UPDATE 1-U.S. Sept existing home sales hit record low pace

(Adds background, details, quote, market reaction)

WASHINGTON, Oct 24 (Reuters) - U.S. sales of previously owned homes fell 8.0 percent in September to a record low 5.04 million unit pace amid troubles in the subprime mortgage and credit markets, the National Association of Realtors said on Wednesday.

It was the lowest sales pace since the group began tracking both single-family and condo sales jointly in 1999.

Total existing home sales, which include condominiums, fell in September from a downwardly revised pace of 5.48 million in August. Economists polled by Reuters were expecting home sales to fall to a 5.25 million-unit sales pace.

"Home sales fell in September, but it was certainly due to the August credit crunch," said NAR economist Lawrence Yun.

U.S. Treasury debt prices extended gains slightly. For details see [ID:nN24472615]

The dollar slipped against the yen to session lows after the unexpectedly weak report. [ID:nNYH000578].

"The housing data ... tells us that we are not out of the woods yet. It increases the uncertainty regarding the U.S. economic outlook and reinforces the view the Fed may have to cut rates at its meeting next week," said Matthew Strauss, senior currency strategist at RBC Capital Markets in Toronto.

The slower pace of sales helped drive up the inventory of homes available for sale by 0.4 percent at the end of September to 4.40 million, which represents a 10.5-month supply at the current sales pace. That supply was the highest for both single-family and condos combined since 1999. Continued...

Thousands of black men to help patrol violent city

By Los Angeles Times and Reuters

Music mogul Kenny Gamble, left, and entertainment executive Charlie "Mack" Alston joined in Sunday's call to action.

PHILADELPHIA — A month after civic leaders and the police chief in this crime-plagued city called for 10,000 black men to patrol the streets, thousands arrived Sunday by foot, car, motorcycle, bus, in wheelchairs, with sons and nephews in tow.

"Sign up here!" a volunteer shouted to the long line of men circling Temple University's athletic center. "Be a part of history!"

With 6,000 already registered online, more than 7,000 men showed up Sunday. They wore suits, fraternity letters, job uniforms, T-shirts emblazoned with the face of Dr. Martin Luther King Jr. or Malcolm X or the words "Stop the Violence."

Many waited more than an hour in line to register, although they did not know much about how they would be trained or deployed to curb violence. But all agreed they wanted to end the killings and drug wars that have seized their neighborhoods.

More than 300 people have been killed here this year. Last year, there were 406 homicides, and most involved black males.

The homicide rate has defied repeated appeals by police and civic and community leaders, and has led national media to dub Philadelphia "Killadelphia" instead of its official nickname, the City of Brotherly Love.

"It's the first step," said Ronald Morris Sr., 50, a middle-school teacher who brought his 16-year-old son to the event. "I hope to try to awaken the spirit of these guys," said Morris, whose son has lost two friends to violence.

Volunteers, who will be unarmed and have no powers of arrest, will be trained in conflict resolution and mentoring.

At neighborhood orientations, they'll also learn how to direct residents to education, jobs and services such as drug treatment, the Baltimore Sun newspaper reported.

The sessions will begin Tuesday and take place throughout the next few weeks. Volunteers are expected to be sent into the streets on three-hour patrols within the next 30 days.

Backers, including Philadelphia Police Commissioner Sylvester Johnson and record-industry boss Kenny Gamble, say the initiative has a better chance of succeeding than earlier anti-violence campaigns because it is broadly representative of the black community, rather than led by the city government or police, who are mistrusted in some inner-city areas.

It has been endorsed by more than 80 community groups, businesses, churches and government agencies, organizers said.

But others, including City Councilman Michael Nutter, are more measured in their endorsements: "I want to be careful about asking people to go into the streets," he recently told The Philadelphia Inquirer.

The call to participate was directed at black men, but organizers said all were welcome. The majority of those who attended Sunday were black.

In a two-hour rally, black leaders urged men to take responsibility for their communities and their families, and to stop blaming others for a history of economic underachievement.

"Slavery, at this late time, is no longer an acceptable excuse," said A. Bruce Cawley, a prominent black businessman.

He said that in the 325 years blacks have lived in Philadelphia, they have been overtaken in prosperity by immigrant Irish, Jews, Italians and now Asians and Hispanics.

"And where are we? We are sitting on the sidelines," Cawley said.

Johnson, whose department has been criticized for failing to curb the homicide epidemic, said police cannot be blamed for its root causes, such as poverty, unemployment, poor education and weak gun control.

"Traditional policing is not working," he said.

Chandlan Crawford, 38, a forklift driver from southwest Philadelphia, said he had already volunteered to join a street patrol and was optimistic that the thousands who attended Sunday's rally would generate more support.

"The people that are here will take the message out there," he said.

H. RUMPH JR / AP
A supporter displays a sign Sunday as thousands of black men registered as volunteers to combat Philadelphia's violence.

Digital scans reveal Mona Lisa secrets

Matthew Weaver and agencies
Monday October 22, 2007


Pascal Cotte with a replica of Leonardo da Vinci's Mona Lisa. Photograph: Marcio Jose Sanchez/AP


The Mona Lisa's famously enigmatic smile was originally wider and more expressive, according to new scans of the painting.

Pascal Cotte, a French engineer, used a self-designed digital camera to uncover what he claimed were 25 secrets about Leonardo's da Vinci's portrait.

Mr Cotte said his 240-megapixel scans revealed traces of Mona Lisa's left eyebrow, obliterated by long-ago restoration efforts.

"The face of the Mona Lisa appears slightly wider and the smile is different and the eyes are different. The smile is more accentuated," Mr Cotte told the Live Science website.

He was invited by the Louvre museum in Paris to photograph the painting in 2004. The results were revealed at an exhibition at the Metreon Centre in San Francisco.

Speaking at the opening, Mr Cotte said: "With just one photo you go deeper into the construction of the painting and understand that Leonardo was a genius."

As a boy growing up in Paris in the 1960s, Mr Cotte said, he spent hours staring at the Mona Lisa at the Louvre.

He later used his expertise in light and optics to develop a camera that would let him examine the object of his obsession.

Mr Cotte estimated he had spent 3,000 hours analysing the data from the scans he made of the painting three years ago.

Other findings included: · Da Vinci changed his mind about the position of two fingers on the Mona Lisa's left hand; · the presence of a blanket that had all but faded from view; · lace on her dress; · "blotches" on her chin and an eye were varnished marks.

Mr Cotte said his analysis also revealed what he believed were the painting's colours as they had looked on Da Vinci's easel.

Age, varnish and restorations have resulted in a painting that now appears saturated with heavy greens, yellows and browns.

Using his camera, made with 13 different colour filters rather than the typical three or four found in consumer-grade digital cameras, Mr Cotte created a reproduction of the Mona Lisa with the light blues and brilliant whites he said represented the painting in its original form.

"For the next generation, we guarantee that forever you will have the true colour of this painting," Mr Cotte said.

Though some art historians have expressed scepticism about Mr Cotte's findings, he said he hoped his technique could be used as a guide for future restoration work on ageing art treasures around the world.

Mr Cotte was not the first to subject the Mona Lisa to detailed scans. Last year, another project revealed that her hair was originally gathered in a bun and that she was wearing a maternity dress.

Bush Asks for $46 Billion More for Wars

Monday October 22, 2007

By ANDREW TAYLOR

Associated Press Writer

WASHINGTON (AP) - President Bush asked Congress on Monday for another $46 billion to fund the wars in Iraq and Afghanistan and finance other national security needs. ``We must provide our troops with the help and support they need to get the job done,'' Bush said.

The figure brings to $196.4 billion the total requested by the administration for operations in Iraq, Afghanistan and elsewhere for the budget year that started Oct. 1. It includes $189.3 billion for the Defense Department, $6.9 billion for the State Department and $200 million for other agencies.

To date, Congress has already provided more than $455 billion for the Iraq war, with stepped-up military operations running about $10 billion a month. The war has claimed the lives of more than 3,830 members of the U.S. military and more than 73,000 Iraqi civilians.

Bush made his request in the Roosevelt Room after meeting in the Oval Office with leaders of veterans service organizations, a fallen Marine's family and military personnel who served in Iraq and Afghanistan.

The White House originally asked for $141.7 billion for the Pentagon to prosecute the Iraq and Afghanistan missions and asked for $5.3 billion more in July. The latest request includes $42.3 billion more for the Pentagon - already revealed in summary last month - and is accompanied by a modified State Department request bringing that agency's total for the 2008 budget year to almost $7 billion.

Bush said any member of Congress who wants to see success in Iraq, and see U.S. troops return home, should strongly support the request.

``I know some in Congress are against the war and are seeking ways to demonstrate that opposition,'' Bush said. ``I recognize their position and they should make their views heard. But they ought to make sure our troops have what it takes to succeed. Our men and women on the front lines should not be caught the middle of partisan disagreements in Washington, D.C.''

Democrats were not swayed.

``We've been fighting for America's priorities while the president continues investing only in his failed war strategy - and wants us to come up with another $200 billion and just sign off on it?'' said Senate Majority Leader Harry Reid, D-Nev. ``President Bush should not expect Congress to rubber stamp his latest supplemental request. We're not going to do that.''

The State Department is requesting $550 million to combat drug trafficking in Mexico and Central America, $375 million for the West Bank and Gaza and $239 million for diplomatic costs in Iraq.

Top House lawmakers have already announced that they do not plan to act on Bush's request until next year, though they anticipate providing interim funds when completing a separate defense funding bill this fall. Bush asked lawmakers to approve the request before the holidays.

``We must provide our troops with the help and support they need to get the job done,'' Bush said. ``Parts of this war are complicated, but one part is not, and that is America should do what it takes to support our troops and protect our people.''

Congress already has approved more than $5 billion for new vehicles whose V-shaped undercarriages provide much better protection against mines and roadside bombs. It's likely that Congress will quickly grant $11 billion more to deliver more than 7,000 of the vehicles.

The delays in submitting the remaining war funding request were in part due to unease among congressional Republicans about receiving it during the veto override battle involving a popular bill reauthorizing a children's health insurance program.

The request also includes $724 million for U.N. peacekeeping efforts in the war-torn Darfur region in Sudan, $106 million in fuel oil or comparable assistance to North Korea as a reward for the rogue nation's promises to cease its efforts to develop nuclear weapons. Another $350 million would go to fight famine in Africa.

For the Pentagon, the latest request includes:

-$1 billion for military construction projects, including improvements at airfields and other U.S. bases in Iraq.

-$1 billion to expand the Iraqi security forces.

-$1 billion to train National Guard units.

All told, the $189.3 billion Pentagon request for 2008 includes:

-$77 billion for military operations and maintenance.

-$30.5 billion for to protect U.S. forces from roadside bombs, snipers, and other threats.

-$46.5 billion to repair and replace equipment that has been damaged or destroyed in combat or worn out in harsh conditions in Iraq and Afghanistan.

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Associated Press writer Deb Riechmann contributed to this report in Washington.

Waxman: Blackwater Violated Tax Laws

Monday October 22, 2007 8:16 PM

By ANNE FLAHERTY

Associated Press Writer

WASHINGTON (AP) - The Democratic chairman of a House watchdog committee said Monday that Blackwater USA violated tax laws and may have defrauded the government of millions of dollars, a charge the embattled security firm said is groundless.

Rep. Henry Waxman, who chairs the Committee on Oversight and Government Reform, released a March letter from the Internal Revenue Service that states the company's classification of a security guard as an independent contractor, instead of company personnel, was ``without merit.''

Under U.S. law, companies must pay Social Security and other federal taxes on their employees. But unlike other security companies operating in Iraq, Blackwater says the guards it trains, equips and deploys to Iraq and elsewhere are independent contractors hired directly by the federal government.

``By classifying its armed guards and other personnel as independent contractors instead of employees, Blackwater has apparently evaded withholding and paying these taxes,'' Waxman, D-Calif., wrote in a letter to Blackwater chief Erik Prince.

Waxman's charge comes as the company is struggling to salvage its reputation after a string of security incidents involving its guards, including a September shooting that left 17 Iraqis dead.

U.S. and Iraqi officials are negotiating Baghdad's demand that Blackwater be expelled from the country within six months, and American diplomats appear to be working on how to fill the security gap if the company is phased out.

Blackwater spokeswoman Anne Tyrrell said in an e-mail statement to The Associated Press that the company has appealed the IRS ruling and that no final determination has been made. Further, she said, the U.S. Small Business Administration has told the company that Blackwater security guards do not have to be classified as company employees.

``It is unfortunate that the chairman has relied upon a one-sided description of the issue to color public perception without all the facts being presented,'' Tyrrell said.

An IRS spokeswoman declined to comment on the case, as is custom to protect privacy.

Waxman has been investigating Blackwater's business dealings for several weeks, including whether the State Department unfairly awarded Blackwater a noncompetitive contract and if its guards took control of two Iraqi military aircraft without permission.

According to the House Democrat, the IRS' finding was the result of an inquiry filed by a Blackwater guard. The guard later agreed not to discuss the matter with anyone, including politicians or public officials, in exchange for receiving compensation owed to him by Blackwater, Waxman said.

The worker's nondisclosure agreement, also released by Waxman on Monday, is ``evidence that Blackwater has tried to conceal the IRS ruling and the evasion of taxes from Congress and law enforcement officials,'' he said.

The primary factor in determining whether a worker is an employee or independent contractor is the degree of control the business has over its worker. Incorrectly classifying a worker could mean steep penalties for the company, including a $25,000 penalty if the IRS determines an appeal is frivolous or groundless.

In its March letter to Blackwater, the IRS noted the company paid all of the guard's travel expenses and signed a written agreement detailing the type of work required.

``A worker who is required to comply with another person's instructions about when, where and how he or she is to work is ordinarily an employee,'' the IRS stated in the letter.

In testimony before Waxman's committee earlier this month, Prince said Blackwater was not trying to avoid legal responsibilities but rather wanted to give its guards more control of their schedule.

``We provide the trained person with the right equipment, the right training, the logistics to get them in and out of theater,'' Prince said. ``When they get to Iraq or they get to Afghanistan, they work for the State Department.''

Two other companies that provide similar services in Iraq and Afghanistan - DynCorp International and Triple Canopy - classify their workers as company employees.