NEWS,24.07.2013

US bill threatens government shutdown

The US senate on Tuesday advanced a $54bn measure that increases funding for transportation and housing projects, setting up a spending clash with Republicans in the House of Representatives that threatens a government shutdown on October 1.
The senate voted 73-26 to clear a procedural hurdle that allows for consideration of amendments and a simple majority vote on the funding bill, drawing the support of 19 Republican senators.
The funding measure for basic infrastructure projects, block grants for cities and public housing draws a sharp contrast between the spending paths laid out by Senate Democrats and House Republicans, who are considering a $44bn measure.
The House Republicans are passing their 12 appropriations bills for the new fiscal year under a discretionary spending cap of $967bn in an effort to keep savings from the automatic "sequester" spending cuts in place.
They want to divert a larger share of that reduced spending pie to defence and security agencies, subjecting domestic programmes to bigger cuts.
Senate Democrats, meanwhile, assume that the sequester cuts will be replaced by tax hikes and savings elsewhere and are applying a $1.058trn cap to their bills - $91bn more than the House.
There is little chance of that difference being resolved as the September 30 fiscal year-end approaches, so Congress would need to pass a stop-gap funding measure to avoid a government shutdown on October 1.
The senate measure would mark an increase of $2.3bn in spending on transportation and housing  mostly urban  over the 2013 level. The House measure would cut it by $7.7bn.
Democrats argued that delaying needed work on airports, roads and public housing will simply cost more in the future, and say such projects help the economy.
"Steel rusts, asphalt wears out, buildings need to be repaired and maintained," said Senate Appropriations Committee Chairperson Barbara Mikulski, a Maryland Democrat. "It's not politics, it's physics. We have to make investments today so that our nation can grow."
Both Tuesday's procedural vote and an Appropriations Committee vote drew significant Republican support, indicating that the party's appetite for continuing the deep spending cuts may be waning in the Senate.
But top senate Republican Mitch McConnell said any spending deal must maintain savings from the sequester about $1.2trn over 10 years  which were set in motion by a budget deal two years ago. He dismissed Democratic demands for additional revenue.
"I have no interest in reopening the subject of additional taxes. The government in my view doesn't need more revenue," McConnell told reporters after the senate procedural vote.

US opens probe into steel pipe imports

The US commerce department on Tuesday launched one of its biggest trade investigations in years into charges that manufacturers in South Korea, India and seven other countries are selling steel pipe used by oil and natural gas producers at unfairly low prices in the United States.
Imports of oil country tubular goods (OCTG) from the nine countries totalled nearly $1.8bn in 2012, more than double their total in 2010, as rising US oil and natural gas production have increased demand for the pipe.
In 2010, the United States slapped duties on imports of OCTG from China after they hit about $2.8bn in 2008. The duties slapped on imports from China created an opening for the other foreign suppliers.
The latest case targets South Korea, which exported about $831m worth of the pipe to the United States last year, as well as India, Vietnam, the Philippines, Saudi Arabia, Taiwan, Thailand, Turkey and Ukraine.
US producers are asking for anti-dumping duties as high as 240% on India, 158%t on South Korea, 118% on Thailand and 111% on Vietnam to offset what they say is below market pricing, and lesser but still hefty duties on the other five countries.
For two countries, Turkey and India, US producers are seeking additional countervailing duties to offset alleged government subsidies.

3G lack hampers West Bank smartphones

Like many young Palestinians, Amir was excited to get his first smartphone, despite the heavy price tag. But he did not keep it long after realising the lack of 3G network meant its applications were largely unusable.
"I sold my iPhone because I just couldn't use it when I was out and about," said the internet cafe worker, who asked to be given a pseudonym.
"It's expensive to buy a smartphone, so without the full benefits there's no point having one," he added.
With the latest Samsung Galaxy or iPhone costing $400 (€300) it is a considerable investment, but for those keeping pace with developments on Twitter and Facebook, a smartphone has become the tool of choice.
As telecom companies in the Middle East prepare to launch the next generation of high-speed mobile phone internet services, commonly known as 4G, the Palestinian territories still have no access to 3G, meaning they are unable to fully use their smartphones on the go.
As a result, most mobile phone owners simply do not use 3G. And many feel the cost of a smartphone is hardly worthwhile.
"I can't get 3G with a Palestinian provider, so I have to have two contracts, one Palestinian and one Israeli, which is cumbersome and expensive," said 27-year-old Jeryes, who runs a bookshop in Ramallah.
Israel's refusal to give Palestinian mobile companies access to the necessary frequencies for 3G means West Bank residents must sign up with an Israeli company to get mobile internet, but calling rates are more expensive in the territories.
Palestinian mobile operators do not include the price of a phone in their monthly packages, adding to the expense.
Sabri Saidam, telecommunications adviser to Palestinian president Mahmud Abbas, said Israel had repeatedly refused to grant 3G access to Palestinian phone companies for "security" reasons.
"Over the past few years several requests have been made and have been denied" to import the technology and get access to the frequencies needed for 3G, he said.
"Israel persistently refuses the application for 3G on the basis of security," Saidam told AFP.
"This is even though there are Israeli companies illegally operating in the Palestinian territories providing 3G for their customers," he said, referring to the more than 500 000 Israeli settlers living in the West Bank and annexed east Jerusalem.
'If you're disconnected you're half dead'
But despite being a nuisance for those who want to use 3G, the issue for most Palestinians is primarily political.
Mobile phone shop worker Alaa Qawasmi, 27, said he was more angry about what the Israeli stranglehold on 3G represented.
"The main reason we don't have 3G is because of the occupation," he said. "Meanwhile, the technology Israeli phone users have is far better, and there are so many services we can't use."
But the obstacle can be overcome, thanks to wireless technology.
"It doesn't affect me much," said Omar, an IT worker in hospitals who did not wish to give his real name.
"Almost everywhere has wireless internet."
Mobile users can sit in cafes or at home, using connections there to have full access to their smartphone features - though some such as digital maps are not updated for West Bank residents, meaning the usefulness of the smartphone is limited, said Omar.
3G "would be nice to have, but we have more important problems here", he said.
A campaign launched by an IT expert during a visit by US President Barack Obama in March to draw attention to the lack of 3G in Ramallah was dismissed by some commentators as potentially overshadowing more crucial political issues.
Ruba Abu Roqqti, visiting her local phone shop, said what was more important was having internet access at all, let alone on the move.
"If you're disconnected from the Web it means you're half dead," she jested - before asking what 3G actually was.
"If it were available, that would be good," she said, "but it's not a big problem, I hadn't even heard of it."
Hamdi Awad, a teenage student, said it could be "good for flirting with girls" in real time.
"You could add them on Facebook and go from there," he laughed.
Though the 3G issue looks far from being sorted, the Palestinians did celebrate a more significant Web-based victory in May, as internet giant Google recognised their upgraded United Nations status, placing the name "Palestine" on its search engine instead of "Palestinian Territories".
Posters on the way into Ramallah from the Israeli-controlled Qalandia checkpoint in the West Bank urged internet users to "log on" to Google.ps and support the Palestinian cause of achieving full independent statehood.

FDA tightening rules on menthol smokes

Shares of US tobacco companies fell on Tuesday after the US Food and Drug Administration (FDA) said it is considering tightening regulations on menthol cigarettes following a scientific review that showed the products are likely to be more addictive than regular cigarettes.
Shares of Lorillard, which makes the Newport brand of menthol cigarettes, fell as much as much as 5% while shares of Altria Group, which makes a menthol version of its Marlboro brand, fell as much as 3%.
The FDA published preliminary results from a study it conducted that suggest "menthol cigarettes pose a public health risk above that seen with non-menthol cigarettes."
The report found that while menthol cigarettes are no more or less toxic than regular cigarettes, menthol's cooling and anesthetic properties can reduce the harshness of cigarette smoke, increasing their appeal to new smokers.
Still, at least some tobacco company analysts see the tone of the report as positive for the industry in so far as it did not recommend an outright ban.
"We believe it's unlikely that menthol will be banned," said Bonnie Herzog, an analyst at Wells Fargo Securities, in a research report.
"We see this as a buying opportunity as we expect the stock to recover as investors digest this report," she said, referring to Lorillard shares.
The FDA's move comes during a trade dispute in which Indonesia charges that the United States illegally allowed menthol cigarettes to remain on the market while banning the import of clove-flavored cigarettes from Indonesia.
In 2012, the World Trade Organization ruled that the United States should either end its ban on Indonesia's imports or impose a ban on US menthol cigarettes. So far the United States has stopped short of a ban.
"The United States has been clear that it would comply with the WTO findings in a way that is appropriate for the public health," said a statement from Andrea Mead, a spokesperson for the Office of the United States Trade Representative, which negotiates with foreign governments to create trade agreements and resolve disputes.
The FDA is seeking public comment on whether a limit could be set on the amount of menthol in cigarettes. It is also seeking information on how menthol cigarettes are marketed to the young and minority communities.
Lorillard Chief Executive Murray Kessler said in a statement that the company is "encouraged" by the FDA's "science-based approach."
"It is Lorillard's long-held belief that the best available science demonstrates that menthol cigarettes have the same health effects as non-menthol cigarettes and should be treated no differently," he said.
A spokesman for Altria, David Sylvia, said the company had only just received the FDA's report and was reviewing the information.
Lorillard's shares were trading down 4.2% at $44.23 in afternoon trading on the New York Stock Exchange. Earlier they fell as low as $43.77. Altria's shares were down 2.5% to $35.94, after dropping as low as $35.73.

Is China ripe for unrest?

RECENTLY, it seems no developing country is safe from sudden, unexpected protests.

In Brazil and Turkey, empowered middle classes pushed back against perceived governmental injustice; protests erupted, and leaders’ approval ratings dropped precipitously.

In Egypt, the economic picture was as ugly as the political one, and the military’s ouster of president Mursi has fomented conflict and instability.

China may look like a candidate for the type of protests currently sweeping the developing world. Not only is a newly empowered middle class demanding better services and more accountability from government, growth has also tapered off in recent quarters.

Don’t hold your breath. At least for the time being, China is well-positioned to navigate such challenges far better than its emerging market competitors.

Let’s start with the economy. For years pundits, and many Chinese government officials, thought that if China’s gross domestic product growth rate ever fell below 8%, it would set off an unemployment crisis that would raise the risk of social and political instability in the country.

Well, China’s finance minister was in Washington last week and said that the Chinese economy could handle 7% or even 6.5% growth a lower rate than China has experienced in 23 years.

But unlike many other emerging markets, China views slower growth as a manageable challenge. The government actually recognises that a slowdown is necessary to meet its reform and rebalancing goals, and is working now to score political points among the population by arguing that it’s doing so.

In particular, Beijing hopes that the slowdown will force industrial consolidation and less resource consumption, which could slow environmental degradation which has been a major point of political vulnerability for the government.

Slower growth should also calm the real estate sector, where rising prices have been a major sore point for urban Chinese. China’s new leadership is betting that progress on these fronts will outweigh the downside risks they’ll face as job losses tick up in the face of slower growth.

From a global perspective, there is a strong case to be made that China’s slowing growth rate is actually a good sign.

Bubbles allowed to shrink

The fact that Beijing hasn’t just reflexively pumped capital into the system to keep growth rates up shows that it is willing to begin undertaking modest economic reforms; it is, in effect, letting bubbles shrink rather than grow until they pop.

This approach is characteristic of the new leadership that took charge in March of this year: they are less risk averse and they have a more long-sighted handle on the necessary economic changes that China will have to undertake.

The new president himself is a cause for optimism. Xi Jinping has a more assertive, off-the-cuff style; he is a more spontaneous, charismatic leader than his predecessors, and early reviews in China’s blogosphere suggest a favourable first impression.

Xi is using this boldness to work to consolidate his support within the Communist Party. And the extent to which he is successful will mean even more capacity for even more reform over time.

All of this doesn’t mean that China’s stability should be taken for granted, or that there aren’t looming problems on the horizon. The very fact that China doesn’t face significant near-term instability could lead to complacency and give it wiggle room to delay necessary reforms.

China still needs long-term and significant economic and political transformations to get it from “developing” to “developed.” It has too many changes coming to its demographics, manufacturing costs, and environmental needs to get away with ignoring them in perpetuity. (The US can sympathise.)

While it’s a good sign that the current leadership is allowing lower growth rates in order to implement some economic reform, thus far, all changes are happening inside the system, not to the system itself. Easy growth was the low-hanging fruit for China over the past thirty years.

Now the government is reaching a bit further up the tree. But they still have a very long way to go to get to the upper branches.

China’s other major threat is the stratification that any developing country has to navigate. As I’ve written about in the past, the growth of the Chinese economy has created a new middle class that has different demands from the largely rural population that China is still trying to lift out of poverty.

In the near term the new government’s tolerance for slower growth is actually positive for helping to address some of these concerns. But eventually, Beijing will have to reconcile two increasingly divergent populations.

This, again, is a long-term issue. But as these issues go unaddressed, and as more Chinese become rich enough to prioritise new sorts of rights and privileges, the chances of unrest will rise.

Don’t believe the idea that China is a ripe victim for this wave of developing world protests, or that China’s slowing growth rate is a sign of an imminent hard landing. China’s near-term picture looks surprisingly bright.

But after that, the larger question still looms: can Xi Jinping and his government handle the looming storm clouds while they are still a good way off?

NEWS,06.06.2013

Walmart offers everything - even love

They came for the low prices and stayed for the lifetime commitment.

A couple that met in a North Carolina Walmart returned to the same store to hold their wedding ceremony.

Wayne Brandenburg said he would casually browse through the store a few times a week and that was where he met his future wife, Susan, who was working there as a cashier.

“I’d ask her how she was that day and tell her she looked very nice,” he said.

He was a widower and Susan was working at the store after her divorce.

Wayne built up the courage to ask her on a date and began taking Susan’s favourite lunch to Walmart each day.

“He was very much a gentleman and I looked forward to seeing him,” she said.

A year later, Wayne proposed.

Susan accepted but the couple was not officially married until six years later.

When they were trying to decide where to hold the reception, Wayne came up with the idea of getting married in the same store where they had met.

The wedding cake even came from the store’s bakery and the couple was reportedly joined by family, friends and even some store customers who stopped in to observe the ceremony.

While the story may sound a bit unusual, it’s actually somewhat common, according to one study.

In fact, Psychology Today says Walmart is the most popular place for Americans to fall in love at first sight.

Greek March unemployment rises

Greece's jobless rate rose again in March, reflecting the pain of a crippling recession after years of austerity under the country's international bailout.

Record joblessness is a major angst for Greece's coalition government as it scrambles to hit fiscal targets and show there is light at the end of the tunnel after years of unpopular tax rises and cuts to wages and pensions.

Unemployment rose to 26.8% from a downwardly revised 26.7% in February, according to statistics service data released on Thursday and is more than twice the average rate in the euro zone which hit 12.2% in April.

"It's long-term unemployment that is the most worrisome as the percentage is higher than 60%," said economist Angelos Tsakanikas at think tank IOBE, adding that the proportion of jobless people out of work for more than a year had been around 45% in 2008.

Those aged between 15 and 24 remain the hardest-hit, even though the jobless rate for that age group eased to 58.3% in March from 64.2% in February.

As the economy shrinks for a sixth straight year and with 1.3 million people officially without jobs - more than the population of neighbouring Cyprus - the pain is felt across the board.

Borrowers have fallen behind on loans and fewer workers are paying into pension funds.

Since the crisis erupted in 2009, Greece's jobless rate has tripled as hundreds of thousands lost their jobs or businesses and about 700 to 1 000 Greeks have been losing their jobs daily, according to estimates.

Once rare in a country where family ties are strong, rising numbers of homeless people, some of them old and sick, have also become a common sight across Athens.

Six out of 10 people on the street lost their home in the past two years and 47% of those have children, according to a study by Klimaka, a nongovernmental organisation.

In the capital's most rundown areas, ordinary Greeks who lost their jobs as a result of the country's economic crisis sleep outdoors side by side with Aids patients, drug addicts and others on the fringes of society.

Scrambling for ways to ease the pain for Greeks, Athens wants to tap about €170m of EU regional development funds to launch job programmes and has asked the European Commission to approve the move.

A turnaround will take time to be felt in the labour market even if recovery sets in next year as authorities predict.

The central bank projects unemployment will peak at 28% before it starts to decline in 2015.

India hikes gold duty to stem demand

India, the world's top gold consumer, on Wednesday hiked import duty on the precious metal to stem surging demand and reduce the country's ballooning current account deficit.
Gold purchases are one of the biggest contributors to India's current account deficit - the broadest measure of trade - which widened to just under five percent from 4.2% the previous year as imports outpaced exports.
The import duty on gold had been raised from six percent to eight percent, Revenue Secretary Sumit Bose told the Press Trust of India news agency.
The import duty hike was the second since the start of the year. Last year the government doubled the duty on gold to four percent.
Indians bought 162 tonnes of gold last month, twice the customary amount, as they sought to exploit a slide in global prices.
The hike is part of a wider set of measures to improve the finances of Asia's third-largest economy, which faces stubbornly high inflation, a sharp slowdown in growth as well as the hefty current and fiscal account deficits.
Ratings agencies have threatened to downgrade India's sovereign investment rating to junk status unless the government takes steps to clean up the nation's finances.
India has long been the world's biggest buyer of gold with purchases strongest during the religious festival and wedding seasons.
Last year's rise in the import duty on gold dampened demand temporarily but purchases soon picked up again.
Many Indians - especially in rural areas where there are few banks - buy gold in the form of jewellery, bars and coins as a hedge against inflation.
Finance Minister P. Chidambaram has said that gold imports must be curtailed, leading the Reserve Bank of India to take separate steps to curb imports.
Gold has fallen 16% since the start of the year as investors bet that the US Federal Reserve may soon start unwinding its financial stimulus as the US economy shows signs of recovery.

 

China to cut coal use amid protests

China is considering plans to cut coal consumption in some major industrial regions, people familiar with the policy said, as part of measures to reduce air pollution - an issue that has triggered a surge in public protests.
In a plan to be released this month, China may set a target to reduce coal use in a heavily polluted region in the north spanning Beijing, Hebei and Tianjin by a combined 100 million tonnes a year by 2015, said a person who has been involved in the policy discussions.
That region consumed an estimated 375 million tonnes of coal last year, around a tenth of the national total, with Hebei province, China's main steel producer, alone responsible for about 300 million tonnes.
Tackling a dependence on coal a major cause of smog and acid rain though, will test China's resolve to clean up its air, water and soil after decades of rapid industrial growth.
Previous attempts by Beijing to rein in its industrial polluters have not always succeeded, with growth-obsessed local governments often turning a blind eye to violations. Fierce lobbying by powerful state-owned utilities also appears to have put paid to a recent plan to raise national coal standards and ban low-grade imports.
Jiang Kejun, a senior researcher at the Energy Research Institute, a think-tank run by the National Development and Reform Commission, said precise targets were still being debated, but a decision was expected soon.
"These targets should be included in the plan, but we are actually still in the process of setting the precise numbers it isn't a particularly easy thing to do," said Jiang, who is involved in drawing up the policies.
China was previously committed to slowing the rate of coal consumption growth, but recent pollution scares appear to have increased its resolve to tackle problems caused by excessive coal combustion.
In January, thick, hazardous smog shrouded Beijing and other industrialised northern Chinese cities for more than a week, with many blaming excessive coal-burning by power plants, steel mills and other industrial facilities.
Steel capacity curbs
The new pollution plan is also expected to ban capacity expansions in steel and other polluting industries in major cities, and force firms to run emissions control equipment. Companies that fail to comply face higher power prices and the threat of having their power and water supplies cut off, officials familiar with the policy told Reuters last week.
China has sought to use the growing public clamour against air pollution to get tough on high-polluting, high-energy consuming industries like steel, cement and aluminium, which have been sapped by crippling levels of overcapacity.
Local industry is responsible for 49% of Beijing's pollutant emissions, vehicles 22 percent, and drift from surrounding provinces, including Hebei, 24.5%, according to a 2011 study. Coal-burning makes up more than 90 percent of sulphur dioxide emissions.
National Targets
China is also looking to reduce coal consumption in the big manufacturing regions of the Pearl River and Yangtze River deltas by 50 million tonnes each though analysts say those figures are unlikely to be enough to change China's overall energy consumption patterns.
"Those are relatively small numbers in the grand scheme of things," said Bill Durbin, analyst at consultancy Wood Mackenzie in Beijing.
"We're looking at total coal consumption of nearly 4 billion tonnes and expect to see that rise, simply because there is a lack of alternatives for baseload power generation, particularly as you move to the central and western regions."
Last October, in its 5-year plan on air pollution, China identified the Beijing-Tianjin-Hebei region and the Pearl and Yangtze river deltas as "pilot zones" to control coal consumption.
It also said China would seek to reduce the share of coal in the national energy mix by promoting renewables and building new gas storage facilities in key cities. Around half of China's total energy comes from coal, far more than anywhere else in the world.
China has already said it aims to keep national coal production capacity to within 4.1 billion tonnes by 2015, up from 3.24 billion tonnes in 2010.
According to the China Coal Industry Association, China's total consumption is still likely to hit 5 billion tonnes by 2020. Wood Mackenzie, in a report published on Tuesday, said China's coal demand would double to 7 billion tonnes by 2030.
"If they cap coal consumption then they will have to raise investment in natural gas, but we're not seeing enough investment that would allow gas to displace coal," said Durbin.
The lack of reliable data is likely to make coal cuts difficult. In Hebei, unregulated private steel mills with a history of underreporting output use large amounts of coal. Monitoring nationally will be an even bigger challenge.
Last year's 5-year plan said special emissions restrictions would be imposed in 47 big cities, banning capacity growth in thermal power, steel, construction materials, coking, non-ferrous metals and chemicals.

US companies add more jobs

Hiring by US firms was sluggish in May while a sharp rise in mortgage interest rates last week weighed on what had been a buoyant housing market, adding to signs the economy had lost some momentum in the second quarter.

A separate report from the Federal Reserve characterised the pace of the economic expansion as "modest to moderate" since mid-April as hiring remained relatively subdued.

The Fed's Beige Book of economic conditions is prepared as research for policymakers to use at their next meeting on June 18-19, a meeting that will be watched for any indications as to when the Fed may pull back on its stimulus programme.

Private employers added 135 000 jobs in May, the ADP national employment report showed, an acceleration from April but missing forecasts for a gain of 165 000.

April's private payrolls were revised to an increase of 113 000 from the previously reported 119 000 gains.

"The number was weak," said Mark Zandi, chief economist at Moody's Analytics, which jointly developed the report.

"The data is suggesting that instead of job growth stepping up, it's actually stepping down as we move into the summer months," Zandi told reporters.

"It's not like we're falling off a cliff...it just feels like we're throttling back a little bit."

The ADP report showed manufacturers had shed payrolls in May and a separate report indicated jobs growth in the vast services sector was weak last month, with a gauge of employment at services firms falling to its lowest in close to a year.

Expansion

Economic growth is expected to cool in the current quarter from the 2.4% rate in the first three months of the year, partly due to fiscal belt-tightening in Washington.

Economists still largely expect the recovery should regain traction in the second half of the year.

The goods producing sector cut 3 000 jobs in May, with a drop of 6 000 positions at manufacturing firms, which could be partially due to defence spending cutbacks, Zandi said.

Wall Street was down over 1% by mid-afternoon, while the weak data helped push Treasury debt prices higher.

The dollar was weaker against a basket of currencies.

Activity in the US services sector picked up slightly in May, with the institute for supply management's services index edging up to 53.7 last month from 53.1 in April and that topped economists' expectations for 53.5.

A reading above 50 indicates expansion in the sector.

The May figure was still off this year's peak of 56.0, which was hit in February.

The forward-looking new orders component rose, but the employment measure slipped to the lowest level since last July at 50.1 from 52.0.

Even with the lacklustre growth, the services industry held up better than its manufacturing counterpart, which contracted in May, according to data from ISM released earlier in the week.

Data on Wednesday added to signs of a slowdown in manufacturing as new orders for factory goods rose in April but not enough to reverse the prior month's plunge.

In a busy day for economic releases, yet another report showed unit labour costs fell in the first quarter by 4.3%, the most in four years, although the reading appeared to be distorted by a shift in employee compensation at the end of last year to avoid a tax hike.

Nervousness the Fed may taper bond purchases sooner than had been expected, sent fixed 30-year mortgage rates up 17 basis points to average 4.07% in the week ended May 31, the Mortgage Bankers Association said.

Last week's interest rate was the highest since April 2012 and the first time rates have been above 4% since early May last year.

Demand for refinancing was hit hardest by the acceleration in rates, with applications slumping 15.0%.

The gauge of loan requests for home purchases - a leading indicator of home sales - held up relatively better, falling just 1.6%.

$200m credit card hacking ring busted

Eleven people in the United States, the UK and Vietnam have been arrested and accused of running a $200m worldwide credit card fraud ring, US and UK law enforcement officials said on Wednesday.
Federal prosecutors in New Jersey said they had filed charges against a 23-year-old man from Vietnam.
They said in a statement that authorities in Vietnam had arrested Duy Hai Truong on May 29 in an effort to break up a ring he is accused of running with co-conspirators, who were not named in the statement.
"One of the world's major facilitation networks for online card fraud has been dismantled by this operation, and those engaged in this type of crime should know that they are neither anonymous, nor beyond the reach of law enforcement agencies," Andy Archibald, interim deputy director of the National Cyber Crime Unit, said in a statement on the British government's Serious Organized Crime Agency website.
The arrests were coordinated by the three countries, the statement said.
The arrests come as law enforcement officials around the world are cracking down on Internet-related heists.
Two weeks ago, authorities raided Liberty Reserve, a Costa Rica-based company that provided a virtual currency system used frequently by criminals to move money around the world without using the traditional banking system.
Earlier last month, authorities arrested seven people involved in a $45m heist in which hackers removed limits on prepaid debit cards and used ATM withdrawals to drain cash from two Middle Eastern banks.
"It's rare that you find actual human beings behind these things," said Mark Rasch, a former cyber crimes prosecutor and now a lawyer in private practice in Bethesda, Maryland. "Usually you can tie them to organizations or hacker handles, but it's harder to find individual people."
Rebekah Carmichael, a spokeswoman for New Jersey US Attorney Paul Fishman, said the charges were filed in New Jersey's federal court because some of the victims of the scheme are residents of the state.
Prosecutors claim Truong and accomplices stole information related to more than a million credit cards and resold it to criminal customers through the websites www.matteuter.biz and www.mattfeuter.com, according to a criminal complaint filed in federal court in New Jersey.
According to the complaint, Truong hacked into websites that sold goods and services over the Internet and collected personal credit card information from the sites' customers. "The victims' credit cards incurred, cumulatively, more than $200m in fraudulent charges," the complaint said. The scheme began in 2007.
"Like many 'carder' cases, this is an international conspiracy," Rasch said, adding that a recently passed computer crime law in Vietnam had made it possible for Vietnamese authorities to participate in the multinational sting.
Although Truong has been charged in the United States, he does not have a US-based lawyer because he is being held in Vietnam, Carmichael said.

NEWS,09.01.2013

Growth in coal demand to slow in 2013

Prices for seaborne thermal coal will stay above production costs for larger mines this year, while demand and supply of the fossil fuel will slow because of weaker economic growth and falling US exports, Deutsche Bank said in a report on Tuesday.Prices for Australian and South African coal benchmarks will be largely unchanged this year as a forecast 3% growth in demand for seaborne coal, driven mainly from China and India, will be met by a corresponding 3% rise in supply, leaving the market short by 19m tonnes, the German bank said.South African coal delivered into Europe (API 4 FOB Richards Bay) will average $93/tonne this year, unchanged from last year's levels, while Australian exports of coal (Newcastle FOB) are likely to fall to $95 from $97 seen in 2012, meaning most larger producers of coal will still be able to break-even or produce at a profit, the German bank said.Deutsche Bank estimated costs of production to be around $89-93, but only smaller producers are likely to be loss-making this year as wages and equipment costs stabilise and demand from fast-growing developing economies is likely to underpin the market, the report added."There is no single explanation for higher demand. In India, it is a perennial shortage of fuel for power generation amidst a slowly improving price tariff environment," Deutsche Bank coal analyst Michael Hsueh told Reuters."In China, [higher demand] is primarily driven by the need to fill in the gap between demand and domestic production to whatever degree it is beneficial. We do believe that we are seeing a recovery in China and that it will strengthen throughout the year," he added.The report said recent economic indicators suggest that China, the world's second-largest economy, could see growth pick up this year at a slightly faster rate compared with 2012, when the pace of expansion slowed and prompted the cancellation of some orders for coal and the build-up of big stockpiles."We can already observe that the year-on-year (y/y) growth in Chinese power demand has picked up in October and November 2012 to 7.1% and 8.0% respectively," it added.Moreover, demand for coal in the US, the world's second biggest consumer, could pick up slightly this year because gas prices are forecast to be higher, Deutsche Bank said.This would mean more production will be consumed domestically by utilities and less exported to Europe, where cheap US coal has prompted utilities to burn more of the fuel in power stations in 2012."As we forecast that US gas prices will average $3.75/mmBtu in 2013, and then carry on rising through 2015 in our forecasts to $4.00/mmBtu and $4.25/mmBtu, we expect that coal demand in the US will recover further in the next year."Despite some shutdowns of older mines in the US and smaller operations in Indonesia, mainly because of rising production costs and a 20% y/y fall in coal prices, global supply rose 7% in 2012 while demand grew 8% in 2012, Deutsche estimated.In a separate report on Tuesday Deutsche said a steady decline in European coal prices that has coincided with a tight gas market means that coal prices would have to rise by almost $80 per tonne in order to restore competitiveness to gas for power generation.

Turkey holds plane en route to Iran

Turkey has been holding for several days a cargo plane en route from the United Arab Emirates (UAE) to Iran after its crew refused to document its load, a customs ministry official told AFP on Wednesday. "The plane owned by a Turkish company had to make an emergency landing at Istanbul's Sabiha Gokcen Airport due to technical reasons," the official said on condition of anonymity. "The company has to document its cargo at our customs until 10:00 [Wednesday], for security purposes otherwise we'll do what's necessary," he added, without elaborating. The official said that Turkish authorities would have the right to check the plane's cargo if the company refused to reveal the items on board. "It is most probably carrying gold," he speculated.An official from the Iranian embassy in Ankara told AFP that they had not been informed by the Turkish foreign ministry of the plane's grounding."Authorities will take necessary steps if there is any irregularity in the conduct of business," another Turkish official said.But officials declined to comment if the cargo of the plane was documented before the given time and if the plane was allowed to resume its journey.The incident comes amid indirect gold trade between Turkey and Iran, with the trade to settle Turkish imports of Iranian natural gas reportedly being done via UAE to bypass US-led sanctions against Tehran.Turkey could have faced recession if it was not for the boom in exports, particularly in gold sales to Iran, Economy Minister Zafer Caglayan said in December."Turkey ships 60% of its gold to Iran and [the] rest to the UAE and other countries. But we are not Iran's only market," the minister added.Turkey sold $6.5bn worth of gold to Iran and another $4.2bn worth to the UAE in the first 11 months of 2012. Ankara is under severe pressure from its Western allies to reduce imports of natural gas from Iran owing to Tehran's disputed nuclear programme. Fearing that Tehran aims to acquire nuclear weapons, the US has led Western powers to impose ever tougher sanctions against Iran which rejects the charge outright, insisting its programme is for peaceful purposes only.Under a law approved last year, Washington threatened to penalise foreign financial institutions over transactions with Iran's central bank, which handles sales of the country's key oil and gas exports.On 30 November, the US Senate unanimously approved new economic sanctions aimed at further crippling Iran's energy, shipping and port sectors.But shortly thereafter, Washington extended exemptions from the sanctions to nine major economic powers, including Turkey, China, Taiwan, India and South Korea.Ankara in return has cut its Iranian oil purchases by 20%. Energy Minister Taner Yildiz said last month Turkey met half of its crude oil needs from Iran in 2011 but was now trying to source more from Libya, Saudi Arabia and Russia.But Turkey expects the latest round of US sanctions against Tehran will not cover natural gas imports.Iran is Turkey's second-biggest natural gas supplier after Russia, and third biggest in oil.Iran's economy is struggling to cope with tightening sanctions imposed by the US and the EU over the past two years.Turkey says it is bound only by UN sanctions against Iran, and Turkish officials insist that Turkey will keep buying natural gas from Iran which supplies up to 20% of the gas it consumes.

Hagel to rein in Israel on Iran strike

Chuck Hagel, the nominee for the next US defence secretary, will seek to rein in Israel over any attempt to carry out a unilateral strike against Iran's nuclear facilities, Israeli observers believe. Hagel's nomination by US President Barack Obama must still be confirmed by the US Senate, but the prospect of the former senator assuming the top Pentagon post has already stirred concern in Israel.Analysts and commentators note that Hagel is known for a non-interventionist approach to foreign policy, and is believed to be strongly opposed to the use of military force to tackle Iran's nuclear programme."The road to Iran stops at Hagel," wrote commentator Bradley Burston in Wednesday's Haaretz newspaper."Obama's message to [Israeli Prime Minister Benjamin] Netanyahu on Iran is succinct enough to be spelled out in 10 letters: Chuck Hagel."The message to Jerusalem is clear: it won't be easy from now on getting a green light from Washington to embark on an adventure in Iran," commentator Orly Azulai wrote a day earlier in the top-selling Yediot Aharonot daily."That is one of the reasons why top figures in Jewish organisations in the US, as well as high-ranking Israeli political officials, have been spending the part number of weeks engaged in a concerted effort to prevent Hagel from being appointed," Azulai added."They argue that he is bad for Israel because he supports dialogue with Hamas and Hezbollah, and he doesn't think that the solution to the Iranian nuclear programme is war."Nadav Eyal, writing in the Maariv daily, agreed that Hagel favoured a non-military solution to the issue of Iran's nuclear programme, which much of the international community believes masks a weapons drive, despite Tehran's denials."Hagel would like for the US to speak directly with Iran, and no, he does not believe that war is the necessary outcome of the nuclear crisis there. He wants to avoid war at almost any price."Haaretz's Burston said that in selecting Hagel, Obama was sending the message that in his second term, he would not "grant the same flexibility" to Netanyahu."In the hole he dug with his ostentatious contempt for Obama, a hole he cannot afford to deepen, Netanyahu may have stumbled into paving the way for Hagel's nomination and confirmation," he wrote referring to the Israeli leader's open backing for Obama's rival in the presidential elections."Thus, the prime minister may ultimately become the factor that blocked a war with Iran."Speculation about a possible unilateral Israeli strike on Iranian nuclear facilities reached fever pitch last year, but ultimately came to nothing, amid reports of strong US opposition to any such move.

Why the Hagel Battle Made More Sense for Obama Than the Rice Battle

 

Why did President Barack Obama choose a big battle with Republicans over Chuck Hagel rather than Susan Rice?Obama himself, of course, has not said. He never said that UN Ambassador Rice was his first choice for secretary of state. He also never said that former Nebraska Senator Hagel, now co-chair of the president's Intelligence Advisory Board and member of the Defense Policy Board, was his top pick for secretary of defense before announcing it on Monday.But the question is important enough for speculation because, at least from a superficial standpoint, it's such a striking contrast. Why go to war on behalf of a white male conservative Republican (on most issues outside geopolitics) rather than the black female Democrat who was a loyal campaign surrogate before joining his government?I don't think it's a matter of qualification. Both Hagel and Rice are qualified for Defense and State. Nor is it really a matter of confounding the notion of political loyalty. While Rice jumped from the Clinton circle, in which she was part of a pack of potential appointees, to the Obama circle, where she was able to enter at the top, Hagel made the existential leap in 2008 from dropping his old friend John McCain to lending a bipartisan veneer to Obama's famous campaign world tour, beginning in Iraq and Afghanistan. Even if Obama had come up short against Hillary Clinton, Rice was still a Democrat, close to the ascending young senator. Whereas Hagel was literally a man without a party.But it's not a matter of owing Hagel more than Rice, which in my view Obama does, either. Instead, I think it came down to a question of which battle made the most sense for Obama. In terms of promoting his agenda and, especially, in terms of minimizing risk of damage to his administration and maximizing the ability to create more problems for the Republican Party.With Rice, the advantage on the latter lay in emphasizing how Republicans were demonizing a black woman for a problem, the Benghazi disaster, she herself had nothing to do with causing. (Mischaracterizing being another matter.)But that point had been made. To continue to push it from an identity politics standpoint would have ignored the real risk of harm to the administration in making the debate about the appointment a debate about Benghazi. Yes, Rice, in her now famed Sunday chat show PR offensive five days after the terrorist attack which claimed the lives of Ambassador Chris Stevens and three other Americans on the anniversary of 9/11, followed talking points asserting that the attack was really the result of a protest gone sour. That there was ample information already available, in classified as well as journalistic form, that was wildly wrong  which it was was a problem for Rice going forward. But she could always try claiming that she was just following a script.The bigger problem for the administration, though not Rice herself, who was clearly doing some political spin work on the shows as she buffed up her own internal candidacy to replace Clinton, is that the talking points were altered as they made their way through the bureaucracy. Why turn Senate confirmation hearings on the secretary of state into an exercise in determining how the talking points changed from accurate to inaccurate? Indeed, why dwell on Benghazi at all? While clearly no Watergate, mistakes were made and a tragedy resulted. Not a very uplifting focus. And clearly no one wants to talk about the CIA's role in all this. CIA had a much bigger presence in Benghazi than State, yet was caught just as unawares as anyone else. Which doesn't make them evil, merely fallible.Some on the left say that Susan Rice was an advocate for the Iraq War and all manner of other military interventions in the Islamic world. (There was also grave concern in environmental circles around her multi-million dollar investments in Canadian fossil fuel stocks, including the Keystone XL pipeline, which the State Department is in charge of sorting out.)Columnist Peter Beinart, a shrewd observer of foreign policy elites and the U.S.-Israel relationship, says the reality is more complex, that the real problem with Rice is that she had no discernible position on the invasion of Iraq for reasons of careerism.Hagel we know supported the invasion of Iraq, then broke dramatically with President Bush, his old compadre John McCain, and the rest of his party, becoming a scourging critic of the Iraq War in particular and of the vastly interventionist neoconservative imperative in general. Even before that he had expressed sympathy for the Palestinians and a desire to avoid war with Iran.So a battle for Rice presented a muddy geopolitical contrast and a likely focus that was very antithecal to Obama's interests. Hagel, on the other hand, presents a very different scenario. With the battle over Hagel,Obama gets to take on what many view as the "Forever War" mindset of the neoconservative faction that seized control of the Republican Party's geopolitics with the election of George W. Bush and Dick Cheney. And he gets to do it in a way that emphasizes his own preferred post-partisan positioning. For the neoconservative tendency, resilient as it is despite the debacle of the Iraq War an amnesiac ADD media culture being a prime enabler runs very contrary to major Republican thinking of the not so distant past. Not counting Republican isolationists of the past, internationalist Republicans like Dwight Eisenhower, who famously warned of the "military industrial complex," and the first President Bush saw limits to interventionism, even as they pursued the Cold War. (Eisenhower forced Britain, France, and Israel to give the Suez Canal back to Egypt following their bombing of Cairo and invasion of Egypt in 1956.) That became especially true after the Cold War.Bush I, for example, in the Gulf War, routed Saddam Hussein from his position occupying Kuwait but did not pursue regime change in Iraq, which he could easily have done. He put Saddam back in his box, and kept him there, where he was a useful counterweight to Iran. And while clearly a friend of Israel, the Bush I administration didn't follow everything on the Israeli government checklist. The neoconservative agenda, ever in lockstep with what is already the most right-wing government in Israel's history, has been very different, taking advantage of 9/11 by diligently pursuing regime change in Iraq on spurious grounds, then taking advantage of the resulting edge for Iran, and Iran's suspicious nuclear program, by pushing for war there. How would that work any better than the Iraq War? They don't say. By promoting Hagel, Obama brings all this to the fore. And he does it in a way which emphasizes that Hagel actually has a great many prominent Republican backers and represents an important tradition in Republican thinking prior to the advent of radical conservatism. General Colin Powell, U.S. secretary of state under Bush II and chairman of the Joint Chiefs of Staff under Bush I, who presided over the success of the Gulf War, on Monday afternoon announced his strong support for Hagel, countering the neoconservatives who bedeviled his tenure during the Bush/Cheney years. As did fellow Vietnam vet former Pennsylvania Governor Tom Ridge, U.S. secretary of homeland security under Bush II and a finalist for vice president with John McCain.Hagel, who should be confirmed after a pointed and at times dramatic and entertaining battle, will be the first former enlisted man to serve as defense secretary. He will also be the first Vietnam War veteran to serve as SecDef.With John Kerry at State, the two will form an unprecedented duo of Vietnam War heroes at the top of America's geopolitical cabinet structure. Which is intriguing in itself, as it comes at a time when decreasing numbers in politics and the media have any military experience of their own. This is especially true among Hagel's eagerly interventionist neoconservative opponents, incidentally, as may be pointed out a time or two.Hagel earned two Purple Hearts in Vietnam for his wounds in combat as an infantry sergeant. A favorite of veterans service organizations, Hagel should relate well to rank and file service members as the military downsizes in the post-Iraq/Afghanistan era.It will be his charge to manage the ending of the Afghan War, as well as execute the big geopolitical pivot to the Asia-Pacific region which I write about on a regular basis. ( You can see an archive of my Pivot-related pieces here.)In what is surely not a coincidence, Afghan President Hamid Karzai is on a four-day visit to Washington this week. It's all about the transition away from the Afghan War for the U.S., and potential agreements about a relatively small residual force, almost certainly less than 10,000 troops.But while Hagel is hated by neoconservatives for breaking with them over the Iraq War, the battle lines over his nomination will play out in large measure over his relationship with Israel and his views of Iran and of radicalized Islamic militant organizations pushing for a Palestinian state.Like many of the geopolitical realists around the first President Bush, Hagel sees clear limits on how far America can follow the lead of the Israeli government and its most vociferous allies in the U.S. He's also backed negotiation with Iran and talks with radical Islamic militants.While Obama is in reality a huge supporter of Israel, as just retired Defense Minister Ehud Barak has noted many times, he is clearly no fan of its current government, the most right-wing in Israel's history. And it's a government that is apt to get more right-wing after the January 22 elections there.Israeli Prime Minister Bibi Netanyahu, a longtime conservative who has become more conservative while incorporating far right religious parties in his Likud coalition, is challenged in this election by his charismatic former chief of staff, Naftali Bennett, head of the new Jewish Home party. Bennett, son of two American emigres from, ironically, '60s San Francisco, has seen his support go up dramatically as he pushes far right-wing policies.Netanyahu, who clearly maneuvered during the U.S. presidential elections to help his old friend and business colleague Mitt Romney, looks to enlarge his appeal to coopt that of Bennett, a fellow former special operator in the elite Sayeret Matkal. (Netanyahu may be a warhawk, but you can't say he's a chicken hawk.)On the other side of the inevitable Bill Kristol  has there ever been a cable noise commentator with a poorer forecasting record?  and company in the Hagel confirmation battle is an array of Hagel supporters, including military brass and the new Bipartisan Group, which includes former Republican National Security Advisor Brent Scowcroft, former Democratic National Security Advisor Zbigniew Brzezinski, former Republican Defense Secretary Frank Carlucci, former Republican Undersecretary of State Thomas Pickering, former Democratic Senator David Boren, former Republican Senator Nancy Kassebaum-Baker, and my old friend and boss, former Senator and Democratic presidential frontrunner Gary Hart.There will be plenty to fight about in the coming debate. Hagel has previously urged talks with Hamas, which the U.S. and Israel have identified as a terrorist group, in order to try to make progress on the Palestinian issue. And he has looked decidedly askance at plans to attack Iran in efforts to derail its nuclear program.But when all is said and done, I expect a new focus to emerge from all the tumult. One in which we see the struggle with jihadism as one calling not for massive interventionism in the Islamic world but for carefully calibrated intelligence and special ops war, police action, and shrewd diplomacy to diminish the well of potential recruits.