Obama Asks Bush to Provide Help for Automakers

By JACKIE CALMES

WASHINGTON — The struggling auto industry was thrust into the middle of a political standoff between the White House and Democrats on Monday as President-elect Barack Obama urged President Bush in a meeting at the White House to support immediate emergency aid.

Mr. Bush indicated at the meeting that he might support some aid and a broader economic stimulus package if Mr. Obama and Congressional Democrats dropped their opposition to a free-trade agreement with Colombia, a measure for which Mr. Bush has long fought, people familiar with the discussion said.

The Bush administration, which has presided over a major intervention in the financial industry, has balked at allowing the automakers to tap into the $700 billion bailout fund, despite warnings last week that General Motors might not survive the year.

Mr. Obama and Congressional Democratic leaders say the bailout law authorizes the administration to extend assistance.

Mr. Obama went into his post-election meeting with Mr. Bush on Monday primed to urge him to support emergency aid to the auto industry, advisers to Mr. Obama said. But Democrats also indicate that neither Mr. Obama nor Congressional leaders are inclined to concede the Colombia pact to Mr. Bush, and may decide to wait until Mr. Obama assumes power on Jan. 20.

Separate from his differences with Mr. Bush, Mr. Obama has signaled to the automakers and the unions that his support for short-term aid now, and long-term assistance once he takes office, is contingent on their willingness to agree to transform their industry to make cleaner, more energy-efficient vehicles.

A week after Mr. Obama’s election, and more than two months before he takes office, the steadily weakening economy and the prospect of many more job losses are testing his effort to remain aloof from the nation’s business on the argument that “we only have one president at a time.”

As the auto industry reels, rarely has an issue so quickly illustrated the differences from one White House occupant to the next. How Mr. Obama responds to the industry’s dire straits will indicate how much government intervention in the private sector he is willing to tolerate. It will also offer hints of how he will approach his job under pressure, testing the limits of his conciliation toward the opposition party and his willingness to stand up to the interest groups in his own.

G.M.’s shares tumbled on Monday to 1946 prices, closing down 23 percent to $3.36, as analysts downgraded the stock on worries it would soon run out of cash and shareholders would be wiped out by any federal bailout.

read more...

On Plane, Obama Reaches Across the Aisle

By Peter Baker

CHICAGO – It was another day on the speculation roller coaster.

Not long after leaving the White House on Monday afternoon, President-elect Barack Obama talked by telephone on his plane with Senator Richard G. Lugar, a Republican from Indiana.

Aha! So maybe Mr. Obama really is considering Mr. Lugar for secretary of state, as many in Washington have been assuming. But wait. Mr. Lugar’s office said the conversation Monday had nothing at all to do with the Cabinet.

“It was not about secretary of state,” Andy Fisher, a Lugar spokesman, said in an e-mail message. “Lugar is not interested (as he explains repeatedly). Nothing about that position was discussed during the call. They discussed ways in which they will continue to work on a number of foreign policy fronts as Lugar continues his Republican foreign policy leadership in the Senate.”

The call to Mr. Lugar was one of three Mr. Obama made after visiting President Bush at the White House, then stopping for a private, 40-minute meeting at a fire station at the airport. Aides would not describe whom he met with. It’s a fair guess that he may have been meeting with a candidate for the Cabinet. But then again, that’s also just a guess.

In this transition period, reporters are literally left trying to read tea leaves. And even lips. At one point on the plane, Mr. Obama stood in the aisle in the front, one leg up on a seat, a mobile phone pressed to his ear and faced toward the back, where the pool of reporters following him around was located. The reporters strained to hear what he was saying. A few snatches of his end of the conversation were audible:

“I am not going to be spending too much time in Washington over the next several weeks,” he was overheard telling the other person on the phone.

“I don’t want us to go lurching so far in one direction,” he said at another point.

“If we come up with some good solid sensible options … ” he said a little later.

What he was referring to was yet another mystery. After a couple minutes, Robert Gibbs, Mr. Obama’s adviser and soon to be his White House press secretary, noticed that the reporters were intently listening and jumped to his feet to tell the president-elect, who then turned around so that he could not be overheard.

Mr. Gibbs later came back to talk to reporters and joked about blocking for Mr. Obama. The overheard call, he said, was not the one with Mr. Lugar.

Obama Team Weighs What to Take On First

By PETER BAKER

WASHINGTON — With the economy in disarray and the nation’s treasury draining, President-elect Barack Obama and his advisers are trying to figure out which of his expansive campaign promises to push in the opening months of his tenure and which to put on a slower track.

Mr. Obama repeated on Saturday that his first priority would be an economic recovery program to get the nation’s business system back on track and people back to work. But advisers said the question was whether they could tackle health care, climate change and energy independence at once or needed to stagger these initiatives over time.

The debate between a big-bang strategy of pressing aggressively on multiple fronts versus a more pragmatic, step-by-step approach has flavored the discussion among Mr. Obama’s transition advisers for months, even before his election. The tension between these strategies has been a recurring theme in the memorandums prepared for him on various issues, advisers said.

“Every president is tempted to take on too much,” said one Obama adviser, who spoke on condition of anonymity to discuss internal deliberations. “On the other hand, there’s the Roosevelt example and the L.B.J. example, which suggest an extraordinary president can do an awful lot. So that’s the question: Is it too risky for the president to be ambitious?”

Much of the issue may be out of Mr. Obama’s hands. The $700 billion financial bailout threatens to push the deficit into the stratosphere. “The poor man has his hands tied by the economic and financial mess we have right now,” said John Tuck, a former aide to President Ronald Reagan. “I don’t know what his options are. They’re very, very limited.”

At a news conference Friday and again in a radio address on Saturday, Mr. Obama signaled that he intended to move quickly to address the nation’s financial problems, despite any obstacles. “I want to ensure that we hit the ground running on Jan. 20,” he said on Saturday, “because we don’t have a moment to lose.”

The argument for an aggressive approach in the mold of Franklin D. Roosevelt or Lyndon B. Johnson is that health care, energy and education are all part of systemic economic problems and should be addressed comprehensively. But Democrats are discussing a hybrid strategy that would push for a bold economic program and also encompass other elements of Mr. Obama’s campaign platform, even if larger goals are put off.

Congressional leaders want to move swiftly in January to pass a major expansion of the State Children’s Health Insurance Program — a plan vetoed by President Bush — as a step toward the broader coverage Mr. Obama promised. Likewise, Democrats plan to incorporate his proposed middle-class tax cuts in the economic legislation or pass them in tandem. And Mr. Obama could increase investment in alternative energy as a down payment on a far-reaching climate plan.

read more...

Obama Calls for Stimulus Package

By JEFF ZELENY

CHICAGO — President-elect Barack Obama approached the lectern Friday for his first news conference since winning the election. He smiled as he looked out at a large retinue assembled from around the world, and paused for a moment before saying, “Oh wow.”

With that, Mr. Obama began the first nationally televised appearance of his new role. Since Election Day, he had been seen only in faraway shots as he dashed from the gym or walked to a meeting. But when he arrived at a hotel ballroom here, flanked by a team of economic advisers, Americans caught their first glimpse of the 44th president at work.

“I do not underestimate the enormity of the task that lies ahead,” Mr. Obama said, his voice slow and controlled. “Some of the choices that we make are going to be difficult. And I have said before and I will repeat again: It is not going to be quick and it is not going to be easy for us to dig ourselves out of the hole that we are in.”

Mr. Obama called on Congress and the Bush administration to pass an economic stimulus package. If an agreement cannot be reached this month in the lame-duck Congressional session, he said, it will be his chief goal when he takes office on Jan. 20.

He said it was an “urgent priority” to extend unemployment insurance benefits for workers who could not find jobs in the bleak economy. He also said he would give aid to states, create new jobs and move forward with his tax-cut plans for middle-class families.

The session was limited to about 20 minutes, and Mr. Obama took nine questions. His answers were purposefully crisp — and, at times, laced with humor — and his presentation stood in contrast to previous news conferences, where he would often devote much more time to a question.

Mr. Obama fielded a variety of questions, including one about the kind of dog he would get for his two daughters in the White House. (“Obviously, a lot of shelter dogs are mutts like me,” he said.) He said that he was studying the writings of Abraham Lincoln and that he had spoken to previous presidents.

“I’ve spoken to all of them that are living,” Mr. Obama said. “I didn’t want to get into a Nancy Reagan thing about, you know, doing any séances.”

A few hours later, Mr. Obama was on the telephone with Mrs. Reagan to “apologize for the careless and offhanded remark.” A spokeswoman for Mr. Obama, Stephanie Cutter, said he and Mrs. Reagan had a warm conversation.

But the overall tone of the news conference reflected the challenges Mr. Obama faces.

Mr. Obama said he would defer to President Bush and his economic team on major decisions in the next 74 days, saying, “The United States has only one government and one president at a time.”

He pledged to find ways to help the struggling automobile industry and invited Gov. Jennifer M. Granholm of Michigan to join his economic advisory board.

Mr. Obama, who stood a few feet in front of an array of economic advisers as well as Vice President-elect Joseph R. Biden Jr. and Representative Rahm Emanuel, the new White House chief of staff, offered no new specifics about what he intended to do to curb the economic crisis. But the stagecraft of the news conference, held after a closed-door meeting of Mr. Obama’s economic advisers, was intended to show that he was hard at work in search of solutions.

read more...

Jihadi Leader Says Radicals Share Obama Victory

By MICHAEL SLACKMAN and SOUAD MEKHENNET

DUBAI, United Arab Emirates — The leader of a jihadi group in Iraq argued Friday that the election of Barack Obama as president represented a victory for radical Islamic groups that had battled American forces since the invasion of Iraq.

The statement, which experts said was part of the psychological duel with the United States, was included in a 25-minute audiotaped speech by Abu Omar al-Baghdadi, leader of the Islamic State of Iraq, an umbrella organization that claims ties to Al Qaeda. Mr. Baghdadi’s statement was posted on a password-protected Web site called Al Hesbah, used to disseminate information to Islamic radicals.

In his address, Mr. Baghdadi also said that the election of Mr. Obama — and the rejection of the Republican candidate, Senator John McCain — was a victory for his movement, a claim that has already begun to resonate among the radical faithful. In so doing Mr. Baghdadi highlighted the challenge the new president would face as he weighed how to remove troops from Iraq without also giving movements like Al Qaeda a powerful propaganda tool to use for recruiting.

“And the other truth that politicians are embarrassed to admit,” Mr. Baghdadi said, “is that their unjust war on the houses of Islam, with its heavy and successive losses and the continuous operations of exhaustion of your power and your economy, were the principal cause of the collapse of the economic giant.”

The audio statement came amid a very public discussion in the Middle East over what Mr. Obama’s election meant for the future — and what it said about the past. Most of the public reaction, in newspapers and on television and radio stations, was euphoric, with many commentators marveling at the election of a black man whose father was from a Muslim family. There was a general assessment that Mr. Obama’s election was a repudiation of the course taken by President Bush and his inner circle over the past eight years.

“Obama’s election was a message against such destruction, against unjustified wars, wars that are fought with ignorance and rashness, without knowledge of their arenas or the shape of their surroundings,” wrote Ghassan Charbel in Thursday’s issue of the Saudi-owned, pan-Arab daily newspaper Al Hayat. “It was a message against the pattern that became a burden on the U.S. and transformed the U.S. into a burden on the world.”

Some even pointed to Mr. Obama’s election as a lesson to the rest of the region. In Kuwait, Sheik Hamed al-Ali, an Islamic scholar known for his support of jihadi fighters, posted a message titled “We Want Change!” on his Web site.

Sheik Ali said, “It remains the obligation of our Islamic nation to benefit from this example and request change, also, and to get rid of any regime that leads with ignorance and injustice, plunders from the country, enslaves the worshipers, drives us to destruction.” The comments were then circulated on other Islamic Web forums.

But there was also a growing chorus of caution, as commentators began to try to tamp down expectations of any change in American policies in the region. And other commentators echoed Mr. Baghdadi’s view that the election was a victory for the insurgents in Iraq, the Taliban in Afghanistan, Hamas in the Gaza Strip and Hezbollah in southern Lebanon.

“It would be no exaggeration to say that we Arabs and Muslims were the main unseen voters who decided the outcome of these elections,” wrote Abdelbari Atwan in Wednesday’s issue of the London-based pan-Arab daily newspaper Al Quds Al Arabi.

He wrote, “The transformation that will begin in the U.S. starting today in various political, economic, military, and social domains may well have been delayed for decades, had the new American century been crowned with victory, and had the situation in Iraq and Afghanistan taken the directions sought by the neo-cons — in other words, had there been political stability and economic prosperity, and had the citizens of the two countries targeted by the U.S.’s designs been totally subjugated by it.”

Mr. Baghdadi also used his address to offer Mr. Obama an unlikely deal, one certain to do little to bring any resolution to the conflict between radical Islamic groups and the United States. He offered a truce of sorts in exchange for the removal of all forces from the region.

“On behalf of my brothers in Iraq, Afghanistan, Somalia and Chechnya, I offer you what is better for you and us: you return to your previous era of neutrality, you withdraw your forces, and you return to your homes,” Mr. Baghdadi said. “You do not interfere in the affairs of our countries, directly or indirectly. We in turn will not prevent commerce with you, whether it is in oil or otherwise, but with fairness, not at a loss.”

read more...

Russia Aims to Be High on Obama’s Agenda

By HELENE COOPER

WASHINGTON — To the extent that he focused on Russia at all, Barack Obama’s attention was concentrated primarily on the need to keep Soviet nuclear weapons stockpiles out of the hands of terrorists.

But now, President Dmitri A. Medvedev of Russia has thrown down a gauntlet intended to demonstrate to the American president-elect that the post-cold war era may not be so post after all.

On Wednesday, while leaders around the world were falling over themselves to hail Mr. Obama’s election, Mr. Medvedev delivered a harsh welcome-to-the-new-cold-war speech in Moscow.

He never mentioned Mr. Obama by name, but Mr. Medvedev said he would deploy short-range missiles near Poland capable of striking NATO territory if the United States pressed ahead with plans to build a missile defense shield in Europe, something that Mr. Obama has said he supports.

Mr. Medvedev put Mr. Obama on notice on the Georgia crisis as well, vowing that “we shall not retreat in the Caucasus.”

Even his one-paragraph congratulatory telegram to Mr. Obama was brusque. “I hope for a constructive dialogue with you, based on trust and consideration of each other’s interests,” Mr. Medvedev wrote.

“It was a giant, ‘Hey, welcome to the game,’ ” said George Friedman, chief executive at Stratfor, a geopolitical risk analysis company. “While Obama would like to deal sequentially with Iraq, Afghanistan and, when he gets to it, the Russians, the Russians themselves want to be a burning issue at the top of his list.”

Mr. Obama, for his part, has yet to respond to the Russian chest-thumping, and he probably will not do so until after his inauguration, his advisers said.

“We only have one president at a time,” Mr. Obama said during a news conference on Friday, responding to a question about whether he would soon meet with foes of the United States. “I want to make sure that we are sending the world one message.”

Since winning the election, the Obama team has taken pains not to say anything publicly that could signal Mr. Obama’s thinking on the many major foreign policy issues lined up before him.

The reasons are twofold.

Many of those advisers are privately hoping for positions in his administration, and they do not want to jeopardize their chances by talking freely with reporters.

More significantly, Mr. Obama himself is still making the transition from campaign oratory — and in the case of Russia, very strong campaign oratory — to the more nuanced approach that many advisers say will be necessary for him to navigate what are bound to be contentious relationships.

But some of his comments during the campaign may already have boxed him in.

When Russia invaded Georgia in August, Mr. Obama’s initial response, drafted just before he left for vacation in Hawaii, was nuanced, urging both nations to exercise restraint. His statement was similar to the State Department’s initial, equally nuanced response, which also did not immediately blame Russia.

The Republicans’ presumptive nominee, Senator John McCain, responded with a hard-line approach, saying that Russia had crossed “an internationally recognized border into the sovereign territory of Georgia” and should “unconditionally cease its military operations and withdraw all forces.”

When the McCain camp criticized Mr. Obama’s response as too measured, Mr. Obama hardened his position. His next statement accused Russia of encroaching on Georgia’s sovereignty. The next day, he said that Russia bore responsibility for the escalation.

By the time of the presidential debates in the fall, Mr. Obama had moved even closer to Mr. McCain on Russia and Georgia, voicing support for Georgia’s entry into NATO, a line in the sand that Russia had dared the West to cross.

Stephen Sestanovich, who was President Clinton’s ambassador at large for the former Soviet Union from 1997 to 2001, said that Mr. Obama’s election may have caused some disquiet in Russia.

“This is a leadership that is not super-comfortable with grass-roots politics,” Mr. Sestanovich, a senior fellow with the Council on Foreign Relations who advised the Obama campaign, said of the Russians. “I had a Russian friend e-mail me right afterwards, a short e-mail, and one of the one-word sentences used was ‘envy.’ So that’s how a real democracy works.”

Mr. Obama has options to distance himself from his hawkish remarks on Russia during the campaign, foreign policy experts said. For one thing, while he can continue to support the idea of Georgia becoming part of NATO, the reality is that for now the Europeans will not go along.

Beyond that, Mr. Obama could try to strike more benign agreements that Russians might find soothing, like pushing again for Russia’s entry into the World Trade Organization and working with Moscow toward a way out of the missile defense morass. One possibility would be to offer to delay deployment of a missile shield in Poland until an Iranian nuclear threat — which Washington says is its reason for existing — has actually materialized, instead of doing so immediately.

The Bush administration might even lend a hand; it offered several new proposals to the Russians on Friday, including an offer for Russian military officials to inspect the new installations planned in Poland and the Czech Republic for the new missile defense system.

What Mr. Obama will not be able to do, foreign policy experts said, is cede the former Soviet republics and satellites in Eastern Europe back into the orbit of what the Russians like to call their near abroad.

It is a full plate, and all a long way from Mr. Obama’s first dip into Russia policy, when he joined the Senate’s Foreign Relations Committee and traveled to Russia, Ukraine and Azerbaijan on a 2005 summer tour with Senator Richard Lugar of Indiana, the Republican foreign policy statesman.

At the Council of Foreign Relations later, the men described their trip, during which they hiked through nuclear weapons storage sites, picked through piles of mortar rounds and land mines, and toured missile elimination facilities.

Mr. Obama deferred to Mr. Lugar often, according to people who attended the session; it was clear, they said, who was the old foreign policy hand, and who was the junior senator. Shortly after, Mr. Obama joined Mr. Lugar in introducing legislation designed to keep stockpiles of weapons in the former Soviet Union from getting into the hands of terrorists.

Mr. Obama’s focus on “loose nukes,” foreign policy experts say, seems almost quaint today.

For Obama, No Time to Bask in Victory As He Starts to Build a Transition Team

By PETER BAKER and JEFF ZELENY

President-elect Barack Obama began moving Wednesday to build his administration and make good on his ambitious promises to point the United States in a different direction, as his commanding victory reordered the American political landscape and transfixed much of the nation and the world.

A day after becoming the first African-American to capture the presidency, Mr. Obama announced a transition team and prepared to name an ally as his White House chief of staff in his first steps toward assuming power. President Bush vowed to work closely with Mr. Obama to ensure a smooth transition in the first handover since the attacks of Sept. 11, 2001.

Representative Rahm Emanuel of Illinois, the fourth-ranking House Democrat and a close friend of Mr. Obama’s from Chicago, has been offered the job of chief of staff, and although he was said to be concerned about the effects on his family and giving up his influential role on Capitol Hill, many Democrats said they expected him to accept it. Mr. Obama named John D. Podesta, the former Clinton White House chief of staff, to lead his transition team along with Valerie Jarrett, a longtime adviser, and Pete Rouse, his Senate chief of staff.

In turning to Mr. Emanuel and Mr. Podesta, Mr. Obama sought out two of the hardest-hitting veterans of President Bill Clinton’s administration, known for their deep Washington experience, savvy and no-holds-barred approach to politics. Neither is considered a practitioner of the “new politics” that Mr. Obama promised on the campaign trail to bring Republicans and Democrats together, suggesting that the cool and conciliatory new president is determined to demonstrate toughness from the beginning.

Mr. Obama stayed largely out of sight on Wednesday as Democrats counted their gains and Republicans stewed over what went wrong. The scope of his success underscored the nation’s discontent with Mr. Bush’s presidency. Mr. Obama captured an estimated 52 percent of the popular vote and 349 electoral votes to John McCain’s 46 percent and 162 electoral votes, with Missouri and North Carolina still too close to call.

Mr. Obama also ushered in a wave of Democrats who strengthened his party’s hold over Congress, picking up at least five seats in the Senate and 19 in the House. Republican senators in Alaska, Minnesota and Oregon were still clinging to razor-thin leads, including Ted Stevens of Alaska, fresh from his conviction on seven felony counts of failing to disclose $250,000 in gifts and services he received.

But the crowds had barely drifted out of Grant Park in Chicago after an exuberant late-night celebration of Mr. Obama’s triumph before the rising sun brought fresh signs of the daunting burdens to come.

read more...

Obama Is Elected President as Racial Barrier Falls

By ADAM NAGOURNEY

Barack Hussein Obama was elected the 44th president of the United States on Tuesday, sweeping away the last racial barrier in American politics with ease as the country chose him as its first black chief executive.

The election of Mr. Obama amounted to a national catharsis — a repudiation of a historically unpopular Republican president and his economic and foreign policies, and an embrace of Mr. Obama’s call for a change in the direction and the tone of the country.

But it was just as much a strikingly symbolic moment in the evolution of the nation’s fraught racial history, a breakthrough that would have seemed unthinkable just two years ago.

Mr. Obama, 47, a first-term senator from Illinois, defeated Senator John McCain of Arizona, 72, a former prisoner of war who was making his second bid for the presidency.

To the very end, Mr. McCain’s campaign was eclipsed by an opponent who was nothing short of a phenomenon, drawing huge crowds epitomized by the tens of thousands of people who turned out to hear Mr. Obama’s victory speech in Grant Park in Chicago.

Mr. McCain also fought the headwinds of a relentlessly hostile political environment, weighted down with the baggage left to him by President Bush and an economic collapse that took place in the middle of the general election campaign.

“If there is anyone out there who still doubts that America is a place where all things are possible, who still wonders if the dream of our founders is alive in our time, who still questions the power of our democracy, tonight is your answer,” said Mr. Obama, standing before a huge wooden lectern with a row of American flags at his back, casting his eyes to a crowd that stretched far into the Chicago night.

“It’s been a long time coming,” the president-elect added, “but tonight, because of what we did on this date in this election at this defining moment, change has come to America.”

The focus shifted quickly on Wednesday to the daunting challenges facing the president-elect, with his supporters offering sober reflections of what lies ahead.

“We’re in deep trouble,” said Rep. John Lewis, a Georgia Democrat and leader in the civil rights movement, on the Today show on NBC.

“We’ve got to get our economy out of the ditch, end the war in Iraq and bring our young men and women home, provide health care for all our citizens,” Mr. Lewis said. “And he’s going to call on us, I believe, to sacrifice. We all must give up something.”

Mr. McCain delivered his concession speech under clear skies on the lush lawn of the Arizona Biltmore, in Phoenix, where he and his wife had held their wedding reception. The crowd reacted with scattered boos as he offered his congratulations to Mr. Obama and saluted the historical significance of the moment.

“This is a historic election, and I recognize the significance it has for African-Americans and for the special pride that must be theirs tonight,” Mr. McCain said, adding, “We both realize that we have come a long way from the injustices that once stained our nation’s reputation.”

Not only did Mr. Obama capture the presidency, but he led his party to sharp gains in Congress. This puts Democrats in control of the House, the Senate and the White House for the first time since 1995, when Bill Clinton was in office.

The day shimmered with history as voters began lining up before dawn, hours before polls opened, to take part in the culmination of a campaign that over the course of two years commanded an extraordinary amount of attention from the American public.

As the returns became known, and Mr. Obama passed milestone after milestone —Ohio, Florida, Virginia, Pennsylvania, New Hampshire, Iowa and New Mexico — people rolled spontaneously into the streets to celebrate what many described, with perhaps overstated if understandable exhilaration, a new era in a country where just 143 years ago, Mr. Obama, as a black man, could have been owned as a slave.

For Republicans, especially the conservatives who have dominated the party for nearly three decades, the night represented a bitter setback and left them contemplating where they now stand in American politics.

Republican leaders began on Wednesday what will likely be a lengthy re-examination of their brand, as Democrats hope to shape a long-term realignment of the electoral map.

read more...

Movie review : Body of Lies (2008)

Big Stars Wielding an Array of Accents, Fighting the War on Terrorism
By A. O. SCOTT

Ridley Scott’s new movie, “Body of Lies,” raises a potentially disturbing question. If terrorism has become boring, does that mean the terrorists have won? Or, conversely, is the grinding tedium of this film good news for our side, evidence of the awesome might of Western popular culture, which can turn even the most intransigent and bloodthirsty real-world villains into fodder for busy, contrived and lifeless action thrillers?

The second answer seems more plausible, but there are other puzzles in “Body of Lies” that are not so easily solved and that may distract from sober contemplation of geopolitical pseudorealities. Such as: what exactly is going on with Leonardo DiCaprio’s accent, or Russell Crowe’s body mass index? Mr. DiCaprio, playing a high-strung C.I.A. operative named Roger Ferris, once again shows his commitment to full employment for dialect coaches, following the mock-Afrikaans of “Blood Diamond” and the South Boston braying of “The Departed” with some good-old-boy inflections that are helpfully identified by Mr. Crowe’s character as originating in North Carolina.

Mr. Crowe, meanwhile, plays Ferris’s supervisor, Ed Hoffman, who lives somewhere around Washington and has no specified regional background to explain his odd little drawl. At times Mr. Crowe, showing the linguistic chameleonism that is the birthright of every Australian actor, spits out his words with an emphatic twanginess that suggests, if not George W. Bush himself, then perhaps Jon Stewart impersonating Mr. Bush. It’s possible that this resemblance is meant to imply a parallel between the president and Hoffman, who is immune to self-doubt and allergic to second thoughts about the righteousness of his actions.

And also, it appears, to exercise (unlike the president). With an unusual display of impish delight, Mr. Crowe throws himself into the physicality of his character, a schlubby, tubby suburban dad whose near-parodic commitment to domestic routine contrasts amusingly with his professional fanaticism. Using a hands-free cellphone, Hoffman orchestrates elaborate schemes and double-crosses while going about his daily paterfamilias business: loading his kids into the minivan, helping his young son in the bathroom and tearing open a bag of Pepperidge Farm Goldfish crackers on the sidelines of his daughter’s soccer game.

On the phone, and in his occasional surprise visits to Ferris in the field, Hoffman is fighting a war whose terms he lays out in a few set-piece speeches. The gist is that no one is innocent and that the ends justify the means. Deceit, torture, the sacrifice of non-American lives — all is permissible in the fight against a shadowy superjihadist named Al-Saleem (Alon Aboutboul), head of a network carrying out suicide attacks around Europe. The contradictions and unintended consequences of Hoffman’s tactics are borne by Ferris, who finds his credibility undermined, his friends and colleagues at risk and his life in danger.

All of which would be fine if “Body of Lies” — with a screenplay by William Monahan (“The Departed”) and based on a novel by David Ignatius, a columnist at The Washington Post — were clearer about its themes or its plot. As it is, the movie is a hodgepodge of borrowings and half-cooked ideas, flung together into a feverishly edited jet-setting exercise in purposeless intensity. Place names flash onto the screen — Amman! Amsterdam! Langley! — and shiny black S.U.V.’s and Mercedes sedans screech through teeming streets or kick up dust clouds on empty desert roads. From time to time an orange fireball erupts, and everything shows up on the satellite surveillance screens back at headquarters.

In Jordan, Ferris flirts with Aisha (Golshifteh Farahani), an Iranian refugee who works as a nurse and who has even less of an organic relation to the narrative than poor Vera Farmiga did in “The Departed.” The dramatic — I daresay the erotic — center of “Body of Lies” is an all-male triangle involving Ferris, Hoffman and Hani (Mark Strong), the head of Jordanian intelligence. Mr. Strong, also seen in the similar and superior “Syriana,” is a marvel of exotic suavity and cool insinuation. Hani calls Ferris “my dear” and may be more sincere in his affection than the ideologically driven Hoffman, who refers to his younger colleague more generically as “buddy.”

If the psychological tensions linking these three were allowed time and space to develop, “Body of Lies” might have been a more surprising and interesting specimen of its genre. Instead, it throws out a few gestures toward topicality — an opening quote from the W. H. Auden poem that flew around the Internet just after 9/11; glances toward Gitmo and the Green Zone; an awkward dinner-table spat about American foreign policy — without saying much of anything. Mr. Scott’s professionalism is, as ever, present in every frame and scene, but this time it seems singularly untethered from anything like zeal, conviction or even curiosity.

“Body of Lies” is rated R (Under 17 requires accompanying parent or adult guardian). It has swearing and graphic violence.

BODY OF LIES

Opens on Friday nationwide.

Directed by Ridley Scott; written by William Monahan, based on the novel by David Ignatius; director of photography, Alexander Witt; edited by Pietro Scalia; music by Marc Streitenfeld; production designer, Arthur Max; produced by Donald De Line and Mr. Scott; released by Warner Brothers Pictures. Running time: 2 hours 6 minutes.

WITH: Leonardo DiCaprio (Roger Ferris), Russell Crowe (Ed Hoffman), Mark Strong (Hani), Golshifteh Farahani (Aisha), Oscar Isaac (Bassam), Simon McBurney (Garland), Alon Aboutboul (Al-Saleem) and Ali Suliman (Omar Sadiki).

Party Guests With Jazzy Moves and Political Leanings

By ROSLYN SULCAS

Dre.dance has a lot going for it. Since one of its artistic directors is Taye Diggs — yes, the one on ABC’s “Private Practice” — there’s a certain glamour attached to the enterprise. The company has fine dancers. And in concert programs shown over the last few years, it has offered unpretentious and generally well-made work.

In “the people,” performed at the Tribeca Performing Arts Center on Saturday night, Mr. Diggs and his co-artistic director, Andrew Palermo, try something different. An hourlong show with a political theme, with a score commissioned from the jazz composer Rob Reddy , it’s both less successful than dre.dance previous ventures and more intriguing.

Although the program says that the work uses a party setting, “the people” feels nonnarrative; the dancers move through ensemble pieces and smaller groupings in front of Mr. Reddy and his musicians in recurrent, stylized movements: jazzy hip swivels, feet pivoting and hands crossing and gesturing in front of the face.

The solos and duos — frequently overlaid by snippets of recorded political texts by Eleanor Roosevelt, President Ronald Reagan, Senator Barack Obama and others — are more nuanced and resonant, sensitive responses to the idiosyncratic rhythms and instrument pairings of Mr. Reddy’s score.

But there is much that feels extraneous: the dancer who offers puzzling bits of speech, the repetitive-movement vocabulary, the ironic bits of ballet, the sluggishly paced final section. “The people” is a 30-minute dance trapped in an hourlong body; Mr. Diggs and Mr. Palermo are surely capable of setting it free.

Couscous Shows Its Sweet Side

By MARK BITTMAN

“COUSCOUS” is one of the most misunderstood words in cooking. The problem is that it’s an ingredient and a dish using that ingredient. (It’s as if “flour” were used for a dish called “flour.”)

So. Couscous the dish, is most commonly a highly seasoned stew with lamb and vegetables, maybe with chickpeas (or with chickpeas and no lamb; or with fish; and so on), with the couscous — not the dish, the ingredient — steamed above the stew, or cooked separately from it and served with it.

And couscous the product is not, as many think, a grain. It’s a small semolina pasta, traditionally hand-rolled but now usually made by machine. But it’s often cooked and served like a grain.

Can you make anything with couscous besides couscous? Yes. Here it is.

This dessert is loosely based on the Moroccan seffa, essentially sweetened couscous sprinkled with rosewater. I’ve had it seasoned in a lot of different ways — with almonds, with citrus, with herbs, with dried fruit, with honey, with cream, and with more or less sugar. It’s a blank canvas, and you can season it the way you like.

I played around with most of these combinations and finally found that the version I like best starts with almond milk. You can make almond milk yourself, and sometimes people do. (Grind almonds with water; soak a bit; strain.) But since you can buy pretty decent almond milk just about anywhere you can buy soy milk, that’s what I do.

When couscous is cooked that way it gains a lovely, not-too-subtle almond flavor that takes to the other seasonings beautifully. Served warm, with a little rosewater, the dish is unlike most American desserts, but not that far from rice pudding. (Not everyone loves rosewater, but a sprinkling of it is exotic beyond belief, almost transporting.) The variation, with citrus and mint, is a close second. In any case, either of these will give you an appreciation for couscous in a role beyond lamb stew.

Global Markets Jump on Vows of New Capital

By DAVID JOLLY and BETTINA WASSENER

PARIS — Banking stocks led equity markets higher Monday in Europe and Asia after European leaders announced plans to inject new capital into troubled financial institutions and guarantee interbank lending, and central banks announced new measures aimed at restarting frozen credit markets.

In early afternoon trading, the FTSE 100 index in London was up 4.86 percent and the CAC-40 added 6.1 percent in Paris. The DAX in Frankfurt rose 6.9 percent.

Trading in Standard & Poor’s 500 index futures suggested Wall Street stocks would gain as much as 6 percent at the opening. The bond market was closed Monday for the Columbus Day holiday.

Deutsche Bank rose nearly 25 percent in Frankfurt, while BNP Paribas and other major French banks rose more than 6 percent.

Royal Bank of Scotland, which is raising billions of pounds worth of new equity with British government backing, rose more than 5 percent.

In Hong Kong, the Hang Seng index bounced 9.6 percent higher. The S&P/ASX 200 index in Sydney closed up 5.6 percent. Tokyo markets, which lost about a quarter of their value last week, were closed Monday for a national holiday.

In Moscow trading, the Micex index rose 4.5 percent.

“We’re extremely cautious,” Philippe Gijsels, senior equity strategist at Fortis Global Markets in Brussels, said. “This looks like the start of a typical bear-market rally.” He said measures Group of 7 countries announced over the weekend had helped banking stocks, but that the market had been due for a rally after major indexes posted some of their worst declines last week.

“To repair the market will take some time,” he said. “The problem is that the financial problem has now become a real economic problem. The damage has been done.”

“The G-7 was responding to a crisis of confidence,” David Thébault, head of derivative sales at Global Equities in Paris, said, comparing the new measures to “a defibrillator applied to a heart attack patient.” “We can see the end of the financial crisis, but at the price of an economic crisis,” he added. “But it’s better to have an economic crisis than to have the entire system endangered.”

Meeting in Paris late Sunday, officials European financial and political leaders agreed late Sunday to a plan that would inject billions of euros into their banks in a bid to restore confidence to the teetering financial system.

Taking their cue from a rescue plan announced last week by Britain, the European countries led by Germany and France pledged to take equity stakes in distressed banks and vowed to guarantee bank lending for periods up to five years. Both France and Germany were planning to unveil national rescue packages on Monday worth hundreds of billions of euros, officials said.

The Federal Reserve said early Monday in Washington that it would create swap lines with the Bank of England, the European Central Bank and the Swiss National Bank “to accommodate whatever quantity of U.S. dollar funding is demanded.”

The Bank of Japan, it said, will consider the introduction of similar measures.

Stocks in Sydney rose a day after Australian and New Zealand governments joined the scramble to calm markets, saying they would guarantee all bank deposits and some interbank lending.

Elsewhere, the Kospi index in South Korea rose 3.8 percent, the Straits Times index in Singapore rose 4.2 percent. In Hong Kong, financial secretary John Tsang warned of an increased risk of recession in 2009 because of the global financial crisis, and PCCW, a leading telecommunications company, on Sunday scrapped the planned partial sale of its HKT unit, citing the market upheaval. The company’s stock slumped nearly 9 percent to its lowest level since 1999.

The dollar lost ground against other major currencies. The euro rose to $1.3637 from $1.3408 late Friday in New York, while the British pound rose to $1.7151 from $1.7042. The dollar slipped to 100.58 yen from 100.68 and fell to 1.1345 Swiss francs from 1.1388.

U.S. crude oil for November delivery rose $3.96, or 3.1 percent, to $80.78 a barrel.

David Jolly reported from Paris and Bettina Wassener from Hong Kong.

Bold Pledges From Leaders, but Investors Await Details

By MARK LANDLER and KATRIN BENNHOLD

WASHINGTON — After a whirl of emergency meetings, government leaders on both sides of the Atlantic made bold promises to rescue the global financial system, but were still racing to work out the details to calm battered stock markets before they opened on Monday morning.

In the wake of the carnage in last week’s markets, European countries pledged to inject capital into ailing banks and guarantee some forms of bank debt, a step analysts said was critical to restoring lending between banks and easing a crisis of confidence.

Europe’s action throws the spotlight back to the United States, where officials said Treasury Secretary Henry M. Paulson Jr. was studying the feasibility of backing up loans between banks here. Lending between banks is considered crucial to the smooth operation of the financial system and the broader economy, but it has slowed considerably because banks are concerned about being repaid should the other bank run into financial trouble.

The Treasury was not expected to announce anything before Monday, officials said. But the government was helping an American financial giant, Morgan Stanley, in its effort to salvage a $9 billion investment by a Japanese bank, Mitsubishi UFJ Financial.

The initial reaction of investors was positive, with stocks up in several Asian markets and stock futures in the United States — which are bets on the direction of the market before its opening — higher as well. The early signs, after one of the worst weeks ever for stock markets, are not a definitive shift in sentiment but were seen as a potential hope that the markets may at least stop their free fall.

“It’s going to take actions more than words at this time, given the extreme distress that the money markets are in and the extreme distress that the equity markets were in,” said Douglas Peta, a market strategist at J.& W. Seligman & Company. He predicted further drops in the stock and bond markets; the Dow Jones industrial average fell 18 percent last week.

But there were some significant steps. In Paris, European leaders agreed to a unified plan that would inject billions of euros into their banks and guarantee bank debt for periods up to five years. President Nicolas Sarkozy of France, who led the talks in the 18th-century Élysée Palace, said governments would announce concrete rescue plans tailored to their national circumstances on Monday simultaneously.

“We need concrete measures, we need unity,” Mr. Sarkozy declared. “That’s what we achieved today.”

Leaders of the 15 countries that use the euro did not put a price tag on any of their promises — contrary to Britain, where last week Prime Minister Gordon Brown announced $255 billion in government funds and other measures to stabilize its banks, or the United States, where a $700 billion bailout plan will now be used partly to infuse banks with fresh capital.

The United States is overhauling its rescue package, which had originally focused on buying distressed assets from banks. Mr. Paulson said on Friday the government would now take equity stakes in banks; the government’s role in the Morgan Stanley negotiations may be an early test of the Treasury’s retooled strategy.

read more...

White House overhauling rescue plan

By Edmund L. Andrews and Mark Landler

WASHINGTON: As international leaders gathered here on Saturday to grapple with the global financial crisis, the Bush administration embarked on an overhaul of its own strategy for rescuing the foundering financial system.

Two weeks after persuading Congress to let it spend $700 billion to buy distressed securities tied to mortgages, the Bush administration has put that idea aside in favor of a new approach that would have the government inject capital directly into the nation's banks — in effect, partially nationalizing the industry.

As recently as Sept. 23, senior officials had publicly derided proposals by Democrats to have the government take ownership stakes in banks.

The Treasury Department's surprising turnaround on the issue of buying stock in banks, which has now become its primary focus, has raised questions about whether the administration squandered valuable time in trying to sell Congress on a plan that officials had failed to think through in advance.

It has also raised questions about whether the administration's deep philosophical aversion to government ownership in private companies hindered its ability to look at all options for stabilizing the markets.

Some experts also contend that Treasury's decision last month to not use taxpayer money to save Lehman Brothers worsened the panic that quickly metastasized into an international crisis.

The administration's new focus was announced late Friday as part of a rescue plan in coordination with six of the world's richest nations. It came during a week when the Dow Jones industrial average plummeted 18 percent, one of the worst weeks in stock market history.

While the Treasury says it still plans to buy distressed assets, the scope of that plan is unclear. Treasury Secretary Henry Paulson Jr. has refused to say whether the capital infusion program for banks would be bigger than the original plan to buy troubled assets.

Still, Treasury has directed Fannie Mae and Freddie Mac, the government-controlled mortgage giants, to ramp up their purchases of hard-to-sell mortgage bonds, in what could be a speedier and less formal process than the auctions proposed by the Treasury.

Underscoring the gravity of the situation, President George W. Bush convened an early morning meeting at the White House on Saturday with finance ministers from the Group of 7 industrialized countries.

"All of us recognize that this is a serious global crisis, and therefore requires a serious global response, for the good of our people," Bush said afterward in the Rose Garden, flanked by the ministers, who are in Washington for the annual meetings of the International Monetary Fund and the World Bank.

Bush said the countries had agreed to general principles to respond to the crisis, including working to prevent the collapse of important financial institutions and protecting the deposits of savers. But he offered no details on other measures, suggesting that there were still differences among countries about which steps to take to shore up their respective financial systems.

To some extent, the effort to agree on a coordinated plan is being driven less by the hope that such measures will carry more punch than by the fear that nations acting alone could destabilize the system.

Those worries grew in recent days when Iceland seized its three major banks, which were failing, and appeared to guarantee the deposits of Icelanders over those of foreigners. That provoked a fierce reaction from Britain, which is now in talks with Iceland to get back the deposits of British citizens.

With the United States and Europe working together on ways to secure their banking systems, economists are concerned that money may flow out of other countries, particularly emerging markets, to Western countries if investors decide that those markets are not as safe.

The United States sought to reassure these countries in a meeting on Saturday evening of the Group of 20, which includes countries with large emerging markets, like China and Russia.

"We want to reaffirm, reinforce our commitment that we're going to take these actions in a way that doesn't undermine the economies of other countries," said David McCormick, the under secretary of the Treasury for international affairs.

Like the United States, Britain plans to provide capital directly to banks. But the United States and other countries have not adopted Britain's proposal to guarantee lending between banks as a way to unlock the credit market.

Germany has been reluctant to put state capital directly into banks, though officials said there were signs of movement in that position on Saturday. Europeans leaders were scheduled to meet in Paris on Sunday, amid reports that Germany may announce a large rescue plan of its own.

read more...

Euro-zone leaders to meet over financial crisis

PARIS, France (AP) -- European leaders meet Sunday in search of a common response to a spreading financial crisis that has ricocheted across the Atlantic to their shores and to try to preserve the bloc's unity.

It could be a complex exercise for the 15 heads of state or government of the euro-zone, where the euro currency is used, because of the varied financial landscapes in each country.

German Chancellor Angela Merkel, stressing the need for a synchronized response, said Saturday that a "common tool box" could be the outcome. Individual countries can use these "tools" to respond to their particular situation, she said.

"We need a common approach in Europe but we must be able to adapt to each national situation in a flexible way," she said after a meeting outside Paris with French President Nicolas Sarkozy.

Both Merkel and Sarkozy stressed that coordination is vital to taming the crisis and putting an end to the go-it-alone approach that has predominated thus far in Europe.

France, the current president of the European Union, and Germany have long been considered the motor for European construction. Decisions made by the euro-zone would likely be later enlarged to include other members of the 27-nation EU.

British Prime Minister Gordan Brown was meeting with Sarkozy ahead of the summit. Britain is not in the euro-zone.

Sarkozy and Merkel each rejected as out of the question any common financial rescue fund based on the U.S. model approved last week.

"The crisis demands extremely rapid responses" and a "European fund would pose gigantic problems" in decision-making among so many nations, Sarkozy said at a news conference with Merkel.

Merkel did not exclude support for banks seeking it but said in that case conditions would be attached. "One cannot talk of nationalization," she said, adding nothing has yet been decided on the subject.

Monday is when decisions should be put into practice nationally, for Germany at least, Merkel said. She called taking things to the national level the "third step" after a weekend meeting in Washington of finance ministers from the Group of Seven -- Japan, Germany, Britain, France, Italy, Canada and the U.S.

President Bush later appealed for a global approach to the crisis that he said was needed in an interconnected world.

So far, European countries have reacted diversely on a case by case basis.

Ireland's unilateral move to guarantee all bank deposits caught other EU nations off balance and fearing a flight of capital to the Emerald Isles.

Britain announced a $88 billion plan to partly nationalize major banks and promised to guarantee a further $438 billion in loans to shore up the banking sector. The Belgian-Dutch bank Fortis got a bailout and so did lender Dexia SA, helped by France, Belgium and Luxembourg.

In Japan, hope fades for disposable workers

By Norimitsu Onishi

OSAKA, Japan: With job signs stuck to their vans' windshields and sliding side doors left open in expectation, the recruiters were sizing up the potential hires at Japan's largest day labor market here recently.

By 4:30 a.m., thousands of aging day laborers had spilled out of the neighborhood's flophouses and homeless shelters, or risen from its parks and streets, to form a potential work force of mostly graying men.

A sign on one blue van, barely legible in the twilight, offered a 15-day construction job paying $95 a day, minus $33 in room and board. Although the terms were comparatively decent, the recruiter sitting in a folding chair in front of the blue van had found only one suitably young laborer by 5 a.m. Most were above the unwritten cutoff age of 55.

"It's really hard to use the men here because they've gotten old," said the recruiter, Takuya Nakamae, 55, turning his head toward his prize catch, a recruit in his 30s. "If you're this young, everybody wants you and you get plenty of offers. Just look at how young you are!"

And yet it was the older men who really knew how to work, he said, adding: "They're the ones who worked during Japan's decades of economic boom, so they know the ins and outs of every job. It's just that they don't have the strength anymore."

Nowadays, few young men gravitate here, the Airin district of Osaka. Little is being built in Japan's stagnant economy, and young day laborers or part-time workers find jobs by registering their cellphone numbers with temporary employment agencies.

Many of the older men who remain arrived here to work on the 1970 Expo in Osaka, which, like the Tokyo Olympics six years earlier, became a symbol of postwar Japan's rebirth. Over the decades, they left to work on bridges, buildings and highways all over the country, performing the dirtiest and most dangerous jobs in helping build Japan. Some made it out of here and moved on to steadier jobs and lives.

read more...

Red Chard, Potato and White Bean Ragout

By MARTHA ROSE SHULMAN

This comforting stew makes a hearty meal when served with a salad and crusty bread.

1 cup dried white beans, soaked for 6 hours or overnight in 1 quart water

A bouquet garni made with 1 bay leaf, a couple of sprigs of fresh thyme, and a Parmesan rind, tied together with kitchen string

Salt

1 generous bunch red chard (3/4 to 1 pound)

2 tablespoons olive oil

1 medium onion, chopped

2 to 4 garlic cloves (to taste), sliced

1 pound Yukon gold potatoes, scrubbed and cut into 1/2-inch dice

1 teaspoon fresh thyme leaves

Freshly ground pepper

1 to 2 tablespoons chopped fresh parsley (optional)

Freshly grated Parmesan cheese for serving

1. Drain the beans and combine with 1 quart of fresh water in a casserole or Dutch oven. Bring to a simmer. Skim off any foam, then add the bouquet garni. Reduce the heat, cover and simmer 1 hour. Add 1 teaspoon salt.

2. Meanwhile, stem and clean the red chard leaves in 2 changes of water. Rinse the stems and dice. Set aside. Cut the leaves in ribbons, or coarsely chop, and set aside.

3. Heat the olive oil in a heavy nonstick skillet over medium heat and add the onion and chard stems. Cook, stirring often, until tender, about 5 minutes. Add the garlic and continue to cook, stirring, until the garlic is fragrant, about 1 minute. Add the potatoes and stir together, then transfer to the pot with the beans. Bring back to a simmer, cover and simmer 30 minutes, or until the potatoes and beans are tender. Salt to taste.

4. Add the chard and thyme leaves to the pot, cover and simmer for 15 minutes. The chard should be very tender. Stir in freshly ground pepper to taste and the parsley. Taste, adjust seasonings and serve, passing the Parmesan to sprinkle on the top.

Yield: Serves 4 to 6

Advance preparation: The dish will keep for 3 or 4 days in the refrigerator. If you are making it ahead, make it through Step 3 and proceed with Step 4 shortly before serving, so that the color of the chard doesn’t fade too much.

Economic Uncertainty Spreads

By KEITH BRADSHER and CARTER DOUGHERTY

In Korea, exporters are suddenly struggling.

In India, industrial growth has slowed drastically.

In Sweden, Volvo is cutting thousands of jobs.

In Japan, which thought it was immune to the market chaos, a credit squeeze seems to be forcing small companies into bankruptcy.

Around the world, fears of recession have fed a stock market panic, as worries about toxic assets spread from the financial sector to the credit markets and now to the broader economy.

Companies from Germany to Asia are hoarding cash because credit markets are tight. The sheer uncertainty of it all is upending plans for businesses to expand. Consumers have pulled back, just as they received some relief from high oil prices.

Even creditworthy companies cannot get money in Europe. And across Asia, export growth has slowed to a crawl or started declining in real terms — and that was before American retailers announced steep sales declines on Wednesday.

The United States, once the engine of the global economy, is ailing and in no position to inspire confidence, much less point the way around or out of recession. Americans are seen as both the root of the problem, and powerless to solve it.

But no government effort has been able to stanch the bleeding — even the unprecedented coordination of central banks on three continents, which only generates more fear.

The liquidity provided by the European Central Bank seems to be going through a revolving door. After releasing billions of euros into the market, the bank took in a record 102.8 billion euros on Sept. 30 and 64.4 billion euros on Thursday for banks. Instead of lending their spare cash to each other or the rest of the economy, banks have parked it with the central bank at extraordinarily low interest rates.

“No sane banker with good contacts and clients would do this,” Erik Nielsen, chief Europe economist at Goldman Sachs in London, said. “It would be a huge arbitrage profit if they wanted to lend, but they don’t.”

The short-lived notion that Asia had decoupled from the United States and was now operating independently of the American business cycle is all but dead. Asia has been the biggest beneficiary of the rise in global trade over the last two decades. Its corporate earnings, real estate prices and much more are dependent on a steady inflow of dollars and euros through exports to the West.

But the International Monetary Fund predicts that growth in the 15 nations that use the euro will fall during the second half of this year and barely rise in 2009. (And that estimate was prepared in advance of this weekend’s meetings of the monetary fund and World Bank in Washington and is already considered out of date by many experts.) Britain’s economy, the only major European one outside the euro zone, is expected to shrink through next year.

read more...

YouTube to Offer TV Shows With Ads Strewn Through

By BRIAN STELTER

After months of experimenting with long-form video, YouTube said on Friday it would start offering full-length episodes of some television shows on its sprawling Web site.

The staggering growth of YouTube — five billion videos were viewed there in July — has come primarily from short videos that last only a few minutes. But Internet users are gradually becoming more comfortable watching longer videos online, prompting YouTube’s commitment to the format.

“This is what the users want,” said Jordan Hoffner, the director of content partnerships for YouTube.

With the addition of TV series like “Dexter,” “Beverly Hills, 90210” and “Star Trek” through a deal with CBS, YouTube is catching up to other Web sites that have promoted long-form video for some time.

Most important for YouTube’s owner, Google, the longer videos will include advertising before, during and after each episode. Google is under pressure to raise more revenue from the nearly four-year-old video sharing site.

The founders of YouTube had resisted so-called preroll, midroll and postroll advertising on short videos for fears that it would alienate users. (Sitting through a 15-second advertisement to watch a 45-second clip is hardly appealing.) But the video ads are now standard on the full-length video sections of network television Web sites.

Shiva Rajaraman, a senior product manager for YouTube, said the company was trying to match the “the right ad format for the right content experience.” For short videos, the company is “very much committed” to in-video overlays, he said. The overlays resemble the banner advertisements that sometimes appear on the bottom of videos.

Short-form videos remain the most popular type online. The measurement firm ComScore reports that the average duration of an online video was 2.9 minutes as of July, the most recent month with data. But the attention spans of viewers are getting (at least slightly) longer: one year ago the average duration of a video was 2.6 minutes.

YouTube’s 10-minute limit on video length has steadily eroded as the site has hosted college lectures, documentary films and promotional episodes of HBO and Showtime series in the last year.

On the CBS page on YouTube, classic TV shows like “MacGyver” are joined by “Dexter” and “Californication,” two series that appear on Showtime, a cable channel subsidiary of CBS. The company is selling its own advertising inventory for the series being shown on YouTube; the two entities will share the revenue.

Copyright concerns linger for some major media companies. CBS’s sister company Viacom — both are controlled by Sumner M. Redstone and his family — is pursuing a $1 billion lawsuit against YouTube and Google over copyright infringement.

As YouTube tries to add TV content, it faces competition, particularly from Hulu, the joint venture between the News Corporation and NBC Universal.

Hulu now reports more than 100 million video streams a month. But that pales in comparison to YouTube. Its five billion video views, as reported by ComScore, represent 44 percent of all online video consumption in the United States.

Earlier this week YouTube added “theater view,” a larger video player for longer content.

G.M. and Chrysler Explore Merger

By BILL VLASIC and ANDREW ROSS SORKIN

DETROIT — General Motors is in preliminary talks about a possible merger with Chrysler, a deal that could drastically remake the landscape of the auto industry by reducing the Big Three of Detroit automakers to the Big Two.

The talks between G.M. and Cerberus Capital Management, the private equity firm that owns Chrysler, began more than a month ago, and the negotiations are not certain to produce a deal. Two people close to the process said the chances of a merger were “50-50” as of Friday and would most likely still take weeks to work out.

A merger would be a historic event, with two of the most iconic names in American industry coming together to survive in an increasingly difficult environment. Both have roots dating back decades in Detroit and, with Ford, long dominated the auto industry — until Japanese and other foreign car makers began making inroads into the American market.

The auto industry is being pummeled from all sides — by high gas prices that have soured consumers on profitable S.U.V.’s, by a softening economy that has scared shoppers away from showrooms, and by tight credit that is making it difficult for willing buyers to obtain loans. Both G.M. and Chrysler have been struggling with product lineups that are out of sync with consumer demand for smaller, more fuel-efficient cars.

General Motors’ stock has fallen from more than $43 a share last year to less than $5, and it is burning through its cash hoard at a rapid rate. Chrysler, as a private company, no longer needs to report its finances.

The meetings between General Motors and Cerberus began more than a month ago, said people familiar with the discussions, and the companies have held several talks involving their most senior executives. Given that both G.M. and Chrysler are struggling, the two sides may determine a merger may not be in their best interests.

The exploratory talks have included debates over various calculations of the savings that would result from a merger, these people said, but neither side has yet to dig into each others’ private financial books and records.

At the same time, Cerberus is continuing to hold talks with other automakers including Nissan and Renault, said people familiar with the discussions. It is unclear at what stage those discussions have reached.

Speculation about a possible bankruptcy filing by G.M. has mounted in recent weeks because of the automaker’s dwindling cash reserves. The automaker had $21 billion in cash on hand at the end of the second quarter, but it was burning through more than $1 billion a month.

The credit rating firm Standard & Poor’s put G.M. on negative credit watch on Thursday.

But G.M. has said it is confident that it can increase its liquidity, and emphasized in a statement released Thursday that it was not considering a bankruptcy filing.

G.M. once commanded about 50 percent of the American vehicle market, but its share so far this year has fallen to 22 percent, according to the research firm Autodata. Chrysler had a market share of about 15 percent before its acquisition in 1998 by Daimler, but its share this year has dwindled to 11 percent.

How government and labor might react to a potential merger of G.M. and Chrysler is unclear. Antitrust questions could be raised, but political issues could be overshadowed by the precarious financial prospects of both automakers.

read more...