France celebrates Bastille Day Tuesday with a grand military parade down Paris's majestic Champs Elysees, joined by a detachment of Indian troops. Indian Prime Minister Manmohan Singh is the guest of honour this year.

France celebrates Bastille Day Tuesday with a massive military parade down Paris's majestic Champs Elysee followed by concerts, fireworks and garden parties as the country marks the 1789 storming of the infamous Bastille prison that marked the start of the French Revolution.

The main feature of the day is a huge military parade involving 5,000 men, about 300 military vehicles, 83 motorbikes, 280 horses, 68 planes and 37 helicopters, according to French officials. The parade moves down the Champs Elysees, from the capital's landmark Arc de Triomphe to Place de la Concorde.

Security is tight across Paris, with nearly 10,000 policemen and gendarmes spread around the city's landmark sites, including the Eiffel Tower, where French rock hero Johnny Halliday will perform at a public concert later Tuesday.

Twelve European companies on Monday signed a deal for a 400-billion-euro ($560 billion) project to build solar farms in Africa and the Middle East to produce energy for Europe. 

The companies, which include leading German energy giants RWE and E.ON, electro-engineering group Siemens, and major insurer Munich Re, signed an agreement in Munich on Monday.

"Today we have taken a step forward (towards the project's realization)," said Nikolaus von Bomhard, head of Munich Re, which hosted the signing.

The firms grouped under The Desertec Industrial Initiative (DII) plan to build solar power generators in North Africa and the Middle East which could provide up to 15 percent of Europe's electricity needs by 2050.

Lawmakers in the Icelandic parliament, the Althingi, reconvened a marathon debate on Monday to decide if the Reykjavik government should formally apply for membership of the European Union.  

Iceland's wish to join the European Union received a setback on Sunday when five Green party members sided with the conservative opposition to block a resolution giving approval to the government proposal. The Greens have hinged their support on the coalition government giving the green light to a national referendum on EU membership.

Social Democrat Prime Minister Jóhanna Sigurdardóttir is opposed to idea of a referendum delaying accession talks and wants a quick vote so she can deliver Iceland's application on July 27 when Sweden's Foreign Minister Össur Skarphédinsson will be hosting a meeting of the Council of Ministers.

The European Parliament is set to elect its new president, and former Polish Prime Minister Jerzy Buzek has already won backing from the powerful conservative and social democrat parliamentary groups for the post. 

The election of the new president is to be among the parliament's first tasks as it begins its own new five-year term in Strasbourg.

The liberal-conservative Buzek, who has been a member of European parliament for five years and sits on the committee for industry, research and energy, would be the parliament's first president from the former-communist east. His election is believed to be now just a formality.

The move is said to reflect the growing influence of the EU's new member states from Central and Eastern Europe.

s Europe really willing to express its aversion to Israeli settlements in the West Bank by slapping customs duties on products made in them? A tax court in Hamburg might soon provide an answer to this touchy issue.

The Israeli settlement known as Maale Adumim sits fortress-like atop a red stone plateau. In the Bible, the road to the plateau was known as the "steep red road."

Yossi Zamir

The Soda-Club factory in the Isreali settlement of Maale Adumim is the center of a storm that is about more than just customs duties. As the largest Israeli settlement in the Palestinian-administered areas of the West Bank, Maale Adumim is home to 40,000 people. Bulldozers are clearing lots for new houses on its outskirts. Its population is growing by the week and, in recent years, it has grown faster than any other settlement.

On the edge of the settlement's industrial zone, there is a factory operated by a company called Soda-Club. The steel gate is painted blue and green to match the company's curvy, modern-looking logo. A camera records the movements of anyone approaching the gate. The plant produces tabletop devices that add carbonation to flat water, like the ones used in many German kitchens. And for those who prefer a sweeter taste, there's also syrup coming out of Maale Adumim.

Iraq has offered to supply enough gas to fill half the capacity of the proposed Nabucco pipeline, the prime minister said, giving the project a boost even as heads of government met to sign a historic agreement approving the plan.

The offer from the Iraqi government to supply 15bn cubic metres a year of gas by 2015 helps address the greatest obstacle to the 3,300km pipeline from eastern Turkey to Austria: the prospect of there not being enough gas to fill it.

That last bit is a bonus reason to support this law.

Ex-prime minister Tony Blair is the UK candidate for president of the European Council, Europe Minister Baroness Kinnock has apparently confirmed.

At a briefing for journalists in Strasbourg, Lady Kinnock said the UK was supporting Mr Blair for one of the most powerful posts in the EU.

Asked if this had been discussed with Mr Blair, she said the government "would not do that without asking him".

The post depends on Irish backing of the Lisbon Treaty in a referendum.

Sounds like the Irish just got a powerful reason to vote "no".  Are the UK trying to sabotage Lisbon?

Gordon Brown is backing Tony Blair, Britain's former prime minister, for a return to the world stage as president of the European Council even before the job has been formally created, a top government official disclosed yesterday.

The council includes the leaders of the 27 European Union member states, and currently rotates among them every six months. Under the proposed Lisbon Treaty, it would become a five-year post, making its holder one of the most powerful figures in Europe.

Banks in the European Union will have to restrict their investment in risky operations under new rules proposed by Brussels as part of a response to the current financial crisis.

"We are acting ambitiously to prevent lightning striking twice," said Jose Manuel Barroso, the president of the European Commission, the EU's main regulator introducing the new legislation on Monday (13 July).

New rules in the financial sector are supposed to prevent crisis "lightning striking twice"

The blueprint aims to revise the bloc's existing rules on capital requirements for banks in two key areas - securitisation and remuneration, viewed by experts as the key factors contributing to the crisis in the financial sector.

Both are linked with risk taking in the financial sector: securitisation involves pooling and repackaging of cash-flow-producing financial assets into "securities" then sold to investors that could worsen or lose their credit if the transaction is improperly structured.

EUOBSERVER / BRUSSELS - Non-EU members Norway, Iceland and Liechtenstein are set to renew a five-year funding scheme of over €1 billion for energy, social and democracy projects in the bloc's poorest member states.

"We have made good progress and we hope to finalize the negotiations before the summer break," Rune Bjastad, spokesman for the Norwegian mission to the EU told this website.

Over the last five years, Norway contributed over €1 billion in regional aid to the EU's new member states

Norway is the leading negotiator with the European Commission, with Oslo funding 97 percent of the current €1.3 billion allocated to EU's 12 most recent members, as well as Greece, Portugal and Spain.

In parallel to the renewal of the funding scheme, which ended in April, Oslo is also negotiating bigger export quotas for its fish products onto the EU market.

Singapore's economy has leapt out of recession, expanding in the second quarter at its fastest rate in nearly 6 years, thanks to a surge in biomedical production and construction.

Gross domestic product for the April-June period rose at an annualized and seasonally adjusted rate of 20.4 percent, versus a median forecast in a Reuters poll of 16.4 percent and the first rise after four consecutive quarters of contraction, preliminary government data showed on Tuesday.

From a year earlier, GDP fell 3.7 percent as manufacturing and service industries continued to contract, the data showed. That compared with expectations for a fall of 5 percent.

Analysts remained cautious over the data and questioned its sustainability given volatility in Singapore's drugs output and a weak global outlook, but said other export-dependent Asian
economies were also likely to see improved second quarters.

The core of the problem, the unavoidable truth, is that our economic system is laden with debt, about triple the amount relative to gross domestic product that we had in the 1980s. This does not sit well with globalisation. Our view is that government policies worldwide are causing more instability rather than curing the trouble in the system.

...

The only solution is to transform debt into equity across all sectors, in an organised and systematic way. Instead of sending hate mail to near-insolvent homeowners, banks should reach out to borrowers and offer lower interest payments in exchange for equity. Instead of debt becoming "binary" - in default or not - it could take smoothly-varying prices and banks would not need to wait for foreclosures to take action. Banks would turn from "hopers", hiding risks from themselves, into agents more engaged in economic activity. Hidden risks become visible; hopers become doers.

It is sad to see that those who failed to spot the problem (or helped to cause it) are now in charge of the remedy. Just as the impending crisis was obvious to those of us who specialise in complexity and extreme deviations, the solution is plain to see. We need an aggressive, systematic debt-for-equity conversion. We cannot afford to wait a day.

The whole paper is worth reading

"Ne te courbe que pour aimer..." René Char

The Department of Justice has opened an investigation into the credit derivatives market, with letters sent to over a dozen dealers asking for several years' worth of detailed information about trading and pricing.

The move comes as the regulatory spotlight continues to shine on the credit default swaps (CDS) market, a sector of the privately-traded derivatives universe that grew dramatically in the last decade and generated huge profits for Wall Street.

...

The letters, sent to banks with an equity stake in Markit Group, which provides pricing data on the CDS market and has developed many of the most closely-watched derivatives pricing benchmarks in it such as the mortgage sector's ABX, CDX and ITraxx Europe indices, were sent recently.

According to people who have seen the letter, it does not specify why the DoJ is seeking the information and whether it is a fact-gathering mission or linked to specific concerns of misconduct or market dominance. It was sent by the anti-trust division of the DoJ. The DoJ declined to comment.

In mid-March, the administration proposed that toxic assets could and would be safely removed from banks balance sheets.  We were skeptical, and the the PPIP now seems to have slipped into irrelevance (loans; securities).  But the administration still put an impressive effort into persuading independent analysts, and broader public opinion, that they should do something clearly beneficial for banks.  This was "all hands on deck," and it definitely had an impact on the debate, at least for a while.

Now, the administration's major remaining initiative is its version of a Financial Product Safety Commission - something that would be clearly beneficial for the public.  And the skepticism - and outright opposition - comes from the banking sector.

The Securities and Exchange Commission has created a new group of examiners to oversee credit rating agencies, which came under sharp criticism for their role during the financial crisis.

The SEC has already adopted a number of measures to increase transparency at credit rating agencies, which are paid by the issuers they rate. But greater oversight is needed with officials expected to conduct both routine and special examinations of their activities, Ms Schapiro is set to tell a Congressional oversight hearing on Tuesday.

The plan is part of a wide range of structural changes being made at the SEC, which has faced withering criticism in the past year for its oversight of financial firms and ratings agencies as well as for failing to detect the Bernard Madoff fraud in spite of credible allegations brought to it for at least a decade.

A businessman walks into a government minister's office and says he needs help. What should the minister do? Invite him in for a cup of coffee and ask how the government can be of help? Or throw him out, on the principle that government should not be handing out favors to business?

This question constitutes a Rorschach test for policymakers and economists.

Reprising much of the diary and comments on Chris Cook's No One Saw it Coming?
Parenteau adds some useful observations, starting with the common characteristics of those who did see it coming.

The dissenters, Bezemer found, shared an emphasis on a stock/flow coherent macroeconomics. That is, starting from what should be an uncontroversial, accounting based view that at the level of the economy as a whole, total income must equal total expenditures, and total assets must equal total liabilities, those who saw this coming were able to identify unsustainable sectoral cash flow and balance sheet developments. In advance, a stock/flow coherent macroeconomics revealed the reasons why the Great Moderation was bound, by construction, to eventually give way to the Great Disruption.

As Bezemer put it,

"Surveying these assessments and forecasts, there appears to be a set of interrelated elements central and common to the contrarians' thinking. This comprises a concern with financial assets as distinct from real sector assets, with the credit flows that finance both forms of wealth, with the debt growth accompanying growth in financial wealth, and with the accounting relation between the financial and real economy."

Having performed one such analysis for the Levy Economics Institute in 2006 (http://www.levy.org/vdoc.aspx?docid=866) and studied financial instability reports issued by the Levy Institute, the BIS, the IMF, and others prior to the recent financial crisis, we believe Bezemer has it largely correct. If policy makers are indeed serious about the "never again" pledge regarding a financial crises the size of the recent one, they will need to set aside the prevailing macroeconomic paradigm - one which has largely made itself irrelevant by approaching macro as little more than aggregated microeconomics. Instead, they will need to become familiar with a stock/flow coherent macroeconomics that highlights the way financial conditions can shape economic outcomes. This is an economics examined and utilized by J.M. Keynes, Irving Fisher, Hy Minsky, Wynne Godley, Kurt Richebacher, and others - it is an economics especially relevant to the world we actually inhabit.

-Skip-

If macroprudential supervision or any such related effort at reducing the odds of systemic economic crises unfolding from financial instability is to be successful, the core analytics will need to be built around a stock/flow coherent approach macroeconomics. The ground work in this area has been already been done by the likes of Claudio Borio, Wynne Godley, Levy Institute research associates, and others working in financial stability projects within various national and international institutions. Without paying attention to unsustainable sectoral cash flows and the resulting balance sheet leverage building up over time, financial vulnerabilities that can trip up the entire economy - indeed, as we have seen, the entire global economy - will remain largely invisible to investors, entrepreneurs, and policy makers. Perhaps that serves the interests of asset bubble perpetrators, but after recent events, it is high time to question whether those interests should remain paramount.

Voit released quarterly reports today for CRE in Las Vegas, San Diego and Orange County.  The reports show the vacancy rates are up and lease rates falling. It also shows new construction has slowed sharply. Here are a couple of graphs for Orange County and San Diego. We are seeing a similar pattern nationwide, although new construction in these areas probably slowed earlier than most of the country.

This graph shows the annual Orange County office vacancy rate and new construction since 1988.

In 2007 the rapid increase in the vacancy rate was due to a huge increase in new space combined with negative absorption as a number of Orange County financial companies (like New Century) went under. New construction has almost stopped, but the net absorption rate is still negative, so the vacancy rate is still rising.

The second graph is for San Diego. The dynamics are similar, but construction halted later than in Orange County.

Although Voit didn't provide a similar graph for Las Vegas, the situation is clearly worse:

   At the close of the second quarter, approximately 10.9 million square feet of vacant office product remained on the market, producing an average vacancy rate of 22.1 percent. When excluding owner-user buildings, the vacancy rate jumps to 24.2 percent for speculative space. Vacancy rates are up from the 19.6 percent posted three months prior, while the comparison to the 16.9 percent vacancy rate from the second quarter of 2008 is even more dramatic.

Great pair of charts from the NY Fed on the various policy responses to the financial crises

Financial Turmoil Timeline

International Responses to the Crisis Timeline

>

Hat Tip: VoxEU via Mike Panzner

Average length of unemployment highest since 1948. - WSJ.com

The recent unemployment numbers have undermined confidence that we might be nearing the bottom of the recession. What we can see on the surface is disconcerting enough, but the inside numbers are just as bad.

The Bureau of Labor Statistics preliminary estimate for job losses for June is 467,000, which means 7.2 million people have lost their jobs since the start of the recession. The cumulative job losses over the last six months have been greater than for any other half year period since World War II, including the military demobilization after the war. The job losses are also now equal to the net job gains over the previous nine years, making this the only recession since the Great Depression to wipe out all job growth from the previous expansion.

Here are 10 reasons we are in even more trouble than the 9.5% unemployment rate indicates:

The NY Times Room for Debate is discussing how we should interpret Goldman Sach's compensation pool, which will be an $11.36 billion set aside for the first half of 2009. Here's the unedited version of my entry (you may like the shorter, edited version better):

And it's not just that the financial sector needs to get smaller so that resources can be used productively elsewhere, the financial sector also needs to change its ways so that risk accumulations do not threaten the financial system and the broader economy. As Robert Reich notes today, Goldman's chief financial officer tells Bloomberg News that "Our model really never changed, we've said very consistently that our business model remained the same." Thus, a second signal from Goldman's unexpectedly large earnings is that firms such as Goldman Sachs are returning to the same high-risk strategies backed by too big to fail government guarantees that got us into trouble in the first place, and that aspect of Goldman's success is worrisome. It's a signal that the excesses that led to the high incomes of financial executives have not ended.

...

Other entries from William K. Black, Yves Smith, Charles Geisst, David Merkel, and Jeffrey Miron.

Following the publication of the first proposed EU law on hedge funds, driven by the French and Germans, many London based fund managers have called for the directive to be altered otherwise they would abandon Europe. The debate has increased as Sweden embarks upon its EU presidency

The Swedish Finance Minister suggested that the Swedish Presidency of the EU would not pursue "overzealous initiatives against hedge funds and private equity firms" and is hopeful of finding compromise between the UK on one side and the French and Germans on the other.

European Commission: Hedge funds are high-risk private investment partnerships that make huge wagers on market movements and are suitable only for professional and institutional investors.

Under the proposed law, managers of hedge funds and similar `alternative investment funds' that handle at least €500 million (€100 million for those using borrowed money) would have to register with regulators.

They would also have to disclose information about their business, for example the extent to which they use borrowed money or financial instruments to boost potential returns.

DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--Securities regulators on Tuesday issued a joint alert warning investors against buying or retaining over-the-counter shares of the now-bankrupt General Motors Corp. The alert, sent out by the Securities and Exchange Commission and the Financial Industry Regulatory Authority [FINRA], said there is "widespread misunderstanding by investors" that the stock in the bankrupt GM company is related to the "new" General Motors Co. that emerged from bankruptcy last week as a new entity that will belong in part to the U.S. and Canadian governments. "Motors Liquidation Company and the 'new' GM are separate and distinct," the alert said.

Not to be confused either with, according to the NYT, the closely held "Vehicle Acquisition Company but soon to be renamed the General Motors Company"? Persons such as the UAW who accepted OLD GM warrants in consideration of OLD GM fiduciary obligations may liken VAC to a GSE-controlled special purpose entity or pupa from which their ownership interest in the NEW!GM will materialize.

"The new GM currently has no publicly traded securities, and none of Motors Liquidation Company's publicly owned stocks or bonds are or will become securities of the new GM." The alert added that "Motors Liquidation Company is currently winding its way through bankruptcy court - and there is a real possibility that stock holders will receive nothing from these proceedings." Finra, the self-regulatory group for the brokerage industry, halted over-the-counter trading in old GM stock under the GMGMQ ticker symbol last Friday. A new ticker symbol - MTLQQ - will be issued for the old stock to avoid having it confused with the new GM, which does not have any publicly traded securities....

The alert added that investors are often confused by the fact that a company's securities may continue to trade after bankruptcy even though the common stock of that company is likely to be cancelled.

## Zombie Chronicles

Diversity is the key to economic and political evolution.

Video of Spitzer on Bloomberg TV today discussing Goldman-Sachs and the Matt Taibbi article in Rolling Stone this week as well as the reality of the bail-out and how a fictional "paper economy" has replaced the manufacturing base.  

It is nice, by the way, to have Eichenbaum et al showing that the paradox of thrift is real even in a model with lots of maximizing bells and whistles. Has someone told Gene Fama and John Cochrane?

Washington is bluffing that it will not bail out California, and every other state suffering from collapsed revenues and massive job losses. If cuts in police and schools don't force DC off from its current position, then the math will. Because in many states the aggregate revenue losses and looming cuts to state payrolls will largely render the intended effects of federal stimulus as moot. Frankly, unless Washington prints money and bails out every state that needs capital, including California, federal power will decline amidst this severe economic recession, and the process of a soft American devolution will begin. If you think this idea is outrageous, then you've still not come to terms with a core reality of our current situation: the structure of this financial crisis is wholly different than any in our post-war era. This isn't a recession. This is collapse.

Creditflux reported last week that the lawyers of bankrupt Lehman Brothers recently filed in English courts a request to overturn the concept of bankruptcy-remoteness for special purpose vehicles (SPVs). If granted, this request could spell the end of securitization as a once-upon-a-time multi-trillion credit product, regardless of how many PPIP or TALF revisions the administration throws into the CRE fire.

...

   A ruling against the investors would be hugely negative for the credit markets as the concept of bankruptcy-remoteness will most likely not be valid for any transactions where the swap counterparty has a U.S. connection. The immediate outcome will be potential ratings downgrades of funded synthetic transactions, as rating agencies factor in the lower ratings of swap counterparties (provided they have a U.S. connection). In some instances, this could lead to forced unwinds by ratings-sensitive investors, resulting in significant upward pressure on spreads. In the medium to longer-term, this outcome could present a huge hurdle in restarting the securitization market especially as most traditional investors, who are also ratings-sensitive, are unable to participate in the market.

Pay at Goldman Sachs this year is set to beat the boom levels enjoyed before the financial crisis, when top executives raked in tens of millions of dollars in year-end bonuses.

The prospect of bumper pay and bonuses at Goldman, which on Tuesday reported surging second-quarter profits and is a bellwether for Wall Street banks, is likely to reignite a fierce debate in the US over bankers' pay.

British policymakers had been wrestling for years with whether to scrap a long-standing ban on gays in the military -- but the pivotal decision was made abroad, by the European Court of Human Rights in Strasbourg, France.

The court ruled in 1999 that Britain had violated the rights of four former service members who were dismissed from the military for being gay and lesbian.

King's College professor Christopher Dandeker said there had been significant opposition to the change among military officers. There were predictions -- not borne out -- that unit cohesion would suffer and that large numbers of personnel would leave the military if gays could serve.

Once the ban was lifted, Dandeker said, the opposition dwindled, and the government of Prime Minister Tony Blair embraced the chance to be seen as a beacon of tolerance.

Lord Alan West, former head of the Royal Navy and now Britain's terrorism minister, served before and after the ban was lifted.

Nobel peace prize winner and human rights activist Shirin Ebadi visited Deutsche Welle's headquarters where she spoke about protests in Iran, human rights, President Ahmadinejad and the West. 

In 2003, Shirin Ebadi became the first Iranian to be awarded the Nobel Peace Prize. She is a lawyer, who gained entrance to the Faculty of Law at Tehran University in 1965. In 1975 she became the first woman in the history of Iran's justice system, to be made the president of Bench 24 of the Tehran City Court. She then set up her own practice after receiving her lawyer's license in 1992. Ebadi has written several books and many of her articles have been published in Iranian journals.

One of the most talked about topics in the world right now is the disputed Iranian presidential election. Do you believe the vote was fair?

With their street protests, Iranians have shown that they do not accept the announced results of the election which they believe was rigged.

You have also said that a new election will take place. Do you believe th

Cat owners may have suspected as much, but it seems our feline friends have found a way to manipulate us humans.

Researchers at the University of Sussex have discovered that cats use a "soliciting purr" to overpower their owners and garner attention and food.

Unlike regular purring, this sound incorporates a "cry", with a similar frequency to a human baby's.

The team said cats have "tapped into" a human bias - producing a sound that humans find very difficult to ignore.

Dr Karen McComb, the lead author of the study that was published in the journal Current Biology, said the research was inspired by her own cat, Pepo.

Inventor Ronald R. Savin, 82, uses a regular kitchen blender to make paint samples as he fine-tunes his formula. The engineer and retired Air Force colonel spent much of his military career creating coatings for spacecraft and airplanes.
Hyperseal paints can reduce the costs and energy needed for cooling by lowering the amount of heat a building absorbs from the sun. White roofs may be the new green.

On bright days, the rooftop of the Anaheim Hilton is so blindingly white that it looks like a mirror positioned directly at the sun. That dazzling glare might just be the greenest thing to happen to the top of a building since solar panels.

The white coating deflects nearly 85% of the heat that hits it, reducing the surface temperature by as much as 50 degrees. That means less energy is needed to cool the hotel's interior, cutting air conditioning costs and carbon emissions.

This is no ordinary coat of paint. Designed by an 82-year-old former military scientist from the Inland Empire, the tinted topcoat is filled with tiny hollow glass balls that deflect heat, layered over a waterproof undercoat made of recycled rubber.

The Hilton spent more than $150,000 on the project, which was completed in March. That's $300,000 less than the cost of a conventional repair to the old, leaky roof, said Jerome Annaloro, director of property operations at the hotel. If the reflective material cuts utility costs this summer the way management anticipates it will, Annaloro said, he will recommend white roofs for the entire Hilton chain.

... "When we conducted the experiments in ferrets and monkeys, the seasonal virus did not replicate in the lungs," said Yoshihiro Kawaoka of the University of Wisconsin, who led the study.

The H1N1 virus replicates significantly better in the lungs."

The new swine flu virus has caused the first pandemic of the 21st century, infecting more than a million people, according to estimates, and killing at least 500. The World Health Organization says it is causing mostly moderate disease but Kawaoka said that does not mean it is like seasonal flu.

"There is a misunderstanding about this virus," he said in a statement. "There is clear evidence the virus is different than seasonal influenza." <...>

People born before 1920 had a strong antibody response to the new H1N1 virus, meaning their body "remembered" it from infection early in life. This finding supports a study published in Nature in August that also found people who survived the 1918 pandemic still had immune protection against that virus. ...

For unknown reasons, the sun goes through cycles of activity that last about 11 years. During this time, the number of sunspots on its surface increases to a point called a solar maximum, in which the star's magnetic field grows strongest, and then gradually drops, with a corresponding weakening of its magnetism. These dark, Earth-sized zones of cooler temperatures and powerful magnetic forces sometimes disappear altogether. However, sunspots haven't stayed away this long--2 years--in nearly a century.

Scientists had been at a loss to explain the lull, as ScienceNOW reported last month (ScienceNOW, 8 May), but now a group from the National Solar Observatory (NSO) in Tucson, Arizona, thinks it has found the reason. It has to do with a magnetic phenomenon called solar jet streams. Every 11 years, the sun simultaneously generates twin streams of plasma at each of its poles. Unlike the jet streams on Earth, the solar versions are magnetized and travel only toward the equator. This migration takes place very slowly--at about 10 kilometers per hour. For reasons still not understood, when the streams reach 22 degrees of latitude, north and south, they touch off a new solar cycle, and the sunspots reappear.

That is what has just happened on the sun, but with a twist, says NSO scientist Frank Hill. He and colleague Rachel Howe have been tracking the solar jet streams since the mid-1990s using a technique called helioseismology. The method is similar to that used by seismologists to detect and evaluate earthquakes, and it's necessary because the solar streams occur several thousand kilometers beneath the sun's surface. Hill and Howe discovered that the jet streams generated in 1996 have migrated more slowly than normal, taking 13 years to reach the critical 22-degree latitude instead of the usual 11 years.

State TV says 168 people were killed when a passenger plane crashed Wednesday in northwest Iran.

Iranian Civil Aviation Organization spokesman Reza Jafarzadeh had told state television that 153 passengers and 15 crewmembers were on the Russian-made Caspian Airlines jet that had been headed from Tehran to the Armenian capital yerevan.

Footage from the scene on state-run Press TV shows a deep trench smashed into an agricultural field by the impact, littered with smoking wreckage. It showed a large chunk of a wing, but much of the wreckage appeared to be in small pieces.

Sir Edward Downes, the conductor emeritus of the BBC Philharmonic, and his wife Lady Joan Downes have died at the assisted suicide clinic Dignitas in Switzerland.

The couple's family said that they decided to end their lives together after struggling with serious health problems.

Lady Joan, 74, is understood to have been suffering with cancer while Sir Edward, 85, had become virtually blind and suffered loss of hearing.

My sister was left speechless by timeless Moghul monuments. She said it's only ideal symmetry and outstanding architectural skills that impressed her much but also as it's her first in India now she understands how Europe was lagging behind Asia till recent times till creation of European colonial empires in Asia. Taj was stunning and she thought it was something to do with breathtaking color contrast - silver white mausoleum was gleeming in the backdrop of brightly green manicured lawns, picturesque river (there was no stench though this time) and red sandstone mosques on both sides.

Absolutely stunning and better if you have good video/photo camera.

We were planning to visit Red Fort in Agra but spent too much time in Taj then went nearby to eat with a look at the monument so have had time only for Fatehpur Sikri and Salim Chisti tomb.

28-hour train delivered us to Goa in the middle of monsoon season. There are not so many tourists but still many expats, we have met one Georgian woman (I knew her from my previous visits there) who was reconstructing her rented home where she makes wonderful cheese and one German girl who started kindergarten for children of expats. Then we visited Smugglers Inn, bar owned by Englishwoman Dorotha but who is away in England, if anyone know her please tell her that her beefburgers are still great the only difference since last time pints of beer got expensive by 20Rs.

I recommend visiting India in monsoon because at the time it's looking most attractive. The only drawbcak will be no swimming. Bye.