news/notes2009.04.16a

[Biography of the Day] from [Britannica]
Sir Peter Ustinov
English actor, director, playwright, and humanitarian Sir Peter Ustinov, who was born this day in 1921, made more than 70 films in Rome, Hollywood, and London during an acclaimed career that spanned some six decades.

[On This Day] from [Britannica]
1912: Harriet Quimby's flight across the English Channel
On this day in 1912, American aviator Harriet Quimby became the first woman to fly across the English Channel, guiding her French Blériot monoplane through heavy overcast from Dover, England, to Hardelot, France.


[TODAY'S TOP STORIES] from [The Japan Times]

[NATIONAL NEWS]
Thursday, April 16, 2009
Grimmer pension forecast released　
（年金：納付率改善ないと現役５割の給付無理　厚労省試算）

By MINORU MATSUTANI
Staff writer

The government will probably renege on its pledge to keep pension benefits in fiscal 2038 at a minimum of 50 percent of a worker's average income, a paper released Tuesday by the welfare ministry says.

Holding the line at 50 percent has been a key pledge by the government and Liberal Democratic Party-New Komeito ruling coalition.

The revised estimate is almost certain to draw fresh criticism from experts and opposition lawmakers, who have argued that the pension plan is based on overly optimistic assumptions.

In its scenario published in February, the ministry assumed an 80 percent compliance rate among all residents obliged to pay into the basic pension system in fiscal 2038.

This is far higher than the 65 percent paying into the system. If the trend continues, pensioners in 2038 will receive in benefits about 49 percent of the average income being made by working-age people in that year, the Health, Labor and Welfare Ministry admitted in a paper released to the press Tuesday.

The ministry did not reveal in February that the estimate was based on 80 percent compliance, ministry official Keisuke Menda told The Japan Times Wednesday. That figure is actually the Social Insurance Agency's compliance target.

In 2009, the ministry estimates the average pension for retirees who have paid into the "kosei-nenkin" corporate pension system will be 223,000, or 62.3 percent of the 358,000 average monthly after-tax income of working-age people. Part of the corporate pension system comes from the basic pension system.

Until 1996, the compliance figure was above 80 percent, but has fallen steadily amid a rapidly rising elderly population and a falling birthrate.

The ministry released the new estimates Tuesday after Democratic Party of Japan lawmakers questioned the reliability of the February figures.


[NATIONAL NEWS]
Thursday, April 16, 2009
Weekly deems Asahi murder memoir false, sets apology
（朝日新聞阪神支局襲撃：新潮編集長、誤報認める）

(Kyodo News) Weekly magazine Shukan Shincho has admitted a memoir it published by a man who claimed responsibility for a fatal 1987 shooting at the daily Asahi Shimbun's Hanshin bureau is false.

In its April 23 edition, the magazine will apologize in a 10-page article titled "How 'Shukan Shincho' was cheated by the 'false attacker' " for running the false memoir.

The man suddenly changed his statement and said he is not the attacker, according to the article, which was written by Shukan Shincho's editor, Kiyoshi Hayakawa.

The magazine didn't make a sufficient effort to substantiate the man's statement, Hayakawa said in the article. "We are deeply ashamed of the fact that we did not have the acute observation to see the real nature of the mendacious man, and for hurting public trust toward magazine journalism," he said.

According to the article, Shukan Shincho in November 2007 began corresponding with the man, who was serving time in Abashiri Prison in Hokkaido. The man had written to the magazine's editorial department implying he was connected to the high-profile shotgun attack on the newspaper's bureau. The man wrote about 50 letters to the magazine over the course of a year, the article said.

Reporters working on the article visited the man in January 2008 and interviewed him nearly 200 hours. He was freed in January, the article said.

The magazine carried his memoir as a four-part series starting with the Feb. 5 issue because it believed it had considerable credibility, Hayakawa said, denying making up any of its contents.

The Asahi Shimbun concluded the memoir was "a lie" after conducting its own examination and requested an apology from the publisher of the magazine.

The article said rightwing activists started raising questions after the first part of the memoir was published. The magazine's reporters, however, began suspecting something was amiss with the man's personal history and his story after doing some belated fact-checking.

"What Shukan Shincho did is akin to selling poisoned dumplings. If they were a food firm, they could go bust," writer Shinichi Sano said. "They already knew that the man was suspicious right after the first article came out, but they ran the entire four parts, which is a sign the magazine lacked crisis management. . . . What the readers want to know is the truth, and they will not forgive this."

Information about the man who provided the memoir, including his identity and the crime he served time for, was not provided. At the time of the slaying, reports suggested police suspected the attack was rightist-inspired.


[NATIONAL NEWS]
Thursday, April 16, 2009
Top court issues groping acquittal
（痴漢事件：最高裁初の逆転無罪 「司法への不信ぬぐえた」）
Professor 'thankful' of being cleared in first appeal to overturn upheld molestation conviction

(Kyodo News) The Supreme Court has acquitted a college professor of groping a high school girl on a train, marking the first time the top court has overturned a guilty verdict in a molestation case.

The Tuesday ruling by the Third Petty Bench overturned lower court rulings that threatened to put Masahiro Nagura, a professor of Japanese intellectual history at National Defense Medical College, in prison for 22 months.

Nagura, 63, has been suspended from teaching since the indictment. He said after the ruling that the top court's verdict "rid me of the feelings of distrust I had against the judicial system. . . . I couldn't stop crying. All I was able to say to my wife was 'Thanks.' "

"I'm thankful for the not-guilty verdict on my case. But I have no appropriate words to express my feelings about people who have been branded as criminals (through wrongful accusations) and their families," he said.

The case turned on the credibility of the girl's testimony, which three of the five justices found fault with.

According to the majority opinion of the court, it was unnatural for the girl, who testified that the groping began before the Odakyu Line train arrived at Seijogakuenmae Station, to get off the train and board it again at the same station, and then to stand near the professor.

However, Justice Mutsuo Tahara, who presided over the bench, and another justice dissented, saying the girl's testimony was "trustworthy."

"It's regrettable (the top court) denied that the victim's testimony was credible. But we will take the court's decision seriously," said Masayuki Ikegami, head of the division in charge of trials at the Supreme Public Prosecutor's Office.

Yukiko Tsunoda, a lawyer knowledgeable about sexual crimes targeting women, said the ruling was "based on ancient and false assumptions" that a woman who pleads that she has been sexually assaulted tends to make false statements. "The girl has no reason to make up a story that she has been molested," Tsunoda said.

The top court called on the lower courts to make "a careful judgment" in cases involving groping on packed trains because it is often difficult to gather objective evidence and the depositions by the alleged victims tend to serve as the only evidence.

This is the first opinion presented by the Supreme Court on how to examine a groping case, and it is expected to influence future investigations and decisions, observers said.

According to Nagura's lawyer, there have been more than 30 molestation cases across the nation in which the accused was acquitted since 1998.

Looking back on the past three years since his arrest in April 2006, Nagura said he "feels resentment" at the way the lower courts handled the case, asking, "How dare they make light of a person's life?"

Nagura said that after the high court handed him a 22-month prison term, the presiding judge told him he "still had the Supreme Court" to appeal to if he wanted to continue the battle.

Nagura was charged with molesting the girl, who was then 17, on the morning of April 18, 2006.

According to Nagura, the girl grabbed his tie without warning and screamed, "This person is a groper!"


[Sports: MLB] from [cnnNEWS]

Griffey, Ichiro reach milestones for Mariners
（イチロー：３０８５安打…満塁弾でタイ記録）

(AP Sports Writer) SEATTLE -- Now Ken Griffey Jr. truly is back. And so is Ichiro Suzuki.

Suzuki had two hits in his season debut following his first career stint on the disabled list, including his first grand slam in six years during a seven-run seventh inning, to tie Isao Harimoto's Japanese record with hit No. 3,085.

news/notes2009.04.16b

[Today's News] from [The Guardian]

Damian Green will face no charges in leaks row
CPS says there is insufficient evidence to charge shadow immigration minister in connection with leaks of information from the Home Office

Damian Green, the Conservative immigration spokesman, will not be charged in relation to his involvement in the leaking of information from the Home Office, it was announced today.

The announcement from the Crown Prosecution Service ends an ordeal that began more than four months ago when Green was arrested and held for nine hours on suspicion of collaborating with Christopher Galley, a junior Home Office civil servant, in leaking information to the Tories.

Galley will not face any charges either, the CPS announced.

In a short statement outside parliament today, Green described the affair as "the first arrest of an opposition politician for doing his job since Britain became a democracy".

He put the blame directly at the door of the government in a clear signal that the Tories intend to use the affair for political advantage.

"I cannot think of a better symbol of an out-of-touch authoritarian failing government that has been in power for too long," he said.

Today's decision is embarrassing for Jacqui Smith, the home secretary, whose department decided to call in the police after an internal inquiry failed to find the source of more than 20 leaks.

But today Smith defended the decision to ask the police to investigate leaks from her department. It would have been "irresponsible to take no action", she said.

Speaking in Glasgow, where the cabinet is meeting today, Smith said: "In the Home Office we deal with some of the most sensitive information in government that relates to terrorism, it relates to serious organised crime. It's our responsibility to make sure that information is kept safe."

In a statement, Keir Starmer, the head of the CPS and director of public prosecutions, said that although there was evidence that the leaks "damaged the proper functioning of the Home Office", there was no evidence that national security was put at risk.

"I have concluded that the information leaked was not secret information or information affecting national security. It did not relate to military, police or intelligence matters. It did not expose anyone to rise of injury or death. Nor, in many respects, was it highly confidential.

"Much of it was known to others outside the civil service, for example the security industry or the Labour party or parliament. Moreover, some of the information leaked undoubtedly touched on matters of legitimate public interest that were reported in the press."

Starmer said that as a result there was insufficient evidence for a prosecution to have a realistic chance of success.

But he said this did not mean that, in other circumstances, the leaking of similar information could not constitute a criminal offence.

A spokesman for Green said that the MP was "delighted with the announcement".

"The police need now to learn the lessons from their operation. There was no necessity to arrest Mr Green, he should have been asked to attend the police station voluntarily. No credible reason has been advanced for the covert tape recording of him from arrest to arrival at the police station, and then failing to reveal this to him and me.

"The police themselves have now referred this to the surveillance commissioner. The search of his parliamentary office in the way it took place was highly questionable and no proper regard was given to issues of parliamentary privilege."

The Green arrest caused outrage at Westminster, where opposition MPs have routinely used information leaked from within Whitehall to embarrass the government. Many MPs were also angered by the fact that police were allowed to raid Green's office in the House of Commons without a warrant.

That move was criticised by the Commons home affairs committee today, which said in a report that government officials had given "an exaggerated impression of the damage done by the leaks" in a letter asking the police to intervene.

Green has always insisted that, in releasing leaked information to the media, he was merely doing his job as an opposition MP in holding the government to account.

Following the announcement, former Liberal Democrat leader Sir Menzies Campbell demanded a full inquiry into the circumstances that led to Green's office in the Commons being raided. MPs narrowly voted down a proposal for a committee without a Labour majority to conduct such an inquiry.

"There is now no sensible obstacle to a full parliamentary inquiry into the circus which allowed police officers to raid Damian Green's offices, except the government's silly and partisan requirement that any such committee must have a government majority," Campbell said.

"The government only defeated my amendment to delete that requirement by four votes.

"It should now accept the spirit and the letter of the amendment and let an inquiry get under way as soon as possible by senior MPs chosen by the Speaker."

The Commons did vote for an inquiry to be carried out by a committee with a Labour-majority. But the Tories and the Lib Dems have said they will not participate because they think it will be biased in favour of the government.

When considering whether to press charges, the CPS considered whether Galley could be charged with the offence of misconduct in public office and whether Green could be charged with conspiring with Galley to commit misconduct in public office, and aiding, abetting, counselling or procuring the alleged misconduct in public office offence.

news/notes2009.04.16c

[Today's Paper] from [Los Angeles Times]

Empty Florida homes may return to nature

By Richard Fausset
April 16, 2009

Reporting from Tampa, Fla. -- The Georgetown apartment complex was one of this city's most coveted properties back in 2005. Now Greg Chelius and Alex Size were touring it as if examining an exotic ruin.

They walked past the unmanned guardhouse and its broken windows. Size snapped photos with a digital camera. Chelius lifted the green fabric on a fence tacked with No Trespassing signs.

Building after building loomed in the near distance, all of them quiet and vacant. From Chelius' vantage, it was difficult to judge their condition.

"We heard they were in such bad shape they'd have to be taken down," he said.

"It depends on the drywall," Size replied. "And the rot. And the mold."

They walked the eastern edge of the property, stopping at a place where they could glimpse -- through a thicket of weeds and Brazilian pepper trees -- the blue water of Old Tampa Bay, lapping at the property's edge.

As if on cue, a circling pelican dive-bombed for a fish.

"It's just outstanding," Chelius said.

These two men have big plans for the Georgetown property, 160 acres on the southwest side of the Tampa peninsula. But they are not planning to build.

Chelius is state director for the Trust for Public Land. Size is from the nonprofit's St. Petersburg office. Because of the steep decline in property values here, they believe they have a chance to help local government purchase and preserve this stretch of waterfront. A few months ago, it was slated to be covered with luxury condominiums, "mansion" town houses and single-family homes.

Instead, Chelius and Size spoke about the native plants that could be restored -- the sabal palmetto palm, the seagrape trees, the three native species of mangrove. With the vegetation would come more native animals, more birds.

"We're sort of like the un-developers right now," Chelius said, smiling.

Florida and California are what Gary R. Mormino, a historian at the University of South Florida in Tampa, calls the two great American "dream states," where surf and sunshine have lured generations with the promise of a better life.

Where Americans dare to dream, they have also dared to gamble on real estate, and the history of both states has been shaped by cycles of boom and bust.

Florida's dream-state status has led to intense fluctuations in the value of its land, and the fortunes of those who would gamble on it: One historian of the 1920s housing bubble there called it the "greatest speculative frenzy in history." More recently, an analyst at Goldman Sachs called Florida the "epicenter" of the nation's current housing bust.

Georgetown was the kind of dream that defined much of Florida's post-World War II growth -- a workingman's idyll, paradise on the cheap.

Built in the early 1960s by a child of the Great Depression named Ralph Kaul, it offered a clean, if unassuming, place to live and modest rents. There was a swimming pool, a clubhouse and a plain-Jane marina -- and of course that postcard-perfect view of the bay.

By 2005, however, a more glamorous Florida dream fueled by borrowed money and unbridled optimism was set to overtake Georgetown.

Few imagined that the new dream would dissolve so spectacularly. By 2007, the state led the nation in foreclosures and unsold inventory, and neighborhoods like southwest Tampa were left with half-realized and abandoned projects.

A development planned for a few blocks away, called New Port, still has a website that promises "restaurants and cafes, residential balconies, boutiques, offices, verdant parklands, gardens, trails. . . ." Today it is in foreclosure; the land is an empty lot. Nearby, work on the gated Westshore Yacht Club has been indefinitely suspended. The developer is in bankruptcy.

And then there is Georgetown, which could now revert -- at least in part -- to the untended field of mangroves that it was when Ralph Kaul first laid eyes on it.

Kaul's widow sold the Georgetown apartments at the market's dizzying peak. The place isn't her problem anymore. Yet Virginia Kaul bristles with frustration when she drives by.

"I have to keep telling myself, 'We don't own it anymore,' " she said. "But I wish they had torn it down. It's just sad."

Ralph Kaul, an experienced developer from the Washington, D.C., suburbs, began looking for places to build in Florida after losing a 1960 race for an Arlington, Va., congressional seat.

He arrived in Tampa at a time when the city was struggling to grow into a major metropolis. The region's signature cigar industry had been on the wane for decades, and civic leaders were campaigning for new kinds of business.

They didn't have trouble luring people. During World War II, soldiers stationed at MacDill Airfield, at the tip of the Tampa peninsula, got a taste of the sun and the sand. After the war, many returned, and other Americans followed.

Tampa didn't have many large apartment complexes, so Kaul decided to build one. He spent $1 million on an empty tract on the western side of the Tampa peninsula, next to a trailer park.

The first phase of Georgetown was a row of brick town houses with colonial touches. It was a hit from the start, attracting young families and empty nesters, government workers and grocery clerks.

"They had a waiting list a mile long, and a screening process," recalled Diana Watson, 71, who moved to Georgetown in 1974. "The apartments were beautiful, big and nice. . . . We loved it there."

Kaul married Virginia in 1976, two years after the death of his first wife, and moved to Florida full time. He was a wealthy man; they could have lived anywhere. But he preferred to live among his tenants in a Georgetown apartment. He built hundreds more units, and filled in enough of the bay to effectively triple his acreage.

Kaul died at Georgetown in 2002. And Virginia watched as Tampa's real estate soared. Middle-class homeowners were doubling their money on housing, then buying more property in hopes of doubling it again.

Developers turned their attention to southwest Tampa, one of the last stretches of waterfront that had not yet been upscaled and super-sized. Georgetown became the subject of a fierce bidding war. Bill Eshenbaugh, a real estate agent who calls himself "The Dirt Dog," got cocky when a client offered $100 million.

"I thought someone would send a limo to take me to lunch for that offer," he recalled. "All I got was a phone call from the broker, who said, 'You're not even close.' "

The winning bid of $125 million was submitted in April 2005 by a group of Delaware-based limited partnerships. Their public face was the Motta Group, a Fort Lauderdale developer with experience building luxury resorts.

Their plan was to tear down Georgetown and replace it with a "true waterfront retreat" called the Westshore Beach Club, with more than 1,200 condos and town homes. Its high-end buildings would be built in a neo-traditional Southern cottage style.

Meanwhile, the market was getting shaky. Eshenbaugh said speculators across Tampa had begun canceling contracts for unbuilt condos months earlier; by 2007, he said, "it was full-blown panic on the residential side."

In September 2008 -- 11 months after the new owners emptied Georgetown of its tenants -- their lenders, a consortium of four banks including LaSalle Bank NA (now owned by Bank of America) began foreclosure proceedings, later accusing the owners of failing to make paymentson their $89-million loan. The banks bought back the property in December, paying little more than $2 million at a bankruptcy auction.

Chelius, of the Trust for Public Land, hopes Bank of America will agree to split up the Georgetown property and let county taxpayers buy the bayfront portion to preserve as a park.

A private developer could buy the buildings, he said, fix them up and rent them as "workforce housing" -- until the market for luxury homes eventually picks up again.

Hillsborough County voters recently extended an environmental lands acquisition program that has been in place since 1987, allowing for the purchase of 6.5% of the land in the county.

Much of that has been in rural areas. City officials say Georgetown is a rare chance to pick up land in the city -- and, even more remarkably, along the water.

"The vast majority of our waterfront has been captured for development," said Mark Huey, Tampa's economic development administrator. "I mean -- look at our downtown. It's bounded on three sides by water, but you'd have a hard time getting to it."

Kaul's daughter doesn't know what her father would make of the idea of Georgetown becoming a park. "His background was in economics," Judith Kaul said. "He was a realist. . . . He wasn't an environmentalist."

As Chelius walked back to Size's Toyota Prius, he alluded, a little mischievously, to the fact that the federal government is now the largest investor in Bank of America, having given the company billions in recent months to help it manage its bad debt.

"It would be nice to have the public benefit from those dollars," Chelius said.

He didn't know what the property was worth, but he assumed that it was "losing value every day." The bank would be wise to sell soon, he said.

He also acknowledged that the environmentalists would need to act fast. In a past life, Chelius was a Florida real estate agent.

He knows that sooner or later, a property like this one will get hot again.

news/notes2009.04.16d

[News Alert] from [The New York Times]

Deals Help China Expand Its Sway in Latin America

By SIMON ROMERO and ALEXEI BARRIONUEVO
Published: April 15, 2009

CARACAS, Venezuela — As Washington tries to rebuild its strained relationships in Latin America, China is stepping in vigorously, offering countries across the region large amounts of money while they struggle with sharply slowing economies, a plunge in commodity prices and restricted access to credit.

In recent weeks, China has been negotiating deals to double a development fund in Venezuela to $12 billion, lend Ecuador at least $1 billion to build a hydroelectric plant, provide Argentina with access to more than $10 billion in Chinese currency and lend Brazil’s national oil company $10 billion. The deals largely focus on China locking in natural resources like oil for years to come.

China’s trade with Latin America has grown quickly this decade, making it the region’s second largest trading partner after the United States. But the size and scope of these loans point to a deeper engagement with Latin America at a time when the Obama administration is starting to address the erosion of Washington’s influence in the hemisphere.

“This is how the balance of power shifts quietly during times of crisis,” said David Rothkopf, a former Commerce Department official in the Clinton administration. “The loans are an example of the checkbook power in the world moving to new places, with the Chinese becoming more active.”

Mr. Obama will meet with leaders from the region this weekend. They will discuss the economic crisis, including a plan to replenish the Inter-American Development Bank, a Washington-based pillar of clout that has suffered losses from the financial crisis. Leaders at the summit meeting are also expected to push Mr. Obama to further loosen the United States policy toward Cuba.

Meanwhile, China is rapidly increasing its lending in Latin America as it pursues not only long-term access to commodities like soybeans and iron ore, but also an alternative to investing in United States Treasury notes.

One of China’s new deals in Latin America, the $10 billion arrangement with Argentina, would allow Argentina reliable access to Chinese currency to help pay for imports from China. It may also help lead the way to China’s currency to eventually be used as an alternate reserve currency. The deal follows similar ones China has struck with countries like South Korea, Indonesia and Belarus.

As the financial crisis began to whipsaw international markets last year, the Federal Reserve made its own currency arrangements with central banks around the world, allocating $30 billion each to Brazil and Mexico. (Brazil has opted not to tap it for now.) But smaller economies in the region, including Argentina, which has been trying to dispel doubts about its ability to meet its international debt payments, were left out of those agreements.

Details of the Chinese deal with Argentina are still being ironed out, but an official at Argentina’s central bank said it would allow Argentina to avoid using scarce dollars for all its international transactions. The takeover of billions of dollars in private pension funds, among other moves, led Argentines to pull the equivalent of nearly $23 billion, much of it in dollars, out of the country last year.

Dante Sica, the lead economist at Abeceb, a consulting firm in Buenos Aires, said the Chinese overtures in the region were made possible by the “lack of attention that the United States showed to Latin America during the entire Bush administration.”

China is also seizing opportunities in Latin America when traditional lenders over which the United States holds some sway, like the Inter-American Development Bank, are pushing up against their limits.

Just one of China’s planned loans, the $10 billion for Brazil’s national oil company, is almost as much as the $11.2 billion in all approved financing by the Inter-American Bank in 2008. Brazil is expected to use the loan for offshore exploration, while agreeing to export as much as 100,000 barrels of oil a day to China, according to the oil company.

The Inter-American bank, in which the United States has de facto veto power in some matters, is trying to triple its capital and increase lending to $18 billion this year. But the replenishment involves delicate negotiations among member nations, made all the more difficult after the bank lost almost $1 billion last year.

China will also have a role in these talks, having become a member of the bank this year.

China has also pushed into Latin American countries where the United States has negligible influence, like Venezuela.

In February, China’s vice president, Xi Jinping, traveled to Caracas to meet with President Hugo Chávez. The two men announced that a Chinese-backed development fund based here would grow to $12 billion from $6 billion, giving Venezuela access to hard currency while agreeing to increase oil shipments to China to one million barrels a day from a level of about 380,000 barrels.

Mr. Chávez’s government contends the Chinese aid differs from other multilateral loans because it comes without strings attached, like scrutiny of internal finances. But the Chinese fund has generated criticism among his opponents, who view it as an affront to Venezuela’s sovereignty.

“The fund is a swindle to the nation,” said Luis Díaz, a lawmaker who claims that China locked in low prices for the oil Venezuela is using as repayment.

Despite forging ties to Venezuela and extending loans to other nations that have chafed at Washington’s clout, Beijing has bolstered its presence without bombast, perhaps out of an awareness that its relationship with the United States is still of paramount importance. But this deference may not last.

“This is China playing the long game,” said Gregory Chin, a political scientist at York University in Toronto. “If this ultimately translates into political influence, then that is how the game is played.”

news/notes2009.04.16e

[Today's Newspaper] fom [The Washington Post]

Bank Test Results May Strain Limits Of Bailout Funding
Much Rides on Size of Capital Needs

By David Cho
Washington Post Staff Writer
Thursday, April 16, 2009

As the Obama administration works to complete its stress tests for gauging the health of major banks, it could confront another problem: how to pay for shoring up any weaknesses the tests reveal.

No one yet knows the extent of the banks' needs. But a senior administration official said yesterday this will be clear once tests on the nation's 19 major banks are done and the results are released early next month.

The administration would be hard-pressed to ask Congress for more rescue funds to plug the holes. Anger on Capitol Hill is high, especially after the furor over bonuses paid to employees at American International Group. The troubled insurer had earlier received more than $170 billion in bailout funds.

But if the capital requirements of banks prove large, the government may need billions of dollars in federal aid back from strong financial firms, which have received that money within the past few months. The administration may even have to carve money from other rescue programs being funded from the $700 billion bailout program.

The task of coming up with money underscores the difficulties posed by the next phase of the government's immense effort to stabilize the financial markets.

Some senior officials say they worry that allowing strong banks to return their bailout funds would stigmatize the firms that couldn't, scaring off their investors. Treasury officials overseeing the rescue effort are willing to take that chance, believing that the risk of such bank runs has receded in recent months as the financial system has become more stable, a senior administration official said.

The official noted that while Wall Street executives have expressed worries about what the government will reveal about their internal conditions in the stress test, the markets have reacted positively as the date of the stress test results has approached. For instance, shares of banks both weak and strong have risen in recent weeks.

The official added that some banks will be able to convert federal aid received last year into common stock, providing these firms the most important kind of capital they need. For that reason, some may not require new government investments.

Still, the stress tests could show that the needs of the 19 banks are substantial, requiring administration officials to rely on bailout money being returned or even scale back other federal programs, government sources said on condition of anonymity because the stress tests are still in their early phases.

Over the past few months, administration officials have outlined ambitious plans that leave them with $32 billion unallocated from the $700 billion financial rescue package -- far less than what officials expect to need for a new round of bank aid, the government sources said.

Treasury officials say they may have as much as $110 billion left over because some of the initiatives are not drawing as much as participation as expected. Many firms have grown wary of taking federal aid, which requires them to cede a measure of control to the government and limit executive pay.

In particular, a program to revive consumer lending, initially projected to soak up $100 billion in bailout funds, may only require $55 billion. The first round of direct government investments into banks, an initiative developed by the Bush administration, was projected to cost $250 billion, but may reach only $218 billion, even after including upcoming help anticipated for some ailing insurance companies.

The Treasury Department also has a contingency plan in case a major financial firm collapses or the shortfall at the large banks proves far greater than anyone in the government now expects. In an emergency, the Treasury can move money out of previously announced programs. Currently, only $303 billion out of the $700 billion bailout program has been disbursed, officials said.

Treasury officials say they conservatively project that at least $25 billion will be returned by recipients of government aid after the stress tests' results are unveiled. In recent weeks, several big firms have said they will pay back their money. Among them are Goldman Sachs, which received $10 billion, and J.P. Morgan Chase, which accepted $25 billion.

Some analysts and officials worry that as strong banks return their government aid, other banks will feel pressured to overextend themselves in order to follow suit. Meanwhile, the weakest banks would be left behind and tarnished.

A senior administration official said no firm will be allowed to pay back money without regulators ensuring that the bank is healthy and able to continue making loans to support economic recovery.

Even if companies begin returning taxpayer money, some analysts and officials say the government may not have enough firepower to accomplish all the goals of the bailout effort, which include buying banks' toxic assets, stabilizing the banking system, reviving consumer lending and helping struggling homeowners and small businesses.

Senior administration officials have said it is likely they may need to ask Congress for more money, but they say such a request probably wouldn't come anytime soon.

In addition, a firestorm over $165 million in bonuses paid to a troubled division of AIG has made the task of asking for more money extremely difficult, officials said.

The senior administration official said fears over another firm melting down like AIG -- whose near collapse last fall threatened the entire financial system -- has significantly diminished. The government demonstrated it will prevent any of the nation's most important banks from failing, spending a total of more than $90 billion to prop up Citigroup and Bank of America.

The stress tests will also help assure the markets that no other major bank will face a fate similar to AIG.

The tests aim to identify the precise areas of need within the banks and provide targeted capital to heal those businesses, the senior official said. They also will provide a clear view of the firms' problems, helping to dispel the uncertainty hanging over the financial system.

"The penalty for opacity or lack of clarity is almost always worse than the truth," the official said.

news/notes2009.04.16f

[Today's Papers] from [Slate Magazine]

Taking On the Drug Cartels

By Daniel Politi
Posted Thursday, April 16, 2009, at 6:56 AM ET

The Washington Post leads with news that, on the eve of his visit to Mexico, President Obama imposed financial sanctions against three Mexican drug cartels by adding them to the list of foreign "drug kingpins." The move not only allows the government to seize the cartels' assets but also makes it easier to prosecute any American who provides support to the organizations. The Los Angeles Times also leads with Mexico but takes a look at how the country has quickly "arisen as a foreign policy emergency" for Obama, who is likely to face pressure from Mexican leaders to move beyond talk of friendship and provide concrete help in several areas that go beyond the drug war. The New York Times leads with a look at how China is working hard to increase its influence in Latin America by offering much-needed capital to struggling countries in the region. After years of being ignored by the Bush administration, many are snapping up the large amounts of money being offered by China, which has quickly grown into the region's second largest trading partner. "This is how the balance of power shifts quietly during times of crisis," a former Commerce Department official said.

USA Today leads with a controversial new article by two Army mental health researchers who say the military is focusing too much of its efforts in identifying mild cases of traumatic brain injury among combat veterans, at the expense of other medical problems. This has led many common symptoms to be identified as the result of TBI when they're more likely due to other problems, such as depression and post-traumatic stress disorder. The Wall Street Journal leads its world-wide newsbox with Obama's vow to simplify what he described as the "monstrous tax code" and notes that the White House is considering a plan that would free up to 40 percent of Americans from having to file tax returns. The announcement came on the same day as thousands of Americans gathered at "tea parties" across the country to protest against the president's policies.

It normally takes a year to add names to the "drug kingpins" list, but the White House accelerated the effort to include the three Mexican cartels, Sinaloa, Los Zetas, and La Familia Michoacana, to send a clear message that the Obama administration supports President Felipe Calderón's efforts to fight the organizations that are responsible for much of the violence in the country. The administration is still in the process of identifying assets held by the cartels, which some say means the move is largely symbolic. Still, a Treasury official insisted that it's just as important that now any business or individual who knowingly does business with one of the cartels could face stiff penalties. In the past, the "drug kingpins" list has been used to fight Colombian drug traffickers.

The drug-related violence in Mexico has killed more than 10,000 people in the last couple of years, and Calderón has asked the United States to take concrete action against weapons traffickers as well as combat Americans' "insatiable demand for illegal drugs," as Secretary of State Hillary Clinton put it when she visited Mexico last month. And while Mexicans know the drug war has overshadowed everything else, they still want the Obama administration to focus on immigration reform as well as trade issues. Ultimately, they're unlikely to be satisfied by Obama's visit, which the LAT describes as "largely symbolic." And symbolism is exactly what Mexicans don't want right now, particularly since they feel like all they got during the Bush administration were "little pats on the back," as former Mexican President Vicente Fox said. So far it seems the White House has no desire to get into a fight with the gun lobby and push to reinstate an assault weapons ban that lapsed during the Bush administration.

The article by Army mental health researchers has raised objections from many who say identifying and treating traumatic brain injury is crucial. The premise is more than a little surprising, considering that the usual story line had been that the Pentagon wasn't paying enough attention to the issue. But now the two authors of the study say the Pentagon and Department of Veterans Affairs have gone too far in the other direction and should get rid of the questionnaires that are meant to identify TBI in troops returning from combat. They claim TBI is often blamed for symptoms that are more likely due to other issues, such as depression and substance abuse, so there should be a bigger focus on identifying and treating the symptoms rather than expending so much energy on identifying whether they're due to a mild case of TBI.

The NYT fronts word that a National Security Agency eavesdropping program went beyond its legal limits and captured e-mails and phone calls between Americans in recent months. Officials say the practice of "overcollection" was significant, but it may have been unintentional. The Justice Department acknowledged the problem had been discovered and said changes have been ordered to the program. Investigators are still trying to determine whether anyone's privacy was violated, but they caution that just because the NSA obtained access to the communications doesn't automatically mean that agents were listening in on conversations or reading e-mail messages. The NYT waits until the ninth paragraph to mention that a separate Justice Department investigation has discovered that the NSA tried to wiretap a member of Congress without a warrant on an overseas trip a few years ago. Apparently it was believed that the lawmaker was in contact with an extremist who was already a target of the surveillance program. The plan was never carried out.

While many have been eager to describe the G20 meeting and, to a lesser extent, the standoff with pirates off the Somali coast as Obama's first test on the world stage, the WP's David Ignatius says the administration's first real diplomatic test came last month in Pakistan. That was when opposition leader Nawaz Sharif joined a "long march" to demand that the government restore the country's deposed chief justice. The ensuing violence could have led to a military coup, but all sides backed down just in time, largely thanks to a settlement that was brokered by members of the Obama administration, including Secretary of State Hillary Clinton. "This intervention was deftly handled," writes Ignatius, "but it deepened America's involvement in Pakistani politics—a process that is creating a dangerous anti-American backlash."

Everyone notes that Obama and his wife reported a combined income of $2,656,902 in 2008, and they paid $855,323 in taxes. They were entitled to receive a $26,000 refund, but chose to apply it to next year's income taxes. The vast majority of the first couple's income came from the sale of Obama's books, which had already made them more than $4.1 million in 2007. These figures put Obama "in the top tier of nonfiction writers in terms of income from book sales," declares the WP. The Obamas reported donating about 6.5 percent of their adjusted gross income to 37 charities. The White House also released the tax returns for Vice President Joe Biden and his wife, who reported an income of about $270,000, and claimed around $1,900 in charitable deductions, less than 1 percent of earnings.

The NYT looks into one very crucial question: Does first dog Bo know he's famous? Answer: No. Some dog lovers beg to differ. "Oh, they know they're famous, and they definitely get an attitude," said the owner of a bichon frisé who won Westminster. But animal psychologists say there's no way Bo knows he's a star. "Dogs don't know fame," one psychology professor said. But since he's probably getting lots of attention from the first family, "that might be equivalent to fame. He might think he has groupies."