our state organizations. Now that that threat is absent, it is important to build up state advocacy organizations and community centers, providing for a staff and adequate technical support. This is particularly important in states with a strong conservative presence.

We need a small specialty think tank of gay-supportive theologians to issue counter-arguments when the Catholic bishops or other religious groups condemn gays, gay relationships or gay sex. The religious roundtable of the National Gay and Lesbian Task Force seems to limit itself to issuing feeble press releases praising this or condemning that, but it never offers sustained arguments against whatever conservative religious groups say. Over the years I have tried to respond to the Catholic bishops and other homophobic religious statements (in pieces now posted at the Independent Gay Forum), but I am a journalist, not a theologian, so I undoubtedly overlook many excellent arguments—and I am only one small voice.

We need a study of homelessness among gay adults. A new NGLTF study drew attention to the fact that a disproportionate percentage of homeless kids are gay. But we have little information on the proportion of gays among homeless adults. I was talking recently with a homeless man in his 30s. He said simply, “What about people like me?” I had no answer. I know of no studies of homelessness that indicate the proportion who are gay. Nor do I know what unique issues they face, nor where to suggest they go for help, nor how best to help them.

Many of us have urged gays to come out to more people. Let me be more specific: Come out especially to older friends and relatives. A larger percentage of older Americans vote than any other group. And older Americans are the most likely to be anti-gay. Born in the 1930s, 1940s and 1950s, they grew up when most gays were not open, so they may never have known a gay person when their social and cultural attitudes were formed. Since older Americans are living (and voting) longer, we need to try to remedy those formative impressions.

In states where it is most practical to advocate gay civil unions rather than marriage, we should start using a film clip of President Bush’s statement late in the 2004 campaign that if states want to offer civil unions for gays, “They should be able to do that.” What more effective propaganda could you offer to conservative voters than Bush’s own non-opposition? I do not understand why that clip hasn’t been used repeatedly.

Drop “queer.” The attempt to “reclaim” it has failed utterly. For most of us it sets our teeth on edge. Gabriel Rotello, a former publisher who once promoted “queer,” renounced it in an Advocate opinion piece titled “The Word That Failed.” (The literary allusion is obvious.) Some younger gays all full of youthful rebellion-without-responsibility adopted “queer” for a time, viewing it as “edgy” and “in your face.” But let me tell you, dear ones, gay liberty and equality are not going to be won by being self-indulgently “edgy” and “in your face.” You are just helping our opponents.

We need more heterosexuals to speak out for gay legal equality, but I have no idea how to go about making this happen. The Advocate recently featured comedian and talk show host Bill Maher, who regularly speaks out on behalf of gays, but can we somehow induce 10, 20, 100 people with a national reputation to take up our cause? Most prominent whites began supporting black civil rights only when the level of violence, intimidation, and denial of rights in the South was made crystal clear on television news shows. But how often is a gay-bashing broadcast? Or a child being yanked away from its lesbian mother or gay father? And how can you film a marriage ceremony that doesn’t happen?

Many of Paul Varnell’s previous columns are posted at the Independent Gay Forum ( His e-mail address is

By Paul Varnell

Chicago Free Press Editorial - Seeking faith, constancy and hope

Chicago Free Press Editorial - Seeking faith, constancy and hope
Copyright by The Chicago Free Press
December 27, 2006

Last weekend seven congregations belonging to the Episcopal Church in the United States voted to leave that church body in order to express their stance against the ordination of gays and women.

It’s a feud that’s been simmering worldwide in recent years in the Anglican Communion, the global parent of the Episcopal Church. Some conservative Anglican churches don’t want women in the clergy and even more emphatically say they are opposed to having gays in the clergy.

That’s put those churches at odds with other Anglican churches in Canada and England and with many Episcopal churches in the United States. The diocese of New Hampshire even elected a gay bishop, Gene Robinson, a move that’s prompted some Anglican churches to cut off ties with the diocese and the U.S. church.

We don’t presume to argue theology with those who are put off by the ordination of women and gays, and we would fight to the end for their right to believe as they please.

But that doesn’t mean that we think they’re right, of course; in fact, we think it’s a sad state of affairs that people who are supposed to be trying to bring a message of faith, hope and charity to the world are instead espousing a message of bigotry and discrimination.

The churches that voted to split say they want to remain a part of the Anglican Communion by aligning themselves with the anti-gay bishop of Nigeria’s Anglican Church, Peter Akinola, who has openly sought to foment revolt among Episcopal churches in the U.S.

Akinola opposes both women and gays in the clergy. He not only opposes gays in the clergy, he opposes gays’ very existence, apparently.

As detailed in the news section of this issue of CFP, Nigeria is considering a law that would ban gays from meeting, from forming organizations, from even speaking out against their repression. Penalties for violating the new law would include execution.

The law is expected to pass because it has powerful supporters in Nigeria, and one of its most powerful backers is Bishop Akinola. This is the man that some American Episcopalians want to follow, emulate and hold up as a model of God’s righteousness.

What they are saying, these people who would align themselves with Bishop Akinola, is that God has a hierarchy—that God believes women and gay people are inferior to heterosexual men when it comes to their ability to express the Godliness of creation and faith.

Heaven help us—how far is that, really, from saying that God believes blacks are inferior human beings who aren’t qualified to represent him to the faithful?

It’s a relevant question. After all, among the churches that voted to split in Virginia are two of the denomination’s most historic congregations, including George Washington’s church. Those churches, and many other Episcopal churches in the South and in the North, once held that blacks were indeed inferior and that it was therefore OK for white men to own them. Their catechism once included a passage telling slaves that God’s command to “love your neighbor as yourself” meant obeying everyone “who has control over me” and to “do as they bid me.”

Bigotry is a singular road, and these churches are free to choose it. But they should do so with their eyes wide open as to where it leads, who they are following and where those leaders would take them. It’s most decidedly not a place of faith, hope and charity.

Wednesday, December 27, 2006

International Herald Tribune Editorial - Meat and the planet

International Herald Tribune Editorial - Meat and the planet
Copyright by The International Herald Tribune
Published: December 27, 2006

When you think about the growth of human population over the last century or so, it is all too easy to imagine it merely as an increase in the number of humans. But as we multiply, so do all the things associated with us, including our livestock. At present, there are about 1.5 billion cattle and domestic buffalo and about 1.7 billion sheep and goats. With pigs and poultry, they form a critical part of our enormous biological footprint upon this planet.

Just how enormous was not really apparent until the publication of a new report, called "Livestock's Long Shadow," by the Food and Agriculture Organization of the United Nations.

Consider these numbers. Global livestock grazing and feed production use "30 percent of the land surface of the planet." Livestock — which consume more food than they yield — also compete directly with humans for water. And the drive to expand grazing land destroys more biologically sensitive terrain, rain forests especially, than anything else.

But what is even more striking, and alarming, is that livestock are responsible for about 18 percent of the global warming effect, more than transportation's contribution. The culprits are methane — the natural result of bovine digestion — and the nitrogen emitted by manure. Deforestation of grazing land adds to the effect.

There are no easy trade-offs when it comes to global warming, and the human passion for meat is certainly not about to end anytime soon. As "Livestock's Long Shadow" makes clear, our health and the health of the planet depend on pushing livestock production in more sustainable directions.

International Herald Tribune Editorial - A test for U.S. lawmakers

International Herald Tribune Editorial - A test for U.S. lawmakers
Copyright by The International Herald Tribune
Published: December 27, 2006

Thanks to America's 2001 tax cut law, over the next four years the U.S. government will forgo $30 billion so America's wealthiest taxpayers can claim bigger write-offs for expenses like dependents and mortgage interest. One-third of those tax cuts kicked in this year, with the rest scheduled to take effect in 2008 and 2010. By then, most of the advantage will go to the top 0.3 percent of Americans — those making more than $1 million a year — who have until now been required to limit the amounts they are allowed to claim for things like the spousal exemption or the mortgage costs on a vacation home.

Over roughly the same period, the government is looking at a $14 billion shortfall in its share of financing for a crucial federal-state program that provides health insurance to poor children, the so-called Schip, or State Children's Health Insurance Program. Without full financing, 1.5 million children will be cut from the program or underserved.

Depriving children of adequate health care while giving the rich tax benefits that were intended for average Americans is flat-out wrong. The new Democrat-controlled Congress must move quickly to prevent that. When it convenes in the new year, Congress should pass a law to freeze the tax write-offs at 2007 levels. That will not cause taxes to rise. But it would free up the money needed for children's health insurance.

It would also be an early sign that the new Congress is more in touch with current economic reality than its Republican-led predecessor. When the bolstered write-offs were enacted in 2001 the United States was still flush with the Clinton-era budget surpluses. And while we never supported the notion that tax cuts for the rich were an appropriate way to use the surplus, those championing the cuts could at least make the argument (quickly proved wrong) that America could afford it.

Since then, the budget surpluses have disappeared, America has gone to war, government services have been cut deeply and the percentage of uninsured children has started to rise again, after declining in every year since 1998. The children urgently need to win this one, and only the new Congress can help them.

U.A.E. to sell dollars for euros

U.A.E. to sell dollars for euros
By Matthew Brown
Copyright by Bloomberg News
Published: December 27, 2006

ABU DHABI: The United Arab Emirates plans to convert 8 percent of its foreign-exchange reserves to euros from dollars before September, the latest sign of growing global disaffection with the weakening U.S. currency.

The U.A.E. has started, "in a limited way," to sell part of its dollar reserves, the governor of the country's central bank, Sultan Bin Nasser al-Suwaidi, said in an interview. "We will accumulate euros each time the market appears to dip" as part of a plan to expand the country's holding of euros to 10 percent of the total from the current 2 percent.

The Gulf state is among oil producers, including Iran, Venezuela and Indonesia, looking to shift their currency reserves into euros or sell their oil, which is now priced in dollars, for euros. The total value of the reserves held by the U.A.E. is $24.9 billion, Suwaidi said.

The dollar has fallen more than 10 percent this year against the euro.

Part of the reason for the decline is the outlook for slower U.S. growth, which makes the dollar a less attractive investment.

But fears that the dollar's level is unsustainable because of the heavy indebtedness of the United States to other countries is also behind the weakness this year, analysts said.

The shift to euros underscores its growing role as a reserve currency nearly eight years after its establishment. Central banks often keep the details about their currency holdings a secret.

The move by the U.A.E. central bank "is hard evidence that diversification is happening," said Shaun Osborne, chief currency strategist at TD Securities in Toronto. "This is negative for the dollar in a broad sense as it reflects falling confidence in the currency."

Central banks in Russia, Switzerland and New Zealand are also diversifying away from the dollar and into yen after the Japanese currency reached a 10- month low against its biggest trading partners in October.

Gulf Arab energy producers will earn as much as $500 billion from oil sales this year, the International Monetary Fund forecasts. The region's central bank reserves represent a fraction of the currency holdings of state-owned investment firms like the Abu Dhabi Investment Authority, which is estimated to have more than $500 billion under management.

But the signal that such a move sends to financial markets is a negative one.

"It is a recognition of the vulnerability of the dollar over the coming year," Simon Williams, an economist with HSBC Holdings, said by phone from Dubai.

The euro rose to $1.3123 from $1.3098 after Suwaidi's comments were published Wednesday.

"This is not confined to the U.A.E. There's a general awareness across the Gulf of the benefits of diversifying currency holdings," Williams said.

The U.S. current account deficit widened to $225.6 billion in the third quarter. Oil producers in the Middle East and Central Asia will run a surplus of $322 billion for all of 2006, according to the International Monetary Fund.

Total foreign holdings of U.S. Treasury securities — which generally support the dollar — increased to a record $2.16 trillion in September, just under half of the $4.34 trillion outstanding.

Harsh treatment

Harsh treatment
By Daniel Wolfe
Copyright by The International Herald Tribune
Published: December 27, 2006

NEW YORK: On Dec. 8, 43 HIV-positive women were killed by a fire in a locked Moscow hospital ward, where they were supposedly being treated for drug addiction. Two nurses also perished. Until governments in Asia and the former Soviet Union stop punishing drug users in the name of treatment, such tragedies are bound to be repeated, and efforts to control both addiction and AIDS will continue to fall tragically short.

In Russia, the locked ward is a legacy of the Soviet era, where medical specialists (or "narcologists") subjected alcoholics and drug addicts to hypnosis, aversion therapy and, when deemed necessary, forced labor.

State power to enact compulsory treatment largely collapsed with the Soviet Union, but in many former Soviet republics the bars on the windows and fire escapes of drug treatment facilities remain in place. So does the attitude that drug users are best treated like drugs — as something to be controlled and contained for the good of society.

Many Russian narcologists offer drug users little more than extreme sedation to mitigate withdrawal from heroin. Drug users' names are added to government registries. Psychological support is minimal or nonexistent. Prescription of the oral medications most effective in reducing heroin injection and HIV risk, such as methadone or buprenorphine, is illegal.

China, spurred by the spread of HIV among injecting drug users, has won well-deserved praise for new programs prescribing methadone to heroin addicts. Less attention, however, has been given to the fact that most Chinese methadone patients receive medication only after spending two terms in compulsory detoxification centers run by the Public Security Bureau, where they are offered such measures as 12 hours of daily, unpaid labor, therapy with electric shocks, and sessions where they chant such slogans as "drugs are bad, I am bad."

In Southeast Asia, drug users are also forced into overcrowded facilities where conditions more closely resemble prisons than treatment centers. Some 35,000 Vietnamese are now detained in rehabilitation centers in Ho Chi Minh City alone.

In Malaysia, an estimated 5,000 drug users are in compulsory rehabilitation centers where they are subjected to boot-camp style drills, and locked at night into barred cells where as many as 40 patients sleep on the floor.

Experts estimate that from 90 percent to 100 percent of drug users subjected to coercive internment in the former Soviet Union and Southeast Asia return to illicit drug use. Bizarrely, this finding has sparked some governments to increase the length of internment rather than to re-examine their approach. In Ho Chi Minh City, detention reportedly can last four years or more.

The cost of these failed approaches can be measured not only in terms of unchecked drug dependence, but also in new HIV infections. In China, Russia, Malaysia and Vietnam, the largest share of all HIV cases are due to injecting drug use.

Outside Africa, the UN now estimates, nearly one in three infections is the result of contaminated needles. For the hundreds of thousands of drug users who are HIV-positive and unlucky enough to find themselves in punitive clinical settings, the problem of ineffective drug treatment is usually compounded by the absence of any HIV treatment at all. Sterile syringes and condoms are also unavailable, even though reports of drug use and sex in compulsory treatment settings are common.

The tragedy in Russia should move national governments and the United Nations to increase monitoring of what for too long has passed for drug treatment, and to speak out against abuses committed in the name of health. Otherwise, we leave millions of drug users in Asia and the former Soviet Union like those young, HIV-positive women: trapped, screaming and with no one to help.

Daniel Wolfe is deputy director of the International Harm Reduction Development Program of the Open Society Institute.

International Herald Tribune Editorial - America, the exam

International Herald Tribune Editorial - America, the exam
Copyright by The International Herald Tribune
Published: December 26, 2006

Name one famous battle from the Revolutionary War. Name one of the major American Indian tribes in the United States. Name one of the things that Abraham Lincoln did.

If you can answer these questions, you may be qualified to become an American citizen. If you can't, you may be one already.

This is one of the oddities exposed by an effort to overhaul the naturalization exam. The U.S. Citizenship and Immigration Services wants to make the test more meaningful at a time when the civics knowledge of native- born Americans is dismal. The aim is to encourage applicants not to memorize trivia, like the colors and number of stripes on the flag, but to understand the basic history and core principles of American democracy.

That goal is sensible, though not everybody is happy about it. Immigrant advocacy groups fear that the new test will be too hard, requiring a competency in English out of the reach of many new arrivals. Some advocates have complained that the cities chosen at random for the experiment are unrepresentative of the immigrant population. The agency somehow missed New York City and all of California, which is ample reason for Asians, especially, to feel left out of the process.

Immigrants are famously rich in gumption; they need it to handle what the bureaucracy throws at them. But if they make it, they will have a credible claim to knowing a lot more about America's history and laws than the average man and woman in the street.

With that in mind, Americans may want to start boning up. Here are the agency's suggested answers for the sample questions above.

1) Lexington and Concord, Trenton, Princeton, Saratoga, Cowpens, Yorktown, Bunker Hill.

2) A partial list: Cherokee, Seminole, Creek, Choctaw, Iroquois, Shawnee, Mohegan, Chippewa, Huron, Oneida, Sioux, Cheyenne, Lakota, Crow, Blackfoot, Teton, Navajo, Apache, Pueblo, Hopi, Inuit.

3) Saved the union; freed the slaves; led the United States during the Civil War.

International Herald Tribune Editorial - A real-world army

International Herald Tribune Editorial - A real-world army
Copyright by The International Herald Tribune
Published: December 26, 2006

Military reality finally broke through the Bush administration's ideological wall last week, with President George W. Bush publicly acknowledging the need to increase the size of the overstretched U.S. Army and Marine Corps.

Larger ground forces are an absolute necessity for the sort of battles America is likely to fight during the coming decades: extended clashes with ground-based insurgents rather than high-technology shootouts with rival superpowers. Bush's belated recognition is welcome, though it comes only after significant damage has been done to the army's morale, recruitment standards and fighting readiness. Given the time required to recruit and train the additional troops, the proposed increase will not make much difference in Iraq's current battles. But over time it will help make America more secure and better prepared to meet future crises.

The need for more troops has for some time been obvious to Americans. They have heard from neighbors or from news reports of tours of duty involuntarily extended, second and even third deployments to Iraq, lowered recruiting standards and members of the National Guard and Reserves vowing to get out. That is the inevitable consequence of trying to squeeze out an additional 160,000 soldiers for Iraq and Afghanistan year after year without significantly increasing overall ground forces.

But it took the departure of Donald Rumsfeld — the author of the failed Iraq policy and the doctrine of going to war with less than the army America needed — for Bush finally to accept this reality.

When the 21st century began, Pentagon planners expected that American forces could essentially coast unchallenged for a few decades, relying on superior air and sea power, while preparing for possible future military competition with an increasingly powerful China. That meant investing in the air force and navy, not the army and Marines.

Then 9/11 changed everything, except the Pentagon mind-set. During the Rumsfeld years, reality was subordinated to a dogma of "transformation," which declared that with a little more technology, the army could do a lot more fighting with fewer soldiers than its senior generals believed necessary.

Every year since 2001 has brought increased demands on America's slimmed-down and dollar-starved ground forces, while billions continued to flow into sustaining the oversized and underused air force and navy, and modernizing their state-of- the-art equipment. As a result, the overall Pentagon budget is larger than it needs to be, while the part going to overtaxed ground forces is too small.

Increasing those ground forces will cost roughly $1.5 billion a year for every 10,000 troops added, as well as tens of billions in one-time recruitment and equipment expenses. But America can afford it and it can be done without any significant increase in the annual military budget.

Over time, bigger ground forces will mean more sustainable troop rotations, fewer overseas deployments of the National Guard and better battlefield ratios of American to enemy fighters. That is the least America owes to the men and women who risk their lives to keep us all more

A market in need of a push - Home buyers and sellers must break stalemate for sector to move beyond post-boom doldrums

A market in need of a push - Home buyers and sellers must break stalemate for sector to move beyond post-boom doldrums
By Mary Umberger, Tribune staff reporter. Tribune wire services contributed to this report
Copyright © 2006, Chicago Tribune
Published December 27, 2006

The housing market isn't dead, it's stuck.

There's a standoff between home buyers and sellers, and the health of the 2007 housing market may depend on who blinks first.

That's according to Chicago-area consumers, real estate agents and analysts who are scratching their heads about how to move housing out of the post-boom doldrums in 2007.

"This situation is unknown to me, and I've been doing this for 26 years," said Stephen Baird, chief executive of Baird & Warner Real Estate in Chicago. "The market is irrational right now."

He's not talking about the so-called irrational exuberance of the long-running real estate boom, which drove prices up nationally by 24 percent in the past three years and began to wind down in fall 2005.

He and others say it's more of an irrational resoluteness, with buyers and sellers staring each other down: Sellers are clinging adamantly to too-high prices, and buyers are equally adamant about getting a bargain.

As that impasse has formed, home sales have hit the brakes.

October home sales in Illinois were down 9.7 percent a year earlier, and when November data are released Thursday, few expect improvement.

The housing thud seems to transcend the usual holiday-period slowdown, analysts say.

Fitch Ratings, for example, recently said housing is in a fairly severe, multiyear contraction--one that isn't based, as previous slowdowns have been, on rising interest rates and a sharply slowing economy. It's being driven by perceptions, the Fitch analysts said.

"A negative buyer psychology seems to have become pervasive," Fitch reported this month. "The expectation or fear is that home prices have peaked and buying now would be a mistake."

Frustrated condo seller David Waters said he buys that.

"I suppose part of it is people are waiting to see if prices drop even further," said Waters, who, with his wife, Joette, has been trying to sell his Edgewater two-bedroom unit since August, without a single offer despite several price reductions and incentive offers.

"Because experts were predicting [the market slowdown], things tended to snowball," Waters said. "People bought into the fear that it's going to be a tough sell. When people start believing it, it makes it real."

Waters, like many others, is banking on housing getting a second wind after the new year. He's weary after five months of marketing the condo, which he thought would have broad market appeal because it overlooks Lake Michigan.

And he may be right. The National Association of Realtors recently announced that "most of the correction in home prices is behind us," and declared that wary buyers were starting to come off the sidelines and would push home sales to livelier levels in the first quarter of 2007.

Others see that as wishful thinking.

"I'm more of a second-quarter, third-quarter guy," said James M. Merrion, regional director of Re/Max Northern Illinois.

"The NAR is a little too optimistic," Merrion said. "We've had too strong a market. When you've had prices go up in Illinois as much as they have in the past five years, people's salaries haven't increased that fast. I think we need to see some price moderation [brought on as sellers lower their prices] in order to get back to a healthy market."

Some aren't expecting many blue skies at all in 2007.

"I think it could take 18 months for the market to normalize," said Naperville real estate agent Eileen Landau, who said the bloated inventory of homes must clear before the market will regain momentum.

That inventory picture may be improving, at least for now.

A survey by ZipRealty found that the number of homes for sale in many cities declined between October and the end of November. The company reported that inventories in the Chicago area in that period fell about 6 percent.

One year ago, about 28,000 single-family homes were listed for sale in the greater Chicago area, a 3.7-month supply, according to Alvin Wagner, president of the Headrick-Wagner Appraisal Group in Naperville. By the end of September, houses for sale had swollen to about 48,000, a 6.8-month supply, he said.

By mid-November, the number had ebbed to about 43,000, or a 6.5-month supply, Wagner said.

Several Chicago real estate experts said they saw a surprising uptick in activity around Thanksgiving, typically a very quiet time.

"We found the post-Thanksgiving market a little stronger than expected," said Merrion. "It is odd. We think it's people getting used to rates and prices."

Or maybe sellers are just giving up for a while.

"I went to show two homes the other day and found they had taken them off" the market, said Coldwell Banker agent Karrie Lange, who said she suspects frustrated sellers are taking a break during the holidays and will be back early next year.

If so, inventory will swell again, as old sellers replant their for-sale signs alongside the new listings that inevitably show up as the traditionally active "spring" market gets under way in January.

Which would bring the market back to the blinking point. Most of the betting is on sellers budging first by cutting prices.

"Sellers are in denial," said Lange, based in La Grange. "I don't think they realize how much inventory is out there. If the buyer doesn't think a house is a value, he will skip it."

But others say it's not necessarily greed causing sellers to stick to their guns; many sellers who bought at or near the top of the market can't afford to bend much.

Area real estate agents said that when sellers do hit the sweet spot on pricing, homes go relatively quickly.

Early in December, Mohammad Mahmood bought a home in southwest suburban Shorewood--after losing out on several other homes because eager buyers had rushed in with higher offers. He had been expecting to bag a bargain, and easily.

"I thought this was a buyer's market, that I would be the one who is deciding the deal," said Mahmood, a Chicago accountant. "It wasn't the case, and trust me, I am a hard bargainer. I don't give in that easily."

Mahmood said he was surprised that the houses that interested him were selling within 1 to 2 points of their asking prices.

But Naperville agent Landau said such numbers, the "list-to-sell ratio," may not paint a true picture of pricing strength in the marketplace.

"Right now, the majority of properties in Naperville, for example, are selling at 96 percent of list price. But that's not accurate because the list-to-sell is based on the latest price," and ferreting out the original asking prices would tell a different story, she said.

And the numbers don't account for the significant amount of houses that aren't selling.

Price predictions for next year vary widely. David Lereah, chief economist for the NAR, predicted that by late 2007, prices will be 1 percent higher than current levels.

That, too, is viewed as optimistic by some. Moody's, for example, predicts that the national median price for existing homes will decline 3.6 percent next year, the first full-year decline in U.S. home sales since the Depression.


- - -

Predictions include gradual increase, stabilization

Whether the housing glass is half empty or refilling itself is a matter of broad conjecture. A sampling of recent predictions for U.S. residential real estate in 2007 shows:

-The National Association of Realtors expects existing-home sales to rise gradually in 2007 from current levels to a pace that's on par with this year, according to its mid-December forecast.

David Lereah, its chief economist, said the upturn would play out at different speeds around the U.S. "Roughly three-quarters of the country will experience a sluggish expansion in 2007, while the other areas should continue to contract for at least part of the year.

"General gains in value next year will be modest, by historical standards," he said.

-The association expects 2006 new-home sales to drop 17.7 percent, to about 1 million, before sliding an additional 9.4 percent next year, to 957,000.

-The most intense phase of the housing downturn has passed, but the correction isn't complete, according to a forecast from the Securities Industry and Financial Markets Association.

"With home building and permit volumes below sales levels, the market is beginning to clear, although price weakness may continue based on buyer and home builder caution," the group predicts. "The downturn should end within six to 12 months."

The association predicts total housing sales of 7.2 million next year, down from 7.6 million in 2006 and 8.4 million in 2005. Thirty-year fixed-rate mortgages will rise to 6.5 percent by the end of next year, the group said.

-The market correction is about two-thirds complete, and housing should stabilize by the middle of 2007, according to Frank Nothaft, chief economist for Freddie Mac.

"We expect house prices, like housing starts and sales, to trough in the fourth quarter [of 2006], with prices appreciating 3.4 percent in the first half of 2007," Nothaft said in a December forecast.

He predicted existing-home sales would average 6.74 million units in 2006, down 10 percent from the year before. Existing-home sales in 2007 would average 6.22 million, he said.

"While residential investment will almost certainly decline further in the first half of next year, the magnitude of the drag on overall economic expansion should diminish," according to the Mortgage Bankers Association.

"Some encouraging signs already have begun to appear in the housing picture," Doug Duncan, its chief economist, said in a mid-December commentary. "Total single-family-home sales, for example, have remained roughly unchanged over the past four months, and applications for loans to purchase homes, a useful indicator of future home sales, have picked up in recent weeks.

"Our forecast, while revising down expected growth this quarter and next, still anticipates a return to trend-like growth by the second quarter of next year."

-What happens in housing stays in housing and isn't enough to trigger a national recession, according to Edward Leamer, director of the UCLA Anderson Forecast.

"The decline in the housing sector is contributing to job loss in the construction sector, but there are no significant losses to be found on the manufacturing horizon," Leamer said in a December report. "Without the accompanying decline in manufacturing jobs, the losses in construction will not be enough to cause a recession.

"If you are a builder or a broker, it will feel like a deep depression," Leamer predicted, "but the rest of us will hardly notice."

--Mary Umberger

U.S. economy runs too hot and too cold - Is recession or inflation a bigger risk?

U.S. economy runs too hot and too cold - Is recession or inflation a bigger risk?
By Eduardo Porter
Copyright by The International Herald Tribune
Published: December 26, 2006

NEW YORK: Economists have long waxed lyrical about a "Goldilocks economy" — one that is not too hot, not too cold.

In this ideal world, the U.S. economy is running so smoothly that there is little risk of it overheating and pushing inflation higher — something that would force the Federal Reserve to raise interest rates. Nor is the job market weakening, threatening to plunge the economy into the icy bath of a recession.

The "just right" economy is not often achieved, of course, but lately this bedtime story has taken a particularly tricky turn: it is both too hot and too cold.

The U.S. housing market has fallen into a deep freeze; so has the auto industry. Yet on several other fronts, including commercial construction and high-end consumer spending, economic activity appears to be sizzling.

Lombard Street Research, a British economic forecasting firm, recently called the American economy the "anti- Goldilocks economy."

That is making it challenging for both economists and the Fed to decide which risk is greater: that housing will drag down the rest of the economy, pushing the Fed to cut rates, or that inflation will remain above the Fed's comfort zone, forcing it to push up rates instead.

But others say that next year, hot and cold could end up canceling each other out, turning the economy balmy.

For now, though, with home construction entering its second year of a downturn, many economists have aggressively pared back their forecasts for growth in 2007. Some have even started to utter the "R word."

"We've increased the probability of a recession in our forecast to 35 percent," said David Berson, chief economist of Fannie Mae, the leading U.S. source for home mortgage financing.

On the other hand, Charles Dumas, who follows the American economy for Lombard in London, ticked off a list of countervailing forces, from high employment and income growth to robust business investment. "None of that speaks of a slowdown," he said.

The economy looks very different depending on whether you are inside or outside the housing market.

Consider Andrew Palau, who runs Premier Homes & Additions in River Edge, New Jersey. Business has dried up as the slump in the housing market has reduced demand for new master bathrooms and refurbished kitchens.

"Homeowners don't have a clear view in front of them, so they are not investing, because they want to hold on to the money," Palau said.

He managed to hold on to his staff of 10 this year, but he said he probably would have to let some people go next year. "Everything is telling me that next year will be worse," he said.

Virtually every home builder in the United States shares Palau's concern. Yet a look just outside the border of the housing-linked economy provides a starkly different view.

"Our market is as close to capacity as you can get," said Michael Bolen, chairman and chief executive of McCarthy Building in St. Louis, Missouri, a commercial builder of properties ranging from schools and hospitals to casinos and parking lots.

To hear Bolen speak, the job market has the go-go feel of the Internet-driven boom of the late 1990s. "It's as goofy as it's ever been," he said. "We're offering signing bonuses and guaranteed locations to people coming straight out of school."

Bolen said McCarthy expected to increase its hourly work force of 1,800 by 10 percent to 15 percent when the construction season picked up in the spring. This off-kilter performance has allowed for an unusually wide difference of views on the economic outlook for next year.

Ian Shepherdson, chief economist at High Frequency Economics in Valhalla, New York, expects the economy to virtually stall at somewhere between zero and 1 percent growth in 2007. He predicts the Fed will lower its benchmark short- term interest rate to 3.75 percent by the end of the year from 5.25 percent now.

A majority of traders anticipate that the Fed will cut rates next year, starting in the summer, though not by quite so much. According to the market for interest rates futures, the Fed is expected to lower its benchmark rate to 4.75 percent by the end of 2007.

Yet for all the economists taking their cue from Palau's bleak outlook, others look to McCarthy's booming business.

Bruce Kasman, chief economist at J.P. Morgan, forecasts the economy will grow a healthy 3 percent in 2007. Rather than cutting interest rates, the Fed may well have to raise them again to quell inflationary pressures, he said. "The rates market is pricing in weak growth and Fed easing," Kasman said. "If our view is right, there will be a correction."

Economists were taken by surprise by the speed at which the housing market changed from a surging bubble to a sinking stone. Today, there are some signs that the worst has passed: mortgage applications seem to be bottoming out, for instance.

But the number of permits issued to build new houses fell for the 10th straight month in November, and they are down about a third since November of last year. Residential investment plummeted in the second and third quarters of this year.

Employment in construction has fallen; so has the production of construction materials and other items related to housing. In the third quarter, the slowdown in home building subtracted more than a full percentage point from economic growth.

But for all the damage done by the deflating housing balloon, it has so far been narrowly circumscribed.

Today, virtually every economist agrees that the housing recession is likely to continue weighing on economic growth. But the consensus breaks up over how bad that damage will be.

The biggest disagreement is over how intensely the housing recession will ricochet through the rest of the economy and how it will affect consumer spending, which accounts for more than 70 percent of U.S. economic activity.

"I find it very hard to believe that what started in housing ends in housing," said Jan Hatzius, chief U.S. economist at Goldman Sachs, "that you are not going to get any spillovers from a major recession in a sector that accounts for 6 percent of the economy."

U.S. holiday sales rise 3%

U.S. holiday retail sales rose 3 percent from 2005 as a slowing housing market and higher energy costs cut into spending, Bloomberg News reported Tuesday from New York, citing a report from MasterCard Advisors.

The gain was less than the 5.2 percent increase in 2005 and the smallest growth since the survey started in 2003, MasterCard Advisors said. Electronics and luxury goods had the strongest sales, according to a company survey.

Holiday sales slowed this year because of higher interest rates and gasoline and heating fuel prices, said Michael McNamara, vice president for research at MasterCard Advisors. Warmer than normal weather in some regions of the United States hurt apparel sales, he said

Daley mayoral bid challenged - On last day to file disputes, opponent questions petitions

Daley mayoral bid challenged - On last day to file disputes, opponent questions petitions
By Mickey Ciokajlo
Copyright © 2006, Chicago Tribune
Published December 27, 2006

Supporters of mayoral challenger William "Dock" Walls filed objections Tuesday to the nominating petitions of Mayor Richard Daley, the first time since Daley became mayor that his petitions have been called into question.

Daley's campaign said it is confident in the validity of its petitions. But Walls said his supporters found a number of problems with the mayor's petitions, including the names of people not registered to vote and evidence of forgery.

"In most instances, you find that most of these people who are purported to be signers on these petitions were not even registered voters in the city of Chicago," Walls said.

In a statement, Daley's campaign manager, Terry Peterson, said, "We are confident that our signatures will withstand any challenge."

Tuesday was the deadline for filing challenges against the petitions for candidates running in the Feb. 27 election for mayor, city clerk, city treasurer and alderman.

A team of 18 hearing officers--private attorneys retained by the elections board--will review the challenges and make recommendations to the Chicago Board of Election Commissioners. Where the validity of signatures is called into question, voter rolls may be reviewed and handwriting experts asked to testify. The board's decisions can be appealed to Cook County Circuit Court.

Mayoral candidates must file a minimum of 12,500 signatures of registered voters. Daley's campaign said it filed more than 24,000, which was far fewer than in past elections.

Walls said his supporters also filed challenges against candidates Syron Smith and Ziff Anthony Sistrunk for not providing enough signatures. But Walls said he did not challenge Dorothy Brown, the other major candidate in the race against Daley, because he and Brown agreed to leave each other's petitions alone. Walls' petitions were not challenged.

Paul Davis, Brown's campaign manager, said they decided not to file objections although their reviewers found problems with each candidate's petitions.

"We thought that it was in the better interest of our campaign that we focus on the issues ahead," Davis said. "We felt that in the long run that the distraction of a long, protracted fight ... could take away from the focus of our campaign."

Daley's petitions were challenged when he ran for mayor in 1989, but he survived and won the election. No one has challenged his petitions since.

In the other two citywide races, challenges were filed against four of the seven candidates for city clerk and a challenge was filed against Elida Cruz, the sole opponent running against newly installed City Treasurer Stephanie Neely.

In some instances, two or more challenges were filed against a candidate. In the aldermanic races, 192 objections were filed against 141 candidates.

Two hundred and forty-five candidates have filed for the 50 seats on the City Council, a job that will pay $100,971 when the new term begins in May.

Some incumbent aldermen also had their petitions challenged, including Richard Mell (33rd), Carrie Austin (34th) and Daniel Solis (25th).


In drug war, a surge in heroin - Afghan bumper crop is blamed for rise in high-quality narcotic hitting U.S. streets

In drug war, a surge in heroin - Afghan bumper crop is blamed for rise in high-quality narcotic hitting U.S. streets
By Garrett Therolf
Copyright © 2006, Chicago Tribune
Published December 27, 2006

LOS ANGELES -- The amount of high-quality heroin in America is surging because of an increasing supply from Afghanistan, and with it the fear that record-breaking poppy harvests after the U.S.-led invasion are fueling more addictions and overdose deaths back home.

According to a Drug Enforcement Administration report, Afghanistan's poppy fields have become the fastest-growing source of heroin in the United States. Its share of the U.S. market doubled from 7 percent in 2001, the year U.S.-led forces overthrew the Taliban regime, to 14 percent in 2004, the latest year studied.

Another DEA report, released in October, said the amount could be significantly higher than 14 percent.

Not only is more heroin being produced from Afghan poppies coming into the United States, it is also the purest in the world, according to the DEA's National Drug Intelligence Center.

Despite the agency's reports, a DEA spokesman denied that increased quantities of heroin were reaching the United States from Afghanistan.

"We are not seeing a nationwide spike in Afghanistan-based heroin," Garrison Courtney wrote in an e-mail to the Los Angeles Times.

Courtney said in an interview that the report that showed the growth of Afghanistan's U.S. market share was one of many sources the agency used to evaluate drug trends. He refused to provide a copy of DEA reports that could provide an explanation.

The agency declined to give the Times the report on the doubling of Afghan heroin into the U.S. A copy was provided by the office of Sen. Dianne Feinstein (D-Calif.).

The impact is being felt in Feinstein's home state. Heroin-related deaths in Los Angeles County soared from 137 in 2002 to 282 in 2004 before dropping to 239 in 2005, still a jump of nearly 75 percent in three years, a period when other factors contributing to overdose deaths remained unchanged, experts said.

The jump in deaths was especially prevalent among users older than 40, who lack the resilience to recover from an overdose of unexpectedly strong heroin, according to a study by the county's Office of Health Assessment and Epidemiology.

"The rise of heroin from Afghanistan is our biggest rising threat in the fight against narcotics," said Orange County sheriff's spokesman Jim Amormino.

The potent Afghan heroin has prompted warnings from some officials who deal with addicts that they reduce the amount of the drug they use. Many addicts seeking the most euphoric high employ a dangerous calculation to gauge how much of the drug they can consume without overdosing. An unexpectedly powerful bundle of heroin, therefore, can be deadly.

"I tell people, `If you're using it, only use half or three-quarters of what you used to,' because of the higher potency," said Orlando Ward, director of public affairs at the Midnight Mission on Los Angeles' Skid Row.

Health workers in rehab centers and health clinics say increasing numbers of clients are addicted to more powerful heroin.

"My patients say it's more available and cheaper," said Dr. Michael Lowenstein at the Waismann Method detoxification center in Beverly Hills.

From 1980 to 1985, Afghan heroin dominated the U.S. market, with a 47 percent to 54 percent share, according to the DEA. Afghanistan's share dwindled to 6 percent for much of the 1990s, as competition from Southeast Asia and Colombia grew. Meanwhile, the Taliban was cracking down as it gained territory, and virtually eliminating poppy production after taking over Afghanistan.

Once the fundamentalist Islamic government was overthrown in 2001 with the help of U.S. forces, Afghans turned again to the poppy trade.

A Nov. 28 report by the World Bank said U.S. and European efforts to end Afghanistan's $2.3 billion opium business were failing.

The production of opium used for heroin reached its highest level ever in Afghanistan this year. It accounted for more than one-third of Afghanistan's gross domestic product and 90 percent of the world's supply of illicit opium, mainly supplying Asia and Europe, according to the report.

- - -

Chicago avoids potent product

While Afghan heroin is having an increasing effect in the United States, police have found almost none of it is sold in Chicago.

Most of the heroin in Chicago comes in a light brown powder form produced in Colombia and Mexico. It is trafficked to Chicago by cartels in Mexico, especially through the state of Durango.

Although most Afghanistan's heroin in the U.S. is moved through Mexican channels as well, the illicit drug is dealt mostly west of the Mississippi River, said a member of the Chicago Police Department's heroin task force, who asked not to be identified.

-- David Heinzmann

Tuesday, December 26, 2006

ACROSS THE NATION - Audits: AIDS funds accountability lacking

ACROSS THE NATION - Audits: AIDS funds accountability lacking
Copyright © 2006, Chicago Tribune
Published December 26, 2006

WASHINGTON, D.C. -- President Bush's ambitious AIDS-fighting program in poor countries has pushed so hard for fast results that basic record-keeping often went by the wayside, making it hard to judge the true success, according to government audits and officials.

Investigators have found that the 3-year-old, $15-billion program has overcounted and undercounted thousands of patients it helped, or was unable to verify claims of success.

The Bush administration says it has worked to fix the problems that were outlined in several audits reviewed by The Associated Press.

Gay marriage industry booms - Same-sex ceremonies are fueling a growing gay-friendly wedding business

Gay marriage industry booms - Same-sex ceremonies are fueling a growing gay-friendly wedding business
By Dionne Walker
Copyright © 2006, Chicago Tribune and The Associated Press
Published December 26, 2006

RICHMOND, Va. -- He's no celebrity, but when Phillip McKee III tied the knot in September, he did it with all the pomp and circumstance of an A-lister: Custom-designed gold rings, a $2,000 kilt and a caviar-and-crepe reception at a posh hotel.

McKee, 34, sank some $60,000 into his Scottish-themed nuptials, worth it he says for the chance to stand before a minister and be pronounced husband --and husband.

Even as lawmakers across the nation debate legislation concerning same-sex marriage, couples are uniting in weddings both miniature and massive, fueling a growing industry peddling everything from pink triangle invitations to same-sex cake toppers.

Vendors say attention to the marriage issue has encouraged more gay couples to recognize their relationships, though in most states, the ceremonies are purely sentimental.

"For the longest time, there was so much shame and privacy around it that people didn't really give themselves permission to have ceremonies like this," said Kathryn Hamm, an Arlington-based wedding consultant who planned McKee's marriage to partner Nopadon Woods. "[Now] the market is growing as the headlines remain out there."

Unlike the multibillion-dollar traditional wedding industry, experts say the gay wedding business is harder to track. Some estimates place its value at up to $1 billion.

In 2005, gays spent $7.2 million with vendors found at the Rainbow Wedding Network Web site, according to data collected by the site, which publishes a national magazine and hosts wedding expos. That's up from $2.1 million in 2002, according to Cindy Sproul, who co-owns the North Carolina firm.

Sproul estimated gay couples spend about $20,000 on ceremonies in states offering some form of recognition, like Massachusetts and Vermont. Sproul said couples average $15,000 on ceremonies in states that have banned gay marriage such as Georgia, where an annual wedding expo her company hosts draws about 500, mostly black gays and lesbians.

Vinyelle White and Madeline Jones of Richmond spent $4,000 -- a month's worth of their combined income -- on their August ceremony, a homespun affair with handmade invitations.

"It may sound really stupid to say, but why not," said White, who visited gay wedding Web sites before choosing an African-themed wedding. "We're showing this is how much we love each other, whether it's legal or not."

Massachusetts is the only state to date to allow gay marriage. In November, Virginia was one of seven states that approved gay-marriage bans, joining 20 that had done so in previous elections. But other states are moving in the opposite direction: New Jersey's gay couples gained new rights last week when the state legalized same-sex civil unions there.

McKee and Woods invited 200 guests to their black-tie ceremony, followed by a cocktail hour and reception at the Ritz-Carlton in Tysons Corner, Va.

Groomsmen received engraved pocket watches; a bagpiper, pianist and DJ serenaded guests, who dined on caviar and lobster.

McKee used gay wedding books, Web sites and a wedding coordinator to find things like gay-friendly photographers. The ceremony cost half their annual income.

In Virginia, the men were no more legally bound after the lavish wedding than before. Still, they considered it a good investment. "For us, the essence of a marriage is our love," McKee said. "Whether the state honors it is the icing on the cake -- it's not the cake itself."

- - -

Custom-made gifts

Items available for same-sex nuptials:

- Rainbow-bejeweled rings

- Double-bride thank you cards

- "His and His" towel sets

International Herald Tribune Editorial - Fear and bigotry

International Herald Tribune Editorial - Fear and bigotry
Copyright by The International Herald Tribune
Published: December 25, 2006

Besides Santa Claus, the Christmas season usually brings some reminder that the worst way to acknowledge the importance of religious faith in America is by demanding that the entire nation follow one particular theology. This year, it's the flap over whether one newly elected member of Congress can use the Koran rather than the Bible next month in a private ceremony.

Keith Ellison, who converted to Islam when he was in college, will be the first Muslim member of the House of Representatives come January. We suspect Ellison's constituents in Minnesota would like to see him using a book that best represents his religious beliefs.

Not so for a radio talk host named Dennis Prager, who claimed that using the Koran would "embolden Islamic extremists." Then Representative Virgil Goode Jr. of Virginia announced that his concerns went beyond the erosion of the Bible's exclusive rights to be sworn on. Goode is bothered by Ellison's faith in general, and wrote a letter to his constituents saying that this was a wake-up call about the danger that there would be "many more Muslims elected to office and demanding the use of the Koran" unless immigration laws were tightened.

Ellison, who traces his ancestors in the United States to 1742, has behaved with extreme grace throughout the incident. As for Prager and Goode, we appreciate their help in demonstrating how very fast things can get both nutty and unpleasant once the founding fathers' wise decision to avoid institutionalizing any religious faith gets breached.

Iran defiant after UN imposes nuclear sanctions - Tehran officials vow not to change course

Iran defiant after UN imposes nuclear sanctions - Tehran officials vow not to change course
By Nazila Fathi
Copyright by The International Herald Tribune
Published December 25, 2006.

TEHRAN: Iran has reacted defiantly to the UN Security Council resolution imposing sanctions on the country's nuclear program. Iranian officials vowed to continue efforts to enrich uranium and warned that the Security Council action would change Iran's relationship with the United Nations' nuclear monitoring agency.

The Security Council voted unanimously Saturday to impose sanctions on Iran, banning the import and export of materials and technology used in uranium enrichment, reprocessing and ballistic missiles.

Mahmoud Ahmadinejad, the Iranian president, said Sunday that the sanctions would not prevent Iran from developing its nuclear program, the Iranian Students News Agency reported.

"The nuclear technology is our right, and no one can take it away from us," Ahmadinejad was quoted as saying.

"You will soon regret this superficial action," he said referring to the sanctions. "What kind of Security Council is this, that is completely in the hands of the Zionists, the United States and Britain?" he said.

Iran's chief nuclear negotiator, Ali Larijani, said Iran would respond immediately to the vote by pushing forward with its plan to develop its nuclear program, the newspaper Kayhan reported Sunday. "Beginning Sunday morning, we will begin activities at Natanz — site of 3,000 centrifuges — and we will drive with full speed," he was quoted as saying. "This will be our immediate response to the resolution."

The Foreign Ministry said in a statement that Iran, in response to the sanctions, intended to put into operation an additional 3,000 centrifuges at its main nuclear complex in Natanz, the newspaper Iran reported Sunday. It had said it would have 3,000 in operation by the end of the month.

Progress at Natanz has been slow, though. Iran has sporadically operated only a single "cascade" of 164 centrifuges, the devices that spin at high speed and turn ordinary uranium into a fuel usable for nuclear power plants — or, at higher enrichment levels, nuclear arms.

Members of Parliament agreed Sunday to discuss a bill that would require the government "to review its cooperation" with the International Atomic Energy Agency, the UN monitoring agency. It was not clear what the bill would require. The deputy speaker of Parliament, Mohammad Reza Bahonar, refused to comment when asked whether it might require that Iran withdraw from the international Nuclear Nonproliferation Treaty.

"Our efforts should be reasonable and moderate," he told the Iranian Students News Agency. "That means we should be after getting our rights and also show that we are not after a fight. And if they are willing to recognize our rights, we will cooperate."

Iran says its program is peaceful and that as a signatory of the treaty, it has the legal right to enrich uranium.

It says it wants to enrich uranium to produce fuel for its nuclear reactors independently. However, enriched uranium can be used for making nuclear weapons if it is enriched to higher levels. The United States says Iran is a major oil exporter and that its nuclear program is a cover for its weapons program.

The Security Council on Saturday required Mohamed ElBaradei, director of the nuclear monitoring agency, to report to the council within 60 days on whether Iran had complied and suspended its enrichment program. The council warned that it would take "further appropriate measures" if Iran refused to comply.

But there were no hints Sunday by the Iranian authorities that Iran might halt the program.

"Our response to the resolution is the continuation of peaceful nuclear activities in a more concrete, decisive and more organized manner than before," said the Foreign Ministry spokesman, Mohammad Ali Hosseini, during his weekly news conference.

Larijani also told Kayhan that pressure from the West through the Security Council would not work. "It will make us more determined to reach our nuclear goals," he said.