Financial Times Editorial Comment: Bernanke explains the Fed to the world

Financial Times Editorial Comment: Bernanke explains the Fed to the world
Copyright by The Financial Times
Published: March 30 2007 00:09 | Last updated: March 30 2007 00:09
Copyright The Financial Times Limited 2007


“It depends” is not the most useful of answers, especially when the question is the future level of US interest rates. The Federal Reserve did itself no favours with a confusing monetary policy statement last week. But this week’s testimony to Congress by Ben Bernanke, the Fed’s chairman, shows that the central bank’s policy has changed little, and still makes sense.

In its statement last week the Fed said that inflation remains its biggest concern but did not mention any further tightening of monetary policy. The markets took that to mean that the Fed is getting closer to cutting interest rates. But in his testimony to Congress Mr Bernanke argued that inflation is more likely to remain too high than fall too far, implying that rates will stay on hold at 5.25 per cent, their current level, for some time yet.

The Fed is at fault for confusing the market, though its mistake was to try and calibrate its message too precisely, rather than a more fundamental error. Its Open Market Committee wanted to acknowledge mixed economic news and show that the balance of risks to its forecast have changed. But the English language is not precise enough to convey that in a sentence or two: Mr Bernanke’s testimony – several thousand words long – did a better job.

The Fed’s view is now fairly clear. It thinks that the economy will continue to grow and core inflation, which at 2.7 per cent is still higher than makes the central bank comfortable, will ease slowly. It does not expect weakness in the housing market to cause a sharp economic slowdown.

The futures market, which is pricing in a rate cut by the end of the summer, is less optimistic. The factors that will decide the issue are housing, business investment and the labour market.

US house prices are stagnant, new construction is down, fewer houses are being bought and sold, and there has been a rise in defaults on so-called subprime mortgages. The housing slowdown will mean weaker growth in consumer spending, but unless the value of existing homes starts to fall, the troubles in subprime are unlikely to mean mass mortgage defaults and serious harm to the economy.

Business investment, which Mr Bernanke flagged as a risk, has been weak since the end of last year. With credit spreads low and the economy still growing, that is both a surprise and a problem: one that will worry the Fed if it continues.

But the issue that will trump all others is the labour market. Unemployment, at 4.5 per cent, is still low and that lack of spare capacity could put pressure on wages and therefore inflation. Unless the Fed expects unemployment to rise, which would leave unused capacity in the economy and create an output gap, then it has little reason to cut rates, but if there is any weakness in the labour market then rate cuts should quickly follow. That, at least, is quite straightforward.

Bush defied again as Iraq deaths mount

Bush defied again as Iraq deaths mount
By Guy Dinmore in Washington and agencies
Copyright The Financial Times Limited 2007
Published: March 30 2007 01:05 | Last updated: March 30 2007 01:05


Suicide bombers killed more than 110 people in mainly Shia areas of Iraq on Thursday while President George W. Bush and Congress slid deeper into a political stand-off over his requests for extra war spending and Democrats’ demands for a date for withdrawal.

Most of the estimated 62 victims of a bombing in a market in the Shaab district of northern Baghdad were women and children shopping before the nightly curfew, Reuters news agency reported. As evening fell more than 50 people were killed north of the capital in three suicide car bombings.

Nouri al-Maliki, the Iraqi prime minister, called for restraint, fearing reprisal attacks. On Tuesday Shia gunmen shot dead up to 70 Sunni Arab men in revenge for the 85 people killed by two truck bombs in a Shia area of the town.

“We’re still trying to get the exact details of what happened but it appears that there clearly were some kind of retribution killings by police,” General David Petraeus, the top US commander, said, confirming reports of police involvement. However he said the security plan remained “generally on track”, Associated Press reported.

The White House said there needed to be a “purge” of Iraq’s police forces.

A growing sense of an administration under siege was reinforced by the confused rejection by officials of the declaration a day earlier by King Abdullah of Saudi Arabia that the US “occupation” of Iraq was “illegitimate”. One US official said clarification would be sought. The White House said US troops were in Iraq at the invitation of its sovereign government.

Despite the new spike in violence, supporters of the president insisted his “surge” strategy was working.

Senator Joe Lieberman, a Democrat, said sectarian killings in Baghdad were down. He said the alternative, as proposed by his own party, would “turn Iraq over to fanatics”.

Two Republican senators – Chuck Hagel and Gordon Smith – ignored Mr Bush’s repeated veto threats and crossed the aisle to vote with the Democrats who won a 51-47 vote to approve a $123bn (£62.6bn) emergency spending bill for the war that set a goal of withdrawing US troops within one year.

The Senate’s challenge to Mr Bush – which he has denounced as political theatre despite opinion polls showing strong support for Congress – followed a similar vote last week in the House which requires most troops to be withdrawn by September 2008.

Officials have said the armed forces would start feeling the monetary pinch by mid-April to mid-May. The White House on Thursday said the Pentagon had already started switching funds in order to pay for 300 “mini-resistant, ambush-protected vehicles”.

While it is not clear how long the stand-off will last, analysts say what amounts to a political game of chicken in Washington could end in a negotiated compromise between the White House and Congress.

Bush team is adept only at bungling

Bush team is adept only at bungling
BY ANDREW GREELEY
Copyright by The Chicago Sun Times
March 30, 2007

The Bush administration reminds me of Jimmy Breslin's comic novel, The Gang That Couldn't Shoot Straight. The premise of the novel was what if you had a Mafia gang whose members were incompetent at the things that mafiosi are supposed to do. Similarly, the Bush administration has often shot itself in the foot because its key players are not qualified for their jobs. They make a mess of the job and are protected by secrecy; or if that isn't possible, by spin.

The current example is the selective firing of U.S. attorneys for reasons that are not yet clear. The gnomes who created the mess are two of President Bush's old cronies from Texas: Alberto Gonzales and Harriet Miers. Neither, as is now patent, is a heavy hitter. Gonzales has been involved in controversies over the Geneva Convention (which he called "quaint") and legal memos that appear to involve approval of secrecy, torture, imprisonment without trial and spying on Americans without legal warrants. Small wonder the president does not want him to testify under oath.

Another example of not being able to do the job were the men who were supposed to deal with Hurricane Katrina: Michael Chertoff and Michael Brown (of Homeland Security and FEMA, respectively), neither of whom had the intelligence to deal with a catastrophe or the experience of responding to major disasters (unlike Brown's predecessor Edward Witt). However, they were loyal Republicans, so no other competence was required. New Orleans continues to be a mess; FEMA continues to be unable to spend the money. No heavy hitters in this mess.

Then there is the Coalition Provisional Authority, which was supposed to govern Iraq in the years after the war. L. Paul Bremer, the head of CPA, did not speak Arabic and had never served in the Middle East. He had been a staff aide to Henry Kissinger and ambassador to Norway. The members of his staff, mostly younger Republicans, seem to have been even less qualified, and according to journalists covering Iraq, did not speak Arabic and rarely left the fortified Green Zone. Whatever Bremer's intentions, he and his staff must share the blame for what came after the new government was installed. None of them seems to have been a heavy hitter.

The worst example by far of the gang that could only shoot itself in the foot is the president's foreign policy team. Condoleezza Rice had been provost at Stanford University, which might have qualified her to become president of a state college in the California system, but scarcely the president's top foreign policy adviser or now secretary of state. Donald Rumsfeld was a hard-driving and arrogant corporate executive skilled at bureaucratic infighting who ignored the advice of the experienced military officers and ran the Defense Department as his own fiefdom. He used the war to prove his hypothesis that a small American military force would easily triumph, and he made no preparations for reconstruction after the war -- two tragic mistakes, the results of which are still with us.

Vice President Dick Cheney, on the basis of the ''Scooter'' Libby trial, seems an angry man with paranoid tendencies who may even now suspect an Iraq link with al-Qaida and weapons of mass destruction hidden away somewhere. Mixed in were a clique of neocons: Paul Wolfowitz, Douglas Feith and Libby, who could write strong memos. The only heavy hitter, who might have been able to prevent the mistake of the war, was Colin Powell, whom Rumsfeld and Cheney marginalized. No wonder the war went terribly wrong and tens of thousands have died.

Gonzales, Miers, Chertoff, Bremer, Rice, Cheney, Rumsfeld, Wolfowitz: Could any of the members of this gang have been expected to shoot straight? Besides Powell, where were the wise men (and women) who could have protected the country from a string of disasters?

Bush is a victim of his bad taste in advisers and staff, his propensity to Texas cronyism and his inclination to cover up and spin the truth. There is no reason to believe that he is better advised about the ''new'' strategy in Iraq, or that the mistakes will not continue till Jan. 20, 2009. No heavy hitters need apply.

America’s ‘Seinfeld’ strategy in Iraq

America’s ‘Seinfeld’ strategy in Iraq
By Michael Fullilove
Copyright The Financial Times Limited 2007
Published: March 29 2007 17:46 | Last updated: March 29 2007 17:46


The history of US foreign policy is punctuated by a series of doctrines. The Monroe doctrine (1823) declared that European powers would not be allowed to intrude into the western hemisphere. The Truman doctrine (1947) committed Washington to assisting free peoples in the fight against communism. The Nixon doctrine (1969) warned that America’s allies would need to assume primary responsibility for their own defence.

Ask the expert

Does Bush’s Iraq policy satisfy the George Costanza criterion? Post a question now for Michael Fullilove
In recent times US grand strategy has been guided by a new kind of doctrine, named after not its author but its exemplar: the Costanza doctrine.

This doctrine, which had its heyday in 2002-2004 but remains influential, recalls the classic episode of the TV comedy Seinfeld, “The Opposite”, in which George Costanza temporarily improves his fortunes by rejecting all the principles according to which he has lived his life and doing the opposite of what his training indicates he should do. As Jerry tells him: “If every instinct you have is wrong, then the opposite would have to be right.”

Emboldened, he tries a counter-intuitive pick-up line on an attractive woman: “My name is George. I’m unemployed and I live with my parents.” At the end of their date, when she invites him up to her apartment, he demurs, cautioning that they do not know each other well enough. “Who are you, George Costanza?” the lady asks. Replies George: “I’m the opposite of every guy you’ve ever met.”

The Iraq policy pursued by the Bush administration satisfies the Costanza criterion: it is the opposite of every foreign policy the world has ever met.

The Costanza doctrine is most closely associated with President George W. Bush and his first-term confidants: the wild-eyed neo-cons and the dead-eyed ultra-cons. But there is a wider group, which includes most presidential candidates and many of Washington’s foreign policy elite, who are not fully paid-up subscribers to the doctrine but went along with it nonetheless. Allied governments in London, Madrid and Canberra also signed up.

In “The Opposite”, George breaches the most fundamental laws in his universe – for example, the age-old principle that “bald men with no jobs and no money, who live with their parents, don’t approach strange women”.

Similarly, in its geopolitical incarnation, adherents to the Costanza doctrine cast aside many of the fundamental tenets they learnt at staff college or graduate school. Let me name a few.

First, military and diplomatic resources are finite and should be directed towards your greatest priority. An example of the opposite approach would be for a country that has been attacked by a non-state terrorist group to retaliate by removing a state regime that had nothing to do with the attack.

Second, take care not to weaken your intimidatory powers through poor military performance. Aim for short, sharp victories (such as that in the 1991 Gulf war) that get your adversaries worrying about the extent of US power. The opposite would be to launch a war of choice involving the drawn-out occupation of an Arab country – the kind of thing that gets your allies worrying about the limits of US power.

Third, you get by with help from friends. Although the powerful are sometimes tempted to go it alone, international support helps determine the perceived legitimacy of an action, which affects its risk and costs. Building this support requires discussion and compromise. The opposite would be to spurn real negotiations, slough off your allies, bin multilateral agreements you do not like and declare that you are not bound by the rules that govern everyone else.

Fourth, state-building is hard. Few of the international efforts at state-building since the cold war’s end have succeeded. Luckily there are numberless reports identifying lessons learnt. The alternative would be to do the opposite of what those reports recommend, for example by deploying insufficient troops and dismantling any extant national institutions such as the army.

Fifth, democracy is a blessing that requires patient nurturing. The opposite approach would be to seek to impose democracy by force of arms on a population traumatised by decades of vicious and totalitarian rule.

Sixth, politics, like nature, abhors a vacuum. If two dangerous states are struggling for dominance of a strategic region, maintaining a balance between them may be the least worst option. The opposite would be to emasculate one of them, thereby greatly increasing the relative power of the other.

Finally, historians often cite the need for prudence in international relations, quoting the physician’s dictum: “First, do no harm.” The opposite would be: “Don’t think too much, just chance your arm and see what happens!”

There is a moment in “The Opposite” when George Costanza pre-empts some hooligans making a ruckus at the movie theatre: “Shut your mouths or I’ll shut ’em for ya. And if you think I’m kidding, just try me. Try me! Because I would love it!”

For a while, that kind of method worked – for both Georges. Then normal service resumed. The Costanza doctrine is all about hope, but when it comes to making your way, in New York or the world, experience is the better guide.

The writer directs the global issues programme at the Lowy Institute for International Policy in Sydney

Prostate vaccine clears hurdle - New class of drugs uses body's defenses

Prostate vaccine clears hurdle - New class of drugs uses body's defenses
By Judy Peres
Copyright © 2007, Chicago Tribune
Published March 30, 2007

A government panel gave the go-ahead Thursday for the first in a new class of anti-cancer drugs: an experimental agent that works by mobilizing the body's natural immune system to fight prostate cancer.

If the federal Food and Drug Administration accepts the recommendation of its advisory committee, as it usually does, the drug will become the first therapeutic cancer vaccine to win regulatory approval.

Unlike vaccines that prevent diseases such as polio and measles -- or, in the case of the human papillomavirus, or HPV, vaccine, cervical cancer -- therapeutic vaccines are meant to treat an existing disease.

The new agent, known by the trade name Provenge, has been tested only in late-stage prostate cancer patients and added only a few months to their lives. But scientists hailed the drug as a step in the right direction because it could be the first of many such vaccines, also called active cellular immunotherapies.

"This is an exciting time in prostate cancer," said Dr. Edwin Posadas of the University of Chicago, an oncologist who specializes in the disease. "We're not there yet, but we are definitely making progress.

"Ten years ago, if you had [advanced] prostate cancer, we could do nothing but treat the pain. Now we have effective chemotherapy and a growing repertoire of agents that look like they might have an impact on the disease."

Part of the excitement is because Provenge demonstrates what researchers call "proof of principle" -- evidence that the immune system can recognize and fight prostate cancer. The FDA's advisory committee voted 13-4 Thursday that the drug was effective.

Doctors also would be thrilled to have a targeted drug that can kill cancer cells gently, without causing debilitating side effects.

The committee voted unanimously that it was safe.

The most common side effects of Provenge are flulike fever and chills. It doesn't cause the hair loss or nerve damage that are common with chemotherapy, nor the hot flashes or mood swings of hormonal treatment. That's important, experts noted, because men are living longer with prostate cancer and doctors worry about their quality of life.

Prostate cancer is the most frequent malignancy in U.S. men, other than common skin cancers. Two million men are living with the disease. The American Cancer Society estimates that nearly 220,000 new cases of prostate cancer will be diagnosed this year and more than 27,000 men will die of the illness.

Scientists have been working for decades, mostly without success, to find ways of getting the immune system to recognize tumor cells as the enemy and attack them the same way a preventive vaccine fights off infections.

Unlike invading viruses and bacteria, however, tumors are composed of the body's own cells, multiplied out of control. Although tumors carry molecular markers that could provoke an immune response, they aren't always visible to the immune system. Or, if they are spotted, they aren't perceived as alien and attacked.

So researchers have been forced to try increasingly sophisticated techniques to train the immune system to spot and fight tumor cells.

Provenge uses dendritic cells, special white blood cells that are uniquely able to attract the attention of other types of cells in the immune system, such as T cells.

Doctors harvest dendritic cells from the patient's blood and send them to a lab at Dendreon Corp., the company that developed Provenge. There the cells are mixed with a booster and a target molecule, or antigen, that's abundant on the surface of nearly all prostate cancer cells but not on normal cells.

The vaccine is then injected back into the patient, in three infusions that constitute the entire course of treatment. The dendritic cells present the prostate antigen to the T cells, showing them which molecular targets to attack. Then the T cells, which have long memories, search out and destroy diseased cells carrying the antigen.

Dr. Robert Flanigan, a urologic oncologist at Loyola University Medical Center in Maywood who is involved in the clinical trials of Provenge, said the results of the trials were encouraging.

"This is a reasonable drug to give, because it's well tolerated," he said.

Another investigator, Dr. Dennis Pessis of Rush University Medical Center, noted that the drug likely will be approved only for patients with advanced prostate cancer that has spread to other organs and has stopped responding to routine medications.

But he said he expected that, once the drug is on the market, some doctors will prescribe it "off label" for less-advanced patients.

"Patients are going to request it [even though] I assume insurance would not cover it," said Pessis, adding that he expects the vaccine to be expensive.

The FDA's final ruling is expected by May 15.

Two prophylactic vaccines already have been approved to prevent viruses that can cause cancer -- one for hepatitis B, which can lead to liver cancer, and the other for HPV.

A number of other therapeutic cancer vaccines are in late-stage clinical trials and could come to market in the next few years. They include vaccines to treat lymphoma, kidney cancer, melanoma and multiple myeloma.

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jperes@tribune.com

Baxter's bird flu vaccine working - Could help in sales talks with nations

Baxter's bird flu vaccine working - Could help in sales talks with nations
By Bruce Japsen
Copyright © 2007, Chicago Tribuner
Published March 30, 2007

Baxter International Inc. on Thursday said its bird flu vaccine is working for humans against several strains of the virus at low dosages, setting the stage for a final round of testing the company expects to complete by the end of this year.

The progress in testing Baxter's cell-based vaccine against strains of the H5N1 virus could help the Deerfield-based medical products giant as it negotiates with countries around the world that hope to protect their citizens from a possible bird flu pandemic.

Baxter has a few contracts but some countries have been asking for more evidence that the product works before signing any deals.

The continued progress of testing may provide consumers with more confidence considering there is no commercially available bird flu vaccine. Bird flu vaccines being developed by Baxter and other companies and stockpiled have not been government-approved.

Baxter is among about a half-dozen vaccinemakers that are in various stages of testing their products against the H5N1 strain of avian influenza, which has killed 170 people, mostly in Asia. Baxter said its product is the first cell-based vaccine in clinical trials.

Baxter is leading the development of cell-based technology, which allows the company to make vaccines more quickly in larger quantities. For decades vaccine developers have used a process that involves injecting strains of virus into millions of chicken eggshells by hand in a laborious, monthslong process.

"A good safety profile and cross immunity against multiple viral strains is critically important for governments considering the concept of using a vaccine before, or immediately after, a pandemic breaks out," said Dr. Hartmut Ehrlich, vice president of global research and development for Baxter's Bioscience business.

Baxter's trials have determined that the vaccine works in 76 percent of those tested. The company also said its vaccine was tested without using "adjuvant," an additive being used by some other companies that is believed to cause side effects.

The findings that Baxter unveiled Thursday come from study of 270 patients from Europe and Asia. Strains of the virus were taken from patients in Vietnam.

"What's important about Phase I/II data is that the results show that Baxter's vaccine works against many strains of the H5N1 avian flu virus without any additives to boost effectiveness," said Baxter spokesman Chris Bona.

"Additives can add additional cost, and they are believed to cause side effects" such as headache and fever, he added.

At least one other company that has disclosed results of its testing is British drug giant GlaxoSmithKline PLC, which said last year that an adjuvant helped its vaccine work against bird flu strains.

But Baxter said in a statement that side effects it observed in its own trial were "injection site reactions, headaches and fatigue." The company said there were "minimal" occurrences of such side effects, which were "similar to those reported for licensed egg-based, seasonal influenza vaccines."

In the next two months Baxter will begin enrolling more than 600 participants in its final clinical trial.

This time each participant will receive the same 7.5-microgram dosage without an adjuvant, in contrast to past testing that has involved some patients receiving larger dosages as well as vaccine that includes adjuvant.

The lower dosage of vaccine is considered important should there be an outbreak because companies might be required to quickly ramp up manufacturing capacity to increase the possibility that a greater number of people can be immunized.

Last year Baxter won a contract from the United Kingdom to make more than 2 million doses of a cell-based vaccine. The company has also signed stockpile agreements with an undisclosed number of other countries, but said those health ministries do not want their names released publicly.

Baxter executives said other governments it has talked to are cautious about stockpiling because it is difficult to predict whether the product they are buying would work against the particular strain of the H5N1 virus that might hit their country.

The progress of Baxter's vaccine in clinical trials will help in negotiating more contracts, said Noel Barrett, Baxter's vice president of research and development for the company's vaccine business.

The price of Baxter stock rose 46 cents a share Thursday, to $53.22, on the New York Stock Exchange. The company's share price has jumped more than 40 percent over the past year.
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bjapsen@tribune.com

Foreclosures at highest in past 8 years

Foreclosures at highest in past 8 years
By Becky Yerak
Copyright © 2007, Chicago Tribune
Published March 29, 2007


Nearly 29,000 foreclosures were filed in the six-county Chicago region in 2006, a one-year jump of 36 percent and the highest level in at least eight years, amid a meltdown in the subprime lending market and the growing use of adjustable rate mortgages, according to a study released Wednesday by a Chicago-based housing policy group.

"The popularity of these complicated and risky products, combined with loose mortgage underwriting standards that often include no documentation of borrower income, have driven foreclosures to record highs" in the region and the city, said Geoff Smith, research director for the non-profit Woodstock Institute.

The 28,997 foreclosures in Cook, DuPage, Kane, Lake, McHenry and Will Counties in 2006 surpassed the previous eight-year peak of 25,882, set in 2002, and is up from 17,705 in 1999. The institute's report did not include pre-1999 figures, but Smith estimates that with rising rates of mortgage lending, the latest number is likely a record.

Much of the blame for the foreclosure spike, up from 21,300 in 2005, was pinned on the ongoing crisis in the subprime lending market and to the growing popularity of ARMs, which can offer low initial monthly payments but reset to higher levels after a few years. Weak home prices and rising interest rates have made it increasingly difficult for borrowers to keep up with their payments.

The share of mortgage originations that are so-called option ARMs rose from 8.4 percent in 2005 to 12.3 percent through May 2006, the report said. Such loans allow borrowers to choose whatever monthly payment they wish, even if it means paying back less than the loan's interest rate.

Cook County had a total of 19,522 foreclosures, up 35 percent from 14,506 in 2005 and up from its previous peak of 18,162 in 2002.

But the pain was widespread, as all counties in the region saw double-digit increases in foreclosures.

DuPage and Lake Counties, generally considered to be affluent, saw the number of foreclosures climb by 46 percent and 36 percent, respectively, to 1,886 and 2,219.

"Adjustable rate mortgages and no-interest mortgages have also gotten affluent people in trouble," said Jeff Metcalf, chief executive of Kaneville-based Record Information Services Inc., which tracks foreclosures. He looked at the summary of Woodstock's report.

"Interest rates were so low for so long," Metcalf said. "Something had to give."

Meanwhile, the higher-growth counties of Will, McHenry and Kane saw foreclosure rates jump by 45 percent, 25 percent and 38 percent, respectively, to 2,742, 1,014 and 1,614.

Overall, the City of Chicago had 18.4 foreclosures per 1,000 mortgageable properties, the Woodstock report found. Within the city, however, there was substantial variation in foreclosure levels by neighborhood.

There was some good mortgage news Wednesday.

Federal Reserve Chairman Ben Bernanke said the growing troubles in the subprime mortgage market, which makes loans to people with poor credit or low incomes, does not appear to be spreading to the overall economy.

"At this juncture ... the impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained," he said, according to The Associated Press.

Bernanke told lawmakers he is open to working with them on ways to address problems with lenders and borrowers.
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byerak@tribune.com

Big-ticket data add to worries - Durable goods orders fall short; Fed chief dims rate-cut hopes

Big-ticket data add to worries - Durable goods orders fall short; Fed chief dims rate-cut hopes
By James P. Miller
Copyright © 2007, Chicago Tribune
Published March 29, 2007

Orders for the big-ticket manufactured items known as durable goods fell significantly short of expectations last month, the Commerce Department said Wednesday in a report that increased investor worries about how long it will be before the underperforming U.S. economy can regain its earlier momentum.

The latest report offered confirmation that businesses are pulling back their spending in expectation of weak market conditions.

"Awful" was the term High Frequency Economics' Ian Shepherdson used to describe the latest durable goods report.

"Disappointing," said another economist.

"Not good," echoed a third.

To make matters worse, the disappointing report came out on the same day that Federal Reserve Chairman Ben Bernanke told a joint congressional panel that despite three consecutive quarters of subpar economic growth, the central bank still considers inflation to be the biggest threat facing the economy.

With that stance, Bernanke "appeared to slash hope that the Fed will lower interest rates any time soon," said A.G. Edwards stock market strategist Al Goldman.

Investors responded by sending the Dow Jones industrial average down nearly 100 points.

Overall, orders for durable goods rose 2.5 percent in February, below the 3.5 percent most economists had been expecting, but the biggest disappointment lay in what's known as the "ex-transport" figure.

Economists often prefer to eliminate the skewing effect caused by the routine swings in orders for commercial jets and automobiles by stripping out those sectors to obtain the ex-transport reading.

Experts had been anticipating that the ex-transport number would grow 1.8 percent in February, but instead it fell 0.1 percent.

The decline wasn't as bad as January's unnerving 4 percent fall, but it nonetheless suggested that the weakness in orders is settling in for what could be a lengthy stay.

Much of that shortfall was centered in capital goods products, such as computers and production machinery, which companies buy as an investment in future productivity. But evidence is growing that corporate executives are opting to stay on the sidelines rather than spend money on equipment.

The economy is generally considered to be performing above its long-term growth potential when it is growing by more than 3 percent a year. Growth has now been below potential for the past three quarters, as the Fed's rate hikes have chilled the economy.

The central bank raised its benchmark rate 17 straight times starting in June 2004 before pausing in August 2006.

Growth will likely remain below trend, at least for the first half of 2007, according to a number of observers.


Risks said to be higher

Wednesday's report "considerably raises the economic risks over the coming months," said Action Economics' Mike Englund.

The economist said he now expects the economy to grow at an annualized rate of only 1.6 percent in the first quarter and 2.8 percent in the second quarter.

In a reference to retired Fed Chairman Alan Greenspan's recent statement that there is a 1 in 3 chance the U.S. will slide into an economic recession this year, Nomura Securities economist David Resler said the slumping durable goods data mean "the possibility of recession by year-end looks somewhat less remote than when Mr. Greenspan first asserted such a risk a month ago."

Not every observer was downbeat.

Business spending will be a drag on first-quarter economic growth, predicted FirstTrust Advisors economist Brian Wesbury, but will then "accelerate and add to economic growth for the rest of 2007."

Others pointed out that the economy's current sluggishness is, after all, the desired effect of the Fed's earlier rate hikes.

"As corporate managers face the uncertainties of the economic slowdown, there is a chill going up and down their spines," acknowledged ClearView Economics economist Ken Mayland.

But, he added, "this is how a rising inflation trend is reversed."

To blunt the threat of inflation, he continued, "the economy must endure some pain" in the form of temporarily weakened performance.

Bernanke told Congress on Wednesday that he doesn't believe the economy will slip into a recession, rejecting the notion Greenspan raised that the economic expansion that started in late 2001 could be running out of steam.

"There seems to be a sense that expansions die of old age," the Fed chairman said. "I don't think the evidence supports that."
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jpmiller@tribune.com

`Da Vinci Code' publisher beats copyright lawsuit - Two claimed author stole from 1982 book

`Da Vinci Code' publisher beats copyright lawsuit - Two claimed author stole from 1982 book
By Danica Kirka
Copyright © 2007, Chicago Tribune and The Associated Press
Published March 29, 2007

LONDON -- Britain's Court of Appeal rejected a lawsuit Wednesday from two authors who claimed novelist Dan Brown stole their ideas for his blockbuster novel "The Da Vinci Code."

Michael Baigent and Richard Leigh had sued Brown's publisher, Random House Inc., claiming he had copied from their 1982 non-fiction book, "The Holy Blood and the Holy Grail."

Both books explore the theory that Jesus married Mary Magdalene and had a child, and that the bloodline continues.

One of the judges said copyright protects an author's labor in researching and writing a book, but doesn't extend to facts, theories and themes.

Brown wasn't a defendant. He testified last year that he studied the plaintiffs' book when writing his best-selling novel but didn't copy from it.

The "case should never have come to court in the first place" and was a waste of "time and money," Random House Group Chief Executive Gail Rebuck said Wednesday in a statement.

"Misguided claims like the one that we have faced, and the appeal, are not good for authors, and not good for publishers," she said. "But we are glad that the Court of Appeal has upheld the original judgment and that, once again, common sense and justice have prevailed, helping to ensure the future of creative writing in the UK."

The authors now face legal bills of about $6 million.

Baigent and Leigh "expended a vast amount of skill and labor" on their book, their lawyers said. "That skill and labor is protectable."

Brown testified for several days during the High Court hearing last year.

The claimants' lawyer, Jonathan Rayner James, said that although the lawsuit had been against the publisher rather than the author, Brown was really the one on trial.

During a hearing earlier this year, Rayner James said issues remain about the role of Brown's wife, Blythe, who did much of the research. She didn't testify at the High Court hearing. Brown said he wanted to protect his wife from publicity.

UN promotes circumcision to reduce HIV risk for males

UN promotes circumcision to reduce HIV risk for males
By Alexander G. Higgins
Copyright © 2007, Chicago Tribune and The Associated Press
Published March 29, 2007

GENEVA -- Heterosexual men should be circumcised because of compelling evidence it reduces their chances of contracting HIV by up to 60 percent, UN health agencies said Wednesday.

But men should still use condoms and other protection against the virus, said the World Health Organization and UNAIDS, the UN agency that coordinates the global fight against the AIDS virus.

"We must be clear," said Catherine Hankins of UNAIDS. "Male circumcision does not provide complete protection against HIV."

Men and women also should consider abstinence, delaying the start of sexual activity and reducing the number of sexual partners, she said. Otherwise, they could develop a false sense of security and engage in high-risk behavior that could undermine the protection provided by male circumcision, the agencies said.

Men also should be warned that they are at a higher risk of being infected with HIV if they resume sex before their circumcision wound has healed, which can take six weeks. Likewise, an HIV-positive man can more easily pass the disease to his partner if the wound hasn't healed.

More study is needed to determine whether male circumcision will reduce the transmission of HIV to women or in homosexual intercourse, the statement said.

"It probably does, but we don't have sufficient research now to confirm that," said Dr. Teguest Guerma of WHO.

The recommendations were based on a conference in which experts discussed three trials -- in Kenya, Uganda and South Africa -- that produced strong evidence of lessened risk because of heterosexual male circumcision.

WHO experts said the trials convinced them after 20 years of observations that circumcision reduces men's susceptibility to HIV infection partly because the cells in the foreskin of the penis are especially vulnerable to the virus.

The public health impact is likely to be most rapid where there is a high rate of HIV infection among men having sex with women.

Studies suggest male circumcision could prevent 5.7 million new cases of HIV infection and 3 million deaths over 20 years in sub-Saharan Africa, they said.

More legal immigrants seek citizenship

More legal immigrants seek citizenship
By Ray Quintanilla
Copyright © 2007, Chicago Tribune
Published March 29, 2007

The proportion of legal immigrants in the country who have become U.S. citizens has reached its highest mark in 25 years, according to a study released Wednesday by the Pew Hispanic Center in Washington.

The population of naturalized U.S. citizens reached 12.8 million in 2005, the latest year available, the center's researchers found.

"Today's immigrants are naturalizing and do want to become U.S. citizens," said Jeffrey Passel, a demographer and a senior research associate with the organization. The findings reflect a rise in the number of legal immigrants and an increasing number of eligible residents who pursue citizenship, he said.

The research also showed the number of Mexican immigrants naturalized in 2005 hit 1.6 million. That year there were 2 million naturalized citizens who traced their origins to nations in Europe, the report found. The numbers of immigrants from China who became naturalized citizens in 2005 reached 956,000, up from 421,000 a decade earlier.

Illinois, California, New York, Texas, Florida and New Jersey were listed as the "Big Six" for naturalizations. California led the way with 3.47 million naturalized citizens in 2005. New York was second with 2 million. Illinois was sixth, posting 512,000 naturalizations, up from 378,000 in 1995.

Immigrants who are better educated, speak English fluently and own their homes tend to be more likely to become naturalized citizens, researchers concluded.

The report found that across the nation, Mexican immigrants were least likely to pursue U.S. citizenship.

The numbers show 20 percent of eligible U.S. permanent residents from Mexico became naturalized citizens in 1995. In 2005, that rose to 35 percent.

Karla Avila, a spokeswoman with the Illinois Coalition for Immigrant and Refugee Rights, said some Mexican immigrants harbor a dream to "one day go back to Mexico."

"Some feel like taking that step will jeopardize their Mexican status in some way," Avila said.

Among immigrants eligible to become citizens, 77 percent of those from the Middle East had done so by 2005, compared with 71 percent from Asia, 69 percent from Europe and Canada, and 46 percent from across Latin America, the research showed.

----------



rquintanilla@tribune.com

Immigrant driver bill approved by House - Proposal for special permit now goes to the Senate

Immigrant driver bill approved by House - Proposal for special permit now goes to the Senate
By Monique Garcia
Copyright © 2007, Chicago Tribune
Published March 29, 2007

SPRINGFIELD -- Illinois would become one of only a handful of states in the nation to authorize illegal immigrants to drive legally on their roads under legislation the Illinois House passed Wednesday to create a special driver's permit for undocumented residents.

The 60-54 vote was an important victory for immigrant advocates, who have focused their energy this spring on several measures before the General Assembly.

"Today we make history," said Rep. Edward Acevedo (D-Chicago), the sponsor. "The roads in Illinois will be a safer place, and immigrants can drive to church, to work, and take their children to school legally and without fear."

The controversial proposal for a driver's certificate for immigrants, which proponents say would encourage many of the state's estimated 400,000 undocumented immigrants to get proper training and automobile insurance, still faces more tests before becoming law.

The House passed the measure with the bare minimum number of votes. The bill now goes to the Senate, where a committee approved a similar measure earlier this year, and supporters believe they can muster enough votes to win approval.

Gov. Rod Blagojevich has pledged to sign the bill.

In the wake of last year's immigrants-rights marches, which drew hundreds of thousands to the streets of downtown Chicago, organizers have tried to channel that energy into political action. Last week thousands of people arrived in Springfield, filling the Capitol's rotunda with a chanting, flag-waving demonstration.

The Illinois Coalition for Immigrant and Refugee Rights estimates that 250,000 uninsured illegal immigrants are on Illinois roads. Advocates believe as many as half of them would apply for the driving certificates.

Opponents had harsh words about that prospect during Wednesday's debate.

"Why are you talking about a driving privilege for folks who can't register to vote?" asked Rep. Ron Stephens (R-Greenville). "Let's just knock down the borders and give everybody a certificate and say, 'Hey, thanks for being here. You're now a great American. It doesn't matter by the means you got here, but you get all the rank and privileges all our ancestors paid dearly for.'

Seven states -- Hawaii, Maine, Maryland, Michigan, New Mexico, Oregon and Washington -- give out driver's licenses without demanding proof that people are in the country legally, according to Jim Reed of the National Conference of State Legislatures.

Tennessee created a special class of driver's permit for undocumented immigrants in 2004, but suspended the program after unearthing problems with identity theft and fraud. In March 2006, Tennessee created a new program requiring applicants to prove a "legal presence," such as a work visa or student visa. Now lawmakers are retooling the program again.

In what may be the closest program to what Illinois envisions, Utah issues "driver privilege cards" instead of regular licenses for undocumented residents. Officials said the program increased the number of insured motorists. Illinois insurance regulators expect the same type of increase.

California has debated a similar measure since the 1990s.

Proponents say providing a legal avenue for undocumented immigrants to drive would not only make drivers already on the road safer but also would give immigrants better access to jobs and services.

Opponents believe driver's certificates could make it easier for terrorists to make their way in society and would tacitly condone illegal immigration.

Acevedo said the bill is "not about helping undocumented immigrants legitimize themselves." He said it would reduce the black-market sale of fraudulent licenses and insurance.

The certificates could only be used for driving and obtaining insurance and could not be used as any form of identification, including boarding planes.

Applicants would have to provide a photo ID, birth records, proof of residence and proof of car insurance within 30 days. They would be photographed and fingerprinted, which has raised concerns about whether authorities could use that information for deportation.

"I think that is always a possibility, but I don't think as a practical matter that will happen," said Lawrence Benito, associate director of the Illinois Coalition for Immigrant and Refugee Rights.

Al Garza, national executive director of the Minuteman Civil Defense Corps, a border security advocacy group, said in an interview that undocumented immigrants do "not deserve" driver's certificates."

"They are here illegally; they broke the laws. They don't deserve to drive," said Garza, who lives in Arizona. "How in the world can we expect our laws to be enforced across the board if we keep handing out freebies? This is a freebie."

Illinois House opponents feared the bill would cause more problems than it is worth.

Rep. Bill Black (R-Danville) said he understands that people won't be able to use the certificates as identification to board a plane, but he questioned whether they would weaken protections against future terrorist attacks.

"[Sept. 11, 2001] is still very fresh in my mind," Black said.

Rep. Dan Brady (R-Bloomington) said 3,000 people in his legislative district alone are driving illegally without insurance.

"The roads in Illinois aren't as safe as they could be," he said. "In my opinion this bill does not add to the problem. It takes steps to correct the problem."

Senate Majority Leader Debbie Halvorson (D-Crete) said Democrats discussing the proposal view the bill as a positive "public safety issue."

Acevedo, a Chicago police officer, encouraged legislators to remember the struggles of their ancestors who settled in this country, recalling a phrase his grandmother used: "Nunca olvidas," or, "Never forget."

"I ask you today, don't forget where you come from. It's from the families of immigrants," Acevedo said. "This country was built on the blood, sweat and tears of immigrants who came to this country looking for opportunity."

In other action, the House voted 110-4 to send the Senate a bill to move the state's 2008 presidential primary to Feb. 5 from March 18, which House members said was aimed at helping U.S. Sen. Barack Obama, a Democratic candidate.

Illinois would join a growing list of states for what is being called "Super-Duper Tuesday," in essence, a national primary day.

Republicans also supported the change, believing it would create national interest in the GOP presidential contest in Illinois even if other Democratic contenders ceded the state to Obama.

Tribune reporter Diane Rado contributed to this report.

mcgarcia@tribune.com

Clinton: Yes, I'm a feminist - Democratic senator gets NOW backing

Clinton: Yes, I'm a feminist - Democratic senator gets NOW backing
By Devlin Barrett
Copyright by The Associated Press
Published March 29, 2007

WASHINGTON -- Presidential candidate Hillary Rodham Clinton declared Wednesday that if you look up the word "feminist" in a dictionary, you'll find her.

Clinton received the endorsement of the National Organization for Women, a group of a half-million members who support feminist candidates for elective office.

Asked whether she saw herself as a feminist, Clinton said by the standard definition, yes.

"If you look in the dictionary, the word feminist means someone who believes in equal rights for women in society, in the economy, the political process -- generally believes in the equality of women," she said. "And I certainly believe in the equality of women."

Her response was met with enthusiastic cheers from the crowd.

The New York senator has launched a nationwide outreach to women voters, the majority of the electorate. The NOW endorsement was expected, and the Clinton campaign hopes the group's membership will strengthen the ranks of campaign volunteers and supporters.

The senator is trying to smash the highest glass ceiling in the nation by becoming the first woman elected president. Part of a generation of women who expanded opportunities for women in the workplace, she has sought to frame her current campaign as a historic event.

"This is really an emotional moment for me," Clinton said, noting that when her own mother was born, U.S. women did not have the right to vote.

NOW President Kim Gandy said the group "will help elect feminist candidates to the House and Senate who will work with President Clinton to undo the damage done by the Bush administration."

Other high-profile women are lining up to support Clinton.

Billie Jean King, the tennis star, formally endorsed her on Wednesday. And Democrat Geraldine Ferraro, who in 1984 was the first female vice presidential candidate on a major party ticket, sent an e-mail fundraising solicitation on behalf of Clinton.

ANALYSIS - Bush, Dems vie to frame war debate

ANALYSIS - Bush, Dems vie to frame war debate
By Mark Silva and Aamer Madhani
Copyright © 2007, Chicago Tribune
Published March 29, 2007

WASHINGTON -- Confronted with votes in both houses of Congress calling for timelines for the withdrawal of U.S. troops from Iraq, President Bush faces a certain showdown with the Democratic-controlled Congress that threatens to stall funding for the war.

In an immediate sense, the president holds the upper hand, because Democrats clearly lack the votes to override the veto he has promised. But as the standoff drags on, Bush may need to find middle ground, because the Democrats hold the purse strings for financing the U.S. military involvement in Iraq.

Using unusually strong language that gave no hint of a compromise, Bush warned Wednesday that Americans would hold Democrats "responsible" for any failure to fund troops on the front line.

But Democratic leaders, energized by their successful push for timetables in both the House and Senate and emboldened by the anti-war sentiment among voters that handed them control of Congress last November, insisted it is Bush who must be held "accountable."

The battle for public opinion may prove decisive.

Americans have been turning against the war in larger numbers and expressing support for specific timetables for ending U.S. military involvement in Iraq. But if voters see Democrats as abandoning the troops, Democratic leaders likely would be forced to give ground to Bush. If, however, they see the Democrats' approach as bringing a sensible end to a hopeless conflict, more Republicans might begin defecting from the White House position.

The House last week voted 218-212 for a bill saying combat troops must be withdrawn by the end of September 2008. The Senate has a non-binding proposal calling for most troops to be out of Iraq by the end of March 2008, attached to a spending bill that is still under debate. Senate Republicans failed to erase that proposal Tuesday, setting a course in which any final bill will prompt an ultimatum of some sort for the president.

In the short term, as Bush threatens a veto and congressional leaders accuse him of stonewalling, the House and Senate must reconcile their slightly different versions of the bill even as they seek to find a compromise with the White House. The president, for his part, remains confident that Congress lacks the votes to override any veto.

And he has been warning that funding for American forces abroad is running out.


Bush: Troops need support

"The clock is ticking for our troops in the field," Bush said Wednesday in a defiant speech to supporters near Capitol Hill. "Members of Congress need to stop making political statements and start providing vital funds for our troops.

"Some of them believe that by delaying funding for our troops, they can force me to accept restrictions on our commanders. ... That's not going to happen," Bush vowed. "If Congress fails to pass a bill to fund our troops on the front lines, the American people will know who to hold responsible."

Democrats, convinced they have the support of the American public, insist the president can be compelled to change course. At a loss for a strategy to override any presidential veto, however, they are attempting to bring the force of public opinion to bear.

House Speaker Nancy Pelosi (D-Calif.) firmly delivered a message to the president during a news conference.

"Calm down with the threats. ... There is a new Congress in town," Pelosi said. "I just wish the president would take a deep breath, recognize ... we each have our constitutional duty."

Senate Majority Leader Harry Reid (D-Nev.) insisted that the president must come to grips with the new Democratic power in Congress.

"We have done our constitutional duty, we have done what we believe the American people wanted us to do," Reid said at a later news conference with Pelosi. "If he is gong to stonewall us, it leaves us with very few alternatives. The speaker and I are not going to get into our options. The president has to look at his options. ... The ball is in his court."

Still, asked how Democratic leaders would respond to a veto, Pelosi said: "We just take this one day at a time."

The days are running out, according to the Bush administration, which insists the Defense Department must start tapping other resources in mid-April if it doesn't get $100 billion in supplemental spending it is seeking to support the wars in Iraq and Afghanistan through September. The White House is seeking another $145 billion for 2008.

The key to a solution, some experts say, is what comes out of final House and Senate negotiations on a war spending bill, but congressional leaders have a powerful ally in public opinion.

"The president has time on his side, and the Senate and House have the people on their side," said Timothy Roemer, a former Democratic congressman and president of the Center for National Policy. "Most of the people in this country want some kind of new policy and different results in Iraq. ... In the short term, the president has time and the rhetoric on his side ... but in the long term he is on the losing side."

Bush, noting that Gen. David Petraeus has received only half of the additional forces he is seeking in Iraq, insists that the new security initiative supported by nearly 30,000 promised new troops has generated signs of hope.

Yet military experts are increasingly skeptical that the U.S. mission can succeed, and some question the administration's claims of progress.

Anthony Cordesman, an analyst with the Center for Strategic and International Studies, sees parallels in the Bush administration's portrayal of Iraqi forces to exaggerations made about successes in training Lebanese forces in the early 1980s. He also draws parallels to mistakes made in Vietnam.

"We have been where we are in Iraq before, and we have done great damage to other countries in the process," Cordesman told the House Armed Services Committee on Wednesday.

While Democrats draw strength from the November elections that handed them control of Congress, they also can point to recent opinion polls that indicate eroding support for the war and growing encouragement for their side of the debate.


Poll finds pullout sentiment

Nearly 6 in 10 Americans surveyed said they want their representatives to support legislation calling for a withdrawal of U.S. forces from Iraq by August 2008, according to a Pew Research Center poll conducted March 21-25.

"In the last election, the American people called out for a new direction," Pelosi said Wednesday. "Since the election, Democrats have brought the winds of change to the Capitol. ... We are holding the administration accountable for the conduct in the war."

The White House, for its part, insists that Congress may as well expedite passage of the war bill so Bush can veto it, as spokeswoman Dana Perino put it Wednesday, "then have discussions on a cleaner bill."

----------

mdsilva@tribune.com

amadhani@tribune.com

- - -

WHERE THEY STAND


House: Has approved $124 billion war-spending bill mandating withdrawal of U.S. combat forces by Sept. 30, 2008.

Senate: Debating a $122 billion spending bill with a non-binding target for troop withdrawal by March 31, 2008.


Bush: Vows to veto either version.


WHAT'S NEXT


House and Senate must agree on a common plan, with narrow votes of support in each chamber.


Bush is prepared to veto any bill with a timeline.


Congress needs a two-thirds vote to override any veto. But it appears to be far short of such consensus.


WHAT IF


In a stalemate, the Defense Department must draw money from other resources if no new spending bill is approved by April 15, Bush says. Bush will blame Congress for jeopardizing troops. Congress will blame Bush for prolonging the war.

-- Mark Silva

A market correction is coming, this time for real

A market correction is coming, this time for real
By William Rhodes
Copyright The Financial Times Limited 2007
Published: March 29 2007 03:00 | Last updated: March 29 2007 03:00


The recent market turmoil should not have been un-expected. We are living in an increasingly interdependent world. Times have been good, even with the volatility of the past few weeks sparked by the Shanghai market and then fuelled by the subprime sector in the US. We have been living in extraordinary times in a global "Goldilocks" economy - not too hot, not too cold. The macro-economy still looks pretty good but the shaking of the trees over the past few weeks has, it is to be hoped, awakened investors and lenders to the risks in the marketplace.

High growth in emerging markets continues, as exemplified by the tremendous growth in China and India. Western and eastern Europe are growing. The Russian economy, driven by energy, has been strengthened well beyond what was expected a few years ago. The Middle Eastern oil-exporting countries are going through a boom fuelled by oil and gas: it is different from earlier periods of high oil prices because this time a substantial amount of the money is staying in the region, rather than being invested elsewhere as in the 1970s.

Africa is in many ways going through something of an economic renaissance. The Japanese economy also has improved and the US locomotive has continued, maintaining good growth of more than 3 per cent in 2006 notwithstanding the downward revision of fourth-quarter growth from 3.5 to 2.2 per cent.

However, much of the good news has come as a result of extraordinary levels of liquidity pouring into opportunities around the globe. To a large extent this is due to the Federal Reserve's expansionary monetary policies early in the decade and the US administration's fiscal stimulus. The yen carry trade has also facilitated the buoyant expansion of investments and leverage evident everywhere today. The low spreads, the tremendous build-up of liquidity, the reach for yield and the lack of differentiation among borrowers have stimulated both dynamic growth and some real concerns.

Pockets of excess are becoming harder to ignore. Problems in the housing and mortgage area such as the subprime sector in the US are one such example of excess that should come as no surprise. As lenders and investors inevitably become more discriminating, liquidity will recede and a number of problems will surface. Too many countries and companies with vastly different risk profiles are still commanding similar pricing.

It has been my experience that periods of economic expansion tend to last between five and seven years. We are entering the sixth year of expansion in the US. Against that background, I believe that over the next 12 months a market correction will occur and this time it will be a real correction. I said as much last spring during the Inter-American Development Bank meetings in Belo Horizonte, Brazil. Soon afterwards, in May 2006, the markets did experience a correction but it was so mild and short-lived that it was in a way less effective than no correction at all. I say that because it left the inexperienced with the impression that it would be smooth sailing from there on.

Market developments in the past few weeks should be seen as a warning. What has been evident for a number of months is that, in the US, we are seeing lagging inflation and slower growth. Whether this means that we are going to have to fend off recessionary tendencies is not yet clear. However, what is clear to me is that in the next year a material correction in the markets will occur.

During the last big adjustment that started in July 1997 in Thailand and spread to a number of Asian economies including South Korea, followed by Russia in 1998 - and led ultimately to the bail-out of Long Term Capital Management, the US hedge fund - a number of today's large market operat-ors were not yet in the mix.

Today, hedge funds, private equity and those involved in credit derivatives play important, and as yet largely untested, roles. The primary worry of many who make or regulate the market is not inflation or growth or interest rates, but instead the coming adjustment and the possible destabilising effect these new players could have on the functioning of international markets as liquidity recedes. It is also possible that they could provide relief for markets that face shortages of liquidity.

Either way, this clearly is the time to exercise greater prudence in lending and in investing and to resist any temptation to relax standards.

The writer is senior vice-chairman of Citigroup, and chairman, president and chief executive of Citibank

The historian shielding Bush from reality

The historian shielding Bush from reality
By Jacob Weisberg
Copyright The Financial Times Limited 2007
Published: March 29 2007 03:00 | Last updated: March 29 2007 03:00
President George W. Bush is sometimes a boastful anti-intellectual, but in the past year he has been touting his reading lists and engaging in who-can-read-more contests with Karl Rove, his chief political adviser. There is even a White House book club.

The most recent selection wasA History of the English-Speaking Peoples since 1900 by Andrew Roberts, the conservative British writer.Mr Bush invited Mr Roberts for a discussion over lunch at the White House earlier this month. The author was joined by Dick Cheney, the vice-president, Mr Rove and a variety of other neo-conservative intellectuals, officials and journalists. Mr Bush's embrace of Mr Roberts' book is hardly surprising, given how it glorifies his presidency. But it does suggest that all the reading he has been bragging about lately may not be opening his mind.

Mr Roberts' book picks up in 1900, around where Winston Churchill's four volumes of a similar title left off. It also takes up Mr Churchill's pet idea that the Anglo-American alliance is uniquely responsible for the survival of liberty in the world. Though Mr Roberts does not favour the term, his framework closely tracks the notion of an "Anglosphere" - a natural alliance among the English-speaking former colonies of Great Britain that serves to spread civilisation in the form of democracy and capitalism.

His own idiosyncratic definition of the English-speaking world, which includes New Zealand but not Bermuda, Canada but not Ireland, and Australia but not India or South Africa, explains the book's curious cross-cutting from London to Wellington to Washington to Canberra.

At the core of the book isMr Roberts' notion of what might be called the "super-special relationship". When Britain could no longer rule its empire in 1946, it handed the responsibility for mankind over to its successor, the US. Mr Roberts views British colonialism and American hegemony as alike in their benevolence and effectiveness. Like Mr Bush, he is peevish that the recipients of such generosity are not more grateful.

As a historian, Mr Roberts is present-minded in the extreme, returning at every stage to justifications for Mr Bush's actions in Iraq. The neo-conservatives who want to spread democracy in the Middle East are the heirs to compassionate Victorians who sought to civilise India, China and Africa. While the reader is still choking on his casting of Richard Perle as Lord Macaulay, Mr Roberts is already at work grafting Mr Bush's head on to Mr Churchill's body. The president's prosecution of the war on terror is "vigorous" and "absolutely unwavering". The Iraq war has provided "excellent value for money" to the British taxpayer. That Mr Bush has brought "full democracy" to Iraq is stated as unequivocal fact.

Mr Roberts has written several other well-regarded works of history, but it is hard to see how this form of assertion qualifies as scholarship, as opposed to polemic. A true historian explores questions; a great popular one can spin a yarn while revealing complexities. Mr Roberts musters a muscular narrative, but examines nothing. All charges against the Anglo-American imperium are dismissed, from the "supposed ill-treatment" of women and children in Boer war internment camps to Dresden, Nagasaki and the prison camp at Guantánamo, which he declares Mr Bush is "right" to keep open. The abuses at Abu Ghraib, he writes, were overstated and resulted from "the fact that some of the military policemen involved were clearly little better than Appalachian mountain-cretins".

Mr Roberts is as sloppy here as he is snobbish. Charles Grainer, the alleged ringleader at Abu Ghraib and the only such "cretin" named, grew up in California. I am seldom bothered by minor errors from a good writer, but Mr Roberts' mistakes are so extensive, fatuous and revealing of his basic ignorance about the US in particular, that it may be worth noting a few of them.

The San Francisco earthquake did considerably more than $400,000 in damage. Virginia Woolf, who drowned herself in 1941, did not write for Encounter, which began publication in 1953. The Proposition 13 tax revolt took place in the 1970s, not the 1980s - an important distinction, because it presaged Ronald Reagan's election. Michael Milken was not a "takeover arbitrageur". "No man gets left behind" is a line from the film Black Hawk Down, not the motto of the US Army Rangers. Gregg Easterbrook is not the editor of The New Republic magazine. In a breathtaking peroration, Mr Roberts points out that "as a proportion of the total number of Americans, only 0.008 per cent died bringing democracy to important parts of the Middle East in 2003-05". Various issues aside, 0.008 per cent of 300m people is 24,000 - off by a factor of 10. If you looked closely enough, I expect you could find an error on every page.

With this book, Mr Roberts takes his place as the fawning court historian of the Bush administration. He claims this role not just by singing its achievements but by producing a version of the past century that confirms its assumptions and prejudices.

He favours Mr Bush, but does him no favour, by feeding his preference for the unknowable future to a problematic present, assuring him that history will vindicate him if only he continues to hold firm.

The writer is editor of Slate.com

“Is Your Baby Gay” article sparks furor

“Is Your Baby Gay” article sparks furor
Copyright by Gay Chicago Magazine
March 17, 2007


NEW YORK, NY (AP) - The president of the leading Southern Baptist seminary has incurred sharp attacks from both the left and right by suggesting that a biological basis for homosexuality may be proven, and that prenatal treatment to reverse gay orientation would be biblically justified.

The Rev. R. Albert Mohler Jr., one of the country’s preeminent conservative Christian leaders, acknowledged that he irked many fellow conservatives with a recent article saying scientific research “points to some level of biological causation” for homosexuality.

Proof of a biological basis would challenge the belief of many evangelical Christians that homosexuality - which they view as sinful - is a matter of choice that can be overcome through prayer and counseling.

However, Mohler, president of the Southern Baptist Theological Seminary in Louisville, Kentucky, was assailed even more harshly by gay-rights supporters. They were upset by his assertion that homosexuality would remain a sin even if it were biologically based, and by his support for possible medical treatment that could switch an unborn gay baby’s sexual orientation to heterosexual.

“He’s willing to play God,” said Harry Knox, a spokesman on religious issues for the Human Rights Campaign, a national gay-rights group. “He’s more than willing to let homophobia take over and be the determinant of how he responds to this issue, in spite of everything else he believes about not tinkering with the unborn.”

Mohler said he was aware of the invective being directed at him on gay-rights blogs, where some participants have likened him to Josef Mengele, the Nazi doctor notorious for death-camp experimentation.

“I wonder if people actually read what I wrote,” Mohler said in a telephone interview. “But I wrote the article intending to start a conversation, and I think I’ve been successful at that.”

The article, published March 2 on Mohler’s personal Web site, carried a long but intriguing title: “Is Your Baby Gay? What If You Could Know? What If You Could Do Something About It?”

Mohler began by summarizing some recent research into sexual orientation, and advising his Christian readership that they should brace for the possibility that a biological basis for homosexuality may be proven.

Mohler wrote that such proof would not alter the Bible’s condemnation of homosexuality, but said the discovery would be “of great pastoral significance, allowing for a greater understanding of why certain persons struggle with these particular sexual temptations.”

He also referred to a recent article in the pop-culture magazine Radar, which explored the possibility that sexual orientation could be detected in unborn babies and raised the question of whether parents - even liberals who support gay rights - might be open to trying potential prenatal techniques that would reverse homosexuality.

Mohler said he would strongly oppose any move to encourage abortion or genetic manipulation of fetuses on grounds of sexual orientation, but he would endorse prenatal hormonal treatment - if such a technology were developed - to reverse homosexuality. He said this would no different, in moral terms, to using technology that would restore vision to a blind fetus.

“I realize this sounds very offensive to homosexuals, but it’s the only way a Christian can look at it,” Mohler said. “We should have no more problem with that than treating any medical problem.”

Such logic dismayed Jennifer Chrisler of Family Pride, a group that supports gay and lesbian families.

“What bothers me is the hypocrisy,” she said. “In one breath, they say the sanctity of an unborn life is unconditional, and in the next breath, it’s OK to perform medical treatments on them because of their own moral convictions, not because there’s anything wrong with the child.”

Paul Myers, a biology professor at the University of Minnesota-Morris, wrote a detailed critique of Mohler’s column, contending that there could be many genes contributing to sexual orientation and that medical attempts to alter it could be risky.

“If there are such genes, they will also contribute to other aspects of social and sexual interactions,” Myers wrote. “Disentangling the nuances of preference from the whole damn problem of loving people might well be impossible.”

Civil Union Bill passes IL House Committee

Civil Union Bill passes IL House Committee
Copyright by Gay Chicago Magazine
March 27, 2007

SPRINGFIELD, IL - An Illinois House committee passed a bill on March 21 that would extend legal recognition and many of the benefits of civil marriage to same sex couples.

The Religious Freedom and Civil Union Act (HB1826) passed the Illinois House Human Services Committee with a vote of 5-4. The bill now goes to the full House for consideration.

HB1826 guarantees many of the rights and responsibilities to persons in civil unions that are currently granted to persons in civil marriages. Among those rights are the ability to participate in healthcare visitation and decision making for one's partner, survivor benefits and the right to make disposition decisions about deceased partner's remains.

The bill also affirms religious institutions’ right not to recognize such unions or to solemnize a civil union.

“While this bill does not provide for recognition of same-sex marriages in the State of Illinois, it does give gay couples legal recognition and many of the same benefits and responsibilities of marriage,” said Rick Garcia, political director of Equality Illinois. “It is a step in the right direction for full equality in Illinois.”

To contact the sponsor Rep. Greg Harris (D-Chicago) and thank him for his sponsorship, send e-mail to greg@gregharris.org, call 217-782-3835 or fax: 217-557-6470.

To contact the following Human Services Committee members who voted for this bill: Rep. Naomi Jakobsson (D-Champaign), e-mail: naomi@naomijakobsson.com; 217-558-1009, fax: 217-557-7680; Rep. Constance Howard (D-Chicago), e-mail: staterep-constance-a-howard@comcast.net, 217-782-6476, fax: 217-782-0952; Rep. Annazette Collins (D-Chicago), e-mail: annazettec@sbcglobal.net, 217-782-8077, fax: 217-557-7643; Rep. Elizabeth Coulson (R-Glenview), e-mail: coulson@earthlink.net, 217-782-4194, fax: 217-782-7613; and Rep. Al Riley (D-Matteson), e-mail: rep.riley38@sbcglobal.net, 217-558-1007, fax: 217-557-1664.

March 28 2007 - The Short View By John Authers

March 28 2007 - The Short View By John Authers
Copyright The Financial Times Limited 2007
Published: March 28 2007 03:00 | Last updated: March 28 2007 03:00
As 2007 dawned, Iran was the greatest worry on investors' minds. The one most alarming geopolitical risk that could upset all bullish scenarios was an extension of the Iraq conflict to its bigger neighbour, with all its implications for oil supply and for the balance of power in the rest of the Middle East.

So why has the crisis over the UK hostages held by Iran (to the backdrop of speculation that Israel is readying a strike against Iran) been accompanied by a recovery in stock markets, and a return of risk appetite?

The easiest answer is that the attention is currently elsewhere. The problems of the US housing market, and the related crisis for subprime mortgage lenders, dominate perceptions of risk.

Beyond that, the situation in Iran hashad an impact on the oil price. The price of West Texas Intermediate crude has risen 11 per cent over the past two weeks. With the "heating" season drawing to a close and the "driving" season still in the future, this is in large part down to events in Iran.

But the relationship between oil and stock prices is changing. Last year, after WTI crude touched $77 a barrel, there was a clear inverse relationship between the oil price and stock markets. The long equity rally over the latter half of the year started on almost the same day oil peaked and began a descent to bring it down by 35 per cent. Oil near $80 was so expensive that it threatened on its own to trigger a recession. A clear inverse relationship with the stock market thus made sense.

Over history, there has been no such inverse relationship. Demand for oil correlates with industrial activity, which in turn correlates with stock market performance. Even after its recent rise, WTI stands at $62.50 - disquieting on many levels, but not enough to spark a macroeconomic "event".

Further, energy stocks tend to benefit from a higher oil price. Since February 27, the day of the recent sell-off, the S&P 500 energy sector has gained 6.4 per cent, leading all sectors. It is only 2 per cent off the all-time high it set last December. So Iran has had an impact on the market - it appears in fact to be pushing stock indices up in the aggregate. Whether that can continue if the crisis deepens is another question.

ABN Amro mulls break-up vote

ABN Amro mulls break-up vote
By Ian Bickerton in Amsterdam and Jane Croft in London
Copyright The Financial Times Limited 2007
Published: March 28 2007 03:00 | Last updated: March 28 2007 03:00


ABN Amro, the Dutch bank courted by Barclays of the UK, is expected to meet all the demands of activist investors by including a break-up vote on the agenda, published today, of its April annual meeting.

The decision reflects the fact that ABN does not want to risk provoking investors during the Barclays talks, which are aimed at creating the world's fifth largest bank with a market value of more than $175bn.

It also underscores a view within ABN that many shareholders believe the takeover negotiations have superseded the demands levelled a month ago by minority investor The Children's Investment Fund (TCI).

ABN has undertaken a comprehensive sweep of shareholders since TCI issued its call, and will approach next month's annual meeting in The Hague confident of supportfrom its investor base.

The bank is understood to believe that few shareholders would risk a move that could jeopardise the bank's sale. Analysts expectBarclays to table a bid of about €35 a share, mostly in shares. ABN declined to comment.

TCI has called for five resolutions to be added to the agenda, the most radical being calls for a break-up, sale or merger of the bank.

In order for ABN not to include the resolutions, it would need to have demonstrated a conflict with the interests of the bank.

Lawyers could have argued that the Barclays discussions provided the perfect opportunity to cite that clause. However, ABN is understood to have chosen not to go down that road, and by so doing will hope to demonstrate that it takes shareholder views seriously.

It will be aware, too, that TCI has a formidable reputation for shareholder activism. The London-based hedge fund has made clear to ABN that it wants the bank to consider all options for a sale, and not simply to talk to Barclays, with which it has entered a period of exclusivity.

Analysts believe a number of rival bidders may be waiting in the wings, including Citigroup, HSBC, Royal Bank of Scotland and Santander, any of which could generate greatersynergies than Barclays.

Bob Diamond, president of Barclays, yesterday stressed that the Barclays takeover approach was in line with the bank's previously stated strategy.

Speaking at the Morgan Stanley European banksconference in London, Mr Diamond said Barclays was "in a strong position" in its talks with ABN.

In his speech he set out the main trends driving future opportunities in investment banking and asset management.

Britain freezes all other business with Iran

Britain freezes all other business with Iran
By Daniel Dombey and Ben Hall in London
Copyright The Financial Times Limited 2007
Published: March 28 2007 11:57 | Last updated: March 28 2007 13:52


Britain said on Wednesday that it was freezing all other business with Iran until Tehran released 15 UK naval personnel as the face-off between the two countries escalated.

Margaret Beckett, foreign secretary, told parliament that she was “imposing a freeze all other bilateral business with Iran until this situation is resolved”. A Foreign Office spokesman suggested this would include bilateral contacts over Iran’s nuclear programme.

Ms Beckett pointed out that even if the UK vessels had been inside Iranian waters, the most Iran could have done under international law was to request that they left immediately.

The Iranian government had not made any demands on the UK but said it was continuing to investigate what it claims was an “very grave and technical breach of its borders”, she said. “Nothing I can call justification has been given (by Tehran).”

Ms Beckett said that satellite data unquestionably showed that the British personnel were in Iraqi territory when they were taken by the Iranian Revolutionary Guard last week.

Iran, which is thought to have transferred the detainees to Tehran, insists that the British boarding vessels carrying the naval personnel had crossed into Iranian territorial waters. The Iranian embassy in London on Wednesday said that the incident had taken place 0.5km within Iranian waters.

But Britain’s deputy chief of defence staff, vice-admiral Charles Style, said on Wednesday morning that the navy’s GPS log showed the incident occurred 1.7 nautical miles within Iraqi territorial waters.

He added that Iran had provided two separate sets of coordinates for the location of the incident, the first of which, provided on Saturday, lay within Iraqi territorial waters. “It is hard to understand the reason for this change of coordinates,” he said. “We unambiguously contest both the positions provided by the Iranians.”

n the House of Commons, prime minister Tony Blair added that the detention was “completely unacceptable, wrong and illegal” and said it was time to “ratchet up” diplomatic pressure on Iran over the incident.

”We had hoped to see their immediate release,” Mr Blair said. “This has not happened. It is now time to ratchet up the diplomatic and international pressure in order to make sure the Iranian government understands their total isolation on this issue.”

William Hague, foreign affairs spokesman for the opposition Conservatives, offered his full support to Ms Beckett, saying the evidence revealed by the UK authorities “shattered the credibility” of the Iranian claims.

The UK was in “the strongest moral and legal position” for having initially attempted to resolve the stand-off using behind-the-scenes diplomacy, he said.

On Tuesday night Ms Beckett cut short a visit to Turkey after discussing the plight of the service personnel in talks with Turkish prime minister Recep Tayyip Erdogan in Ankara.

On Wednesday, CNN Turk television quoted Mr Erdogan as saying Turkish diplomats may be allowed to see the British sailors after he had discussed the situation with Iranian foreign minister Manouchehr Mottaki in Saudi Arabia, where they are attending a meeting of the Arab League. CNN Turk also quoted Mr Mottaki as saying the servicewoman among those detained would be freed “today or tomorrow”.

The detention of the British sailors has added to the growing tension between Iran and the west and contributed to a strong spike in oil prices on Wednesday.

In mid-day trading in London. Brent crude was $1.48 higher to $66.08 a barrel, while Nymex West Texas Intermediate was up $1.61 to $64.54 a barrel.

US crude had risen more than $5 in after-hours trade on Tuesday on rumours of hostilities in the northern Persian Gulf. The initial spike – as high as $68.09 for Nymex crude – was caused by rumours, which were swiftly denied by the US, that Iran had fired a missile at a US warship in the Persian Gulf.

Curious George takes a little walk by Garrison Keillor

Curious George takes a little walk by Garrison Keillor
Copyright © 2007, Chicago Tribune
Published March 28, 2007


The Current Occupant decided to go for a walk one fine spring morning, and he strolled down the White House drive to the main gate and chatted with the cops in the guardhouse and then strolled down Pennsylvania Avenue and through Lafayette Park to Christ Church and turned and looked at the White House through the trees and then it dawned on him that he was alone, no Secret Service in their dark suits and their earpieces with the curly wires. Nobody had tried to stop him from leaving. They just let him wander away.

A couple of kids in Capitals jackets walked past, and then a cop, and an old couple, and nobody stopped: They glanced his way and nodded and moved on. He thought, "It's true what Laura says. I'm different in person than the way the media portrays me." Some folks sat in lawn chairs holding signs, GET OUT OF IRAQ and STOP THE TORTURE and so forth. He walked in among them to get a closer look and said to the GET OUT OF IRAQ man, "What would you say to the president if you could talk to him up close and personal?"

"I'd tell him that I'm afraid for my country. We've accepted lies without protest, we're ignoring what we're doing to the planet, we're bankrupting the nation, we're stuck in a senseless war, and we can't even take decent care of our own people."

"Well, everything has its ups and downs," said Mr. Bush.

He walked away and sat down on a bench. His brother Jeb had phoned from his Florida condo. He was trying to write a book and earn some dough and figure out what to do next and he wasn't hopeful. Decent governor, smart, good man. But the family name was mud, the country was Bushed. The lecture circuit had more or less dried up for Republicans, as Rumsfeld was discovering. Nobody wanted to pay to hear an upbeat story about how we're winning in Iraq, and he wasn't getting good offers for his memoirs. Giuliani and McCain were bucking a strong tide. Lots of negatives for Republicans. It was like when Al Capone Jr. applied for accounting school: There was distrust to overcome.

Bush's approval ratings were down to a faithful remnant who believed that he was God's chosen president as prophesied in Nehemiah, the one whose reign is the beginning of the Tribulation. And he had seen new polling data showing an 85 percent correlation between his 2004 voters and the more than half of all Americans who cannot say how long it takes the Earth to make one orbit around the sun. They had voted for the man they thought didn't know, either. And that's how he would go down in history: the slacker, the dummy.

And now Congress had discovered the power of the subpoena. The firing of the U.S. attorneys was a mess. He should have said, "No way, Jose," to the Leahy committee, but instead the geniuses on the staff had him offer up Karl Rove to testify in private, no oath, no transcript, which was a joke, of course, and it only got the Democrats riled up more. And using the USA Patriot Act to slip the new appointments through without Senate confirmation -- boy, who was calling the signals on that one? Hello! They were like, "Let's run this around end," and he was going like, "No way," and they were like, "What's the problem?" and he was like, "Duh, you really want me to tell you?" But they went ahead and did it and now every Republican with a re-election race in 2008 was looking for cover. Sununu was shaky. Even Coleman, the biggest bootlicker in the Senate, was playing coy.

No chance of him riding a motorcade through cheering throngs in foreign cities, the way other presidents had finished up. Too bad about that. But he still had Laura, and he had Dick. Dick was his insurance policy against impeachment. No chance, not with Gunner waiting in the wings.

It was time for his soup and sandwich and his 1:30 nap, so he headed home. There was a new cop at the gate and he didn't recognize Mr. Bush either. He waved him away. "I need to go in there," said Mr. Bush. "I've got a job to do." That was all the guard needed to hear. He had the man taken into custody on suspicion of intent to do harm. The case is being investigated.

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Garrison Keillor is an author and radio host of "A Prairie Home Companion." E-mail: oldscout@prairiehome.us

MRIs urged in breast cancer detection

MRIs urged in breast cancer detection
By Judy Peres, Tribune staff reporter. "About MRIs and breast cancer" sidebar by the Associated Press
Copyright © 2007, Chicago Tribune and The Associated Press
Published March 28, 2007

Women who are at high risk for breast cancer should be screened with MRI in addition to mammograms, according to new guidelines from the American Cancer Society.

In addition, top researchers recommended Tuesday that anyone recently diagnosed with cancer in one breast should have magnetic resonance imaging to make sure she's not harboring an invisible tumor in the other. Their study, published in the New England Journal of Medicine, found that more than 3 percent of new breast cancer patients had cancer in the other breast that standard mammograms and physical examination missed.

Together the developments represent the latest step in the evolution of medical thinking about the use of MRI -- a sophisticated and expensive tool -- to find breast tumors. But experts caution that healthy women at low or average risk should continue to rely on mammography and physical exams to detect signs of cancer.

Widespread use of MRI, they note, could detect non-threatening cancers that don't need to be treated and therefore might do more harm than good.

"Finding more cancers is not necessarily a good thing," said Dr. Steven Woloshin of Dartmouth Medical School. "The key is whether these 'missed cancers' are ones that were destined to cause problems, and whether earlier detection and treatment has a net benefit. These issues can only be resolved with a randomized trial."

Even for women diagnosed with invasive breast cancer on the basis of conventional tests, MRI can be a double-edged sword.

Findings of additional tumor sites can affect the patient's emotional state and may lead to unnecessary mastectomies, said Dr. Nora Hansen, director of the Lynn Sage Comprehensive Breast Center at Northwestern Memorial Hospital.

"Patients freak out," she said. "They have this knee-jerk reaction -- 'I just want everything taken out.'
"

The cancer society says women at high risk will benefit from the addition of MRI to their regular screening tests because MRI is more sensitive and finds smaller tumors compared to mammography.

The new guidelines recommend that all women whose lifetime risk of breast cancer is around 20 percent or higher get an annual MRI. A 60-year-old white woman with no children and two close relatives with breast cancer has a 23 percent chance of being diagnosed before her 90th birthday. The average American woman's lifetime risk is 13 percent.

Women who automatically fit into the high-risk category include those with a genetic mutation that predisposes to breast cancer, such as BRCA carriers.

The society said evidence was insufficient to recommend for or against MRI screening in women with a personal history of breast cancer or precancerous conditions. But its recommendations were written before the latest study was completed.

That study looked at 969 women recently diagnosed with cancer in one breast but not the other. All were given MRIs of the second breast, which found possible cancer in 121 women. Biopsies confirmed invasive cancer in 18 of them. Twelve had ductal carcinoma in situ, which sometimes but not always progresses to invasive cancer.

"This study is pretty definitive evidence that the opposite breast needs to be evaluated with MRI," said study author Dr. Etta Pisano of the University of North Carolina.

Up to 10 percent of women treated for cancer in one breast are later diagnosed with cancer in the other, Pisano noted. That could mean undergoing two rounds of cancer treatment -- surgery and possibly radiation and chemotherapy -- when one round would suffice for two cancers detected at the same time.

Hansen of Northwestern Memorial said she discusses the pros and cons of MRI with each new breast cancer patient.

"If you have an MRI you may have to have additional tests -- such as ultrasound and biopsies -- that could delay your surgery and may not be necessary," she said. "We don't know if treating [the tiny cancers detected by MRI] will make a difference in your outcome. But once we find something, we can't ignore it."

Of particular concern are noninvasive cancers, such as ductal carcinoma in situ. There is no evidence that treating DCIS when it's detected is better than waiting to treat it until it progresses. But almost no one is comfortable leaving it in place and taking that chance.

Hansen is also concerned about the cost of screening all new breast cancer patients with MRI, which can run to "several thousand dollars" and often is not covered by insurance.


"Over 200,000 new breast cancer patients are diagnosed each year," Hansen noted. "To do a $3,000 test on each one to find 3 percent with [a tumor in the opposite breast] seems like a big expense -- not for those with the cancer, but in terms of public health policy."


About MRIs and breast cancer

The American Cancer Society is recommending MRIs in addition to mammograms for certain women considered to be at unusually high risk for breast cancer. Here are more details:

Q. Who should get an MRI?

A. Those with a mutation in the BRCA1 or BRCA2 genes; those who were treated for Hodgkin's disease; those with a strong family history of the disease, such as women with two or more close relatives who had breast or ovarian cancer or who have a close relative who developed breast cancer before age 50. Experts say about 1 in 50 adult U.S. women fall into this category.

Also, a new study suggests MRI is useful for women diagnosed with cancer in one breast.

Q. Why is an MRI necessary?

A. MRIs are better at showing increased or abnormal blood flow in the breast, a sign of early cancers not visible on a mammogram. They also are better than mammograms at detecting cancer in women with dense, non-fatty breasts.

Q. Why do I still need to get a mammogram, then?

A. Mammography is considered a very good diagnostic technique, and it can show things MRIs miss, like calcium deposits, which are usually benign but which can occur in patterns that indicate breast cancer.

Q. What are the downsides of MRI?

They make mistakes -- one estimate is 5 percent to 25 percent of MRI positive tests are wrong. That can lead to unnecessary biopsies and mental anguish. They are expensive, and not all insurers will pay.

Q. How do I choose an MRI testing facility?

A. Some medical facilities that offer MRI lack the expertise and equipment to do MRI-guided biopsies. The cancer society says breast MRIs should be done at places that do biopsies as well.

-- Associated Press

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jperes@tribune.com

City must end shameful history of bad cops now

City must end shameful history of bad cops now
BY CAROL MARIN
Copyright by The Chicago Sun-Times Columnist
March 28, 2007

Enough already. We don't need one more promise. Or one more policy to protect us from wayward police officers.

Or Police Supt. Phil Cline assuring us last night that he is "disgusted to witness" his cops clobbering innocent citizens and then covering it up.

Chicago, be clear.

The whole world is watching.

From Mexico to Moscow, CNN has shown the international community the shameful videotape of off-duty Chicago Police Officer Anthony Abbate trying to beat the living daylights out of a female bartender less than half his size. In what appears to be an alcohol-soaked rage, Abbate showed us Chicago's Finest at their lowest. And the cops who were called in to stop Abbate's pounding of Karolina Obrycka at Jesse's Short Stop Inn once again cause us to ask whether Chicago Police would rather close ranks to protect a brother officer than protect the public from a crazed cop.

If you had any doubt that some in the Police Department remain unmoved by this outrageous conduct, you need only consider what happened Tuesday when Abbate appeared in court. A dozen of his police pals blocked reporters and cameras, ticketed vehicles, threatened one news team with arrest and made sure Abbate was whisked in and out of the building through private entrances out of public sight.

So exactly what is it that these cops don't get? In defending "a few rotten apples,'' are they really willing to trash the whole damn orchard?

Let's review the list, shall we?

Jon Burge and Torture (1973-1991):

To this very day, Mayor Daley and the city Law Department continue to pay the fees of a raft of lawyers, expensive outside legal counsel, to defend the indefensible. Even though the city already has paid millions in settlements for what Burge and his boys did to force murder suspects to confess (electrodes on testicles, suffocation and cattle prods), even though the city admitted years ago that "an astounding pattern of torture" existed, the city still defends Burge in current federal cases. And Daley, who was the Cook County state's attorney for many of the years when Burge and his gang were brutalizing suspects, has yet to have a candid conversation with the public or the courts about how it could have happened under his and other public officials' watch.

Oh, one other thing.

Not a single solitary police officer, prosecutor or judge has ever come forward to testify about what Burge did to make his cases. Make no mistake, a number of them knew.

Joseph Miedzianowski, Cop, Dope Dealer, Gun Runner:

One of the worst officers ever to wear a badge was also one of the department's shining stars and most protected players. No less than Raymond Risley, head of Internal Affairs during Meidzianowski's ruthless reign, defended him in the face of growing evidence he was a violent, corrupt, menacing thug. Even though Miedzianowski went to prison, it took 15 years and a federal jury to acknowledge the damage that this one cop did to, among others, two federal agents who desperately tried to get the city to investigate the danger he posed to the community. As a result, for years Miedzianowski terrorized those agents. Last month, the jury awarded them $9.75 million in damages, obligating us taxpayers to pony up for the city's failure.

SOS -- The Still Growing Special Operations Scandal:

Last summer, the elite Special Operations Section of the Chicago Police Department saw the indictment of four highly decorated cops. Police Officer Jerome Finnegan and members of his unit are charged with home invasion, robbery and the ripoff of drug dealers they were investigating. Along the way, they allegedly robbed and terrorized people who were not drug dealers but simply immigrant workers who kept cash in their homes. Did Internal Affairs know about the allegations? You bet. Did it promptly and aggressively investigate? Absolutely not. Is the scandal going to get worse? Count on it.

The New Ticking Time Bomb:

There is another videotape out there that the Police Department has not released. It shows six off-duty cops beating four businessmen at a downtown bar in December. One of the victims had to have reconstructive surgery. When police were called to investigate, the off-duty officers waved them off. Supt. Cline, last night, stripped the cops of their police powers.

In addition, Cline declared that Abbate's beating of the barmaid "tarnished our image worse than anybody else in the history of the department."

He's dead wrong.

If Jon Burge or Joe Meidzianowski had ever been caught on tape, Chicago might have qualified for the International Court at the Hague by now.