The News Update
No. 1 November 26, 2001

A news letter for the member of the InformationGazette

Warm Messages From
The Editorial Department

Welcome to the first issue of The Citiinst Newsletter. This publication has been created to provide you, our valued member, with the focused information you need to make sound analysis of current political and economics as well as financial decisions today.

As a member of The Citi Institute, you already know how important it is to receive up to date information. Since 2000, The Citi Institute has been serving the business and executive community. We are continuously striving to better serve you. This publication is a step in that direction.

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US Military Hit Caves in Search of Bin Laden

The American military continued its systematic hunt for Taliban and Al Qaeda leaders in Afghanistan by working down a target list of cave networks where Osama bin Laden is suspected to be hiding, US officials said today.

They dropped guided missiles, a giant bomb and more copies of leaflets offering a $25 million bounty. In the latest attacks, the American military has particularly targeted areas south of Kandahar, the largest Taliban stronghold still resisting opposition forces.

American special operations forces are providing advice to the Northern Alliance, but a senior Pentagon official emphasized today that they are not playing a central role in the negotiations except to reinforce the Bush administration's position that Al Qaeda fighters who surrender must be taken as prisoners of war, and not granted safe passage to freedom.

The Pentagon is working through a target list of possible bin Laden hideouts, most of which are caves, though some buildings are included.The targets have been designated by aerial surveillance, human intelligence on the ground, or from the files of Russia's secret service, which inherited the archives of the Soviet Union's disastrous, decade-long occupation of Afghanistan, officials said.

One senior military officer said that it would be a misinterpretation of the bombing campaign to say that ordnance was being dropped in an attempt to force Mr. bin Laden into a certain set of known refuges for attack. "We are trying to deliberately push back his perimeter, shrink the area where he can move," the USofficer said. Another military officer said: "When we hit the caves, we are trying to kill as many of the enemy as we can while denying bin Laden another hiding place".

Inside the Afghan war zone that opened on Oct. 7, American combat planes struck for the second day in a row outside Jalalabad, where bands of Taliban roam with highway robbers in an area only nominally under opposition control. Two target zones were struck north and east of Jalalabad on Wednesday, the Pentagon said in its daily update of the previous 24 hours of bombing.

A 15,000-pound bomb effective for killing and terrifying troops the BLU-82 "daisy cutter" — was dropped south of the Kandahar stronghold on Wednesday, a United States Central Command spokesman said today. The bomb, the largest conventional explosive in the American arsenal, is designed to explode three times. (NYT).

European Stocks Rise; Ericsson, Nokia, Alcatel, Infineon Climb

London: European stocks rose, led by phone-equipment companies, as four interest-rate cuts from the European Central Bank this year prompted some investors to switch money out of cash and into shares. Ericsson AB, Nokia Oyj and Alcatel SA, which have slid 42 percent or more in 2001, advanced. ``When they're getting just 2.5 percent on their money-market account, people look to alternative investments like stocks,'' said Ken Forman, global strategist at Standard Life Investments Ltd., which has about $110 billion in assets worldwide. ``We'vegone further into equities'' after rate cuts in Europe and the U.S. in the last six weeks.

European Stocks Rise;

Infineon Technologies AG rose after saying it sees early signs of rising demand for mobile-phone semiconductors. Rhodia SA slipped after the specialty-chemical company said it ended talks on a combination with rival Clariant AG following about three months of negotiations.

The Dow Jones Stoxx 50 Index added 31.88 points, or 0.9 percent, to 3713.71, bringing its gain since Sept. 21, when it dropped to a three-year low, to 27 percent. (Bloomberg).

Cyberspace Will Be
The New Battle Ground

US government officials are warning that cyberattacks are likely as retribution for the United States campaign in Afghanistan, and at the same time, computer security experts are seeing increasingly numerous and more powerful attacks from traditional hackers.

So far, most technologically proficient attackers are hackers or insiders with no terrorist intent, while the terrorists are not yet very proficient, Frank J. Cilluffo, an expert on terrorism at the Center for Strategic and International Studies in Washington, said during Congressional testimony in October. But, calling cybersecurity the "gaping hole" in the nation's infrastructure defense plans, he said, "It is only a matter of time before the convergence of bad guys and good stuff occurs."

Soon after the terrorist attacks, President Bush named Richard Clarke, the Clinton administration's counterterrorism czar, as special adviser for cyberspace security. In an interview earlier this month, Mr. Clarke said the Bush administration was organizing its counterterrorism efforts "in a single strategy with people rowing in the same direction." He has his work cut out for him: Congressional investigators announced recently that two-thirds of federal agencies failed a government wide test of computer security.

Cyberterrorism is unlikely to be the sole thrust of a terrorist attack, said Jeffrey A. Hunker, dean of the Heinz School of Public Policy and Management at Carnegie Mellon University and a former National Security Council official. Instead, hacking would be used to further complicate matters, perhaps by taking down key computers in financial or communications industries, after a bombing. He places cybertools in a different category from nuclear, biological or chemical "weapons of mass destruction," which would directly cause injury or death. Cyberthreats, instead, are considered weapons of mass disruption.

Up to now, most computer attacks could more accurately be defined as "weapons of mass annoyance," as when intruders commit acts of vandalism against Web sites. Last month, the National Infrastructure Protection Center issued a warning that such "cyberprotests," including attacks on Web sites, were likely.(NYT)

Crude Oil Rises as Norway to Cut Output; Russians Move Closer

London: Crude oil jumped more than 6 percent and neared $20 a barrel after Norway said it will cut output and Russian oil executives signaled they will also lower supply if ordered to by the Kremlin.

Norway, the third-largest oil exporter, will trim output by 100,000 to 200,000 barrels a day if other non-OPEC nations make a similar cut, said Einar Steensnaes, the country's oil minister. The president of Lukoil, the largest oil company in Russia, said he will urge President Vladimir Putin to order a reduction.``Now it comes down to the Russians,'' said Mohammed Sheikh- Kadir, an analyst at Rhein Oel Ltd., a unit of RWE AG, Europe's fourth-biggest power company. ``People are expecting they will commit'' to the effort to boost prices Brent crude oil for January settlement rose $1.17 to $19.90 a barrel on the International Petroleum Exchange in London.

Brent,the benchmark for two-thirds of the world's oil, last week touched a two-year low on concern the Organization of Petroleum Exporting Countries will start a price war if rivals didn't cooperate.(Bloomberg)