Forex News

US Dollar: What to Expect in December

2007-12-02T23:59:00.000+02:00

Written by Kathy Lien, Chief Strategist
• 5 Central Bank Meetings Will Make for a Busy Trading Week in the FX Market
• Euro Extends Losses Despite Strongest Consumer Price Growth Hits 6 Year High

US Dollar: What to Expect in December
We are entering the last trading month of the year which usually draws out a lot of unique factors that can affect the demand for US dollars. A few weeks ago, we published a report on the seasonality of the US dollar and we found that based on 20 years of data, the dollar has a greater tendency to fall in the month of December (see report). These risks are higher this year with problems in the financial sector still plaguing the US economy; we could see another month of volatility because options are expiring and traders across different markets are divided on what to expect from the Federal Reserve. The futures market is currently pricing in a 100 percent chance of a quarter point rate cut with 42 percent of that probability in favor of a half point cut; in other words the odds for 50bp over 25bp is quickly nearing fifty-fifty. The dollar however was stronger across the board today and the main reason for that is the expectation that the Fed will come to the market’s rescue. However over the medium term their rescue efforts should be dollar negative and regardless of what the Fed decides to do, half of the market will be surprised. For the US dollar and the currency market this means one thing and that is volatility. Fundamentally, Federal Reserve Chairman Ben Bernanke has set the tone for trading last night when he reiterated the cautionary comments made by Fed Vice Chairman Kohn earlier this week. Bernanke told the markets that the relapse of funding problems has tightened credit conditions significantly and he believes that consumer spending could be particularly vulnerable this month given higher energy prices and mortgage payments, a weak housing market, and unfavorable volatility in equities. Today’s US numbers were mixed. Personal income and personal spending growth declined but the PCE deflator and Chicago PMI accelerated. Ultimately the bad news outweighed the good which is why rate cut expectations continued to rise. The Middle East Council meeting begins on Monday read our special report on what this could entail for the US dollar.

5 Central Bank Meetings Will Make for a Busy Trading Week in the FX Market
Five central bank meetings in the coming week will make it an exceptionally busy time in the foreign exchange market. The Bank of Canada, Reserve Banks of Australia and New Zealand, the European Central bank and the Bank of England will all be convening to discuss interest rates. No one is expected to make a move, but many could surprise with one. Now more than ever the upcoming interest rate decisions require close attention by anyone who may be interested in where currencies may be headed over the next few weeks. The comments made by the central bankers after their rate decisions can and will confirm or deny current market sentiment. The biggest impact may be on carry trades, which live and die by the expectations for interest rates. The Japanese economic calendar is pretty empty with only labor cash earnings, the leading economic index and the final figures for third quarter GDP due for release. Even if there were some meaningful surprises, the data should have a minimal impact on the Japanese Yen. Last night we had what could have potentially been very market moving Japanese data, but unfortunately the mixed reports failed to lift the Yen. National consumer prices were stronger than expected due to the rise in oil prices and housing starts improved. The unemployment rate remained unchanged but the job to applicant ratio fell to 1.02, reflecting the tough conditions that the Japanese economy still faces.

Euro Extends Losses Despite Strongest Consumer Price Growth Hits 6 Year High
The Euro extended its losses today and is on its way to testing 1.45. Although we are still long term Euro bullish, the Euro could now fall to 1.44 before it rises back to 1.50. Economic data continues to support further Euro gains. Consumer prices in the Eurozone hit a 6 year high of 3 percent in November, which is the strongest pace of growth in more than 5 years. This is well above the ECB’s 2 percent target and if it were not for weakening growth, the central bank would probably be rushing to raise interest rates. Third quarter GDP was stronger than expected, but that is old news. Eurozone consumer confidence in the month of November and German retail sales for the month of October were much weaker than expected. Collectively this will force the ECB to sit on their hands next week while screaming about the need for tight monetary policy.

British Pound Continues to Weaken on Softer Consumer Confidence
With financial market turmoil taking a big toll on the UK economy, it would be surprising if consumer confidence actually held steady. In the month of November confidence plunged to a 4 year low, reflecting mortgage concerns and rising prices. The Bank of England will be meeting to decide on monetary policy next week and currently a rate cut is not expected. However it is important to be careful because the BoE is notorious for catching the market by surprise. We have seen many instances where the market did not expect a rate cut, yet the BoE delivered one anyway, so do not be surprised if the Bank of England actually cuts interest rates.

Canadian Dollar Hits Parity, Australian and New Zealand Dollars Extend Losses
The Canadian dollar fell back to parity with the US dollar after the release of their GDP numbers. Growth last month was right in line with expectations but the data was more positive than negative given strong readings in both Q2 and Q3 GDP. Business investment led the rise, but goods and industrial production weakened in September which means that the latest numbers reflect the recent deterioration in the Canadian economy. The Australian and New Zealand dollars also sold off, but that was primarily due to a broad based dollar rally and drop in commodity prices because the Australian current account balance was actually stronger than the market’s forecast.

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AUDNZD Range's Technical Appeal Looks To Fend Of Fundamental Wave

2007-12-02T23:55:00.000+02:00

There is considerable event risk for the majors (due to heavy-hitting US data and the GCC summit), carry pairs and a number of currencies whose central banks are scheduled to release rate decisions. To balance some of this risk, we will look to range trade AUD/CAD, a pair that is comprised of two commodity exporters whose central banks have a hawkish lean. Both the RBA and BoC are scheduled to release rate decisions next week, though neither is expected to shift their benchmark target.

Trading Tip – There is considerable event risk for the majors (due to heavy-hitting US data and the GCC summit), carry pairs and a number of currencies whose central banks are scheduled to release rate decisions. To balance some of this risk, we will look to range trade AUD/CAD, a pair that is comprised of two commodity exporters whose central banks have a hawkish lean. Both the RBA and BoC are scheduled to release rate decisions next week, though neither is expected to shift their benchmark target. However, this does not guarantee low volatility as there is a relatively stocked calendar. Aside from scheduled event risk, USD/CAD’s action around parity will likely act as a good guide for AUD/CAD. The suggested strategy uses a very aggressive entry and tight stop as it can be expensive to wait out a test of 0.89 to see if it is a genuine or false break. If spot hits 0.8750 before we are entered, we will cancel the order. Additionally, we will cancel any unexecuted orders on Thursday.

Event Risk Australia and Canada

Australia – All eyes will turn to significant event risk leading up to Tuesday’s Reserve Bank of Australia interest rate decision and Gross Domestic Product report, with Trade balance and Retail Sales figures likely to influence sentiment ahead of the key releases. Analysts predict that Retail Sales grew at a 0.6 percent pace through the month of October, as a robust labor market and strong consumer sentiment boost spending. Indeed, strong wage price pressures and consumer demand were behind the Reserve Bank of Australia’s decision to raise rates to 6.50 percent through their last meeting. Though analysts expect the bank will leave rates unchanged through their upcoming December announcement, there remains a very real risk that rates will continue to rise through upcoming months. A later Gross Domestic Product figure is likewise to force noteworthy volatility across Australian dollar pairs.

Canada – Event risk for the Canadian dollar will intensify in the week ahead, with a key Bank of Canada interest rate decision to easily drive volatility through Tuesday’s trade. Outlook is very mixed for the Bank of Canada’s result, with median consensus forecasts calling for unchanged rates. Yet 12 of 27 analysts polled by Bloomberg news predict that the central bank will actually cut rates by 25 basis points to 4.25 percent. Such indecision typically makes for strong reactions to a rate announcement. Otherwise, traders will look to Friday’s Employment report to drive volatility across Canadian dollar currency pairs.
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Carry Trades: Are They In for More Losses?

2007-11-13T14:27:00.000+02:00

Nov 12, 2007 (DailyFX via COMTEX) -- - US Dollar Expected to Rebound This Week - Canadian Dollar Sees Biggest Rise One Day Rise in 36 Years

Carry Trades: Are They In for More Losses? With the US bond markets closed for Veterans' Day, the equity and currency markets were as volatile as ever. Intraday charts show US equities fluctuating in and out of positive territory with the intraday trading range of the Dow reaching as much as 181 points. The Japanese Yen crosses were in the red or negative throughout the US trading session. Today's extensions of Friday's losses were not a complete surprise because on Friday we had indicated that with the Dow closing "at its session lows, we expect follow through weakness in the Yen crosses at the open of Tokyo trading on Sunday." What we didn't expect however was the degree of the move, which in some cases matched and surpassed that of the moves we saw on Friday. The combination of stronger Japanese economic data and significant weakness in the Asian stock markets appeared to be too much for carry traders to bear. Domestic CGPI and the current account were both better than expected but stronger economic data alone would not have caused today's move. The Chicago Board Options Exchange Volatility Index (VIX) opened at the highest level since August, when we had a big spike up to 37.50. Carry trades thrive in an environment of low volatility which means that should the VIX continue to rise, and it appears to want to, carry trades could suffer more losses. It is important for Yen traders to not only watch the Dow, but also the VIX. Tonight, we have the Japanese GDP report for the third quarter, which is expected to be firm.

US Dollar Expected to Rebound This Week Despite the lack of nay US economic data released today, it is already shaping up to be a dollar positive week. Oil prices are lower and gold plummeted as much as $30 an ounce. The main events this week are producer prices, retail sales and consumer prices. Bernanke is also holding a special session on November 14 to announce changes in FOMC communications but this should not be market moving since he is only expected to announce measures to increase the transparency of interest rate decisions such as giving more forecasts and extending their horizon. We continue to believe that the data this week has a greater chance of surprising to the upside. The estimates for October retail sales are low (0.2 percent) because many of the nation's largest retailers have missed their sales forecasts. However, non-farm payrolls over the past few months have been exceptionally strong and gasoline prices in the month of October remained steady, which means that retail sales could still beat expectations. Also, we expect both producer and consumer prices to surprise to the upside given the rise in food and energy prices. Will this be THE bottom in the US dollar? No. The reason why the Dow and carry trades were so weak today is because the market is still concerned that a large structured investment vehicle has blown up and Deutsche Bank's predictions of another $400 billion in subprime losses could materialize, which of course is not good news for the US economy.

Canadian Dollar Sees Biggest Rise One Day Slide in 36 Years The Commodity Currencies are all significantly weaker against the US dollar today as a result of carry trade liquidation and commodity price retracement. Economic data is not really to blame because even though New Zealand house prices grew at a slower annualized pace last month, the RBA statement was more hawkish than dovish. The RBA revised down their growth forecasts for the next 2 years but they also revised up their inflation forecasts. Canada did not release any economic data, but the currency still managed to incur its biggest one day slide in three decades. On Friday, we had said that fundamentals, technicals and sentiment all pointed to a reversal but we did not expect the majority of the move to happen in one day. Although we could see further gains, parity will be an exceptionally hard level to break in USDCAD. Australian business confidence is the only piece of data due for release from any these three countries over the next 24 hours. With the Dow closing at its session lows, there could be further losses.

Euro: Be Careful of What You Buy Depending on which currency pairs you traded today, you could have made money being long Euros. On Friday, we had said that the better buy this week may be relative strength plays like EURGBP or EURCAD than the EURUSD itself because of the risk of stronger US data. Interestingly enough EURGBP and EURCAD were two of the few currency pairs that are actually up on the day. In an environment where we have a potential for a dollar rally, the dollar's biggest gains would be against the currency pairs whose rise have been driven mostly by speculation and flow rather than economic data. This is the case with the British pound which reported only downside surprises last week and the Canadian dollar, which has rallying on the belief that oil will reach $100 a barrel. Although this trend could continue, tomorrow we should have some Euro driven movements with German GDP, the ZEW survey and Industrial Production due for release.

British Pound: Down 400 Pips Even though inflation in the UK rose by the fastest pace in 1 year, the British pound fell 400 pips today. Last week the British pound rallied 300 points despite signs of weaker growth and it is not until this week that price action finally reflects fundamentals. This is more obvious when we look at EURGBP. After range trading between 69 and 70 cents for the past 2 months, we finally see a strong break to the upside. The ECB and BoE face similar inflationary conditions but the ECB could realistically raise interest rates given stronger economic data but the BoE does not have much choice other than to keep rates unchanged for the foreseeable future

Indian central bank says bought $11.9 bln in September

2007-11-13T14:26:00.000+02:00

MUMBAI, Nov 13 (Reuters) - India's central bank bought a record $11.87 billion in intervention in September to slow the rupee's rise after U.S. rate cuts drew huge inflows into the stock market, its monthly bulletin showed on Tuesday.

The Reserve Bank of India has bought $51.8 billion in the first nine months of 2007, with the previous record purchase at $11.86 billion in February.

Despite the intervention the rupee has appreciated 12.3 percent against the dollar this year. It was trading at 39.4 rupees per dollar on Tuesday afternoon, after last week hitting 39.16 -- its strongest since March 1998.

Foreign portfolio flows of nearly $17 billion into the stock market this year have been a key driver for the rupee.

India's currency reserves have also risen $89.3 billion this year to $266.5 billion on Nov. 2. (Reporting by Anurag Joshi; Editing by Ranjit Gangadharan)

Australian Dollar Rebound Potential Offers Range Trade Opportunity

2007-11-11T22:49:00.000+02:00

Often times, a good range opportunity comes hand in hand with a high probability of a breakout and vice versa. The set up in AUDUSD is certainly walking that fine line. Recently, the pair cascaded lower, carried by wave of risk aversion that produced volatility in a nearly 175 point decline. The weekend pulled the plug on momentum; but the chart is still marked with lower lows - raising the prospects of a breakout. However, with the weekend acting as a potential cooling period for the previous decline we could very well see a rebound on the auspices of mild event risk in the first half of the week. Our suggested strategy is tailored to the possibility of a breakout move with good entry and tight stop. To play this scenario more conservatively, the objective can be set at 0.9150 to take profit on a small bounce before a possible continuation move.

Event Risk Australia and US

Australia – A number of second-tier economic releases do threaten to force unexpected volatility, but we believe we would have to see especially large surprises to force worthwhile moves in the AUD. A notable exception may include the RBA Quarterly Monetary Policy Statement on the 11th. Though we have recently read RBA commentary in the form of the recent post-hike statement, any substantial shift in rhetoric may fuel choppy AUD trade. Otherwise the Aussie will trade off of global risk sentiment. If global equity indices continue to falter, we could easily see the AUD falter against the USD. Hence it will be important to watch price action in equity indices so as not to get stopped out of our AUDUSD trade.

US – Economic event risk will be limited in early-week trade, but that will clearly change by Wednesday, as Producer Price Index and Advance Retail Sales reports threaten to force major volatility in USD pairs. Highly anticipated retail figures are typically market-moving events, and recent consumer confidence data will only increase scrutiny on the report. The next day’s Consumer Price Index figures may likewise force sharp moves in the dollar, and range traders will really have to monitor any USD-based range trades on the 14th and 15th of next week.

China central bank hikes bank reserve ratio to control credit growth

2007-11-11T22:47:00.000+02:00

BEIJING (XFN-ASIA) - China's central bank said it is raising the bank reserve ratio by 0.5 percentage point in a move to control overly fast lending growth.

The increase is the ninth this year in the proportion of funds banks must hold in reserve. It takes the ratio to 13.5 pct for most banks.

The People's Bank of China, in a brief announcement on its website, said the increase will take effect November 26.

The move was not unexpected. Analysts had been predicting at least one more interest rate hike and possibly two increases in the bank reserve ratio before the year-end.

"We could see one (interest rate hike) as early as next week," said Stephen Green, economist at Standard Chartered Bank in Shanghai.

The central bank has already raised interest rates five times this year.

Next week, the government will announce consumer price index data for October, and that might give the central bank the ammunition it wants to push through another interest rate hike.

Investment bankers Goldman Sachs have said that China's consumer inflation may exceed 7 pct for October and November, prompting authorities to drastically tighten monetary policy despite rising uncertainties surrounding global demand going into next year.

Year-on-year consumer price inflation shot to 6.5 pct in August - the highest reading in more than a decade - on the back of food prices hikes, before easing slightly to 6.2 pct in September.

For the January to September period, inflation stood at 4.1 pct, well above the central bank's comfort zone of 3 pct set at the beginning of the year, in spite of the repeated interest rate hikes.

Authorities have been issuing a steady stream of warnings on the inflation front.

The central bank said this week that strong price pressure remains and inflation needs to be watched closely, with further potential increases in grain prices, which could propel the CPI higher.

Price pressures are also evident in the property sector, energy prices and labor costs.

Meanwhile, the nation's banking regulator, the China Banking Regulatory Commission, has instructed banks to slow their lending in the final months of the year.

Forex - New Zealand Kiwi Falls Versus Euro [EUR/NZD]

2007-10-23T21:32:00.000+03:00

10/23/2007 11:46:40 AM The New Zealand kiwi was weak in trading against the euro on Tuesday. The currency fell in the midday action to a mark of 1.89 against its European counterpart. Euro zone industrial new orders grew 0.3% on month in August, reversing a revised 2.6% fall in July. However, the number came in weaker than the expected 0.9% in August. The industrial new order index for July was revised from 4.0% decline estimated earlier. Excluding ships, railway and aerospace equipment, industrial new orders advanced 0.3%.

Forex - New Zealand Currency Choppy Versus Dollar [NZD/USD]

10/23/2007 11:45:15 AM The New Zealand currency was choppy against its American counterpart in trading in Tuesday's midday. The kiwi bounced between a high of 0.7563 and a low of 0.7496. The pair moved as no major economic reports were scheduled for release Tuesday from the US. Later in the week, a few reports on housing should generate interest. On Wednesday more information on the housing market in the form of existing home sales will be made public.

Forex - Sterling Skyrockets Versus Dollar, Yen As Global Stocks Bounce Back [GBP/USD]

10/23/2007 11:06:25 AM The sterling was broadly stronger against other major currencies Tuesday morning, racing higher versus the dollar to all but erase its losses from Monday's session.

The pound accelerated to the upside versus the dollar Tuesday morning, coming almost all the way back from Monday's dramatic plunge. With confidence restored in global equities markets, traders raced back into riskier higher yielding currencies.

The sterling rose to 2.05 versus its American counterpart by mid-morning Tuesday, a major improvement from Monday's low of 2.0257. A move above the 2.055 mark would bring the sterling to its highest point since late July.

The pound hit a 10-day best versus the euro in early dealing Tuesday, but pared its gains to trade at .6956 by mid-morning. The sterling failed to sustain its early advance to .6946, with traders weighing a slew of economic data from the Euro zone.

Euro zone industrial new orders growth fell to its lowest level since December 2006, official data showed Tuesday. The Eurostat said that industrial new order annual growth stood at 5.1% in August, smaller than the revised 12% rise in July. The number for July was revised up from 10.9% initially estimated. The number came in weaker than the expected annual growth of 6%.

French consumer spending growth accelerated in September from the prior year, official data showed Tuesday. The spending growth also topped expectations in September.

The sterling continued to move away from Monday morning's monthly low versus the yen, improving to 235.40 after pausing near 233 overnight.

Japan's September domestic shipments of consumer electronics products climbed 8 percent on year to 253.6 billion yen, according to data released Tuesday by the Electronics and Information Technology Industries Association.

The U.K.'s balance of firms reporting growth in total orders stood at 9% during three months to October 10, the latest quarterly Industrial Trends survey result of the Confederation of British Industry, or CBI, showed Tuesday. The report said that the balance improved from plus 7% recorded in July, however a slight slowdown was expected over the coming three months.

Forex - Sterling Skyrockets Versus Dollar, Yen As Global Stocks Bounce Back [GBP/USD]

2007-10-23T21:31:00.000+03:00

10/23/2007 11:06:25 AM The sterling was broadly stronger against other major currencies Tuesday morning, racing higher versus the dollar to all but erase its losses from Monday's session.

The pound accelerated to the upside versus the dollar Tuesday morning, coming almost all the way back from Monday's dramatic plunge. With confidence restored in global equities markets, traders raced back into riskier higher yielding currencies.

The sterling rose to 2.05 versus its American counterpart by mid-morning Tuesday, a major improvement from Monday's low of 2.0257. A move above the 2.055 mark would bring the sterling to its highest point since late July.

The pound hit a 10-day best versus the euro in early dealing Tuesday, but pared its gains to trade at .6956 by mid-morning. The sterling failed to sustain its early advance to .6946, with traders weighing a slew of economic data from the Euro zone.

Euro zone industrial new orders growth fell to its lowest level since December 2006, official data showed Tuesday. The Eurostat said that industrial new order annual growth stood at 5.1% in August, smaller than the revised 12% rise in July. The number for July was revised up from 10.9% initially estimated. The number came in weaker than the expected annual growth of 6%.

French consumer spending growth accelerated in September from the prior year, official data showed Tuesday. The spending growth also topped expectations in September.

The sterling continued to move away from Monday morning's monthly low versus the yen, improving to 235.40 after pausing near 233 overnight.

Japan's September domestic shipments of consumer electronics products climbed 8 percent on year to 253.6 billion yen, according to data released Tuesday by the Electronics and Information Technology Industries Association.

The U.K.'s balance of firms reporting growth in total orders stood at 9% during three months to October 10, the latest quarterly Industrial Trends survey result of the Confederation of British Industry, or CBI, showed Tuesday. The report said that the balance improved from plus 7% recorded in July, however a slight slowdown was expected over the coming three months.

Forex - CIBC Comments Retailing Plus For August GDP, But Wholesaling And Manufacturing Are Negatives []

10/23/2007 10:30:19 AM Avery Shenfeld from CIBC World Markets commented on Monday that while retailing will be a big plus for August GDP, wholesaling and manufacturing are two major negatives.

The economist stated that the recent numbers put the month on track for a modest 0.2% real GDP advance, and has Q3 real GDP aiming close to, if perhaps a shade under, his 2.4% projection.

The Bank of Canada likely wants to see a few quarters a bit slower than that pace to unwind inflationary pressures, Shenfeld commented.

Shenfeld also noted that the C$ gained a bit on the news, having rallied strongly overnight on a weaker US dollar backdrop. The results, he remarked, were consistent with his view that the Bank of Canada, seeing a healthy domestic economy, isn't going to be matching Fed rate cuts any time soon.

Forex - Euro Gains On Dollar And Yen Amid Renewed Risk Appetite [EUR/USD]

10/23/2007 9:50:29 AM The euro continued to pare Monday's sharp losses against the dollar and yen Tuesday morning in New York, with traders moving into higher yielding currencies after global equities markets roared back to life overnight.

In economic news, French consumer spending growth accelerated in September from the prior year, official data showed Tuesday. The spending growth also topped expectations in September.

The euro gained against the dollar Tuesday morning, paring a good portion of its dramatic losses from Monday's early retreat. The euro snapped back Monday afternoon following a plunge from record high levels and has followed through on its rebound, hitting 1.4254 just before the opening bell on Wall Street.

The euro plummeted to 1.4125 from an all-time high of 1.4346 on Monday. However, with positive earnings news providing a catalyst for gains in global equities markets, appetite for riskier higher yielding currencies has picked up, sending the euro higher.

The euro raced higher against the yen Tuesday morning, extending its gains from the previous evening. The euro fell sharply over the course of the last week, but hit bottom Monday morning when it made a turnaround from a 5-week low. As of 10 am ET Tuesday, the euro fetched 163.80, having moved well off Monday morning's low of 160.46.

The euro was slightly weaker in choppy trading versus sterling Tuesday morning in New York. The euro dropped to a nearly a 2-week low of .6946 in early dealing, but pared most of losses to fetch .6962 by mid-morning.

U.S. Forex Market Commentary

2007-10-20T01:03:00.001+03:00

EURO

The euro came off vis-? -vis the U.S. dollar today as the single currency tested bids around the US$ 1.4245 level and was capped around the $ 1.4320 level. Today??™sintraday high represents a new lifetime high for the common currency.Traders drove the pair higher on expectations that today??™s G7communiqu?© will not make explicit reference to the euro??™s relativestrength. Countries like France and Italy are known to be critical of the euro??™s recent strength while Germany and the U.S. appear more sanguine. The G7??™s statement may instead refer to disorderly exchange rates and/ or Asian currency fundamentals. ECB??™sWeber said high oil prices are an ???upside risk??? for inflation and a???downside risk??? for economic growth while ECB??™s Parama said the ECBcannot permit expectations of mid-term price rises. ECB chief Trichetcharacterized the global pace of economic growth as ???fantastic.??? G7officials may also comment on the relatively high price of oil as crudeprices approach the psychologically-important US$ 90.00 figure. Data released in the eurozone today saw September PPI was up 0.2% m/m and 1.5% y/y. InU.S. news, yesterday??™s Philadelphia Fed manufacturing index fell to 6.8in October from 10.9 in September but the prices paid and pricesreceived sub-indices moved sharply higher. FedChairman Bernanke stressed central banks need to ???strive forpredictability and transparency??? while Cleveland Fed??™s Pianalto saidthe economy is ???holding up??? outside of housing. Euro bids are citedaround the US$ 1.4160/ 05 levels. Euro bids are cited around the US$ 1.4160 level.

JPN/CNY

The yen appreciated vis-? -vis the U.S. dollar todayas the greenback tested bids around the ??114.85 level and was cappedaround the ??115.70 level. Technically, today??™s intraday low was justabove the 61.8% retracement of the move from ??109.00 to ??124.15. Finance minister Nukaga said ???there certainly will be debates over foreign-exchange developments??? at today??™s G7 meeting. Mosttraders believe the G7 will call for more Chinese economic reform andare curious to see if the yen??™s relative weakness and/ or carry tradesare mentioned in the G7??™s communiqu?©. BoJ boss Fukui sees possible sub-par U.S. growth ???for the time being??? and many traders believe the BoJ will delay its next rate hike for several months. Data released in Japan overnight saw the all-industries index rise 1.0% in August. The Nikkei 225 stock index lost 1.71% to close at ??16,814.37. Dollar bids are cited around the ??113.85 level. The euro depreciated vis-? -vis the yen as the single currency tested bids around the ??163.70 level and was capped around the ??165.25 level. The British pound and Swiss franc moved lower vis-? -vis the yen as the crosses tested bids around the ??234.80 and ??97.95 levels, respectively. The Chinese yuan appreciated vis-? -vis the U.S. dollar as the greenback closed at CNY 7.5080 in the over-the-counter market, down from CNY 7.5111.

STERLING

The British strengthened vis-? -vis the U.S. dollar today as cable tested offers around the US$ 2.0525 level and was supported around the $2.0405 level. Technically, today??™s intraday low was right around the 76.4% retracement of the move from $2.0655 to $1.9650. Cablewas higher on preliminary Q3 U.K. GDP data that saw a quarterly growthrate of 0.8%, the fourth consecutive quarter with that growth rate andthe seventh in a row it??™s been above the trend growth rate of 0.6% to0.7%. Cable bids are cited around the US$ 2.0420/ 2.0350 levels. The euro moved lowervis-? -vis the British pound as the single currency tested bids aroundthe ?‚¤0.6960 level and was capped around the ?‚¤0.7000 figure.

SWISS

The Swiss franc depreciated vis-? -vis the U.S. dollar today as the greenback tested offers around the CHF 1.1735 level and was supported around the CHF 1.1655 level. Dollar offers are cited around the CHF 1.1750 level. The euro came off vis-? -vis the Swiss franc as the single currency tested bids around the CHF 1.6685 level while the British pound gained ground vis-? -vis the Swiss franc and tested offers around the CHF 2.4015 level.

AUD/NZD

The Australian dollar weakened vis-? -vis the U.S. dollar today as the Aussie tested bids around the US$ 0.8890 level and was capped around the US$ 0.8995 level. Data released in Australia today saw the Q3 import price index fall 0.8% q/q. Australian dollar bids are cited around the US$ 0.8840 level. The New Zealand dollar came off vis-? -vis the U.S. dollar today as the kiwi tested bids around the US$ 0.7430 level and was capped around the $0.7555 level. New Zealand dollar bids are cited around the US$ 0.7420 level.

CAD

The Canadian dollar appreciated vis-? -vis the U.S. dollar today as the greenback tested bids around the C$ 0.9630 level and was capped around the C$ 0.9755 level. Data released in Canadatoday saw the September consumer price index accelerate to +2.5% y/yfrom +1.7% y/y, its highest reading since May 2006. Bank of Canada??™sMonetary Policy Report was released yesterday and predicted economicgrowth will decelerate this quarter with headline consumer pricespeaking around 3%. U.S. dollar offers are cited around the C$ 0.9810/60 levels.

Bank-led 'super fund' risks may exceed benefits, says Greenspan

2007-10-20T00:59:00.000+03:00

WASHINGTON (Thomson Financial) - Former Federal Reserve chairman Alan Greenspan has warned that the recently announced Master Liquidity Enhancement Conduit fund, or M-LEC, may not provide the hoped for benefits.

The fund, devised by Citigroup Inc, JPMorgan Chase & Co and Bank of America Corp, is designed to spread out balance sheet losses over time and prevent dramatic swings in asset valuations that could unbalance financial markets.

The banks hope the creation of the M-LEC will prevent turmoil in mortgage-backed securities from further spilling into other parts of the credit market.

But Greenspan said in an interview with Emerging Markets magazine that "it's not clear to me that the benefits exceed the risks."

"The experiences I've had with that sort of intervention are two-sided," he said.

It could make conditions affecting investor psychology adverse because "if you believe some sort of artificial non-market force is propping up the market you don't believe the market price has exhausted itself," he told the magazine.

"What creates strong markets is a belief in the investment community that everybody has been scared out of the market, pressed prices too low and they're wildly attractive bargaining prices there.

"If you intervene in the system, the vultures stay away. The vultures sometimes are very useful," he said.

Business Events for the Coming Week

2007-10-13T11:53:00.000+03:00

AP) - Major business events and economic events scheduled for the coming week (some dates are tentative):

MONDAY, Oct. 15

STOCKHOLM, Sweden -- The 2007 Nobel Memorial Prize in Economic Sciences is announced.

WASHINGTON -- Treasury bill auction.

NEW YORK -- Citigroup Inc. releases third-quarter financial results.

EL SEGUNDO, Calif. -- Mattel Inc. releases third-quarter financial results.

SAN FRANCISCO -- Charles Schwab Corp. releases third-quarter financial results.

SOUTH SAN FRACISCO, Calif. -- Genentech Inc. releases third-quarter financial results.

TUESDAY, Oct. 16

WASHINGTON -- Federal Reserve reports on industrial production for September, 9:15 a.m.

JACKSONVILLE, Fla. -- CSX Corp. releases third-quarter financial results.

ATLANTA -- Delta Air Lines Inc. releases third-quarter financial results.

SANTA CLARA, Calif. -- Intel Corp. releases third-quarter financial results.

ARMONK, N.Y. -- International Business Machines Corp. releases third-quarter financial results.

NEW BRUNSWICK, N.J. -- Johnson & Johnson releases third-quarter financial results.

SACRAMENTO, Calif. -- The McClatchy Co. releases third-quarter financial results.

GEORGE TOWN, Cayman Islands -- Seagate Technology releases first-quarter financial results.

EDEN PRAIRIE, Minn. -- Supervalu Inc. releases second-quarter financial results.

MINNEAPOLIS -- US Bancorp releases third-quarter financial results.

SAN FRANCISCO -- Wells Fargo & Co. releases third-quarter financial results.

SUNNYVALE, Calif. -- Yahoo Inc. releases third-quarter financial results.

WEDNESDAY, Oct. 17

WASHINGTON -- Labor Department reports on consumer price index for September, 8:30 a.m.; Commerce Department reports on housing starts for September, 8:30 a.m.; Federal Reserve releases beige book, its survey of regional economic conditions, 2 p.m.

ABBOTT PARK, Ill. -- Abbott Laboratories releases third-quarter financial results.

NORTHBROOK, Ill. -- Allstate Corp. releases third-quarter financial results.

NEW YORK -- Altria Group Inc. releases third-quarter financial results.

FORT WORTH, Texas -- AMR Corp. releases third-quarter financial results.

ATLANTA -- Coca-Cola Co. releases third-quarter financial results.

SAN JOSE, Calif. -- eBay Inc. releases third-quarter financial results.

NEW YORK -- E-Trade Financial Corp. releases third-quarter financial results.

MCLEAN, Va. -- Gannett Co. releases third-quarter financial results.

NEW YORK -- JPMorgan Chase & Co. releases third-quarter financial results.

MILWAUKEE -- Manpower Inc. releases third-quarter financial results.

NEW YORK -- Merrill Lynch & Co. releases third-quarter financial results.

PHILADELPHIA -- Sovereign Bancorp Inc. releases third-quarter financial results.

HARTFORD, Conn. -- United Technologies Corp. releases third-quarter financial results.

SEATTLE -- Washington Mutual Inc. releases third-quarter financial results.

THURSDAY, Oct. 18

NEW YORK -- Conference Board reports its monthly Leading Economic Indicators Index, 10 a.m.

WASHINGTON -- Labor Department reports on weekly jobless claims, 8:30 a.m.; Freddie Mac, the mortgage company.

LOS ANGELES -- E3 electronics show at LA Convention Center.

SUNNYVALE, Calif. -- Advanced Micro Devices Inc. releases third-quarter financial results.

CHARLOTTE, N.C. -- Bank of America Corp. releases third-quarter financial results.

NEW YORK -- Bank of New York releases third-quarter financial results.

DEERFIELD, Ill. -- Baxter International Inc. BAX releases third-quarter financial results.

MCLEAN, Va. -- Capital One Financial Corp. COF releases third-quarter financial results.

HOUSTON -- Continental Airlines Inc. releases third-quarter financial results.

NEW YORK -- Dow Jones & Co. releases third-quarter financial results.

INDIANAPOLIS -- Eli Lilly & Co. releases third-quarter financial results.

MOUNTAIN VIEW, Calif. -- Google Inc. releases third-quarter financial results.

HERSHEY, Penn. -- Hershey Co. releases third-quarter financial results.

RICHMOND, Va. -- Media General Inc. releases third-quarter financial results.

CHARLOTTE, N.C. -- Nucor Corp. releases third-quarter financial results.

NEW YORK -- Pfizer Inc. releases third-quarter financial results.

DALLAS -- Southwest Airlines Co. releases third-quarter financial results.

OMAHA, Neb. -- Union Pacific Corp. releases third-quarter financial results.

MINNETONKA, Minn. -- UnitedHealth Group Inc. releases third-quarter financial results.

MADISON, N.J. -- Wyeth releases third-quarter financial results.

FRIDAY, Oct. 19

ST. PAUL, Minn. -- 3M Co. releases third-quarter financial results.

NATICK, Mass. -- Boston Scientific Corp. releases third-quarter financial results.

PEORIA, Ill. -- Caterpillar Inc. releases third-quarter financial results.

MILWAUKEE -- Harley Davidson Inc. releases third-quarter financial results.

MORRISTOWN, N.J. -- Honeywell International Inc. releases third-quarter financial results.

OAK BROOK, Ill. -- McDonald's Corp. releases third-quarter financial results.

NEW YORK -- Schlumberger releases third-quarter financial results.

CHARLOTTE, N.C. -- Wachovia Corp. releases third-quarter financial results.

STAMFORD, Conn. -- Xerox Corp. releases third-quarter financial results.

Colombia's Stock Market Falls, Led By ISA; Peso Weakens

2007-10-13T11:52:00.000+03:00

Colombia's Stock Market Falls, Led By ISA; Peso Weakens

BOGOTA (Dow Jones)--The Colombian stock index ended lower on Friday, pulled down by state-run electricity grid operator Interconexion Electrica SA (ISA.BO), or ISA.

The IGBC stock index fell 0.7% to close at 10,557.27 points, bringing the index down 5.4% so far this year.

"Pension funds and other institutional investors are not buying shares these days because they are waiting for the shares of Ecopetrol to start trading in November," said Nicolas Pardo, a market analyst with local brokerage Valores Bancolombia.

The Colombian government sold a 10.1% stake in state-run oil company Ecopetrol in August and September, raising about $2.8 billion. Ecopetrol will start trading on the stock market in November.

Ecopetrol's price is likely to rise, since demand was strong during the sale, Pardo said.

The most heavily-traded share Friday was ISA, which fell 1% to 6,710 Colombian pesos ($3.40), as COP9.1 billion worth of shares changed hands.

"ISA is a typical share for long-term investors such as pension funds," Pardo said.

The second most-traded share was financial holding company Suramericana de Inversiones SA (SURAMINV.BO), which fell 1% to COP19,320.

The peso weakened to COP1,972.5 to the dollar from COP1,969.25 on Thursday. The yield on the benchmark peso-denominated bond maturing in 2020 fell to 10.150% from 10.158% Thursday.

-By Inti Landauro, Dow Jones Newswires; 57-310-867 65 42; colombia@dowjones.com

A run for the money

2007-10-09T19:46:00.002+03:00

IS A FULL-BLOWN BUYING-PANIC ABOUT TO ENSUE, OR ARE WE APPROACHING A NEAR-TERM, OR PERHAPS A MORE SIGNIFICANT CRESTING TERMINAL OF MAJOR IMPORT?

The answer is painfully clear. Nobody knows but the esteemed Mr. Price.

We have learned a long, long time ago ??“ that virtually ANYTHING is possible regarding both short and longer-term outcomes in financial markets.

Fundamentals, logic, technical??™s, as well as the most perfectly counted Elliott Wave Patterns have a sinister way of breeding deception with alarming frequency.

In defiance of the majority??™s immediate expectation bias, the ???PRICE-ACTION??? remains the most fruitful common denominator in determining both the short and long-term intent of nominal-values.

As one speculates amid this rather perverse, and psychologically-driven price discovery process, emotions and bias run high. Due to this unavoidable human condition, it is crucial that one find a disciplined means to step-back and view price action for what it is, and not what one thinks, or hopes it will be.

Once this means is attained, an individual regiment must then be adopted to enter and exit positions based purely on boundaries, targets, risk tolerance, and personal trading preferences.

Following our short-term trading recap below, we will wrap up with a longer-term briefing of the major indices in our regular market update.

All The Right Stuff
A small handful of our clients have alluded that although we masterfully lay all of the ground-work relative to elected entry-locations and exit-targets, that we do not prognosticate or express staunch enough predictive bias to either support or dissuade them from taking or holding onto positions.

As we layout the evolving price landscape, there is simply no time for hand-holding or table pounding banter. In our view, such emotional endeavor is a simply a waste of valuable time and a huge drain on productive energy.

As the dynamic landscape is drafted, all one is called upon to do is to align one??™s money management criteria and trade preferences with the dynamic boundaries and price targets set forth - then get all of the appropriate orders in front of the market and manage their trades ??“ win, lose, or draw.

Upon impartial assessment of wave-structures in concert with traditional chart analysis, we continue to successfully-plot forward-looking navigational landscapes based solely upon the reality that ???PRICE-ACTION??? dictates.

Thereafter, we apply the balance of our technical acumen to confirm or negate longer-term prospective wave structures whilst keenly observing success or marginalization of our shorter-term proprietary trade-trigger boundaries.

Below is a recent account of trade-triggers and price-target outcomes from Elliott Wave Technology??™s Near Term Outlook. The results speak for themselves.

You Get Out of it, What You Put into it
Bear in mind that the chart landscapes we furnish are archived in clear graphic form, and include a full compliment of consistent and impartial commentary assessments.

By no means do we predict prices, nor do we issue specific buy and sell recommendations in advance of trade-triggers electing, or upon price-targets achieving objectives.

Although we graphically identify explicit entry-triggers along with point-values and price-target objectives, decisions to place orders and manage trades through fruition are the sole the responsibility of each individual.

The Near Term Outlook covers the short-term Dow, S&P, and NDX five-days-per-week, and issues near-term updates for the Dollar, Gold, Crude Oil, and the HUI two times per week.

In addition, NTO subscribers receive an Interim Monthly Forecast, as well as our longer-view Millennium Wave Quarterly reports to balance one??™s perspectives in every time-horizon.

Subscription premiums for the NTO are currently a scant $50.00 per month. The Interim Monthly Forecast and Millennium Wave Quarterly reports are currently available as stand-alone subscriptions for $19.00 per month and $25.00 per quarter respectively.

Consistency and outstanding achievement in accurately drafting both short and long-term market landscapes has ballooned our subscriber-base more than three-fold in recent months. Growing demand dictates that we soon raise our three subscription premiums to $75.00, $29.00, and $38.00 respectively. As such, there is no time better than the present to try one of our outstanding publications.

That said, let??™s take a longer-term view of what is currently taking place in the financial sphere.

The Past 15-yrs in Brief:

The NASDAQ 100

The NDX:

HOPE MARCHES ON

As the ticker on CNBC runs those annoying orange blurbs for days-on-end stating that the Dow or S&P is so many points above or below a historic high, we often wonder why they do not include one that reflects the NDX is still 3000 points below its former peak.

Such a shout-out may bring to light one possible reason why participants appear to be chasing what they perceived to be the most undervalued, risk-free asset class - with the most upside potential.

Chants for NDX 3000 (some 40% above current levels) would somehow fail to cut the mustard considering that 5000 would be the appropriate level to chant about.

For now, the NDX appears to have its radar locked on the 2300 level, with an eye toward 3000 should the king-fiat currency devaluation really start digging in.

Breaching 15-year lows, The Dollar resides in the hyperinflationary danger zone below the 80-level. Should 80 mark a permanent ceiling, the dollar is on its way to 40, heading inevitably toward its intrinsic value of $0.00.

Not surprisingly, The Dow is a near mirror image of the dollar. Whether or not this reflection will remain consistent in the aftermath of extreme dollar devaluations is questionable. For now, ???letting the dollar go??? is still perceived as bullish.

Although Gold may have gotten a bit ahead of itself at the highs back in 2006, its long-term trend is overwhelmingly bullish. The five or more hugging base-line touches between 2002 and 2005 were extraordinarily bullish, and rather telling. Given Gold??™s tight ride along the lower trend channel boundary, the $300 dollar explosion in 2005-2006 came as no major surprise. Even though the 2006 spike-high marked an interim top, the market has now recaptured this level in 2007.

Trailing markedly behind the leadership of the Dow, The S&P is taking another crack at breaking above its 2000-2002 bear-market trading range. In contrast to the Dow, note how close the S&P came to breaching its five-year uptrend at the recent August low. Likewise, note how the Dow has broken decisively above its previous bull-market highs and has stayed there for more than a year, while the S&P continues to struggle at its similar respective crest.

Should readers have interest in obtaining access to Elliott Wave Technology??™s blog-page, kindly forward the author your e-mail address for private invitation.

Minutes of the FOMC meeting held on 18 September may explain the big interest-rate cut

2007-10-09T19:46:00.001+03:00

Fundamental highlights this week
Germany: industrial orders, August - Monday

The order intake fell by 7% in July after rising solidly over the preceding months.

Given the strong euro and slowing growth in the US, a turn to the better does not seem imminent.

The order index of the PMI also points to additional falls, but it is far from a one-to-one correlation between PMI and the order intake.

The US: minutes of the FOMC meeting held on 18 September - Tuesday

The Fed lowered its Fed-funds rate by half a percentage point on 18 September, which was a surprisingly big cut..

It was the first time in a very long time that the Fed surprised the markets, and the minutes will be scrutinised for signs of more interest-rate cuts and explanations why the Fed made this surprise move.

In particular, market participants will look out for assessments of whether the financial turmoil will affect the rest of the economy.

The US: retail sale September ??“ Friday

One of this week's absolutely most important indicators, since it indicates whether the financial crisis has spilled over into consumer spending.

A credit tightening will primarily affect consumer buying of durable consumer goods such as cars, PCs, furniture etc.

Retail sales grew at the trend growth rate in August, and we expect retail sales to grow at a slower pace than the trend rate growth of .3%, mainly due to lower car sales.

Expected Exchange Rates

United States Dollar EUR/USD USD/DKK

The highlight of the week is the minutes from the monetary policy meeting held on 18 September.

The latest statements show that 95% of the market participants on a daily basis predict a continued weaker dollar. However, according to market psychology this can very well be a sign of a future trend turnaround.

The USD index reached a new all-time low on 1 October and strengthened afterwards.

We expect as a minimum a small strengthening of USD in the coming week.

Great Britain Pound EUR/GBP GBP/DKK

Macroeconomic highlights: industrial production and RICS.

As expected, since the end of last week we have witnessed a strengthening of GBP from the lowest level since April 2006 towards 69 against EUR.

We are expecting a relatively quiet week dominated by technical trades, since it seems that the Northern Rock affair has calmed. However, new stories about crises in the UK can spark off financial turmoil again..

Japanese Yen EUR/JPY JPY/DKK

Carry trades have been the predominant theme for a couple of weeks now. Still, we feel that the weakening of JPY will prompt some investors to buy at these low levels. Hence we find that the risk of a correction lower on EURJPY has increased

This week's main event will be the monetary-policy meeting at BoJ on Wednesday

We expect the BoJ to adopt a waiting stance and leave rates unchanged until mid 2008.

Swiss Franc EUR/CHF CHF/DKK

There are not many important macroeconomic releases in Switzerland in the coming week.

As in the case of EURJPY, we feel that the risk of a correction lower in EURCHF has increased

The currency cross has moved along a positive trend for a while now and is currently trading around the mid- July highs.

This will prompt some investors to take profit on long positions

Norwegian Krone EUR/NOK NOK/DKK

NOK has strengthened substantially over the past weeks on the back of rising oil prices and a relatively hawkish monetary policy stance by Norges Bank.

We find that the decline of EURNOK will prompt some investors to take profit on short positions ahead of the release of the Norwegian CPI on Wednesday.

We expect that overall inflation will pick up although the strong NOK will pull in the opposite direction

Swedish Krona EUR/SEK SEK/DKK

EURSEK has been trading sideways for some time now, and we expect this tendency to last until the release of the Swedish CPI on Thursday

The rising capacity utilization and the higher wage increases that are expected in relation to the agreements to be made in the spring will continue to contribute to a sustained inflationary pressure.

The Riksbank has been rather hawkish until now ??“ therefore SEK will strengthen in case the rise in CPI is substantially above expectations

Fed Most Likely on Hold at October 30-31 FOMC Meeting

2007-10-07T12:33:00.000+03:00

Civilian Unemployment Rate: 4.7% in September vs. 4.6% in August

Payroll Employment: +110,000 in September, net gain of 118,000 new jobs after revisions of payroll estimates for July and August, with government sector tally accounting for 113,000 net new jobs

Hourly earnings: +7 cents to $17.57, 4.09% yoy change, cycle high was 4.28% yoy change in Dec. 2006.

Household Survey ??“ The unemployment rate rose to 4.7% in September compared with 4.6% in July and August. The unemployment rate has moved up gradually from a cycle low of 4.4% in March 2007 (see Chart 1). The rise in the unemployment rate was due mainly to a large influx of teenagers into the labor force who were unable to find employment. Thus, the September increase in the unemployment rate is less ominous than would have been the case had it resulted from layoffs of adult workers.

Establishment Survey ??“ Payroll employment advanced 110,000 in September after net upward revisions of 118,000 new jobs in July and August. These upward revisions were concentrated in the government sector (+113,000) and were attributed to school hiring. (As an aside, what does it say about our public school system if administrators have this much difficulty tallying up the number of employees on their payroll?) Total nonfarm payrolls have risen 1.19% on a year-to-year basis in September (see chart 2), the lowest since May 2004. Private sector nonfarm employment shows a similar deceleration from a 2.43% year-to-year gain in March 2006 (peak) to a 1.23% year-to-year increase in September (see chart 2). From June to September, employment growth averaged 90,000 per month; during the first 5 months of 2007, the average monthly gain was 147,000. In 2006, the monthly average increase in nonfarm payrolls was 186,000.Each of these measures sends a message of significant slowing in payroll employment. Moreover, in the 12 months ended September 2007, the birth/death adjustment represented 69% of the increase in nonfarm payrolls; in the 12 months ended September 2006, it represented 42% of the increase in nonfarm payrolls. In sum, the slowdown in nonfarm payroll growth being experienced so far this year may, in reality, be more severe than what is being reported because of an upward bias imparted by ???phantom??? jobs assumed to have been created by start-up businesses not yet covered in the BLS survey.

Factory sector employment fell 18,000 in September; the total number of factory jobs lost in the first nine months of the year is 148,000 jobs versus a reduction of 3,000 in the first nine months of 2006. Total hiring in construction fell 14,000 in September, inclusive of gains in the non-residential sector and losses in the residential sector. In the residential sector, employment declined 20,000. During the first nine months of 2007, jobs in residential construction have dropped 93,000 after adding 16,500 jobs in the same period of 2006 (see chart 3), reflecting the recession in the housing sector.

Service sector payrolls increased 143,000 in September, with government payrolls accounting for one-fourth of the increase. Retail employment fell 5,000, 4,000 jobs were lost in the financial industry, with offsets from 33,000 new health care jobs and 21,000 new hiring in professional and business services. The financial sector has posted a total loss of 28,000 in the August and September months which are most likely related to the financial market crisis. Temporary help, a leading indicator of employment, dropped 34,900 in September, with a loss of 202,900 in the first nine months of the year vs. a reduction of 23,800 jobs during the same period in 2006.

Hourly earnings increased 7 cents to $17.57 in September, putting the year-to-year gain at 4.09%. The earnings and employment numbers suggest an increase in personal income during September that is probably larger than the 0.3% gain reported for August. The steady reading of the manufacturing man-hours index points to a small increase in industrial production during September.

Conclusion ??“ The payroll tally for September, significant upward revisions of employment in July and August, the 0.6% inflation adjusted increase in consumer spending during August, and the nearly steady sales pace of autos in September (16.22 million units vs. 16.26 million units in August) are factors that have reduced the probability of a cut in the federal funds rate on October 31. That said, it is abundantly clear that a growth recession is underway. By cutting the federal funds rate by 50 bps in one fell swoop on September 18, the FOMC has bought itself some time to watch developments in the economy. We believe that further weakness in economic activity will appear in the weeks ahead, which will induce another cut in the federal funds rate at the December 11 FOMC meeting.

Market Directions Sunday, October 7, 2007

2007-10-07T12:32:00.000+03:00

The stoics-the Bank of England and the European Central Bank

Job growth returns to the US, but not optimism to the Dollar

The ECB wants a strong dollar but not a strong Euro?

The Week in Review October 1 - October 5
It was status quo in the central bank market this week. T he Bank of England, the European Central Bank and the Reserve Bank of Australia a ll left their base rates unchanged. Only the American Federal Reserve has felt the need to chop rates in this post sub-prime world.

In the immediate aftermath of the recent credit problems the currency markets have placed the onus squarely on the Usd. The States were the source of the original problem and the most likely sufferer from its aftereffects. The Fed September rate cut and the admission it represented for the immediate health of the American economy drove the Usd down and down. The skein did not completely unwind until this past Monday when the Euro reached its lifetime high at 1.4280.

The fears that financial markets would freeze up in credit scarcity brought on by defaults in the sub prime housing and asset backed sectors have subsided. And while another large bank or mortgage company failure would make headlines it is unlikely it would incite the worldwide panic of early August. One of the chief fears in August was the unknown extent of the problem. How much questionable debt was held and how much would come due for refinancing in the following weeks. The period until the end of October was seen as crucial. We are now more than two thirds through that period and the credit markets have returned to normal functioning, if not to entirely normal spreads. The Europeans and the British central bankers, while acknowledging the severity of the credit liquidity situation, have demonstrated their resolve. They judge that their economies do not require preventative medicine. The remaining question is the health of the US economy; it weighs heavily on the dollar.

The situation is similar to that of last December. From October to December the then relatively new housing market collapse was expected to crack the wider US economy and produce a severe slowdown if not recession. The dollar sank against the Euro through the last quarter of the year in anticipation of the economic result. However, the US economy did not falter and the statistics improved throughout December. In January the Dollar gained almost 3.4% against the Euro. The case here is not to predict a Dollar recovery but to underline the fact that the market assumption is not yet proven. The speculative urge that is driving down the Usd is produced by anticipation of events not the events themselves. It may prove to be correct and the American economy may slip to neutral or recession. But the two figure fall in the Euro on Thursday reminds traders of the potential fragility of that assumption.

The difference between the economic views of the ECB and the Fed as expressed in their actions and policy are driving the dollar lower. Both are based on projections of current economic trends that are not yet fully substantiated.

United States

The US economy has not rolled over; it is still growing and creating jobs, the basic value for a consumer economy. But most economic numbers are sliding. Both ISM numbers, manufacturing and services, and factory orders were below forecast. The slowing trends that are evident in most US statistics originated before the credit crisis surfaced. However, there does not seem to be a generalized depiction of weakness, moderating growth is still the order of the day. With the Christmas and Holiday season approaching and the credit crisis behind a return to more buoyant spending is always possible. The main forward looking statistics, the purchasing managers indices and the consumer sentiment numbers were no doubt swayed by the emotional effects of the credit market crisis.

The Fed and Chairman Bernanke should be pleased with the NFP report. Job growth was not unduly affected by the credit liquidity crisis and recession fears are reduced as a consequence. Moderate but not dramatic job growth can support consumer spending without aggravating inflation. And while the three month moving average has been falling steadily all year, from +190,000 in January to +97,300 in the latest month this may help spur productivity and forestall rising labor cost pressures. Average Hourly Earning gained in September and with PCE Core Inflation at only +1.4% there is room for an increase in retail spending.

Eurozone

The ECB program for rate policy is clear and well expressed in the statement accompanying the rate decision. The reference to an "accommodative' rate policy was eliminated and replaced by "upside risks...to price stability". The wording may be different but it is hard to see how the rate stance has changed. Economic "fundamentals...support a favorable outlook for economic activity...on balance risks to the outlook for growth are judged to lie on the downside...[but] these downside risks relate mainly to the potential for a broader impact from the ongoing reappraisal of risk in financial markets..". In brief, except for the financial and credit market problems, the EMU economies are expanding at or above trend, producing a serious future potential for inflation that remains the bank's central concern. By implication, if the credit problems disappear then the bank will have no reason to be other than vigilant against inflation and the governing council will raise rates when and if it deems necessary.

Earlier in the week Jean Claude Trichet, ECB President speaking in Valetta Malta, reminded his audience that the US Treasury and Federal Reserve Bank have historically supported a strong dollar. His point was not to lecture the dignitaries that a strong Euro is good for the EMU economies and that the Europeans should stop complaining, but to remind the US officials of their traditional stance.

On Tuesday French Finance Minister Christine Lagarde had suggested that US Treasury Secretary Henry Paulson should say "loud and clear that a strong dollar is good for the US economy". If a strong Dollar is good for the US economy why wouldn't a strong Euro be good for the EMU economies? Would not all the advantages that a strong currency confers on the US also accrue to the EMU? Are the laws of economics different in the Old world than the New?

Or as one commentator, Barbara Rockefeller of Rockfeller Treasury S ervices put it, as quoted by Market News International, "the chance of ECB or G7 intervention is nearly zero, especially if it depends on the US participation". The Fed does not appear to be worried about the Dollar and the Treasury is unlikely to be either with exports up over 12%. While the US say "a strong dollar [is in its] best interest", it does nothing to support such a policy. "The real policy is let the markets decide". As for the Euro, the European have long said that they wanted a currency that could compete with the dollar's reserve status, "now let them live with it". No major industrial country predicates its economic, fiscal or monetary policy on exchange rates. The overriding operational factor is the health of the domestic economy; the Europeans are no different.

Japan

The Tankan Survey for the third quarter from the Bank of Japan held ground with large manufacturing firms reporting sentiment the same as in the second quarter, 23. Since GDP contracted 1.2% in that quarter according to the latest government figures the status quo reading was a small victory, reflecting strong demand from non US customers.

Economic Releases October 1 - October 5
United States

Monday: the Institute for Supply Management Survey of Manufacturing for September recorded a decline for the third month in a row at 52.0. This is consistent with a 2.5% growth in manufacturing. The median prediction had been 52.9, the same as the August reading. "Prices Paid' fell to 59.0 from 63.0, "New Orders' to 53.4 from 55.3. Only the result for 'Employment' increased to 51.7 from 51.3.

Tuesday: the Pending Home Sales Index from the National Association of Realtors (NAR) plunged 6.5% in August to 85.5. It is down 21.5% from the same period last year. Pending sales are those where a price between the seller and buyer has been agreed but the sale has not closed. The decline reflects the increased difficulty in mortgage financing for retail home buyers. The Pending Index acts as a leading indicator for 'existing home sales' and promises further weakness in the largest category of home purchase in the US. It also underlines the still lively potential for wider economic impact from the year long decline in the residential housing market.

Wednesday: the Institute for Supply Management Non-Manufacturing Index (ISM) at 54.8 was slightly better than the 54.5 forecast but below the August reading of 55.8. Though this was a bit less than the 56.6 average for the past it is nevertheless indicative of continued moderated growth into the fourth quarter. The 'Employment' Index staged a recovery to 52.7 from 47.9 in August; 'New Orders' fell to 53.4 from 57.0.

Thursday: Factory Orders for August underperformed expectations at -3.3% against the median forecast of -2.8%. It was the largest monthly drop since January when they fell 5.7%. The Euro climbed 50 points immediately after the release.

Friday: Non Farm Payrolls returned to positive territory in September as excepted adding 110,000 jobs. More interestingly the August deficit of -4,000 was erased with the adjustment to +89,000 for the month, most of the addition being in government payrolls. July's number was adjusted higher to +93,000 from +68,000 for a total revision of 118,000 over the two months. The unemployment rate moved 0.1% higher to 4.7%. The three months moving average has almost halved since the beginning of the year: January 180.7, February 159.3, March 142.3, April 129.0, May 162.3, June 127.0, July 117.3, August 83.7, September 97.3. Average Hourly Earning moved up 0.4% for the month, now 4.1% annually, a gain of 0.2% over July and August and slightly better than the average for the past year.

Eurozone

Monday: The final issue for the September PMI manufacturing number was 52.3 as expected and unchanged from the preliminary issue. It is the third monthly decline since June registered 55.6 and the lowest reading since February of last year.

Tuesday: the Produce Price Index gained 0.1% in August as expected, flattening the yearly rate to 1.7% from 1.8% in July. Energy prices ebbed 2.2% in August helping to lower the overall result but prices have since surged higher in September and were the chief cause for the spike to 2.1% in the preliminary HICP rate as reported last week. The ECB is unlikely to take much ease with this number. Unemployment in the EMU was steady at 6.9% in August, the third month in a row that it has sustained the historic low for this series which began in 1993. German unemployment fell to 6.2% from 6.4%; French to 8.6% from 8.7%. The jobless rate in the US is 4.6% and in Japan it is 3.8%.

Wednesday: Retail Sales rose only 0.1% in August, a quarter of the +0.4% forecast. The annual rate was +0.5% as predicted. The July result was revised to +0.4 from +0.1% monthly, and to +1.3% from +0.5%. The Euro was unmoved by the disappointing monthly number, the July adjustment negating the August result.

Germany

Monday: the NTC/BME Manufacturing Purchasing Managers Index (PMI) dropped to 54.9 in September 1.1 points lower than August.

Wednesday: the NTC PMI Report on Services registered a sharp drop to 53.1 in September from the August reading at 59.8. It was the lowest result in more than a year. NTC Economics is a private British economics date and research firm that produces a wide array of data on the economies of 20 of the worlds largest industrial countries.

United Kingdom

Monday: the CIPS/NTC Manufacturing Purchasing Managers Index (PMI) for September fell slightly to 55.1 from 56.1.

Wednesday: Reuters Services PMI for September eased to 56.7 from 57.6, a tad below the 56.8 median forecast and the weakest result in 13 months. "Employment' fell to 51.8 from 43.7 and "Prices Charged" jumped to 53.7 from 53.1. The British Retail Consortium (BRC) Shop Price Index in September gained 0.2% and was 0.4% ahead of last year's prices. Food prices were the main culprit, up 0.6% in September, and 2.7% annually. It was the largest increase since last December. In August the yearly inflation rate for food prices was only 2.1%. Non-food prices sank 0.1% in September, a +0.7% annual rate. The 'final' RBS/NTC Report on Services PMI added 0.2 to 54.2, a substantial drop from the 58.0 reading in August. Nationwide Consumer Confidence rose to 99 in September a major improvement over the 94 reading in August. However, the current relevance of the September score is questionable because 90% of the data was collected before the BOE rescue of Northern Rock.

Japan

Monday: The BOJ Quarterly Tankan Report for the third quarter presented a mixed picture for the Japanese economy. Business confidence at large manufacturing companies remained at 23, as it was in the second quarter but better than the forecast of 21. All other major categories of business confidence recorded losses: 'small manufacturing firms' were 20 against 22 in quarter two; 'large service firms' were 20 versus 22 in the second quarter and 'small service sector firms' categories were -10 as opposed to -7 in the second quarter. Firms were polled for their opinion between August 28th and September 28th.

The Week Ahead October 8 - October 12
United States

Monday: Columbus Day Holiday US markets closed

Tuesday: FOMC minutes at 2:00 ET for the September 18th meeting when the Fed unexpectedly cut rate 0.5%.

Thursday: International Trade Balance for August at 8:30 ET; July -$59.2 billion

Friday: Retail Sales for September at 8:30 ET; August +0.3%. Retail Sales ex Food and Auto for September at 8:30 ET; August -0.4%. Producer Price Index (PPI) September at 8:30 ET; August -1.4%. PPI for September at 8:30 ET; August +0.2%. University of Michigan Consumer Sentiment for October at 10:00 ET; September 83.4.

Eurozone

Thursday: GDP for the second quarter (second issue) at 9:00 GMT; first quarter +0.7% q/q, +3.1% y/y. EU Commission GDP forecast at 9:00 GMT; Q3 2007 +0.3%-0.8%, Q4 2007 +0.2%-0.8%, Q1 2008 +0.2%-0.8%.

Friday: Industrial Production for August at 9:00 GMT; Jul +0.6% m/m, +3.7% y/y.

Germany

Monday: Total manufacturing Orders for August at 10:00 GMT; expected +2.0% m/m, +4.3% y/y. July -7.1% m/m, +6.1% y/y.

Tuesday: Industrial Output for August at 10:00 GMT; expected +0.5% m/m, +3.9% y/y. July +0.1% m/m, +4.4% y/y. Manufacturing Sector Output for August at 10:00 GMT. July +0.2% m/m, +5.7% y/y.

Thursday: Wholesale Prices for September a 6:00 GMT. August +0.5% m/m, +2.5% y/y.

United Kingdom

Monday: Manufacturing Output for August at 8:30 GMT; July -0.3% m/m, +0.6% y/y. Industrial Production for August at 8:30 GMT; July -0.1% m/m, +0.9% y/y.

Greenback Mired near Lows

2007-09-29T16:07:00.002+03:00

The dollar sold off across the board to end the week at fresh record lows against the euro at 1.4277 and multi-week lows versus the sterling near 2.0450. Fundamentally, little has changed in the US economic and interest rate outlook but with sentiment biased toward further Fed easing, traders have been given the green light to dump dollars. The economy remains in a precarious state with the housing market yet to reach bottom and burgeoning fears of slipping into recession.

While the barrage of economic data released this morning was mixed, it had little impact in the foreign exchange market. Inflation reports showed the PCE price index softer than expected, with the headline reading at 1.8% y/y and down 0.1% m/m. The core reading edged up by 0.1% m/m, albeit weaker than anticipated while the annualized figure fell to 1.8% from 2.1%. August personal consumption rose by 0.6%, up from 0.3% while personal income drifted to 0.3% from 0.5%. The September NAPM index tumbled to its lowest level since November 2001, falling to 437.6 versus 445.0 from August. However, the Chicago PMI reading exceeded consensus estimates for a decline to 53.3, instead rising to 54.2 from 53.4 a month earlier. The University of Michigan sentiment survey unexpectedly fell to 97.9, coming short of forecasts for 99.0 and down from 98.4 from August. The sentiment survey echoes the Conference Board??™s dismal consumer confidence survey from earlier this week and is indicative of deteriorating economic fundamentals and recent market volatility.

We continue to look for more dollar weakness in the near-term. Next week??™s US economic reports will provide additional clues on the state of the economy. The data consist of September manufacturing ISM, pending home sales, services ISM, durable goods orders, factory orders, and the September jobs report. Recall last month, the greenback sold off sharply following an unexpectedly dismal non-farm payrolls number, which declined by 4k. The September NF payrolls reading are seen posting a dramatic improvement to 94k.

Traders will also focus closely on central bank policy decisions from the Bank of England and the European Central Bank. The sterling came under pressure in the New York morning amid rumors circulating trading desks that the BoE would come in with a surprise rate cut. The currency quickly recouped its losses against the yen and the dollar, but the prospect of a BoE rate cut will remain fresh on traders??™ minds.

Also worth noting, St Louis Fed President Poole said that the 50-basis point Fed rate cut was justified in order to help markets to recover. However, he said it is a mistake for markets to bet on further easing and policy would be determined from meeting to meeting. Poole also added that inflation expectations are firm, but the core PCE figures released today were moving in the right direction.

Consumer Spending Advanced in August, Core Inflation Is Within "Comfort Zone"

2007-09-29T16:07:00.001+03:00

Inflation adjusted consumer spending rose 0.6% in August following a 0.3% gain in July. The strength was in durable goods purchases (+2.8% vs. -0.3% in July) and services (+0.6% vs. +0.3% in July). Spending on non-durables was virtually steady in August. The July-August average for consumer expenditures points to a third quarter increase that is noticeably higher than the 1.4% reading of the second quarter. However, soft numbers for September could alter this projection.

Personal income increased 0.3% in August after a 0.5% gain in July, reflecting only a 0.2% increase in wages and salaries. Personal saving as a percent of disposable income was 0.7%. In the first eight months of the year, personal saving is running at an average of 0.8%, compared with a 0.5% and 0.4% readings in 2005 and 2006, respectively.

The personal consumption expenditure price index fell 0.1% in August due to lower energy prices. The core personal consumption expenditure price index excluding food and energy rose only 0.1% in August, putting the year-to-year increase at 1.76% compared with gains of 1.92% and 1.91% in June and July, respectively. The cycle peak appears to be a 2.46% increase in February 2007. This places core inflation well within the Fed??™s comfort zone of below 2.0% year-to-year increase. This is significant because it gives the FOMC flexibility to place a greater emphasis on weakening economic conditions and reduce the concern about inflation.

Residential Construction Remains Weak in August
Total construction spending rose 0.2% in August, following two consecutive monthly declines. The 2.3% jump in private sector non-residential construction spending and 1.2% increase in public construction outlays more than offset the 1.5% decline in private residential construction spending. The July-August average of residential construction spending points to a sharper drop in residential construction spending (proxy for residential investment expenditures in GDP accounts) during the third quarter compared with the second quarter decline, which implies that residential investment expenditures are most likely to make a larger negative contribution to real GDP in the third quarter vs. the second quarter. At the same time, the strength in private non-residential construction expenditures suggests a positive contribution to GDP in the third quarter.

Iran Leader Denied Bid to Visit Ground Zero

2007-09-20T12:35:00.000+03:00

A remark by Police Commissioner Raymond W. Kelly that the Police Department was considering a request by Iran that its president visit ground zero set off complaints yesterday before the department corrected itself.

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Go to City Room » Late in the day, it said, the request had already been turned down.

Iran asked this month that its president, Mahmoud Ahmadinejad, be permitted to visit ground zero when he attends the opening of the United Nations General Assembly next week.

Paul Browne, the chief spokesman for Commissioner Kelly, said the request — that Mr. Ahmadinejad be allowed to lay a wreath at the former site of the World Trade Center — had been made by Iranian officials earlier this month in a meeting that was also attended by officials of the United States Secret Service and the Port Authority of New York and New Jersey.

Mr. Browne said the request was rejected because the Iranians wanted Mr. Ahmadinejad to visit the area of ground zero where construction is under way, but he said that any additional request that he appear near the site of the 9/11 terrorist attack would also be denied out of concerns about security. Although relatives of the victims were allowed to visit the site briefly on the sixth anniversary of the Sept. 11 attacks, members of the public are not allowed into the area.

Mr. Browne’s comments came late yesterday in the form of a clarification of remarks made earlier in the day by Mr. Kelly, who said that a ground zero visit by Mr. Ahmadinejad, a strident critic of the United States and an object of scorn for the Bush administration, was under consideration.

Speaking to reporters at Police Headquarters, Mr. Kelly said that a request had been made by Iran’s Permanent Mission to the United Nations, and “we are talking to them right now.” He said that Mr. Ahmadinejad would not be allowed into the section of ground zero where construction is taking place, but that a visit nearby might be allowed.

“It is something we are prepared to handle if in fact it does happen,” he said.

Mr. Browne said later that Commissioner Kelly had been reviewing several security questions involving many heads of state who will be attending the General Assembly session and that he misspoke when asked about the Iranian leader’s visit.

Mr. Ahmadinejad, elected in 2005, has clashed with the Bush administration over his country’s nuclear program and human rights record, and has faced international criticism for calling the Holocaust a “myth.”

He is expected to arrive in New York on Sunday, address the United Nations on Monday, and leave the city on Wednesday morning, Mr. Kelly said. Mr. Ahmadinejad is also scheduled to speak at Columbia University on Monday. Lee C. Bollinger, the president of Columbia, said yesterday that Mr. Ahmadinejad would speak at a World Leaders Forum, but that strict conditions had been set.

The Iranian president has visited Manhattan before, and been greeted by protest.

A year ago, after he was invited to address the same Columbia forum he is scheduled to attend on Monday, Mr. Ahmadinejad’s invitation was withdrawn.

The possibility of a visit to ground zero, as suggested by Mr. Kelly yesterday, provoked a cool response from the White House.

“This is a matter for the City of New York, but ground zero would be an odd place for the president of a country that is a state sponsor of terror to visit,” said Gordon Johndroe, a White House spokesman.

Before the department’s clarification, the presidential candidates condemned the prospect of Mr. Ahmadinejad’s visiting ground zero.

“It is unacceptable,” said Senator Hillary Rodham Clinton. “Under no circumstances,” said Rudolph W. Giuliani, the former mayor of New York. “Ahmadinejad’s shockingly audacious request should be met with a vehement no,” said the former Massachusetts governor, Mitt Romney.

In blow to Democrats, Senate kills anti-war bill !

2007-09-20T12:34:00.001+03:00

WASHINGTON (AFP) — President George W. Bush's administration Wednesday thwarted the latest bid by Democrats to derail its Iraq strategy, as the Senate blocked a bid to limit the numbers of troops ready for deployment.

After wavering Republican Senators came under fierce political pressure, the bill garnered 56 votes in the 100-member chamber, but in a stinging defeat for Democrats, fell four votes short of the required 60-vote supermajority.

The measure, framed by Democratic Senator James Webb, and co-sponsored by Republican war critic Senator Chuck Hagel, would have mandated rest periods for troops equal to the length of time they spent on combat tours.

Its failure was the latest bitter disappointment for Democrats who grabbed control of Congress last year, but have repeatedly failed to change the course of US strategy in the unpopular war.

Hagel had argued in a day of impassioned debate that US troops were being stretched beyond endurance, and facing rising rates of stress, divorce and personal hardship by repeated combat tours in Iraq and Afghanistan.

"We cannot continue to look at war and the people who fight and die in wars as abstractions, as pawns, as objects," said Hagel.

"The humanity of this is lost.

But critics branded the bill a "back-door" attempt to enforce a drawdown of US troops from Iraq. Supporters did not dispute the fact it would limit troop levels, but said it was vital to ease the strain on the US military.

Though Secretary of Defense Robert Gates had warned he would ask Bush to veto the measure had it passed, the bill was seen as the Democrats best shot this year of challenging Bush's control of the war.

Republicans celebrated the defeat of the bill, which they said would have amounted to a legislated surrender in Iraq, a week after Bush declared his troop surge strategy a success.

Senator and 2008 presidential candidate John McCain branded the bill "dangerous," adding it would have "the effect of changing policy on the war."

Republican Senator Jim Bunning issued an outspoken attack on the bill.

"I will not support this slow bleed strategy in Iraq, it ties the hands of our commanders," he said.

Republican Senator John Warner, an expert on the military, who has expressed disquiet about war strategy, had considered voting for the measure, but was swayed by top military brass in a meeting on Wednesday.

He said the provision would interfere with Bush's gradual troop redeployment plan from Iraq, to 'pre-surge' levels of around 130,000 by mid-2008, and would limit specialist troops available in Iraq.

"I regretfully say I have been convinced by those in professional uniform -- they cannot do it," said Warner.

Another Republican Senator Arlen Specter, who had expressed interest in the bill, also changed his mind of meeting senior military officers.

Webb said he had been hopeful that the bill would get the required 60 votes, but concluded his quest was derailed by a fierce lobbying operation organized by the White House.

"When it became possible, and likely that we would get to 60 votes, the White House really revved up the engines on this," he told reporters after the vote.

The bill's 56-vote tally was exactly the same as the number a similar version garnered in June, when it last came up for the vote, showing little progress by Democrats in thwarting Bush's war strategy.

Faced with apparently solid Republican backing for Bush on the war in the Senate, Democrats are now expected to make several symbolic -- but almost certain to fail -- attempts to establish troop withdrawal timetables.

By the Democratic script, September was supposed to have been the month, when constant pressure on wavering Republican senators broke the back of Bush's support for the war in Congress.

But a public relations campaign by the White House, and testimony by war commander General David Petraeus and US ambassador to Baghdad Ryan Crocker now seems to have been decisive.

Shinzo Abe's Year in Power

2007-09-12T13:57:00.002+03:00

Sept. 12, 2007: Abe announces he will resign as Japanese prime minister.

Sept. 9, 2007: Abe says he is ready to resign if Parliament fails to extend a mission to refuel U.S.-led coalition warships in the Indian Ocean.

Sept. 5, 2007: Environment Minister Ichiro Kamoshita and his political-fund-management group come under fire over an ¥8 million ($69,000) discrepancy in records of loans from the lawmaker to the group declared in fund reports in the 1990s. Kamoshita denies any ill intent, and Abe and other government officials rally to his defense.

Sept. 3, 2007: Agriculture minister Takehiko Endo resigns only a week after his appointment because of a scandal involving misuse of farm subsidies.

Aug. 27, 2007: Abe starts his campaign to bounce back from an election defeat by selecting older, more experienced cabinet ministers, many of whom served in the administration of Junichiro Koizumi, Abe's predecessor.

Aug. 1, 2007: Agriculture minister Norihiko Akagi steps down to take responsibility for a major electoral defeat for the ruling party. Akagi is suspected of reporting $730,000 in office expenses over the past decade for a political office that was registered at his parents' address and was defunct. Akagi has denied any wrongdoing.

July 29, 2007: Just 10 months after Abe takes office, the ruling Liberal Democratic Party loses its majority in the Upper House. Despite the electoral defeat, Abe says he would remain in office.

July 3, 2007: Japan's defense minister, Fumio Kyuma, resigns after he offended many Japanese with remarks about the 1945 U.S. atom-bomb attacks. Kyuma had said in a speech that the atomic bombings of Hiroshima and Nagasaki, which together killed more than 200,000 people, were inevitable.

May 28, 2007: Agriculture Minister Toshikatsu Matsuoka hangs himself just hours before he is to face questioning over alleged bookkeeping fraud.

March 26, 2007: Abe, under fire for denying that Japan forced women to work as sex slaves during World War II, offers an apology but refuses to clearly acknowledge Japan's responsibility for running the frontline brothels.

Jan. 9, 2007: Japan's conservative government upgrades the Defense Agency to a full ministry for the first time since World War II as part of Abe's push to raise the military's profile.

Dec. 27, 2006: Minister for administrative reforms Genichiro Sata resigns after admitting that a political support group had engaged in fraudulent accounting. Abe chooses Yoshimi Watanabe, a cabinet vice-minister, to replace Sata.

Dec. 21, 2006: The head the government's tax panel, Masaaki Homma, resigns amid an outcry over his use of a plush government apartment to house his mistress.

Sept 26, 2006: Shinzo Abe, the leader of the ruling Liberal Democratic Party, is elected prime minister of Japan. He announces a cabinet lineup that indicates he will follow many of the policies of his predecessor, Junichiro Koizumi.

Philippine ex-president gets life sentence

2007-09-12T13:57:00.001+03:00

MANILA, Philippines -- Deposed Philippine President Joseph Estrada, who once pulled off the biggest election victory in Philippine history, has been sentenced to life in prison on charges he took bribes and kickbacks in office.

Estrada was convicted of plunder -- a capital offence -- though the death penalty was recently abolished.

He was acquitted of perjury for allegedly falsely declaring his assets.

It was unclear when he might be eligible for parole.

He was given credit for the time he has spent in detention.

Riot police and troops kept hundreds of flag-waving Estrada backers several blocks from the Sandiganbayan, the anti-graft court in Manila that the former action film star inaugurated before he was ousted in January 2001 by the country's second people power revolt.

Security also was very tight around the presidential palace as President Gloria Macapagal Arroyo worried about a repeat of violent protests that followed Estrada's arrest in April 2001.

Estrada's son, Senator Jinggoy Estrada, and lawyer Eduardo Serapio were acquitted of all charges.

Estrada said before the verdict he would appeal a conviction but did not immediately tell the court he would do so.

Congressional probe promised for deadly mine

2007-08-18T11:55:00.000+03:00

WASHINGTON - Congress will investigate and hold hearings on the Utah mine disaster, several key congressional leaders vowed Friday after a second tragedy at the Crandall Canyon mine brought rescue operations to a halt.
The chairwoman of the Senate subcommittee that oversees mine safety promised a congressional probe, as did the the head of the House Education and Labor Committee. Utah politicians also backed an investigation of what went wrong in the initial mine tunnel collapse and the subsequent rescue effort that claimed three lives Thursday night.
"We owe it to all those affected by this tragedy and to mine workers everywhere to find out why this accident occurred, and how future disasters can be prevented," said Sen. Edward Kennedy, D-Mass., chairman of the Health, Education, Labor and Pensions Committee, which has oversight of mine safety.
Sen. Patty Murray, D-Wash., the chairwoman of HELP subcommittee on employment and workplace safety, said in "light of the tragic events" she promised to join with colleagues to "conduct a comprehensive investigation into the causes of this tragedy, the handling of the response, and the ways we can improve mine safety and rescue efforts across our nation."
Rep. George Miller, D-Calif., said the latest news was "extremely disturbing," and while his prayers are with the rescuers, their families and the trapped miners, the tragedy has again
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raised serious questions about mine safety and how to improve it.
"The Education and Labor Committee intends to answer those questions by investigating and convening hearings at the appropriate time," Miller said in a statement.
Neither member set any timetable for hearings, citing the still-ongoing rescue efforts. "Obviously, right now the only job that matters is the job of reaching the six trapped miners while limiting, as much as possible, the risk to rescuers," Miller said.
Utah Gov. Jon Huntsman Jr., who called for a suspension of any rescue effort until the safety of the responders could be assured, signaled support for a congressional investigation, saying that Washington must use this experience as a lesson on how to improve mine safety.
"I think this is a defining moment for the history of mining," Huntsman said during a news conference. "And we all expect to come out of this better and smarter and safer."
The last congressional hearings on a mine disaster emerged in 2006 out of the deaths of 12 miners at the Sago mine in West Virginia and resulted in the passage of the MINER Act.
That legislation was called the biggest improvement in mine safety regulations in some 30 years, and forced mine owners to continuously update emergency response plans, required two-way communications and electronic tracking equipment within three years and boosted penalties for flagrant violations.
But several members say the bill did not go far enough and are pushing additional measures in the House and Senate to beef up safety requirements. The Senate version speeds up the date by which mines must install improved underground communication systems and enhances penalties for a mine with a "pattern of violations."
While no member of Congress on Friday would say if the mine disaster might spur the legislation's passage it's likely to gain support following the Utah tragedy.
Sen. Orrin Hatch, R-Utah, said the Mine Safety and Health Administration would "completely" investigate the tragedy and Congress should hold hearings, but he cautioned that any investigation needs to be put off until the miners are rescued.
"I know that many in Congress will want to get involved in this, and I'll support the efforts to make sure miners are as safe as possible," Hatch said. "But for the present time, we need to let the professionals do their job, with our support but without our interference."
tburr@sltrib.com
gehrke@sltrib.com who spoke at a news conference Friday in Huntington.

Bush offers condolences

WASHINGTON - President Bush called Utah Gov. Jon Huntsman Jr. on Friday about the Crandall Canyon mine disaster, the second call the president has made to Huntsman to express concern for the trapped miners and their families.
"The president spoke to Gov. Huntsman this afternoon to offer his support and condolences to all those affected by this tragedy and said he is keeping the miners, rescue workers and their families in his thoughts and prayers," said White House spokesman Trey Bohn.
Bush initially called shortly after the mine disaster hit last week to offer any federal help needed.

Opposition in Lebanon declares win

2007-08-06T17:24:00.000+03:00

BIKFAYA, LEBANON — In a probable blow to the Western-backed government, a key opposition leader Sunday declared victory in voting for a seat in parliament that was widely regarded as a proxy fight between the government and the pro-Syrian opposition.

Under guard by soldiers, tens of thousands of voters cast ballots in mountain villages northeast of the capital, where two civil war veterans and former allies were pitted against each other in a heated struggle for the Christian vote. After the opposition leader declared victory, the faction aligned with the government immediately claimed fraud but urged followers to remain calm.

Amin Gemayel, an ally of the government, was competing in the election for the seat of his dead son against a relatively unknown candidate, Kamil Khoury, who was backed by Michel Aoun, an ally of the Shiite-dominated opposition.

Pierre Gemayel, a young, popular Cabinet minister, was shot and killed late last year. His supporters believe Syria had a hand in his assassination, a charge denied by the government in Damascus.

Late Sunday evening, Khoury's camp announced it had won the seat. But official results were not expected until today.

"The big winner today is Syria," said Michael Young, an opinion editor at the Daily Star, a Lebanese newspaper. "At the end of the day, Gemayel did not win, and Aoun did not lose…. It's an ideal situation if Syria decides to impose its candidate" for president.

According to the Lebanese political system, the post of president is reserved for a Maronite Christian, and the vote was widely seen as a precursor to the upcoming election of a new president by parliament. President Emile Lahoud must step down by Nov. 23.

The race for the legislative seat highlighted deep divisions within the Christian community. Before the vote, Gemayel led an emotional campaign, telling voters that casting a ballot for him would be like casting a rose on his son's grave. Volunteers in his stronghold of Bikfaya handed out white roses to voters to commemorate the slain politician.

"Pierre Gemayel didn't die of a heart attack or in a car accident," said Eli Fares, the 36-year-old owner of La Vida, an electronics shop in Bikfaya. "Our heroes are all in the cemetery."

Like Fares, many Christians on both sides of the divide thought the election was a chance to reassert themselves on the political scene.

"This is a fight for our existence here as Christians in this area," Fares said.

Amin Gemayel, who heads the Falangist Party, served as Lebanon's president in the '80s during the nation's civil war, and appointed Aoun prime minister at the end of his term.

Although Aoun helped put an end to almost 30 years of Syrian domination, the 72-year-old former army commander upset the political balance last year by allying himself with Hezbollah, the Shiite group that is opposed to the predominantly Sunni government and supported by Syria and Iran.

"We have to think of being Lebanese first, then Christians, et cetera, second," said Joe Chebli, in explaining his vote for Khoury.

Despite the importance of the vote, there were few reports of violence. The Reuters news agency reported that two people were shot and wounded in clashes between supporters of rival political groups Sunday night.

In Bikfaya, supporters of Gemayel yelled out to an SUV full of Aoun supporters: "Go back to Daheer!" referring to the predominately Shiite suburbs of Beirut.

Prime Minister Fouad Siniora characterized the election as a peaceful response to a string of political assassinations. "Democracy in Lebanon will defeat terrorism," he said in a statement.

The Lebanese government has been paralyzed since a walkout by the opposition late last year.

In another election in Beirut, pro-government candidate Mohammed Amin Itani easily won a Sunni seat in parliament that came open when lawmaker Walid Eido was killed in a car bombing in June.

Iowa Republicans See Romney As Straw Poll Winner

2007-08-06T17:23:00.001+03:00

With a week to go before the Iowa Republican Party's critical straw poll, an informal survey of Iowa Republican Party leaders, conducted by Real Clear Politics, shows high expectations for former Massachusetts Governor Mitt Romney. Those high expectations of local party leaders could be a huge benefit, if Romney meets them, or a painful negative should he fail. The numbers, and the expectations for all the candidates, show a race that could dramatically change on Saturday.

Of the 30 Republican officials - representing county parties around the state and the party's Central Committee - who responded to the survey via email, 93% picked Romney to win in Ames. Many saw his commitment to the state as indicative that he will prevail next Saturday; the same percentage said it was Romney whose campaign had the most visible presence in their locations.

Poll participants were asked to predict the top five finishers at the straw poll, and answers were ranked in order. A first place vote was worth five points, a second place vote was worth four points, et cetera, meaning 150 points was the maximum one candidate could achieve.
Predicted finish.bmp
Romney scored 144 points out of 150 possible. Colorado Congressman Tom Tancredo, who, according to an ABC/WP poll of Iowa voters, is the top choice of 5% of likely Iowa Republican caucus-goers, finished a distant second, with 59 points. Tancredo, though, led national front-runners Rudy Giuliani, who finished third with 55 points, and Fred Thompson, who finished sixth with 41 points. Neither Giuliani nor Thompson are actively participating in the straw poll.

Tancredo's second-place finish, if that lead holds on Saturday, would be a massive coup for a campaign driven largely by the congressman's views on illegal immigration and the war on terror. 20% of respondents, a slight plurality, said Tancredo had the most to gain at the poll, and that his performance would improve his standings in national polls. Aside from Romney, Tancredo was the only candidate to receive any first-place votes.

Perhaps unsurprisingly, Texas Congressman Ron Paul, a libertarian in the truest sense of the word, did not receive a single vote in the poll. The lone anti-war voice on the GOP stage, Paul would be unlikely to earn support, or even notice, of people involved in Republican circles enough to be an elected board member.

The most intriguing subplot leading up to the poll on Saturday has been an increasingly bitter feud between two candidates vying for the religious vote. Kansas Senator Sam Brownback and former Arkansas Governor Mike Huckabee have for weeks accused the other of dirty campaign tactics, the latest incident being an email a Huckabee supporter sent to two Brownback supporters urging them to drop the senator, a Catholic, in favor of the governor, a Baptist minister. When Brownback's campaign complained to the press, Huckabee's manager urged Brownback to "stop whining."

The two face an uncertain future after Saturday's vote. Both are low on money, and both are counting on a voting bloc that, if divided, could see its influence over the GOP nomination wane. Iowa is home to more evangelical Christians than any state, proportionally, outside the South, and with a united bloc, either Huckabee or Brownback could cause the front-runners trouble. Taking either candidate's best score on all 30 ballots, their 72 points easily trumps any candidate but Romney. Divided, Huckabee finishes fourth, with 52 points, while Brownback's 42 points come in fifth.

Former Wisconsin Governor Tommy Thompson, who has said he will drop out if he does not perform well in Iowa, is not expected by Iowa's Republican elite to rise to the top. If Thompson does come in seventh, at 32 points and behind Fred Thompson, his campaign may come to a premature close.
Most To Lose.bmp
But it was not Thompson who most respondents said had the most to lose come Saturday. Instead, Arizona Senator John McCain, once the front-runner, and Romney are seen as the two risking the most come the weekend, with 30% naming each when asked. McCain, who announced he would not participate in the event mere hours after Giuliani did, is the victim of an Iowa Republican electorate still furious with him for ignoring them in 2000 and again this year, as well as for what they perceive as his less-than-complete conservatism. McCain, said one respondent representative of many in the survey, "is not a loyal Republican."

Romney, though, is the front-runner with a strong potential upside and the steepest possible downside. The candidates' performance at yesterday's debate, broadcast as a special edition of ABC's "This Week," showed that others recognized Romney's front-runner status in Iowa as well. Romney defended himself from charges from Brownback, who accused the Massachusetts governor of failing to be completely pro-life.

Seeking to boost their own support while cutting Romney down, other candidates "have hinged their efforts into trying to tear us down," said Romney spokesman Kevin Madden. "A lot of analysts will watch and see if anybody has a kamikaze mission, so to speak, that's going to effect us."

Though Romney is widely viewed as the candidate poised to walk away with the straw poll and thought of as the strongest organizationally in Iowa, there is a danger that many of the voters he busses in from around the state may not intend to follow through on voting for him. "People are known to show up at the straw poll with a ticket paid for by candidate A, yet they vote for candidate B," wrote one respondent, recalling businessman Steve Forbes' 1999 campaign. Forbes "bussed in a lot more people than he got votes from."
Most To Gain.bmp
The candidates with the greatest potential, according to most, are those in the so-called second tier, candidates without the money to compete directly with Romney or Giuliani. In Ames, it could be a good day for several contestants near the back of the pack. "They have the opportunity to show strong support from activists and potentially gather momentum in other states," said Sioux County Republican chairman Mark Lundberg.

Respondents to the poll differed on candidates they support, but their views on who the opposition will be come 2008 could hardly have been more unified. All but two predicted that New York Senator Hillary Clinton would be the Democratic nominee, though two believed it would be either her or Illinois Senator Barack Obama. One respondent declined to guess, while another predicted the Democratic winner would be either Delaware Senator Joe Biden or former North Carolina Senator John Edwards.
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Asked which candidate would be best able to defeat Clinton or whomever may be the eventual Democratic nominee, Iowa Republican leaders chose Giuliani, by a small 30% plurality, over Romney, who finished second with 23%.

As the straw poll draws near, pressure on candidates builds. Each campaign is operating at full speed to entice their voters to the polls. "We're working very hard every day making calls and trying to motivate our voters," said Brownback's Rob Wasinger. "We're putting an investment of staff and an investment of time there," said Jesse Benton, spokesman for Ron Paul.

Underscoring the importance of Ames, Benton responded to request for comment on his way to Iowa. Wasinger, Brownback's national campaign manager, has been in Ames since last week. They are but the first of what could be up to 40,000 visitors the sleepy college town hosts next week for what will be the most pivotal moment thus far in the Republican race.
Reid Wilson, an associate editor and writer for RealClearPolitics, formerly covered polls and polling for The Hotline, National Journal’s daily briefing on politics. Wilson’s work has appeared in National Journal, Hotline OnCall and the Arizona Capitol Times. He can be reached at

First Alarm About Bridge Raised in 1990

2007-08-03T13:43:00.002+03:00

MINNEAPOLIS -

It was 1990 when the federal government first issued an ominous label for the state's busiest bridge: "structurally deficient." In the ensuing years, inspectors found cracks and corrosion on the Interstate-35W bridge. They stepped up inspections from once every two years to every year, and made what they thought were the necessary repairs. They were convinced that the bridge had no safety issues at all.

Their actions have come under intense scrutiny since the 40-year-old bridge plummeted into the Mississippi River on Wednesday, killing at least four and injuring another 79.

Police said the death count would surely grow because bodies had been spotted in the fast-moving currents. As many as 30 people were still reported missing.

"We have a number of vehicles that are underneath big pieces of concrete, and we do know we have some people in those vehicles," Police Chief Tim Dolan said Thursday. "We know we do have more casualties at the scene."

The eight-lane I-35W bridge, which carried 141,000 vehicles a day, was in the midst of mostly resurfacing repairs when it buckled during the Wednesday evening rush hour.

Dozens of cars plummeted more than 60 feet into the Mississippi River, some falling on top of one another. A school bus sat on the angled concrete.

Among the missing is Sadiya Sahal, 23, and her 2-year-old daughter, Hanah Mohamed. Sahal, who is five months pregnant, left home at 5:15 p.m. with the toddler in the back seat. She called her family at 5:30 p.m. saying she was stuck in traffic on the bridge, according to Omar Jamal, a spokesman for the family. That was her last phone call.

"Her husband is destroyed. He's in shock," Jamal said.

Officials identified the dead as Sherry Engebretsen, 60, of suburban Shoreview; Julia Blackhawk, 32, of Savage; Patrick Holmes, 36, of Moundsview; and Artemio Trinidad-Mena, 29, of Minneapolis.

Ronald Engebretsen said he and his family were trying to come to grips with his wife's death. "She's a great person. She's a person of great conviction, great integrity, great honesty and great faith in her God," he said.

National Transportation Safety Board chairman Mark Rosenker said his investigators got two big breaks Thursday with a surveillance video showing the collapse and a computer program that would analyze how the bridge failed. Those two things would speed their work and allow them to do a smaller reconstruction of part of the bridge span, rather than the whole thing.

Despite the powerful images of devastation from the collapse, some believed the design of the bridge reduced the death toll.

Joseph Schofer, professor of civil and environmental engineering at Northwestern University, said the bridge's underlying arch truss stopped heavy pieces of steel from falling onto vehicles when the cars plunged into the water.

Gov. Tim Pawlenty responded Thursday by ordering an immediate inspection of all bridges in the state with similar designs, but said the state was never warned that the I-35W bridge needed to be closed or immediately repaired.

"There was a view that the bridge was ultimately and eventually going to need to be replaced," he said. "But it appears from the information that we have available that a timeline for that was not immediate or imminent, but more in the future."

More than 70,000 bridges across the country are rated structurally deficient like the I-35W bridge, and engineers estimate repairing them all would take at least a generation and cost more than $188 billion.

"I think anybody who looks at the national picture, the national statistics and says that we don't have a problem would be naive or misleading the situation," Pawlenty said. "We have a major problem."

Authorities cautioned not to read too much into the "structurally deficient" tag. The designation means some portions of the bridge needed to be scheduled for repair or replacement. It wasn't a candidate for replacement until 2020.

The collapsed bridge is one of 1,160 bridges in that category, which amounts to 8 percent of bridges in the state. Nationally, about 12 percent of bridges are labeled "structurally deficient."

During the 1990s, inspections found fatigue cracks and corrosion in the steel around the bridge's joints. Those problems were repaired. Starting in 1993, the bridge was inspected annually instead of every other year.

State bridge engineer Dan Dorgan said the bearings could not have been repaired without jacking up the entire deck of the bridge. Because the bearings were not sliding, inspectors concluded the corrosion was not a major issue.

After a study raised concern about cracks, the state was given two alternatives: Add steel plates to reinforce critical parts or conduct a thorough inspection of certain areas to see if there were additional cracks. They chose the inspection route, beginning that examination in May.

"We thought we had done all we could," Dorgan told reporters near the mangled remains of the span. "Obviously something went terribly wrong."

The collapsed bridge's last full inspection was completed June 15, 2006. The report shows previous inspectors' notations of fatigue cracks in the spans approaching the river, including one four feet long that was reinforced with bolted plates.

Although concern was raised about cracks, some experts theorized it's no coincidence the collapse happened when workers and heavy equipment were on the bridge. The construction work involved resurfacing and maintenance on guardrails and lights, among other repairs.

"I would be stunned if this didn't have something to do with the construction project," said David Schulz, director of the Infrastructure Technology Institute at Northwestern University. "I think it's a major factor."

Associated Press writers Seth Borenstein, Brian Bakst, Ryan Foley and Jon Krawczynski contributed to this report.

US marine guilty of Iraq murder

2007-08-03T13:43:00.001+03:00

A US marine has been convicted of murdering an Iraqi man after an attempt to locate and execute an alleged insurgent went disastrously wrong.

A US court martial heard that Sgt Lawrence Hutchins and the squad he led hatched a plan to kidnap and kill a suspected militant in Hamdania, west of Baghdad, in April last year.

When they could not find him, they instead kidnapped another man, believed to be Hashim Ibrahim Awad, a father of 11, from a neighbouring house, dragged him to a hole and shot him, prosecutors told the court martial.

Squad members tried to cover up the murder by planting a shovel and an AK-47 by the man's body to make it look like he was an insurgent planting a bomb.

Hutchins, 23, faces a possible life sentence after being convicted of murder, conspiracy to murder, making a false official statement and larceny. He was acquitted of kidnapping, assault and housebreaking.

He had also been charged with premeditated murder but the military jury dismissed the premeditation element from the verdict.

Hutchins stood rigidly and stared straight ahead in the courtroom as the verdict was read out. His wife sobbed silently with her head bowed.

Several witnesses testified that the plot was born out of frustration after suspected insurgents kept evading prosecution.

Lawyers for Hutchins argued that he participated in the plot because his own officers had set a poor leadership example and had given approval for marines to use violence in capturing and interrogating suspected insurgents.

Another squad member, Cpl Marshall Magincalda, 24, was convicted of conspiracy to murder, larceny and house breaking and could also receive a life sentence. He was acquitted of premeditated murder and kidnapping.

A military psychiatrist said Magincalda developed post-traumatic stress disorder and severe depression as a result of combat.

"He was essentially a broken shell," Jennifer Morse told the court. "This was a young man who was gone, who was clearly haunted by his memories."

All eight members of the squad were initially charged with murder and kidnapping.

Four lower-ranking marines and a navy corpsman agreed deals with prosecutors in exchange for their testimony and received sentences ranging from one to eight years in prison.

A jury last month acquitted another corporal of murder but convicted him of conspiracy to commit murder and kidnapping.

Prosecutors had identified the victim as Mr Awad, 52, a 52-year-old retired policeman. However, he is now referred to in court papers as an "unknown Iraqi male" after defence lawyers said authorities could not conclusively establish the victim's identity.

Japan’s voters give Abe a thrashing

2007-07-29T22:27:00.000+03:00

Until Sunday, Japan’s public had not had the opportunity to pass its verdict on Shinzo Abe, the blue-blood politician anointed prime minister by the ruling Liberal Democratic party last September.

Voters clearly relished the opportunity. In upper house elections, they handed Mr Abe's party a crushing defeat and rewarded the opposition Democratic Party of Japan with a clear majority. It was the first time in the ruling LDP’s 52-year history – only nine months of which it has spent out of power – that it won fewer seats than the biggest opposition bloc.
The DPJ won overwhelmingly, not only in the big cities, where it has always been strong, but also in the countryside, where the LDP has traditionally been all but unassailable. Many well-known LDP senators in former rural strongholds were defeated by political novices, whose main election message was that they were not running for Mr Abe.

By midnight Sunday night, with all but 10 seats declared, it looked as though the LDP would fail to reach 40 seats, much worse than the 44 seats that forced the resignation of Ryutaro Hashimoto, former LDP prime minister, in 1998. The DPJ was projected to win more than 60.

Yukio Hatoyama, secretary-general of the DPJ, said Sunday night: “People have lost trust in the Abe administration. We clearly felt this during the campaign.” He and other members of his party said Mr Abe should resign and the LDP call a general election by dissolving the more powerful lower house. That would mark the long-awaited dawn of two-party politics after years of LDP monopoly, he said.

There were at least three main reasons for Mr Abe’s pummelling. First, his cabinet has become mired in a series of political scandals, many involving dirty money, which called into question the prime minister’s judgment and leadership. Two cabinet members quit and Toshikatsu Matsuoka, farm minister, committed suicide amid a corruption scandal.

On the eve of the election, Norihiko Akagi, Mr Abe’s choice to replace Mr Matsuoka, was fleeing reporters pursuing him over allegations that he had massively fiddled his political expenses. “The politics and money scandal plagued us right until the end,” said Hidenao Nakagawa, secretary-general of the LDP, Sunday night.

Second, Mr Abe, 52, has sorely lacked the charisma of his popular predecessor, Junichiro Koizumi, and has failed to convince the public that they should share his political convictions. The youngest prime minister since the war has pushed constitutional revision, patriotic education and breaking free of Japan’s war-related guilt. But polls suggest Japanese people are more concerned about continuing economic problems, especially in poorer rural areas, where five years of economic growth has failed to filter through.

“The Japanese public had absolutely no interest in the themes being promoted by Abe,” said Jiro Yamaguchi, politics professor at Hokkaido university, located in one of Japan’s most economically deprived regions.

The final straw for Mr Abe’s administration was an admission that the government had lost 50m pension records. Although the prime minister was not directly responsible for a problem dating back 10 years, his government’s lacklustre response poured fuel on already flaming passions. The DPJ took credit by bringing the pension shambles to light in the first place.

Mr Abe was Sunday night insisting that he would not resign, saying he would fulfil his promise to the public to “proceed with reform and create a beautiful country”. Takao Toshikawa, editor of Inside Line, a political newsletter, said pressure might still build for him to quit, particularly if the DPJ-controlled upper house passed a censure motion in September when parliament is expected to reconvene.

Hirotaka Futatsuki, a political commentator, said that many of Mr Abe’s enemies within the LDP, including those who regard him as too nationalistic, might be emboldened to mount a leadership challenge. “They are not going to go down with Abe on a sinking ship,” he said. “They will move aside and watch him drown.”

But several LDP heavyweights, as well as Akihiro Ota, leader of Komeito, the junior collation member, said they backed Mr Abe’s decision to stay on. Even Mr Abe admitted that it would be “very tough” and that he would have to learn to work with the opposition DPJ “where necessary”.

Using the sort of bland language that has infuriated his critics and failed to electrify his natural supporters, he said Sunday night: “I will reflect on what I have to reflect on and, when the results are finally in, I will think how to respond.”

U.K.'s Brown Wants Bush Talks in U.S. to Focus on Trade, Darfur

2007-07-29T22:26:00.000+03:00

Prime Minister Gordon Brown will push for progress on world trade talks and an end to the conflict in the Darfur region of Sudan when he travels to the U.S. to meet President George W. Bush today.

Brown, who took over from Tony Blair on June 27, will visit Bush in Camp David, Maryland today and tomorrow and address the United Nations in New York on July 31. His spokesman Michael Ellam said trade and Darfur are the ``main issues'' the British government wants to talk about. U.K. involvement in Iraq will also be discussed, he said.

The meetings mark Brown's opportunity to shape U.K. policy toward the U.S. after he sent conflicting signals about his intentions. While Brown has stressed the importance of maintaining the trans-Atlantic relationship, he has appointed officials critical of Bush to his government.

``It is firmly in the British national interest that we have a strong relationship with the United States,'' Brown said en route to his meeting with Bush. ``We should acknowledge the debt the world owes to the United States for its leadership in the fight against international terrorism.''

Policy toward Iran, Iraq, Afghanistan, global warming and the humanitarian situation in Sudan top the agenda for the talks, according to officials at the White House and Downing Street. Brown already has visited French President Nicolas Sarkozy in Paris and German Chancellor Angela Merkel in Berlin.

World Trade Organization governments must be prepared to engage in ``intensive negotiations'' in September to rescue global trade talks that will otherwise collapse this year, WTO Director General Pascal Lamy said on July 26.

Draft Accord

Earlier this month, WTO mediators published proposals for a draft accord in a bid to breathe life into discussions that have languished for almost six years. The proposals, which the WTO's 150 members have accepted as a basis for compromise, would lower customs duties on products ranging from beef to car parts, cut U.S. subsidies to farmers and force rich economies including the European Union to slash tariffs and abolish subsidized exports.

Peter Allgeier, the U.S. ambassador to the WTO, said the Bush administration's ``fundamental concern'' with the text on farm trade remains the ``uneven treatment'' in steps some countries are being asked to take to cut tariffs and subsidies.

``Trade should be the top priority in the coming months if we are to get a deal,'' Ellam told reporters traveling with Brown today.

Ellam today said bringing peace to Darfur will also top talks with Bush, following agreement between Britain and France to push the United Nations to introduce sanctions against Sudan unless the country takes steps to end the four-year conflict.

Lives Claimed

The conflict already has claimed at least 200,000 lives and driven 2 million people from their homes. The fighting began in 2003 when rebels seeking a larger share of Sudan's political power and oil wealth attacked the government. Sudan's government in turn organized a force to assault rebel villages.

Neither Brown nor Ellam brought up Britain's policy toward Iraq after the Sunday Times newspaper reported that Simon McDonald, Brown's chief foreign policy aide, had been ``doing the groundwork'' with foreign policy representatives in Washington for a possible withdrawal of U.K. troops from Iraq.

Ellam today said the U.K.'s policy toward Iraq remains unchanged and that there is ``no significance'' in Brown not putting Iraq at the top of his agenda.

``I have always been an Atlanticist and a great admirer of the American spirit of enterprise and national purpose, and to the commitment to opportunity for all,'' Brown said in a statement. ``It is our shared ideals that for two centuries have linked the destinies of our two countries,'' he said.

Predecessor Blair

While Brown's words toward the U.S. have barely departed from the tone set out under his predecessor Blair, some of his actions have been less accommodating of the U.S.

Brown tapped to serve as a junior minister at the Foreign Office Mark Malloch Brown, who told the Daily Telegraph on July 14 that Brown would not be ``joined at the hip'' with Bush. Malloch Brown in 2006 criticized U.S. policy at the United Nations, earning a rebuke from U.S. ambassador John Bolton.

More recently, International Development Secretary Douglas Alexander said the U.S. and Britain should adopt a more multilateral approach to foreign policy.

``The U.S.-U.K. relationship will not be what it has been,'' said Charles Kupchan, senior fellow at the Council on Foreign Relations, who served under President Bill Clinton as director of the National Security Council. ``It will be more distant, more conditional. We can expect more tough talk across the Atlantic.''

`War on Terrorism'

Brown also has avoided joining Bush and Blair in speaking about a ``war on terrorism,'' focusing instead on the need to win over ``hearts and minds'' of potential foes in the Middle East. In January, Brown said he would ``be very frank'' with Bush on subjects of disagreement. More recently, he talked about the importance of preserving the alliance.

``I believe relationships between a British prime minister and an American president will be strong, should be strong and I believe will be strengthened in the months and years to come,'' Brown told reporters in London on July 23.

In Britain, Blair's relationship with Bush cost him popularity with voters and won him ridicule from newspaper cartoonists, who portrayed him as Bush's loyal poodle.

Sixty-nine percent of U.K. voters believe Blair as prime minister was too close to Bush, and 58 percent said the war in Iraq was the biggest mistake of the Labour government, according to a BPIX Ltd. survey on April 8.

Popularity Risen

Labour's popularity has risen above that of the opposition Conservative Party for the first time in more than a year following Blair's decision to step down.

Brown's party had the support of 41 percent of voters compared with 32 percent for the Conservatives and 20 percent for the Liberal Democrats, according to a YouGov Plc. poll of 1,877 adults finished on July 27. No margin of error was provided.

U.K. lawmakers have criticized the way the U.S. handled shared intelligence data in the case of Jamil el-Banna and Bisher al-Rawi, two British residents who were held by the Central Intelligence Agency and shipped to the prison in Guantanamo Bay, Cuba.

The episode has ``serious implications for the relationship'' between both countries, said Paul Murphy, a Labour member of Parliament who compiled a 75-page study on the matter released on July 25.

During his visit to Washington, Brown will also meet with Congressional leaders.

Protest flares at Red Mosque

2007-07-27T15:11:00.001+03:00

Hundreds of students have prevented an imam, selected by the Pakistan government, from leading prayers at the Red Mosque in Islamabad.

The mosque was reopened for prayers on Friday after a siege against armed religious students ended in bloodshed two weeks ago.

The protesters say they want the mosque's senior leader, now in detention, returned to his post.

The group chanted slogans against Pervez Musharraf, the president, and called for Abdul Aziz, seen as being pro-Taliban, to be released.

The mosque had been hastily restored and reopened after it was badly damaged in fighting between students at the neighbouring religious college and government troops.

Its roof has been replaced, and bullet-scarred walls patched and painted in yellow. The rooftop minarets have been recoated in white.

The study centre was also badly damaged in the assault and has since been demolished.

Workers had pitched tents on Thursday in anticipation of worshippers filling the main hall on Friday and spilling over outside into Islamabad's monsoon-season heat and humidity.

Outside the mosque, dozens of police and paramilitary officers remained on patrol, and barbed wire still encircled part of the complex.

Police storm

The mosque was left scorched by explosions and sprayed with bullets after commandos stormed the complex on July 10 to end a week-long siege by those inside. At least 102 people died in the fighting and violence earlier in the siege.

The Red Mosque was riddled with bullets [AFP]

Ul-Haq said that 50 bodies found in the mosque after the siege were still to be identified.

He denied that the government was hiding the exact number of casualties.

After the siege, the government sealed off the central mosque and moved quickly to have it repaired, amid outrage in Pakistan that a sacred place had been the scene of violence.

Ul-Haq said the government will pay for the education and accommodation of students from the demolished seminary if asked for.

A senior municipal official said the school would not be reconstructed.

3 killed, 3 injured in explosion at rocket test site in Mojave

2007-07-27T15:10:00.000+03:00

Incident at the Mojave airport also injures three workers who are testing a spaceship propellant system.
By Tami Abdollah and Stuart Silverstein, Times Staff Writers
July 27, 2007

Explosion site
Explosion site
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Burt Rutan
Burt Rutan
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Emergency
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Somber
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MOJAVE — Three workers were killed and three others were badly hurt Thursday afternoon in an explosion on the edge of Kern County's Mojave airport during the test of a propellant system for a pioneering private spaceship.

The blast occurred at a private test site run by Scaled Composites, a company founded by high-profile aviation entrepreneur Burt Rutan.

In June 2004, the firm became the first business to launch a reusable manned rocket into space, a craft known as SpaceShip One.

Thursday's explosion — whose sound was likened to a 500-pound bomb by a mechanic working several hundred yards away — is believed to have been caused by an undetermined operating flaw that ignited a tank of nitrous oxide.

Authorities said the blast occurred about 2:30 p.m. at a remote site on the northeastern fringe of Mojave airport, a small, county-run commercial facility about 95 miles north of downtown Los Angeles.

Rutan, looking tired and disheveled, appeared at a 20-minute evening news conference at the desert airport. He told reporters that the blast occurred as the company was testing the propellent flow system for SpaceShip Two, the intended successor to the pioneering SpaceShip One and a project whose details had been closely guarded by Scaled Composites.

"We felt it was completely safe. We had done a lot of these [tests] with SpaceShip One," said Rutan, who added that "we just don't know" why the explosion occurred.

Rutan said the suspected culprit, nitrous oxide, normally is "not considered a hazardous material." Commonly called laughing gas, it is found in dental offices and is used by hot-rodders to boost the horsepower on their vehicles' engines.

According to Rutan, company employees were examining the rate at which the propellant flows through an opening. He emphasized that the test, conducted at room temperatures, did not involve igniting the rocket motor or sparking any fire.

The three who died and the three who were injured, Rutan said, were his employees. He said "several more" of his employees escaped injury.

A Kern Medical Center spokesman said two of those who perished apparently died at the scene, and the third died at the hospital following surgery. The three injured workers — two with "critical" injuries and one with "serious" injuries — suffered numerous shrapnel wounds, according to the spokesman.

Rutan, who took some moments to collect himself before speaking, said he had just come from a meeting with a few concerned workers and relatives of employees.

Scaled Composites has been 40% owned by Northrop Grumman since 2000. The Century City-based company agreed this month to buy the business in its entirety, pending regulatory approval. On Thursday, however, Northrop Grumman declined to comment on the tragedy, referring all questions to Scaled Composites.

Local authorities did not provide the names of the three dead or the three injured workers, who were flown by helicopter to Kern Medical Center in Bakersfield. But relatives of one Scaled Composites employee, Charles "Glen" May, said they were notified by the company that their family member had died.

Gary May, 47, who lives near Dallas, said his 45-year-old brother, generally known as Glen, had been away from the company for a year but returned to Scaled Composites on Monday. "He really enjoyed working there," Gary May said of his brother, citing the camaraderie at the company.

Gary May also cited the excitement of working for a company whose projects were financed by famous entrepreneurs such as Richard Branson of Virgin Atlantic and Paul Allen, a co-founder of Microsoft.

Branson and Allen were backing the SpaceShip Two project that was being tested Thursday. About three times larger than SpaceShip One, it is to be powered by much more powerful rocket engines and is supposed to carry six passengers and two pilots.

Robert Albarran Jr., an aircraft mechanic working several hundred yards from the explosion, said the sound of the blast "was louder than a sonic boom."

Albarran said the noise was so loud that he initially was worried that the aircraft fuselage that he was working on, which was suspended on braces off the ground, "was actually collapsing and coming down."

"It felt like the aircraft was actually moving and rattling," he said. "It was really scary."

Man declaring 'I am the emperor' killed at Colorado governor's office

2007-07-17T11:50:00.000+03:00

DENVER (AP) -- Gov. Bill Ritter heard the shots echo in the hallway -- pop, pop, pop.

An unidentified man was shot and killed outside the offices of Colorado Gov. Bill Ritter.

1 of 2 Just outside his Capitol office, a man who declared "I am the emperor" had been shot and killed by a state trooper when he refused to drop his gun, authorities said. Inside, Ritter -- a former Denver district attorney -- immediately tried to draw on lessons from his old job.

"I handled a lot of different investigations as the DA, and I went into the mode I would have as the DA, which is to separate those people who listened or heard something and those who actually witnessed something," Ritter said Monday a few hours after the incident.

Ritter was not injured.

Authorities said the unidentified man -- described as wearing dark pants and a white shirt -- had at least two verbal confrontations with state troopers in Ritter's security. The man had walked into the reception area of Ritter's office and was being escorted out before he produced a gun and refused orders to put it down, police spokesman Sonny Jackson said. Watch the governor describe how he went into DA mode »

Four or five shots were heard, but authorities would not say how many times the trooper fired.

Before he was shot, the gunman said, "I am the emperor and I'm here to take over state government," said Evan Dreyer, the governor's spokesman.

Police said they did not know his name or motive.

In the Denver suburb of Northglenn, police said the man may have rented a tuxedo from a formal wear shop Monday morning.

A woman working at a Mr. Neat's store there reported that a man with a pistol and knife in his pockets was fitted for a tuxedo and said "the emperor is coming," police Sgt. Steve Garrow said.

"He did make the statement that today is the day he will reign. The emperor is coming. So it's something that sounds a lot like what that guy Denver had was saying down there," Garrow said.

"It was something to where we felt that it's a good possibility that it's the same guy," Garrow said. "There's nothing confirmed."

Jackson had no immediate comment on the report.

Ritter said he was inside the office with 10 or 11 other people and heard the shots, but he would not say how close he was to the action. He said several members of his staff witnessed the shooting.

"I asked them not to talk to one another so they didn't taint their perceptions, begin talking to the police officers about what we had inside the office in terms of witnesses, so that's basically how I dealt with it," Ritter said in a news conference on the Capitol steps just hours after the shooting.

Ritter said he spoke with his wife, Jeannie, and told her he was fine.

"It was much more difficult communicating with my kids," said Ritter, who has four children, two still living at home. "It's just something that comes with this business."

The shooting occurred shortly after 2 p.m. The man did not fire his weapon, Jackson said.

The Capitol has no metal detectors. They are usually installed temporarily during the governor's annual State of the State address in January but then are removed.

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Metal detectors were installed after the September 11, 2001, terrorist attacks but were removed the following July because lawmakers wanted to ensure the public had easy access.

Ritter said Capitol security would be temporarily stepped up while lawmakers and others discuss any permanent changes. Starting Tuesday, all visitors will be required to enter through a single entrance and pass through a metal detector, he said. It wasn't clear how long that requirement would be in place.

"We live in a country where there is just that constant tension about security versus openness," he said.

State Rep. Edward Casso, who said he saw the gunman after the shooting, said the Capitol should have metal detectors.

"It's kind of freaky someone could get that close," the first-term Democrat said.

Casso described the suspect as being in his 30s or 40s, dressed in a white shirt and dark slacks.

Authorities roped off the area where the man was shot, and an ambulance and eight police cars converged on the building's north entrance.

An hour after the shooting, state troopers and police -- some carrying automatic weapons -- ordered the Capitol evacuated and began a room-by-room search. They did not say whether the search was a precaution or whether they had reason to believe someone else was involved.

Pat Garriott said he was eating in the basement cafeteria when he heard shots.

Nuclear waste drums lose lids in Japan quake

2007-07-17T11:45:00.001+03:00

KASHIWAZAKI/TOKYO, Japan (Reuters) -- About 100 drums containing low-level nuclear waste at Tokyo Electric Power Co's (TEPCO) Kashiwazaki-Kariwa nuclear power plant were knocked over by Monday's earthquake and some lost their lids, Kyodo news agency said on Tuesday.

Following the earthquake, a fire broke out at a facility of Tokyo Electric Power's nuclear plant at Kashiwazaki city.

1 of 4 more photos » Checks were being made as to possible effects on the environment, Kyodo added. Officials were not immediately available for comment.

The plant, the world's biggest nuclear power plant, reported a fire and a radiation leak at the facility after Monday's quake.

More than 12,000 people huddled in evacuation centers in northwest Japan on after the earthquake flattened homes, killing nine elderly people and injuring around 1,000.

As aftershocks continued, forecasts for wet weather raised fears of mudslides that could add to the devastation.

"I am worried about the aftershocks," said 80-year-old Toshiko Kojima, who said she had spent a mostly sleepless night in a crowded elementary school gymnasium in the worst-hit city of Kashiwazaki, too afraid to go home.

Water, gas and electricity supplies were cut by the 6.8 magnitude quake that hit Niigata prefecture at 10:13 a.m. (0113 GMT) on Monday, which also caused a small radiation leak and fire at the world's biggest nuclear plant.

With more than 300 homes totally destroyed in Kashiwazaki alone, it was unclear when people could go home and worries were mounting about the health of evacuees, many of whom are elderly.

"The damage was worse than anticipated," Mayor Hiroshi Kaeda told reporters. "If we can restore water service, more people can go home to live, so that is what we want to do first." See crumbled roads and homes after the killer quake

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In Kashiwazaki, people lined up with plastic bottles for fresh water, which was trucked in by local officials and a contingent of about 500 members of the armed forces.

The navy shipped in emergency rations, convenience stores and supermarkets gave out rice balls and bottled water, and smiling soldiers in camouflage uniforms and helmets made rice balls and distributed them at schools and other evacuation centers.

The earthquake halted gas service to about 35,000 homes and disrupted the water supply to all of Kashiwazaki, a city with a population of around 95,000 whose economy relies on nuclear power generation and fishing.

TEPCO said water containing radioactive materials had leaked from a unit at its Kashiwazaki-Kariwa nuclear power plant. The contaminated water was also released into the ocean, but had had no effect on the environment.

The quake was stronger than those its reactors had been designed to withstand, the company added.

A fire in an electrical transformer at the plant was quickly extinguished but it was unclear when TEPCO could restart three power units there.

Media as well as local residents urged the nuclear power industry to take heed of the threat.

"Nuclear power companies must not only keep in mind the quake resistance of buildings and facilities, but must take full precautions so that people in the vicinity and all citizens will trust that if there is a quake, nuclear reactors will be safe," the Nikkei newspaper said.

Retired taxi driver Tomiji Okura, 72, said the nuclear industry had boosted his business, but reactors had to be able to withstand earthquakes. "When you have something like this, it's scary. I want them to be made safe," he said.

Prime Minister Shinzo Abe cut short campaigning for the July 29 parliamentary elections to inspect damage on Monday.

It was unclear when production would re-start at some factories in the area, including a Fuji Xerox printer factory.

Japan is one of the world's most earthquake-prone countries, with a tremor occurring at least every five minutes. Watch CNN's Chad Myers offer a possible explanation for the second quake

Houses, many wooden with traditional heavy tile roofs, collapsed and roads cracked in Monday's quake, centered in the same northwestern area as a tremor three years ago.

Niigata was hit in October 2004 by a quake with a matching magnitude of 6.8 that killed 65 people and injured more than 3,000. It was the deadliest quake in Japan since a magnitude 7.3 tremor hit Kobe city in 1995, killing more than 6,400.

ANALYSIS: Musharraf wins points over mosque assault - for now

2007-07-12T14:46:00.000+03:00

Islamabad - The decision to crush the ranks of radical clerics and armed students at Islamabad's Red Mosque and seminary with military force may give a quick boost to Pakistani President Pervez Musharraf's hand, but is expected to fuel greater unrest in the country in the long term.

The events that led to 106 confirmed deaths from the eight-day siege have sidelined the judicial and political crisis that erupted after Musharraf's controversial suspension of the country's chief justice in March.

Many devout Pakistanis that may have been sympathetic to the clerics' demand for Sharia law in Pakistan will also have been angered to see the mosque transformed into a fortress by its defenders, including the stockpiling of large quantities of arms. Sworn liberal political enemies who criticized Musharraf for allowing extremism to go unchecked have also signalled approval for his actions at the mosque.

'The action was essential,' exiled former prime minister Benazir Bhutto told Britain's Sky TV during the storming operation. 'I'm glad there was no cease-fire with the militants in the mosque because cease-fires simply embolden the militants,' she said, but also predicted a backlash.

The president also waited six months to take firm action, preferring to negotiate a solution, which while exposing him to accusations of appeasement now bolsters his claim that he made every effort to resolve the crisis.

'We demonstrated maximum patience and restraint on Lal Masjid issue,' Musharraf said as the fighting raged. 'No option remained other than an operation.'

The first reaction from the country's liberal media was also one of cautious approval for the president's actions against the two brothers who ran the complex, one of whom subsequently died in fighting while the other was captured trying to escape.

'The government's mistakes in the entire drama notwithstanding, one has to admit that it exercised the utmost restraint. It kept talking to the Aziz-Rashid brothers for months for months and used a variety of channels to free the hostages and disarm the militants,' the influential Dawn newspaper commented.

Musharraf's actions won praise and re-established his reputation as a bulwark against extremism in the United States, which relies on Pakistan as a key ally in its wars against Muslim extremists.

Washington staunchly backed the army general after coercing him into cooperation following the attacks of September 11, 2001, but showed increasing concern in recent months that he was losing control of the situation at home.

'He has gained a couple of points with those that support him,' said retired army general and defence analyst Asad Durrani.

But a sharp backlash from Islamic extremists is inevitable, as well as deepening shock and anger among ordinary citizens if it emerges that hundreds of non-combatants died inside the mosque and seminary.

The body count following the operation looks certain to rise sharply after the army's understatement of the death toll and increasingly implausible denial that women and children died.

'The negative implications start immediately. People don't want to see so many of our own being killed, especially when it comes to women and children,' said Durrani.

But those who oppose Musharaf and see him as a stooge to the West look set to capitalize on the mosque attack.

Osama bin Laden's deputy, Ayman al-Zawahiri, released a videotaped message calling upon Pakistanis to rise up against the military leader.

Accusing Musharraf of working on behalf of the 'crusaders' - a reference to the West - he called the assault on the mosque a 'despicable crime' and 'a message of blinding clarity to the Muslims in Pakistan.

'This crime can only be washed away by repentance or blood,' the al-Qaeda leader said. Taliban insurgents in Afghanistan also called for attacks on the Pakistani armed forces. Thousands of protesters have taken to the streets in cities across the country over the mosque operation, while retaliations to the assault quickly ensued in Pakistan's strongly Islamic tribal areas and the North-West Frontier Province (NWFP) bordering Afghanistan.

Revenge strikes by militants during the Red Mosque siege killed at least 19 people, including 11 members of the country's security forces, which are both the core of Musharraf's power base and the main target of Islamists opposed to his rule.

'Should events in Islamabad provoke an uprising in the tribal areas and the NWFP, it would add to pressure on the military,' said Oxford Analytica. 'An intensification of operations within Pakistan would increase the prospect of cracks emerging within the armed forces. They could appear in the form of army personnel refusing to be take part in anti-terror operations.'

As well as questions about the apparent concealment of the number of casualties in the mosque siege, the government is also under growing pressure to carry out an inquiry into why and how the intelligence agencies failed to get wind of the goings-on in the Lal Masjid and the stockpiling of arms and ammunition in such large quantities

These come against the backdrop of past speculation that the Lal Masjid stand-off was allowed and even encouraged by the intelligence services to demonstrate Musharraf's value as a bulwark against extremism.

'Any investigation into the past will embarrass a lot of quarters,' Pakistan's Daily Times newspaper wrote Thursday. 'President Musharraf will have to confess to a lot more of the murky past of the Pakistani intelligence agencies and army than he has done so far.'

GOP Unity Fraying on Iraq War

2007-07-12T14:45:00.000+03:00

WASHINGTON (AP) - Republican unity is fraying on the long war in Iraq, not to mention civility.

``Wimps,'' House Republican leader John Boehner calls GOP defectors in the Senate - a growing breed as public opinion polls chart ever-deepening opposition to the war and a climbing U.S. casualty count 16 months before the 2008 elections.

With both houses of Congress debating war-related legislation, lawmakers awaited the Bush administration's assessment Thursday of political, economic and military progress made by Iraqi Prime Minister Nouri al-Maliki's government.

Administration officials said in advance the report concludes that the Iraqis have failed to pass long-promised laws that the administration has called key to national cohesion and economic recovery, such as legislation that would fairly divide Iraq's oil resources.

But officials said the report also would show progress in several areas, such as a drop in sectarian killings in Baghdad and opposition to al-Qaida terrorists by tribal sheiks in Anbar province.

Predictably, Democrats say the findings are proof the war effort is failing, while Republicans say the limited progress shows hope and that lawmakers should not lose faith.

Boehner, R-Ohio, made his ``wimps'' remark in a private meeting Wednesday with rank-and-file Republicans - ironically at nearly the same moment that several GOP senators beseeched the White House without apparent success for a quick change in course on Iraq.

``I'm hopeful they (White House officials) change their minds,'' Sen. Pete Domenici, R-N.M., said after a meeting that President Bush's national security adviser, Stephen Hadley, held with several Republicans in the Capitol.

Domenici and several other GOP members, including Sens. Richard Lugar of Indiana and George Voinovich of Ohio, say they want Bush to begin reducing the military's role in Iraq. In the meeting, Hadley said Bush wants to wait until September when Gen. David Petraeus, the Iraq war commander, will reassess military progress.

Emboldened by the Republican divide, Democrats called for a vote on legislation to end U.S. combat operations next year. The House planned to vote first on Thursday.

Boehner spokesman Brian Kennedy said the lawmaker's comments ``were intended to illustrate the fact that we just recently voted to give the troops our full support - including ample time for the Petraeus plan to work, and that too much is at stake for Congress to renege on its commitment now by approving what can only be described as another partisan stunt by Democrats.''

A senior U.S. official familiar with the report's conclusions said it would assess Iraq's progress toward congressional benchmarks in three main categories: completed, partially completed and those that show limited or no progress.

Most of the bigger and more difficult issues, the ones that the Bush administration has said were key to Iraq's national cohesion and economic future, likely would fall into the partially completed category, the official said. One major exception was the expectation that Iraq's government would pass a law redressing the effects of a policy to purge Baath Party members following Iraqi President Saddam Hussein's ouster during the U.S.-led invasion of Iraq in 2003. There has been almost no progress on that goal.

The official said the Iraqi government would get a passing grade on a few of the military benchmarks that demonstrate its cooperation with Bush's troop buildup this spring.

``It's going to be a mixed picture,'' the official said.

The official spoke on condition of anonymity because the report was not yet public.

Siege mosque cleric vows to fight to death

2007-07-06T17:23:00.000+03:00

The Pakistani cleric leading militants holed up in a besieged mosque in the heart of Islamabad has said he would rather die than surrender to government forces, dealing a defiant blow to hopes of a peaceful end to the siege.

Abdul Rashid Ghazi, the deputy cleric of the Lal Masjid, or Red Mosque, today rejected calls by President Pervez Musharraf’s administration for an unconditional surrender, saying he and his following of radical students were ready for martyrdom.

An end to the three-day crisis had appeared to be imminent last night after Mr Ghazi said his supporters would lay down their weapons in return for amnesty. But the government rejected the offer on the grounds that demands of safe passage were unacceptable, insisting the cleric release women and children being held.

“We have decided that we can be martyred but we will not surrender,” Mr Ghazi told a Pakistani television channel. “We are ready for our heads to be cut off but we will not bow to them. This may be my last conversation with you."

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In a further indication that the standoff was far from being resolved, armed troops continued to hit the complex with heavy gunfire and explosives. Since Tuesday, at least 19 people have already been killed in the clashes, and government troops – backed by armoured personnel carriers and helicopter gunships – have been moving closer to the mosque, having destroyed much of its surrounding walls.

There is no turning back. It has to be taken to its logical end,” said Javed Cheema, an Interior Ministry spokesman.

An official from the mosque claimed that further casualties had been caused by today’s gunbattles, and that the building had been hit by further mortar fire from security forces. Hundreds of Islamic students are still inside the compound, along with up to 60 die-hard militants, said to have been schooled in guerrilla warfare at mountain training camps in Kashmir and Afghanistan and who are believed to be equipped with assault rifles, grenades and petrol bombs.

Keen to avoid further damage to his administration, General Musharraf earlier ordered that no military action should be taken until women and children were out of the mosque, amid claims that human shields were being held inside, and authorities have insisted they would not storm the complex until then. Mr Ghazi and his brother Maulana Abdul Aziz – the chief cleric of the mosque, who was captured on Wednesday - have both denied that anyone was being kept against their will.

“For the Pakistan army to go in is no problem, but safety is our foremost objective,” said Tariq Azim, a government spokesman. “We don’t want to harm any innocent lives. We already know that these people are being kept as hostages.”

Today as the violence continued, dozens of parents waited anxiously behind security barriers near the mosque, with about ten allowed to approach the shrine’s entrance. During lulls in the fighting, some parents have approached the complex, handed notes to those inside with the names of their children, who have then emerged. More than 1,000 have fled the complex, most of them young male and female students at the mosque’s seminaries.

Mr Aziz, who was seized as he tried to slip through the military cordon dressed in a burka and high heels, has urged his followers to give themselves up. In an interview with state television Mr Aziz - still dressed in the burka – said that 850 students remained inside. However, Mr Ghazi later insisted the number was 1,900 – a claim which officials could not corroborate.

The violence erupted on Tuesday in the form of deadly street clashes, after months of tension between Pakistan’s US-backed government and mosque’s followers - who have sought to impose Taliban-style rule in the city. Since January, Mr Aziz and his students have led an increasingly aggressive vigilante campaign in the capital, protesting against so-called immoral conduct by kidnapping alleged prostitutes and police officers, and carrying out raids on music and DVD shops.

Key to the campaign is said to be Umme Hassan, the wife of Mr Aziz, whom many regard as more radical than her husband, and who mobilised hundreds of young women who formed the nucleus of the Red Mosque’s movement for enforcement of Sharia. The burka-clad, stick-wielding women known as the Hafza Brigade, had assumed the role of a self-styled vice squad, raiding houses and dragging out women alleged to be involved in prostitution.

They are alleged to have kidnapped seven Chinese nationals who they accused of running a brothel from an acupuncture clinic. They were also seen stopping women and reprimanding them for not covering themselves with Islamic headscarves.

General Musharraf’s authority has been weakened by the spread of militant Islam from tribal areas. His decision to sack the country’s chief justice, who is believed to have opposed constitutional changes proposed by General Musharraf, heightened the political crisis ahead of elections later this year

New GOP Defection From Bush Iraq Policy

2007-07-06T17:22:00.000+03:00

In another setback to President Bush's increasingly unpopular war strategy, Republican Party stalwart Sen. Pete Domenici said he wanted to see an end to combat operations and U.S. troops heading home from Iraq by spring.

The longtime New Mexico senator is the latest of several party loyalists and former war supporters to abandon Mr. Bush on Iraq in the past 10 days. They have urged a change sooner rather than later and further isolated the Republican president in his attempt to defend the unpopular war.

Last week, Sens. Richard Lugar, an Indiana Republican, and George Voinovich, a Republican from Ohio, said the U.S. should significantly reduce its military presence in Iraq while bolstering diplomatic efforts. Republican Sen. John Warner, of Virginia, is expected to propose a new approach this month.

"I do not support an immediate withdrawal from Iraq or a reduction in funding for our troops," Domenici said. "But I do support a new strategy that will move our troops out of combat operations and on the path to coming home."

With Congress on its July Fourth break, Domenici made his views known Thursday at a news conference in Albuquerque, New Mexico, though he said he has not talked to the administration about wanting a strategy shift.

"I have carefully studied the Iraq situation and believe we cannot continue asking our troops to sacrifice indefinitely while the Iraqi government is not making measurable progress to move its country forward," he said.

Domenici was elected in 1972 and is a senior member of a panel that oversees defense spending. He said at the news conference that parents of those killed in Iraq previously told him the United States should stay in Iraq as long as it takes. Now, he said, some parents have asked him to do more to bring the troops home sooner.

The senator said the situation in Iraq is getting worse. He said he now supports a bipartisan bill that embraces the findings of the independent Iraq Study Group.

In December, the group said the primary mission of U.S. troops should evolve to supporting Iraqi security forces. The report also said the U.S. should reduce political, military or economic support for Iraq if the Baghdad government cannot make substantial progress.

The group said combat troops could be out by March 2008 if specific steps were taken.

The bill would make most of the group's findings official U.S. policy.

House Speaker Nancy Pelosi, a Democrat from California, and Senate Majority Leader Harry Reid, a Nevada Democrat, said it was time Republicans back up their words with action and vote to bring troops home.

A spokesman for the White House, Tony Fratto, said the troop buildup had only recently reached full strength, and said Mr. Bush's plan should be given more time to work.

Voinovich and Lugar previously had expressed concerns about Mr. Bush's decision to send 30,000 extra troops to Iraq in a massive U.S.-led security push in Baghdad and Anbar province. But they had stopped short of saying U.S. troops should leave and declined to back Democratic legislation setting a deadline for troop withdrawals.

In a floor speech last Monday, Lugar said the U.S. should reduce the military's role in Iraq and called on Mr. Bush to press other diplomatic and economic initiatives instead. Because of Lugar's position as the top Republican on the Foreign Relations Committee, his speech was a considered a blow to the administration as it tries to shore up sagging political support for the unpopular war.

"In my judgment, the costs and risks of continuing down the current path outweigh the potential benefits that might be achieved," Lugar said in a Senate floor speech. "Persisting indefinitely with the surge strategy will delay policy adjustments that have a better chance of protecting our vital interests over the long term."

Putin Visiting Bush In Maine

2007-07-02T12:34:00.000+03:00

(CBS/AP) Russian President Vladimir Putin is in Maine, a houseguest at the Bush family home in Kennebunkport, Maine, enjoying the local seafood and blueberries and a speedboat ride with President Bush and Mr. Bush's father, former President Bush.

That's the lighter side of the Bush-Putin summit, a meeting with the very serious aim of easing tensions in the U.S.-Russian relationship.

The two presidents may kick off the day Monday with an early morning fishing trip before moving on to official business in what is being called an "informal" meeting.

CBS News correspondent Mark Knoller says this summit is not expected to produce any new treaties or other major agreements, but the two leaders do have important issues to discuss.
(CBS/AP) Sunday night, the Bush family hosted a dinner for Putin, featuring a cornucopia of local specialties – lobster and swordfish representing Maine's fishing heritage, and for dessert, blueberry and pecan pie.

Blueberries are Maine's most famous fruit and the pecan is the state tree of Texas, another home state for President Bush, a former governor of that state.

Putin's arrival in the area sparked demonstrations by protesters who are calling for the impeachment of President Bush. The protesters Sunday marched to within a half mile of the site of the Bush-Putin summit.

Protesters chanting slogans including "Impeach now, impeach now!" carried colorful signs and pulled a wagon with a 7-foot-tall replica of the Statue of Liberty in a coffin, representing the perceived loss of liberties under the Bush administration.

The crowd estimated by police at 1,700 criticized both world leaders – President Bush for the war in Iraq and President Putin for the hard line his government has taken against separatists in Chechnya.

Four demonstrators wearing orange jumpsuits, like those worn by detainees at the U.S. Navy base in Guantanamo Bay, Cuba, kneeled on the ground near a police roadblock. Two demonstrators who crossed the police line were arrested.

Jamilla El-Shafei, one of the organizers, said Presidents George W. Bush and Putin have inflamed tensions that are already running high in the Muslim world. In particular, she zeroed in on Bush and Vice President Cheney over their handling of the war in Iraq.

"We want the troops home now. We want permanent bases out of Iraq. And we want to hold Bush and Cheney accountable for deceiving the people into an immoral and unjust war, for mutilation of the Constitution and the evisceration of habeas corpus," she said.

The protest began Sunday morning at Kennebunkport's Village Green, a park with many tourist shops and restaurants.

The demonstration was organized by the Kennebunk Peace Department and the Maine Campaign to Impeach. But demonstrators represented a wide variety of causes that included ending the genocide in Darfur, fighting corporate greed and improving the environment.

The event featured music, chants and speeches before demonstrators and a small marching band paraded down Ocean Avenue toward the Bush home at Walker's Point.

Included in the demonstration was a rolling memorial for Marine Lance Cpl. Alexander Arredondo, who was killed in Iraq on Aug. 25, 2004. His father's pickup truck had a flag-draped coffin with Arredondo's boots and camouflage shirt bearing a purple heart.

"This is my pain. This is my loss," said Carlos Arredondo, who became so upset when he learned of his son's death in Hollywood, Fla., that he tried to destroy a military van and was burned in the process. He now lives in the Boston area.

The demonstrators' main target was President Bush, whose unpopular policy in Iraq has come under widespread and growing criticism.

"Outrage and anger isn't enough," said John Kaminski of Maine Lawyers for Democracy, a group of 80 attorneys pushing for impeachment proceedings. "We have a job to do and that job is to hold this administration accountable and take this country back."

But some protesters didn't spare Putin, who came into office as the Chechnya conflict was flaring. Critics have accused him of human rights violations in suppressing mostly Muslim, separatist rebels in the breakaway region.

Victoria Poupko, who moved from Moscow to Boston 17 years ago, said the two presidents are "both criminals" for torture, war crimes and abuse of power, among other things. She carried a sign that said, "Stop imperialism. Bush out of Iraq. Putin out of Chechnya."

"Withdraw from Chechnya, let them have their independence," she said.

While marching down Ocean Avenue, the group encountered a couple of dozen counter-demonstrators waving signs in support of President Bush. One of them jumped into the parade and shouted slogans, shouting at one point "Liars, liars, liars!"

The event was peaceful but two demonstrators who insisted on crossing a police line on Ocean Avenue were arrested and charged with trespassing.

"I pay taxes. I can walk on the street if I want to," one of the protesters, Lynn Curit-Smith of Portland, told Kennebunkport Police Chief Joseph Bruni before crossing the line with two others, one of whom was released because she was a minor.

Mr. Bush, Knoller reports, wants to win Putin's backing for tougher U.N. sanctions on Iran to pressure it to end its nuclear weapons program. The two are also likely to talk about their differences on the subject of a missile defense system in Europe and the issue of independence for Kosovo.

In January, the U.S. said it plans to build a missile defense system based in the Czech Republic and Poland. Russia, however, indicated it is not persuaded by the argument that the system targets a possible future threat from Iranian nuclear missiles. The Kremlin threatened to aim missiles at Europe and denounced the U.S. as an irresponsible source of force.

At a summit last month of world economic powers, Putin surprised President Bush by proposing that the system instead use an old Soviet-era radar facility in Azerbaijan instead of the Czech and Polish sites. It is an idea that U.S. officials do not want to reject outright. But they have concluded it would not work as a substitute, only perhaps as an early warning supplemental component.

On Iran, Mr. Bush is seeking Putin's backing for a third round of penalties against Tehran for defying U.N. orders to halt uranium enrichment. Iran says the enrichment is intended for a nuclear energy program. The West suspects Iran wants to develop nuclear bombs.

The U.S. has begun discussing with Security Council members a proposal to require all nations to inspect cargo for illicit nuclear-related shipments or arms coming from or going to Iran and to freeze assets of a number of Iranian banks, a senior administration official. The official spoke on condition of anonymity because the talks are in their initial stages.

Russia and China previously have balked at such measures, supporting more modest penalties that have had little effect. But there are signs the Kremlin may now be in a more cooperative mood.

Sunday, President Bush waited at his family's Maine seacoast estate as his father, former President Bush, met Putin at a nearby airport and rode with the Russian leader in a helicopter to the compound. Emerging from a limousine, Putin handed large bouquets of flowers to first lady Laura Bush and former first lady Barbara Bush, then kissed them on both cheeks.

"It's pretty casual up here — unstructured," said President Bush, referring to the setting for his talks with Putin.

President Bush knows what he wants from the visit: Convince Putin that a U.S. missile defense system in Eastern Europe would not threaten Russia. Bring the Kremlin behind tough new penalties aimed at Iran's suspected nuclear weapons program. Generally defrost relations.

What the Russian president seeks is less clear.

Putin requested an audience with President Bush before going to Guatemala, where Olympic officials are picking a host city for the 2014 winter games.

"Does Putin have something he plans to throw at Bush's feet?" wondered Sarah Mendelson, Russia policy expert and senior fellow at the Center for Strategic and International Studies.

Both sides have insisted there is no set agenda and scant potential for announcements. With expectations lowered and an itinerary that amounts to little more than three meals, a meeting and maybe some fishing, Mendelson only somewhat jokingly termed it "the no-summit summit."

Before leaving for the U.S., Putin said his "very good, I would say friendly" relations should create a positive atmosphere. "If it wasn't that way, I wouldn't go, and I wouldn't have been invited," he said. "In politics, as in sports, there is always competition."

.K. Manhunt Under Way After 5 Held for Terror Attack

2007-07-02T12:31:00.000+03:00

July 2 (Bloomberg) -- A manhunt was under way for further terrorist suspects after police arrested five people and searched houses following an attack on Glasgow International Airport and two attempted car bombings in London.

Prime Minister Gordon Brown's new government stepped up security in the U.K. Controls were tightened at airports, cars were checked and more police were patrolling crowded public areas. The Home Office raised its terrorist threat assessment to ``critical,'' the highest level, meaning an attack is expected imminently.

Two men were arrested at Glasgow airport June 30 after their Jeep Cherokee crashed into the terminal entrance and caught fire. Police arrested two more people, a 26-year-old man and 27-year- old woman, on the M6 highway in northwest England the same evening and a fifth, a 26-year-old man, in Liverpool yesterday.

The identity of the arrested suspects isn't ``certain,'' Home Secretary Jacqui Smith said when asked on Sky News whether the attackers were foreign or British. She said the ``public needs to be vigilant about potential threats'' of more incidents and added that Britain shouldn't be intimidated by the attacks.

An al-Qaeda-linked cell of eight people was behind the attempted bombings, with three remaining suspects still being sought, the Guardian newspaper reported today, citing unidentified counterterrorism officers. Two of those arrested are medical doctors, the British Broadcasting Corp. reported late yesterday.

`Long-Term Threat'

``It is clear that we are dealing in general terms with people who are associated with al-Qaeda in a number of incidents that have happened across the world,'' Brown said in an interview yesterday. ``We're dealing with a long-term threat. It's not going to go away in the next few weeks or months.''

There was little market reaction in London June 29 to the discovery of the first car bomb. Police announced the second London device, and the attack on Glasgow airport, after markets closed for the weekend.

U.K. government bonds, or gilts, gained today, pushing 10- year yields to near a three-week low. Analysts expect the pound to hold above $2 before the July 5 interest-rate decision by the Bank of England. It last traded at 2.0075, from 2.0088 at the close Friday. The benchmark FTSE 100 Index fell 29.20 to 6578.70 at 10:05 a.m.

Bush Support

U.S. President George W. Bush yesterday praised the Brown government's handling of the terrorist threats in London and Glasgow, calling it a ``very strong response.''

The British Cabinet's emergency committee, Cobra, named for Cabinet Office Briefing Room A, met yesterday for the fourth time in two days, a Downing Street spokeswoman said.

The Glasgow attack came as police were conducting one of their biggest manhunts after dismantling two car bombs made from gas canisters, gasoline and nails left in the heart of London's West End shopping and theater district three days ago.

``The links between the three attacks are becoming ever clearer,'' Peter Clarke, the U.K.'s chief anti-terrorism officer, said at a televised news conference yesterday. ``The investigation is extremely fast-moving. New information is coming to light hour by hour.''

Police said they were searching a number of houses in the Renfrewshire area, near Glasgow, as well as two addresses in Liverpool and a house in Staffordshire, north of Birmingham. Glasgow airport, which was closed to all flights June 30, resumed operations yesterday.

Aircraft Plot

The incidents prompted the biggest terrorism alert in the U.K. since authorities foiled an Islamist plot in August 2006 to blow up aircraft flying from Heathrow airport to the U.S. Terrorists killed 52 people in London on July 7, 2005, in suicide bombings on the subway and a bus.

``The real question is, is it part of a plan that is being directed by someone?'' said David Bentley, an analyst in terrorism law at London-based policy research group Chatham House. ``London today, Glasgow tomorrow, then maybe Birmingham or Manchester?''

In London, police were examining hours of images from security cameras to try to establish the cars' routes into the center of the city. They discovered the first bomb in a Mercedes parked outside a packed nightclub in Haymarket, close to Piccadilly Circus, at 1:30 a.m. on June 29.

The second device, in another Mercedes parked between Haymarket and Trafalgar Square, was found hours after the car was towed to a garage on Park Lane for being parked illegally.

The Jeep Cherokee crashed into a front entrance of Glasgow airport's main passenger terminal at 3:15 p.m. on June 30, catching fire on impact.

Suspect Burned

One of the two men from the Jeep was in police custody and the other was taken to the Royal Alexandra Hospital in Paisley and was in critical condition because of burns. Police carried out a controlled explosion of a suspect vehicle that was parked outside the hospital, Sky News reported late yesterday.

One other person who had been at the Glasgow terminal received hospital treatment for an injured leg, police said. Some passengers were stranded on planes after the attack because police didn't want to evacuate them through the terminal.

Glasgow, with a population of more than 1 million in the metropolitan area, is Scotland's largest city. The airport, operated by BAA Ltd., is 8 miles (13 kilometers) west of the city center and is the busiest of Scotland's three main airports.

Heathrow

London's Heathrow airport, Europe's busiest, shut traffic lanes closest to terminal buildings and urged travelers to arrive on public transportation. Terminal 3 was closed briefly late yesterday when an unattended bag was found, police said.

Dropping off and picking up in front of BAA airports is ``severely restricted,'' the company said in an e-mailed statement. BAA, owned by Grupo Ferrovial SA of Spain, operates Heathrow, Gatwick and five other U.K. airports.

Commuters returning to work in London today will notice increased security at rail stations and on the street, police said.

Vehicles approaching mainline rail stations, and their passengers, will be subject to random searches for the foreseeable future, a British Transport Police spokesman said.

At the Wimbledon tennis championships in southwest London, concrete blocks are being use to protect entry and exit points and the organizers urged visitors to use public transportation rather than private cars.

``We urge everyone coming to the event to allow more time for their journey,'' said Ian Ritchie, chief executive of the All England Club said on the club's Web site. ``Safety and security is of paramount importance to us.''

Middle East News

2007-06-27T14:01:00.003+03:00

Tehran - Riots broke out in Iran in the early hours of Wednesday and some petrol stations were set on fire in the capital Tehran following the government's decision to ration petrol.

According to local press reports, at least five petrol stations in Tehran were set on fire in protest against the rationing. Some banks and supermarkets were also reportedly robbed.

Witnesses said the people also shouted slogans against President Mahmoud Ahmadinejad who is considered as the initiator of the petrol rationing.

The Iranian parliament swiftly reacted to the riots and summoned the oil and interior ministers to investigate the incidents in a secret session.

The oil ministry announced via state-television that necessary grounds would be prepared to prevent any petrol problems for the people. The ministry's promises were, however, based on establishing new oil refineries in the coming years.

As of Wednesday, Iran, one of the world's largest oil producers, started rationing petrol nationwide.

The oil ministry said in a statement that each private car will get 100 litres per month at 0.108 dollars per litre for normal and 0.151 dollars for super petrol.

The announcement caused huge chaos on Tehran's streets in the late night hours of Tuesday with cars rushing to petrol stations to fill their tanks before the start of the rationing.

Anything above the ration quota was scheduled to be sold at 0.30 to 0.40 dollars per litre or at a floating rate but no final decision has yet been announced in this regard.

The incidents confirmed the government's fears that the move would dent Ahmadinejad's popularity before parliamentary elections in March next year, besides increasing inflation.

Although Iran as a leading OPEC member has a daily oil production of 4.2 million barrels, the Islamic state still spends 5-8 billion dollars annually on petrol imports due to lack of refineries and a preference for oil export.

The first phase of petrol rationing was carried out earlier this month for governmental cars which have a quota of 300 litres per month.

Petrol is only supplied through the so-called 'smart card' or petrol coupon, an initiative by Ahmadinejad to stop lavish fuel consumption which currently stands at an estimated 73 million litres daily.

With the initiative Ahmadinejad hopes not only to fill the huge gap in Iran's budget but also to tackle related problems such as traffic jams and pollution in big cities.

Middle East News

2007-06-27T14:01:00.002+03:00

Boxer's vote switch helps revive immigration bill

2007-06-27T14:01:00.001+03:00

The Senate's mammoth immigration overhaul was resurrected Tuesday in a big test vote -- aided by a reversal by California Sen. Barbara Boxer -- but the strange alliance of business, unions and ethnic groups supporting the effort is increasingly fractured.

The tensions are nowhere more evident than in Boxer's shaky role as a Democrat who a month ago split with her California colleague, Sen. Dianne Feinstein, to kill the bill, and on Tuesday rejoined her party in a 64-35 vote to let it move forward to the Senate floor for debate.

"I'd say it's a pretty good pounding from all directions," Boxer said. "People are strong on both sides. ... Constituents have opinions, labor has opinions, the Hispanic groups and other immigrant groups are split."

Boxer said her decisions on final passage later this week ride on two dozen highly controversial amendments affecting everything from H-1B visas for skilled workers to family green cards.

Her biggest complaint is a proposed guest worker program that would admit 200,000 unskilled workers a year for up to three two-year stints, each punctuated by a year out of the country. Boxer is proposing to subtract one guest worker from the quota for each one that fails to go home.

"As I decide, it will be based on my feelings about the whole issue, and what is in the best interests of my state and my country," Boxer said. "I know that sounds very corny, but that's really where it's at."

Feinstein, who helped negotiate the legislation and remains an ardent supporter, said she has received over 100,000 calls and letters on the issue.

"Have we gotten a lot of heat? Yes," Feinstein said. But she said it is hard to tell in a state as large as California whether that sample of mostly hostile opinion reflects a majority. Feinstein said she believes, "people understand we have an amnesty now" with millions of people living in the country illegally.

Silicon Valley technology companies were fighting their own battles behind the scenes, spurning White House entreaties to help push the larger bill until they are assured passage of an amendment by Sen. Maria Cantwell, D-Wash., to increase H-1B visas and allow employers to continue to sponsor some permanent migrants for five years.

The industry was horrified when the bill emerged from closed-door talks not only without the big increase in H-1B temporary visas for skilled workers they have sought for three years, but also eliminating employer-sponsored green cards for permanent residence with a merit-based point system.

The administration called 30 tech lobbyists to the White House on Monday to solicit their support, but got a limp handshake.

"A month ago, the same people said we shouldn't even get the Cantwell amendment," one said, speaking anonymously for fear of alienating the White House. "The president said, 'This bill is great and we don't want you to fight it.' Now they're saying, 'What a great amendment, we have helped get this for tech, and we support it.' "

The lobbyist said that was all well and good, but that high-tech muscle was riding entirely on their own provisions.

"We love them and want to work with them," the lobbyist said, "but our fate will be determined on the Senate floor and that's where our fight will be."

The technology provision remains caught in the swirl of backroom deal-making and arm twisting that delayed further progress on the bill throughout the afternoon. Cantwell said her amendment was being "used as bait" by Republicans trying to get Democratic votes for their tougher enforcement amendments.

Divisions within business, labor and immigrant rights groups have only grown over the past weeks. This unstable alliance has provided the muscle for every major immigration reform of the last four decades, and this one is no different.

But this time, with a bill hammered out secretly by a bipartisan group of senators and the White House, each faction felt left out in the cold. As the compromises pile higher, the cracks widen.

The more liberal of California's senatorial duo, Boxer is under greater pressure from unions and ethnic groups, who themselves are divided. Several Bay Area immigrant organizations -- the Asian Law Caucus in San Francisco, the Bay Area Immigrant Rights Coalition and others -- split off from the national lobbies, arguing that the enforcement-heavy bill is akin to apartheid.

National groups, such as the National Immigration Forum and the Mexican American Legal Defense Fund, have stayed on board, hoping to alter the bill later in the Democratic-controlled House.

The AFL-CIO, especially its construction trades, has split on immigration from the United Farm Workers union, hotel, restaurant, laundry and gaming workers union called UNITE HERE!, the Service Employees International Union and others with heavy immigrant memberships. UNITE's political director Tom Snyder is delighted that Boxer has come around, so far.

"Our California-based locals and leadership did reach out to her after that vote," Snyder said. "The opportunity, which won't return for many, many years, to legalize 10 million undocumented immigrants is essential to the future of the American workplace. You can't have that many people undocumented and have a workplace that's good from a union's standpoint."

Fractures among Democrats have been obscured by the ferocious fight between GOP conservatives and the White House.

Newly elected Democratic moderates such as Sens. Jon Tester of Montana and Claire McCaskill of Missouri oppose an expansion of immigration. Pro-union liberals like Boxer worry that large numbers of low-skilled immigrants are putting pressure on wages.

Many Democrats and their immigrant allies are torn between the prospect of legalizing the estimated 12 million people living in the country illegally and GOP provisions that they loathe: the guest worker program and a new skills-based point system that would gradually replace extended family ties as the main basis for admitting new immigrants.

Republicans wrestle with trade-offs between legalization and a big boost in enforcement, not just at the border but at the workplace, sweetened with $4.4 billion in up-front money Bush promised.

Feinstein and Boxer both badly want long-languishing provisions to admit farmworkers and allow children brought illegally to the United States to gradually legalize their status, receive in-state college tuition, travel freely and get driver's licenses.

"There's a lot in the bill that's really good and a lot in the bill that's not good," Boxer said.

Many unaware of fire risks when building out West

2007-06-26T13:12:00.000+03:00

COLEVILLE, CALIF. — Lori and Don Morris had just started unpacking the boxes this month in their new dream house — four acres, national forest view, wide open land at their doorstep — when a wildfire raced down the stark bluffs over this high-desert town near the Nevada border.

More than 300 federal firefighters from as far away as Montana arrived, battling heat, 60-mile-an-hour wind gusts and flames bolting through 1,100 acres of bone-dry sagebrush and juniper. The Morrises, along with 200 other residents, watched helplessly as, miraculously, their homes were spared.

"Both of us were aware that these things happen," said Morris, 47, as she looked out the window to the charred hillside. "We just didn't think it would happen this fast."

A new generation of Americans like the Morrises, in moving to places perched on the edge of vast, undeveloped government lands in the West, are living out a dangerous experiment, many ignorant of the risk.

Number of fires up
Their migration — more than 8.6 million new homes in the West within 30 miles of a national forest since 1982, according to research at the University of Wisconsin — has coincided with profound environmental changes that have worsened the fire hazard, including years of drought, record-setting heat and forest management policies that have allowed brush and dead trees to build up.
"It's like a tsunami, this big wave of development that's rolling toward the public lands," said Volker C. Radeloff, a professor of forest ecology and management at the University of Wisconsin. "And the number of fires keeps going up."

But now federal agencies at the front lines of defending these new communities from peril are starting to say enough is enough. The constellation of federally owned parks, forests and arid sagebrush fiefs in the lower 48 states is collectively about three-fourths the size of all the land east of the Mississippi River, and is becoming too expensive to protect with so many people pushing up against the fringes.

'Coming to a head'
This spring, the U.S. Forest Service began warning state and local officials across the West that they would need to pick up more of the tab from the federal government, and do more to make homes less vulnerable to fire. About 45 percent of the Forest Service's proposed budget for 2008 is designated for firefighting, compared with 13 percent in 1991. Last year, the agency spent $2.5 billion, a record, thinning fuels and fighting fires that burned 9.9 million acres, also a record.
"A lot of people are saying, 'If you're not going to do your part, we're not going to risk our lives,' " said Stuart McMorrow, a forest-fuels expert with the North Tahoe Fire Protection District, which covers 31 square miles near Lake Tahoe.

"It's coming to a head," McMorrow said, "this notion that people move out to the woods and put themselves in dangerous situations."

Costs are also spiraling up like smoke for states and other federal agencies.

The insurance industry, in the aftermath of disasters like Hurricane Katrina, has also begun taking a much harder look at the places where people and trees meet, and is becoming less willing to write policies for those who do not meet a "wildfire checklist" by taking measures to protect their homes.

Justices ease limits on campaign ads

2007-06-26T13:11:00.000+03:00

A U.S. Supreme Court ruling Monday easing a key provision of a landmark campaign finance law could have a big impact on the 2008 presidential election.
The court ruled 5-4 to loosen restrictions on corporate- and union-funded television ads in the closing days of the primary and general elections, a decision that could give special interest groups more influence in the presidential race.
The high court's upholding of an appeals court ruling that a Wisconsin anti-abortion group should have been allowed to air ads in the final two months before the 2004 elections could also hurt the presidential aspirations of the law's co-sponsor, GOP Sen. John McCain of Arizona.
"Fair or unfair on McCain, it seems to be one more issue where he's ending up on the short end of the stick," said Kirk Jowers, director of the University of Utah's Hinckley Institute of Politics and a supporter of another Republican presidential candidate, Mitt Romney.
Jowers, a founder of Campaign Legal Center based out of Washington, D.C., that filed a brief with the Supreme Court backing the law commonly referred to as McCain-Feingold, said the decision will result in more negative advertising in the 2008 campaign.
"You will see a lot more ads that will attack candidates through legislative and policy positions in an attempt to fit within the standard established by the Supreme Court," Jowers said.
Randy Dryer, a Salt Lake City attorney who wrote a brief supporting McCain-Feingold for the Campaign Legal Center in an earlier case, agreed.
"I think we're going to see a resurgence of attack ads," Dryer said. "They'll again be challenged, but by the time they wind their way through the court system, the election will be long gone and determined."
The case involved ads that Wisconsin Right to Life was prevented from broadcasting, urging voters to contact the state's two senators, Democrats Russ Feingold and Herb Kohl, and tell them not to filibuster President Bush's judicial nominees.
Feingold, the other co-sponsor of McCain-Feingold, was up for re-election in 2004.
The provision in question was aimed at preventing the airing of issue ads that cast candidate in positive or negative lights while stopping short of explicitly calling for their election or defeat. Sponsors of such advertising contend they are exempt from federal contribution limits.
McCain downplayed the decision in a statement, calling it "regrettable that a split Supreme Court has carved out a narrow exception by which some corporate and labor expenditures can be used to target a federal candidate in the days and weeks before an election."
The Arizona senator pointed out the decision Monday has no effect on a more far-reaching component of the campaign finance law, a ban on the ability of political parties to raise unlimited and unrestricted amounts of money from unions, corporations and donors.
"Fortunately, that central reform still stands as the law," McCain said.
Romney, a critic of McCain-Feingold, promptly hailed the decision Monday. "Score one for free speech," he said. "Today's decision restores, in part to the American people, a right critical to their freedom of political participation and expression."
Romney, the former leader of Salt Lake City's 2002 Winter Olympics, also raised concerns about McCain-Feingold during a fund-raising stop in Utah Saturday, telling reporters it has hurt the political process.
"The intent was to take the influence of money out of politics, but it's made it worse, not better. The bill ought to be repealed," Romney said. "The nature of fund-raising is that it's now around the clock and non-stop."
He said the problem is that money can be put into "organizations that are not controlled either by the party or the candidate, so they're not subject to the same kind of responsibility you have when candidates are directing what is said about them or about their opponents. It's been the wrong course for American campaigns."
Romney said the influence of money on campaigns is "there and it's overwhelming for candidates to be participating in the process of gathering money." He called for limits to be lifted on what donors can give a campaign, and those contributions to be listed immediately on the Web.
Scott Parker, chief of staff for Rep. Rob Bishop, R-Utah, described the ruling as "certainly a step in the right direction when it comes to partially correcting the damage that's already been done."
Parker said McCain-Feingold "was a convoluted and misguided infringement on individual liberties and free speech. So it's nice to see the court recognize political speech for what it is — a guaranteed constitutional right."

Spanish defence chief in Lebanon

2007-06-25T13:29:00.002+03:00

Spain's defence minister, Jose Antonio Alonso, has arrived in Lebanon to visit Spanish troops a day after six UN peacekeepers died in a bomb attack.
Three Spaniards and two Colombians in the Spanish army were killed in Sunday's blast near the Israeli border.

A further two Spaniards were also hurt when a roadside bomb hit the vehicle the Unifil troops were travelling in.

It was the first attack on Unifil since its mandate was widened after the war between Israel and Hezbollah last year.

Condemnation

On Sunday, US Secretary of State Condoleezza Rice condemned the attack on the UN Interim Force in Lebanon (Unifil).

"The Unifil mission has been very important in helping to bring an end to the Lebanese war of last summer and in helping to bring security so that the people of Lebanon could return to normal life," she said

Ms Rice was speaking at a joint news conference in Paris with French Foreign Minister Bernard Kouchner, who also spoke out against the bombing.

"We deplore it and, in the name of the president of the republic, we condemn this attack against the Spanish soldiers of Unifil," he said.

Hezbollah issued a statement describing the incident as very dangerous and said it was aimed at undermining the stability of southern Lebanon, a sentiment echoed by Lebanese President Emile Lahoud as he "strongly denounced" the blast.

The explosion occurred on the main road between the towns of Marjayoun and Khiyam, about six kilometres (four miles) north of the Israeli border town of Metulla.

There has been no official confirmation from the UN or the Lebanese authorities about who caused it, but Mr Alonso said the explosion was the result of a "pre-meditated attack", most likely caused by a roadside bomb or a remotely-detonated explosive device.

"It's important to determine the exact cause and then we can work out the context and analyse the vehicle, and the type of explosives," he said.

'Plot confession'

No-one has claimed responsibility for the attack so far, but the BBC's Kim Ghattas in Beirut says that radical Sunni Muslim groups have for months made threats against the UN peacekeepers.

For the last five weeks the Lebanese army has been battling militants apparently inspired by al-Qaeda at a refugee camp in northern Lebanon.

The Lebanese authorities said that militants from the Fatah al-Islam group who were arrested and interrogated confessed that there was a plan to attack the UN peacekeepers in southern Lebanon.

The government in Beirut, which is dominated by critics of Syria, has also accused Damascus of backing Fatah al-Islam in an attempt to destabilise Lebanon.

The Unifil peacekeeping force, which has been deployed in Lebanon since 1978, was beefed up last summer after the end of hostilities between Hezbollah and Israel.

There are now around 13,000 UN peacekeepers deployed in the area, including French, Spanish and Indian soldiers.

Spain's contingent, about 1,100 troops, is the third largest, after France and Italy.

Revived immigration bill may get stuck at the border

2007-06-25T13:29:00.001+03:00

WASHINGTON - A revived immigration reform bill that could legalize some 12 million undocumented immigrants faces a crucial vote as soon as tomorrow - and its prospects are far from certain.

"It's going to be an interesting week," said White House spokesman Scott Stanzel.

President Bush appealed to senators in his Saturday radio address to "summon the courage" to move the bill forward. The White House worked with senators on both sides of the aisle to resurrect the measure after it stalled early this month.

A lead opponent, Sen. Jeff Sessions (R-Ala.), predicted yesterday the bill was headed south.

"The support for it continues to erode," Sessions said on ABC's "This Week." "A lot of key senators that were thought to be supportive have announced in recent days that they don't support it."

Sessions and other opponents see the bill, which also includes a guest-worker program and tighter security measures, as offering amnesty, even though illegal immigrants would have to pay fines and wait for years to apply for green cards.

The Senate will need 60 votes to push the bill ahead. It also faces extremely uncertain prospects in the House, if it survives.

8 US soldiers die in Iraq, 7 from roadside attacks

2007-06-24T10:15:00.000+03:00

BAGHDAD -- Eight American soldiers died yesterday in Iraq, including seven killed in roadside bombings, the US military said, bringing to 30 the number of US service members whose deaths were announced in the past six days.

The number of American troops killed in Iraq so far this month, an average of about 3.5 fatalities per day. Sixty of the deaths were caused by roadside bombs, the leading killer of US troops here.

US military officials say powerful roadside bombings are occurring more frequently as more American troops are deployed on the streets of Iraq, particularly in the capital. US officials say many of the materials used in the bombs and much of the know-how for building them are being imported from neighboring Iran.

In the deadliest event yesterday, four US soldiers were killed in northwest Baghdad when a roadside bomb exploded near their vehicle during combat operations, according to a military statement. An Iraqi interpreter was wounded in the attack.

Two soldiers were killed in eastern Baghdad when their unit was hit by a roadside bomb and then came under small-arms fire, the military said. A US airman was killed in a roadside bomb attack on his vehicle in Tikrit, about 90 miles north of Baghdad.

A US soldier died in Baghdad of noncombat causes, the military said.

The British Defense Ministry announced that a British soldier died of wounds sustained in a roadside bombing Friday near the southern port city of Basra, bringing to 153 the number of British troops killed in the war.

Elsewhere, at least 12 people were killed and 14 wounded yesterday in a drive-by shooting, a sniper attack, a roadside bombing, and other violence, according to an Iraqi Interior Ministry official who was not allowed to be quoted by name. In addition, 12 bodies, all bearing gunshot wounds and signs of torture, were found in Baghdad, he said.

At least 3,555 members of the US military have died since the Iraq war started in March 2003, according to an Associated Press count.

The military has staged a series of counterattacks this week on roadside bomb factories and insurgent strongholds where stockpiles of explosives have been uncovered.

US forces using tips from Iraqi informants raided a safe house before dawn yesterday and detained three militants suspected of ties to Iran, the military said. The operation in Sadr City, Baghdad's main Shi'ite enclave, was the latest in a series of raids on targets where militiamen are believed to have ties to Iran.

The United States contends that Iran is arming Shi'ite militias and some Sunni insurgents with explosives, including armor-penetrating bombs, which have killed hundreds of US troops in recent months.

Amid yesterday's violence, two Sunni political blocs threatened to boycott the 275-seat parliament, demanding reinstatement of Speaker Mahmoud al-Mashhadani, a Sunni. The Shi'ite-dominated Legislature wants him to step down and has named his Shi'ite deputy, Khaled al-Attiya, as a temporary replacement.

Many legislators viewed Mashhandani's erratic behavior as unbecoming and a hindrance to parliament's ability to pass key benchmark legislation as demanded by Washington.

Kurds in northern Iraq, meanwhile, prepared for today's announcement of a verdict against deposed Iraq president Saddam Hussein's cousin, known as Chemical Ali, and other defendants who could face the death penalty for the 1980s crackdown against the ethnic minority.

Many said they were looking forward to closure, expecting the stiffest penalty against the cousin, Ali Hassan al-Majid, former head of the Ba'ath Party's Northern Bureau Command.

He is accused of ordering the use of chemical weapons against Kurds in the late 1980s scorched-earth campaign. Hussein feared the Kurds were siding with Iran during the eight-year war between Baghdad and Tehran.

"Finally, the past hard days are gone. I am ready to start over without this burden on my chest," said Lokman Abdul-Qader, a 40-year-old resident of Halabja who lost six relatives in a chemical attack and says he has suffered from acute asthma attacks since he inhaled the gas that was used.

Majid has denied he was responsible for the Halabja attack and others. The prosecution says 180,000 people, mostly civilians, were killed in the operation.

The defendants who face charges of war crimes and crimes against humanity have contended that they were acting on orders during the 1980-88 Iran-Iraq war.

Hussein was a defendant in the case but was executed on Dec. 30 after his conviction for the killing of 148 Shi'ite Muslims in Dujail after a 1982 attempt on his life.

The case -- called Anfal after the code name for the campaign to crush the Kurdish rebellion -- does not include the deaths of an estimated 5,600 people in a 1988 chemical weapons attack in Halabja .

Material from the Associated Press was included in this report.

Boyfriend charged with murder of pregnant woman

2007-06-24T10:14:00.000+03:00

CANTON, Ohio -- The mother of a pregnant woman who vanished weeks before her delivery date prayed that her daughter's boyfriend wasn't involved, but suspected he was.

Even Bobby Cutts Jr. understood the suspicion around himself. A policeman in this northeast Ohio city married to another woman, he had said he had nothing to do with Jessie Davis' disappearance, but knew that when bad things happen to women, husbands or significant others are often involved.

By the time authorities found a body they believe to be Davis' on Saturday, they concluded the awful pattern had been repeated. Cutts was arrested and is to be arraigned Monday on charges of killing Davis, 26, and their unborn daughter, whose due date had been July 3.

The body was found at the southeast edge of the Cuyahoga Valley National Park, about 25 miles north of her home, said Roger Riggins, an investigator with the medical examiner's office in Summit County, where the body was discovered.

Television helicopter news footage showed investigators riding off-road vehicles to reach an area heavily covered with trees and brush. It also showed authorities carrying a body bag on a stretcher and loading it into a white van.

Thousands of volunteers had searched for Davis over several days in the rural area of northeastern Ohio where she lived. Cutts joined volunteers in an earlier search.

Davis' family declined to comment Saturday, but on Friday her mother said Friday she considered Cutts a suspect. "I still pray that it's not him," Patricia Porter told NBC's "Today" show.

Porter reported her daughter missing June 15. She found Davis' 2-year-old son home alone at her daughter's Lake Township home, which was in disarray. A bed comforter and Davis' cell phone were missing. Items from her purse were scattered, bedroom furniture was toppled and bleach had been spilled on the floor.

Investigators said the toddler told them "Mommy was crying. Mommy broke the table. Mommy's in rug."

Authorities repeatedly questioned Cutts, 30, and searched his home during the investigation.

Stark County Chief Deputy Rick Perez said the case was still being investigated. He would not comment on whether there were any other suspects.

Cutts is the father of Davis' son, and her family says he also is the father of the unborn child. He has said he and his wife are separated and that she knew about the affair with Davis.

Cutts has been on paid administrative leave from his job.

"There is no denying that this has resulted in giving a black eye in the opinion of the local community as well as the opinion of the rest of the nation," Police Chief Dean McKimm said of the arrest of a police officer.

Telephone messages seeking comment on the arrest were left at the office of Cutts' lawyer, Bradley Iams.

Rick Pitinii, Porter's attorney, said Davis' family had no comment.

"They have gone through an absolute roller coaster of emotions," he said. "I've seen them laugh, cry, be angry -- everything you can imagine. ... It's tough."

"They need to be together, and they need to be alone, and they need to grieve."

Tim Miller, director of Texas EquuSearch, an internationally active search group that organized the volunteer effort, said Porter and the rest of Davis' family were called together and told about the body in late afternoon.

"A lot of the community stopped their lives to looked for Jessie and that meant so much to her and the entire family that they knew they were not alone in this," he said.

Haniyeh calls for talks with Abbas's Fatah faction

2007-06-23T15:47:00.000+03:00

GAZA, June 23 (Reuters) - Hamas leader Ismail Haniyeh, prime minister of the Palestinian government dismissed by President Mahmoud Abbas, called for power-sharing talks on Saturday with Fatah rivals routed from the Gaza Strip.

"There will be no dialogue with Hamas," responded Hussein al-Sheikh, a senior Fatah official in the West Bank.

Hamas seized control of Gaza over a week ago and faces isolation there, not only from Israel and Western powers, but also from the emergency cabinet Abbas had set up in the occupied West Bank as well as from Arab states like Egypt and Jordan.

Egyptian President Hosni Mubarak said on Saturday that Hamas's bloody takeover of Gaza amounted to a "coup against legitimacy" that damaged the Palestinian cause.

Israel plans to choke off all but humanitarian and basic supplies to Gaza, home to 1.5 million people, while opening the financial taps to Abbas's emergency government.

Israel will begin next week to transfer tax revenues to the emergency government in the West Bank and will ease some travel restrictions there.

Israeli Prime Minister Ehud Olmert will offer the gestures to Abbas on Monday when the leaders meet at the Egyptian Red Sea resort of Sharm el-Sheikh.

Envoys from the Quartet of Middle East mediators -- the United States, the European Union, Russia and the United Nations -- plan to meet in Jerusalem on Tuesday to discuss steps to bolster Abbas. One U.S.-backed proposal would name outgoing British Prime Minister Tony Blair to spearhead talks.

In the West Bank, Israeli troops on Saturday seized a top militant from the Islamist Hamas identified as the founder of the group's armed wing in the territory.

Hamas spokesman Sami Abu Zuhri said the arrest was proof "we are facing a dual conspiracy" in the West Bank, one led by Israel and the other by Abbas's security forces.

NO DIALOGUE

Abbas has ruled out any dialogue with Hamas, whom he accused of trying to assassinate him. Hamas has denied the allegations.

"The way out of the current situation is launching a Palestinian dialogue without pre-conditions," Haniyeh told Yemeni President Ali Abdullah Saleh by phone.

Haniyeh said these talks should be held "on the basis of no loser and no winner, and on the basis of no harm to anyone, and on the basis of a national unity government," according to Haniyeh's office.

A source close to Haniyeh said his statement was a call to form a new unity government with Fatah and other factions.

Haniyeh's office said Haniyeh also spoke by telephone to Egyptian intelligence chief Omar Suleiman and that "both sides stressed that there is no solution to the status quo except through dialogue".

Egyptian officials neither confirmed nor denied the call.

The Israeli cabinet was expected to approve on Sunday Olmert's request to recognise Abbas's emergency government and to resume the transfer of withheld Palestinian tax revenues. Israel is seeking assurances the money will not be used to support the Hamas administration in the Gaza Strip.

Israeli officials say some $400 million in tax revenues will be transferred to the emergency government in stages, short of the $700 million sought by Abbas. Israel says the rest of the money has been frozen by court order.

In talks with their Israeli counterparts, U.S. officials have requested that Israel ease restrictions on Palestinian access to the Jordan Valley, as well as remove barriers, checkpoints and roadblocks near major Palestinian population centres, including Hebron, Bethlehem and Nablus.

Israeli defence officials have mainly objected to removing the roadblocks and checkpoints near Nablus, arguing they are needed to prevent militants from criss-crossing the West Bank and infiltrating Israel.

Palestinians say the checkpoints are collective punishment.

Some aid groups said Abbas's decision to sever contacts with the Hamas leadership in Gaza was holding up negotiations on reopening Gaza's main commercial crossing at Karni to bring in humanitarian and other supplies.

"Food is being used as a political weapon," a senior Western diplomat involved in the negotiations said.

Gitmo's days are numbered

2007-06-23T15:45:00.000+03:00

The Bush administration is moving closer to shutting down its bitterly criticized prison for terrorist suspects at Guantanamo Bay, but the process is being held up by disagreement among his closest advisers, and problems about where to send many of the 370 inmates who remain at the jail, at a U.S. base in Cuba.

Despite a White House statement that a meeting of top officials scheduled for yesterday to take decisions on the future of the facility had been cancelled, it become clearer by the day that the pressures to remove what has become a global embarrassment for the U.S. are now well-nigh irresistible.

President Bush himself has said he would like the prison to close its doors as soon as is feasible, and both Robert Gates and Condoleezza Rice, the Secretaries of Defense and State, have indicated their opposition to it.

Only last Sunday General Colin Powell, Secretary of State when the first detainees arrived at Guantanamo Bay in January 2002, said he thought the facility should be closed and the prisoners moved to jails on the U.S. mainland.

On Capitol Hill, proposals are circulating for the prison's closure, supported not only by Democrats but also by several leading Republicans.

Guantanamo was not merely a problem but "an international disgrace that every day continues to sully this great nation's reputation," Steny Hoyer, majority leader and the second ranking Democrat in the House of Representatives, said this week. As the outrage has grown, U.S. officials increasingly find that when they press for greater human rights around the world, their arguments are undercut by critics who point to how prisoners have been held at the prison for up to five years or more without charge, effectively incommunicado and without the right of habeas corpus.

Only last year did legal action finally force the Pentagon to release a list of names and nationality of those detained. But four more suicides in the last 12 months alone, and years of reports of inhumane treatment, religious abuse and harsh interrogation techniques, have sealed Guantanamo's reputation as a place of despair, where the normal requirements of the law and international conventions do not apply.

U.S. officials say the obstacles to simply shutting it down are practical: persuading other countries to take those inmates -- 75 or so -- who have been cleared for release, and finding enough space in secure military jails within the U.S. One possibility is the U.S. army jail at Fort Leavenworth, Kansas. Another is the U.S. Navy brig at Charleston, South Carolina, where Jose Padilla, U.S. citizen and one-time 'dirty bomber,' was held without trial or proper representation for three and a half years, before those charges were effectively dropped. But even at the brig, room exists only for some 200 prisoners at most, it is claimed. "These steps have not been completed and no decisions are imminent," a National Security Council spokesman said.

However the fate of Guantanamo Bay also exposes a long familiar fault line in the Bush administration, between those like Rice and Gates who want above all to salvage America's reputation, and hardliners -- led, as usual, by vice-President Dick Cheney, backed this time by the Justice Department and the Department of Homeland Security.

Attorney General Alberto Gonzales, the man who as President Bush's first

White House counsel was largely responsible for devising the "enemy combatant" status conferred on the prisoners, argues that to bring the detainees to the mainland would merely lead to a new flood of habeas corpus cases. For their part, homeland security officials worry about housing top drawer terrorists like al-Qaeda's Khalid Sheik Mohammed, a prime organizer of the 9/11 attacks and transferred last year to Guantanamo, on U.S. soil.

In testimony on Capitol Hill this week, John Bellinger, the State Department's top lawyer complained that although critics in the U.S. and abroad were urging the prison's immediate shut down, they had offered "no credible alternatives for dealing with the dangerous individuals detained there."

2007-06-21T10:51:00.000+03:00

How Will The Markets React?

Retail sales growth in Canada is anticipated to slow during the month of April, with the headline reading estimated to rise only 1.0 percent after surging 1.9 percent during the month prior. Meanwhile, retail sales excluding automobiles are forecasted to gain a tepid 0.5 percent from 1.1 percent. While these indicators are expected to continue to show a pick up in consumption, signals that spending may not be able to keep pace and thus, may start to contribute to a slowdown in second quarter expansion would not bode well for market speculation that the Bank of Canada will be aggressive with monetary policy tightening this year. Furthermore, the actual release could actually prove to be softer than estimated after wholesale sales for the same period – a fairly reliable leading indicator – surprisingly plunged -3.1 percent , the sharpest decline in nearly four years. The drop was led by automobile sales, which actually contributed the most to the March retail sales report and could take the wind out of the sails of the April reading. Nevertheless, market reaction to this particular piece of data may only be short lived as the Bank of Canada has made it very clear that they will hike in July. What the central bank will do thereafter is up for debate, but it will certainly be largely dependent upon inflation pressures in coming months.

Bonds – 10-Year Canadian Government Bond Futures

While 10-year Canadian Government Bond futures made decent bullish headway on Wednesday, substantial resistance near 110.42 could limit gains. However, Thursday’s retail sales report could give CGB’s some fuel to make a fierce attempt at that level, as the figure has the potential to prove very disappointing. On the other hand, figures that meet or beat expectations may actually push prices down as yields would rally in anticipation of hawkish policy action by the Bank of Canada in July. Regardless, any moves higher may only be impressive on a short-term basis, as attention is likely to refocus on the central bank’s tightening bias.

10-Year Canadian Government Bond Futures (Intraday Chart)

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Canadian Retail Sales May Disappoint - Will It Throw Off BOC Expectations?
Wednesday, 20 June 2007 21:48:35 GMT
Printer Friendly | Email Article | RSS | Previous articles
Previous Articles
Jun 20 - Canadian Retail Sales May Disappoint - Will It Throw Off BOC Expectations?
Jun 19 - British Pound May Target 2.00 If BOE Minutes Signal July Hike
Jun 18 - USDCAD Move Towards Parity Could Be Crushed On Canadian CPI
Jun 15 - US Dollar, Treasury Yields May Suffer If Dismal Housing Data Prevails
Jun 14 - US CPI To Determine If EUR/USD Takes Out 1.3300
Jun 13 - Will Carry Trades Get Crushed If The BOJ Springs A Surprise Hike?
Jun 12 - US Retail Sales Rebound Could Push EUR/USD Below 1.3300
Jun 11 - British Pound May Target 2.00 Once Again If Inflation Fails To Soften
Jun 08 - Will The Canadian Dollar Approach Parity Or Break Trend Next Week?
Jun 07 - Canadian Dollar Rally Could Reignite on Labor Market Data
Jun 06 - British Pound Could Take On 2.00 If The BOE Surprises With A Hike
Jun 05 - Will ECB Trichet's Commentary Trigger a Surge in Euro, Bund Yields?
Jun 04 - Dollar, Look To ISM Services Report To Revive The Charge
Jun 01 - Japanese Capital Spending Will Kick Off The Week For Global Markets
May 31 - Dollar Toeing A Technical Cliff Ahead Of NFP, ISM Mix
May 30 - Dollar, Equity Traders Hold Breath For Expected Cut To US Growth
May 29 - Can Australian Retail Sales Keep AUDUSD Above 0.8200?
May 28 - US Markets May Lose Steam If Consumer Sector Cools
May 25 - Will Improved Japanese Consumption Turn the Carry Trade?
May 24 - Dollar, Stocks Demand Confirmation On Housing From Existing Sales Report
Written by Terri Belkas, Currency Analyst
Retail Sales (MoM) (APR) (12:30 GMT; 08:30 EST) Retail Sales Ex Autos (MoM) (APR) (12:30 GMT; 08:30 EST)
Expected: 1.0% Expected: 0.5%
Previous: 1.9% Previous: 1.1%

How Will The Markets React?

Retail sales growth in Canada is anticipated to slow during the month of April, with the headline reading estimated to rise only 1.0 percent after surging 1.9 percent during the month prior. Meanwhile, retail sales excluding automobiles are forecasted to gain a tepid 0.5 percent from 1.1 percent. While these indicators are expected to continue to show a pick up in consumption, signals that spending may not be able to keep pace and thus, may start to contribute to a slowdown in second quarter expansion would not bode well for market speculation that the Bank of Canada will be aggressive with monetary policy tightening this year. Furthermore, the actual release could actually prove to be softer than estimated after wholesale sales for the same period – a fairly reliable leading indicator – surprisingly plunged -3.1 percent , the sharpest decline in nearly four years. The drop was led by automobile sales, which actually contributed the most to the March retail sales report and could take the wind out of the sails of the April reading. Nevertheless, market reaction to this particular piece of data may only be short lived as the Bank of Canada has made it very clear that they will hike in July. What the central bank will do thereafter is up for debate, but it will certainly be largely dependent upon inflation pressures in coming months.

Bonds – 10-Year Canadian Government Bond Futures

While 10-year Canadian Government Bond futures made decent bullish headway on Wednesday, substantial resistance near 110.42 could limit gains. However, Thursday’s retail sales report could give CGB’s some fuel to make a fierce attempt at that level, as the figure has the potential to prove very disappointing. On the other hand, figures that meet or beat expectations may actually push prices down as yields would rally in anticipation of hawkish policy action by the Bank of Canada in July. Regardless, any moves higher may only be impressive on a short-term basis, as attention is likely to refocus on the central bank’s tightening bias.

10-Year Canadian Government Bond Futures (Intraday Chart)

FX – USD/CAD

The Canadian dollar has been holding within a pretty well-defined range against the US dollar, though 1.0700 has emerged as decent resistance today. Weaker-than-expected wholesale sales helped push USDCAD up towards that level, but given the crystal clear signals that the Bank of Canada has given regarding their intentions to raise rate next month, there is a significant amount of fundamental support for further declines until July 10th. However, the release of retail sales could add a bit of volatility to USDCAD trade on Thursday, as there are indications that the figure will be announced at a disappointing rate. Such a surprise could easily lead price to spike up to 1.0700, and depending upon the degree of difference between the actual figure and estimates, USDCAD could even take aim on 1.0750. Nevertheless, the price action will likely be just a blip on the radar, as persistent inflation above the central bank’s 2.0 percent target remains the more predominant issue for Canadian dollar trade. As a result, USDCAD may return to the bottom of its range even with a sharp fall in retail sales.

USD/CAD (Intraday Chart)

Equities – S&P/TSX Composite Index

Canadian stocks fell for the second day in a row as an unexpected drop in wholesale sales reinforced concern that a stronger Canadian dollar may be crimping profits for exporters. At the Toronto close, the S&P/TSX was down 1 percent at 13,978.16. A 1.3 percent decline in crude oil for July delivery to $68.19/bbl in New York didn't help either after an Energy Department report showed that US oil and gasoline stockpiles increased. Suncor Energy Inc., the world's second-biggest oil-sands producer, dropped C$3.06 to C$95.00 while EnCana Corp., Canada's largest energy company by market value, fell C$1.47 cents to C$68.90.

Canadian equities could be in for another rough day on Thursday, as the nation’s retail sales report has the potential to fall back more than expected during the month of April. Given the softness already seen in the S&P/TSX, the equity index could become even more vulnerable on such data and ease back towards the 13,650 level. However, a surprisingly strong result would help underpin a retrace up above 14,000, as the figures would signal that though exports may suffer at the hands of a stronger Canadian dollar and damage growth prospects, resilient consumption could help pick up the slack.

S&P/TSX Composite Index (Daily Chart)

2007-06-21T10:34:00.000+03:00

Retail sales growth in Canada is anticipated to slow during the month of April, with the headline reading estimated to rise only 1.0 percent after surging 1.9 percent during the month prior. Meanwhile, retail sales excluding automobiles are forecasted to gain a tepid 0.5 percent from 1.1 percent. While these indicators are expected to continue to show a pick up in consumption, signals that spending may not be able to keep pace and thus, may start to contribute to a slowdown in second quarter expansion would not bode well for market speculation that the Bank of Canada will be aggressive with monetary policy tightening this year. Furthermore, the actual release could actually prove to be softer than estimated after wholesale sales for the same period – a fairly reliable leading indicator – surprisingly plunged -3.1 percent , the sharpest decline in nearly four years. The drop was led by automobile sales, which actually contributed the most to the March retail sales report and could take the wind out of the sails of the April reading. Nevertheless, market reaction to this particular piece of data may only be short lived as the Bank of Canada has made it very clear that they will hike in July. What the central bank will do thereafter is up for debate, but it will certainly be largely dependent upon inflation pressures in coming months.

Bonds – 10-Year Canadian Government Bond Futures

While 10-year Canadian Government Bond futures made decent bullish headway on Wednesday, substantial resistance near 110.42 could limit gains. However, Thursday’s retail sales report could give CGB’s some fuel to make a fierce attempt at that level, as the figure has the potential to prove very disappointing. On the other hand, figures that meet or beat expectations may actually push prices down as yields would rally in anticipation of hawkish policy action by the Bank of Canada in July. Regardless, any moves higher may only be impressive on a short-term basis, as attention is likely to refocus on the central bank’s tightening bias.

10-Year Canadian Government Bond Futures (Intraday Chart)

Retail Sales (MoM) (APR) (12:30 GMT; 08:30 EST) Retail Sales Ex Autos (MoM) (APR) (12:30 GMT; 08:30 EST)
Expected: 1.0% Expected: 0.5%
Previous: 1.9% Previous: 1.1%

advertisement
Canadian Retail Sales May Disappoint - Will It Throw Off BOC Expectations?
Wednesday, 20 June 2007 21:48:35 GMT
Printer Friendly | Email Article | RSS | Previous articles
Previous Articles
Jun 20 - Canadian Retail Sales May Disappoint - Will It Throw Off BOC Expectations?
Jun 19 - British Pound May Target 2.00 If BOE Minutes Signal July Hike
Jun 18 - USDCAD Move Towards Parity Could Be Crushed On Canadian CPI
Jun 15 - US Dollar, Treasury Yields May Suffer If Dismal Housing Data Prevails
Jun 14 - US CPI To Determine If EUR/USD Takes Out 1.3300
Jun 13 - Will Carry Trades Get Crushed If The BOJ Springs A Surprise Hike?
Jun 12 - US Retail Sales Rebound Could Push EUR/USD Below 1.3300
Jun 11 - British Pound May Target 2.00 Once Again If Inflation Fails To Soften
Jun 08 - Will The Canadian Dollar Approach Parity Or Break Trend Next Week?
Jun 07 - Canadian Dollar Rally Could Reignite on Labor Market Data
Jun 06 - British Pound Could Take On 2.00 If The BOE Surprises With A Hike
Jun 05 - Will ECB Trichet's Commentary Trigger a Surge in Euro, Bund Yields?
Jun 04 - Dollar, Look To ISM Services Report To Revive The Charge
Jun 01 - Japanese Capital Spending Will Kick Off The Week For Global Markets
May 31 - Dollar Toeing A Technical Cliff Ahead Of NFP, ISM Mix
May 30 - Dollar, Equity Traders Hold Breath For Expected Cut To US Growth
May 29 - Can Australian Retail Sales Keep AUDUSD Above 0.8200?
May 28 - US Markets May Lose Steam If Consumer Sector Cools
May 25 - Will Improved Japanese Consumption Turn the Carry Trade?
May 24 - Dollar, Stocks Demand Confirmation On Housing From Existing Sales Report
Written by Terri Belkas, Currency Analyst
Retail Sales (MoM) (APR) (12:30 GMT; 08:30 EST) Retail Sales Ex Autos (MoM) (APR) (12:30 GMT; 08:30 EST)
Expected: 1.0% Expected: 0.5%
Previous: 1.9% Previous: 1.1%

How Will The Markets React?

Retail sales growth in Canada is anticipated to slow during the month of April, with the headline reading estimated to rise only 1.0 percent after surging 1.9 percent during the month prior. Meanwhile, retail sales excluding automobiles are forecasted to gain a tepid 0.5 percent from 1.1 percent. While these indicators are expected to continue to show a pick up in consumption, signals that spending may not be able to keep pace and thus, may start to contribute to a slowdown in second quarter expansion would not bode well for market speculation that the Bank of Canada will be aggressive with monetary policy tightening this year. Furthermore, the actual release could actually prove to be softer than estimated after wholesale sales for the same period – a fairly reliable leading indicator – surprisingly plunged -3.1 percent , the sharpest decline in nearly four years. The drop was led by automobile sales, which actually contributed the most to the March retail sales report and could take the wind out of the sails of the April reading. Nevertheless, market reaction to this particular piece of data may only be short lived as the Bank of Canada has made it very clear that they will hike in July. What the central bank will do thereafter is up for debate, but it will certainly be largely dependent upon inflation pressures in coming months.

Bonds – 10-Year Canadian Government Bond Futures

While 10-year Canadian Government Bond futures made decent bullish headway on Wednesday, substantial resistance near 110.42 could limit gains. However, Thursday’s retail sales report could give CGB’s some fuel to make a fierce attempt at that level, as the figure has the potential to prove very disappointing. On the other hand, figures that meet or beat expectations may actually push prices down as yields would rally in anticipation of hawkish policy action by the Bank of Canada in July. Regardless, any moves higher may only be impressive on a short-term basis, as attention is likely to refocus on the central bank’s tightening bias.

10-Year Canadian Government Bond Futures (Intraday Chart)

FX – USD/CAD

The Canadian dollar has been holding within a pretty well-defined range against the US dollar, though 1.0700 has emerged as decent resistance today. Weaker-than-expected wholesale sales helped push USDCAD up towards that level, but given the crystal clear signals that the Bank of Canada has given regarding their intentions to raise rate next month, there is a significant amount of fundamental support for further declines until July 10th. However, the release of retail sales could add a bit of volatility to USDCAD trade on Thursday, as there are indications that the figure will be announced at a disappointing rate. Such a surprise could easily lead price to spike up to 1.0700, and depending upon the degree of difference between the actual figure and estimates, USDCAD could even take aim on 1.0750. Nevertheless, the price action will likely be just a blip on the radar, as persistent inflation above the central bank’s 2.0 percent target remains the more predominant issue for Canadian dollar trade. As a result, USDCAD may return to the bottom of its range even with a sharp fall in retail sales.

USD/CAD (Intraday Chart)

How Will The Markets React?
Equities – S&P/TSX Composite Index

Canadian stocks fell for the second day in a row as an unexpected drop in wholesale sales reinforced concern that a stronger Canadian dollar may be crimping profits for exporters. At the Toronto close, the S&P/TSX was down 1 percent at 13,978.16. A 1.3 percent decline in crude oil for July delivery to $68.19/bbl in New York didn't help either after an Energy Department report showed that US oil and gasoline stockpiles increased. Suncor Energy Inc., the world's second-biggest oil-sands producer, dropped C$3.06 to C$95.00 while EnCana Corp., Canada's largest energy company by market value, fell C$1.47 cents to C$68.90.

Canadian equities could be in for another rough day on Thursday, as the nation’s retail sales report has the potential to fall back more than expected during the month of April. Given the softness already seen in the S&P/TSX, the equity index could become even more vulnerable on such data and ease back towards the 13,650 level. However, a surprisingly strong result would help underpin a retrace up above 14,000, as the figures would signal that though exports may suffer at the hands of a stronger Canadian dollar and damage growth prospects, resilient consumption could help pick up the slack.

S&P/TSX Composite Index (Daily Chart)

2007-06-20T11:22:00.001+03:00

Griffin has quite the iTrip legacy, and though the company was a pioneer for iPod-friendly FM transmitters, the signal strength has been a weak point.

Unfortunately, the issue has not been remedied in the iTrip Pocket, an otherwise lovely device with an ultracompact design and friendly user interface.

Still, if you live outside the urban jungle and want a transmitter that can double as a keychain, the $49 iTrip Pocket could suit you just fine.

Measuring in at 1.6 inches wide by 1.1 inches tall by 0.2 inch thick, the iTrip Pocket is indeed smaller than a book of matches and just as thin as the iPod Nano.

A 30-pin connector jutting out of the top allows you to connect it to any dock-connecting iPod, and the iTrip Pocket will output its tuner display to the player's screen.

On the front of the transmitter are four buttons: one long tuner shuttle key for scanning through frequencies and three numbered preset buttons.

There's also a tiny LED that lights up red when the unit is on. The iTrip comes with a clear plastic cap that features a hole through which you can string a key ring.

Operating the iTrip Pocket is a simple matter: plug it in and turn on the iPod, and the transmitter automatically powers on. Then use the tuner rocker or preset keys to navigate to an open frequency.

However, probably due to its small size (and -- as a result -- small transmitter), the iTrip has trouble holding on to even the weakest stations. So unless you have a completely vacant channel in your area, expect frequent static and dropouts.

During testing, we tuned the iTrip to 88.1 -- a channel that both the Maximo SAN-360 and the DLO TransPod had no trouble locking onto throughout San Francisco -- but we received almost constant static and suffered from several dropouts.

It wouldn't even transmit to other near-vacant frequencies. In the few instances we received some uninterrupted music, audio quality was acceptable, so if you live in an area with a lot of open channels, the iTrip Pocket could be an OK choice.

Users rage against China's 'Great Firewall'

2007-06-20T11:18:00.000+03:00

BEIJING, China (Reuters) -- Yang Zhou is no cyberdissident, but recent curbs on his Web surfing habits by China's censors have him fomenting discontent about China's "Great Firewall."
Yang's fury erupted a few days ago when he found he could not browse his friend's holiday snaps on Flickr.com, due to access restrictions by censors after images of the 1989 Tiananmen Square massacre were posted on the photo-sharing Web site.
"Once you've complained all you can to your friends, what more can you do? What else is there but anger and disillusionment?" Yang said after venting his anger with friends at a hot-pot restaurant in Beijing.
The blocking of Flickr is the latest casualty of China's ongoing battle to control its sprawling Internet. Wikipedia and a raft of other popular Web sites, discussion boards and blogs have already fallen victim to the country's censors.
China employs a complex system of filters and an army of tens of thousands of human monitors to survey the country's 140 million Internet users' surfing habits and surgically clip sensitive content from in front of their eyes.
Its stability-obsessed government says the surveillance machinery, commonly known as the "Great Firewall," is necessary to let Internet users enjoy a "healthy" online environment and build a "harmonious" society.
Yang just thinks it's a pain.
"I just want to look at some photos! What's wrong with that?" said the 24-year-old accountant, typical of millions of young urban-dwelling professionals who are increasingly aware of and fed up with state intrusions into their private life.
Privacy, once regarded with suspicion in pre-reform China, has become a sought-after commodity among China's burgeoning middle class, according to Nicholas Bequelin from Hong Kong-based Human Rights Watch.
"Of course, it's the first thing people seek when they have the economic resources," Bequelin said. "We see this growing in China in the wake of ideas of ownership and property."
Away from cyberspace, the battle for privacy between China's secretive government and its increasingly active citizens has turned violent in recent months.
In Bobai county, in the southern region of Guangxi, hundreds of farmers smashed government offices and burnt cars after local officials imposed punitive fines on residents who had defied family planning laws and had too many children.
The battle for control of China's Internet, however, will remain much more covert than confrontational, according to Liu Bin, an IT consultant with Beijing-based consulting firm BDA.
He believes it will take a long time before the government loosens control over Web content, especially because the Internet-savvy middle class is unlikely to take to the streets -- like the farmers of Bobai county -- over lack of Web access.
"Many educated people feel they can accept the current status quo because it doesn't have much impact on their daily lives ... They have been living with government propaganda for over 1,000 years," Liu said.
Such an attitude grates on Du Dongjin, a 40-year-old IT worker in Shanghai.
Du has decided to sue his Internet service provider, the Shanghai branch of state-owned behemoth China Telecom, who he said had blocked a Web site that had carried financial software he hoped to market.
"If the court authorities aren't influenced and they can hear the case fairly, I will win," Du said.
Most frustrated Web surfers, however, would rather air their grievances in the relatively safe realms of Internet anonymity.
They still have their anonymity because a state push to have China's millions of bloggers register with their real names to ensure they only posted "responsible" Web content was abandoned after an outcry from the Internet industry and due to the impossible task of keeping lists of exploding numbers of users.
"The thirst for information in China is so strong, it is very difficult for the (Communist) Party to stay ahead of the curve," Bequelin explained.
Within days of the blocking of Flickr, links to browser plug-ins and how-to explanations to subvert the filters and see Flickr photos were gleefully posted on blogs and in chat-rooms.
Many posts were preceded by tirades against the censors for "harmonising" Flickr.
One blogger posted an image of a voodoo doll, calling it the Great Firewall and inviting users to -- digitally -- stick pins in it.
Yang said restrictions on Flickr probably wouldn't motivate him to write a blog, much less push him down the road of "potentially dangerous" activism.
But he liked the idea of the Great Firewall voodoo doll.
"Have you got the link? Maybe I'll go stick a pin in it," he said.

Instant Transcripts from a Credit Bank

2007-06-19T16:11:00.001+03:00

If you want to further your education or career, but don’t have the transcripts to prove your qualifications, consider using a credit bank service. A credit bank is a program sponsored by a university that takes all of your past courses, test scores, and employment records and puts them together on a single transcript. You can then use this transcript when applying for employment or education instead of sending in numerous records from different schools. Once the odds and ends of your past experiences are together on one page, you may find that you have more of an extensive education than you imagined.
Who should use a credit bank?Anyone who has a lot of past experience from different institutions may benefit from using a credit bank. If you went to three or more colleges, have a lot of credit by examination, or can put together a portfolio that demonstrates learning outside of a traditional school, a credit bank may be an excellent option.
What kinds of credit can be put on the transcript?Credit banks have their own policies about what type of credit may be included. Because the name of the school that sponsors the credit bank is on the top of each transcript, schools are generally cautious about making sure credit is legitimate. Some banks will only permit credits from regionally accredited universities; others are more lenient. Possibilities for credit include: examinations, experiential learning, specialized training, and certifications. Often, credit banks will allow students to prove their learning through the creation of a portfolio. Even if a bank rejects some of your credit, they may place it on the transcript in a non-credit section.
Where can I find a credit bank?To find a credit bank try searching online or talking with a school counselor. Make sure that any program you select is sponsored by a reputable school. Some suggestions include:Excelsior College7 Columbia Circle, Albany, NY 12203-5159International Phone: 518-464-8500Thomas Edison State College101 W. State St. Trenton, NJ 08608-1176 (888) 442-8372 (toll free)Fax: (609) 777-2956E-mail: enrolled@tesc.eduCharter Oak State College55 Paul J. Manafort DriveNew Britain, CT 06053-2150(860) 832-3800E-mail: info@charteroak.edu
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Forex News

2007-06-19T16:09:00.002+03:00

19.06.2007 - ZEW economic expectations index fell in Germany in June
document.title += " > " + document.getElementById("news-page-title").innerHTML;
Economic expectations in Germany unexpectedly worsened in June, ZEW reported today. The ZEW economic expectations index decreased in June by 3.7 points to 20.3, compared with 24.0 points in May.
The index fell after six-month consecutive growth and was still below its historical average - 33.0 points. Besides, the index was below analysts’ estimates, who expected the increase to 27.5 points in June.
The assessment of the current economic situation in Germany improved slightly, by 0.7 points to 88.7. The assessment of current economic situation for the euro area rose in June by 4.2 points to 86. The index of economic expectations for the euro area fell in June by 3.3 points to 19.

Forex News

2007-06-19T16:09:00.001+03:00

19.06.2007 - EUR/USD will be in the corridor 1.3359-1.35 this week
document.title += " > " + document.getElementById("news-page-title").innerHTML;
Artem Enshin, NorthFinance financial analyst: “The forthcoming week will be monotonous due to absence of significant macroeconomic data and important events. At the moment EUR/USD is traded at 1.34. We expect its movement to 1.3350 - 1.35 this week.
Last week Japanese yen went through powerful level of resistance 122 and we observe further decline of yen against American dollar.
Cross-rates supported this movement, in particular EUR/JPY, which is traded now at 166, its 15-year maximums. GBP/JPY, in its turn, is also at 15-year maximums, 246, and if it breaks through 250, there are all chances for impetuous up-trend.
USD/RUR is at 25.9558. After continuous decline of ruble, there is slight correction. We expect the pair keeps 26.05-25.90 this week.
Oil, on the background of Middle East sores, rushed to the level of $70/a barrel, however, such a rise is short-term and the price is to go below %68. ”

Japanese govt bonds close lower on hazy US bond yield outlook, BoJ rate prospect

2007-06-19T10:49:00.001+03:00

TOKYO (XFN-ASIA) - Japanese government bond prices closed lower as lingering fears of sharp rises in US Treasury bond yields, along with persistent expectations of an interest rate hike in August by the Bank of Japan, capped the upside for JGB prices.
At the close, the yield on the bellwether 10-year bond was 1.925 pct, up from 1.890 pct yesterday.
The yield on the two-year note had inched up to 1.030 pct from 1.010 pct, while the yield on the five-year note had risen to 1.520 pct from 1.485 pct.
The yield on the 20-year bond had inched up to 2.310 pct from 2.300 pct, while the yield on the 30-year bond had risen to 1.520 pct from 2.500.
Bond prices move inversely to yields.
The price of the September futures contract for 10-year bonds had fallen to 131.35 yen from 131.64 yesterday.
"Expectations of a rate hike in July have faded (following softer-than-expected remarks Friday by BoJ governor Toshihiko Fukui), though it's only two months left before the vast majority of market players expect the central bank move to take place in August. In this environment, JGB prices don't have much room to climb," said Akitsugu Bando, strategist at Okasan Securities.
Short-covering seen yesterday to factor in fading expectations of a rate hike next month had mostly run out of steam, while some caution about prospects for US Treasury bond yields continued to weigh on investor sentiment following the directionless trading overnight, dealers said.
The yield on the benchmark 10-year US Treasury note climbed to as high as 5.18 pct overnight in the US before closing the trade at 5.15 pct, just below Friday's 5.16 pct.
Prices of longer-term bonds rose in the morning as investors rebalanced their portfolios on the view that these instruments have been over-sold in recent sessions. The longer tenors, however, fell back in late trading as the market became top-heavy, prompting selling across the yield curve

Household Clicker Clutter Problem Gets An Answer: Universal Remote

2007-06-18T12:16:00.001+03:00

The digital living room is clicking for Universal Electronics. (NASDAQ:UEIC)
The Cypress, Calif.-based maker of universal remote controls is seeing growing demand for its products as people's homes get more cluttered with electronics.
Universal Electronics UEIC supplies remotes that aren't "universal." These remotes simply control a customer's product, such as the set-top boxes of cable firm Comcast CMCSA or the set-top boxes of satellite TV firm DirecTV DTV. Those remotes often do have some ability to consolidate functions from other remotes, but usually that's limited.
So Universal Electronics also makes high-end universal remote controls, led by its Nevo family. It calls these products intelligent remotes or smart remotes. Nevo features a touch-screen display with simple icons for activities like watching a DVD or listening to music. With it, users can wirelessly control PCs and other consumer electronics throughout the home.
Universal Electronics has been posting strong sales and profit growth. This quarter, analysts polled by Thomson Financial expect UEI to earn 30 cents a share, up 76%, on sales of about $69 million, up 32%. The stock hit an all-time high intraday Friday before closing down 3%.
IBD recently spoke with Ramzi Ammari, vice president of product development at Universal Electronics, about the state of the business.
IBD: What's Universal Electronics doing to solve the problem of too many remote controls crowding living room coffee tables?
Ammari: It's funny, because the more remote controls consumers have on their coffee table, the more of a market it represents for us. The average consumer has 13 to 15 remote controls scattered throughout the home, mostly in the living room. More and more consumer electronics devices come with remote controls. Essentially the home is getting cluttered with all these remotes. And the value proposition that a universal remote control brings is that you can eliminate all the remotes on your coffee table and use a single universal device.
You also can have buttons on that remote control that are specifically designed to give you access to activities within your CE (consumer electronics) equipment. So if you want to switch from watching a DVD to watching a TV show or listening to music, that experience is facilitated through a universal remote control through patented technology that's called "macros." One-button press will initiate a sequence of infrared codes that will control your television, your DVD player, change the input on your TV and audio video receiver.
IBD: What motivates people to buy universal remotes?
Ammari: The primary reason consumers buy a universal remote control is replacement. The Sony (NYSE:SNE) TV remote control broke, or they lost the remote control.
The second one is consolidation. The idea is that you have three or four devices that you want to put into one remote control.
IBD: Where is remote control technology headed?
Ammari: Touch-screen remote controls are becoming popular. They're a little bit more expensive.
IBD: What's the low end of the price range for touch-screen universal remotes?
Ammari: Right now you can buy touch-screen products maybe for $300 to $500 on the low end.
IBD: Why get a touch-screen remote?
Ammari: The beauty of a touch screen is that you can offer all the functions (of the remotes you're replacing). The touch screen will reveal eight or 10 functions at a time and the user can scroll through them to access the specific function. So you don't get the button clutter (of other remotes).
The Nevo is our flagship product. It's the culmination of a lot of different technologies bundled into a single device. The product offers universal remote control of any (audio-video) device. It's got a color, touch-screen display and built-in Wi-Fi. It connects to your home network so it can access and control the digital media content on your PC.
IBD: Any other trends?
Ammari: Remote controls are starting to get more interactive. Nevo is an example of interactive remotes that display and have intelligence built in that can give consumers a lot more information than the traditional universal remote does. That interactivity is being powered through a lot of new (radio frequency) technologies entering the home. The initial value of RF is "nonline of sight." With RF, you can be in another room, the device can be inside a cabinet, and the RF in the remote will send the signal wirelessly without having to point 20 the device.

IBD's Top 10 - Friday

2007-06-18T12:14:00.001+03:00

Stocks Rise Broadly; Volume Up
1 The Nasdaq led with a 1.1% jump, making a new high for the year. Goldman Sachs (OOTC:GSGRP) (NYSE:GS) ' upgrade of Intel (NASDAQ:INTC) boosted chip stocks and other techs. The NYSE composite rose 0.9% and the S&P 500 0.7%. Volume surged on quadruple witching. Another tame inflation report helped stocks. It also took the yield on the 10-year Treasury to 5.15%, down 7 basis points.
Core Inflation Continues To Fall
2 May core consumer prices rose 0.1% vs. April. Year over year, core CPI climbed 2.2%. That's still above the Fed's 1%-2% comfort zone, but it's the lowest in 14 months and down from 2.9% last Sept. Overall consumer prices rose 0.7% after April's 0.4% gain, led by rising energy costs. It was the biggest gain since Sept. 2005. Prices were up 2.7% vs. May last year.
Immigration Bill Back On Track
3 Legislation to strengthen border security while bestowing legal status on millions of illegal immigrants is showing signs of life, with Senate leaders saying they'll bring it back for a vote as soon as this week. "Each day our nation fails to act, the problem only grows worse," President Bush said. He lobbied hard to rescue the bill after many Republicans withheld their support.
Hamas Killings Continue In Gaza
4 Hamas mocked Fatah rivals on its first day in full control of Gaza, offering a few Fatah leaders amnesty but also tossing a Fatah fighter to his death from a rooftop. Hamas supporters ransacked President Mahmoud Abbas' home in Gaza City. In the West Bank, where Fatah maintains control, Abbas appointed a new gov't. The U.S., U.N., Egypt and Jordan pledged to support Abbas.
Gates Tours Iraq; F-16 Crashes
5 Defense Secretary Robert Gates backed Gen. David Petraeus' criticism that previous Iraq commanders gave overly optimistic assessments of progress in the war. Gates went to Baghdad, which has been under a strict curfew after a recent mosque bombing. Meanwhile, the Air Force said one of its F-16 fighter jets crashed in Iraq. The pilot's fate is unknown.
Penn Nat'l Gaming OKs Buyout
6 The casino operator agreed to be acquired by Fortress Investment Group and Centerbridge Partners for $8.9 bil in cash. Under the deal, shareholders will receive $67 a share. Penn rose 21.5% to 62.12. Penn National Gaming's (NASDAQ:PENN) PENN CEO and CFO are expected to stay on. The buyout lift gaming stocks, with MGM Mirage (NYSE:MGM) surging 4.2%.
Monsanto Raises EPS Outlook
7 The biggest seed company raised its '07 earnings outlook to $1.75-$1.80 a share, above views of $1.69. Monsanto (NYSE:MON) MON said it had strong sales of its corn seeds -- fueled by growing demand for ethanol -- as well as its herbicides. It also said Q3 results were expected to be about $1 per share on an ongoing and reported basis. Views are 76 cents.
NATO Targets Cyberterrorism
8 Defense ministers at a gathering of 26 NATO nations in Belgium agreed that there's an "urgent need" to develop protections against "cyberattacks" that could destabilize international markets or even disrupt military communications. Experts have long warned such assaults are inevitable. Last month, an Internet-based attack crippled some bank operations in Estonia.
N. Korea Warns On Missile Plan
9 North Korea warned it may strengthen its "self-defense deterrent," seen as a reference to its nuclear program, in response to U.S. and NATO plans to build a missile shield in Eastern Europe. North Korea just recently started to start dismantle a nuclear plant in return for an easing of sanctions and access to its funds overseas.
Foreign Money Flows Into U.S.
10 International investors bought a net $111.8 bil in U.S. securities in April, up from $30.1 bil in March, the Treasury Dept. said. Net April long-term capital inflows, excluding swaps, rose to $84.1 billion from $51.2 billion in net purchases recorded for March. The U.S. needs to attract nearly $2 bil a day to help cover its trade deficit. Newstex ID: IBD-0001-17510491
Originally published in the June 15, 2007 version of Investor's Business Daily.

Intel News

2007-06-17T12:14:00.000+03:00

Intel and Google Join with Dell, EDS, EPA, HP, IBM, Lenovo, Microsoft, PG&E, World Wildlife Fund and Others to Launch Climate Savers Computing Initiative

Broad effort organized to drive energy-efficient computing; goal to save $5.5 billion in energy costs and reduce greenhouse gas emissions by 54 million tons per year†
MOUNTAIN VIEW, Calif., June 12, 2007 – Intel Corporation and Google* joined with Dell*, EDS*, the Environmental Protection Agency*, HP*, IBM*, Lenovo*, Microsoft*, Pacific Gas and Electric*, World Wildlife Fund*, and more than a dozen additional organizations today announcing their intent to form the Climate Savers Computing Initiative. The goal of the new broad-based environmental effort is to save energy and reduce greenhouse gas emissions by setting aggressive new targets for energy-efficient computers and components, and promoting the adoption of energy-efficient computers and power management tools worldwide.

"Today, the average desktop PC wastes nearly half of its power, and the average server wastes one-third of its power," said Urs Holzle, senior vice president, Operations, Google Inc. "The Climate Savers Computing Initiative is setting a new 90 percent efficiency target for power supplies, which if achieved, will reduce greenhouse gas emissions by 54 million tons per year -- and save more than $5.5 billion in energy costs.
"We are asking businesses and individuals throughout the world to join with us to institute better power management of their computing equipment and purchase energy-efficient computers," Holzle added.
Initial companies who intend to participate in the initiative represent both the demand and supply side of the computer industry, including computer manufacturers and chip makers, as well as environmental groups, energy companies, retailers, government agencies and more. The group will formalize its membership in coming weeks.
"By 2010, the Climate Savers Computing Initiative will cut greenhouse gas emissions in an amount equal to removing more than 11 million cars from the road or shutting down 20 500-megawatt coal-fired power plants -- a significant step in reducing the emissions affecting our planet," said Pat Gelsinger, senior vice president and general manager of Intel's Digital Enterprise Group.
"Computers have helped us make huge strides toward a more efficient world today, with reduced travel, more productivity, online transactions and more," Gelsinger added. "But with today's latest energy-efficient technologies, we can do even more. The commitment of the member companies that are here with us today is a firm statement to the collective resolve to make an enormous impact."
Computer and computer component manufacturers who support the initiative are committed to building energy-efficient products that meet or surpass the EPA's Energy Star* guidelines. Businesses must also commit to requiring high efficiency systems for the majority of their corporate desktop PCs and volume server purchases, and to deploy and use power management tools on desktop PCs.
Individual consumers can also support the Climate Savers Computing Initiative by signing up at www.climatesaverscomputing.org, where they will be able to pledge to purchase an initiative-certified system. The Web site will also help consumers learn how to take advantage of their existing computer's power-saving capabilities such as sleep and hibernate modes, which can reduce the amount of energy consumed by up to 60 percent.
The Climate Savers Computing Initiative licensed its name from the World Wildlife Fund Climate Savers program, which involves several leading companies working to reduce their carbon footprint.
"This is the first time our Climate Savers program has been applied to an entire sector, engaging manufacturers, retailers, and consumers," said John Donoghue, senior vice president for the WWF. "We are pleased to join these industry leaders to provide solutions to address climate change."
The initiative's energy efficiency benchmarks will initially follow the EPA's Energy Star guidelines; but with increasing requirements during the next several years. For example, 2007 Energy Star specifications require that PC power supplies meet at least 80 percent minimum efficiency. The initiative would require a minimum of 90 percent by 2010. In addition, the initiative sets a higher efficiency target in the power supply for volume servers (1U and 2U single-socket and dual-socket systems): an increase from 85 percent to 92 percent efficiency by 2010. For a complete description of the requirements, see www.climatesaverscomputing.org.
Initial SupportersIntel Corporation (www.intel.com), Google, Inc.* (www.google.com), Advanced Micro Devices, Inc.* (www.amd.com), Canonical Ltd.* (www.canonical.com), Center for Information Technology Research in the Interest of Society* (www.citris-uc.org), Coldwatt, Inc.* (www.coldwatt.com), Dell Inc.* (www.dell.com), Delta Electronics, Inc.* (www.delta.com.tw), eBay* (www.ebay.com) Electronic Data Systems Corporation* (www.eds.com), EMC Corporation* (www.emc.com), Fujitsu Limited* (www.fujitsu.com), Hewlett-Packard Development Company, L.P.* (www.hp.com), Hipro Technology Inc.* (www.hipro-us.com), Hitachi, Ltd.* (www.hitachi.com), IBM Corporation* (www.ibm.com), LANDesk Software* (www.landesk.com), Lenovo Group Limited* (www.lenovo.com), Linux Foundation* (www.linux-foundation.com), Massachusetts Institute of Technology* (web.mit.edu), Microsoft Corporation* (www.microsoft.com), Natural Resource Defense Council* (www.nrdc.org), NEC Corporation* (www.nec.com), One Laptop per Child* (www.laptop.org), PG&E Corporation* (www.pgecorp.com), Power-One, Inc.* (www.power-one.com), Quanta Computer Inc.* (www.quantatw.com), Rackable Systems* (www.rackable.com), Red Hat, Inc.* (www.redhat.com), Starbucks Corporation* (www.starbucks.com), Sun Microsystems, Inc.* (www.sun.com), Supermicro Computer Inc.* (www.supermicro.com), United States Environmental Protection Agency* (www.epa.gov), University of Michigan* (www.umich.edu), Unisys (www.unisys.com) Verdiem Corporation* (www.verdiem.com), World Wildlife Fund* (www.worldwildlife.org), World Resources Institute* (www.wri.org), Yahoo!* (www.yahoo.com).
About IntelIntel, the world leader in silicon innovation, develops technologies, products and initiatives to continually advance how people work and live. Additional information about Intel is available at www.intel.com/pressroom.
About Google Inc.Google's innovative search technologies connect millions of people around the world with information every day. Founded in 1998 by Stanford Ph.D. students Larry Page and Sergey Brin, Google today is a top web property in all major global markets. Google's targeted advertising program provides businesses of all sizes with measurable results, while enhancing the overall web experience for users. Google is headquartered in Silicon Valley with offices throughout the Americas, Europe and Asia. For more information, visit www.google.com.
Intel and the Intel logo are trademarks of Intel Corporation in the U.S. and other countries.
Climate Savers is a trademark or registered trademark of WWF used under license.

Punctul zero al omenirii in anul 2012

2007-06-17T12:11:00.000+03:00

Sâmbătă, 16 Iunie 2007

In acceptiunea oamenilor de stiinta, "Punctul Zero" corespunde inversarii polilor magnetici ai Pamantului. Unii cercetatori situeaza acest eveniment la sfarsitul anului 2012.
"Inima" Pamantului bate mai repede. Mii de ani a batut cu o frecventa de 7,8 Hz, dar, din anul 1980, s-a observat o accelerare, mai intai lenta, apoi, din 1997, mai rapida, ajungand la valoarea de 12 Hz. Cresterea frecventei vibratorii a planetei noastre face ca 24 de ore de viata sa corespunda cu numai 16 ore reale, in termenii timpului terestru. Inversarea totala se preconizeaza a fi in 2012 si multe scenarii apocaliptice au fost create pentru aceasta data. FENOMENE CLIMATICE EXTREME Cercetarile din ultimii zece ani au inregistrat deplasarea Polului Nord magnetic spre Ecuator. Efectele observate la suprafata pamantului nu au fost de mare anvergura, dar cercetatorii atrag atentia asupra schimbarii dramatice de clima, alternanta temperaturilor excesiv de calde, secetoase, cu ploi torentiale care scot raurile din matca si formarea tornadelor in zone unde nu sunt specifice. Normele de constructie a caselor vor trebui sa tina seama de urgiile care vor veni.
RADIATIILE SOLARE MULT MAI PUTERNICE Pentru sanatatea omului, cea mai importanta consecinta va fi vulnerabilitatea la radiatiile solare, mult mai puternice. Vor trebui sa se impuna norme stricte de igiena, inclusiv alimentara, pentru ca si plantele si animalele vor fi "bombardate" de radiatii. Cercetatorii sunt de parere ca cei mai afectati vor fi oamenii deosebit de sensibili, care simt campul electromagnetic al Pamantului ( de ex. paranormalii). PENTAGONUL, LA PAMANT Schimbarea polilor magnetici afecteaza o intreaga tehnologie. Mai multi sateliti au suferit dereglari dupa ce au trecut prin zona Atlanticului de Sud, unde se inregistreaza cele mai slabe valori ale campului magnetic. In corelare, orice aparatura ce functioneaza pe baza undelor transmise de sateliti ar putea ceda, inclusiv cea militara. Pentagonul are in vedere tehnologii noi, pe baza de energie alternativa. GEOGRAFIA NU SE SCHIMBA Cercetatorii sunt de parere ca inversiunea polilor magnetici nu influenteaza miscarea placilor tectonice sau procesele din suprafata terestra. Pozitia axei de rotatie a Pamantului, care uneste Nordul cu Sudul geografic, pozitia continentelor in raport cu aceasta axa raman neschimbate. Agentia Spatiala Europeana va lansa in 2009 trei sateliti care vor masura schimbarile cauzate.
PESTE 2000 DE ANI John Tarduno, specialist american in geofizica, a creat un program pentru predictia datei cand se va produce inversarea polilor magnetici. Conform programului, aceasta se va intampla peste 2000 de ani, nu in 2012. "Inversarea polilor magnetici nu poate fi prevazuta si nici nu se petrece conform unei anumite periodicitati", sustine Gheorghe Marmureanu, directorul Institutului National de Fizica a Pamantului. Ultima schimbare de polaritate a avut loc acum 780 000 de ani, dupa cum rezulta din cercetarea rocilor.

Consolidarea pietei bancare europene genereaza noi provocari !

2007-06-16T17:10:00.000+03:00

Vineri, 15 Iunie 2007

Dorinta de fuziune a avut consecinte benefice neprevazute Dezvoltarea trebuie sustinuta de un management de calitate Sectorul bancar european se confrunta cu o noua tendinta, evidentiata de accelerarea activitatilor de consolidare transfrontaliera, amploarea acestor afaceri si cresterea implicarii active a actionarilor, reiese dintr-un studiu publicat ieri de agentia de rating Moody's.
Crearea monedei unice europene nu a dus la o activitate de consolidare bancara atat de ridicata cat era estimat initial, cu toate ca fenomenul de consolidare in Europa e mai amplu fata de maniera in care a fost perceput, iar in ultima perioada a fost remarcata o accelerare a acestor activitati.Multe dintre fortele ce sustin aceasta activitate nu sunt neaparat caracteristice Europei si nici sectorului bancar in general, insa se pare ca obstacolele in calea tranzactiilor transfrontaliere de mari dimensiuni in Europa incep sa dispara, afirma Moody's."In mod asemanator cu alte sectoare, dorinta de a fuziona a avut consecinte benefice neprevazute, consolidarea in cadrul pietei fiind mult mai de succes decat operatiunile transfrontaliere", a declarat vicepresedintele Moody's, Pierre Cailleteau, coautor al acestui studiu.Activitatea de consolidare aduce riscuri si provocariMoody's este de parere ca principala intrebare ridicata de reconfigurarea accelerata a industriilor bancare nationale in Europa este daca aceasta consolidare are consecinte pozitive din punct de vedere al ratingului de credit si daca dimensiunea bancii conteaza in determinarea puterii financiare a acesteia. In acest caz, Moody's este adeptul agnosticismului.Dintr-un punct de vedere, activitatea de consolidare poate aduce cu sine riscuri si provocari, insa, pe de alta parte, francizele bancare disciplinate, chiar daca de dimensiuni mai mici, pot obtine ratinguri foarte bune. "Problema principala este daca aceasta activitate de consolidare este bazata pe ratiuni economice clare sau doar reflecta un joc strategic circular, in care bancile devin pradatori din simplul motiv ca nu vor sa devina prada", a explicat Cailleteau. "Influenta activitatilor de consolidare asupra ratingului este in general pozitiva pentru entitatile bancare preluate si relativ pozitiva pentru beneficiarii preluarii", a declarat managerul general al biroului Moody's din Milano, Henry MacNevin, coautor al raportului. Pe plan general, consolidarea pietei are consecinte pozitive pe termen lung, afirma MacNavin.Impactul financiar imediat trebuie luat in considerareDin punctul de vedere al managementului de rating, Moody's este de parere ca impactul financiar imediat trebuie sa fie luat in considerare impreuna cu potentialul pozitiv pe termen lung, mai ales in cazurile in care consolidarea este sustinuta de management si de o strategie de calitate. Relatia complexa intre consolidare, stabilitate si concurenta lasa mult spatiu interpretarii reglementarilor, afirma Moody's in acest raport. "Privind in perspectiva, sunt mari sanse ca activitatile de consolidare sa continue in Europa, atat pe plan intern, cat si transfrontalier, putand avea o amploare chiar mai ridicata", estimeaza Cailleateu. Moody's afirma ca acest lucru va avea consecinte pozitive asupra ratingului de credit .Studiul Moody's concluzioneaza ca exista posibilitatea emergentei unei noi tendinte de resegmentare a sectorului bancar european, aducand cu sine noi provocari.