Vast and Pristine, Russia’s Lake Baikal Is Invaded by Harmful Algae

Abstract: LAKE BAIKAL, Russia — Yury Azhichakov set out early by bike for Senogda Bay, his favorite beach, on the northwestern shore of Lake Baikal in Siberia. The world’s oldest, deepest and most voluminous lake, Baikal holds 20 percent of the planet’s unfrozen freshwater. It is often described as the world’s cleanest lake. As Mr. Azhichakov discovered, that is no longer the case. Senogda’s once pristine sands were buried under thick mats of reeking greenish-black goo. “This stuff stretched far into the distance, for several kilometers,” said Mr. Azhichakov, 61, a retired ecological engineer. “The beach was in terrible condition.” The muck, scientists have discovered, follows mass algal blooms at dozens of sites around Lake Baikal’s 1,240-mile perimeter. Confined to shallow water and shores near towns and villages, the problem seems to stem from an influx of untreated sewage — the result of inadequate wastewater treatment. Algal blooms threaten iconic freshwater bodies around the world, including the Great Lakes, Lake Geneva, and Lake Biwa in Japan. But Lake Baikal is especially precious: a World Heritage site home to more than 3,700 species, more than half found nowhere else. “People are dumping sewage, waste and rubbish around the lake, creating pretty appalling conditions in some places,” said Anson MacKay, an environmental scientist at University College London. Runoff from fertilizers and other pollutants leads to so-called eutrophication, an excessive growth of algae. These blooms eventually deplete the water of oxygen, suffocating aquatic plants and animals. Russian scientists had assumed that Lake Baikal is simply too vast to suffer such a fate, but recent growth in tourism and development seem to be changing the calculus. Image Thick mats of reeking goo on a beach at Lake Baikal in Russia. Such algal blooms caused by pollution team with planned Mongolian dams and climate change as areas of concern. Credit Rachel Nuwer “We have a saying in Russia: A clever person is trained on the mistakes of others,” said Oleg Timoshkin, a biologist at the Russian Academy of Science’s Limnological Institute in Irkutsk, 40 miles from Baikal’s southwestern shore. “Unfortunately, we’re now repeating the mistakes of so many other countries.” Dr. Timoshkin and his colleagues have found that Spirogyra, a type of green algae that had rarely grown in Lake Baikal’s shallow zones, accounts for the outbreaks. In Severobaikalsk, Mr. Azhichakov’s town, the researchers traced Spirogyra blooms to locations downstream of the town’s wastewater facility, as well as to an illegal sewage dumping site. The researchers also found little difference in phosphorus and nitrogen content — indicators of synthetic detergents and fecal material — in treated and untreated water entering the lake. And, as it turned out, Russian Railways had been adding industrial-grade waste to the town’s sewage system, overwhelming it. Despite remedial action, high levels of phosphorus and nitrogen in Severobaikalsk’s wastewater persist even today, and fecal bacteria in treated wastewater have turned up at various sites around Lake Baikal. Dr. Timoshkin’s team is trying to figure out which nutrients are fueling Spirogyra’s growth. Spirogyra smothers other species of algae, and thousands of empty snail shells — gastropod cemeteries, as Dr. Timoshkin calls them — regularly wash up alongside the blooms. But the damage is more extensive than that. Underwater forests of native Lake Baikal sponges have begun dying off. In nearly 90 dives around the lake, researchers have found that 30 to 100 percent of sponges are affected in a given area. The green stalks — some a century old — are turning a dull brown, reminiscent of cattails. The cause of death is unknown, although Dr. Timoshkin and his colleagues suspect that pathogens from sewage may be causing disease outbreaks, or that the influx of nutrients is causing symbiotic algae to vacate the sponges. Without intervention, the researchers believe that the environmental damage will worsen. Algal blooms, for instance, can produce neurotoxins that are harmful to fish and crustaceans — and the humans who consume them. Last year, the largest algal bloom ever recorded shut down the crab and clam fisheries along the West Coast of the United States. Image Fishermen on Lake Baikal complain that Spirogyra algae are tangling in their nets, and some locals say they can no longer drink water from their taps during algal blooms. Credit Rachel Nuwer Along Lake Baikal, some locals say they can no longer drink water from their taps during blooms. Fishermen complain of Spirogyra tangling in their nets. “Will Baikal be able to attract the same amount of tourism, which is a major part of the economy, if tourists show up and see a green lake?” said Ted Ozersky, a limnologist at the University of Minnesota Duluth. In 2014, Dr. Timoshkin testified before the Duma, Russia’s Parliament, about Lake Baikal’s problems. Earlier this year, he and his colleagues also published their findings in The Journal of Great Lakes Research . They are calling for an immediate ban on synthetic detergents and for help from the federal government in reforming sewage facilities around the lake. But such fixes will probably be slow to come. Some government officials and academics insist that the problems are caused by climate change, not pollution; others blame mud volcanoes , or even say that Lake Baikal’s eutrophication is a lie made up by scientists to gain funding. Russia’s Ministry of Natural Resources and the Environment has yet to formally acknowledge that the lake’s health is in question at all. “One of the tragedies of Baikal is that top-level, senior scientists who are themselves never on a field expedition mistakenly believe that the lake can never be eutrophied because it is too huge, too pure and full of too much water,” Dr. Timoshkin said. “It’s an easy idea to have, but it’s wrong.” Even as federal aid stalls, some people are attempting to address the problems where they live, organizing beach cleanups and trying to find ways to put the thousands of pounds of washed-up Spirogyra to use as fertilizer or material for making traditional Siberian paper. Marina Rikhvanova, an award-winning environmental activist in Irkutsk who helped raise initial awareness about the Spirogyra outbreaks, persuaded a local investor to fund a plan for a prototype sewage treatment plant. “More and more people with various specialties and interests are working together for the lake,” she said. “This, at least, is a source of optimism.” Eutrophication, however, is not the only threat to Lake Baikal. Mongolia is planning to build up to eight hydroelectric dams on the Selenga River and its tributaries, the source of 50 percent of Lake Baikal’s surface water. Despite hearings and protests in Russia and Mongolia, the Mongolian government — which imports around 8 percent of its energy from Russia and 12 percent from China — argues that the dams will help achieve energy independence and cut back on coal use. Some experts think there must be a better way. Mongolia can technically produce around 100 gigawatts of power from wind and solar in their part of the Gobi Desert alone — about 90 times the country’s current capacity, said Eugene Simonov, an international coordinator with the nonprofit Rivers Without Boundaries Coalition. “Instead, the plan is to first build dams, then to develop a huge capacity to produce thermal energy from coal, then to build the next generation of big dams to offset the negative effects of coal on the climate and then, finally, to use some of the proceeds to build true renewables.” Researchers predict that Mongolia’s dams would have significant ecological effects on Lake Baikal, including disrupting the flow of water and sediment into the lake, effecting the quality of breeding sites for birds and fish, and blocking migration routes. “This is likely to be yet another step toward biotic homogenization, where widely distributed, cosmopolitan species like pike increase while unique endemic species like taimen lose ground,” said Olaf Jensen, an aquatic ecologist at Rutgers University. “It’s kind of the ecological equivalent of Starbucks replacing the local bodega.” Heeding such warnings, China, which is funding the largest of the projects, in July froze all dam construction until Mongolia and Russia jointly assess potential effects on the lake. “This is important, but just a small step in the right direction,” Dr. Simonov said. In October, however, Russian and Chinese tourism firms announced intentions to invest $11 billion in developing new hotels, attractions and infrastructure around the lake — a plan that Marianne Moore, an aquatic ecologist at Wellesley College, called “chilling.” “Even if the project is tightly regulated by the government, I’m unsure whether the coastal zone could be developed sustainably without harming it,” she said. “Nutrient pollution from human waste and shoreline erosion will be enormous problems.” Overshadowing the threat of pollution and dams, however, is climate change, the effects of which are already being felt at Lake Baikal. Summer surface waters lake-wide have warmed about two degrees Celsius since 1977, and winter ice cover has decreased in duration and thickness compared with a century ago. Plankton species associated with warm water have also increased in summer months. “The question that many ecologists are asking now is whether the endemic, cold-loving species will be able to adapt and persist if warm-loving species begin increasing in abundance,” Dr. Moore said. Another unanswered question is how the triple stressors of pollution, dams and climate change might combine to produce even greater effects on the lake. As Dr. Moore said, “Correcting the problems that we do have control over will help the lake respond as best it can to climate change.” But that first requires acknowledging that Lake Baikal is “absolutely ill,” Dr. Timoshkin said. “Will we Russians be able to show the world that Baikal can avoid the common fate of so many other lakes? That is a question I ask from the bottom of my heart.”

Lake Baikal
Lake
Algae
Siberia
Water pollution
Sewers Sewage


At the 2022 Winter Olympics, No Snow Is No Problem for the I.O.C.

Abstract: It’s a sad day when the International Olympic Committee cannot even clear one of the lowest bars for choosing the host city for the Winter Games: snow. Yes, snow — the element that most would say is crucial for holding events that are contested on it. But the I.O.C. on Friday still went ahead and chose Beijing to host the 2022 Winter Games , even though the mountains in those Olympic plans have “minimal annual snowfall” and the Games would “rely completely on artificial snow,” according to an I.O.C. evaluation report published in June. The vote over the only other bid, from Almaty, Kazakhstan, was closer than expected, 44-40. But those tough-minded I.O.C. delegates weren’t wooed by Almaty and its picture-perfect setting or its longstanding tradition of winter sports. Or, of course, by its mountains, which Almaty organizers pointedly — and repeatedly — noted were covered by snow that actually fell from the sky. While the Almaty bid’s slogan was “Keeping It Real,” Beijing’s could have been, “Keeping It Impractical.” Image A ski resort in Zhangjiakou, 135 miles away from downtown Beijing, could be the site of some skiing events for the 2022 Winter Olympics. Credit Rolex Dela Pena/European Pressphoto Agency The skiing competitions will be held in two different areas, one 55 miles from the Chinese capital, the other 100 miles away. There is a plan for a high-speed railway that would cut the travel time there to just under an hour, but no mention of the cost of it in a proposal that was supposed to be transparent. The estimated 1,500 people who will lose their homes for the ski jump and the Olympic Village were apparently dismissed as collateral damage. The most obvious consequence of Friday’s I.O.C. vote — eliminating the annoying hurdle that the Winter Games host actually has natural snow — is that it has created a precedent for holding a Winter Games almost anywhere. Imagine the possibilities. A St. Tropez Winter Games. (Grenoble is, after all, just 140 miles away by air.) Slogan: Forget Snow, We’ve Got Sand. Or Phoenix, where the luge track can run right down the side of the Grand Canyon. (It’s only a few hours away.) Or Dubai, where the organizers have enough cash to fly everyone to the Alps for the skiing events. Then again, I take that back: People are probably skiing there as you read this, albeit inside a giant building . So bring on the Winter Games! Slogan: Keeping It Completely Indoors. Already, Beijing gave us a glimpse at an Olympics held not as part of the city, but in a far-off corner of the city, devoid of an atmosphere that would reflect the world’s biggest sporting party. In 2008, the Olympic Park was miles from downtown Beijing. Instead, inside high gates, it was held in a massive Olympic Disney World, with brilliant venues and stunning architecture, but without the buzz and joy of the four Olympics I’d covered before. Even in that manufactured sporting bubble, though, the organizers couldn’t manufacture real fans. Sure, they said, they had sold all of their tickets to the competitions, but — in a city of nearly 17 million residents — where were all the people? There were so many empty seats that those organizers had to bring in “cheer squads” to fill stadiums and act happy. And that was for the summer sports. What will happen in 2022, when China is faced with trying to fill seats for winter sports, which have almost no history in that country in the first place? Image Members of the Beijing delegation celebrate their city's selection as host for the 2022 Winter Olympic Games Friday. Credit Stanley Chou/Getty Images But then, the I.O.C. obviously isn’t aiming for authenticity. Just bring back those cheer squads, Beijing, this time not in the bright yellow shirts they wore in 2008 but in bright yellow ski parkas that will never be worn again. I’ll give Beijing this: Its 2008 Olympics were a marketing coup for the companies eager to court China’s 1.3 billion residents. Now how about 2022? There’s even more to be made, considering the huge commercial upside. Yao Ming, the basketball player who was involved in the Olympic bid, saw the potential. At the news conference after Beijing won the bid, he joked that he might start a winter sports company. An associate on the bid team laughed and said she would join him. It sounds funny, but it’s not. There are serious problems — again — to having Beijing play host. In 2008, those who projected that bringing the Games there might open up China saw nothing of the sort. Potential protesters were detained, some sentenced to “re-education through labor.” Websites were blocked. A day after the closing ceremony, thick, yellow pollution returned to the city’s sky. Seven years later, the only use for most of the dusty, unloved venues from 2008 was as a lure for another chance at the Games in 2022. Image The Trans-Ili mountains as seen from the Sunkar Ski Jumping Complex in Almaty, Kazakhstan. Almaty's Olympic bid organizers made it a point to note their mountains had real snow. Credit James Hill for The New York Times Yet back to Beijing the world will go — somehow, some way. The I.O.C. didn’t demand that the Chinese fulfill their promises in 2008, and in the interim the country’s human rights record has gotten worse, not better. It’s hard to expect change this time around. President Xi Jinping of China, in a video statement before Friday’s vote, said, “We will honor all the commitments.” And something made the I.O.C. actually believe that, even though it had heard that pitch before and been burned by it. Now Beijing’s second Games will test Thomas Bach, the I.O.C. president, in a way he has not been tested before. Last fall, he announced that he would include an anti-discrimination clause in future contracts with host cities. But will he stand by that rule, in the face of a Chinese government unwilling to bend to outside influence and the corporate sponsors who have begun to drool? If Beijing does not follow through on its guarantees, what can Bach do? He could always ask another city to jump in. How about Boston? It shot down a chance to host the Summer Games this week, but it does have at least one advantage over Beijing: It snows there in winter.

International Olympic Committee
Beijing
China
Human Rights
Snow Snowstorms
Almaty Kazakhstan


Seven Basketball Schools Vote to Leave Big East

Abstract: The seven Big East programs that do not play Football Bowl Subdivision football are leaving the conference many of them founded to build a league focused on basketball, the universities’ presidents announced Saturday. “Earlier today, we voted unanimously to pursue an orderly evolution to a foundation of basketball schools that honors the history and tradition on which the Big East was established,” the statement said. “Under the context of conference realignment, we believe pursuing a new basketball framework that builds on this tradition of excellence and competition is the best way forward.” The seven basketball programs leaving the Big East are Georgetown, St. John’s, Villanova, DePaul, Marquette, Seton Hall and Providence. Georgetown, St. John’s, Seton Hall and Providence helped form the Big East, which started playing basketball in 1979. Villanova joined in 1980. The Big East did not begin playing football until 1991. The statement from the seven Catholic institutions did not say when they want to depart or whether they will try to keep the Big East name. Big East bylaws require departing members to give the conference 27 months’ notice, but the league has negotiated early departures with several universities. Big East rules allow colleges to leave as a group without having to pay exit fees. There are also millions of dollars in N.C.A.A. basketball tournament money and exit fees collected from recently departed members that will be divided. The latest hit to the Big East leaves Connecticut, also a founding member, Cincinnati, Temple and South Florida — the four current members with F.B.S. programs — as the only universities currently in the Big East that are scheduled to be there beyond next season. The Big East is still lined up to have a 12-team football conference next season, with six new members joining, including Boise State and San Diego State for football only. Rutgers and Louisville, which both announced intentions to leave the Big East, are still expected to compete in the conference next year.

College Athletics
Big East Conference
Providence College
Georgetown University
Seton Hall University
St John's University
Marquette University
Villanova University
DePaul University
Basketball (College)


South Korean Prime Minister Offers to Resign Over Deadly Ferry Disaster

Abstract: SEOUL, South Korea — Prime Minister Chung Hong-won, the No. 2 official in the South Korean government, apologized and offered to resign on Sunday, as the country remained angry and saddened over the sinking of a ferry that left 302 people, a vast majority of them high school students, dead or missing. The government has come under fire as early investigations revealed a slew of loopholes in safety measures and a lax regulatory enforcement that investigators said contributed to the sinking of the 6,825-ton ferry, the Sewol, on April 16. It was also criticized for failing to respond quickly and efficiently to the crisis and for fumbling during the early stages of rescue operations. A somber-looking Mr. Chung accepted the criticism on Sunday when he offered “an apology to the people” during a nationally televised news conference. “When I saw the people’s sadness and fury, I thought it was natural for me to step down with an apology,” he said. Mr. Chung was the highest-ranking government official to lose his job over the sinking, South Korea’s worst disaster since 1995, when a department store collapsed in Seoul, killing 501 people. South Koreans were especially traumatized by the fact that most of the dead and missing were students on a class trip. Many survivors reported that the crew repeatedly instructed passengers to stay inside while the ship was listing dangerously and gradually sinking off southeastern South Korea. The ship’s captain, Lee Jun-seok, 69, and 14 other top members of the crew escaped the ferry in the first two Coast Guard ships arriving at the scene. All of them were now under arrest on criminal charges, including accidental homicide. Mr. Chung’s resignation will become official when President Park Geun-hye accepts it. By midday Sunday, Ms. Park had not commented publicly on the resignation offer. The prime minister is a largely ceremonial post in South Korea, with the executive power concentrated in the president, and is sometimes fired when the government takes responsibility for a major scandal or policy failure. As of Sunday morning, 115 ferry passengers remained missing. The number of the survivors, 174, has not changed for the past 11 days. The official death toll was at 187 on Sunday, where it has remained because of bad weather. Divers trying to reach inside the ship have been stymied by strong waves and rapid currents. Once inside, they face the more challenging task of making their way through narrow corridors clogged with debris to try to reach into small cabins in the front and a large communal sleeping hall in the back of the ship where many of the students were believed to have been trapped. The nation has been plunged into a paroxysm of grief and shame . Loud cheering at baseball stadiums has been banned, and television comedy programs suspended. Schools canceled their spring-break trips. When thousands of Buddhists paraded through downtown Seoul on Saturday evening, ahead of the Buddha’s May 6 birthday, many of them carried black-and-white lotus lanterns in memory of the dead.

South Korea
Ferry
Chung Hong-won
Boat Accidents


Sweden Wants to Lift Reactor Ban

Abstract: BRUSSELS — The Swedish government on Thursday proposed refreshing its nuclear power industry, joining a growing list of European nations considering putting the technology in the forefront of future energy plans. Swedes voted nearly three decades ago to phase out nuclear power by 2010. But 10 of the country’s 12 reactors are still operating, and public opinion has become more favorable toward the technology. The Swedish plan was agreed on by the center-right coalition government and foresees the building of new reactors at the 10 sites where reactors are currently operating. Under the plan, which still needs approval from Parliament, Sweden would replace existing reactors gradually. Reactors account for half of the electricity produced in Sweden. The new reactors are likely to be more powerful than existing units, allowing Sweden to potentially increase nuclear capacity.


Aid Groups Report Rising Misery Among Displaced Syrians

Abstract: New signs of deprivation plaguing Syria’s war-ravaged civilians emerged on Tuesday, with the United Nations saying it is unable to feed a million hungry residents in combat zones and aid agencies reporting an outbreak of violence in a large refugee camp in Jordan, where a winter storm felled tents and left many frustrated inhabitants shivering in a cold rain. Weather forecasters said another storm was threatening Syria and its neighbors with snow on Wednesday. The World Food Program , the food agency of the United Nations, said that it was providing food to one and a half million people inside Syria this month but that as many as two and a half million needed help, mostly in areas made hazardous by fighting between insurgents and loyalist forces of President Bashar al-Assad. “Our partners are overstretched, and there is no capacity to expand operations further,” said a World Food Program spokeswoman, Elizabeth Byrs, at the agency’s Geneva headquarters. “We need more implementing partners.” She also said acute fuel shortages in Syria had delayed food deliveries and contributed to severe inflation in the price of bread because bakeries needed fuel for their ovens. In the contested city of Aleppo, for example, the price of a kilogram of bread is 250 Syrian pounds, or about $3.50, at least 50 percent higher than in other parts of Syria and at least six times more than its cost when the Syrian conflict began nearly two years ago. The United Nations appealed last month for $1.5 billion in additional aid to handle the growing humanitarian crisis created by the Syrian conflict, which has left at least 60,000 people dead and is threatening to destabilize the Middle East. More than half a million Syrians have fled to neighboring countries, and the United Nations refugee agency has forecast a doubling of that number by the middle of 2013. The most heavily burdened neighbors — Turkey, Jordan and Lebanon — have been persistently calling for more international aid, particularly during the cold winter months. At the Zaatari refugee camp, which shelters 54,000 Syrians in northern Jordan, fighting erupted Tuesday during food distribution after a night of relentless rain inundated parts of the encampment. The number of injuries was unclear. A statement by the Jordanian police said two aid workers had been hurt. Save the Children, one of the international groups that help the United Nations refugee agency administer the camp, said 11 people had been hurt, more than half of them Save the Children workers. Video The Times’s David E. Sanger discusses the bid to keep the Syrian president, Bashar al-Assad, from using chemical weapons. “The incident followed a night of heavy storms, during which torrential rains and high winds swept away tents and left parts of the camp flooded,” Save the Children said in a statement. Mohammed Abu Asaker, a regional spokesman for the United Nations refugee agency, acknowledged weather-related problems at the camp, aggravated by a large number of new residents — roughly 9,000 arrivals in the past week. “It is a difficult situation in the camp,” he said. “There is a frustration from the refugees.” Ali Bibi, a liaison officer with the refugee agency, said the violence on Tuesday was the latest in a series of at least four clashes among refugees, aid workers and the police in recent weeks. Melissa Fleming, the chief spokeswoman for the refugee agency in Geneva, said in an e-mail that most of the camp had withstood the rainfall and that aid workers were expediting efforts to move families into prefabricated housing. She attributed tensions among the camp population to “fears of worsening weather conditions, with some families rushing to occupy prefabs out of turn.” One refugee, who described himself as a colonel in the Syrian Army before he defected, said that even though he was living in one of the prefabricated houses and covering himself with blankets, he could not stay warm. “The tents are drenched. Kids are crying. Puddles of water are all over,” the refugee, who asked to be identified by only his first name, Mohamad, said in a telephone interview. “I am walking, my shoes are covered with rainwater. I can’t remember being so cold. I don’t even want to think about more than half of the camp living in tents. Something has to be done.” In Syria on Tuesday, activists reported new violence in the Yarmouk district south of Damascus, a longtime Palestinian refugee encampment convulsed by fighting last month when insurgents temporarily seized control . The Syrian Observatory for Human Rights, a Britain-based opposition group with a network of contacts in Syria, reported an unspecified number of casualties in the area, as well as shelling by the Syrian military aimed at insurgent pockets in other Damascus suburbs. In a speech on Sunday , Mr. Assad, whose family has dominated Syria’s politics for four decades, denounced those fomenting the armed uprising against him as foreign stooges, rejected negotiations and instead offered his own plan for political changes, which critics said was meant to keep him in power. His speech was denounced by the opposition, its Arab and Western supporters, and the United Nations secretary general. On Tuesday, the prime minister of Turkey, Recep Tayyip Erdogan, a former friend of Mr. Assad’s who has since become a strident foe, added his voice to the criticism. “It is unimaginable to consider suggestions of a person who has killed his people with bombs, planes and shelling as democratic,” Turkey’s semiofficial Anatolian News Agency quoted Mr. Erdogan as saying.

Syria
Jordan
Bashar al-Assad
Arab Spring
Refugees,Internally Displaced People
Humanitarian aid
UN
World Food Programme


Theresa May Prepares to Stare Down Parliament in ‘Brexit’ Standoff

Abstract: LONDON — Against a backdrop of rising political acrimony, Theresa May, the British prime minister, warned critics on Sunday not to thwart her timetable for withdrawal from the European Union, as she prepared for a standoff with lawmakers that could prompt calls for an early general election here. Mrs. May, who wants to start the formal process of leaving the bloc by the end of March, now has a serious fight on her hands, after several months of facing relatively little challenge over her plans for British withdrawal, known as “Brexit.” Judges on Britain’s High Court ruled last week that she could not start exit negotiations by invoking Article 50 of the European Union’s treaty without first consulting Parliament, where the government’s majority is slim. The government is appealing the case to the Supreme Court, but if it loses, and then finds itself constrained by lawmakers, the temptation to seek an early general election may become overwhelming for Mrs. May. For now, the government is playing down that prospect. Mrs. May insisted on Sunday that she had a mandate to pursue Britain’s exit without consulting Parliament. In a referendum in June, about 52 percent of voters elected to quit the bloc. “The British people, the majority of the British people, voted to leave the European Union,” Mrs. May said at Heathrow Airport as she left for a trade mission to India. “The government is now getting on with that.” After the court ruling, however, Mrs. May now knows there is a good chance that she may not be able to do so with the free hand that she wants. So far she has specified almost no detail about her objectives, arguing that she wants to keep her negotiating position as strong as possible. At the heart of the dispute lies an ambiguity inherent in a referendum that asked voters to say whether they wanted to quit the European Union but that did not seek their views on what relationship should replace it. Supporters of Brexit contend that opponents now want to thwart the will of the people as expressed in the referendum. Critics fear that the government has no coherent Brexit strategy, and worry that the country may lurch into a damaging economic rupture with the bloc, which voters did not endorse. On Sunday, Gina Miller, the founder of an investment management firm who was the lead claimant in the legal case against the government, told the BBC that Mrs. May must take the decision to Parliament “because we do not live in a tin-pot dictatorship.” Ms. Miller said she had faced online death and rape threats over the case. Nigel Farage, the interim leader of the U.K. Independence Party, which campaigned for British withdrawal, warned of protests in the streets if the decision in favor of Brexit was ignored. “Believe you me, if the people in this country think they’re going to be cheated, they’re going to be betrayed, then we will see political anger the likes of which none of us in our lifetimes have ever witnessed in this country,” he said. The court ruling has unleashed an ugly political discourse, with one tabloid newspaper that supported Brexit describing the judges who delivered the verdict as “ Enemies of the People .” How ‘Brexit’ Could Change Business in Britain Britain has started the clock on leaving the European Union, and will be out of the bloc by March 2019. Here is how “Brexit” has affected business so far. While the government has said it defends the independence of the judiciary, it has not rushed to condemn the newspaper coverage, prompting criticism from some senior legal figures. More worrisome for Mrs. May is the parliamentary math should she be forced to take her case for British withdrawal to lawmakers. Last week, David Davis, the secretary of state for exiting the European Union, conceded that if the appeal to the Supreme Court failed, the government would probably have to put forward legislation to trigger Article 50. That could give opponents the possibility to amend it, and tie down its negotiating stance. In an interview with The Sunday Mirror , the leader of the opposition Labour Party, Jeremy Corbyn, said he would push for Mrs. May to adopt his “Brexit bottom lines.” “We are not challenging the referendum,” he said. “We are not calling for a second referendum. We’re calling for market access for British industry to Europe.” The party’s deputy leader, Tom Watson, took a more lenient position. He told the BBC that Labour was “not going to hold this up,” and that “Article 50 will be triggered when it comes to Westminster.” Asked about the possibility of a general election, the health secretary, Jeremy Hunt, told the BBC on Sunday that it was “the last thing the government wants” — a formulation that does not specifically exclude it happening.

Theresa May
Brexit
Nigel Farage
Jeremy Corbyn
EU
Great Britain
Legislature


Oil’s Comeback Gives U.S. Global Leverage

Abstract: It has become fashionable to note a decline of American global power and influence, but don’t tell that to the energy experts. Many see increased domestic production of oil and gas as driving more muscular United States energy diplomacy, power that exists in curious tandem with the Obama administration’s efforts to wean the world off fossil fuels. “The rapid rise in U.S. oil and gas production, together with the decline in oil consumption and the elevation of climate change as a priority, is completely scrambling the way policy makers think about energy diplomacy,” said Michael A. Levi, a senior fellow at the Council on Foreign Relations. Joseph S. Nye Jr., the Harvard professor who articulated the notion of “soft power” in international affairs, sees a “shale gale” propelling America’s status: “If you are attracted to a country or any leader, a lot has to do with the feeling, ‘Do they have momentum? Is the wind in their sails or are their sails flapping?’ We’ve got a gust.” Carlos Pascual, a former senior American diplomat, agrees. Increased energy production “strengthens our hand.” he said. “China, when it talks to us about global energy supplies, it sees us as a supplier,” he said. This monumental shift, Mr. Pascual said, allows the United States to cooperate more closely with the world’s largest energy consumers to combat climate change — for example, by persuading them to reduce their heavy reliance on coal. “If we can’t work with China on diversifying their fuel mix, then we’re all going to die,” Mr. Pascual said calmly, calling natural gas “the fuel in the interim that has the greatest prospect for substituting for coal.” The State Department’s Bureau of Energy Resources , which Mr. Pascual ran from its inception in 2011 until last August, is evidence of a brighter spotlight on energy. It has grown from a staff of fewer than 50 to 90 today, with a mission to “develop, harmonize and promote U.S. energy security overseas,” according to a State Department document . Several federal agencies have increased investments in foreign energy projects in recent years. Some are modest, such as a $750,000 loan by the Overseas Private Investment Corporation to an Indian start-up that builds micropower plants run on discarded rice husks. Others are huge: OPIC recently announced $230 million in loan guarantees to construct a 141-megawatt solar power plant in Chile’s Atacama Desert, the largest project of its kind in Latin America. On Sept. 23, President Obama issued an executive order that “requires the integration of climate-resilience considerations into all United States international development work.” Still, the United States government remains a big backer of fossil fuel production. The Export-Import Bank of the United States underwrote a $1.5 billion bond guarantee last year, enabling Mexico’s state-owned oil monopoly, Pemex, to patronize United States companies. In 2010, the bank lent $3 billion for a liquefied natural gas project in Papua New Guinea. The project, led by Exxon Mobil, started shipping gas this year to Japan and has contracts with clients in Taiwan and China. No doubt many investments abroad are intended to generate economic benefits at home. That’s an old story. In the late 19th century, Standard Oil, owned by John D. Rockefeller, “depended on the State Department to fight for the removal of tariffs and other barriers to the entry of American oil into foreign markets,” Rosemary A. Kelanic, an assistant professor of political science at Williams College in Massachusetts who studies energy access as a coercion tactic, said by email. In “Titan: The Life of John D. Rockefeller Sr.,” Ron Chernow quotes the oil magnate as saying, “Our ambassadors and ministers and consuls have aided to push our way into new markets to the utmost corners of the world.” The Pemex financing arguably continues that tradition, with an estimate that it would support around “6,800 U.S. jobs spread across about 10 states,” according to the Export-Import Bank’s website . But some loans, grants and bond guarantees also serve as attempts to win friends and electrify neighbors. In 2007 the United States Agency for International Development spent $43.8 million for energy services, but that rose to more than $391 million by 2013. OPIC’s financing of energy projects soared from $123 million in 2007 to $1.21 billion in 2013, roughly tenfold. “Investing in development today means averting instability tomorrow,” OPIC’s president and chief executive, Elizabeth L. Littlefield, said by email. Sometimes, the State Department’s energy bureau forges agreements directly with other countries. In August, it signed a memorandum of understanding with Grenada to provide technical assistance and encourage private investment in sustainable energy technology. While Mr. Nye of Harvard considers the Grenada agreement “minor,” he views it as further evidence of America’s enhanced status: “If you want the vote of Grenada in the U.N., and Venezuela is now purchasing it, along with a lot of other Caribbean votes, by subsidized energy, we are now going to be able to compete in that area.” The United States has used its energy resources to play diplomatic hardball. In the summer of 1941, Franklin Delano Roosevelt’s administration slapped licensing requirements on oil exports to Japan, “which effectively amounted to a complete embargo,” Victor McFarland, an assistant professor of history at the University of Missouri, said by email. It was the “first time that access to oil was used as a foreign policy tool on a big scale,” he added. At the time, the United States accounted for nearly two-thirds of global oil production, but “rather than restraining Japanese aggression,” he said, “the embargo helped push Japan towards war.” Ellen R. Wald, a professor of Middle East history at Jacksonville University, draws parallels between the United States’ ascending role as an energy supplier and the postwar period, when the country still ranked as an oil powerhouse. Government officials funneled foreign-bought oil to rebuild Europe as part of the Marshall Plan. In 1956, during the Suez crisis, the administration of President Dwight D. Eisenhower used access to oil to intimidate Britain and France. After Egypt’s president, Gamal Abdel Nasser, nationalized the Suez Canal Company in July 1956, Britain and France launched a surprise aerial attack to seize the critical waterway on Oct. 31. (Two days earlier Israel had invaded the Sinai Peninsula in concert with Britain and France.) Furious about being blindsided, the Eisenhower administration stepped up its pressure tactics, weakening the British pound and threatening to withhold oil from Britain and France at a time when both had limited reserves of fuel. The British and French soon relented. In other words, the United States wielded its energy policy to achieve geopolitical ends. “That’s something we did do historically,” Ms. Wald continues, “and we may be able to do again.” It seems a fair bet. The State Department’s energy bureau helped persuade China, India and other countries to reduce imports of Iranian crude oil. The arm-twisting very likely spurred Tehran to freeze its nuclear program last year, though Mr. Pascual, a former ambassador to Mexico and Ukraine, put it more diplomatically. “We were able to have a different kind of conversation than we could have had even 10 years ago,” he recalls, providing negotiating partners with an “analysis of global oil markets: what the trends were in those markets, where supply was coming from — in particular, from the United States.”

Climate Change
Oil and Gasoline
US Foreign Policy
Renewable energy
Global Warming
International trade


Wachovia Is Said to Raise Billions Amid Losses

Abstract: The Wachovia Corporation , the country’s fourth largest bank, is raising several billion dollars from outside investors because of mounting housing losses and an ill-timed acquisition of a big California mortgage lender, people briefed on the matter said Sunday night. It is unclear whether the investment will come from the issuing of new shares of stock to the public or from private investors. Wachovia said Sunday night that it would move up the release of its first-quarter earnings to Monday from Friday, without explanation. That has led to speculation that an announcement of an investment deal could come with its earnings report. Representatives of the bank did not return calls seeking comment about the investment. Wachovia is the latest financial institution to seek outside funding. Citigroup, Merrill Lynch and UBS raised tens of billions of dollars from foreign and private equity investors last fall, and last week Washington Mutual secured $7 billion from a group of investors led by the buyout firm TPG. Meanwhile, other lenders, including small local banks, are actively looking to raise capital. Taken together, the moves show how quickly the banking industry’s health has deteriorated. The deals will help shore up the balance sheets of those banks, which have suffered a series of blows since housing and credit markets started cratering last summer. But the transactions will probably erode the value of shares held by existing investors and could lead to a wave of shotgun acquisitions. The investment in Wachovia comes after bank executives tried to stave off such a move for months, maintaining that the company was financially strong. Earlier this year it raised more than $8.3 billion by issuing preferred stock and other securities. Wachovia had been riding high over the last few years, aggressively expanding its retail franchise and benefiting from unusually few credit losses. But in May 2006, the bank’s chief executive, G. Kennedy Thompson, made a big bet on the housing market: a $25.5 billion acquisition of Golden West Financial, a large California thrift that specialized in interest-only mortgages. The deal gave Wachovia a foothold in the fast-growing California market. Executives played down the risks at the time, but many Wall Street analysts and investors questioned the logic of the bank ratcheting up its exposure to the nation’s most buoyant market as the housing boom appeared to peak. Wachovia shares fell sharply after the deal was announced. The bank has continued to take a beating, especially in California. Bank executives have been caught off guard by the high number of borrowers walking away from their homes after falling behind on their payments. Other parts of the bank’s portfolio have been hit similarly hard: Losses tied to auto, credit card and home equity loans have risen sharply over the last few months. Wachovia also faces pressure in its capital markets business, where it was a big packager of mortgage-related loans and provider of corporate buyout loans. Analysts say the bank could be in store for bigger losses tied to commercial real estate loans, where it has about $12 billion of exposure to construction loans.

Housing
Mortgages
Wachovia Corp
Stocks and Bonds


Federal Judge Declines to Return Hiram Monserrate to Senate

Abstract: A federal judge on Friday refused to reinstate former Senator Hiram Monserrate , the first member of the New York State Legislature removed from office since the 1920s, rejecting Mr. Monserrate’s claims that his expulsion was unconstitutional. Writing that a legislative body’s power to expel its members is “embedded in American Democracy,” Judge William H. Pauley of United States District Court in Manhattan denied Mr. Monserrate’s request to have his removal blocked and the special election to replace him halted. The decision about who should represent Mr. Monserrate’s former district in Queens should be left to the voters and not to the courts, Judge Pauley said. The ruling marked the first decision in what could be a lengthy appeals process for Mr. Monserrate. Judge Pauley’s order applied only to Mr. Monserrate’s most immediate request to the court: to block his expulsion so he could return to the Senate when it reconvenes on Monday. The case is expected to proceed in Judge Pauley’s court, though lawyers for Mr. Monserrate said they were strongly considering an appeal to the United States Court of Appeals for the Second Circuit. Norman Siegel , one of Mr. Monserrate’s lawyers, said the judge’s ruling “opens the door to arbitrary and unfettered decisions that violate the rights of duly elected officials and their constituents.” But Judge Pauley rejected Mr. Monserrate’s argument that the people of his district were disenfranchised, writing that the impediment to voting rights was “gossamer.” “The burden here,” Judge Pauley wrote, “is no greater than the occasional vacancies due to death or resignation.” Attorney General Andrew M. Cuomo , whose office is defending the Senate in the case, said he was gratified by the decision. “The time for changing the culture of Albany is long past due,” Mr. Cuomo said in a statement. “Today’s ruling is a step in that direction.” The ruling raised numerous questions about the merits of Mr. Monserrate’s legal claims and indicated that the court would ultimately decide against him if he pressed on with the case. Judge Pauley was especially skeptical of the arguments that Mr. Monserrate’s rights were violated under the 1st and 14th Amendments. His lawyers alleged that the expulsion process was not only unfair and unconstitutional, but was also political payback for Mr. Monserrate’s role in a leadership coup last summer and his critical public comments about the Senate’s investigation into his conduct. Mr. Monserrate’s lawyers said his ouster was an unlawful coup, a choice of words the judge said he found to be “an ironic twist.” Judge Pauley was also not persuaded by Mr. Monserrate’s claims that he was denied due process by the special Senate committee that recommended his expulsion. The judge noted that the former senator refused to testify before the committee or present evidence in his favor. Mr. Monserrate’s lawyers also argued that the provision of state law the Senate relied on to expel him was too vague. But the judge was not persuaded. The law, he wrote, is a “short and plain” statement that is “neither standardless nor so unclear that a person of reasonable intelligence could not understand its meaning and application.” The Senate removed Mr. Monserrate by a vote of 53 to 8, citing his conduct in a violent confrontation in 2008 that left his female companion with a deep gash on her face. A judge acquitted him of felony assault charges but convicted him of a misdemeanor for dragging her down a hallway — an act caught on videotape. State law provides for the automatic expulsion of any legislator convicted of a felony, but it is silent with regard to misdemeanors. The judge said that simply because the law did not spell out every circumstance under which a legislator might be expelled “does not make the statute vague or overbroad.”

New York State
State Legislatures
Assaults
Monserrate Hiram
Decisions and Verdicts
Siegel Norman
Cuomo Andrew M


New York Fire Dept. Cuts Crews on Pumpers to Limit Overtime

Abstract: With hundreds of city firefighters out of work every day for medical problems ranging from broken bones to more serious illnesses, the Fire Department is moving to reduce staffing at 49 engine companies in the five boroughs, city officials said Tuesday. Officials say the change, to take effect at 9 a.m. on Wednesday, is prompted by a provision in the labor contract that allows the city to reduce staffing when the average number of firefighters on medical leave citywide reaches a certain percentage over a 12-month period. In doing so, the city can avoid paying overtime to firefighters to keep engine companies at agreed-upon staffing levels. The move immediately ignited a new round of debate over an issue that has long been a source of contention between the department and the Uniformed Firefighters Association, the union that represents the city’s 8,800 rank-and-file firefighters. It is the third time since 2003 that the department has cut staffing at engine companies — a condition that usually lasts a few months, until sick firefighters return to work. The average number of firefighters out sick each day during the last three weeks has ranged from 500 to 700. “They are clearly spoiling for a fight on staffing and firehouse closings,” said Stephen J. Cassidy, the union’s president, who held a news conference on Tuesday afternoon to denounce the city’s decision. The 49 engine companies affected have five firefighters per shift and will lose one. Fifteen companies in the Bronx, 14 in Brooklyn, 12 in Manhattan, 7 in Queens and one on Staten Island are affected. Of the other 145 engine companies in the city, 134 are already staffed with four firefighters. The remaining 11 are always staffed with five firefighters, regardless of the medical leave numbers, because their members provide daily backup to companies whose firefighters call in sick. Ladder companies, in contrast, are staffed with five firefighters at all times. But Mr. Cassidy warned of reduced staffing at ladder companies as well if the number of those on medical leave in the engine companies outpaces those on hand to fill in for them. With the medical leave numbers rising for months, Fire Commissioner Nicholas Scoppetta, who is leaving at year’s end, is exercising his discretion to reduce staffing at the 7.5 percent threshold. The contract mandates such cuts when the rate reaches 7.6 percent, officials said. “Increased medical leave is costing us more in overtime, and we’re going to do everything we can to be fiscally prudent in these difficult economic times,” Mr. Scoppetta said in a statement. Mr. Cassidy contended that a minimum of five firefighters per engine company was essential for the health and safety of firefighters and the public. The union also suggested that the prevalence of swine flu had driven the sick rate higher than normal, but the department said those numbers were negligible.

Fire Department (NYC)
Fires and Firefighters
New York City
Uniformed Firefighters Assn


Vaccine Aide Gunned Down in Pakistan

Abstract: ISLAMABAD, Pakistan — A health worker supervising a polio vaccination campaign was fatally shot and two others were wounded on Saturday when gunmen opened fire at a hospital in northwestern Pakistan, officials said. No one immediately took responsibility for the killing, but the Taliban, which accuses the United States of using a drive to eradicate polio in the country as a cover for spying, has threatened the lives of health workers who immunize children. Pakistani officials said two gunmen riding a motorbike had opened fire at a government hospital in Matni, a suburb of Peshawar, the provincial capital of the restive Khyber-Pakhtunkhwa Province. Zahid Gul, who was overseeing the vaccination campaign, was killed and another man and a woman were wounded in the attack. The gunmen fled. Saturday’s episode was a particular setback to the former cricket star and current opposition leader Imran Khan, whose political party controls Khyber-Pakhtunkhwa. Mr. Khan this month condemned the attacks on health workers taking part in vaccination efforts. He said that he would personally lead the anti-polio drive and warned that the country risked being quarantined internationally if the attacks continued. Pakistan is one of only a few countries where the polio virus is still rampant. Mr. Khan has supported peace talks with Taliban militants and opposes the Pakistani military’s operations against them in the semiautonomous tribal regions adjoining Khyber-Pakhtunkhwa Province. He also vehemently opposes drone strikes by the United States Central Intelligence Agency and says civilian casualties from the missile strikes fuel more militancy, instead of curbing it. The Taliban’s resistance to polio vaccination hardened after the raid in May 2011 on Osama bin Laden’s compound in northern Pakistan, as revelations surfaced that the C.I.A. had used a Pakistani doctor, Shakil Afridi, to run a vaccination campaign that aided efforts to locate Bin Laden. Since then, the Taliban has repeatedly targeted the vaccination campaign.

Pakistan
Polio
Taliban
Terrorism
Vaccines Immunization


World Cup Rights Awarded

Abstract: ESPN was awarded the American rights to the 2016 World Cup of Hockey. ESPN was selected ahead of NBC Sports Group, which is in the midst of a 10-year contract to broadcast N.H.L. regular-season and playoff games through 2020-21. ESPN was the N.H.L.’s American broadcaster from 1992 through the league’s lockout that wiped out the 2004-05 season. ■ The Florida Panthers will be without the injured goalies Roberto Luongo and Al Montoya for at least Thursday night’s game against Dallas, and possibly longer. To replace them, the Panthers recalled Dan Ellis from San Antonio of the A.H.L., and he will start on Thursday. Florida is two points behind Boston for the last playoff spot in the Eastern Conference. (AP)


City to Clear Homeless Encampments

Abstract: WASHINGTON, July 17 — Beginning an aggressive push to reduce the number of people living on New York City’s streets, the city will start pressuring homeless men and women to leave makeshift dwellings under highways and near train trestles and will raise barriers to make those encampments inaccessible, Mayor Michael R. Bloomberg said on Monday. The city has found 73 of those sites inhabited by groups of chronically homeless people, the mayor said. “Humanely, respectfully and firmly, we’ll work to get these men and women to enter supportive housing, enroll in treatment programs or go into shelters,” Mr. Bloomberg said to a gathering of government officials and social service providers from around the country. The changes amplify the mayor’s longstanding effort to steer the city away from its emphasis on emergency shelter for the homeless, and toward providing permanent housing and using social services to prevent homelessness. The measures discussed by the mayor on Monday represented a significant shift in the culture of the Department of Homeless Services. “While everyone has a right to emergency shelter, that doesn’t always make emergency shelter right for everyone,” Mr. Bloomberg said, adding that his administration was working to replace “the dead-end model of managing homelessness with the new goal of ending it.” He cited his administration’s program to create 12,000 units of supportive housing, which offers social services like mental health counseling and substance abuse treatment. And he announced plans to expand another program, which helps people on the verge of homelessness hold onto their homes. But the new element is potentially controversial. The Department of Homeless Services, under its new commissioner, Robert Hess, has identified 73 makeshift encampments, including 30 in Manhattan, to which roughly 350 homeless men and women — of a total homeless population of about 3,800, according to the city’s last count — return nightly. Most of the encampments are little more than collections of cardboard boxes, or tarpaulins hung over a beam, officials said. Now, working with community and faith-based organizations, the city plans to work more aggressively to persuade people to leave those areas and enter housing, treatment programs or shelters. The vigorous focus on the street population is an unusual approach that Mr. Hess brings from his time supervising services to adults in Philadelphia, where he built a reputation for reducing the number of people living on the streets. The strategy, which officials say has been tried in only a few cities, reflects a growing consensus that a small number of long-term, chronically homeless people account for a large share of the medical care and other services required by the homeless population over all. Officials stopped short of saying that they would force people off the streets, but they do plan to clear the makeshift dwellings and make them inaccessible for others to return. “We’re going to let them know that their days on the streets must come to an end,” Mr. Bloomberg said in an address to the annual conference of the National Alliance to End Homelessness. “And we’ll secure and clean up the places where they’ve been bedding down, to make sure that they won’t be occupied again.” Over the past four years, officials said, the administration has worked to shift its focus from improving and expanding shelters toward more permanent solutions. That effort has included the use of supportive housing — or housing that affords a range of on-site social services — and a program called HomeBase, which offers flexible subsidies or other support for people at risk of homelessness. Mr. Hess would not give the precise locations of the sleeping areas — most of them out of sight of the public — that the city plans to target, out of respect for the people who stay in them, he said. But officials said that some of the sites are already familiar to the department’s teams of outreach workers and that they will coordinate with the Police and Sanitation Departments and with transit officials to identify other sites, both outdoors and in vacant buildings. One site, near Riverside Drive in Upper Manhattan, is known to homeless workers as the Bat Cave. Lately, it has been home to at least four people, including Gladys Anderson, 44, who sleeps on a discarded bed propped on milk crates. Monday afternoon, sitting on a red velveteen bedspread, she said she would gladly accept the mayor’s offer of more permanent housing. She said it was “time to be out” of the cave. “I will drop it like it’s hot,” she said. “This is not no life adventure for me. We’re just passing through.” City outreach workers stopped by a few days earlier, she said, and had the people in the encampment fill out paperwork needed to get apartments. Her boyfriend, who would give his name only as Country, was more skeptical of the offer. “This is America,” he said as he loaded 12 garbage bags full of cans and bottles onto a large rolling cart. “This is living off the land. That’s how we built this thing.” The largest group of street homeless identified by city workers, 195, is in Manhattan, officials said, spread over 30 locations. In the Bronx there are 54 people living at 12 sites; in Brooklyn, workers identified 45 people in 10 areas; in Queens they found 40 people at 10 sites; and in Staten Island, they identified 24 people gathering at 11 spots. The city estimates that it will take six months to a year to clear the often-squalid locations, which will then be secured with fencing or other methods, said Mr. Hess, who appeared with the mayor at a news conference after Mr. Bloomberg’s speech. Both men emphasized that they would not forcibly remove people, pointing out that there are legal barriers to doing so. “The objective is not in any way to force people from one area to another,” Mr. Hess said. “It is to take a social service intervention strategy approach to help people make a decision to move from these very unhealthy encampments.” Two years ago, Mr. Bloomberg pledged to create the 12,000 units of supportive housing, in addition to 21,000 built over the previous two decades. On Monday, he said the money had been secured to keep his promise. He also said that the city would funnel an extra $10 million into HomeBase, which helps people to stay where they live by interceding with landlords to head off eviction, making temporary loans for rent or helping obtain needed job referrals, health care or other services. Mr. Bloomberg faced a receptive audience, which interrupted his speech with applause more than a dozen times. As if to anticipate criticism of his efforts, he used the address to take several jabs at some advocates for the homeless, who have been a frequent thorn in the side of his and previous administrations, suing the city to force it to change its policies. “To rid our society of homelessness we must first liberate ourselves from the chains of conventional wisdom, from the fetters of political correctness, from the tyranny of the advocates and their unwillingness to admit that we’re ever making progress,” the mayor said.

New York City
Housing
Department of Homeless Services
Bloomberg Michael R
Homeless Persons


Cerberus in Talks to Buy Remainder of Chrysler

Abstract: DETROIT — Cerberus Capital Management said Wednesday that it was negotiating to buy Daimler AG’s 19.9-percent stake in Chrysler , a move that could pave the way for further changes at the American automaker. Cerberus bought 80.1 percent of Chrysler a year ago for $7.4 billion, ending the troubled nine-year marriage between Daimler and Chrysler. Since then, Chrysler’s automotive operations have struggled amid speculation that Cerberus might be looking to sell the business or align Chrysler with a foreign automaker. Cerberus has repeatedly said that it has a long-term investment plan for Chrysler. But industry analysts viewed the buyout of Daimler’s stake as a necessary step toward a larger deal. “It looks like they are cleaning Chrysler up for a deal with somebody else,” said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich. Cerberus said in a statement that it approached Daimler about acquiring its stake and the discussions were continuing. A Cerberus spokesman, Peter Duda, declined to elaborate on the talks. A Daimler spokesman, Han Tjan, confirmed that negotiations were continuing, but did not provide further details. The acquisition of Chrysler last year was considered a bold but risky move for Cerberus, a leading private-equity firm with growing interests in the automotive sector. But high gas prices and a soft economy have been tough on Chrysler, the smallest of Detroit’s Big Three automakers. Chrysler’s United States sales have fallen 24 percent this year, as consumers have fled from its core truck products into smaller, more fuel-efficient vehicles. Because it is privately owned, Chrysler is not required to release its financial results. The company has said it lost $400 million in the first quarter, but has not provided any updates since. Under Cerberus’s ownership, Chrysler has been cutting jobs and vehicle production to match its shrinking market share. Robert L. Nardelli, Chrysler’s chairman, and his executive team have also been aggressively pursuing alliances and joint ventures with other automakers. A buyout of Daimler’s stake could make it easier for Cerberus either to sell Chrysler or enter an alliance involving an equity exchange with another automaker. “It gives Cerberus more exit options,” said John Casesa, a principal in the consulting firm Casesa Shapiro Group. “It clearly would make it easier to sell the business.” The spokesmen for Daimler and Chrysler gave no timetable for the talks regarding Daimler’s remaining stake. In its statement, Cerberus said “existing industrial relationships” between the two automakers would continue even if the transaction is completed. Chrysler, for example, is expected to use components developed by the Mercedes-Benz unit of Daimler for the next generation of its Jeep Grand Cherokee sport utility vehicle. Like its American rivals General Motors and the Ford Motor Company, Chrysler is hoping for a cash infusion from a proposed $25 billion federal loan program to help meet tougher fuel-economy standards. From a business standpoint, Chrysler is banking heavily on the introduction of its new Dodge Ram pickup this fall to improve its sagging sales. The company also surprised analysts and competitors this week by introducing three potential electric vehicles, one of which Chrysler said will go on sale by 2010.

Cerberus Capital Management
Chrysler LLC
Mergers Acquisitions and Divestitures
Automobiles
Layoffs and Job Reductions
Reform and Reorganization


Obama Ends Exemption for Cubans Who Arrive Without Visas

Abstract: WASHINGTON — President Obama said Thursday that he was terminating the 22-year-old policy that has allowed Cubans who arrived on United States soil without visas to remain in the country and gain legal residency, an unexpected move long sought by the Cuban government. “Effective immediately, Cuban nationals who attempt to enter the United States illegally and do not qualify for humanitarian relief will be subject to removal, consistent with U.S. law and enforcement priorities,” Mr. Obama said in a statement . “By taking this step, we are treating Cuban migrants the same way we treat migrants from other countries.” The move places a finishing touch on Mr. Obama’s efforts as president to end a half-century of hostility between the United States and Cuba and to establish normalized relations and diplomatic ties with a government American presidents have long sought to isolate and punish. The action came through a new Department of Homeland Security regulation and a deal with the Cuban government, which Mr. Obama said had agreed to accept the return of its citizens. “What we’ve agreed to is that the past is past, and the future will be different,” said Jeh Johnson, the Homeland Security secretary. “This is us repealing a policy unique to Cuba given the nature of the relationship 20 years ago, which is very different right now.” The so-called “wet foot, dry foot” policy, which dates to 1995, owes its name to its unusual rules, which require Cubans caught trying to reach the United States by sea to return home, yet allow those who make it onto American soil to stay and eventually apply for legal, permanent residency. It was one way in which the United States tried to weaken Fidel Castro’s government, by welcoming tens of thousands of Cubans fleeing repression. In recent years, however, it has become a magnet for economic refugees, enticing many Cubans to make a perilous journey to the United States, where they enjoy a status unlike migrants from any other country. “The exceptionalism of the ‘wet foot, dry foot’ policy toward Cuba is a relic of the Cold War, and this decision by the administration is really its final effort to normalize an area of interaction between Cuba and the United States, migration, that is clearly in need of normalization,” said Peter Kornbluh, a co-author of “Back Channel to Cuba,” which recounts the secret negotiations between the United States and Cuban governments that forged the policy. But the change drew sharp criticism from opponents of Mr. Obama’s move to thaw United States relations with Cuba, who argued it would reward dictators in Cuba, ignoring their human rights abuses. “Today’s announcement will only serve to tighten the noose the Castro regime continues to have around the neck of its own people,” Senator Robert Menendez, Democrat of New Jersey, said in a statement . He said Congress had not been consulted on the move, and he added, “The Obama administration seeks to pursue engagement with the Castro regime at the cost of ignoring the present state of torture and oppression, and its systematic curtailment of freedom.” Benjamin J. Rhodes, the deputy national security adviser, who led clandestine negotiations that produced the 2014 opening, said most Cubans who came to the United States in the past “absolutely had to leave” Cuba “for political purposes.” Now, he said, the flow is largely of people seeking greater economic opportunity. Ending the policy, he added, is a reflection of Mr. Obama’s view that, ultimately, the rise of a new generation of Cubans pressing for change in their own country is vital to bringing about change there. “It’s important that Cuba continue to have a young, dynamic population that are agents of change,” Mr. Rhodes said. Jorge Mas, the chairman of the Cuban American National Foundation, said the changes would force Cuba’s leaders to be more responsive to their citizens. “People may be initially upset at not being able to have this way of getting out of Cuba, but ultimately, the solution for Cuba is people fighting for change in Cuba,” Mr. Mas said. The change in policy essentially guts the Cuban Adjustment Act of 1966, which assumed that Cubans were political refugees who needed protection and allowed those who remained in the United States for more than a year to become legal residents. Obama administration officials urged Congress on Thursday to repeal the measure, but in the interim, by eliminating the policy that automatically afforded parole to Cubans arriving in the United States, they have essentially denied Cuban migrants the opportunity to take advantage of its benefits. Cuba, likewise, still has a law in place that denies re-entry to migrants once they have been gone for four years or more; Mr. Rhodes said officials in Havana have pledged to repeal it once the United States Congress scraps the Cuban Adjustment Act. Cubans who believe they will be persecuted if they return home will still be permitted to apply for political asylum when they reach the United States. According to the agreement, which was signed on Thursday in Havana, the Cuban government said it would accept 2,746 people who fled in the Mariel boatlift of 1980 back into the country, and consider accepting back others on a case-by-case basis. The Obama administration also eliminated the Cuban Medical Parole program, in which Cuban medical professionals stationed in international missions could defect and get fast-tracked visas to the United States. Obama administration officials had initially said they were not planning to change the policy after efforts to normalize relations with Cuba. But the thaw prompted speculation that once diplomatic relations resumed — as they did in 2015 — the arrangement would end. On Thursday, the officials said they had deliberately played down talk of revising the policy for fear of setting off an even larger exodus from the island nation. The number of Cubans trying to arrive by sea surged after the United States and Cuba announced the decision to restore diplomatic relations in 2014. In the 2014 fiscal year, almost 4,000 Cubans either landed or were caught. Two years later, the number shot up to 7,411, according to the Coast Guard. The number of Cubans who have since begun to arrive in the United States by land has also soared in recent years. The number of Cubans who arrived at the Southwest border has increased more than fivefold since 2009. Last year, almost 55,000 Cubans arrived nationwide, the Department of Homeland Security said. Kevin Appleby of the Center for Migration Studies of New York praised the specific change, while questioning the broader rules covering asylum. “The good news is that it ensures equal treatment between Cubans and asylum-seekers from other nations,” he said. “The bad news is that our asylum system is broken and does not afford adequate due process and protection to those who need it.” Phil Peters, president of the Cuba Research Center, said that the number of Cubans entering the United States is actually much higher because tens of thousands more overstay their visitor visas and still others migrate legally. “This is a favor to Trump because it’s a tough measure to take, but it’s the right measure to take,” Mr. Peters said. “These are economic migrants coming here that, unlike any other nationality, get a big package of government benefits without any justification.” There was a mixed reaction among Cubans in Havana to news of the sudden change in policy. Some said they felt its repeal was long overdue. Others thought the impact would be widely felt among Cubans still hoping to leave their island. Michel, 33, who declined to give his last name for fear of running afoul of the government, said he tried to escape on a makeshift boat in the early 2000s, but the vessel broke down halfway to the Florida Keys. Since then, he has given up on his desire to move to the United States. But he knows many Cubans who still hope to leave and who would be devastated by the change in policy. “This is going to make a lot of people’s lives very hard,” he said. Alberto Herrero, 58, a high school biology teacher, applauded the move by the Obama administration, saying the previous regulation was “an unfair law. It’s unfair to the rest of the world’s people, especially those in Latin America.” “It’s exclusive to us, and that’s not fair to the world,” he said, adding that he hoped the removal of the policy was a signal of a re-evaluation of other outdated measures taken by the Americans against Cuba. “Maybe other restrictions will be lifted, like the embargo,” he added.

Cuba
Homeland Security
US Foreign Policy
Immigration
Barack Obama


Yankees’ Wait for Reinforcements Revives Patience at the Plate

Abstract: In last three Subway Series games, the Yankees failed to draw a walk. The impatient approach was an indictment of a lineup filled with replacement players who had filled in admirably for a core of injured stars. While it would have been ambitious to say that Kevin Youkilis and Mark Teixeira would make an immediate impact when they returned to the lineup on Friday against the Boston Red Sox, Manager Joe Girardi eagerly looked forward to having two players who would make pitchers work. “These guys grind out at-bats,” Girardi said. “I think their impact is big. We need to keep them healthy.” In their first at-bats in the Yankees’ 4-1 win, Youkilis and Teixeira each saw seven pitches from the ace Jon Lester, a patience that would set the tone for the rest of the evening. By the end of the night, the Yankees had drawn four walks and the offense once again seemed patient. “I think when you get two guys that grind out at-bats, I think that affects other guys in the lineup,” Girardi said. “It changes our lineup. It gives us a better balance.” Teixeira, who made his season debut after injuring his wrist in March while practicing with Team USA for the World Baseball Classic, said that he made it a point to see as many pitches as possible in his first at-bat. In the second inning, Teixeira saw several cutters and sinkers before finally walking on a 3-and-2 fastball. Teixeira scored the Yankees’ first run on a single by Jayson Nix. “That was a good at-bat for me and the team,” Teixeira said. Youkilis, who faced Boston, his former team, in his first game back after missing more than a month with an injured lower back, would not address the topic of his old team. “Next question,” Youkilis said when asked if it continued to be peculiar playing against Boston. Youkilis burned the Red Sox in the fifth inning with a run-scoring single, which gave the Yankees a 3-0 lead. Teixeira and Youkilis combined to go 1 for 7 with a walk, a run and a run batted in. It was not the immediate impact on the scoreboard that will be expected from them as the season progresses, but for a first impression, it was fine. Both players realized that it would take some time for them to get back to their old selves. “Physically, the timing is going to come,” Teixeira said. “Mentally, I want to see a lot of pitches and swing at strikes.” Neither player has any physical limitations. Teixeira said he iced only his wrist after the game. Girardi said he expected both to be back in the lineup again on Saturday. But Youkilis probably will not play the field until Sunday’s series finale. Youkilis said he was not bothered by continuing to be the designated hitter. “I get paid a lot of money to play baseball,” Youkilis said. “I’m living my dream.” Youkilis said he played many five-inning extended spring training games, in which he hit every inning, and they prepared him for the grind of returning. But he joked, “The pitchers are much better here.”

Yankees
Kevin Youkilis
Mark Teixeira
Red Sox
Baseball


Overhaul Largely Ignores Rating Agencies Like Moody’s

Abstract: Four stars, two thumbs up, a must read: Rave reviews like those might seem a bit suspect if they were paid for by the restaurateurs, movie makers and authors being reviewed. But that is essentially how things work in the credit-rating industry, a central culprit of the financial crisis that, to its critics’ dismay, now seems to be escaping serious change. In the overhaul of financial regulation proposed by the Obama administration on Wednesday, rating services — which, during the boom, stamped high ratings on many subprime securities — will avoid the radical changes their detractors have urged. While the administration is proposing some modest changes, none addresses what many see as the central problem: Services like Moody’s and Standard & Poor’s are paid by the companies whose securities they are evaluating. It is as if Hollywood studios paid movie critics to review their would-be blockbusters. Despite calls to shake up the ratings establishment, the industry’s “issuer-pay” system is deeply entrenched. And, while the services have taken some steps to mitigate conflicts, they reject the idea that they should have been more vigilant. “This is not an effort to remake the industry,” Jerome Fons, a former managing director of credit policy at Moody’s, said of the administration’s proposals. “If we believe the system is broken, this doesn’t offer a fix.” The rating services play a crucial role in the capital markets by rating everything from plain-vanilla corporate bonds to trickier “structured” investments. By law, banks must take ratings into account when investing in bonds. Big money managers often base investment guidelines on them. But over the last decade, the rating services helped Wall Street repackage mortgages into securities, thereby fostering the spread of risky lending that eventually imperiled the economy. Many securities that had been rated AAA are now worthless. Yet now the agencies appear poised to retain their lucrative, and well-protected, perch. Many of the proposals laid out Wednesday are vague principles or paper standards that go little beyond changes being contemplated by the Securities and Exchange Commission, or even the rating agencies themselves. The proposals call for the agencies to improve disclosure and release more detailed information, as well as establish policies for “managing and disclosing conflicts of interest.” But the plan does not alter the issuer-pay model, whereby the companies selling securities pay to have them rated. Nor does it encourage competitors to enter the industry, which many regard as an oligopoly. The proposal does call for regulators to reduce their reliance on agency ratings when deciding whether structured investments are safe enough for banks, insurance companies, pension funds and money market mutual fund investors. Regulators should encourage more independent analysis, a Treasury official said, but the administration did not propose an alternative standard. Many of the other proposals rehash “best practices” that the major agencies were either moving toward or had already begun to employ. For example, the proposal calls for disclosing ratings methodology and the types of risks that the services do — and do not — assess. It also would require the agencies to distinguish between their grades for complex mortgage-related investments and more traditional bonds, one of the few elements of the proposal that the industry strongly opposes. “It’s like a scarlet letter,” George Miller, the head of the American Securitization Forum, said of the possible designation. “It indicates that there is something to be aware of, but it doesn’t tell you what it is.” He also said such a step would be a burden for some investors, who would have to rewrite their investment guidelines. But the proposals do little to address the behavior that contributed to the crisis, industry critics maintain. “Lacking any significant performance history, rating agencies rated unratable products for regulatory approval and escaped liability for doing so under First Amendment protection,” said Joseph Mason, a finance professor at Louisiana State University. “Nothing in the Treasury proposal changes that.” The ratings proposals are part of a broader plan to revive and overhaul the securitization markets, which supply roughly two-thirds of the credit in the economy (banks provide the rest, with loans). To keep banks and other lenders from bundling the riskiest loans, the administration proposed requiring loan originators to keep 5 percent of loans that they package, so the banks have their own money at stake. While that step, in theory, should make banks more careful, industry experts said they were unsure if it would. After all, in the current crisis, many banks got stuck holding too many risky mortgage bonds. “The reason why so many investment banks got into difficulty was that they did have skin in the game,” said Lawrence J. White, a New York University economics professor. But the proposal gives regulators the flexibility to adjust the size of the banks’ interest in the securities and leaves room for institutions to offset some risk to ensure they are sound. Given the failures of the credit rating industry — and the conflicts laid bare by the mortgage collapse — some industry experts said the Obama administration is missing a rare chance to rework the industry. “It’s the equivalent of grabbing the rating agencies by the lapels, shaking them, and saying ‘do a better job,’ ” said Professor White. “This was a big-time missed opportunity.”

Banks and Banking
Regulation and Deregulation of Industry
Ratings and Rating Systems
Subprime Mortgage Crisis
Moody's Corporation
Standard & Poor's Corp


For ESPN and Univision, the U.S. Is a Soccer Country

Abstract: ESPN and Univision are paying more than ever to carry the World Cup in the United States, proof that the quadrennial soccer tournament that begins Friday keeps increasing in value. “If you ranked World Cup viewing by countries going back to 1998, the U.S. ranked 23rd,” said Kevin Alavy, director of Initiative Sports Futures, a London-based analysis firm. “In 2002, the U.S. jumped to 13th, and in 2006, it jumped again to 8th place. And we expect America to keep on jumping.” In 2006, the ESPN-ESPN2-ABC broadcasts of the World Cup reached 70.2 million viewers while Univision reached 29.5 million, according to Nielsen Media Research. If soccer isn’t as popular in the United States as it is in Europe and South America, it is more firmly established than ever. And ESPN’s World Cup marketing push is the largest it has undertaken for a single event. “We’re definitely selling the World Cup as if the U.S. has been converted to soccer,” said Ed Erhardt, the president of ESPN customer marketing and sales. “It’s a more diverse country than it’s ever been.” ESPN is paying $100 million for the rights to two World Cups and two Women’s World Cups through 2014 — up from $11 million in 1994 and $22 million in 1998. For the package of rights that included the 2006 World Cup, ESPN got a break. Soccer United Marketing, created by Major League Soccer, paid $40 million to FIFA, soccer’s world governing body, for the United States rights, then rented the time on ESPN, ESPN2 and ABC to show the games. Univision is paying $325 million for the current package of domestic Spanish-language rights, up from its previous fee of about $125 million. It is allocating about $155 million of its total payment to this year’s tournament. “Univision is the home of the World Cup in so many ways,” said Cesar Conde, the president of Univision Networks. “We’ve had it since 1978. It’s a real passion point for our audience, our talent and our employees.” Asked if Univision would make a profit from the World Cup, Conde was noncommittal. “It’s an incredibly important event that has so many benefits for us — monetary, tangible, intangible,” he said. Univision and ESPN said they were each close to selling out their commercial time. “We’ve exceeded all our expectations for every part of the portfolio,” Erhardt said. Most of the 30 percent jump in ad revenue on ESPN.com is attributable to the World Cup, he said. It is not surprising that with so many advertisers in ESPN’s World Cup fold that the current issue of ESPN magazine is its thickest ever. John Skipper, ESPN’s executive vice president for content, said that the challenge of paying a good-size rights fee (although it is cheap compared to many other events it has) and selling the advertising would be “financially advantageous” because it lets ESPN unleash its various platforms. “We’re not just doing matches, but 230 hours of studio shows, including a daily preview, daily wrap-ups,” Skipper said. “We have three networks, three digital sites, radio. Four years ago, what we did was fairly modest.” ESPN and Univision are offering strikingly similar viewing options. Among ESPN, ESPN2 and ABC, all 64 games will be shown live; all will be available in high definition, and all will be streamed on ESPN3.com . Twenty-five games will be carried in 3-D. Univision and its sibling network, TeleFutura, will carry all of the games live, in HD, and stream them at UnivisionFutbol.com . “We bring our blood, sweat and tears to cover this event,” Conde said. “Soccer runs through our veins.” Univision has not had to change how it presents soccer. Its announcers bring an intense patter to nearly everything they say and draw in some viewers who do not understand Spanish. “They feel it’s painful not to be engaged,” Conde said. “So they say, ‘I’m tuning to you guys even if I don’t understand what they’re saying.’ ” ESPN is not fretting about defections to Univision. But viewer satisfaction and lack of deep expertise was enough of a concern to import announcers from Britain (Martin Tyler, Ian Darke, Derek Rae and Adrian Healey). The decision atones for the decision to use Dave O’Brien, a baseball announcer who had never called a soccer game until months before he became ESPN’s lead 2006 World Cup announcer. O’Brien was criticized for mistakes he made and his lack of knowledge about soccer’s nuances. Skipper said his decision to hire British relief was made after the European Championship in 2008, when Healey and Rae Anglicized ESPN’s broadcasts. “We didn’t try to Americanize the games or overexplain what’s going on,” Skipper said. “We assumed there were sophisticated viewers and it worked.” Skipper’s inclination sounds right. Why not seek experienced soccer voices from places where soccer is more popular? Only one American, John Harkes, will be analyzing ESPN’s games from South Africa. His colleagues are the former players Efan Ekoku, an English-born Nigerian, and Robbie Mustoe, an Englishman. None of the studio analysts, save for Alexi Lalas, are Americans. Asked if ESPN had gone too far in its de-Americanization policy, Skipper said, “I think people will be happy with our breadth of talent.”

ESPN
Univision
World Cup 2010 (Soccer)
Television


Suffolk Loses Ground in ’06 Census Report

Abstract: SUFFOLK COUNTY dropped to 29th in median household income in 2006, from 21st in 2005, on a national list of large counties in a 2006 census report released last week, and its reported poverty rate jumped. Nassau County, however, climbed four spots in the ranking of income to 10th, and its poverty rate was unchanged. Nassau had the highest median income among counties in New York in 2006, at $85,994. The rankings come from the American Community Survey, which reported results for 786 counties with populations of more than 65,000. The import of the new numbers was not fully clear last week, because changes in the way the Census Bureau reports data make it hard to compare 2005 and 2006 directly. But economists said the numbers might reflect a growing strain among families who have moved to the periphery of the region’s suburbs. “The outlying suburbs generally have the youngest families, the most first-time home buyers, and these are people who are operating closest to the financial margins,” said Pearl M. Kamer, chief economist for the Long Island Association, a business group. In a year in which the national poverty rate dropped for the first time in President Bush’s tenure, Suffolk’s rate climbed to 6.5 percent, from 4.8 percent in 2005. The 2006 numbers at the county level include people living in institutions, like group homes and treatment centers, who were not included in 2005, and it was unclear what impact the change might have had. Nassau’s poverty rate was unchanged at 5.2 percent. “Nassau has a large proportion of mature households in their prime earning years,” Dr. Kamer said. “These people have more discretionary income.” Several counties on the edges of the region, like Warren in New Jersey and Putnam and Rockland in New York, experienced increases in reported poverty rates and apparent decreases in median income. The income changes in most cases were within the margin of error of the census surveys, meaning that there is a possibility that the changes were a result of chance. Putnam’s median income, $81,907, ranked 14th nationally in 2006, down from 12th in 2005. Rockland’s income, $76,710, was 30th, down from 18th in 2005. But, like Nassau, Westchester’s income ranking climbed, to 35th from 37th. Its median income was $75,472. Westchester’s poverty rate also declined, to 7 percent from 7.9 percent. “The demographic segment that’s growing fastest is the baby boom echo, the group in their 20s,” said James W. Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. “Those are young households, and they’re probably below the median, so they may be bringing the median down in some outlying areas.” New York City’s poverty rate was virtually unchanged at 19.1 percent. The county with the highest median income in the country was Fairfax in Virginia, at $100,318, and Loudoun County in Virginia was second, at $99,371. The two counties, both suburbs of Washington, were reversed in 2005, with Loudoun at the top. Five of the top 10 were suburbs of Washington and four were in the New York metropolitan area. Three counties in New Jersey had higher incomes than Nassau: Hunterdon, with a median income of $93,297; Somerset, at $91,688; and Morris, at $89,587. The only county in the top 10 outside the Washington and New York metropolitan areas was Douglas County, Colo., a Denver suburb where the median income was $92,125.

Census
Suburbs
Economic Conditions and Trends


Plants That Practice Genetic Engineering

Abstract: In the debate over genetically modified crops, one oft-said word is “unnatural.” People typically use it when describing how scientists move genes from one species into another. But nature turns out to be its own genetic engineer. Genes have moved from one species of plant to another for millions of years. Scientists describe a spectacular case this week in The Proceedings of the National Academy of Sciences in which ferns acquired a gene for sensing light from a moss-like plant called hornwort. Gaining the gene appears to have enabled the ferns to thrive in shady forests. The new research builds on a 2004 study on ferns carried out by Kathleen M. Pryer of Duke University and her colleagues. They traced the evolutionary history of ferns by comparing samples of DNA from 45 fern species. The scientists found that roughly 100 million years ago, ferns exploded into a number of new lineages. Eighty percent of today’s fern species can be traced to that evolutionary burst. Intriguingly, these successful ferns also evolved a new kind of light-sensing protein. Known as a neochrome, it makes ferns sensitive to dim levels of light. These neochromes may have enabled ferns to thrive on shady forest floors. In 2011, one of Dr. Pryer’s graduate students, Fay-Wei Li, set out to discover the origin of neochromes. It was possible, he speculated, that an older light sensor that was sensitive to brighter light became adapted to dim forest shade. To find that ancient gene, Mr. Li examined the neochrome gene, and then he looked at genes for other light sensors in ferns. But as hard as Mr. Li looked, he couldn’t find a light-sensor gene in ferns that was closely related to the neochrome gene. “I remember walking to my adviser’s office and telling her my Ph.D. was doomed because I couldn’t figure it out,” Mr. Li said in an interview. But just as Mr. Li was despairing, a team of scientists at the University of Alberta unveiled a new database of DNA from hundreds of plant species. Mr. Li renewed his search, searching this new cache of genes for a neochrome-like gene. He found one. To his surprise, however, the gene was not in a fern. Instead, it belonged to a hornwort. These primitive plants, which lack roots or stems, grow in mats on damp banks or on trees. It was a strange connection to find because hornworts are only distantly related to ferns. “The first thing that came to my mind was that this must be a contamination,” Mr. Li said. A neochrome gene must have somehow been mixed into a sample of hornwort DNA. The only way to know for sure was to look at more hornwort DNA. Mr. Li obtained hornwort tissue from other scientists and gathered some of his own from a roadside ditch near Duke. In all five species, he found variants of the neochrome gene. Comparing all the data, Mr. Li and his colleagues came up with an unexpected hypothesis for how ferns got their neochromes. Neochromes did not gradually evolve in ancient ferns. Instead, a single lineage of ferns picked up the neochrome gene from hornworts about 180 million years ago. Mr. Li speculates that the transfer took place between a hornwort and a fern growing in intimate contact. Once a fern picked up the neochrome gene, his research indicates, it moved into other fern species as well. It’s possible that acquiring this gene enabled ferns to thrive in dark forests. “The results look to be strong and convincing,” said Jeffrey D. Palmer , an evolutionary biologist at Indiana University. Dr. Palmer has found evidence for DNA moving between plant species, as have other researchers in recent years. Those previous studies suggested that plants sometimes replaced one of their genes with a version from another species. “It’s like swapping out one part of a machine for another part made in another country,” said Dr. Palmer. The fern study, on the other hand, shows that plants have also gained functions by acquiring new genes from other plants. And Dr. Palmer expects that Mr. Li’s study will prompt other researchers to hunt for other cases. “We’re bound to find more,” Dr. Palmer said.

Fay-Wei Li
Flowers and Plants
Genetics and Heredity
Evolution
Kathleen M Pryer


Deutsche Bank Joins Retreat From China

Abstract: Deutsche Bank is joining peers in cashing out of China. The German lender is selling a $3.8 billion, 19.9 percent holding, in Hua Xia Bank to local insurer PICC Property and Casualty. Like such rivals as Goldman Sachs and Bank of America Merrill Lynch before it, Deutsche Bank is crystallizing a solid return — while acknowledging that minority stakes on the mainland are of little use. Given China’s troubles, this is a less-than-ideal time to sell. Shares of the bank, which is listed in Shenzhen, trade at just 6.5 times forward earnings, or 0.9 times book value, both roughly one-third below their 10-year average, Thomson Reuters StarMine data shows. But the foray was still worth the effort. In total, Deutsche Bank invested about 1.3 billion euros from 2006 to 2011. The final sale price will depend on how Hua Xia’s shares trade. But at the midpoint of the stated range, €3.45 billion, plus €400 million or so of previous dividends, Deutsche Bank will have nearly tripled its money on a gross basis. That is not to be sniffed at, even if taxes on dividends and capital gains will presumably cut the net return significantly. Goldman Sachs made about 3.5 times its money investing in Industrial and Commercial Bank of China, albeit over a shorter time frame. Moreover, Deutsche Bank gets a clear capital benefit: a 30- or 40-basis point uplift to its Common Equity Tier 1 ratio, currently at 11.5 percent. Basel III rules make holding small stakes in other financial institutions an extra burden. The German bank is also now off the hook should Hua Xia need shareholders’ help in shoring up its balance sheet. Shareholders will be heartened in other ways, too. Minority positions with little influence, and no prospect of future control, look badly out of place when banks are struggling to make sustainable returns. This holds doubly true given China’s slowdown. The era of Western investment in Chinese banks is not quite over — HSBC is a notable holdout, firmly committed to its stake in Bank of Communications. But further retreats are likely, such as a sale by Standard Chartered of its holding in Agricultural Bank of China. The exodus will go on.

Deutsche Bank
China
Mergers and Acquisitions