Monday, August 18, 2008

Dr. Doom


On Sept. 7, 2006, Nouriel Roubini, an economics professor at New York University, stood before an audience of economists at the International Monetary Fund and announced that a crisis was brewing. In the coming months and years, he warned, the United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence and, ultimately, a deep recession. He laid out a bleak sequence of events: homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt. These developments, he went on, could cripple or destroy hedge funds, investment banks and other major financial institutions like Fannie Mae and Freddie Mac.

The audience seemed skeptical, even dismissive. As Roubini stepped down from the lectern after his talk, the moderator of the event quipped, “I think perhaps we will need a stiff drink after that.” People laughed — and not without reason. At the time, unemployment and inflation remained low, and the economy, while weak, was still growing, despite rising oil prices and a softening housing market. And then there was the espouser of doom himself: Roubini was known to be a perpetual pessimist, what economists call a “permabear.” When the economist Anirvan Banerji delivered his response to Roubini’s talk, he noted that Roubini’s predictions did not make use of mathematical models and dismissed his hunches as those of a career naysayer.

But Roubini was soon vindicated. In the year that followed, subprime lenders began entering bankruptcy, hedge funds began going under and the stock market plunged. There was declining employment, a deteriorating dollar, ever-increasing evidence of a huge housing bust and a growing air of panic in financial markets as the credit crisis deepened. By late summer, the Federal Reserve was rushing to the rescue, making the first of many unorthodox interventions in the economy, including cutting the lending rate by 50 basis points and buying up tens of billions of dollars in mortgage-backed securities. When Roubini returned to the I.M.F. last September, he delivered a second talk, predicting a growing crisis of solvency that would infect every sector of the financial system. This time, no one laughed. “He sounded like a madman in 2006,” recalls the I.M.F. economist Prakash Loungani, who invited Roubini on both occasions. “He was a prophet when he returned in 2007.”

Over the past year, whenever optimists have declared the worst of the economic crisis behind us, Roubini has countered with steadfast pessimism. In February, when the conventional wisdom held that the venerable investment firms of Wall Street would weather the crisis, Roubini warned that one or more of them would go “belly up” — and six weeks later, Bear Stearns collapsed. Following the Fed’s further extraordinary actions in the spring — including making lines of credit available to selected investment banks and brokerage houses — many economists made note of the ensuing economic rally and proclaimed the credit crisis over and a recession averted. Roubini, who dismissed the rally as nothing more than a “delusional complacency” encouraged by a “bunch of self-serving spinmasters,” stuck to his script of “nightmare” events: waves of corporate bankrupticies, collapses in markets like commercial real estate and municipal bonds and, most alarming, the possible bankruptcy of a large regional or national bank that would trigger a panic by depositors. Not all of these developments have come to pass (and perhaps never will), but the demise last month of the California bank IndyMac — one of the largest such failures in U.S. history — drew only more attention to Roubini’s seeming prescience.

As a result, Roubini, a respected but formerly obscure academic, has become a major figure in the public debate about the economy: the seer who saw it coming. He has been summoned to speak before Congress, the Council on Foreign Relations and the World Economic Forum at Davos. He is now a sought-after adviser, spending much of his time shuttling between meetings with central bank governors and finance ministers in Europe and Asia. Though he continues to issue colorful doomsday prophecies of a decidedly nonmainstream sort — especially on his popular and polemical blog, where he offers visions of “equity market slaughter” and the “Coming Systemic Bust of the U.S. Banking System” — the mainstream economic establishment appears to be moving closer, however fitfully, to his way of seeing things. “I have in the last few months become more pessimistic than the consensus,” the former Treasury secretary Lawrence Summers told me earlier this year. “Certainly, Nouriel’s writings have been a contributor to that.”

On a cold and dreary day last winter, I met Roubini over lunch in the TriBeCa neighborhood of New York City. “I’m not a pessimist by nature,” he insisted. “I’m not someone who sees things in a bleak way.” Just looking at him, I found the assertion hard to credit. With a dour manner and an aura of gloom about him, Roubini gives the impression of being permanently pained, as if the burden of what he knows is almost too much for him to bear. He rarely smiles, and when he does, his face, topped by an unruly mop of brown hair, contorts into something more closely resembling a grimace.

When I pressed him on his claim that he wasn’t pessimistic, he paused for a moment and then relented a little. “I have more concerns about potential risks and vulnerabilities than most people,” he said, with glum understatement. But these concerns, he argued, make him more of a realist than a pessimist and put him in the role of the cleareyed outsider — unsettling complacency and puncturing pieties.

Roubini, who is 50, has been an outsider his entire life. He was born in Istanbul, the child of Iranian Jews, and his family moved to Tehran when he was 2, then to Tel Aviv and finally to Italy, where he grew up and attended college. He moved to the United States to pursue his doctorate in international economics at Harvard. Along the way he became fluent in Farsi, Hebrew, Italian and English. His accent, an inimitable polyglot growl, radiates a weariness that comes with being what he calls a “global nomad.”

As a graduate student at Harvard, Roubini was an unusual talent, according to his adviser, the Columbia economist Jeffrey Sachs. He was as comfortable in the world of arcane mathematics as he was studying political and economic institutions. “It’s a mix of skills that rarely comes packaged in one person,” Sachs told me. After completing his Ph.D. in 1988, Roubini joined the economics department at Yale, where he first met and began sharing ideas with Robert Shiller, the economist now known for his prescient warnings about the 1990s tech bubble.

The ’90s were an eventful time for an international economist like Roubini. Throughout the decade, one emerging economy after another was beset by crisis, beginning with Mexico’s in 1994. Panics swept Asia, including Thailand, Indonesia and Korea, in 1997 and 1998. The economies of Brazil and Russia imploded in 1998. Argentina’s followed in 2000. Roubini began studying these countries and soon identified what he saw as their common weaknesses. On the eve of the crises that befell them, he noticed, most had huge current-account deficits (meaning, basically, that they spent far more than they made), and they typically financed these deficits by borrowing from abroad in ways that exposed them to the national equivalent of bank runs. Most of these countries also had poorly regulated banking systems plagued by excessive borrowing and reckless lending. Corporate governance was often weak, with cronyism in abundance.

Roubini’s work was distinguished not only by his conclusions but also by his approach. By making extensive use of transnational comparisons and historical analogies, he was employing a subjective, nontechnical framework, the sort embraced by popular economists like the Times Op-Ed columnist Paul Krugman and Joseph Stiglitz in order to reach a nonacademic audience. Roubini takes pains to note that he remains a rigorous scholarly economist — “When I weigh evidence,” he told me, “I’m drawing on 20 years of accumulated experience using models” — but his approach is not the contemporary scholarly ideal in which an economist builds a model in order to constrain his subjective impressions and abide by a discrete set of data. As Shiller told me, “Nouriel has a different way of seeing things than most economists: he gets into everything.”

Roubini likens his style to that of a policy maker like Alan Greenspan, the former Fed chairman who was said (perhaps apocryphally) to pore over vast quantities of technical economic data while sitting in the bathtub, looking to sniff out where the economy was headed. Roubini also cites, as a more ideologically congenial example, the sweeping, cosmopolitan approach of the legendary economist John Maynard Keynes, whom Roubini, with only slight exaggeration, calls “the most brilliant economist who never wrote down an equation.” The book that Roubini ultimately wrote (with the economist Brad Setser) on the emerging market crises, “Bailouts or Bail-Ins?” contains not a single equation in its 400-plus pages.

After analyzing the markets that collapsed in the ’90s, Roubini set out to determine which country’s economy would be the next to succumb to the same pressures. His surprising answer: the United States’. “The United States,” Roubini remembers thinking, “looked like the biggest emerging market of all.” Of course, the United States wasn’t an emerging market; it was (and still is) the largest economy in the world. But Roubini was unnerved by what he saw in the U.S. economy, in particular its 2004 current-account deficit of $600 billion. He began writing extensively about the dangers of that deficit and then branched out, researching the various effects of the credit boom — including the biggest housing bubble in the nation’s history — that began after the Federal Reserve cut rates to close to zero in 2003. Roubini became convinced that the housing bubble was going to pop.

By late 2004 he had started to write about a “nightmare hard landing scenario for the United States.” He predicted that foreign investors would stop financing the fiscal and current-account deficit and abandon the dollar, wreaking havoc on the economy. He said that these problems, which he called the “twin financial train wrecks,” might manifest themselves in 2005 or, at the latest, 2006. “You have been warned here first,” he wrote ominously on his blog. But by the end of 2006, the train wrecks hadn’t occurred.

Recessions are signal events in any modern economy. And yet remarkably, the profession of economics is quite bad at predicting them. A recent study looked at “consensus forecasts” (the predictions of large groups of economists) that were made in advance of 60 different national recessions that hit around the world in the ’90s: in 97 percent of the cases, the study found, the economists failed to predict the coming contraction a year in advance. On those rare occasions when economists did successfully predict recessions, they significantly underestimated the severity of the downturns. Worse, many of the economists failed to anticipate recessions that occurred as soon as two months later.

The dismal science, it seems, is an optimistic profession. Many economists, Roubini among them, argue that some of the optimism is built into the very machinery, the mathematics, of modern economic theory. Econometric models typically rely on the assumption that the near future is likely to be similar to the recent past, and thus it is rare that the models anticipate breaks in the economy. And if the models can’t foresee a relatively minor break like a recession, they have even more trouble modeling and predicting a major rupture like a full-blown financial crisis. Only a handful of 20th-century economists have even bothered to study financial panics. (The most notable example is probably the late economist Hyman Minksy, of whom Roubini is an avid reader.) “These are things most economists barely understand,” Roubini told me. “We’re in uncharted territory where standard economic theory isn’t helpful.”

True though this may be, Roubini’s critics do not agree that his approach is any more accurate. Anirvan Banerji, the economist who challenged Roubini’s first I.M.F. talk, points out that Roubini has been peddling pessimism for years; Banerji contends that Roubini’s apparent foresight is nothing more than an unhappy coincidence of events. “Even a stopped clock is right twice a day,” he told me. “The justification for his bearish call has evolved over the years,” Banerji went on, ticking off the different reasons that Roubini has used to justify his predictions of recessions and crises: rising trade deficits, exploding current-account deficits, Hurricane Katrina, soaring oil prices. All of Roubini’s predictions, Banerji observed, have been based on analogies with past experience. “This forecasting by analogy is a tempting thing to do,” he said. “But you have to pick the right analogy. The danger of this more subjective approach is that instead of letting the objective facts shape your views, you will choose the facts that confirm your existing views.”

Kenneth Rogoff, an economist at Harvard who has known Roubini for decades, told me that he sees great value in Roubini’s willingness to entertain possible situations that are far outside the consensus view of most economists. “If you’re sitting around at the European Central Bank,” he said, “and you’re asking what’s the worst thing that could happen, the first thing people will say is, ‘Let’s see what Nouriel says.’ ” But Rogoff cautioned against equating that skill with forecasting. Roubini, in other words, might be the kind of economist you want to consult about the possibility of the collapse of the municipal-bond market, but he is not necessarily the kind you ask to predict, say, the rise in global demand for paper clips.

His defenders contend that Roubini is not unduly pessimistic. Jeffrey Sachs, his former adviser, told me that “if the underlying conditions call for optimism, Nouriel would be optimistic.” And to be sure, Roubini is capable of being optimistic — or at least of steering clear of absolute worst-case prognostications. He agrees, for example, with the conventional economic wisdom that oil will drop below $100 a barrel in the coming months as global demand weakens. “I’m not comfortable saying that we’re going to end up in the Great Depression,” he told me. “I’m a reasonable person.”

What economic developments does Roubini see on the horizon? And what does he think we should do about them? The first step, he told me in a recent conversation, is to acknowledge the extent of the problem. “We are in a recession, and denying it is nonsense,” he said. When Jim Nussle, the White House budget director, announced last month that the nation had “avoided a recession,” Roubini was incredulous. For months, he has been predicting that the United States will suffer through an 18-month recession that will eventually rank as the “worst since the Great Depression.” Though he is confident that the economy will enter a technical recovery toward the end of next year, he says that job losses, corporate bankruptcies and other drags on growth will continue to take a toll for years.

Roubini has counseled various policy makers, including Federal Reserve governors and senior Treasury Department officials, to mount an aggressive response to the crisis. He applauded when the Federal Reserve cut interest rates to 2 percent from 5.25 percent beginning last summer. He also supported the Fed’s willingness to engineer a takeover of Bear Stearns. Roubini argues that the Fed’s actions averted catastrophe, though he says he believes that future bailouts should focus on mortgage owners, not investors. Accordingly, he sees the choice facing the United States as stark but simple: either the government backs up a trillion-plus dollars’ worth of high-risk mortgages (in exchange for the lenders’ agreement to reduce monthly mortgage payments), or the banks and other institutions holding those mortgages — or the complex securities derived from them — go under. “You either nationalize the banks or you nationalize the mortgages,” he said. “Otherwise, they’re all toast.”

For months Roubini has been arguing that the true cost of the housing crisis will not be a mere $300 billion — the amount allowed for by the housing legislation sponsored by Representative Barney Frank and Senator Christopher Dodd — but something between a trillion and a trillion and a half dollars. But most important, in Roubini’s opinion, is to realize that the problem is deeper than the housing crisis. “Reckless people have deluded themselves that this was a subprime crisis,” he told me. “But we have problems with credit-card debt, student-loan debt, auto loans, commercial real estate loans, home-equity loans, corporate debt and loans that financed leveraged buyouts.” All of these forms of debt, he argues, suffer from some or all of the same traits that first surfaced in the housing market: shoddy underwriting, securitization, negligence on the part of the credit-rating agencies and lax government oversight. “We have a subprime financial system,” he said, “not a subprime mortgage market.”

Roubini argues that most of the losses from this bad debt have yet to be written off, and the toll from bad commercial real estate loans alone may help send hundreds of local banks into the arms of the Federal Deposit Insurance Corporation. “A good third of the regional banks won’t make it,” he predicted. In turn, these bailouts will add hundreds of billions of dollars to an already gargantuan federal debt, and someone, somewhere, is going to have to finance that debt, along with all the other debt accumulated by consumers and corporations. “Our biggest financiers are China, Russia and the gulf states,” Roubini noted. “These are rivals, not allies.”

The United States, Roubini went on, will likely muddle through the crisis but will emerge from it a different nation, with a different place in the world. “Once you run current-account deficits, you depend on the kindness of strangers,” he said, pausing to let out a resigned sigh. “This might be the beginning of the end of the American empire.”

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Where The Jobs Are -- Even Now!


(CBS) It's hard not to think about jobs in this tough economy - how to keep the one you have, or how to find one if you're unemployed.

On The Early Show Saturday, financial journalist and contributor Vera Gibbons filled viewers in on the fields that are putting up "Help Wanted" signs, and on where in the country you have the best shot at finding work.

According to Gibbons:

The job outlook in the near-and-medium-term isn't very good, with the unemployment rate expected to tick up to over six percent early next year, and about 500,000 job losses for this year in all.

But there are some bright spots; you just have to know where to look.

Most openings this year, and through the next decade, for that matter, are in the two largest sectors of the economy - the professional and service categories.

Education is one of the recession-proof industries. There's a big demand for post-secondary school teachers. Some 38,000 post-secondary jobs are expected to be created this year. By 2016, nearly 400,000 jobs will be created, if you look at the ten-year projections from the Bureau of Labor Statistics.

Another field to consider: healthcare. It's expected to generate three million jobs between 2006 and 2016. The demographics are certainly on the side of this field: There's a growing population of elderly people. We're living longer, into our 80s and 90s, and we're going to need everything from new hips to prescription drugs to long-term care. So there's a big demand in healthcare.

In fact, almost half of the 30 fastest-growing occupations are concentrated in health services at all levels, from physical therapists to pharmaceutical sales reps to pharmacists and nurses. More than 50,000 nursing positions are expected to be created this year alone.

Another of the fastest-growing jobs is veterinarian. Employment of vets is expected to increase 35 percent from 2006 to 2016. That's much faster than the average for all occupations. Pets, like humans, are living longer and getting treatment for their ailments.

Financial services is a sector to mull. We've got 77 million boomers. They're starting to retire, and not only will they need health services, but also help managing their money. That means job opportunities for financial analysts and advisers. Wealth management and financial services are still strong places to build a career.

"Green" jobs are hot. Job listings on green-centric sites, and are steadily growing.

Among the top green careers: solar installers (for someone who likes physical work), sustainable design architects, fuel cell entrepreneurs (Ph.D.-types), environmental engineers, and environmental lawyers. Corporations everywhere need their help. This is a field that's expected to grow as much as 25-percent in the next decade.

Despite the economic turndown, there are parts of the country that still have some job growth, beginning in Texas. It's generating a lot of jobs, from Forth Worth to San Antonio. Education and healthcare are among the top growth industries there, all the way to Austin. Austin is home to Dell. The University of Texas largely expanded its economy to include digital media, green energy and biotech. Houston is the energy capital of the world. There are also jobs in aerospace, tech, and medical companies there. Last year, there were 10,000 jobs added in Houston.

Also, Atlanta. There are jobs in transport, distribution and financial services. There is also growth in education and healthcare. Raleigh, N.C. has one of the most highly-educated work forces in America. It's the top area for tech jobs, and is expected to expand much faster than other tech hubs. Salt Lake City is also attracting a highly educated labor pool, with jobs in tech and international business.

In Omaha, businesses are hiring and recruiting young professionals, especially in finance, healthcare, information technology. Entrepreneurs are also setting up shop there.

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Australian plea for 'ugly' women

The last census showed there were just 819 women aged 20-24 in Mount Isa

The mayor of a remote Australian mining town has come under fire after saying that female "ugly ducklings" might benefit from its shortage of women.

John Molony told a newspaper last week that "with five blokes to every girl, may I suggest that beauty-disadvantaged women should proceed to Mount Isa".

The council has since been swamped with complaints from both men and women.

But Mr Molony has refused to apologise for the remarks, saying he was "telling it like it is" in the Queensland town.

Located 1,829km (1,136 miles) from Brisbane, Mount Isa is home to one of the world's biggest underground mines.

In 2006, there were just 819 women aged 20-24 living there out of a total population of 21,421, according to the most recent census.

'Lonely women'

In an interview with the Townsville Bulletin last week, Mr Molony proposed a novel solution to Mount Isa's shortage of eligible women.

It's an absolute disgrace - it's not council's view and it's not mine
Mount Isa Councillor Jean Ferris

"Quite often you will see walking down the street a lass who is not so attractive with a wide smile on her face. Whether it is recollection of something previous or anticipation for the next evening, there is a degree of happiness," he said.

"Some, in other places in Australia, need to proceed to Mount Isa where happiness awaits. Really, beauty is only skin deep. Isn't there a fairy tale about an ugly duckling that evolves into a beautiful swan," he added.

A fellow councillor, Jean Ferris, said the invitation to "beauty-disadvantaged women" had caused consternation among both sexes.

"It's an absolute disgrace," she told the Courier Mail. "It's not council's view and it's not mine. It's hard when you've got to defend something someone else has said. We're definitely appalled."

Mr Molony has since refused to retract his remarks and insisted he is "a bloke who respects women".

"I believe we should look after women," he said. "I'm told men outnumber women here by five to one. If that's the case, then perhaps it's an opportunity for some lonely women."

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How hotels help themselves to your money

By Christopher Elliott
Tribune Media Services

(Tribune Media Services) -- If you think your hotel is done with you when you check out, think again. It might just be getting started.

Charges can be quietly added to your hotel bill after you've left. And increasingly, they are.

When John Richards was a weekly guest at a W Hotels & Resorts property, the items he found on his credit card bill after checkout were often bogus -- a candy bar he hadn't eaten or a bottle of water he hadn't drunk. Although he successfully fought to have the charges reversed, "it got to the point that before I checked in, I would ask them to remove the goodie-box from my room," he says.

Just a year ago, about one in 200 bills at full-service hotels were revised after checkout, according to Bjorn Hanson, an associate professor at New York University. Today, as hotels struggle with slipping occupancy levels and flat-lining growth, properties are wasting no opportunity to add late charges. As a result, the number of re-billings has doubled.

The late charges are usually correct, say experts. And if they aren't, most hotels are quick to correct the error. But not always. Some properties either resist crediting their customers or refuse.

That's what happened to Charles Garnar when he stayed at the Renaissance Fort Lauderdale Hotel recently. "When we checked out, we were told there were no charges so we had a zero balance," he remembers. But when he returned home after a cruise vacation, he found an unwelcome surprise on his credit card statement: a $57 charge. "It took two days to get through to the accounts payable department," he says. "They said we used the minibar."

The hotel only removed the charges after he proved it couldn't have been him. How? Garnar had turned down the minibar key when he checked in.

This shouldn't be happening, of course. The latest hotel accounting systems let you see your room charges in real time, often from your TV screen. There's no reason the bill that's slipped under the door on the morning of your checkout shouldn't include all of your charges, with the possible exception of your breakfast check. "It should be your final bill," says Robert Mandelbaum, a hotel expert with PKF Consulting.

I contacted several hotel chains to find out about their policy on late charges, including Marriott (which owns the Renaissance) and W Hotels. Only one of the major hotels, InterContinental, bothered to respond. My favorite non-answer came from W, where a spokeswoman told me that, "because of transitions in the company, we don't have an appropriate spokesperson to speak on this topic right now."

Oh, too bad.

Here's what InterContinental, which owns the Crowne Plaza, Holiday Inn and Staybridge Suites brands, had to say about late billing. It's rare, and usually only happens when guests choose the express checkout option -- that's where the bill is slipped under your door on the day of checkout. If you bill something to your room after 3 a.m., chances are you'll get a late charge.

Normally, guests aren't notified about the charges, because they've agreed to them as part of the terms of their express checkout. But when there's a significant additional fee, a hotel typically notifies travelers before billing them. What if they disagree with the bill? Contact the hotel and tell a representative you have a problem with the charge, recommends InterContinental spokesman Brad Minor.

"Our hotels value their guests and we want to make sure guests are satisfied with all aspects of their stay," he says.

I'm pretty confident that the other hotels would have said more or less the same thing. But guests don't necessarily agree with that. After I posted Richards' story on my blog, I received a firestorm of comments accusing the hotels of deliberately charging guests after their stay, in the hopes that they wouldn't notice. InterContinental says that's not how it works.

It doesn't really matter. What matters is that you, the guest, don't get socked with a surprise charge on your credit card days or weeks after your vacation. Here are three excuses hotels use for separating you from your money after you're long gone. You might hear some of these reasons articulated by a hotel employee -- other excuses are probably reserved for the privacy of the break room or the hotel's executive offices.

You sure you didn't take something from the minibar?

A vast majority of late checkout charges -- about 75 percent, according to Hanson -- are from those little refrigerators stocked with vastly overpriced snacks. Hotel minibars have become figurative traps that guests get stuck in. Often, they don't even know about it until it's too late. The newest minibars have sensors that charge your room the moment an item is moved. Here's a chilling first-person account of an unsuspecting guest falling into one of these traps at a Los Angeles hotel, courtesy of HotelChatter.

The solution? Don't accept the key to your minibar. If there's no key, ask to have the minibar (or goody-basket) removed. It's the only way to be sure.

But you checked out before we could charge you!

Unless you're talking about breakfast on the day you check out, this is an empty excuse. Remember, most hotel accounting systems are lightning-fast. The moment you sign your check for an activity or meal, your account is charged. Experts I spoke with say it's possible some charges can get stuck in the system. A good example is a hotel gift shop that for some reason still uses a paper system to handle room charges. But if a major charge shows up on your credit card, it's worth calling the hotel. If it took this long to get billed, can they be sure it's correct?

The solution? Review your bill before checking out to make sure nothing is missing. And check out your credit card bill after your stay to make sure nothing is added.

We didn't think you would notice

I have no proof -- no memos or transcripts of scheming hotel employees saying this -- except for scores of guest experiences that suggest this attitude is pervasive behind the front desk. For example, Eugene Santhin, who was a frequent business traveler from Mt. Laurel, New Jersey, before retiring, says he was often billed for water and minibar items that weren't consumed. "Many properties charged for breakfast when it was included in the room rate," he adds. To their credit, the hotels quickly removed the items when he protested. But it was the speed with which they did so that made him suspicious. Were they adding these extras to his bill, hoping he wouldn't notice? It's difficult to say for certain.

The solution? Pay attention! Your hotel may be trying to pull a fast one, despite its denials. Keep all of your receipts.

Not all late billings hurt hotel guests. Reader Kate Trabue remembers a recent stay at the InterContinental Sydney where she was hit with unexpected room charges after she checked out. "A call to the billing department got the charges reversed without a problem," she remembers. "The interesting part of this transaction was that because of the exchange rate, I was credited more dollars than the original charge."

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Saudi girl drinks bleach to escape marriage

Shura Council member says marriage contract violates Sharia law (File)


A 16-year-old Saudi girl drank a bottle of bleach in an attempt to commit suicide to escape a forced marriage to a 75-year-old man, press reports revealed Sunday.

The girl identified only as, Shaikha, said her father was forcing her to marry the old man so that he could marry his 13-year-old daughter in an exchange deal, Bahrain's Tribune reported.

Shaikha described how her father took her to meet the old man and his 13-year-old in a marriage office where they all had pre-marital tests done, the Tribune quoted the Saudi Gazette as reporting.

Shaikha told the paper how she begged and pleaded not to be forced into marriage but both of the men ignored her pleas.

The 16-year-old appealed to the National Society of Human Rights to intervene and stop the marriage, the Tribune said, adding Shaikha, whose parents are seperated, wants to go live with her mother.

Shaikha’s mother said she should be protected from her father and demanded the marriage contract be cancelled because Shaikha was threatened to marry the man, the paper said.

“Judges can punish men who force their daughters to marry like this," Sheikh Abdul Mohsin Al Obeikan, Shura Council member said, adding the marriage contract was void because it violated Shariah law, the Tribune reported.

Shaikha's case is under investigation.

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Buffalo Police batter their way into wrong house

Family of 8 traumatized by officers’ behavior; officials admit error made but defend actions


Terrell and Schavon Pennyamon look out through the missing glass of the door police broke in during a mistaken raid on the family’s lower flat on the city’s West Side Wednesday.

Armed with a battering ram and shotguns, Buffalo police looking for heroin broke down the door and stormed the lower apartment of a West Side family of eight.

The problem is that the Wednesday evening raid should have occurred at an apartment upstairs.

And, that’s only the tip of the iceberg, according to Schavon Pennyamon, who lives at the mistakenly raided apartment on Sherwood Street with her husband, Terrell, and six children.

Pennyamon alleges that after wrongly breaking into her apartment, police proceeded to strike her epileptic husband in the head with the butt end of a shotgun and point shotguns at her young children before admitting their mistake and then raiding the right apartment.

She says she’s left with a broken door, an injured husband, jittery children and — what bothers her most — still no apology from police.

“They know they did something wrong and they were still ignorant,” said the 29-year-old Pennyamon. “At first, I just wanted an apology. Now, because they want[ed] to be ignorant and rude, I have to take it to the next level.”

She filed a report with the department’s Professional Standards Division and also contacted Mayor Byron W.

Brown about the incident. Pennyamon said Friday evening she also has retained a lawyer and intends to pursue legal action.

Police brass acknowledge that officers with the Mobile Response and Narcotics units entered the wrong apartment.

“As the officers were in the lower apartment, one of the detectives reviewed the search warrant application and realized it was for the upper [apartment],” said Dennis J. Richards, chief of detectives.

“It appears to be an honest mistake and we certainly apologize to all involved,” added Michael J. DeGeorge, Buffalo police spokesman.

Police declined to comment, however, on Pennyamon’s allegations of assault and other police impropriety. The internal investigation with the Professional Standards Division is now under way to determine exactly what happened.

“We wouldn’t be comfortable discussing the internal investigation,” Richards said. “We can say comfortably that over 1,100 search warrants were executed last year and 580 to date this year and that, with such a high volume and such a fast-paced environment, it is understandable that mistakes could happen.”

Pennyamon remains unconvinced it was a mistake. She says officers told her they had “raided the house before” and she believes they felt entitled to do it again — warrant or not.

“The way they make it seem is ‘we can do whatever we want,’ ” she said.

Pennyamon’s troubled by what she says is an arrogance by police officers and an unwillingness to “serve and protect” those who need it.

“It’s a sad situation. I’ve always looked up to the police. I’ve always expected them to be on my side.”

Pennyamon was called home from her job as a certified nursing assistant at a local health care facility at about 6:30 p. m. Wednesday to find police at her house, her children partially dressed on the porch and her husband — a U.S. Air Force veteran — injured. She said police were rude and unapologetic.

It was a harsh welcome to the neighborhood for the family. They’ve only lived at the apartment on Sherwood Street, on the far West Side just south of West Ferry Street, for two weeks after she says they moved from the East Side to escape crime. Now, Pennyamon said, the family already is looking to relocate again.

“I don’t know what was going on upstairs, but it gives police no right to bust in my doors,” she said. “That’s just ridiculous.”

Richards said police protocol dictates that search warrants are executed by police first announcing their presence and then quickly and forcefully entering a property with guns drawn for their own protection.

“Police have been faced with fortified doors and windows. In numerous locations, they’ve been met with individuals armed with weapons or attacking animals,” he said.

Pennyamon said the event left her husband with physical injuries and left a lasting impression on the children.

She said her husband, Terrell, suffered a dislocated arm after he was yanked up by police during the raid and is expected to return to his doctor Monday to possibly have glass — left behind by the door window police broke to get into the apartment — surgically removed from his foot.

Pennyamon’s 5-year-old daughter now sleeps with her.

“My 12-year-old and 6-year-old don’t want to be home at all,” she said, adding that her younger children cower or run to the back of the house when they hear anyone approaching.

“ ‘That’s the police,’ they say,” Pennyamon said.

Police said no arrests were made in the subsequent raid at the upstairs apartment.

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East Europe tries to protect itself from Russia

Chief U.S. negotiator John Rood, left, and Polish negotiator Andrzej Kremer exchange documents they just signed on an initial agreement on conditions for placing a U.S. missile defense base in Poland, in Warsaw, Poland, Thursday, Aug.14, 2008. (AP Photo/Alik Keplicz)


WARSAW, Poland (AP) — Poland strikes a deal on a U.S. missile defense base. Ukraine tries to limit the Russian navy's movement in its waters. The Czech Republic's leader warns his nation is in danger of being sucked back into Moscow's orbit.

Russia's attack on Georgia has sparked fears across the young democracies of Eastern Europe that Moscow is once again hungry for conquest — and they are scrambling to protect themselves by tightening security alliances with Western powers.

On Friday, Moscow sent a new jolt through the region when a top Russian general was quoted as saying that the missile defense deal signed the previous day by Washington and Warsaw exposes Poland to an attack.

"Poland, by deploying (the system) is exposing itself to a strike — 100 percent," Gen. Anatoly Nogovitsyn said, according to Interfax News Agency.

Around the region, memories are being revived of the darkest days of Soviet oppression.

In Prague, where Czechs on Wednesday will mark the 40th anniversary of the Soviet invasion that crushed a reform movement, Prime Minister Mirek Topolanek expressed fears of history repeating itself.

"The Russian tanks on the streets of Georgian towns remind us ... of the invasion in 1968," Topolanek wrote in Mlada Fronta Dnes daily, the country's biggest newspaper.

"But it is not just history. It is still, even now, a relevant question whether we will or will not belong to the sphere of Russian influence."

He appealed to his political opponents to support his unpopular plan to host a U.S. missile defense shield.

Since fighting broke out more than a week ago between Russia and Georgia, the crisis has dominated headlines and sparked pro-Georgia rallies across Eastern Europe.

Poland's President Lech Kaczynski and the leaders of four ex-Soviet republics journeyed together to Tbilisi last week to show solidarity with Georgia. At a demonstration there, Kaczynski declared that the Russians had again "shown the face that we have known for centuries."

Poland was carved in two by Germany and the Soviet Union when they were allies at the beginning of World War II. After the war, Poland and the other east European countries became Soviet satellites for some 40 years.

Fears have grown in recent years as Russia has used its vast energy reserves to exert control over its neighbors, as when it cut off gas to Ukraine the winter after the pro-democracy Orange Revolution of 2004 put the country on a pro-Western course.

"I am scared of those things that are happening in Georgia now," said Juste Viaciulyte, a 23-year-old student among thousands of people who rallied Thursday in Lithuania's capital, Vilnius, to protest Russia's actions in Georgia.

He noted that the Russian enclave of Kaliningrad borders his country "and is beefed up with Russian soldiers, missiles and tanks. It would take just several hours for them to ignite a similar nightmare here in Lithuania if something turned really wrong."

Of all the Eastern democracies, the most vulnerable is probably Ukraine, a nation wedged between Russia and NATO states — and which itself is seeking to join the Western security alliance.

Eugeniusz Smolar, director of the Center for International Relations in Warsaw, said that countries like Poland and the Czech Republic are safer because they already belong to NATO and the EU.

"But not so with Ukraine; with Ukraine there is fear," Smolar said. "It's very unstable politically, there is a strong pro-Russian political element, plus there's strong activity of Russian intelligence."

Ukraine is strategically important to Russia because its pipelines carry Russian oil and gas westward, and its port of Sevastopol is home to Russia's Black Sea Fleet.

The port is leased to Russia through 2017, after which Ukraine wants the navy out. And in a strong show of support to Georgia on Wednesday, Ukraine ordered limits on the movement of the Russian ships since they were deployed to Georgia's Black Sea coast as part of Russia's military onslaught.

Above all, Ukraine, with its huge Russian-speaking population in its east and south, has immense emotional resonance for Russians — and Moscow has been humiliated by Ukraine's push to join NATO.

Feeling vulnerable, Ukraine's pro-Western president, Viktor Yushchenko, is appealing to the West to uphold Georgia's territorial integrity — a message made in a phone call with President Bush on Thursday.

He also stressed the importance of the "Euro-Atlantic partnership," another sign that Ukraine is putting its hope in NATO membership. The Georgia crisis has raised Ukrainian fears that its NATO bid will be shelved for fear of Russia's response.

And there are signs Eastern European countries feel that their NATO membership isn't sufficient protection.

As part of the preliminary missile defense deal that Poland struck with the United States on Thursday, it secured from Washington a commitment of swifter help than that offered by NATO.

Polish Prime Minister Donald Tusk said NATO would be too slow in coming to Poland's defense if threatened and that the bloc would take "days, weeks to start that machinery."

"It is no good when assistance comes to dead people. Poland wants to be in alliances where assistance comes in the very first hours of — knock on wood — any possible conflict," Tusk said.

On Saturday, Poland's president, Kaczynski, criticized the way France and Germany have handled the Russia-Georgia crisis, accusing them of being too soft on Moscow due to their commercial ties with Russia.

Kaczynski also said that European Union policy was being decided by the two EU giants without taking into consideration the views of new EU members such as Poland that once fell under Moscow's control.

"Saying that the Union will have a common policy toward Russia is laughable," Kaczynski said in an interview published by the daily Rzeczpospolita and also posted on his official Web site.

Anxiety in the Baltic states runs deep in part because, like Ukraine, they have large Russian minorities.

There is fear that Moscow could repeat there what it did in South Ossetia, the breakaway republic where fighting began: Hand out passports to ethnic Russians. Moscow justified its attack on Georgia as necessary to protect its citizens.

The big question hanging over the efforts to shore up military ties with Western powers is whether they protect them or merely fuel tensions.

Strolling through Kiev's Independence Square, the heart of Ukraine's Orange Revolution, Oleksandr Pylypchuk, a 43-year-old doctor, said he worries that the country's new Western course could be crushed by Russia.

"I remember this square was covered with the orange flags of democracy," he said. "I'm afraid it could become the red of blood."

Associated Press writers Olga Bondaruk in Kiev, Ukraine; Liudas Dapkus in Vilnius, Lithuania; and Karel Janicek in Prague, Czech Republic contributed to this report.

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Georgians force to clean South Ossetia streets

By MANSUR MIROVALEV, Associated Press Writer

TSKHINVALI, Georgia - Russian troops and their armed allies forced Georgian men to clean the streets of South Ossetia's bombed-out capital Saturday, avenging Georgia's attack on the breakaway province a week ago.

Three teams of ethnic Georgian men in their 40s and 50s were seen hauling debris from the streets of Tskhinvali. When approached, one of them confirmed he was being forced to work.

"Labor even turns monkeys into humans," said a Russian officer, who along with armed Ossetians escorted one group of about two dozen Georgians through the streets of the capital.

The Russian officer threatened to arrest an Associated Press photographer if he took pictures, and would not give his name.

It appeared to be the first sign of abuse of Georgians in the Russian-controlled province.

"They are cleaning up after themselves," said Mikhail Mindzayev, South Ossetia's interior minister.

Tskhinvali was at the nucleus of fighting that has pitted two former Soviet neighbors against each other and further strained Russia's ties to the West.

Georgian troops pounded the city with rockets and bombs in a bid to retake control of separatist South Ossetia on Aug. 7, provoking a fierce response from the region's Russian backers.

Russia sent in hundreds of tanks and ensuing street fighting gutted yet more of Tskhinvali. Some 80 percent of the city's 30,000 residents fled, Mindzayev said.

Russia is now in charge of the province, Russian and Georgian leaders have signed a cease-fire deal, and Ossetian refugees are returning home. But local leaders and residents aren't ready to forgive their Georgian attackers anytime soon.

Ossetians accuse Georgians of targeting civilians, a claim Georgia denies.

Lyudmila Bitoyeva, a resident of Tskhinvali in her 40s, said her family hosted five Georgian workers who were forced to clean streets and pick up wreckage after the fighting subsided.

After Russian and separatist forces drove Georgian troops out of the nearly deserted city, there was widespread looting of stores and homes. The houses of ethnic Georgians on the outskirts of Tskhinvali were burned.

Mindzayev described the situation in the city Saturday as "complicated and nervous." He said there were many unexploded shells laying on the ground and he accused Georgian agents of shooting at people in the city, a claim that could not be independently confirmed.

Georgian forced laborers were not the only ones cleaning up the city; many returning refugees were sweeping up glass and debris from the fighting.

The city is in shambles and still has no electricity. To find clean water, residents drive or hitch rides to creeks several miles away, and they are struggling to find food.

Many complained about the late arrival of humanitarian aid. Some refugees have returned to find their homes destroyed, only to leave again.

Still, there were some signs the city was getting back to normal. For the first time in days, there were more cars on the street than tanks Saturday.

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Russia’s new nuclear challenge to Europe

Russian servicemen sit on top of an armoured vehicle in the Georgian town of Gori, about 80 km (50 miles) from Tbilisi

Russia is considering arming its Baltic fleet with nuclear warheads for the first time since the cold war, senior military sources warned last night.

The move, in response to American plans for a missile defence shield in Europe, would heighten tensions raised by the advance of Russian forces to within 20 miles of Tbilisi, the Georgian capital, yesterday.

Under the Russian plans, nuclear warheads could be supplied to submarines, cruisers and fighter bombers of the Baltic fleet based in Kaliningrad, a Russian enclave between the European Union countries of Poland and Lithuania. A senior military source in Moscow said the fleet had suffered from underfunding since the collapse of communism. “That will change now,” said the source.

“In view of America’s determination to set up a missile defence shield in Europe, the military is reviewing all its plans to give Washington an adequate response.”

The proposal to bring back nuclear warheads was condemned by Kurt Volker, the US ambassador to Nato, who said he knew of the threat.

“It is really unfortunate that Russia chooses to react by putting nuclear warheads in different places – if indeed it does that – when the rest of the world is not looking at some kind of old-fashioned superpower conflict,” he said.

The warnings came 24 hours after Russia told Poland that it could face a nuclear strike for agreeing to let the United States station components of the missile defence shield on its soil.

The Russian military also said it would ignore attempts to restrict the movement of its Black Sea fleet in and out of Sebastopol, in Ukraine. The Crimean port was emerging as a potential flashpoint in Russia’s efforts to prevent former Soviet countries on its borders from joining Nato.

This weekend Ukraine further angered Russian officials by offering to create a joint missile defence network with western countries.

The Russians have already indicated that they may point nuclear missiles at western Europe from bases in Kaliningrad and Belarus. They are also said to be thinking of reviving a military presence in Cuba.

In Georgia, Russian forces extended their reach across the west of the country yesterday, occupying several towns, seizing control of a main road and blowing up a railway bridge. Working with Abkhazian fighters they seized several Georgian villages and the Enguri power station. They pulled out of Igoeti, a village near the capital, after President Dmitry Medvedev signed a ceasefire agreement. The deal gave the Russians the right to continue patrolling “a few miles” inside Georgia. President George W Bush called the signing a “hopeful step”.

David Cameron, the Conservative leader, seized the initiative with a lightning trip to Tbilisi, becoming the first British politician to meet President Mikhail Saakashvili since the conflict began. Critics have accused government ministers of dithering.

Writing in today’s Sunday Times, Cameron says: “Russian armies can’t march into other countries while Russian shoppers carry on marching into Selfridges.”

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Russia agrees to truce; key Georgia bridge blown up

Michael Robinson Chavez / Los Angeles Times
A key railway bridge was blown up by Russia and its allied forces, effectively severing all east-west transportation routes within Georgia, officials said.
Russia denies destroying the railroad bridge that connects Georgia's east with its Black Sea ports. Russian troops appear to be digging in for a long stay.

By Megan K. Stack, Los Angeles Times Staff Writer

IGOETI, GEORGIA -- Even as Russia signed a cease-fire agreement with Georgia on Saturday, its troops destroyed a key railroad bridge that links the Caucasus region to the Black Sea coast, cutting off east-west transportation routes through the country, the Georgian Foreign Ministry announced.

Russia denied blowing up the bridge, calling the charge "another unverified allegation" in the wake of large-scale fighting over a pro-Moscow separatist republic. A Los Angeles Times photographer traveling in the area Saturday saw explosives attached to the underbelly of a nearby railroad bridge, but it was still intact.

The blast in the Kaspi region caused immediate economic chaos, forcing Azerbaijan to suspend crude oil shipments to the Black Sea ports, and stranding 72 Armenia-bound freight cars in Georgia, Interfax news agency reported.

The bridge attack came as Russian soldiers dug in at strategic posts along the country's main roadway, setting up gun positions, camouflaging their hardware with tree branches and hiking into the sunburned hills. Russian soldiers interviewed between the garrison town of Gori and the capital, Tbilisi, said they had been deployed to protect the road.

Tanks flying Russian flags were parked in this small town, about 25 miles from the capital, during most of the day. A Russian tank convoy that streamed from Gori to Igoeti on Saturday afternoon left fields burning in its wake, apparently set on fire by Russian troops.

By late afternoon, the Russian tanks had fallen back, but were still holding positions at the edge of the nearby Lekhura River.

Russia has appeared to be taunting Georgia, sending tank columns roaring toward the capital only to turn them back again. But despite the constant commotion of redeployment, the trend has been a creeping entrenchment that has engulfed strategically crucial Gori and moved steadily in on the capital, creating a swath of nearly abandoned towns and villages.

Russia's aggressive troop movements call into question its commitment to a cease-fire, Georgian and international officials said Saturday.

"I don't see why they signed it if they don't want to implement it," said Estonian Foreign Minister Urmas Paet, who was trying to make his way from Tbilisi to Gori to evaluate the state of the cease-fire.

But Russia's foreign minister, Sergei Lavrov, seemed unfazed, telling reporters that the Russian troops may stay in Georgia for some time to come.

The departure of Russian troops would come gradually, and would depend upon "extra security measures" for Russia's soldiers in Georgia's breakaway republic of South Ossetia, Lavrov said. Asked how long the withdrawal would take, he replied, "As much as is needed," Interfax reported.

"This does not depend on us alone because we are constantly coming up against some problems on the Georgian side," he said. "Everything depends on how effectively and quickly these problems are solved."

Last week's fighting has increased tensions between Russia and the West, and especially soured relations between Moscow and Washington to a degree not seen since the Cold War.

The mutual frustration is expected to rise as Russia and the United States square off diplomatically over the fate of South Ossetia and Georgia's other breakaway republic, Abkhazia.

Washington has called on Russia to respect Georgia's borders and territorial integrity. Moscow, however, has vowed to back the republics' drive for independence, which critics regard as a veiled annexation of the former Soviet regions, both of which border Russia.

President Bush said Saturday that Russia could not claim the republics. "There is no room for debate on this matter," he said.

A day earlier, Russian President Dmitry Medvedev had vowed that Georgia would never get back its breakaway regions.

"Unfortunately, after what has happened it is unlikely that the Ossetians and the Abkhazians will be able to live in one state together with the Georgians," Medvedev said Friday at a news conference in the Russian Black Sea resort of Sochi.

For the time being, Russia's troop movements in Georgia are being closely scrutinized for hints of Moscow's intentions.

"If they violate their own agreement, that has even more serious consequences," said Richard Holbrooke, a prominent former U.S. diplomat now in Georgia. "Each hour, each day, is a test."

In the cool shade of an acacia tree, the elders from the tiny roadside farming village of Natareti clumped miserably around a Russian tank. The men had approached the Russian troops not only to inquire how long they would stay, but also because they were hungry, they said plaintively.

"We are very scared. We don't know what to do," said Suliko Usradze, a 60-year-old farmer. "We can stand the fear, but not the hunger."

The Russian occupation has interrupted their harvest. They had no fuel for the tractors, and the soldiers had taken over their farmlands. They were out of bread and flour. They had nothing left to eat but potatoes.

The Russian troops had given them some canned food, the villagers said sheepishly.

"Let them take Saakashvili with them," griped Giorgi Aptsiauri, another white-haired farmer, referring to the Georgian president. "Look what condition we're in! If he steps down, the Russians will stop everything."

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Florida Man Dies After Police Allegedly Shoot Him Repeatedly With Taser Gun

MIAMI — A Florida man is dead after being repeatedly shocked by a Taser stun gun.

Police say 45-year-old Kenneth Oliver of Miami-Dade showed up at a friend's home early Friday morning, shouting and banging on the front door.

The friend, Johnnie Mosely, told police he considered letting Oliver in, but his daughters were frightened by the way Oliver was acting.

Mosely called police and officers arrived several minutes later. Mosely says officers used a stun gun on Oliver at least four times.

Miami-Dade police say Oliver went into shock while he was in custody and was pronounced dead at a hospital later Friday morning.

Police spokesman Bobby Williams says the death is under investigation.

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