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MONDAY, MAY 23, 2011


Obama tries to reassure Israel on Mideast policy



Washington Post Service

(AIPAC) at its annual conference in Washington. While sticking to the views he outlined in a policy speech Thursday, Obama more clearly aligned his position on borders to one espoused by the George W. Bush administration in 2004. The Bush White House had concluded that a return to the precise boundaries that existed before the 1967 ArabIsraeli War was “not realistic”, because of the presence of large Jewish settlements in the West Bank. Acknowledging that Israel faced “hard choices” and security risks, Obama argued that stalling on peace negotiations posed even greater dangers for the country’s survival. The Arab Spring movement and changing demographic

U.S. President Barack Obama sought to reassure Israel and its supporters of “ironclad” U.S. support Sunday in a speech to a Jewish lobbying group that also warned that time could be running out for a peace accord with Palestinians. Obama, wading afresh into a topic that evoked anger from Israeli leaders last week, insisted again that 1967 boundary lines should be the starting point for talks on a new Palestinian state. But he allowed that the dividing line would be negotiated to accommodate Israeli settlements and security needs. “Israelis and Palestinians will negotiate a border that is different than the one that existed on June 4, 1967,” Obama told the American Israel Public Affairs Committee • TURN TO OBAMA, 2A

In Europe, Obama seeks help from old allies BY JULIE PACE AND NANCY BENAC Associated Press

the backdrop of the NATO-led bombing campaign in Libya and stubborn economic weakness on both sides of the Atlantic. A priority for the president and his allies will be to more clearly define the West’s role in promoting stability and democracy in the Arab world without being overly meddlesome and within tight financial limitations. Obama, who was to depart late Sunday, will visit Ireland, England, France and Poland.

WASHINGTON — Weaving together strands of pomp, policy and summitry, U.S. President Barack Obama’s weeklong European tour is all about tending to old friends in the Western alliance and securing their help with daunting challenges, from the political upheaval in the Mideast and North Africa to the protracted war in Afghanistan. Obama’s eighth trip to Europe as president, with a quick-moving itinerary that dips into four countries in six days, unfolds against • TURN TO EUROPE, 2A

Obama says he’d repeat bin Laden raid


Iceland’s Grimsvotn volcano, which lies under the Vatnajokull glacier, erupted Saturday for the first time since 2004, sending a plume of ash, smoke and steam 12 miles into the air. n

Volcanic eruption forces Iceland to close main airport, 3A

Strauss-Kahn remains in pricey temporary digs BY COLLEEN LONG Associated Press

NEW YORK — With armed guards and cameras watching his every move, former IMF leader Dominique Strauss-Kahn remained holed up Sunday in a pricey highrise building while he awaits a more permanent location for house arrest in his sexual assault case. The onetime French presidential contender has been living in the lower Manhattan skyscraper since his release Friday on $1 million bail. He’s been accused of trying to rape a housekeeper in his hotel suite but has denied the allegations. He’s scheduled for arraignment on June 6. The 62-year-old Strauss-Kahn was initially set for a tony apartment complex on the Upper East Side, but tenants in the building complained about the throng of police and media gathered outside. So instead, Strauss-Kahn was ensconced in the 21-story Empire Building within the New York Police Department’s ring of steel, a network of private and police cameras.


It’s not clear when and where he’d be moved to a more permanent house arrest; calls to his attorney and to the security firm weren’t returned. Even with the severe restrictions, Strauss-Kahn’s family wealth has afforded him one of the cushiest bail agreements possible. But it won’t come cheap. The cost to secure the former International Monetary Fund chief was estimated at $200,000 a month — and he must foot the bill. The funds will go toward armed surveillance, the installation of cameras and a special bracelet shackled to his ankle that will set off an alarm if he travels too far. Right now, he’s not allowed out at all, but after he’s moved to a more permanent location he can leave for court, doctor visits and weekly religious services. Prosecutors must be notified at least six hours before he goes anywhere. He can’t be out between 10 p.m. and 6 a.m. But he won’t be lonely: StraussKahn can have visitors — up to four at a time in addition to family.

LONDON — (AP) — U.S. President Barack Obama says he would order another covert military raid like that which killed Osama bin Laden if it was necessary to stop terrorist attacks. Pakistan is furious that that United States sent Navy SEALs to raid bin Laden’s Pakistan hideaway earlier this month without informing Pakistani authorities. Obama told the BBC in an interview broadcast Sunday that “we are very respectful of the sovereignty of Pakistan”, but “our job is to secure the United States”. He said he could not allow “active plans to come to fruition without us taking some action”, and would send troops again if a senior Taliban leader was found in Pakistan. “We cannot allow someone who is planning to kill our people or our allies’ people — we can’t allow those kind of active plans to come to fruition without us taking some action,” Obama said, The president told the BBC’s Andrew Marr Show that he hoped the raid would be “a wake-up call where we start seeing a more effective cooperative relationship” with Pakistan, an important but awkward ally in Washington’s fight against terrorism.

Believers await apocalypse, skeptics carry on BY GARANCE BURKE Associated Press

They spent months warning the world of the apocalypse, some giving away earthly belongings or draining their savings accounts. And so they waited, vigilantly, on Saturday for the appointed hour to arrive.

When 6 p.m. came and went across the continental United States and various spots around the globe, and no extraordinary cataclysm occurred, some believers expressed confusion, while others reassured each of their faith. Still, some others took it in stride. “I had some skepticism but I


Local atheists gather outside a rapture party on Saturday at Dorky’s Arcade in Tacoma, Wash.



was trying to push the skepticism away because I believe in God,” said Keith Bauer — who hopped in his minivan in Maryland and drove his family 3,000 miles to California for the Rapture. He started his day in the bright morning sun outside the gated Oakland headquarters of Family Radio International, whose founder, Harold Camping, has been broadcasting the apocalyptic prediction for years. “I was hoping for it because I think heaven would be a lot better than this earth.” But he added, “It’s God who leads you, not Harold Camping.” Bauer, a tractor-trailer driver, began the voyage west last week, figuring that if he “worked last week, I wouldn’t have gotten paid anyway, if the Rapture did happen”. After seeing the nonprofit ministry’s base of operations, Bauer planned to take a day trip to the Pacific Ocean, and then start the cross-country drive back home Sunday with his wife, young son and another family relative. The May 21 doomsday • TURN TO APOCALYPSE, 2A


INDEX NEWS EXTRA..............3A THE AMERICAS ...........4A OPINION .......................7A COMICS & PUZZLES ..6B


An investment asks, how much can you afford to lose? BY PAUL SULLIVAN

New York Times Service

nvestor interest in private equity and debt offerings continues to increase a mere three years after these illiquid investments caused a lot of anxiety, if not substantial financial losses. The problem is there is little sign that investors are any more aware now of the risks involved in these deals than they were then. At the beginning of the year, wealthy investors were abuzz over a private placement investment in Facebook, the social networking site. But deals that large are not the norm. Most private offerings, or placements, are smaller — with minimum investments of $25,000 as opposed to the reported $2 million in the Facebook offering — but carry the same high risks and high fees. “We’re starting to see more of it because more and more of our clientele are having the ability to invest in these sorts of things,” said Drew Kanaly, chairman and chief executive of Kanaly Trust, which manages $1.8 billion. “This is where they’re going to see better returns going forward, but the pros and cons are tough.” Jeffery and Linda Knippa, who now live in Point Venture, Texas, found this out the hard way. After coming into a modest inheritance and selling their home in Houston, they made two investments in private placements, in 2005 and 2007, that totaled $80,000. They say they did so on the recommendation of their broker, Don L. Devens, a registered representative of the broker-dealer Capital Financial Services. Their goal was to keep their money safe, they said, until they returned from Colombia, where Jeffery Knippa was sent to work as an oil field engineer. Instead, they lost their $80,000. The Knippas filed an arbitration claim against Capital Financial Services in November 2009 and are waiting for a hearing. “We knew him through the Lutheran church, so we put our trust in him,” Linda Knippa said. Devens declined to comment. John Carlson, chief executive of Capital Financial Services, said he could not comment while the case was pending. Regardless of the size of these deals, investors need to weigh many factors before getting in, including their willingness to lose the money they put in. Here is a look at the considerations: The reality is the Knippas should never have gotten into such a high-risk investment. They did not have the net worth to be what the Securities and Exchange Commission calls “accredited investors” — those with at least $1 million in




Europe frets over trade deficits with China BY FLOYD NORRIS

New York Times Service

The European Commission, angered over what it sees as unfair Chinese trade policies, last week imposed what it said were the “first ever antisubsidy tariffs against imports from China”. The commission said China was “significantly subsidizing its coated fine-paper industry by giving cheap loans, allocating land below market value and granting various tax incentives”, and announced duties of up to 12 percent on imports of highquality paper used for magazines and brochures. While the move affected only one industry, it was indicative of rising worry in Europe. “There is a general feeling that economic open-

ness and business climate in China are not improving, so we will use all instruments at our disposal to improve the situation there,” Europe’s trade commissioner, Karel De Gucht, said last month. Overall, the bilateral trade deficits between countries in the European Union and China have been growing since economies began to recover in 2009, but there are wide differences between countries. Trade levels had plunged during the financial crisis, and are now recovering. Germany, by far the largest exporter in Europe, now runs a trade surplus with China, something it did not do before the financial crisis. But Italy’s terms of trade have weakened significantly. Data show that exports from

most European countries to China are rising faster than imports from China. But if Europe is to start reducing its bilateral deficits with China, it will have to make even more adjustments. At the extreme, Greek exports are now running at well over twice their 2007 level, while Greek imports from China are declining and are only slightly ahead of the 2007 level. But because Greek exports are so small, it still exports only 10 cents worth of goods to China for each dollar’s worth it imports. Bilateral trade deficits are not the full story, of course. A country can run a large deficit with one country and a similar surplus with another. But with China now by far the world’s largest exporter, a big defi-

cit with it can be hard to overcome. The austerity that was forced upon Ireland and Greece, which both sought bailouts along with Portugal, has stifled imports, particularly in Ireland, and something similar seems likely to happen in Portugal. But Italy, which is also deeply in debt but has a growing economy, has been able to rapidly increase its Chinese imports. As a result, its trade deficit with China has nearly doubled over the last year. The trade figures are released by China and are in dollars, which is the currency used to denominate most international trade. China has released data through April for its major trading partners, but has given figures only through February for some smaller ones.



A girl talks to her grandparents over the video phone service Skype at her home in Long Island, N.Y.


New York Times Service

Thirty years ago, people marveled at the idea of making a phone call and actually seeing the person you were talking to. But like individual jet packs, it seemed a futuristic concept that was always just around the corner, but would never actually arrive. Well, the future may be now. Videoconferencing, Skype and similar technology are not new, but neither have they been widely used by the average consumer or business. That’s changing, though. “I think we’ve hit a critical

mass,” said Rick Osterloh, head of Skype’s consumer product management. This month, Microsoft announced plans to buy Skype, the leader in Internet and voice communication, for a staggering $8.5 billion. So why is the technology taking off now? What exactly are the options out there? And, perhaps more important, what impact will this have besides requiring more people who work at home to change out of their pajamas? Are we edging ever closer to a world where we’re never going to leave our houses?

First, a primer on what we’re talking about. There are all sorts of choices out there for those who want to talk face-to-face without being in the same room. Philipp Karcher, a researcher at Forrester Research, helped me sort them out. First, there are desktop platforms that allow face-to-face video chats and Web conferencing, among them Skype, MSN Messenger, Google and Yahoo Messenger. Skype is by far the largest, claiming 170 million users. Calls are free unless they involve more than one person or are from a Skype user to

a non-Skype user. Companies like Fring, Tango and Qik (which has been acquired by Skype), also allow video calling between smartphones and from mobile devices to desktops. Apple, through Facetime, offers video calling between Apple devices. Just to give you an idea of the popularity of such a concept: the first day Skype began offering video calls on iPhones on Jan. 1, users placed one million video calls from their mobile phones. Next is the idea of room-based TURN TO VIDEO CALLING, 2B

Guard dog to the stars (legally speaking) CHRISTOPH HITZ/NEW YORK TIMES SERVICE


Yelp aims to deal with problem of fake reviews BY DAVID SEGAL

New York Times Service

In this episode of the Haggler: gaming Yelp. As a consumer review website, Yelp is so big and influential that it has given rise to a small, semiunderground group of entrepreneurs who, for a fee, will post a rave about your company. Others will post a negative review about

your rivals. Yes, this is very sneaky, and it’s a continuing problem for Yelp, which is locked in a Spy vs. Spy-style contest with fake reviewers. Let’s see how that contest is going by looking at, of all things, the field of dentistry. “I was in need of teeth whitening and my friend referred me to Southland Dental,” begins a thumbs-up for a clinic in Sherman

Oaks, Calif. Then there’s a description of the whitening procedure favored by Southland, and this closer: “Pain or no pain, it was very much worth it. I can’t stop staring at my bright smile in the mirror.” This reads like a rave on Yelp, but it’s actually a sample from a help-wanted ad on another site — TURN TO YELP, 2B

New York Times Service

LOS ANGELES — It started with a fortune cookie. Two of them, actually. Martin D. Singer still carries in his wallet the slip he plucked from the first in 1980, on the day he decided to join John H. Lavely Jr. to start their law firm, Lavely & Singer. It reads: “Your intuitions in business decisions are good.” On the firm’s first anniversary, Singer recalls, he and Lavely went out for Chinese again. And he got the same fortune. Somebody knew the stars were in the market for a pit bull. Since then, Singer and his firm of 15 lawyers have emerged as Hollywood’s foremost protectors of the unlikeliest of underdogs: celebrities who seem to have it all. A growing tabloid culture, coupled with the brutal economics of a contracting entertainment industry, has left a surprising number of the glamour set feeling picked

on — and looking for someone to even the score. That is often Singer, a stocky, bespectacled 59-year-old litigator. More than 30 years ago, he began taking odd jobs that were beneath established firms, then built what might have been a niche practice — shielding stars and their adjuncts from annoyance — into a Hollywood mainstay. “He’s ferocious and fearless, he really is,” says Sylvester Stallone, one of the first in an expanding list of entertainers, executives and even political figures who have turned to Singer for help with contracts gone wrong, business relationships gone bad or most any other sort of problem. “I think I was having trouble with a dinosaur, that’s how far back we go,” jokes Stallone when asked how he initially connected with Singer. “There was a dinosaur making some sexual innuendos.” Lately, Singer has taken up the TURN TO CELEBRITIES, 2B


Edition 23 May 2011