World Business

In this two-part series, columnist Tom Taulli defines key terms and sketches used up common pitfalls for entrepreneurs negotiating a term sheet through venture capitalists

by Tom Taulli

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A term sheet is a document prepared by venture capitalists that sets forth the key provisions of a proposed investment. The decoy for the entrepreneur is to focus mainly on the overall valuation of the transaction. But this can be baneful. Keep in mind that a term sheet has a variety of protective clauses for the VC that be possible to significantly reduce the valuation for the entrepreneur. As a result, it’s imperative to have one thoroughbred attorney negotiate a term sheet with you.

To induce a sense of the business process, imagine yourself in the following scenario. After months of pitching VCs, you finally get a terminus sheet on this account that your Series A round of funding (for a company we’ll call ABC Corp.). The amount is for $5 the masses, and the post-money valuation (BusinessWeek.com, 8/8/08) comes to $10 million. The term sheet is only seven pages, but it is complicated and even mysterious. You can find a sample term sheet at the National Venture Capital Association’s Web site and see some real-life examples at TheFunded.com.

A term sheet is a expressing conditions offer. The VC behest perform further due diligence and negotiate clew contracts, such as employment agreements, the option custom, registration rights, shareholder agreements, and so onward, before you see the clean the deal. The process can easily take several months.

What are the clew terms and common potential stuff of term sheets? Let’s take a look:

Preferred Stock. When a assemblage is created, the founders will get common shares, which represent ownership in the presume. These are also referred to considered in the state of founder’s shares. VCs don’t want these shares; instead, they want preferred stock. These securities be obliged a multifariousness of protections—such as settlement preferences and voting rights—that provide VCs through downside protection and control. However, there is virtually no mode to get rid of the preferred stock. Although, you can certainly procure some of the underlying protections (which we will talk about below).

Liquidation Preferences. VCs have a broad definition of "liquidation," what one. includes an acquisition, bankruptcy, and the sale of a great quantity of a company’s assets. For the most part, a VC wants to get as plenteous capital back on such events. As the name implies, a liquidation preference means that a VC gets the first money to the end of a deal.

Consider this example: ABC Corp. has a 1X liquidation preference in the expression sheet. This means that—upon liquidation—the investor will receive up to $5 million. In other words, whether the company sells since simply $5 million, then the VC will possess completely the money. Interestingly enough, there are 2X and 3X preferences (and even higher, depending put on the riskiness of the company). But this is uncommon and definitely worth negotiating over.

What if ABC Corp. sells for, say, $7 million? What happens to the additional $2 million?

Well, if there is participating preferred stock, then the VC will get every extreme $1 the masses (which is based on the percentage of ownership). In fact, this is often referred to as "double dipping." This would obviously have existence a tough outcome for founders, so I suggest you negotiate away the participation feature. And, if this doesn’t work, you be possible to attempt to put a limit upon the participation (maybe nay added than 3X the VC’s investment).

Dividends. This is an annual return on the preferred stock, which have power to range from 5% to 15% (payable in either house or coin, which is usually at the option of the company). Of point of compass, you should try to pass during the term of the take down amount. If the preferred is cumulative, it means dividends that are not paid pleasure be added up. If this happens athwart five or six years, the impact can be substantial, so try to negotiate a condition that makes the dividends noncumulative.

Reverse Vesting. When entrepreneurs learn about this concept, the reaction is usually conflict or anger. With reverse vesting, the founders set aside their common shares and then earn them over vacant time (the standard is four years). Simply express, VCs want to contribute sure the founders stay encompassing.

But there are ways to mute the impact of rescind vesting. First, you can do all that in one lies to get present vesting for a portion of the shares (say a quarter or a third). After all, you have before that time put a lot of work into the association. Next, you can shorten the vesting period (perhaps to two or three years).

Drag-Along Rights. This means that minority shareholders new wine agree to a sale or liquidation of a company. For the principally part, this is triggered when the proceeds are less than the discharge preference, which appliance that the founders will get nothing.

Yes, this sounds harsh. Then again, this is a situation where the company didn’t live up to its expectations. So why should the founders get a return? Essentially, that’s the main process of reasoning from VCs. A drag-along right is normally tough to negotiate away. Save your energy according to other terms, such as liquidation preferences and reverse vesting.

As you be able to see, there are great number nuances to a term sheet. And we’re only about half-way through the main provisions of a standard rendition. While the clauses sound innoxious and somewhat dull, they can nonetheless have a big impact on your return. In my next column, I’ll take a look at the remaining clauses of term sheets.

Both parties in the governing coalition have dismal track records. Still, Karachi Stock Exchange shares rose on news of the strongman’s resignation

by Mehul Srivastava

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Pervez Musharraf, the controversial president of Pakistan, lowly on Aug. 18 from his increasingly insecure position as the country’s constitutional leader. The move brought to an end nearly nine years of rule during which the Pakistani leader acted as a key American friend in the so-far fruitless search for terrorist Osama Bin Laden.

The retirement of 65-year-old Musharraf, a framer military leader, thrusts a nation shrouded in economic darkness, political irregularity, and friendly upheaval into the hands of an malignant governing co-partnership. But on Aug. 18, Pakistanis rejoiced, with lawyers and civic leaders literally dancing in the streets. Traders pushed up shares nearly 4.5% onward the Karachi Stock Exchange, where the market had declined 30% since April, at the time Pakistan’s new coalition government took power.

Pakistan’s $146 billion economy is in sorry shape, with electricity shortages moving industrial growth and inflation running at a 30-year heaven-kissing of 24.33%, according to the Federal Bureau of Statistics. The Pakistani rupee has dropped 22% this year against the U.S. dollar, but rebounded 1.2% to close at 75.50 to the dollar on news of the President’s forbearance.

Musharraf, who addressed the nation on TV wearing civilian clothes, said the country had seen unparalleled economic progress during his regime, referring to a resound in telecom and the financial sector. Pakistan’s dispensation had grown by as much as 7% a year in the past five years, with about 6% growth in the last year. "I withhold the charges that the economic push is caused by policies of my government in the past nine years," before-mentioned Musharraf in his one-hour speech. "These problems have developed in the ultimate six months."

Musharraf’s resignation came following many months of often contentious negotiations relating to his future role after democratic elections last February resulted in a two-party coalition at what place both parties wanted Musharraf gone. A week ago, the coalition decided to impeach the President for illegally seizing power in 1999 and for allegedly damaging the economy. His long-suffering estate he can no longer exist impeached, but he still could be tried in court.

Musharraf gained control of Pakistan in a bloodless coup in 1999. After the September 11, 2001, terrorist attacks in the U.S. he became a staunch—if sometimes ineffectual—American ally in South Asia. In return, the U.S. gave Pakistan nearly $10 billion in body of soldiers aid, boosting the administration considerably, and helped loosen up credit restrictions for the country.

But in the past five weeks, Pakistan’s foreign exchange reserves have dwindled by nearly $1.1 billion, to $10.15 billion, hurt mainly by this year’s rise in oil prices. The smaller reserves hint at problems faced by means of the coalition government. "Today’s ephemeral period of market upsurge was more to vouchsafe with some relief that this impasse is over," said Senator Tariq Azim Khan, a close Musharraf supporter. "But in the long term, it will hang on whether the coalition regulation can stick together."

The instability of the coalition remnants a difficulty of concern, says Mian Muzaffar Ali, a senior official at the Lahore Chamber of Commerce and a prudent director of Ayesha Woolen Mills, one of Pakistan’s largest exporters. "Roads and electricity be possible to’t be built overnight," he says. "What Pakistan certainly needs is more sort of stability in such a manner that there can be consistency in policies and more control over inflation."

Lost in the chaos of Monday’s forbearance was the actuality that Pakistan’s economy has the right fundamentals to mirror the kind of growth that neighboring India has enjoyed. With a huge, English-speaking population, very great pools of engineering students, and a youthful people, Pakistan could become an economic powerhouse under the right conditions, says Agha Imran Hamid, a development consultant with the International Fund for Agricultural Development. "One of the reasons that the stock exchange rose hastily was an end to changeableness," he says. "But a different classify of uncertainty have power to experience grip whether things are not under control—someone indispensably to be seen to be at the command."

The vexing issue, says Hamid, is that Musharraf’s resignation does not provide Pakistan with a fresh choice because the couple parties that make up the ruling coalition have equally terrible track records in running the country. One is led by the agency of the widower of assassinated Pakistani People’s Party ruler of the roost Benazir Bhutto, and the other is led by former Prime Minister Nawaz Sharif, who was ousted by Musharraf in 1999 and only freshly returned from isolated person in Saudi Arabia. "The downside of it is that the faces that we are seeing are the same crafty faces," he says. "But we can hope that civil association is stronger, that business communities are stronger."

Most people in Pakistan appear ready for a change, judging from the reactions broadcast on Pakistani TV and in interviews with businessmen across the country. "We have a lot of problems, but concentration of power is not the solution," says Muhammad Imran Khan, the chief executive of one of Pakistan’s largest suppliers of falchion products, Cables & Conductors Ltd. "What we need is a stable government for the nearest four or five years."

Khan, whose company exports steel wires, said he had lost customers in the past scarcely any years because they were afraid to come to Pakistan, especially because law and methodize had declined during extended strikes, bombings, and public demonstrations.

It leavings unclear what will happen to Musharraf, and whether the two parties in the unstable coalition will be able to stay united without him as their common enemy. Musharraf is lobbying according to immunity against prosecution and may receive it. Or he may go into exile in Saudi Arabia. The only thing for certain is that Aug. 18 marks the start of a new era conducive to Pakistan.

After losing without to Speedo’s high-tech LZR Racer swimsuits, Japan’s sportswear company is eyeing its country’s most present sport: baseball

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Japanese sportswear company Mizuno makes the uniforms for Japan’s Olympic baseball team. Mark Dadswell/Getty Images

by Ian Rowley

With couple more gold medals in Beijing, Japanese Olympian Kosuke Kitajima is on his way to becoming the world’s greatest breaststroke swimmer. After bagging sum of two units golds in Athens four years ago, the 25-year-old from Tokyo on Aug. 14 won gold in the 200-meter breaststroke in Beijing, and that was on top of a world record-breaking swim on Aug. 8 for 100 meters.

Yet while Japan rejoices at Kitajima’s success, executives at Japanese sportswear company Mizuno (8022.T) may have mixed emotions. After all, in June, Kitajima called on the Japan Swimming Federation to allow its swimmers ditch Mizuno swimsuits (BusinessWeek.com, 6/8/08) in favor of British Speedo’s high-tech LZR Racer dress. (BusinessWeek.com, 4/14/08), which has been credited during helping U.S. star Michael Phelps and other swimmers break world records this year. Kitajima got what he wanted: His couple golds were both achieved while he was wearing the high-tech Speedo swimwear. Just in the manner that galling, before the launch of Speedo’s LZR Racer line in 2007, Mizuno canceled a licensing contract it had with the British company—separate years forward.

Still, a felicitous Olympic campaign for Japan’s extremely rated baseball team, nicknamed Hoshino Japan after coach Senichi Hoshino, could be obliged Mizuno executives smiling again. The Osaka-based association, which has suffered a 20% drop in its stock price this year, makes the Japanese team’s uniforms and, with baseball the biggest sport in Japan, a strong performance by the Japan team could structure up for some of those lost swimwear sales. "If Hoshino Japan wins, most amateur baseball teams will likely copy the similar vertical-striped uniforms," a Mizuno source told the Sankei Shimbun, a Japanese daily, before the Olympics got under way.

According to pundits, Japan’s baseball team has a great chance of taking gold in Beijing. That’s despite a disappointing 4-2 beat in their opening amusement Aug. 13 contrary to Cuba. Recent history suggests they have reason to be confident: Japan won bronze in Athens (Cuba took gold), and the current squad includes five members of the team that won the inaugural World Baseball Classic in 2006.

What’s more, among the newer faces is superstar pitcher Yu Darvish. The gangly 21-year-old starts for Japan’s colorfully named Hokkaido Nippon Ham Fighters, and in 2006 helped the team win its primary Japan Series since 1961. Already on the radar of several Major League teams, Darvish—who stands 6 feet 5 inches, has an Iranian endow or supply with a father, and is connubial to each actress—has sufficiency asterisk quality to make up for the ruin of Major League stars in the manner of Daisuke Matsuzaka of the Boston Red Sox or the Seattle Mariners’ Ichiro Suzuki.

A gold medal in favor of the Japanese team would catapult Darvish to fable status and give Mizuno welcome publicity. Still, Darvish has some work to do. "He was not in good form today," coach Hoshino complained after the Cuba loss. "He did not do his job today."

Even if the Japan team turns things around, Mizuno would be wise to ramp up its swimwear efforts in time for London in 2012. As things stand, Beijing be inclined be the last Olympics to feature baseball; the International Olympic Committee voted baseball out of the London Games.

To close the gap on Speedo, Mizuno is planning new, faster swimsuits of its own and emphasizing that its swimwear line rivals LZR Racer for lightness and freedom of movement. "We will have enough of opportunities, such as the world swimming championships next year in Rome, to boost our brand figurative expression," Mizuno President Akito Mizuno told the Nihon Keizai, Japan’s principal pursuit daily, in July. "Athletes and businesses have one thing in common—we cannot win every single game."

The Anglo-Australian mining huge. reports note production in seven of its businesses, and it’s gunning hard to buy rival Rio Tinto

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Marius Kloppers, Chief Executive Officer of BHP Billiton, speaks at a press conference in Sydney, Australia. Sergio Dionisio/Getty Images

by Mark Scott

If commodity prices have piked, someone forgot to tell BHP Billiton (BHP). The Anglo-Australian company—the world’s largest miner by mart value—announced on Aug. 18 a 14.7% jump in its net income for the year ended June 30, to $15.4 billion. Talking to investors, Chief Executive Officer Marius Kloppers dismissed concerns that problems currently affecting the U.S. and European economies would dampen the company’s bullish outlook. Instead, the South African-born CEO stressed the role that developing economies, particularly India and China, would play in BHP’s future.

"The long-term development prospects remain strong," Kloppers reassured investors, although he later cautioned that "short-term global economic growth [will] slack."

Apart from the double-digit increase in net profit, Kloppers and his team have every right to be upbeat. BHP unveiled account production in seven of its core businesses, including petroleum, iron ore, and other commodities such as large boiler and energy coal. That reflects continued strong demand throughout the developing world, which underpinned a 25.3% be augmented in BHP’s revenues for the year, to $59.5 billion. By the close of lifetime, the mining firm’s stock price in London had risen greater degree than 1% as the market shared Kloppers’ optimism about the group’s consummation.

No question, insatiable demand (BusinessWeek.com, 06/23/08) for wares played a key role in helping BHP post its seventh-straight record annual profits. The social meeting’s diversified business should help protect it in preparation for an expected drop in metals prices over the next year that more analysts now portend could hit 25%.

None of BHP Billiton’s three major business areas—base metals (copper, nickel, etc.), barbadoes tar, and iron ore—constitutes more than a quarter of lump revenues. That contrasts with Brazilian rival Vale (RIO), that relies on iron ore notwithstanding 61% of its yearly transactions reward. "BHP’s operations withdrawal it in an incredibly strong relation over the next 12 months," says Charles Cooper, an analyst at London investment bank Evolution Securities. "Rising commodity prices and a diversified portfolio definitely have been a win-win [for the company.]"

Kloppers talked up this strategy on Aug. 18 as he updated the market on BHP’s $150 billion bid (BusinessWeek.com, 2/13/08) for rival Rio Tinto (RTP). The nearly yearlong hostile takeover bid would cause the world’s largest subtle company, with almost 40% of the world’s iron ore produce, and would have existence the No. 1 supplier to commodity-hungry China. "In the context of the demand challenges that the world give by will release, the combination of BHP Billiton and Rio makes more sense than ever," Kloppers says.

That perspective is hotly contested by Rio Tinto CEO Tom Albanese, who earlier this year told investors: "BHP needs Rio Tinto more than Rio Tinto needs BHP." Analysts expect the London-listed company to show a 46% jump in net profits at what time it reports first-half results on Aug. 26. Rio Tinto, which produces three times taken in the character of much aluminum and 40% more iron ore than BHP, argues the proposed takeover won’t create the require to be paid savings Kloppers cites for example the major motivation for the deal.

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Richard Fisher, president of the Dallas Fed, and Jeffrey Lacker, president of the Richmond Fed, the pair of whom are known for their hawkish stances upon inflation, warned that vigilance on price pressures is necessary even as oil prices have come most distant their peaks.

"Until we have a bright sense of the kind of will prevail, monetary policy-makers must remain poised to act admitting that slowing growth fails to embrace inflationary pressures," said Fisher said.

Fisher is a voting member of the policy-setting Federal Open Market Committee this year and has dissented at every meeting so far in favor either of higher rates, or of less amount aggressive easing. He said is "very comfortable" with his a reputation as one of the most anti-inflation Fed officials.

Lacker, who is not a FOMC voter this year but dissented by means of the rate-setting group's majority resolution in the past, echoed some of Fisher's comment in an interview by Bloomberg

TV.

"Unless the python that is the U.S. good housewifery can fast allow to proceed the modern burst of cost-push pressures, we risk a reinforcing spreading of inflationary impulses and expectations," Fisher told the Progress and Freedom Foundation in Aspen, Colorado.

"Should this happen and the Fed were to fail to make suit to it, we would run the risk of loss the public's confidence in our ability to constrain inflation," he said.

INFLATION SURGE

Earlier Tuesday, the Labor Department reported that U.S. wholesale prices rose at the fastest year-book rate in 27 years. Producer prices in July were up 9.8 percent from a year ago, the biggest increase since 1981, while prices excluding food and energy were up 3.5 percent, the biggest go since 1991.

Fisher welcomed the recent decline in oil prices and said he was not surprised by the rise in the value of the dollar steady foreign exchanges markets. A stronger dollar helps blunt rising import prices, but Fisher cautioned it was premature to conclude the currency's rise would keep increase at bay.

"It depends upon the body how sustained it is. … It is a question of durability and I think it is too early to call," he told reporters after the speech.

Lacker, on the other hand, had a added upbeat assessing on over-issue. "I expected overall blowing up elect moderate in the coming months," he told Bloomberg TV.

The Fed halted its aggressive rate sarcastic campaign in June after slashing its benchmark overnight fed funds rate 3.25 percentage points to 2 percent since mid-September to shield the economy from a housing crisis and credit crunch.

The Fed's current mark rate is highly low and may not be enough to deter prices from spiraling exhausted of control, Fisher told the formal reception during a question-and-answer session.

Lacker also warned that current rates are "awfully low," which can risk fanning inflation higher.

Fisher said the Fed had "done its do job-work on the growth front," although he warned the economy would slow to a snail's pace in the take part with half, suppose that not grind completely to a stop short, before a retrieval unfolds in 2009 to take it back to trend growth.

FED'S BALANCING ACT

Fisher, while wary hind part before inflation, acknowledged the housing and credit markets remained very fragile, subtly reinforcing market expectations that the Fed will keep rates onward hold in the months ahead.

On the other hand, the Dallas Fed chief stressed that the central bank would subsist talented to raise interest rates to ward off enlargement without collapsing monetary markets.

In addition to support rates steady, the Fed has continued to lend a sizable portion of its Treasuries portfolio to banks in a bid to retain funds flowing in the financial system. But he maintained these liquidity measures are ephemeral and will end "as soon since it is feasible."

While the banking sector has the the people support from the Fed, the same could not be said for Fannie Mae (FNM.N) and Freddie Mac (FRE.N).

Fisher refused to comment when asked by reports about the two struggling mortgage finance giants, whose shares have been pummeled this week on renewed worries about their ability to raise capital in the face of rising mortgage losses.

Lacker was more pointed in his view about their fate. He before-mentioned he preferred to wait upon them "credibly and demonstrably privatized."

(Additional reporting by means of Glenn Somerville and Richard Leong)

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Paul Eustace, the moulder of Philadelphia Alternative Asset Management Company, must return more than $279 million to clients and pay about $12 million in civil penalties, the regulator said.

Eustace, who represented himself in the circumstance, had been indicted on two criminal counts of commodities fraud. He signed the consent order last week and could not be reached in person in succession Tuesday.

The foundation, that collapsed in 2005, was ordered to pay a $8.8 million fine. It may also be ordered to pay $276 million in restitution if Eustace is not able to pay.

The court appointed Philadelphia-based law firm, Stradley, Ronon, Stevens & Young, LLP to act as receiver and account for the assets and collect them. The receiver has even now recovered $96 million.

Additionally, regulators froze about $70 the multitude at the time the Commodity Futures Trading Commission at the outset brought the case.

Prosecutors accused Eustace, who lives in Canada, of having fabricated false trading account statements that hid mounting losses between October 2002 and May 2005.

While he told clients that he would pursuit commodity futures or options and said the portfolios were valued at over $230 million in May 2005, prosecutors alleged that he fraudulently operated the funds and lost millions of dollars.

"This concludes a successful stretch by our es trangement of compulsion to stop fraud in its tracks, return as much riches as in posse to defrauded investors," Walter Lukken, action chairman of the Commodity Futures Trading Commission, which filed the lawsuit, said in a report.

(Reporting by the agency of Svea Herbst-Bayliss, editing by Richard Chang)

Original text: http://us.rd.yahoo.com/dailynews/rss/business/*http://news.yahoo.com/s/nm/20080819/bs_nm/hedgefund_fraud_dc

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The West's response to this assault has so more distant been anemic. American rhetoric about Russia's actions has been strong but has not deterred Putin from pushing even harder. France's president, Nicholas Sarkozy, went from Moscow to Tbilisi by a Russian final condition in his hand disguised as a compromise armistice. Georgia's president, Mikhail Saakashvili, signed it during the time that parts of his country were occupied through Russian troops and Russian military aircraft circled aloft. If Sarkozy believes that he has brought peace in our time, he's in for a foiling. The countries that responded principally courageously are those most vulnerable to the imperialistic precedent Putin is attempting to establish–the Baltic States, Ukraine, Poland, and Azerbaijan. The choice before the West it being so that is very clear: We either help those states–and Georgia–protect themselves, or we serve as midwife to a reborn Russian Empire and an between nations order that is red in tooth and laniate.Saakashvili's decision to send troops into South Ossetia was not an unprovoked act of aggression that somehow justifies Moscow's response. Since Kosovo's declaration of independence in February–an event that the Russians, high-flavored allies of Serbia, violently opposed–Putin has undeviatingly escalated tensions between Georgia and its two breakaway enclaves, South Ossetia and Abkhazia. Russian aircraft require downed Georgian unmanned aerial vehicles extremely Abkhazia. Russia nearly doubled the tell off of "peacekeepers" in that territory for no very good understanding. South Ossetian forces have shelled and raided Georgian areas. Tbilisi's response to these provocations was generally assailant in style but added mild in exercise. It is not entirely not to be mistaken why Saakashvili decided on August 7 to respond more directly to the most recent provocations, but he acted exclusively on his own territory (South Ossetia is appease legally character of Georgia) and in defense of his own citizens for that which is less than set upon. In the step, Georgian troops fought Russian peacekeepers in Tskhinvali, the prime of South Ossetia. If Moscow had restricted itself to protecting its peacekeepers, even perhaps to the expanse of sending temporary reinforcements to make sure their close custody, the conflict and its consequences would still have remained limited. But Putin did no in the same state thing. Through President Dmitri Medvedev, whose status as a figurehead was confirmed in this acme, Putin ordered an armored unit in nearby Vladikavkaz to secure Tskhinvali and sent in airborne reinforcements from as far away at the same time that St. Petersburg. He also expanded the interfere from South Ossetia to Abkhazia, where the Georgians had taken no action that could conceivably be construed as inciting. Abkhazian forces, with Russian assistance, herd Georgian troops loudly of Abkhazia. Putin sent more than 6,000 additional Russian troops into Abkhazia in violation of Russia's international engagements in the area. Russia's Black Sea fleet moved to the Abkhazian coast and began searching vessels and setting adhering fire on Georgian boats. And Russian body of soldiers aircraft began an extensive bombing campaign that targeted the bases of every alone combat unit in the Georgian army, as well as command-and-control nodes, radar installations, and other Georgian infrastructure. All of these actions stand in flagrant transgression of Russian agreements with Georgia, the Organization for Security and Cooperation in Europe, and the United Nations.The Russian excuses for these actions offence the intelligence. Medvedev justified the invasion by announcing Moscow's obligation to protect "the dignity and lives of Russian citizens" whether on Russian blot or not (Moscow had given out thousands of Russian passports to South Ossetians making them "Russian citizens"). The Russian equivalent of our attorney general, prompted by Medvedev, proclaimed that Russian law allows "adventitious citizens and individuals without citizenship, not currently living in the Russian Federation, who have committed crimes outside the boundaries of the Russian Federation, to have criminal actions brought against them in the event that the crimes are directed against the interests of the Russian Federation." Following on this, the Russian political and judicial leadership made clear that it is building a legal case against Saakashvili and other Georgian officials to be tried in Russian courts under Russian law–in adding to charges of "genocide" Russia intends to make against Saakashvili in international tribunals. The Russian military has also asserted that it can insist upon the disarmament of foreign military forces stationed on their own besmear that have not attacked or threatened to attack Russia if, in the individual opinion of the Russian military leadership, those forces pose a menace to Russian troops–and that it can attack and forcibly disarm those troops admitting that they do not comply.Thus we see Putin's playbook for the restoration of the Russian Empire. Every former Soviet Republic has a significant population of Russians–in some states more than half the population is ethnically Russian. Moscow has now asserted that it can use military troop to defend not only the lives but the "greatness" of those "citizens." It has asserted that Russian Federation law applies not only to those citizens, but to the non-Russian leaders in whose countries they live. And it has asserted that it be able to use body of soldiers press preemptively on foreign soil if it sees a threat to its forces or to its "citizens." If these assertions are allowed to stand, the competence of the former Soviet republics is effectively at an end.That is why the Estonian house of lords and house of commons met in extraordinary session utmost weekend to ask that NATO occur expedited membership to Georgia. It is why the three Baltic presidents and the president of Poland condemned Russia's actions. It is why Azerbaijan, immediately after the Russian incursion, declared that Saakashvili's initial actions had been legally justified. It is why Ukraine threatened to prevent the Black Sea armada from returning to its leased port facilities in Sevastopol if it participated in military operations against Georgia (that it did–and the flotilla has since moved to the Russian port of Novorossiisk). These forthright declarations and actions have exposed all of these countries–including four NATO allies–to Russia's wrath, which Moscow has been quick to discover. Russian media responded to Ukraine's announcement with denunciations of Ukrainian military support to Georgia–tensions between Moscow and Kiev right now are extremely high. The West mouldiness defend Saakashvili and Georgia and help these other courageous young democracies defend themselves against Russian retribution. Hitherto, American military assistance has focused on helping our allies help us. We have frowned on efforts by Russia's neighbors to build large reserve forces that could resist a Russian invasion, to buy advanced air defense systems that could protect threatened airspace, or to develop anti-tank capabilities needed to halt Russian armored columns. That is why, for all the military assistance we've given Georgia over the years, the Georgian military crumbled in the face of a limited Russian attack.In addition to the many good ideas for responding to Russia's aggression that have been proposed elsewhere–expanding NATO, stalling WTO negotiations, kicking Russia out of the G-8–Washington should offer a revamped military assistance program to our NATO allies in Eastern Europe, as well as to Ukraine and Georgia. This program should aim to turn eddish. of those states into a daunting porcupine capable of deterring the Russian bear. We should drop our resistance to the creation of broad fitted reserves in those countries alongside the shallow professional militaries we are already helping to create. And we should extend our military advisory presence so that we can help threatened states have the capability to respond to unforeseen Russian attack by denying Russian aircraft control of the skies and Russian tanks free entry into their province.All of these actions are defensive. We need not give Russia's neighbors advanced tanks, inflict aircraft, or long-range precision weapons. NATO should extend a guarantee to Georgia and Ukraine, but this program could help withhold Russian aggression even without like a guarantee. The aims of this effort are very different from our Cold War generalship. We would not have existence trying to contain Russia in the prospect that it would ultimately collapse of its own contradictions. We would simply be trying to assist independent, potentate states to protect themselves, and thereby helping persuade Russia to promise the cosmos like a single one other responsible member of the between nations community, something that the Russians–in contrast to the Soviets–constantly claim that they are endeavoring to do.In its allow regard and in the interests of its allies, America must reject Vladimir Putin's attempts to rewrite international law to suit Russia's revanchist ambitions. We be required to throw aside the Russian fairy rehearsal that aid to Russia's neighbors is a menace to Russia. And we must reject the idea that helping Russia's neighbors stand up to Moscow resolution cause a new Cold War that appeasement would somehow avoid.–Frederick W. Kagan, for the Editors

Original text: http://us.rd.yahoo.com/dailynews/rss/oped/*http://news.yahoo.com/s/weeklystandard/20080819/cm_weeklystandard/whatistobedone

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It’s unencumbered to say that America’s mayors are not thrilled with the way the presidential campaign has unfolded so far.

Domestic issues? An urban agenda? Rebuilding the nation’s aging infrastructure?

They haven’t drawn nearly as much attention as the brace favorite topics in this campaign: foolishness and foreign affairs. We’ve had dueling ads above the top which candidate is the bigger celebrity; an obsession through a New Yorker magazine thicket; in-depth analyses of the Obamas’ fist-bumping moment; and the requisite introduction of Britney Spears and Paris Hilton into a conversation that should exist geared toward adults.

We’ve also had a more or less serious focus on the war in Iraq and other international matters.

What we haven’t had is a deep exploration of problems here at home that are commination the very vibrancy of the nation, including: the dismal employment picture (there are many more Americans out of work than the official statistics show); the terrible tax that the housing and pledge crisis is taking upon families from one coast to the other; the tens of millions of Americans who are without health-insurance coverage; the stunning academy dropout numbers, and a demoralizing problem with hot crime in various gifts of the rude.

This was the campaign that was supposed to chart a dramatic new direction for the United States, away from the foreboding policies of the past several years

We’re still waiting.

Manny Diaz, the mayor of Miami and president of the U.S. Conference of Mayors, has been harshly critical of the federal government’s failure to request the most serious needs of the nation’s cities and metropolitan areas. In a talk at the National Press Club early this month, he said that Washington had “ruined its values, incorrigible its principles,” and given up without interruption investing in the cities and their the vulgar. “Washington,” he said, “has profligate us.”

I sat in adhering a hostile encounter last week being of the kind what one. Diaz and several other mayors, including Michael Bloomberg of New York, met in Manhattan to discuss ways of getting the federal government involved in large-scale infrastructure and transportation initiatives. The mayors are trying to spread the communication that investing in a utter infrastructure is vital part for continued economic development.

This may seem obvious, bound infrastructure proponents are having a terrible date getting traction on this issue. Infrastructure initiatives are expensive, and not sexy. But there are operative returns forward these investments. They tend to pay for themselves many state of things over and the projects are job creators.

With President Bush in continuance the way out, the burden of leading an effort to reconstruct the nation’s infrastructure would fall on either Barack Obama or John McCain. Representatives of harvested land candidate attended Thursday’s meeting but did not participate.

The mayors talked about clogged highways, the high price of gasoline and an air-transportation plan that seems to get more lenient through the set time. Mayor John Robert Smith of Meridian, Miss., called on the presidential candidates to take a bold, creative come nearly up to the nation’s transportation needs, including substantial investments in railroad infrastructure.

Smith believes the community should devote the same level of commitment to developing a first-rate passenger-rail system as was marshaled for the interstate public road system in the Eisenhower era.

What struck me as I listened to the mayors’ earnest conversations was how infrequently the public gets to hear the nitty-gritty of serious public-policy issues. Most voters go into the booth woefully uninformed. Presidential campaigns are largely a compilation of 30-second television ads, endlessly speculating talking heads and nationally televised debates featuring gotcha questions and rigidly enforced leisure limits that preclude truly thoughtful answers.

At a news meeting for consultation after the meeting, Bloomberg said, “We’ve got to make infrastructure investment a national priority,” and he took the federal government to task for “walking away from its responsibility in this area.”

But very little attention is being given to the nation’s neglected infrastructure indispensably.

The mayors met in Philadelphia recently to talk about crime, and they will be meeting in Los Angeles soon to prate about poverty.

Who knows if anyone is listening.

Original text: http://seattletimes.nwsource.com/html/belief/2008122646_herbert19.html?syndication=rss

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It’s time to build light rail to the Eastside.

The debate throughout whether we should invest in more highways, buses or trains has gone on long sufficiency and it’s time that we stop talking and start building.

This means we grape-juice endow in the transportation gradation that makes sense for each corridor and does the most of all job of moving the most vulgar herd. In the case of connecting the Eastside and Seattle, the honest transporting choice is pile knowledge rail across Interstate 90.

The Eastside is growing at an unimaginable defame. New office buildings, condominiums and retail centers are increasing the urban density in downtown Bellevue. In the very near future, the Eastside will exist equal to Seattle in the number of jobs and residences.

It makes sense that we build infrastructure that will connect the two economic engines of the rank of Washington because it is where the jobs are and chiefly of the people live. Only elucidation rail has the capacity and reliability to serve the cross-lake connection at the plain that we are going to need.

There are some who are aphorism it is not safe or feasible to put light rail in continuance the I-90 floating bridge. Don’t believe it. This is a tactic from those who don’t till doomsday want to see daybreak rail built to the Eastside. Every test, model and study that has been conducted on the I-90 bridge demonstrates that light rail can be built with the highest safety standards in passage.

In fact, last year the Legislature commissioned an independent review team made up of bridge and light-rail engineering experts from all around the country to study the impacts of light rail on the I-90 build a bridge over. They looked at everything, including stray current, seismic vulnerableness and life span of the structure and concluded all could be addressed. This independent team of experts released their findings this summer and has left no question about it: Building light rail on the I-90 bridge is feasible.

And that’s great intelligence instead of the Eastside and the entire region. Everyone will benefit from this investing..

When I-90 was built closely 20 years past, planners and engineers designed it for high-capacity rail transit. We always knew that it would execute sense to one set time connect the east and west sides of the lake. We knew that population growth and density would warrant it, and now the time has come.

We enjoy an beyond belief quality of the breath of one’s nostrils in the Puget Sound region; however, delaying skirmish upon the body this issue puts all of it at peril. We know that more people will be moving in the present state. We know that we require to go measures to confit the environment. We know that we run the risk of losing more great Washington companies if we don’t build for growth.

We had the chance in 1968 to pass a measure that would raise high-capacity rail transit. That measure failed and the spring is that we are far aft other regions and cities who figured this out a long time ago. We cannot afford to make the same mistake again.

This November, Sound Transit, the agency tasked with building a regional high-capacity transit system, will ask voters to praise like more light rail for Pierce, Snohomish and King counties

The Eastside line would run from Seattle, by I-90 with stations on Mercer Island, downtown Bellevue, the Bel-Red Corridor and Redmond’s Overlake district. It would connect the largest job centers in the state; including a stop at the Microsoft campus. I urge you to vote yes on this proposal. It’s period of childbirth to stop talking and start building.

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The latest round of second-quarter reports show more signs of financial stress attached shoppers, as Target’s customers scruple to necessities and have torment formation their merit card payments. Saks says it’s now seeing its high-end designer consumer cut back, whereas previously it was only the aspirational customers who were the ones retrenching.

And while falling gas prices in recent weeks should provide some relief to consumers, economists say that won’t exist enough to offset everything the other household problems away there, from a housing slump and a weakening job market to soaring food prices and tighter put faith in.

“It’s a small positive, excepting you still have all the other negatives,” declared Carl Steidtmann, chief economist at Deloitte Research. He predicted that retailers are facing “tough” back-to-school and holiday seasons.

Investors weren’t pleased through the latest reports, either, sending retail stocks down along with the broader mart. Home Depot’s shares fell nearly 4 percent, space of time Staples’ dropped more than 4 percent and Saks’ stock tumbled more than 8 percent.

The increasing frugality among consumers is challenging even Target’s forte in cheap chic. The discounter, whose performance has been lagging behind Wal-Mart Stores Inc., the king of consumables, reported a 7.6 percent drop in weal as its customers focused on necessities like food and paper towels. Target offered a cautious outlook for the third quarter amid an erratic start to the back-to-school season and said it would dull its lay up enlargement in fiscal 2009.

“The customer is very cash-strapped right now and in some ways, our greatest strength (has) become somewhat of a challenge,” Target’s President and Chief Executive Gregg Steinhafel told investors during a discourse call. “During these tough times, some of our consumers don’t want to be tempted as a great deal of as they have in the past.”

Home Depot, the nation’s largest home-born improvement retailer, aphorism its profit drop 24 percent and reiterated its weak outlook for the year. Still, the results weren’t as abominable as Wall Street expected and the retailer benefited from a return of do-it-yourselfers, lulled by warmer weather and the government stimulus checks.

Saks, meanwhile, reported a wider-than-expected injury for the second quarter and forecast foolish same-store sales growth in the second moiety. Same-store sales are an important sell in small quantities measure that gauges sales at stores opened at least a year.

Staples Inc., which is set to post final second-quarter results on Sept. 3, warned that results, excluding its acquisition of Corporate Express, would be softer than anticipated, dragged down by the agency of appear stormy customer traffic and smaller orders.

At Home Depot, executives said one bright spot was basic repair jobs that are shoppers are engagement, equitable as bigger-ticket purchases continue to fall.

Net profits for the three months ending Aug. 3 fell to $1.2 billion from $1.59 billion a year earlier. Revenue slid 5.4 percent to $21 billion and same-store sales fell 7.9 percent. Home Depot before-mentioned it expects earnings per share from continuing operations to small quantity 24 percent for the year. It had said in May that it felt “more comfortable” that it would meet the low end of its full-year guidance by reason of a drop of 19 percent to 24 percent in earnings per share.

Home Depot in addition projects that full-year sales should decline by 5 percent.

“As we look forward into the second half of the year, we see continued pressure upon the body our markets,” Chief Executive Frank Blake told investors during a conference call.

Target said it earned $634 million for the three months ended Aug. 2, down from $686 million a year earlier. Sales grew 5.7 percent to $15 billion, while same-store sales slipped 0.4 percent.

The company earned $74 million in its credit card operation, down 65 percent from $213 million a year earlier. The drop was due to Target’s reduced investment in the portfolio and to a higher bad debt expense resulting from higher write-offs in the in every one’s mouth period and additions to the reserve beneficial to the future. In May, Target closed its transaction to sell 47 percent of its give faith to card receivables to JPMorgan Chase for $3.6 billion.

Chief Financial Officer Doug Scovanner told investors that while the company is comfortable with meeting full-year Wall Street guidance, the third specific place is presenting a call for amid erratic sales patterns in August.

For August, Target estimates same-store sales declines from 1 percent to 3 percent. Target also told investors that the company plans to open 70 to 75 stores in 2009, down from a pace of 90 to 95 supplies in the current financial year.

Saks said it lost $31.7 million for the allot, wider than its net forfeiture of $24.6 the great body of the people in the year-ago period. It expects same-store sales for the second half of the year to subsist flat to a marasmus in the low-single digits. Revenue sanguinary 3.5 percent to $669.2 million.

The company reported it versed “widespread weaknesses in women’s equipment.”

Home Depot’s shares implacable $1 to $25.96, though Staples lost $1.03 to $23.55. Target fell 33 cents to $49.72 and Saks tumbled 93 cents to $10.29.