Brisk Spending in March Raises
By Vikas Bajaj
THE NEW YORK TIMES
Robust spending on homes, cars and other consumer goods kept the economy moving at a brisk pace and sent a critical measure of inflation higher in March, the Commerce Department reported Monday, renewing concerns that the Federal Reserve will have to raise interest rates further.
Prices paid for consumer items excluding food and energy — a gauge closely watched by policy makers — rose at an annual pace of 2 percent in March, up from 1.8 percent in February, as personal spending, income and home construction all increased. Economists had expected prices to rise at a 1.9 percent pace. Including food and energy, prices rose 2.9 percent, the same pace as February.
Analysts and investors are carefully monitoring the latest economic data in an effort to divine whether the Fed will raise rates once, twice, or even three more times before stopping.
The latest increase in prices, though modest, will concern policy makers because it could set the stage for higher inflation later, said Nigel Gault, an economist at Global Insight, a research firm. If gasoline and oil prices stay at current levels or move higher, businesses may be forced to raise the prices of other goods and services. Inflation excluding food and energy may then surpass 2 percent, the top end of the range Fed officials consider ideal.
“There is a risk that we will push up above 2 percent, not necessarily over the next month, but sometime over the next few months,” Gault said. “That will be a concern to the Fed.”
Judge Sentences Palestinian
To Additional 19 Months
By Jennifer Steinhauer
THE NEW YORK TIMES TAMPA, FLA.
Although the U.S. government lost most of its case last year against Sami Al-Arian, the former computer science professor it once identified as the linchpin in a terrorist organization, a federal judge sentenced him on Monday to an additional 19 months in prison before he is deported.
The case against Al-Arian, a Palestinian born in Kuwait, stemmed from a decade-long investigation that resulted in a 2003 indictment, charging him with being the leader of a domestic cell of the Palestinian Islamic Jihad, a group that claims responsibility for terrorist acts.
Al-Arian, who had been under surveillance by American intelligence officials since 1991, was accused of raising money for suicide bombings in and around Israel.
The six-month trial, a centerpiece of the Bush administration’s anti-terrorism efforts that attracted the intense interest of legal experts, ended in December when the anonymous jury acquitted Al-Arian of eight of the 17 federal charges against him, deadlocking on the rest.
Rather than face a retrial, the two sides agreed last month to a plea bargain in which Al-Arian pleaded guilty to a lesser charge of aiding members of the militant Palestinian group and agreed to be deported.
But any hope Al-Arian might have had of being deported quickly evaporated on Monday in the courtroom of Judge James S. Moody Jr. of U.S. District Court. In a surprise move, Moody sentenced Al-Arian to the maximum allowed under the sentencing guidelines, more than even the prosecution requested, and chided him for acts even the jury had rejected as Al-Arian’s. The government had asked for the low end of the guidelines.
Militants Kill 35 Hindus Ahead
Of Talks on Kashmir
By Somini Sengupta
THE NEW YORK TIMES NEW DELHI, INDIA
Thirty-five Hindus were killed in recent days in two separate incidents in the Indian-administered portion of the disputed Kashmir province, the police said. The killings were believed to be the handiwork of Islamist militants just days before a scheduled meeting between the Indian prime minister and Kashmiri separatists.
In one incident, gunmen stormed a village in a district called Doda, dragged Hindu villagers from their homes and shot 22 of them dead. In another, in neighboring Udhampur district, suspected militants kidnapped 13 villagers from a remote mountainous spot. Four of their bodies were found lying in the woods late Sunday, and the rest were discovered Monday, the police said.
Even by the standards of blood-soaked Kashmir, it was a particularly grisly pair of incidents — and the deadliest violence since peace talks began more than two years ago between India and Pakistan, neighbors and rivals on the question of Kashmir. The attacks are worrisome because they appear designed to fuel Hindu-Muslim tensions.
Their impact is likely to be felt during the talks about Kashmir’s future, slated to begin Wednesday between the Indian prime minister, Manmohan Singh, and a coalition of Kashmiri separatist leaders, known as the All Parties Hurriyat Conference.
An Online Game’s Economy
Yields ATM Cash
By Seth Schiesel
THE NEW YORK TIMES
When you put your card into an automated teller machine, view your balance on the screen and then receive money from the dispenser, you probably understand that a merely electronic notion your bank account — is being translated into a physical object with value: greenbacks.
But what if you are at the corner ATM and your net worth is locked up in an imaginary asteroid mining venture?
Until now you would be plumb out of luck. But today the makers of Entropia Universe, a popular online science-fiction game, plan to introduce a real-world ATM card that will allow players instantly to withdraw hard cash automatically converted from their virtual game treasury. So a player with, say, 2,000 spare PEDs (Project Entropia Dollars) left over after purchasing a new laser rifle in the game could withdraw $200 and take a date to a real-life ballgame.