news/notes2009.04.24a

[Biography of the Day] from [Britannica]

Barbra Streisand
American entertainer Barbra Streisand—one of the most popular singers of her generation, a star of stage and screen (especially in musicals), and one of the most powerful women in show business—was born this day in 1942.

[On This Day] from [Britannica]

2005: Installation of Pope Benedict XVI
On this day in 2005, Pope Benedict XVI (Joseph Ratzinger), successor to John Paul II, formally assumed his position as the new leader of the Roman Catholic Church during a mass in St. Peter's Square in Vatican City.


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

[BUSINESS NEWS]

Friday, April 24, 2009
\700 billion loss looms for Nomura
（野村ＨＤ：赤字７千億円に拡大）

(Kyodo News) Nomura Holdings Inc. will probably fall into the red in fiscal 2008 with a record group net loss of about 700 billion, sources said Thursday.

Nomura is likely to have incurred the massive loss in the year that ended March 31 due to investment losses that swelled amid the worsening global financial turmoil and costs related to taking over part of the failed U.S. investment bank Lehman Brothers Holdings Inc., the sources said.

The red ink also stemmed from growing evaluation losses on securities holdings, they added.

It will be the second consecutive fiscal year for Japan's largest brokerage to fall into the red. Nomura posted a group net loss of 67.85 billion in fiscal 2007.

Nomura is scheduled to release its fiscal 2008 earnings report Friday.

Together with electronics conglomerate Hitachi Ltd., Nomura's group net loss is likely to be the largest among Japanese firms reporting their fiscal 2008 earnings data. Hitachi is expected to post a group net loss of 700 billion.

By booking hefty losses in its fiscal 2008 earnings report, Nomura is eyeing settling its losses linked with the financial crisis and swinging back into the black at an early date, the sources said.

However, the firm's earnings forecast remains uncertain since the recovery of the global financial market is likely to take time, observers said.

In the January-March period alone, Nomura's consolidated net loss is likely to have been roughly 200 billion, the sources said.

In late January, Nomura said it fell into the red with a group net loss of 492.36 billion for the first nine months of fiscal 2008.

The firm's consolidated earnings results are based on U.S. accounting standards.

Big Mizuho loss seen
Mizuho Financial Group Inc. is expected to incur a group net loss of more than 580 billion in fiscal 2008, sinking into the red for the first time in six years as disposal costs for bad loans surged amid the global economic slump, the financial group said Thursday.

Mizuho, one of Japan's three megabanks, is expected to announce sharp downward revisions to its current earnings forecast of 100 billion in net profit for the year that ended March 31 in the near future, Mizuho said.

With Mizuho's anticipated loss, the nation's three megabanks, which also include Sumitomo Mitsui Financial Group Inc. and Mitsubishi UFJ Financial Group Inc., are now almost certain to report a consolidated net loss for fiscal 2008, Mizuho said.

Financial institutions are widely suffering from deteriorating earnings with higher appraisal losses on shareholdings due to the stock market turbulence and rising bad loans due to the recession.

The deterioration in earnings may have an adverse effect on their lending stance, observers said.

Mizuho is suffering from huge losses in stockholdings in Merrill Lynch & Co., in which it invested about 130 billion. The company intends to accelerate efforts to restore its financial health under the new top managers installed earlier this month at the holding company and two group banks.

Given the deteriorating earnings, major financial institutions have implemented a series of large-scale capital reinforcements to strengthen their narrowing capital bases.

Among them was Sumitomo Mitsui, which announced a fresh capital increase through a public offering worth up to 800 billion. The bank is expected to incur a 390 billion group net loss for fiscal 2008.


[NATIONAL NEWS]

Friday, April 24, 2009
SMAP star's public nudity spurs arrest
（ＳＭＡＰの草：公園で全裸；公然わいせつ容疑で逮捕）
Drunken Kusanagi bares all in Roppongi park, loses sponsors

By MINORU MATSUTANI
Staff writer

What's wrong with a little public nudity?

It's a crime called public indecency. But for pop group SMAP's 34-year-old member Tsuyoshi Kusanagi, it also means angry sponsors and the cancellation of lucrative advertising contracts, including one from the government.

The singer, actor and TV celebrity from the ubiquitous pop group was arrested early Thursday on suspicion of public indecency after stripping down in Hinokicho Park by the tony Tokyo Midtown complex in Roppongi. He was heavily drunk at the time, Akasaka Deputy Police Chief Michitaka Sugahara told reporters.

"The windows were closed, but I heard a man yelling 'Woooo' and 'Ohhhh.' I wondered if my baby would wake up," said a woman who lives nearby.

A naked Kusanagi was found after police received a call from a Tokyo Midtown resident at around 2:55 a.m. complaining about someone making noise in the park and sent three officers to investigate, Sugahara said. When they arrived, they found Kusanagi naked, his clothes and other belongings piled nearby.

"What's wrong with being naked?" Kusanagi reportedly asked the officers as a bystander looked on.

The pop star was wrapped in a sheet and put into a squad car. He was not cuffed at the park, Sugahara added.

Kusanagi lives nearby in one of the complex's luxurious apartments in the entertainment area. He was drinking with two acquaintances in the Akasaka district before the incident, police quoted him as saying. His blood-alcohol level was measured at 0.8 mg per liter and a urine test was negative for drugs, they said.

Akasaka police said they also searched his house to determine his motive for the stripping act and to dig up more details, without elaborating.

"I'm sorry I became naked. I don't remember why I became naked," Kusanagi was quoted as telling police.

SMAP is extremely popular, and Kusanagi is regarded as the quietest and gentlest of its five members. The group also has followings in other parts of Asia, and Kusanagi is known for being able to speak fluent Korean.

The reaction from private and public sponsors was immediate. Toyota Motor Corp. and Procter & Gamble responded by halting all ads featuring the pop star, even his frequent TV commercials.

The Internal Affairs and Communications Ministry, which recruited Kusanagi to promote the nationwide conversion to terrestrial digital broadcasting, said it will immediately stop distributing flyers and posters with Kusanagi in them.

"It's embarrassing. He is a character who is calling for public understanding of the cancellation of analog broadcasting, which will burden the people. I have no choice but to think he is a disgusting person," communications minister Kunio Hatoyama angrily told reporters.

Likewise, the Association for Promotion of Digital Broadcasting has decided to stop airing Kusanagi commercials.

Kusanagi's agent, Johnny and Associates, later in the day released the statement: "We deeply apologize for causing lots of trouble and worry to fans and many other people."

The idol will refrain from entertainment activities for the time being, the company said Thursday evening.

Kusanagi debuted with SMAP in 1991 and later starred in several TV dramas and movies, gaining fame elsewhere in Asia as well, including South Korea.

South Korean media issued news flashes about the star's arrest, describing the event as "shocking." Its two biggest Internet portals said key words tied to the arrest were simultaneously ranked as the No. 1 and No. 2 search terms at one point Thursday.


[NATIONAL NEWS]

Friday, April 24, 2009
Lower House passes bill widening MSDF antipiracy role
（衆院通過：海上自衛隊による新たな根拠法となる海賊対処法案）

By MASAMI ITO
Staff writer

The Lower House passed an antipiracy bill Thursday to create a permanent law enabling the Maritime Self-Defense Force to protect ships of any nationality against pirates, amid strong protests from opposition parties.

The bill passed with the majority vote of the Liberal Democratic Party-New Komeito ruling bloc and was immediately sent to the opposition-controlled Upper House for further deliberation.

Even though the upper chamber is expected to reject the bill, the ruling bloc is still on course to enact the legislation during the current Diet session, which ends June 3, by ramming the legislation through with a second vote in the more powerful Lower House.

During a Lower House special committee on the piracy bill, Prime Minister Taro Aso said its enactment was "an urgent and important issue," and stressed the need to approve it as soon as possible.

Crucially, the bill would relax restrictions on the use of arms and allow the MSDF to fire at pirate vessels that ignore warnings.

"Being an island country, Japan relies heavily on imports of resources, so securing the safety of marine transport is extremely high on the list of priorities," Aso said. "I believe that protecting the lives and goods of Japan is a serious responsibility of the government."

CONTINUED ON news/notes2009.04.24b

news/notes2009.04.24b

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

[NATIONAL NEWS]

Friday, April 24, 2009
Lower House passes bill widening MSDF antipiracy role
（衆院通過：海上自衛隊による新たな根拠法となる海賊対処法案）

By MASAMI ITO
Staff writer

CONTINUED FROM news/notes2009.04.24a

Piracy in the Gulf of Aden off Somalia has increased considerably since last year. According to former Defense Minister Gen Nakatani, 20 vessels have been hijacked by pirates this month alone and 15 boats remain in captivity and 250 crew members and passengers held hostage.

To deal with piracy off Somalia, the government sent two MSDF destroyers last month to patrol the area based on the maritime police provision of the Self Defense-Forces Law. This law, however, limits MSDF activity to escorting vessels connected with Japan, such as Japanese-registered ships or foreign ships with Japanese crew or cargo on board.

"The MSDF activities are extremely limited because they can only protect Japan-related ships," Nakatani said. Japan "cannot protect the ships of other countries under the current law and I heard they are having a difficult time" in Somalia.

The government-sponsored antipiracy bill would enable the MSDF to protect not only Japan-related ships but also foreign vessels.

Under the current law, the MSDF cannot attack pirates except in limited circumstances, such as emergency evacuations or for self-defense. Article 7 of the Police Execution of Duties Law limits the use of arms to incidents deemed necessary, including self-defense or the protection of others, or in making arrests or preventing flights from justice.

However, the Social Democratic Party and Japanese Communist Party expressed strong concern over the relaxation of the use of weapons. JCP lawmaker Seiken Akamine slammed the bill, saying it should be scrapped.

"This is a bill that uses antipiracy measures as an excuse for the SDF to use force abroad and would pave the way for a permanent bill to dispatch the SDF overseas," Akamine said at the Lower House plenary session Thursday. "The bill should definitely be scrapped."

The Democratic Party of Japan, meanwhile, had tried and failed to come to an agreement with the ruling bloc to amend the bill so MSDF dispatches on antipiracy missions would require prior Diet approval.

But the government and the ruling bloc rejected this demand, saying the government may need to swiftly deploy MSDF vessels. The bill requires the prime minister to report to the Diet only after orders have been issued for a dispatch.


[Today's News] from [The Guardian]

British economy shrinks at fastest rate for 30 years
Official figures show GDP fell by 1.9% in the first three months of this year, the sharpest quarterly decline since 1979, the year Margaret Thatcher came to power

Julia Kollewe
guardian.co.uk, Friday 24 April 2009 13.22 BST

The British economy shrank at the fastest rate in 30 years in the first three months of this year, raising fresh doubts over Alistair Darling's budget forecasts just 48 hours after they were announced.

Official figures released this morning showed gross domestic product (GDP) fell by 1.9% between January and March. This is the sharpest quarterly decline since the third quarter of 1979, the year when Margaret Thatcher came to power.

The fall was far worse than the 1.5% decline forecast by City economists. It contradicts the chancellor's claim on Wednesday that the economy shrank "by a similar amount" to the fourth quarter, when it contracted by 1.6%.

The Conservatives were quick to launch a fresh attack on Darling. The shadow chancellor, George Osborne, said: "Just two days ago, the chancellor said his figures for this quarter would be similar to the last quarter – in fact they are worse. This is worrying as it means the recession will be deeper and people will suffer more. This budget has unravelled quicker then any in living memory as we discover a secret tax bombshell, hidden spending cuts and fantasy forecasts on which the government's whole plan for recovery is based."

Analysts were equally critical. ING economist James Knightley said: "Today's GDP report again highlights how optimistic Darling was in his budget assumptions and that the risk to the fiscal deficit remains heavily to the upside."

The downturn is forcing the chancellor to borrow £175bn this year.

The data from the Office for National Statistics (ONS) revealed that economic output in the first quarter was 4.1% less than a year ago, the worst annual decline since the end of 1980.

James Hughes, the chief investment officer at Black Swan Capital wealth management, said the UK economy was "very clearly in serious, serious trouble", with more pain to come.

"Our research suggests that the latter stages of this crisis will be characterised by rapidly escalating inflation and further weakening of sterling, much like the stagflation of the 1970s. The chancellor's forecasts in the budget are now looking even more out of touch," said Hughes.

Darling confirmed on Wednesday that the UK was in the grip of the deepest recession since the second world war as he slashed his GDP forecast for this year to a decline of 3.5%. But he surprised economists by predicting a rapid recovery, saying that the economy would return to growth towards the end of the year and expand by 1.25% in 2010 and by 3.5% in 2011 and the following years. Many analysts believe this is wildly optimistic. The average forecast is for growth of just 0.3% next year.

Yvette Cooper, the chief secretary to the Treasury, said this morning that the government stood by its forecast that the recovery would begin at the end of 2009.

Gloomy views

The breakdown of today's numbers made grim reading. Manufacturing slumped by 6.2% on the quarter, its worst performance since records began in 1948, and overall industrial production including utilities and mining was down 5.5%. The dominant service industries declined by 1.2%, the sharpest fall since 1979, with the financial sector particularly weak.

The Centre for Economics and Business Research calculated today that the economy would contract by at least 4% this year, which would be the largest slide since 1931. The thinktank's economist Benjamin Williamson said: "A contraction of only 3.5% this year as outlined in the budget on Wednesday seems now to be wishful thinking from the chancellor."

The International Monetary Fund takes a similarly gloomy view. It warned two days ago that Britain would be stuck in recession for another year as consumers, reeling from the housing crash, cut spending. The organisation predicted a 4.1% slump for the UK this year and a further 0.4% contraction next year.

However, the IMF backed Darling's claim that Britain would suffer less than other major economies, including Germany and Japan.

The CBI business organisation said today's GDP data showed "how grim the last three months have been". Its deputy-director general, John Cridland, said: "Looking ahead, the best we can say is that the pace of economic decline may slow in the coming months. Given that unemployment will continue rising sharply, even if businesses begin to see the rate of decline in activity starting to ease, consumers are likely to feel anxious about job prospects."

Industry is suffering severely after world trade collapsed, with carmakers hit particularly hard. Industry figures out today showed that the number of new cars produced in the UK fell by more than half in March from a year ago. The 51.3% drop was slightly better than February's record decline of 59%, according to the Society of Motor Manufacturers and Traders. Many manufacturers have moved to shorter working hours or even suspended production.

Sterling came under pressure even before the GDP figures were released, dropping by over 1% against the euro to €1.1062 this morning on fears that the UK may lose its triple-A credit rating because of the scale of public debt outlined in the budget - with Darling forecasting it will reach 79% of GDP by 2013.

A downgrade would make it more expensive for the government to borrow money by selling bonds, potentially leading to further tax rises or cuts in spending.

But Moody's, the ratings agency, said this morning that the UK's AAA rating was "stable, not under review".

There is some optimism that the worst of the slump may now be behind us.

Colin Ellis, European economist at Daiwa Securities, said: "Today's data are undoubtedly bad, and could serve as a rude awakening to anyone who had started dreaming of an eventual recovery (stand up, Mr Brown). Despite this, the marked size of the fall could even end up bolstering hopes that further cuts in output may be less pronounced - because if so much of the adjustment in the economy has already come through, maybe less is required going forwards."

news/notes2009.04.24c

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

U.S. plans to accept several Chinese Muslims from Guantanamo
The Uighurs would be the first detainees from the prison to settle in America. Challenges are expected from China and within the U.S.

By Julian E. Barnes
April 24, 2009

Reporting from Washington -- The Obama administration is preparing to admit into the United States as many as seven Chinese Muslims who have been imprisoned at Guantanamo Bay in the first release of any of the detainees into this country, according to current and former U.S. officials.

Their release is seen as a crucial step to plans, announced by President Obama during his first week in office, to close the prison and relocate the detainees. Administration officials also believe that settling some of them in American communities will set an example, helping to persuade other nations to accept Guantanamo detainees too.

But the decision to release the Chinese Muslims, known as Uighurs, is not final and faces challenges from within the government, as well as likely public opposition. Among government agencies, the Homeland Security Department has registered concerns about the plan.

The move would also incense Chinese officials, who consider the Uighurs domestic terrorists and want those held at Guantanamo handed over for investigation. U.S. officials no longer consider the Chinese Muslims to be enemy combatants and fear they would be mistreated in China.

There are 17 Uighurs (pronounced WEE-gers) at Guantanamo. A U.S. official familiar with the discussions over their release said that as many as seven could be resettled in the U.S., possibly in two or more small groups.

Officials have not said where in the United States they might live. But many Uighur immigrants from China live in Washington's Virginia suburbs, and advocates have urged that the detainees be resettled near people who speak their language and are familiar with their customs.

The release would mark a dramatic turn in the history of the Guantanamo Bay facility, set up in Cuba by the Bush administration as an offshore prison beyond the reach of American law. Intended to hold alleged terrorists captured during the "war on terror," Guantanamo turned into an international symbol of U.S. overreach. At its peak, it held nearly 800 prisoners; about 250 remain.

The Uighurs are primarily from the northwestern steppes of China in a region officially called the Xinjiang Uighur Autonomous Region but known to Uighurs as Turkestan. Beijing, which controls the area, has been criticized by Washington and others for repressing Uighur religious rights and freedoms.

The Uighurs were sent to Guantanamo in 2002 after being captured in Pakistan. Before that, they had gravitated to Afghanistan, where they received firearms training at a camp apparently run by a Uighur separatist.

Some former U.S. officials have said government information indicates that the Uighurs may pose a danger if released. But other officials and human rights organizations insist they pose no threat to Americans.

"It is kind of hard to tell other countries you would like them to accept some of these guys from Guantanamo if you are not willing to accept them," said the U.S. official, who described the internal discussions on condition of anonymity.

The release is a slap in the face to Beijing, which has requested that the Uighur prisoners be repatriated to China to stand trial for separatist activities. In their testimony before the Guantanamo tribunal, the Uighurs admitted that their purpose in going to Afghanistan was to receive military training to fight Chinese rule over Xinjiang.

"If these people are terrorists, they should be punished. If they are not terrorists, the United States should apologize to China for holding them so long and make compensation," said Zhang Jiadong, an expert in terrorism at Fudan University's Center for American Studies. Zhang said, however, that he did not expect the Chinese government to retaliate because it was already widely anticipated in Beijing that the United States would not return the Uighurs to China.

"The [Chinese] foreign ministry will criticize the decision, but there is nothing they can do about it. We're used to the United States being tough with us," Zhang said.

In captivity, the Uighurs filed suit to win their freedom. A U.S. district court in 2008 ordered their release. The decision, appealed by the Bush administration, was overturned by the U.S. Court of Appeals for the District of Columbia. Lawyers for the Uighurs appealed to the Supreme Court.

U.S. officials did not detail what supervision the Uighurs might receive once they are living on their own. But they said the Uighurs would be allowed to live freely.

In 2006, the U.S. released five Uighurs into Albania. After pressure from Beijing, which also urged other countries with Uighur communities not to accept the released detainees, Albania declined to take any more.

The Uighurs oppose the Chinese government but do not consider the U.S. government a direct enemy. Still, many of the Uighurs hold strict views of what is permitted under Islam.

Within the prison, Uighurs are not considered a grave threat and are allowed greater freedom, such as television privileges, than other detainees.

But the TV privileges underscored potential difficulties to come, according to one current and one former U.S. official. Not long after being granted access to TV, some of the Uighurs were watching a soccer game. When a woman with bare arms was shown on the screen, one of the group grabbed the television and threw it to the ground, according to the officials.

Since then, officials at Guantanamo have bolted down the TVs and shown pre-taped programs, editing out any images they thought Uighurs might find offensive.

U.S. officials said they expected any release of former Guantanamo Bay prisoners into the U.S. to generate opposition among Americans.

"It is a very emotional issue," said the official familiar with the internal discussions. "It is all about determining the risk of placing these people into American society."

But the Obama administration's plans reflect the view that, despite expected opposition, the Uighurs would be the easiest detainees to relocate in the U.S.

Sabin Willett, a lawyer for some of the Uighurs in Guantanamo, argued that his clients should be set free immediately. But he said officials should make sure that the Uighurs have some measure of protection from people who might mistakenly consider them a threat.

"I fear political opponents of the Obama administration will try to sow fear and paranoia about the Uighurs," Willett said. "Once America gets a look at our clients, all this mythology will fall away, and America will feel ashamed at the fact they were in prison so long."

U.S. officials have supported Chinese Uighurs who have sought asylum to remain here but are opposed to elements of the Uighur movement. Earlier this week, the Treasury Department froze the assets of a Uighur leader, Abdul Haq. Haq's Eastern Turkestan Islamic Party advocates secession from China and creation of an independent state.

In a statement, the Treasury Department focused on a threat by Haq to attack the 2008 Olympic Games in China, and cited his party's support for Al Qaeda. There have been no allegations that the Guantanamo detainees have been affiliated with Haq.

Human rights advocates read the move against Haq as a diplomatic olive branch to Beijing to blunt the fallout from releasing the Uighurs into the U.S.

Willett, the detainees' attorney, said that of the five former Uighur prisoners released to Albania, four are still there and one has moved to Sweden.

"They have been living peacefully for three years," Willett said.

news/notes2009.04.24d

[Today's Paper] from [The New York Times]

U.S. Said to Seek a Chrysler Plan for Bankruptcy

By MICHELINE MAYNARD and MICHAEL J. de la MERCED
Published: April 23, 2009

DETROIT — The Treasury Department is directing Chrysler to prepare a Chapter 11 bankruptcy filing as soon as next week, people with direct knowledge of the talks said Thursday.

The company faces a deadline of April 30 to come up with a viable business plan supported by its creditors, the United Automobile Workers union, and Fiat, the Italian car company that wants to acquire a stake in Chrysler.

The Obama administration has told Chrysler it will provide up to $6 billion in new financing, on top of the $4 billion in loans it has already given the company, if Chrysler can complete a deal by next Thursday with a cost structure that gives it a chance of survival. The creditors have so far balked at the terms suggested by the Treasury.

But the negotiations have taken a new direction. Treasury now has an agreement in principle with the U.A.W., whose members’ pensions and retiree health care benefits would be protected in the event of a bankruptcy filing, said the people with knowledge of the discussions, who asked for anonymity because they were not authorized to discuss the case.

Moreover, under this outcome, Fiat would complete its alliance with Chrysler while the company is under bankruptcy protection.

Fiat, a company that was struggling this decade, is seeing new opportunities in Detroit’s troubles. Its chief executive, Ser-gio Marchionne, already in Washington for talks on the Chrysler deal in recent days, has raised the possibility of also acquiring the Opel division of General Motors in meetings with United States officials, a top government negotiator said Thursday.

Such a deal, while far from certain, could turn Mr. Marchionne, a lawyer by training, into one of the most prominent auto executives in the world.

During a call with analysts Thursday, Mr. Marchionne said he had not had direct talks with Opel, adding, “Chrysler is my first and foremost objective.”

Mr. Marchionne has long argued that the number of automakers must shrink. “We need to go back to making cars and making money making cars,” he said Thursday.

He said he was not trying to build a new empire, as some analysts have suggested, but rather create a profitable template for the industry. “The obligation is on all of us not to do stupid things,” he added.

But many analysts doubt that Mr. Marchionne can pull off a three-way deal, despite his success at reviving Fiat since he took over five years ago.

The Chrysler talks, with the deadline nearing, are more urgent than any discussions over Opel, particularly in light of the $6.9 billion in Chrysler debt held by the company’s lenders.

Despite any hopes for a smooth outcome from a Chapter 11 filing, there are risks in bankruptcy. Consumers may avoid Chrysler cars because of worries about their quality or resale value.

A bankruptcy filing for Chrysler would most likely wipe out existing equity stakeholders, notably Cerberus Capital Management, which took over the carmaker from Daimler in 2007.

Some analysts questioned whether the Treasury’s steps to direct Chrysler to prepare for bankruptcy were an effort to pressure the lenders to come to an agreement outside the courts.

“You have to proceed as if it’s happening, and in doing so, you may avoid it,” said Jeremy Anwyl, a veteran industry analyst and the chief executive of Edmunds.com, a Web site that offers car buying advice.

The Treasury declined to comment. But an administration official who did not want to be named said, “It should surprise no one that the administration is planning on contingencies, but we remain focused on the goal and engaged with all stakeholders to bring Chrysler and Fiat to a working partnership.”

The U.A.W. declined to comment. A Chrysler spokeswoman, Lori McTavish, said, “As we move forward in this process, we believe it’s important to keep all options open.” She added that Chrysler would continue to work through the end of the month, based on direction given by President Obama’s auto task force, “to secure the support of the necessary stakeholders and reach a successful conclusion that the administration and U.S. Treasury deems appropriate.”

The creditors’ claims are backed by most of Chrysler’s collateral, including plants, brands and equipment, and the senior lenders will argue that they have first claim on those assets — even before repayment of the government’s debt.

The government and the creditors have been trading offers, with new ones likely in coming days. The most recent offer, presented Wednesday, would give the company’s lenders about 22 cents on the dollar, or $1.5 billion, and a 5 percent equity stake in a reorganized Chrysler.

This week a steering committee of the lenders proposed that they receive 65 cents on the dollar, or $4.5 billion, and a 40 percent equity stake.

A committee representing Chrysler’s senior lenders is preparing another counteroffer, people briefed on the matter said.

Chief among the creditors’ concerns is that Fiat is being asked to contribute little to a Chrysler alliance, while lenders and the U.A.W. are being asked to make big concessions, this person said.

Yet fissures have emerged within the Chrysler lending group, a collection of roughly 50 banks and hedge funds. The four major banks — JPMorgan Chase, Citigroup, Morgan Stanley and Goldman Sachs — hold about 70 percent of the roughly $7 billion of Chrysler debt, and they favor striking a deal with the government. Many of the hedge funds, however, are calling for a tougher stance.

The Treasury is also working with General Motors to prepare a possible bankruptcy case, and the terms of a Chrysler filing might offer a glimpse into the shape of a G.M. filing.

G.M. faces a June 1 deadline in its own efforts to draft a restructuring plan. The company said on Thursday that it would idle 13 assembly plants in North America to reduce production by 190,000 vehicles from May through July.

Under the most likely assumptions, Treasury will provide the financing that Chrysler needs to operate while under bankruptcy protection. The Canadian government is also expected to participate in backing the company. The Globe and Mail of Toronto reported the Canadian government’s role on Thursday.

Although Chrysler and Fiat have been discussing an out-of-court agreement, a bankruptcy case would allow Fiat to more easily select the Chrysler assets it wants to preserve.

The approach, which relies upon Section 363 of the federal bankruptcy code, is somewhat similar to what the government is planning in the case of G.M. Then, Chrysler could sell or jettison any assets it did not want to keep and cancel franchise agreements with car dealers it considered superfluous.

news/notes2009.04.24e

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

In Obama's Inner Circle, Debate Over Memos' Release Was Intense
Some Feared That a Partisan Outcry Could Obstruct Larger Agenda

By R. Jeffrey Smith, Michael D. Shear and Walter Pincus
Washington Post Staff Writers
Friday, April 24, 2009

As President Obama met with top advisers on the evening of April 15, he faced one of the sharpest policy divides of his young administration.

Five CIA directors -- including Leon E. Panetta and his four immediate predecessors -- and Obama's top counterterrorism adviser had expressed firm opposition to the release of interrogation details in four "top secret" memos in which Bush administration lawyers sanctioned harsh tactics.

On the other side of the issue were Attorney General Eric H. Holder Jr., Director of National Intelligence Dennis C. Blair and White House counsel Gregory B. Craig, whose colleagues during the campaign recall him expressing enthusiasm for fixing U.S. detainee policy.

Defense Secretary Robert M. Gates had said he supported the disclosures because he saw the information's release as inevitable and because the White House was willing to promise that CIA officers would not be prosecuted for any abuse. Joint Chiefs of Staff Chairman Mike Mullen sided with Gates.

Seated in Chief of Staff Rahm Emanuel's West Wing office with about a dozen of his political, legal and security appointees, Obama requested a mini-debate in which one official was chosen to argue for releasing the memos and another was assigned to argue against doing so. When it ended, Obama dictated on the spot a draft of his announcement that the documents would be released, while most of the officials watched, according to an official who was present. The disclosure happened the next day.

Obama's aides have told political allies that the last-minute conversation, which ended around 9:30 p.m., demonstrated the president's commitment to airing both sides of a debate that was particularly contentious. But it also reflected widespread angst inside the White House that a public airing and repudiation of the harsh interrogation techniques that the last administration sought to keep secret would spark a national security debate with conservatives that could undermine Obama's broader agenda.

Several top aides had argued, for example, that the question of whether to release the memos should be put before a "truth commission," effectively postponing resolution of the issue for months. But Obama vetoed the idea on the grounds that it would create the divisive debate his closest advisers feared -- a viewpoint he reiterated at a meeting with lawmakers yesterday. Craig also argued persuasively, other officials said, that the federal judge in New York overseeing a lawsuit seeking the memos' release was unlikely to approve any significant delay.

Now Obama is being lashed by former Bush appointees and is facing growing pressure to accept such a commission. Some liberal activist groups presented petitions with 250,000 signatures to Holder at a House hearing yesterday, asking him to appoint an independent prosecutor to investigate the originators of the interrogation tactics. Meanwhile, debate is swirling in Washington not only about the merits of the techniques but also about the wisdom of Obama's decision to exercise his unique authority to instantly transform the "top secret" documents into public ones.

This account is based on interviews with more than a dozen officials, some of whom spoke on the condition of anonymity because they are not authorized to talk about the internal deliberations.

Several Obama aides said the president's decision was in line with his frequent criticism during the campaign of President George W. Bush's policies on interrogations at secret prisons. On his second day in office, Obama banned the prisons and the tactics in an executive order.

The aides also said they hope the memos' release will focus public attention on the coldness and sterility of the legal justifications for abusive techniques, with Obama telling reporters in the Oval Office on Tuesday that the documents demonstrate that the nation lost its "moral bearings" in the Bush years.

A source familiar with White House views said Obama's advisers are further convinced that letting the public know exactly what the past administration sanctioned will undermine what they see as former vice president Richard B. Cheney's effort to "box Obama in" by claiming that the executive order heightened the risk of a terrorist attack.

Officials say the process of rolling back the controversial policy began shortly before Obama took office, when the president-elect dispatched half a dozen experts to the CIA for two days of secret briefings in the director's conference room.

At the time, Obama was leaning toward adopting the Army Field Manual rules for intelligence interrogations but wanted to receive a broader perspective. He sent Craig; retired Gen. James L. Jones, now the national security adviser; foreign policy adviser Denis McDonough; former senators David L. Boren (D-Okla.) and Chuck Hagel (R-Neb.); and former CIA general counsel Jeffrey H. Smith to Langley.

During the meetings, then-CIA Director Michael V. Hayden, his deputy Steve Kappes and about 20 other senior CIA officers sought to explain the agency's counterterrorism and rendition programs and to present the best case for retaining the option of reestablishing secret prisons and using aggressive interrogation methods, according to four of those present. Hayden emphasized that the agency had discarded most of the old programs, including the secret prisons, in 2006.

The use of waterboarding ended in 2003, but Hayden said he wanted to keep the flexibility to utilize some of the other, less controversial techniques. Boren and Smith said the group was not convinced that whatever useful intelligence had been gleaned from the programs warranted keeping them as an option.

"They said that they had produced valuable intelligence," Smith said. "We took them at their word." But the group's consensus was that "whatever utility it had at the outset . . . the secret prisons and enhanced techniques were no longer playing a useful role -- the costs outweighed the gains." He said those costs included obvious damage to the nation's values and identity, and problems with U.S. allies that strongly opposed the use of such methods.

Boren, who chaired the Senate intelligence committee from 1987 to 1993 and is now president of the University of Oklahoma, said that attending the briefings was "one of the most deeply disturbing experiences I have had" and that "I wanted to take a bath when I heard it. I was ashamed of it." He said he concluded that "fear was used to justify the use of techniques that violate our values and weaken our intelligence" and that the agency did not prove those methods "are particularly effective at getting the truth."

One of those present said that when asked, the CIA officers acknowledged that some foreign intelligence agencies had refused, for example, to share information about the location of terrorism suspects for fear of becoming implicated in any eventual torture of those suspects. Sources said that Jones shared these concerns and that, as a former military officer, he worried that any use of harsh interrogations by the United States could make it more likely that American soldiers in captivity would be subjected to similar tactics.

The issue of releasing the Justice Department memos, which Craig first reviewed in December, became the focus of attention in mid-March, when the department's lawyers warned the White House of an April 2 federal court deadline that could force their hand. They told Craig they were prepared to offer a legal defense for keeping all or part of the memos secret but warned it would not be a strong case, in part because much of the information was included in a leaked report by the International Committee of the Red Cross summarizing detainee mistreatment.

Craig and others in the White House were aware of the legal and political implications of both partial and full disclosure of the memos, and with the president they began consultations on how to proceed. Meanwhile, the Justice Department received an extension from the court.

In a series of small gatherings over the next two weeks, before Obama went to Europe, he and his staff met with officials from the CIA, the Pentagon, the intelligence director's office, the State Department and the Joint Chiefs of Staff. A full National Security Council meeting and another gathering of principals followed, in which Cabinet members met in the White House situation room and were later joined by the president. Obama continued to huddle with aides on the topic during breaks in his European trip.

A key last-minute debate emerged over whether to redact details of the interrogation methods while releasing the legal explanations underpinning the approvals. Panetta had no objection to disclosing the analysis but "strongly opposed declassification of their operational content," according to an intelligence official. His fear was that it would plant doubts in foreign governments about the U.S. ability to shroud collaborative activities, and he predicted -- accurately -- that it would lead to calls for more investigations.

CONTINUED ON news/notes2009.04.24f

news/notes2009.04.24f

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

In Obama's Inner Circle, Debate Over Memos' Release Was Intense
Some Feared That a Partisan Outcry Could Obstruct Larger Agenda

By R. Jeffrey Smith, Michael D. Shear and Walter Pincus
Washington Post Staff Writers
Friday, April 24, 2009

CONTINUED FROM news/notes2009.04.24e

Gates told reporters yesterday that he "was quite concerned, as you might expect, with the potential backlash in the Middle East and in the theaters where we're involved in conflict, and that it might have a negative impact on our troops. All that said, you know, we just had a significant investigation release by the Senate Armed Services Committee. . . . And so there is a certain inevitability, I believe, that much of this will eventually come out; much has already come out. . . . I think all of us wrestled with it for quite some time, in terms of where we were on it."


[Today's Papers] from [Slate Magazine]

The Unending Abuse Trail

By Daniel Politi
Posted Friday, April 24, 2009, at 6:51 AM ET

The Los Angeles Times leads with news that the administration will be releasing photographs of alleged abuses of detainees in Iraq and Afghanistan next month. Late yesterday, administration lawyers informed a judge in New York that the government will release 44 photographs that the American Civil Liberties Union had demanded as part of a lawsuit, plus a "substantial number" of other images, by May 28. The Washington Post leads with a long look at the internal debate between White House officials that preceded the release of the four memos detailing CIA interrogation tactics. In deciding whether the memos should be released, President Obama faced "one of the sharpest policy divides of his young administration," reports the paper.

The New York Times leads, and the Wall Street Journal goes high, with word that the government has ordered Chrysler to prepare for a bankruptcy filing as early as next week. Under the current negotiations, Chrysler would file for bankruptcy even if it manages to reach a deal with creditors, the United Workers Union, and Fiat. The WSJ leads its world-wide newsbox with, while the LAT and NYT front, U.S. officials and Pakistani politicians calling on Pakistan's military to unleash its full force against the Taliban militants who have taken over the Buner district, which is a mere 70 miles from the capital. The Taliban forces in Buner easily beat back a government militia that was deployed to the area to take back the government buildings. USA Today leads with a new poll that shows Obama has managed to maintain good approval ratings while also improving his image with the American people. The percentage of Americans who see Obama as a "strong and decisive leader" has increased 12 points since October, while the view that he is an effective manager has gone up by 11 points. Overall, 56 percent say he has done an "excellent" or "good" job since moving into the White House, while 20 percent give him a "poor" or "terrible" rating. As good as his numbers may be, his wife beat him hands down with 79 percent saying they approve of the way Michelle Obama is handling her job as first lady.

According to Pentagon investigators who have seen the photographs that the administration will release next month, the images won't be as shocking as the infamous Abu Ghraib photographs, but officials at the Defense Department are still "concerned that the release could incite another backlash in the Middle East," reports the LAT. Apparently some of the images, which were all taken between 2001 and 2006, show American service members threatening detainees by pointing weapons at them, an action that has previously resulted in military officers being court-martialed. The release of the photos will undoubtedly ramp up calls to investigate abuses during the Bush administration and is only the first of several potentially controversial disclosures that could be coming up in the near future. Over the next few weeks, the administration will have to decide whether to release a 2004 CIA inspector general's report about the interrogation program, transcripts of interrogations, and materials relating to a Justice Department investigation into detainee abuse. The ACLU also wants the administration to release any documents that describe what was in the destroyed CIA videotapes.

The LAT notes that while Obama "has tried to walk a fine rhetorical line" in releasing some information but urging against a full-fledged investigation, he actually may have "managed to anger both constituencies." As confusion reigns about whether Obama really wanted an investigation or not, the NYT fronts a look at how he met with Democratic leaders Wednesday night to urge against a special inquiry because it would distract from his agenda. Yesterday, Senate Majority Leader Harry Reid said he doesn't even want to discuss an independent commission until the Senate Intelligence Committee completes its own investigation. That sentiment, echoed by other Democratic leaders, though not House Speaker Nancy Pelosi, makes it extremely unlikely that an independent commission will be formed anytime soon. The hearings of the Senate committee investigation will be closed, and it could take six to eight months to complete. It's still far from clear how much of that investigation would be made public.

The intense debate that preceded the release of the memos displays the "widespread angst inside the White House," as the WP puts it, that the release would launch a debate over national security that could quickly get out of control. But several White House advisers appear eager to release information about what the previous administration allowed, partly to undermine Dick Cheney's efforts to claim that the banning of secret prisons and harsh interrogation tactics puts the country at risk. That process to repudiate the previous administration's policy began before Obama took office, when he sent six experts to the CIA for secret briefings that lasted two days. David Boren, a former Democratic senator from Oklahoma who was no stranger to classified briefings (having chaired the Senate Intelligence Committee for six years), said those two days amounted to "one of the most deeply disturbing experiences I have had. I wanted to take a bath when I heard it. I was ashamed of it." At those briefings, CIA officials apparently acknowledged that some foreign intelligence services had refused to give information about terror suspects to the United States out of fear that they could be implicated in their eventual torture.

Assuming Chrysler can reach a deal with its lenders, the automaker's bankruptcy would make it easier to "rid itself of some liabilities," notes the WSJ. Such a move would also allow Fiat to "pick and choose" what parts of Chrysler it wants. If such an orderly bankruptcy actually becomes a reality, it "would represent a measure of success for the Obama administration," declares the Journal. But if no deal is reached, then the company would have to begin liquidating. The NYT gets word that the Treasury Department has reached "an agreement in principle" with the union to protect pensions and retiree health care benefits if Chrysler goes into bankruptcy. The WSJ says UAW agrees with the bankruptcy plan and would probably end up owning "a sizable stake" in the restructured Chrysler.

In a surprise move, the WSJ reports that Fiat is now in talks with General Motors "about joining forces in Europe and Latin America." The NYT also hears word that Fiat has raised the possibility of buying GM's Opel division during talks with U.S. officials. Fiat's CEO, Sergio Marchionne, denied he had direct talks with Opel and emphasized that Chrysler is his first priority. But it's clear that Fiat "is seeing new opportunities in Detroit's troubles." Many doubt Marchionne will be able to make so many deals so quickly, but he could very well be on track to become "one of the most prominent auto executives in the world," declares the NYT. Indeed, the WSJ points out that even the possibility that Fiat and GM may join forces, "opens the door to a restructuring of much more global scope than the car makers and Obama administration had envisioned." The Journal sees this as a potentially positive step "toward the kind of large-scale consolidation that long has been overdue" in the car industry.

CONTINUED ON news/notes2009.04.04g

news/notes2009.04.24g

[Today's Papers] from [Slate Magazine]

The Unending Abuse Trail

By Daniel Politi
Posted Friday, April 24, 2009, at 6:51 AM ET

CONTINUED FROM news/notes2009.04.24f

Even as Taliban forces set up checkpoints in Buner to consolidate their control over the area, and were spotted in areas that are even closer to the capital, the government only sent over "poorly paid and equipped constabulary forces," notes the NYT. This despite the fact that Pakistan has a 500,000-strong military that receives huge financial backing from the United States. But the military remains focused on fighting a conventional war with neighboring India, and Pakistani generals are reluctant to pull troops from the border. Even if they were deployed to fight the Taliban, however, it's far from clear whether they could be successful, since they aren't trained in counterinsurgency operations. The LAT points out that no one knows whether such a diverse country can even agree to wage a full-out war against Taliban militants.

The WSJ reports that the recent developments in Pakistan have led U.S. officials to reconsider a closer alliance with former Prime Minister Nawaz Sharif, a man that the United States has never been too fond of because of his ties to Islamist political parties. But now, U.S. and European officials believe that these ties could be an asset because it might be easier for him to convince the Pakistani people of the need to confront the Taliban. U.S. officials have appreciated President Asif Ali Zardari's willingness to not raise too much of a ruckus about the drone attacks in the border areas, but they're growing convinced that he doesn't have what it takes to wage a successful war against the Taliban.

The LAT off-leads word that the Obama administration is getting ready to release as many as seven Chinese Mulims, known as Uighurs, from Guantanamo into the United States. The decision is far from final and would face huge opposition, not only from Americans but from the Chinese government, which considers the Uighurs to be domestic terrorists and wants the 17 that are still being held in Guantanamo to face investigations in China. The Homeland Security Department has raised concerns about the plan, but the Obama administration considers it a crucial step in its move to close down Guantanamo and to persuade other countries to take in detainees. It's not clear what kind of supervision they could be under in the United States, but officials said they would be allowed to live freely.

The NYT 's Paul Krugman writes that investigating and prosecuting the abuses of the Bush administration shouldn't be seen as a "luxury we can't afford," because the United States is a "nation of moral ideals." Even though the government had previously done things that go against these ideals, "never before have our leaders so utterly betrayed everything our nation stands for." It's true there are a lot of other problems in the world, but "laws aren't supposed to be enforced only when convenient." And, besides, any investigation wouldn't consume the entire administration. "We need to do this for the sake of our future," writes Krugman. "For this isn't about looking backward, it's about looking forward—because it's about reclaiming America's soul."

In USAT's poll, 2 percent of people say that getting first dog Bo was the best thing Obama has done as president, while 1 percent say it was the worst. "Those people are cats," White House adviser David Axelrod said.