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To understand Japan’s role in deflating the rice market, it helps to visit the warehouses rimming Tokyo Bay. It’s here in temperature-controlled buildings that Japan keeps millions of 30-kilogram vinyl bags of rice that it imports every year. Tokyo doesn’t need rice from the outside world: The country’s heavily subsidized farmers produce more than enough to feed the country’s 127 million people. Yet every year since 1995, Tokyo has bought hundreds of thousands of metric tons of rice from the U.S., Thailand, Vietnam, China, and Australia.

A Rice Imbalance

Why does Japan buy rice it doesn’t need or want? In order to follow World Trade Organization rules, which date to 1995 and are aimed at opening the country’s rice market. The U.S. fought for years to end Japanese rice protectionism, and getting Tokyo to agree to import rice from the U.S. and elsewhere was long a goal of American trade policy. But while the Japanese have been buying rice from farms in China and California for more than a decade, almost no imports ever end up on dinner plates in Japan. Instead the imported rice is sent as food aid to North Korea, added to beer and rice cakes, or mixed with other grains to feed pigs and chickens. Or it just sits in storage for years. As of last October, Japan’s warehouses were bulging with 2.6 million tons of surplus rice, including 1.5 million tons of imported rice, 900,000 tons of it American medium-grain rice.

It’s one of the cruel ironies of global trade that poor countries have been paying through the nose for rice while Japan has been sitting on reserves (BusinessWeek, 5/1/08). The imbalance is a cause for concern because half the world’s population depends on rice as a staple food. Following Shirasu’s announcement that Japan is putting its reserves to good use, U.S. trade officials have sent word to Tokyo that they back the move. The two sides will meet in Washington on May 23 to discuss the details.

That’s good news for poor nations like Bangladesh and the Philippines that either import rice or get handouts. The Japanese gesture has helped to rein in rice prices. On the Chicago Board of Trade (CBOT), rice futures have fallen almost 20% since reaching an all-time high of $25.07 per 100 lb. on April 24. But they are still nearly three times their levels from a year ago.

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To tap its import reserves, Tokyo had to get Washington’s imprimatur. That might not have happened if not for Tom Slayton, a former U.S. agriculture official, and Peter Timmer, a visiting Stanford University professor, who drew attention to Japan’s reserves in a report on the Center for Global Development’s (CGD) Web site in early May. Releasing the rice, they wrote, “would bring prices down immediately, averting hunger, malnutrition and increased mortality among poor people in Asia.”

Hundreds of African migrants were evacuated overnight from a squatter camp near Cape Town, the hub of South Africa’s prized tourism industry. Somali-owned shops also were looted in Knysna, a resort town on the southwestern coast.

“We don’t know the exact number of shops looted and burnt, but it’s a lot,” said Billy Jones, senior superintendent with the Western Cape provincial police. He added that one Somali died overnight but it was unclear whether the death was linked to the attacks.

At least 42 people have been killed and more than 25,000 driven from their homes in 12 days of attacks by mobs that accuse African migrants of taking jobs and fuelling crime. More than 500 people have been arrested.

The unrest began in Johannesburg area townships but has spread to other provinces. Authorities warned more attacks were expected over the weekend and said they would seek additional assistance from the military if necessary.

Troops have joined police in operations in Johannesburg’s seething shantytowns. President Thabo Mbeki approved army intervention to quell unrest that has threatened to destabilise Africa’s largest economy.

The South African currency fell sharply earlier this week on the back of the violence. The rand was slightly firmer on Friday at 7.63 to the U.S. dollar.

The violence comes amid power shortages and growing disaffection over Mbeki’s pro-business policies. Soaring food and fuel prices helped push tensions between poor South Africans and immigrants to a breaking point. The attacks have also sent a chill through the business community.

Officials in the tourism industry, a cornerstone of the economy, are worried overseas visitors will avoid the country. A number of Western governments have issued travel warnings for South Africa, and tour companies report rising cancellations.

Sen. Daniel Inouye (D-Hawaii), chairman of the Senate Appropriations defense subcommittee, asked Gates and Mullen the question he said no one wants to ask: “Is the cost of maintaining an all-volunteer force becoming unsustainable and, secondly, do we need to consider reinstituting the draft.”

Inouye cited the ever-increasing pay and benefits paid to active and reserve service members, noting that it now costs an estimated $126,000 per service member.

Gates and Mullen both said they thought the current volunteer force was the finest the U.S. has ever fielded. Gates said he “personally” believes that “it is worth the cost.”

Mullen was not quite as sanguine.

“A future that argues for, or results in, continuous escalation of those costs does not bode well for a military of this size,” he said, adding it the rising costs will eventually force the US to shrink the military, spend less on new weapons or to “curtail operations.” The question of pay and benefits for the U.S. military “is the top issue we need to come to terms with,” Mullen said.

This marks the first time a senior member of Congress has seriously discussed reinstituting the draft in almost two years. Rep. Charlie Rangel (D-NY), chairman of the powerful House Ways and Means Committee, called for reinstituting the draft in November 2006.

Vehicle owners can no longer be sure that petrol or diesel will be available on demand. Beginning Tuesday, Bharat Petroleum Corporation Limited has put its petrol pumps across the country on a “rationed” supply.

BPCL has adopted the drastic system because of a severe cash crunch for buying oil products.

Other oil majors like as HPCL and IOC too are facing a cash crunch given the government’s refusal to allow an increase in retail prices, which has been in the offing several times in the last few months.

Amarjit Singh, vice-president of the Petro Dealers’ Association in Mumbai, said that BPCL petrol-pump owners were informed on Tuesday that every dealer would receive only a limited quota every month.

“Every petrol dealer will receive petrol/diesel equivalent to the sale that was done in the same period last year. For instance, my pump sold around 80 kilolitres in May last year. I will receive a similar quantity or less this month,” he said.

In effect, this means that if a dealer exhausts his quota within, say, 25 days, due to the growing demand for petrol from the ever-growing automobile sector, he has to down the shutter for the remaining days of the month.

The company has told dealers that the move is only aimed at extending the available products for a longer duration.

Federal prosecutors in Alexandria, Va., on Tuesday obtained a superseding indictment against Kyle “Dusty” Foggo, who as executive director held the CIA’s No. 3 rank before leaving in 2006.

The indictment accuses Foggo of accepting tens of thousands of dollars in meals, vacations and other perks in exchange for helping friend Brent Wilkes obtain various contracts with the CIA.

The new indictment also includes an allegation that Foggo received sexual companionship and “enrichment of a mistress,” though the allegations are not detailed in the indictment.

Calls and an e-mail sent to Foggo’s lawyers were not immediately returned Tuesday.

The sexual companionship allegation may be new to the formal charges against Foggo, but they are a familiar part of the case as a whole. Wilkes has already pleaded guilty to paying bribes to then-Rep. Randy “Duke” Cunningham, R-Calif., some of which came in the form of prostitutes.

The superseding indictment also adds new counts of making false statements and conflict of interest against Foggo. Specifically, the indictment accuses him of failing to disclose the various gifts he received from Wilkes on his federal financial disclosure form.

The conflict of interest charges allege, among other things, that Foggo tried to steer to Wilkes a contract worth more than $100 million to provide air support to the CIA, even as Foggo stood to benefit financially.

Generally, though, the new indictment spells out many of the same allegations made previously; prosecutors had said earlier this year that the new indictment would not contain any major surprises for the defense.

CIA spokesman Mark Mansfield said Tuesday that “the CIA has cooperated closely with the investigating agencies and the Department of Justice. That cooperation continues today.”

“Malignant” is how he described the former and “malevolent” is how he described the latter as he paced across the small stage of a ballroom at the East Brunswick Hilton.

The former Central Intelligence Agency director under President Bill Clinton and current adviser to John McCain spoke May 13 at the American Jewish Committee Metro New Jersey Area’s National Community Relations Award dinner.

“No, we can’t prove conclusively that in another five or ten years, sea levels are going to be rising by such-and-such a degree,” said Woolsey. “But we can be pretty sure that society, like the individual who smoke five packs a day, is making the risk of climate change worse. What we know is we are making the problem worse by putting so much carbon into the atmosphere, and we are risking catastrophic and exponential change.”

As for terrorism, “the real problem is not just that the systems are vulnerable to malignant threats. Terrorists are smart,” he said. “They don’t need to wait for a tree to touch power lines in a summer storm. They can go on-line and read reports on how vulnerable the transformers are. Firewalls and intrusion detection systems are pretty effective against nine-year-old hackers. But 12-year-old hackers probably give them a real problem.”

And both issues come together in America’s dependence on foreign oil.

“If we don’t fix it, it is our fault. But oil’s distribution and infrastructure is not here,” he said. “Most of it is where the oil is, and two-thirds of the world’s crude oil production is in the Middle East. It is about as crazy as a society can be to depend on a substance for 97 percent of our transportation that comes from that part of the world…To be relaxed about that, as we have been for some time, is just about as self-destructive as a society can get.”

According to Woolsey, Al Qaida failed two years ago in an attack on the world’s largest oil production facility in Saudi Arabia.

“They could have taken about six million barrels of oil offline for well over a year. It would have sent oil up to well over $200 a barrel,” he said on a day that a barrel of oil briefly hit a record of $126.98.

Not only was the ingracious acronym amusingly close to C3PO, one of the hapless robots from the Star Wars movies, but also like the heroes of Star Trek the products seemed “to boldly go” where no credit product had gone before.

In a time of ever shrinking returns from investments in credit at the height of a raging bull market, early versions of these highly structured and complex deals promised to pay 200 basis points – that is 2 percentage points – over Libor, or the “risk-free” rate at which banks lend to each other. And that spread came with the top-notch triple A ratings that indicate an incredibly low probability that investors could lose their money.

To put this spread in context, triple A rated European prime mortgage backed bonds at the time typically paid less than 20bps, more than 10-times smaller than the CPDO – constant proportion debt obligation – coupon, for example.

However, the triple A ratings that Moody’s awarded to some early deals were based on a model that contained an error in its computer coding and these ratings should have been up to four notches lower, according to internal documents seen by the Financial Times. Billions of dollars could have been affected.

The very first deals from ABN Amro in August 2006, which were rated triple A by Standard & Poor’s alone, provoked huge excitement among bankers, investors, traders in the underlying credit markets and of course the media. Moody’s followed up with its first rating of an ABN Amro CPDO in late September 2006.

By December, a range of banks had copied the deal and this new kind of product had been credited by some with adding new impetus to the rally in corporate credit – a rally which meant that a number of the follow-up products could not pay the same high returns promised by the original deals.

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It was nothing more than a mathematical typo – a small glitch in a line of computer code. The impact of the “bug” Moody’s analysts discovered was, nevertheless, significant.

When the model was re-run it became clear that the CPDOs could no longer achieve triple A ratings, according to documents seen by the FT.

The results showed that early CPDOs might lose between 1.5 and 3.5 notches in the Moody’s Metric, an internal measure, which equals up to four ratings notches.

David Murray may drive the quietest car in North Texas, powered only by a small electric motor, and not creating any emissions.

“The most common question I get is, ‘Is this an electric car?’ and then they’re like, “Is it a hybrid?’ Nope, it’s a real electric (car),” Murray said.

When his car is low on fuel, Murray simply plugs the power cord into the nearest outlet.

“Yeah, just plug it in here. Just a regular old extension cord,” Murray said.

The self-described computer geek from Kennedale bought the 1993 Eagle Talon from a junkyard for just $750.

“First thing I did when I got the car home was pull the engine out,” Murray said.

He then spent about $4,000 more to convert the gas-guzzler to run on electricity alone, doing all the work himself in his garage at home.

“I bought the electric motor and I was like well, I gotta figure out a way to couple it together with the original transmission,” he said.

The car can hit 55 mph, driving right past the high prices at gas stations.

“I hear people complain about them at work all the time. I just grin,” he said.

Murray spends just $7 per month on electricity to charge the batteries — enough to go about 300 miles.