Officials fear design of nuclear bomb went to others

Four years after Abdul Qadeer Khan, the leader of the world's largest atomic black market, was put under house arrest and his operation declared over, international inspectors and Western officials are confronting a new mystery left by him, this time over who may have received blueprints for a sophisticated and compact nuclear weapon found on his network's computers. Working in secret for two years, investigators have tracked the digitized blueprints to Khan computers in Switzerland, Dubai, Malaysia and Thailand. The blueprints are electronic and rapidly reproducible for creating a weapon that is relatively small and easy to hide, making it potentially attractive to terrorists. The revelation this weekend that the Khan operation even had such a bomb blueprint underscores the questions that remain about what Khan, a Pakistani metallurgist and father of Pakistan's nuclear weapons program, was selling and to whom. It also raises the possibility that he may still have sensitive material in his possession. Yet even as inspectors and intelligence officials press their investigation of Khan, officials in Pakistan have declared the scandal over and have discussed the possibility of setting him free. In recent weeks, American officials have privately warned the new government in Pakistan about the dangers of doing so. "We've been very direct with them that releasing Khan could cause a world of trouble," a senior administration official who has been involved in the effort said last week. "The problem with Pakistan these days is that you never know who is making the decision — the army, the intelligence agencies, the president or the new government." The illicit nuclear network run by Khan was broken up in early 2004. President George W. Bush declared that shattering the operation was a major intelligence coup for the United States. Since then, evidence has emerged that the network sold uranium enrichment technology to Iran, North Korea and Libya. Investigators are still pursuing leads that he may have done business with other countries as well. Khan is an expert in centrifuges used to produce enriched uranium for bomb fuel, and much of the technology he sold involved enrichment. But it was only in recent days that officials disclosed that they had found the electronic design for a bomb itself among material seized from some of Khan's top lieutenants, a Swiss family, the Tinners. The same design documents were found in computers in three other locations connected to Khan operatives, according to a senior foreign diplomat involved in the investigation. American officials and inspectors at the International Atomic Energy Agency say they have been unable to determine if the weapon blueprints were sold to Iran or the smuggling ring's other customers. The bomb blueprints bear a strong resemblance to weapons tested by Pakistan a decade ago, said two senior diplomats involved in the investigation. Pakistani officials have balked at providing much information about the newly revealed warhead design, just as they have refused to allow the CIA or international atomic inspectors to directly interrogate Khan, who is still considered a national hero in Pakistan for helping it become a nuclear weapons state... IHT

Korea's new generation of 'Web 2.0' protesters

June 1987, Seoul's City Hall Plaza reverberated with a chant that signaled the end of military rule in South Korea: "Dokjetado!" or "Down with the dictatorship!" In June this year, the plaza has once again become a rallying point for crowds calling for the removal of an unpopular government: "Out with Lee Myung Bak!" But the similarity ends there. And in those differences is the challenge for President Lee and anyone else engaged in politics in this highly wired country, where the Internet has merged with the South Korean penchant for street demonstrations. "The Internet fits Koreans' quick-paced temperament," said Kim Il Young, a political scientist at Sungkyunkwan University in Seoul. "As you have seen recently, when the nation's world-class Internet infrastructure, its nationalism and its hot temper all come together, you have a major conflagration." In the 1980s, streets around the plaza lit up with orange flames as students clashed with the police, trading firebombs for tear gas. The military dictators had a clear-cut enemy; they arrested activist leaders. In contrast, the people jamming the same streets this month looked almost like cheerful vacationers on a mass picnic - teenagers in school uniforms, mothers pushing baby carriages, fathers with children on their shoulders, singing and shouting slogans. And the police investigating who organized the country's biggest antigovernment protests in two decades ended up rummaging in cyberspace. When Lee agreed in April to lift a five-year-old import ban on U.S. beef, despite widespread fears that the meat might not be safe from mad cow disease, it quickly became a hot topic on the Internet, first among teenage girls gathering at fan Web sites for television personalities, and later at Agora, a popular online discussion forum at the Web portal Daum. There, people suggested that they stop just talking and take to the streets. When a high school student began a petition on Agora calling for Lee's impeachment, it gathered 1.3 million signatures within a week. The police were caught off-guard on May 2 when thousands of teenagers networking through Agora and coordinating via text messages poured into central Seoul, holding candles and chanting "No to mad cow!" The mainstream media and the government ignored them at first. But protesters stepped forward as "citizen reporters," conducting interviews, taking photographs and, thanks to the country's high-speed wireless Internet, uploading videos to their blogs and Internet forums. One video showing the police beating a female protester caused outrage on the Internet and prompted even more people to join the demonstrations... IHT

United Nations a "talking shop" of 192 nations

More than just talk By Ban Ki Moon Monday, June 16, 2008 Detractors often call the United Nations a "talking shop" of 192 nations where, it has memorably been said, "no issue is too small to be debated endlessly." But the real UN, almost invisible to the general public, is the action-oriented UN. This real UN feeds 90 million people in more than 70 countries - forming a thin blue line between hungry people and starvation. It wipes out debilitating diseases like smallpox and polio and vaccinates 40 percent of the world's children. It provides $2 billion annually in emergency disaster relief and maintains the second-largest army in the world - a global peacekeeping force of 120,000 men and women who go where others can't or won't go. In my travels, often to the world's most difficult places, I always try to meet the faces behind these facts and figures. At a film festival in Jackson Hole, Wyoming, I recently introduced a few of them to Hollywood screenwriters and directors who wanted to learn more about the UN. One was a young Canadian woman from Unicef, the UN agency dedicated to the protection, well-being and rights of children the world over. Her name: Pernille Ironside. Her job: to go with a small team into the eastern wilds of the Democratic Republic of the Congo. There she confronts warlords and demands that they give up their "child soldiers," boys and sometimes girls as young as 8 or 10 who have been recruited or kidnapped to fight in the country's long-running guerilla wars. Often as not, she succeeds. Over the past few years, the UN mission in the DRC has secured the release of 32,000 of an estimated 35,000 such children. Pernille hopes to win back the rest by the end of this year. Another was Kathi Austen, a UN arms-trafficking expert who has spent much of the past decade tracking illegal weapons smugglers operating in the DRC and other conflict zones across Africa. Partly as a result of her dogged efforts, the alleged leader of one of the world's largest trafficking networks, Viktor Bout, was recently arrested on terrorism charges in Thailand. Ishmael Beah, a Unicef advocate for children affected by war, told of his life as a child soldier during the decade-long civil war in Sierra Leone. Thanks to a UN rehabilitation program, he not only survived but thrived, eventually finding his way to America where he attended Oberlin College and wrote a best-seller about his experiences. A young woman from Sierra Leone, Mariatu Kamara, told her story, as well. At the age of 12, rebels killed her parents and, as happened to many thousands of other children, cut off both her hands. With the UN's help, she too survived. She is now living with an adoptive family in Toronto and going to college. She returns periodically to her homeland to share her story and raise awareness about the work Unicef does around the world. In my job I meet many other faces of this real UN, seldom so famous but no less selfless or dedicated. Indeed, our most important work is often the least visible. Visiting West Africa this spring, I saw UN teams in Liberia struggling to help the government restore the most basic social services after years of war: electricity, water, sanitation, schools. In Ivory Coast, I met with UN advisers helping a nation divided by conflict to hold elections and usher in an era of genuine and enduring democracy. In Burkina Faso, just south of the advancing Sahara desert, the UN has been bringing diesel generators to rural villages without power. The machines are used to grind grain, alleviating hunger; they can recharge cell phones, allowing farmers to be in touch with regional markets and help them decide what and when to plant. Usually these small enterprises are run by women's collectives, giving them new authority and status in their communities. Through such small actions we change the world. Sometimes, I wonder how it is that I, growing up as the poorest of Korean youngsters in a village destroyed by war, not always knowing where my family's next meal would come from, could one day be part of this noble enterprise. As for the Talk Shop on Turtle Bay, site of UN headquarters in New York, let us remember that talking sometimes achieves things, too. It's the talk that put UN peacekeepers on the ground in 18 countries on four continents. It's the talk that raises the money and mandates the programs that feed so many of the world's hungry. It's the talk that marks the world's first steps toward dealing with climate change, the global food crisis and a daily array of humanitarian crises. The convening power of the UN is the ultimate "soft power" on the globe. Ban Ki Moon is secretary general of the UN. IHT

Dr Mahathir's 'racist remarks' draw flak

Educated but irrational, narrow-minded & dumb, this person? Read on... He claimed Malaysia was the only nation in the world where the main ethnic group had admitted other races and endowed them with rights. The Malays have every reason to fight for their rights, said Tun Dr Mahathir Mohamad, as non-Bumiputera groups again lamented over the former prime minister's apparently racist line.He claimed Malaysia was the only nation in the world where the main ethnic group had admitted other races and endowed them with rights."We (the Malays) are not the type to protest and have accepted those who came to the country."We even accorded them rights unlike other countries," he said at a talk titled "The Future of Malaysian Malays" organised by Warisan Pekembar, a non-governmental organisation, in Teluk Intan on Saturday.Some 2,000 people attended the hour-long event.In an immediate response, Gerakan secretary-general Datuk Seri Chia Kwang Chye said national unity was crucial to meeting the challenges of the present day."It's time we thought like Malaysians and as Bangsa Malaysia to work together to forge a united country and face future challenges as one."Global challenges like the fuel and food crisis are best tackled and handled together. In light of these challenges, it is inappropriate to start questioning each other's contributions and rights."It is more important to treat everyone as Malaysians, regardless of race, in order to contribute effectively to the country's development."Dr Mahathir expressed sadness at being termed a racist each time he spoke on the rights of the Malays."When they speak of their rights, people say it is all right as we live in a multiracial country."I am extremely sad but we have every right to speak in defence of the Malays," he said.Malaysian Associated Indian Chambers of Commerce and Industry president Datuk Kenneth Eswaran said the special rights of the Malays had never been questioned, at least in Barisan Nasional."There is no basis whatsoever to Dr Mahathir's claims. The Indian community, at least those in BN, has never questioned the economic rights of the Malays."Dr Mahathir should know this better as he was part of the system at one time," he said.The former prime minister also demolished the notion of a Bangsa Malaysia, which he had proposed."We have failed to create a Malaysian race and must accept the fact that we are made up of different races and religions."Malaysia is not like other countries. We have come up with policies to help the Malays without sidelining the interests of other races."The New Economic Policy was designed not to deny others of their rights but to improve the economic status of the Malays."He said peace and harmony in the country could only be achieved when the economic divide between the races was narrowed."If the gap is too big, it might lead to dissatisfaction by certain groups and to untoward incidents like the May 13 riots in 1969."MCA vice-president Datuk Seri Dr Fong Chan Onn said: "Now is not the time to distinguish between Malays and non-Malays."We are first and foremost Malaysians and we (MCA) articulate our views as Malaysians."As MCA leaders, we are responsible for everyone and are constantly aware of the sensitivities of Malaysians and the multiracial context we live in," he said. Asiaone

Unacceptable trait - China’s quake throws up an ugly side of Singaporeans that frequently makes them disliked abroad

The disastrous Sichuan earthquake has sparked off a re-look here at a Singaporean characteristic that overshadows his economic achievement. In a TV interview, a tourist who just returned unhurt complained angrily about his encounter with airport delay and telephone breakdown at a time when the Chinese were frantically rescuing people. One viewer commented: “He kept complaining bitterly as if the whole world owed him an explanation about the airport delay.” Another added: “the man was practically shouting at the camera. His behaviour was really shocking.” In the face of the terrible suffering, the middle-aged Singaporean’s insensitive complaint about his personal inconvenience spread consternation and a sense of shame among viewers. It highlighted a trait often attributed to affluent, educated Singaporeans that they have become too self-centred and insensitive to other people’s plights. After years of social campaigns, tales still abound of people rushing for train seats or refusing to give one up to the elderly, ill treatment of maids, littering or inconsiderate driving. Many of the offenders are middle-class, young and educated who seem to have little interest in other people’s feelings. The Singaporean tourist, instead of lending a helping hand, was fuming about his own safety – even after he was safely back home. “Typical ugly Singaporean the sort that makes other people dislike us – totally self-centred,” said a blogger. Others disagree, with one defending it as a normal reaction for a foreigner desperate to escape quickly. “He may have put it badly, but he was scared and obviously wanted to return to his family,” he said. “Realistically speaking, not every one can be highly principled about helping in a disaster in a foreign country,” he added. Most, however, condemned his insensitivity. “It reflects the overall selfishness and self-centredness of middle-class Singaporeans,” said ‘investor’. “My general impression is that they are the second most selfish and self-centred people in Asia, next only to Hong Kongers.” The debate raised the question whether Singapore could be considered a First World city with such boorishness. A mature, developed country isn’t defined only by wealth and education; it is also about humanity and concern for others. Several days earlier, a girl who refused to give up a seat (meant for the elderly and the handicapped) to a pregnant woman, called her a “bitch” because she had stared at her and shook her head. Some blame it on the environment, especially an elitist, each-man-for-himself mentality. “There’s no such thing as a free lunch” is a theme that has been drilled into every child and adult. A whole generation has grown up believing that if Singaporeans get into trouble, they can expect no help from anyone. It may be a good teaching for a small city without resources, but it has also spawned an antithesis: If you can expect no help from others, you also do not need to care for others. “Living in a society where only money talks makes all of us less human and less caring,” says ‘Anonymous’. Another writer said he was a typically an apathetic, uncaring Singaporean until he went to live in the United States. “Two years into my stay there and having been offered help by plenty of strangers on the street, I found myself doing the same,” he said. “The typical Singaporean reaction when they are offered unsolicited help is a suspicious glare. Certainly not encouraging to would-be helpers,” he added. The person who has the single biggest influence on how Singaporeans think and behave is Lee Kuan Yew. Many of the current leaders and civil servants as well as older Singaporeans, emulate him. The Minister Mentor has never been too concerned about his own – or Singapore’s – popularity as much as its interests. Giving charity to countries in need, for example, has rarely been its forte. The political elite, followed by and large by the citizenry, takes after Lee’s generally no-welfare, harshly competitive and unsentimental leadership. Last year, the “survival of the fittest” type view, believed to prevail among the top elites, burst into a public furore following remarks made by the scholar-daughter of a government MP. Condemning a young professional, Derek Wee, who wrote about the pressures faced by the common people, the student, Wee Shu Min lambasted the critic as wretched, an idiot and “leech”. She appeared to be defending the class divide in Singapore or “a tyranny of the capable and the clever” saying that “the only other class is the complement.” She ended by telling Derek: “Please, get out of my elite uncaring face.” Her MP father criticised her intemperate language, but supported some of her sentiments expressed. A nationwide condemnation ensued. The issue would have ended there if it were just regarded as a teenager’s rants. It was more than that. Because Shu Min was a scholar designed for a possible leadership role and daughter of a People’s Action Party MP (from Prime Minister Lee Hsien Loong’s constituency), it instantly became a political hot potato. The critics said it reflected a government perception that a class divide was inevitable and may even be necessary to encourage people to strive harder in life. The target of her invective, Derek Wee, was actually echoing a popular public sentiment when he said Singaporeans were suffering partly because the government failed to understand their plight. Shu Min’s message was that failures were caused by laziness or lack of capabilities, which the persons themselves were responsible – with no words of support or care for those in need...LittleSpeck

Browsers: The OS for SAAS

Yours is a typical modern company. You have sales and customer management systems, advanced project management tools, extensive network and system security infrastructures, collaboration tools, and a heavily customized enterprise content management system. What's not so typical now--but will be in the near future--is that none of these applications is run in-house. All of these core applications are delivered over the Web in a SAAS (software-as-a-service) model. As such, the applications are accessed via a Web browser that is basically acting as the operating system. There's nothing wrong with that. Right? Right?The idea of the browser as the operating system has been around since the early days of the Web. In fact, it is generally accepted that Microsoft went after Netscape so hard because it feared that the Netscape browser would become more important than the operating system it ran on. That fear may have been unfounded at the time, but we are much closer now to being able to access everything--from e-mail to office applications to image editing to essential enterprise business applications--from the confines of the humble Web browser...eWeek

Employee Monitoring: It's Not Paranoia—You Really Are Being Watched!

Your employer could be watching you. We tell you how to know whether you're being monitored and what you can do about it.It's possible that someone has been reading your e-mails, listening to your phone calls, and tracking your Internet use. No, it's not a foreign spy. It's not even your ex—it's your employer. And she doesn't even need to tell you she's doing it. Employers can legally monitor their workers however they want. They can log and review all computer activity as long as they own the machines. The most popular method of keeping tabs on employees is to track Internet use: A whopping 66 percent of companies monitor employee Internet activity, according to a survey released in February by the American Management Association and the ePolicy Institute. What are they looking for? Frequent visits to sexually explicit sites, game sites, and social-networking sites like Facebook on company time. Almost a third of those who said they monitor their employees have fired someone for inappropriate Web surfing. Some companies monitor employees—tracking keystrokes, reviewing computer files, and reading e-mail—to ensure they're staying loyal. Press leaks of confidential information and trade secrets are of legitimate concern to employers, and many will go to great lengths to make sure that their employees aren't using company computers to pass on information to outside sources. How They Do It...PCmag

5 Google-Whacking Ideas for Microsoft

It's dress-down Friday here at Microsoft Watch and good reason to dress down Microsoft with suggestions for gaining search share against Google. w00t! w00t!Microsoft is so desperate to get ahead in search, it has pushed out some crazy strategies: Hostile Yahoo takeover No, just buy Yahoo search Cash back for purchases through Live Search Seeing as how it's a holiday weekend here in the United States—and so a somewhat slow news day—I am making some Google-killing suggestions for Microsoft's consideration. Surely, I can do no worse suggesting lame ideas for beating Google than Microsoft already has. So, without fanfare, I humbly offer five wacko ways Microsoft could increase search share against Google. The list is in no order of importance...eWeek

Let's not fight! Peace psychology is a a relatively new field of study

For the sake of argument, imagine a world without conflict. That's the full-time job for members of a relatively new field called peace psychology who focus on problems like the genocide in Darfur, hatred in the Middle East, gang warfare in our cities, and rape everywhere. Wondering what lessons they've learned in the trenches that we could use in our daily lives, "O" asked five top peace psychologists for their best advice on waging harmony. "We often figure that other people see the world in the same way we do and overestimate the degree to which they understand our approach and actions. Rather than making assumptions, ask for clarification; even ask about their intention to harm you ('Did you realize when you did that, it affected me in this way?' They might not be aware of it). Be willing to take the first step in opening up such conversation. Also, when we think we'll be rejected, we tend not to smile, we make less eye contact and stand farther away. The other person may perceive these gestures as a brush-off. Go out of your way to say hello. Or smile or make eye contact. We have to take a deep breath and try to recognize that we all feel anxiety. Go in and learn."Sometimes, a difference runs so deep that talking about it just won't help. In this case, having a third person present may neutralize the tension and balance the bully's power. It can be a friend of both parties. Mediation is a possibility. When both parties need to maintain a working relationship...CNN

US 'takes seriously' reports of China human rights clampdown

United States is taking seriously reports that Chinese activists were subjected to a clampdown ahead of US-China talks this week on a range of human rights issues, a spokesman said Tuesday. "We take these reports seriously. And we're going to look into them," said State Department spokesman Sean McCormack. McCormack was responding to reporters' questions about information from the Chinese Human Rights Defenders (CHRD), relayed to Washington through the US-based AIDS victim group Critical Path. CHRD reportedly said that Chinese authorities placed numerous activists under increased surveillance ahead of talks in Beijing this week between US and Chinese officials, the first such dialogue on human rights since 2002. Among the cases cited by Chinese activists was Zeng Jinyan, who is a blogger, activist and wife of jailed dissident Hu Jia. She reportedly was visited on Friday and Saturday by authorities who barred her from leaving the house. "They told her that she would not be allowed to leave her home and that they would watch her even more closely because 'a US delegation wants to meet you,'" CHRD said. Hu Jia, 34, is an AIDS activist and advocate of the environment and free speech. He was sentenced in April to three and a half years in prison for publishing online articles that were critical of the government and giving interviews to members of the foreign media...CNA

Huge Flying Reptiles Ate Dinosaurs

With a name like T. rex, you'd expect to be safe from even the fiercest paleo-bullies. Turns out, ancient, flying reptiles could have snacked on Tyrannosaurus Rex babies and other landlubbing runts of the dinosaur world. ADVERTISEMENT A new study reveals a group of flying reptiles that lived during the Age of Dinosaurs some 230 million to 65 million years ago did not catch prey in flight, but rather stalked them on land. Until now, paleontologists pictured the so-called "winged lizards" or pterosaurs as skim-feeders. In this vision, the creatures would have flown over lakes and oceans grabbing fish from the water's surface, much as gulls do today. The new findings, detailed this week online in the journal PLoS ONE, don't ground the animals totally. "In our hypothesis, flight is primarily a locomotive method," said co-researcher Mark Witton of the University of Portsmouth in England. "They're just using it to get from point A to point B. We think the majority of their lives, when they're feeding and reproducing, that's all being done on the ground rather than in the air." To uncover these feeding habits, Witton and Portsmouth colleague Darren Naish analyzed fossils of a group of toothless pterosaurs called azhdarchids, which are much larger on average than other pterosaurs. For example, one of the largest azhdarchids, Quetzalcoatlus, weighed about 550 pounds (250 kilograms) with a wingspan of more than 30 feet (10 meters) and a height comparable to a giraffe. Witton and Naish learned that more than 50 percent of the azhdarchid fossils had been found inland. Other skeletal features, including long hind limbs and a stiff neck, also didn't fit with a mud-prober or skim-feeder...LiveScience

Understanding liquidity is key

The current financial crisis has revolved around the drying up of markets that had been built on the presumption of ample liquidity. ADVERTISEMENT Massive leveraged positions were built up in instruments which, in spite of their triple A credit ratings, suffered from significant systemic liquidity risk and were difficult to value in the best of times. Current regulatory solutions focus on the liquidity position of institutions. But if liquidity positions are to be properly evaluated there needs to be better evaluation of the liquidity of instruments and how they change over time. Does this mean that we need a formalised liquidity rating system along the lines of the existing less than satisfactory credit rating system? Perhaps not, but we do need to better understand the drivers of liquidity and it's pricing. Investor mandates need to include liquidity factors and independent and bank research departments need to rate instruments. Liquidity risk is a difficult concept to grasp and is often confused with credit risk. One simple way of distinguishing the two is as follows. Credit risk is the probability that a counterparty will be unable to repay money due. Liquidity risk relates to a lender's future requirements to generate cash to meet its own obligations. A liquidity crisis, where lenders sell securities to meet their own cash requirements, will almost inevitably lead to a credit crisis as investors sell bonds because they are worried about the issuers' ability to repay. Similarly a credit crisis will lead to a liquidity crisis, but the causality differs. During the crisis, some central banks have moved quickly to expand the range of instruments against which they lend money. It seems probable that central banks will continue to lend against non-government collateral in the future, as the ECB has done in the past. Varying eligibility criteria and haircuts (the percentage of a security they will advance) would give central banks an enhanced range of instruments to manage market liquidity. The Institute of International Finance has proposed to explore alternative valuation techniques for assets in illiquid markets when market prices are clearly not reflective of fair, willing seller/ willing buyer, valuations - in other words where liquidity dries up. A liquidity rating could provide an objective measure of this as well as helping to determine, in the first place, whether instruments should be held in the banking book or the trading book. The following are some of the factors that contribute to the liquidity of an instrument: central bank repo eligibility and haircuts; issue size; time since issuance; market maker support; price volatility; complexity of structure; availability of comparable benchmarks; and breadth of the investor community. There are many more factors, and these vary in their influence over time. Some research has been carried out into this but not comprehensively and not consistently. Despite its complexity, it is important to evaluate how liquidity is likely to respond to conditions of systemic stress. An understanding of liquidity drivers will also encourage virtuous behaviour by issuers, dealers and investors. Issuers will resist dealer pressure to create small, complex, idiosyncratic structures unless there is a clear investor benefit. Issuers will be more likely to reward dealers who maintain liquidity and transparency in their issues as this will have an impact on their issuance costs. Geared institutions and those who lend to them will be able to make better informed decisions about the liquidity of instruments held. This will also assist regulators in their prudential supervision of insurance companies, banks and bank lending to hedge funds. Above all a greater focus on liquidity of instruments will help to avoid a build-up of aggregate market positions in highly illiquid instruments by geared institutions at times of easy market liquidity. The writer is former head of funding at the European Investment Bank and a consultant to the International Capital Markets Association. He is writing in a personal capacity...FT

US economy in need of urgent action

In March last year I warned in this newspaper that the global "Goldilocks" economy and markets would face a material correction within the next 12 months and there was a need to exercise greater prudence in lending and investing. ADVERTISEMENT This warning was ignored by most in the private and public sectors. Unfortunately, much of what I feared would happen has materialised. From the twin origins of the subprime fallout and the dislocation of the mortgage-backed securities markets, there has been a crisis of confidence that has already led the US economy into a period of low growth, or even a recession. Add to this mix a weak dollar and the trend of rising inflation across the world driven by high food, energy and commodity prices and it is clear the future is still fraught with risk and uncertainty. With decoupling probably a myth, there will most likely be a worldwide economic slowdown should the US downturn be a protracted one. While there are signs that the credit markets may be bottoming out, it seems likely that the housing market will remain in its downward spiral for the remainder of the year. The impact on the real economy could be even more serious should the US consumer decide to cut back significantly on spending. The question then becomes: what should be done to ameliorate the current slowdown before it becomes a full-blown economic crisis with potential worldwide consequences? Specifically, I would like to mention three areas where immediate action should be taken in order to restore confidence in the markets. First, I would encourage the Federal Reserve to continue showing flexibility in providing liquidity to the financial markets. The Fed has modified the requirements of its Term Auction and Securities Lending Facilities several times in the past few months to help ease the liquidity needs in the market. Its efforts surrounding the Bear Stearns situation, where the discount window was opened to investment banks and brokerage houses, were critical to maintaining stability in the system. The Fed needs to continue to respond proactively to developments and consider further modifications to its facilities as necessary. All of this should be done in co-ordination with the world's leading central banks. Second, the government and regulatory authorities need to make greater efforts to support the mortgage markets. Recently, there have been many new ideas and initiatives coming out from the US Congress, economists and the financial community. These include the Senate's recent passing of a bipartisan package of tax breaks, credits and grants as well as Congressman Barney Frank's and Senator Christopher Dodd's plans to let the Federal Housing Administration insure refinanced mortgages after lenders reduce principal to struggling homeowners. Any solution will require some government or federal funding and must be dealt with as an immediate priority to halt the downward spiral in US property prices. Last, professionals in the financial industry and regulators need to re-examine the weaknesses that have surfaced in the current turmoil. Recently, the Institute of International Finance (IIF) released a report that made some recommendations to improve market practices. One of the important issues that the institute is looking at carefully is that of fair value/mark-to-market accounting, which has proven valuable in promoting transparency and market discipline over the past 10 years. However, we have seen that in certain extreme conditions with very limited liquidity for various securities, this accounting approach may have an unintended consequence of prolonging liquidity difficulties and exacerbating the current crisis. Paul Volcker, in his recent speech at the New York Economic Club, raised questions about the usefulness of mark-to-market accounting, particularly its extension in uncertain and illiquid markets. The IIF has made specific recommendations on how this approach might be refined to take into account extreme market conditions. These recommendations need to be worked on in a timely fashion in conjunction with the regulators and international accounting bodies. The action steps I have recommended above need to be considered proactively and with a sense of urgency. If implemented, they should help in restoring the US economy to an even keel and limit the global impact of the current correction. While the picture ahead is still unclear, what is needed is the courage to make tough decisions and to implement corrective measures expeditiously. The writer is senior vice-chairman of Citi, and chairman of Citibank... FT

Space station crew to NASA: Send plumber soon

The international space station's lone toilet is broken, leaving the crew with almost nowhere to go. So NASA may order an in-orbit plumbing service call when space shuttle Discovery visits next week. Until then, the three-man crew will have to make do with a jury-rigged system when they need to urinate. While one of the crew was using the Russian-made toilet last week, the toilet motor fan stopped working, according to NASA. Since then, the liquid waste gathering part of the toilet has been working on-and-off. Fortunately, the solid waste collecting part is functioning normally. Russian officials don't know the cause of the problem and the crew has been unable to fix it. The crew has used the toilet on the Soyuz return capsule, but it has a limited capacity. They are now are using a back-up bag-like collection system that can be connected to the broken toilet, according to NASA public affairs officials. "Like any home anywhere the importance of having a working bathroom is obvious," NASA spokesman Allard Beutel said. The 7-year-old toilet has broken once before but not for as long a time, said Johnson Space Center spokeswoman Nicole Cloutier in Houston. Discovery is already set for launch Saturday with a planned docking with the space station on Monday. Cloutier said NASA officials are considering having some parts flown to Cape Canaveral and placed in the shuttle during its countdown, an unusual and delicate situation. Because the shuttle's payload weight is limited and balance carefully calculated, it will be tricky to try to figure out where the parts can go, said Kennedy Space Center spokesman Bill Johnson Discovery's main payload, a 32,000-pound Japanese laboratory addition, is so big that the shuttle's boom sensor system had to be removed to make room for the lab...AP

404 for Microsoft's latest decision

In the middle of a gritty search war, did Microsoft's Steve Ballmer just commit the mother of all mistakes? I've been wondering about that ever since Microsoft said it would close its Search Books and Live Search Academic projects, thus ceding the field of book digitization to Google. (While both Live Search Books and Live Search Academic are going dark, both Google's Book Search and Google Scholar continue to operate.) Satya Nadella, who runs Microsoft's Search, Portal and Advertising Platform Group wrote in a blog post that "given the evolution of the Web and our strategy, we believe the next generation of search is about the development of an underlying, sustainable business model for the search engine, consumer, and content partner." I tried getting through to Nadella on Tuesday for a better explanation, but Microsoft pulled up the drawbridge. Left on my own to speculate, it appears that Microsoft was being penny-wise but pound foolish. (After all, the company was ready to buy nearly $45 billion worth of trouble integrating Yahoo.) Memo to Nadella: When you get sick of hunkering in the bunker, let's talk. Reading through Nadella's blog post, this much is clear: Microsoft wants to put its search marbles into programs like Cashback (the new Microsoft service that rebates people to buy products online) where there's better potential for a material payback...CNET

New Climate Report Foresees Big Changes

The rise in concentrations of carbon dioxide in the atmosphere from human activities is influencing climate patterns and vegetation across the United States and will significantly disrupt water supplies, agriculture, forestry and ecosystems for decades, a new federal report says.The changes are unfolding in ways that are likely to produce an uneven national map of harms and benefits, according to the report, released Tuesday and posted online at climatescience.gov. The authors of the report and some independent experts said the main value of its projections was the level of detail and the high confidence in some conclusions. That confidence comes in part from the report’s emphasis on the next 25 to 50 years, when shifts in emissions are unlikely to make much of a difference in climate trends...NYT

Microsoft demos future Windows with touch-screen

Steve Ballmer unveiled the iPhone-like touch-screen feature at The Wall Street Journal's "D: All Things Digital" conference, calling it "just the smallest snippet" of the Windows 7 operating system slated for release in late 2009. A Microsoft employee showed possible applications like enlarging and shrinking photos and navigating a map of San Diego by stroking the screen. Microsoft Chairman Bill Gates framed the new feature as an evolution away from the mouse. "Today almost all the interaction is keyboard-mouse," Gates said. "Over years to come, the role of speech, vision, ink — all of those — will be huge." Microsoft's top two executives defended the company's last operating system, Vista, while acknowledging missteps. Gates said he has never been 100 percent satisfied with any Microsoft product, and that the company prides itself on fixing shortcomings in later versions...AP

Newly relaunched Borders.com may be too little, too late

Borders—the book and music store—has two types of customers: brick-and-mortar shoppers, and Amazon customers. The latter is because, seven years ago, the company decided to practically merge its online store with Amazon.com because it was doing nothing but bleeding money. Borders seems to have changed its mind, however, and has relaunched its own, independent online store this week. No longer is Borders.com just another portal to Amazon—it now operates once again as one of Amazon's competitors. Related StoriesCan Borders' new "concept store" compete with online retailers? The point, apparently, is to offer a friendly online shopping experience for those customers who are used to buying from Borders' brick-and-mortar stores. Borders believes that experience differs from the one offered by Amazon, and that it can somehow take advantage of this unique niche without necessarily competing directly with its former partner. "It's not the intent that we're going to out-Amazon Amazon at what they do," Borders CEO George Jones said earlier this year, according to the Associated Press. "What we think is that we can still have a great, compelling offering." A quick run through of the site shows that it is, indeed, a web site that sells books...Ars Technica

U.S. says no new evidence of al Qaeda threat

There is no evidence of a direct threat from al Qaeda or that the group has obtained weapons of mass destruction, U.S. intelligence officials said on Tuesday, despite reports that al Qaeda will release a new video urging jihadists to use such weapons to attack the West. FBI spokesman Richard Kolko said the bureau sent out an alert to U.S. law enforcement agencies about the expected video. "We got information the tape is coming," he said. "We sent out an alert to law enforcement to let them know the tape was coming." Kolko said the alert was a routine precaution sent to 1,800 U.S. law enforcement agencies. ABC News reported on Tuesday evening that the video was expected in the next 24 hours. However, IntelCenter, a U.S.-based terrorism monitoring firm, said the video being referred to was actually released at least as early as Monday and is entitled "Nuclear Jihad, The Ultimate Terror."IntelCenter described it as "a jihadi supporter video compilation" and said that it was not from an official group. "These videos almost always are comprised of old video footage that is edited together to make a new video," IntelCenter said. "The material in these types of videos do not qualify as an official message from al-Qaeda or any other group." A U.S. intelligence official said on Tuesday evening that there is no sign that al Qaeda has acquired the capability to use weapons of mass destruction...IHT

Energy drinks linked to risky behavior among teenagers

Super-caffeinated energy drinks, with names like Red Bull, Monster, Full Throttle and Amp, have surged in popularity in the past decade. About a third of 12- to 24-year-olds say they regularly down energy drinks, which account for more than $3 billion in annual sales in the United States. The trend has been the source of growing concern among health researchers and school officials. Around the country, the drinks have been linked with reports of nausea, abnormal heart rhythms and emergency room visits. In Colorado Springs, several high school students last year became ill after drinking Spike Shooter, a high caffeine drink, prompting the principal to ban the beverages. In March, four middle school students in Broward County, Florida, went to the emergency room with heart palpitations and sweating after drinking the energy beverage Redline. In Tigard, Oregon, teachers this month sent parents e-mail alerting them that students who brought energy drinks to school were "literally drunk on a caffeine buzz or falling off a caffeine crash." New research suggests the drinks are associated with a health issue far more worrisome than the jittery effects of caffeine — risk taking...IHT