NEWS,12.11.2012

Brazil Violence: At Least 140 Murdered In Sao Paulo Over Past Two Weeks

 

At least 140 people have been murdered in South America's biggest city over the past two weeks in a rising wave of violence, Sao Paulo's Public Safety Department says.Killings in Sao Paulo began sharply increasing in September, a month in which 144 people were killed, the department's website says. It says a total of 982 homicides took place in the city during the first nine months of the year.The victims included 90 police officers, most of them gunned down while off duty.A Public Safety Department official said Saturday that the killings of police have been ordered by imprisoned leaders of an organized crime group called the First Capital Command in reprisal for a crackdown on the drug trade. The official spoke on condition of anonymity because he was not authorized to speak to the press.The First Capital Command is one of Brazil's most notorious organized crime groups. Based in Sao Paulo state prisons, the group allegedly was behind several waves of attacks on police, government buildings, banks and public buses in 2006. Those assaults and counterattacks by police in the slums killed more than 200 people.With the latest violence, shops and schools in some Sao Paulo districts closed early this past week as rumors of gang-imposed curfews spread. "In view of the wave of violence in the city's south zone, the school's directors decided to send staff and students home early so as to assure their safety," Eliane Valerio de Souza, administrative assistant at a professional training school, told the newspaper Folha de S. Paulo.Sao Paulo state authorities last week said incarcerated leaders of the First Capital Command suspected of using smuggled cellphones to order attacks and coordinate drug sales, murders of rival gang members and the purchase of weapons, would be transferred to a maximum security federal prison outside the state.On Thursday, one of the gang's lower echelon leaders was sent go a federal penitentiary in northern Brazil. Others are expected be transferred by the end of the month.

Greece Racist Attacks Increase Amid Financial Crisis

 

The attack came seemingly out of nowhere. As the 28-year-old Bangladeshi man dug around trash bins one recent afternoon for scrap metal, two women and a man set upon him with a knife. He screamed as he fell. Rushed to the hospital, he was treated for a gash to the back of his thigh.Police are investigating the assault as yet another in a rising wave of extreme-right rage against foreigners as Greece sinks further into economic misery. The details vary, but the cold brutality of each attack is the same: Dark-skinned migrants confronted by thugs, attacked with knives and broken bottles, wooden bats and iron rods.Rights groups warn of an explosion in racist violence over the past year, with a notable surge since national elections in May and June that saw dramatic gains by the far-right Golden Dawn party. The severity of the attacks has increased too, they say. What started as simple fist beatings has now escalated to assaults with metal bars, bats and knives. Another new element: ferocious dogs used to terrorize the victims."Violence is getting wilder and wilder and we still have the same pattern of attacks ... committed by groups of people in quite an organized way," said Kostis Papaioannou, former head of the Greek National Commission for Human Rights.As Greece's financial crisis drags on for a third year, living standards for the average Greek have plummeted. A quarter of the labor force is out of work, with more than 50 percent of young people unemployed. An increasing number of Greeks can't afford basic necessities and healthcare. Robberies and burglaries are never out of the news for long.With Greece a major entry point for hundreds of thousands of illegal migrants seeking a better life in the European Union, foreigners have become a convenient scapegoat.Some victims turn up at clinics run by charities, recounting experiences of near lynching. Others are afraid to give doctors the details of what happened and even more afraid of going to the police. The more seriously hurt end up in hospitals, white bandages around their heads or plaster casts around broken limbs."Every day we see someone who complained of (some form) of racist violence," said Nikitas Kanakis, president of the Greek section of Doctors of the World, which runs a drop-in clinic and pharmacy in central Athens that treats the uninsured.Racist attacks are not officially recorded, so statistics are hard to come by. In an effort to plug that gap and sensitize a population numbed by three years of financial crisis, a group of rights groups and charities banded together to document the violence.They registered 87 cases of racist attacks between January and September, but say the true number runs into the hundreds."Most of the time the victims, they don't want to talk about this, they don't feel safe," Kanakis said. "The fear is present and this is the bigger problem."Frances William, who heads the tiny Tanzanian community of about 250 people, knows the feeling well."People are very, very much afraid," he said, adding that even going next door to buy bread, "I'm not sure I'll be safe to come back home."The community's cultural center was attacked several weeks ago, with amateur video shot from across the street showing a group of muscled men in black T-shirts smashing the entrance. Earlier that day, children standing outside during a birthday party were threatened by a man brandishing a pistol, William said.The recent elections showed a meteoric rise in popularity of the formerly marginalized Golden Dawn, which went from less than half a percent in 2009 elections to nearly 7 percent of the vote and 18 seats in the country's 300-member parliament in June.Campaigning on a promise to "clean up the stench" in Greece, the party whose slogan is "blood, honor, Golden Dawn" has made no secret of its views on migrants: All are in the country illegally and must be deported. Greece's borders must be sealed with landmines and military patrols, and any Greeks employing or renting property to migrants should face punishment.The party vehemently denies it is involved in racist attacks."The only racist attacks that exist in Greece for the last years are the attacks that illegal immigrants are doing against Greeks," said Ilias Panagiotaros, a burly Golden Dawn lawmaker who divides his working time between Parliament and his sports shop, which also sells military and police paraphernalia.His party is carrying out a "very legitimate, political fight . through parliament and through the neighborhoods of Athens and of Greece," he said.The party's tactics handing out food to poor Greeks, pledging to protect those who feel unprotected by the police are working. Recent opinion polls have shown Golden Dawn's support rising to between 9 and 12 percent.In late August, the conservative-led coalition government began addressing the issue of illegal immigration by rounding up migrants. By early November, they had detained more than 48,480 people, arresting 3,672 of them for being in the country illegally.Rights groups also warn that what started as xenophobic attacks is now spreading to include anyone who might disagree with the hard-right view. Greek society must understand that the far-right rise doesn't just concern migrants, said Kanakis."It has to do with all of us," he said. "It's a problem of everyday democracy."

U.S. To Become World's Largest Oil Producer, Exceeding Saudi Arabia, By 2020: International Energy Agency

 

The United States will become the world's largest oil producer by around 2020, temporarily overtaking Saudi Arabia, as new exploration technologies help find more resources, the International Energy Agency forecast on Monday.In its World Energy Outlook, the energy watchdog also predicted that greater oil and natural gas production thanks partly to a boom in shale gas output as well as more efficient use of energy will allow the U.S., which now imports around 20 percent of its energy needs, to become nearly self-sufficient around 2035. That is "a dramatic reversal of the trend seen in most other energy-importing countries," the Paris-based IEA said in its report. "Energy developments in the United States are profound and their effect will be felt well beyond North America and the energy sector."Rebounding U.S. oil and gas production is "steadily changing the role of North America in global energy trade," the IEA said.For example, oil exports out of the Mideast will increasingly go to Asia as the U.S. becomes more self-sufficient. That will increase the global focus on the security of strategic routes that bring Middle East oil to Asian markets. Tensions between Iran and Western powers have raised concerns that oil exports from the Persian Gulf could be blocked in a potential conflict over Tehran's alleged plan to develop nuclear weapons.The IEA added that global trends in the energy markets will be influenced by some countries' retreat from nuclear power, the fast spread of wind and solar technologies and a rise in unconventional gas production.The agency concluded that despite the rising use of low carbon energy sources, huge subsidies will keep fossil fuels "dominant in the global energy mix.""Taking all new developments and policies into account, the world is still failing to put the global energy system onto a more sustainable path," the IEA said.Global energy needs are forecast to increase by a third by 2035, with 60 percent of the additional demand coming from China, India and the Middle East.

NEWS,04.10.2012

Spain central bank undercuts budget as rescue looms

Spain's central bank chief undercut the government's proposed 2013 budget today, saying it was based on over-rosy forecasts for economic growth and tax revenue.Speaking to a parliamentary budget committee, newly-appointed Central Bank Governor Luis Maria Linde delivered a blunt message as Prime Minister Mariano Rajoy weighs when to seek an international bailout."This outlook ... is certainly optimistic in comparison with the outlook shared by the majority of international organisations and analysts," he said.Linde said the government, which has already hiked taxes and cut tens of billions of euros in costs, should consider further steps this year to meet next year's deficit target of 4.5% of gross domestic product agreed with the European Union.Expectations that Rajoy will request a euro zone rescue package before the end of the year lowered Spain's borrowing costs at a Treasury auction on Thursday of 4 billion euros in government bonds.The yield on bonds due in 2014 dropped significantly to 3.282% from 5.204% when it was last sold in July.But market pressure could return if Rajoy drags his feet on seeking a bailout or is held back by German reluctance to put more assistance for Spain to its parliament.The European Central Bank has pledged to support Spain by buying its short-term debt on the open market, but only once Madrid signs up to the conditions attached to European aid."Markets are giving Spain the benefit of the doubt in anticipation of a rescue. Foreign investors need to see some sort of conditional backstop in place before seriously thinking about buying Spanish debt again," said Sassan Ghahramani, head of New York-based hedge fund consultancy SGH Macro.The euro zone is considering aiding Spain by providing insurance for investors who buy government bonds in a move designed to maintain Spanish access to capital markets, shaping a rescue differently than the previous full bailouts of Greece, Ireland and Portugal.The bond gaurantee scheme, which is under consideration and has not been decided yet, would achieve two important aims. Spain would be rescued without draining Europe's entire bailout fund and there would be no contagion to Italy.ECB head Mario Draghi praised Spain's fiscal consolidation and economic reforms but reiterated that countries would have to make a formal application and sign up to strict conditions to benefit from the bank's bond-buying programme.Central banker warns A rescue looks increasingly on the cards, as a prolonged recession complicates efforts to cut government spending.Tens of thousands of protesters gathered near parliament in Madrid on three nights last week, demonstrating against the austerity measures and demanding changes in government.Anger over costly rescue plans for banks has increased with one in four workers jobless. The shrinking economy has eaten into tax revenue and also pushed up unemployment benefit costs.Much of the savings from aggressive cost-cutting have gone to servicing debt due to high borrowing costs.Linde said most independent forecasters expect a 1.5% economic contraction in Spain next year, rather than the 0.5% fall on which the government based its calculations.Rajoy sent a tough budget to parliament on Saturday with 13 billion euros in savings from spending cuts and tax increases.The budget included a 1% increase in state pensions next year but Rajoy has not yet said whether he will maintain an inflation-pegged rise in pension payments as well.Linde said an inflation adjustment to pensions would be so costly as to endanger budget execution.The government is also taking on additional debt - some of it from European rescue funds - to bail out troubled banks and cash-strapped regional governments.The central bank chief also urged ministers to make a prudent forecast for revenue next year, saying the tax-take outlook in the 2013 budget was subject to downside risks.Fitch ratings agency also flagged the budget as unrealistic but said it would not downgrade Spanish bonds to junk status if the country sought a bailout and unlocked ECB bond-buying."Some of the assumptions certainly are optimistic in terms of the Spanish budget, nonetheless we do think that they're putting in place a programme which is consistent with giving support. And we'll give some tine to see how that will evolve," Fitch's head of sovereign ratings David Riley said in an interview with Reuters on Thursday.Fellow credit watchdog Moody's is due to decide this month whether to downgrade Spain's sovereign rating to junk.The yield on Spain's benchmark 10-year bond traded slightly higher on Thursday at 5.8% . In July, before Draghi announced the ECB's bond-buying programme, the Spanish 10-year yield spiked above 7%, a level seen as unsustainable.

Russia dismisses talk of new spy scandal with US

Russia said today that the Kremlin had nothing to do with a network alleged by the United States to be smuggling military technology to Moscow.The US Justice Department said on Wednesday it had broken up an elaborate network aimed at illegally acquiring US-made microelectronic components for Russian military and spy agencies.It charged 11 people with taking part.The Russian Foreign Ministry expressed surprise at the allegations."The charges are of a criminal nature and have nothing to do with intelligence activity," Deputy Foreign Minister Sergei Ryabkov told Russian news agencies.The situation had caused deep concern in Russia, whose relations with its former Cold War enemy are difficult despite President Barack Obama's call for a new start.Authorities were questioning the Russian nationals who were among the accused, Ryabkov said.Foreign Ministry spokesman Alexander Lukashevich said Washington had informed Moscow that the charges were criminal and unrelated to espionage."We will look into this situation and what really happened, and what charges are being imposed on our citizens," he said.US authorities had "not properly informed" Russia of the arrest of its citizens and Russian diplomats were seeking access to them, he added. A consul had met one in a courtroom, he said.Foreign Minister Sergei Lavrov said in an interview this week that Moscow and Washington must do more to strengthen relations because the "reset" called for by Obama could not last forever.Republican candidate Mitt Romney has accused Obama of being soft on Moscow during his four-year term and described Russia as the United States' "number one geopolitical foe".In a case in 2010 that harked back to the Cold War, the United States arrested 10 suspected Russian agents who were later sent back to Russia in the biggest spy swap since the Soviet era.Security experts puzzled The US Justice Department said 11 people, and companies based in Houston, Texas and Moscow, had been accused on Wednesday of illegally exporting high-tech components to Russian security agencies.The US companies from whom the components were bought were not identified.A US official said Alexander Fishenko, a Kazakhstan native who immigrated to the United States in 1994 and has frequently travelled to Russia, had been charged with operating in the United States as an unregistered agent of the Russian government.He was being held in custody with seven others in Houston.The Justice Department said the three others were in Russia including Sergei Klinov, identified as CEO of Apex System, which it said served as a certified supplier of military equipment to Russia's government, working through subsidiaries.Klinov, reached by telephone in his office in Moscow, said he had learned about the accusations from media reports."Honestly, I am very upset. I just don't know what to say. Everyone has his own truth and it is somewhere in the middle,".Asked whether he worked either for the security services or for the Defence Ministry, he said: "I am floored by this. I don't know what I'm supposed to say."Russia's Federal Security Service, successor of the KGB, and the Defence Ministry denied immediate comment.Another person facing accusations was named as Yuri Savin and described as the marketing director of Russia-based company Atrilor. The company denied having an employee of that name.Asked about the allegations, a Russian security expert said such practices has not been unusual in Soviet times.

US: Secret chemical tests raise concerns

Doris Spates was a baby when her father died inexplicably in 1955. She has watched four siblings die of cancer, and she survived cervical cancer.After learning that the US army conducted secret chemical testing in her impoverished St Louis neighbourhood at the height of the Cold War, she wonders if her own government is to blame.In the mid-1950s, and again a decade later, the army used motorised blowers atop a low-income housing high-rise, at schools and from the backs of vehicles to send a potentially dangerous compound into the already-hazy air in predominantly black areas of St Louis.Local officials were told at the time that the government was testing a smoke screen that could shield St Louis from aerial observation in case the Russians attacked.But in 1994, the government said the tests were part of a biological weapons programme and St Louis was chosen because it bore some resemblance to Russian cities that the US might attack. The material being sprayed was zinc cadmium sulfide, a fine fluorescent powder.Now, new research is raising greater concern about the implications of those tests. St Louis Community College-Meramec sociology professor Lisa Martino-Taylor's research has raised the possibility that the army performed radiation testing by mixing radioactive particles with the zinc cadmium sulfide, though she concedes there is no direct proof.But her report, released late last month, was troubling enough that both US senators from Missouri wrote to army Secretary John McHugh demanding answers.Aides to Senators Claire McCaskill and Roy Blunt said they have received no response. Army spokesperson Dave Foster declined an interview request from The Associated Press, saying the army would first respond to the senators.The area of the secret testing is described by the army in documents obtained by Martino-Taylor through a Freedom of Information Act request as "a densely populated slum district". About three-quarters of the residents were black.Spates, now 57 and retired, was born in 1955, delivered inside her family's apartment on the top floor of the since-demolished Pruitt-Igoe housing development in north St Louis. Her family didn't know that on the roof, the army was intentionally spewing hundreds of pounds of zinc cadmium sulfide into the air.Three months after her birth, her father died. Four of her 11 siblings succumbed to cancer at relatively young ages."I'm wondering if it got into our system," Spates said. "When I heard about the testing, I thought, 'Oh my God. If they did that, there's no telling what else they're hiding.'"Mary Helen Brindell wonders, too. Now 68, her family lived in a working-class mixed-race neighbourhood where spraying occurred.The army has admitted only to using blowers to spread the chemical, but Brindell recalled a summer day playing baseball with other kids in the street when a squadron of green army planes flew close to the ground and dropped a powdery substance. She went inside, washed it off her face and arms, then went back out to play.Over the years, Brindell has battled four types of cancer - breast, thyroid, skin and uterine."I feel betrayed," said Brindell, who is white. "How could they do this? We pointed our fingers during the Holocaust, and we do something like this?"Martino-Taylor said she wasn't aware of any lawsuits filed by anyone affected by the military tests. She also said there have been no payouts "or even an apology" from the government to those affected.The secret testing in St Louis was exposed to Congress in 1994, prompting a demand for a health study. A committee of the National Research Council determined in 1997 that the testing did not expose residents to harmful levels of the chemical. But the committee said research was sparse and the finding relied on limited data from animal testing.It also noted that high doses of cadmium over long periods of exposure could cause bone and kidney problems and lung cancer. The committee recommended that the army conduct follow-up studies "to determine whether inhaled zinc cadmium sulfide breaks down into toxic cadmium compounds, which can be absorbed into the blood to produce toxicity in the lungs and other organs".But it isn't clear if follow-up studies were ever performed. Martino-Taylor said she has gotten no answer from the army and her research has turned up no additional studies. Foster, the army spokesperson, declined comment.Martino-Taylor became involved years ago when a colleague who grew up in the targeted area wondered if the testing was the cause of her cancer. That same day, a second colleague confided to Martino-Taylor that she, too, lived in the test area and had cancer.Martino-Taylor decided to research the testing for her doctoral thesis at the University of Missouri. She believes the St Louis study was linked to the Manhattan Atomic Bomb Project and a small group of scientists from that project who were developing radiological weapons. A congressional study in 1993 confirmed radiological testing in Tennessee and parts of the West during the Cold War."There are strong lines of evidence that there was a radiological component to the St Louis study," Martino-Taylor said.Blunt, in his letter to the army secretary, questioned whether radioactive testing was performed."The idea that thousands of Missourians were unwillingly exposed to harmful materials in order to determine their health effects is absolutely shocking," the senator wrote.McCaskill agreed. "Given the nature of these experiments, it's not surprising that Missouri citizens still have questions and concerns about what exactly occurred and if there may have been any negative health effects," she said in a statement.Martino-Taylor said a follow-up health study should be performed in St Louis, but it must involve direct input from people who lived in the targeted areas."Their voices have not been heard," Martino-Taylor said.

NEWS,26.909.2012

Clashes erupt as thousands of Greeks protest austerity

Greek police clashed with hooded rioters hurling petrol bombs as tens of thousands took to the streets of Athens on Wednesday in Greece's biggest anti-austerity protest in more than a year.Violence erupted after nearly 70,000 people marched to parliament chanting "We won't submit to the troika (of lenders)" and "EU, IMF Out!" on the day of a general strike against a new round of cuts demanded by foreign lenders.As the rally ended, dozens of black-clad youths threw stones, petrol bombs and bottles at riot police, who responded with several rounds of teargas. Police chased the protesters through Syntagma square in front of parliament as helicopters clattered overhead. Smoke rose from small blazes in the streets.About 120 people were detained after angry protesters smashed bus stop kiosks and set fire to garbage cans."We can't take it anymore - we are bleeding. We can't raise our children like this," said Dina Kokou, a 54-year-old teacher and mother of four who lives on 1,000 euros a month."These tax hikes and wage cuts are killing us."The 24-hour nationwide strike, called by the country's two biggest unions representing half the four-million-strong work force, is shaping up to be the first test of whether Prime Minister Antonis Samaras can stand his ground.Police officials estimated the demonstration was the largest since a May 2011 protest, and among the biggest since near-bankrupt Greece first resorted to aid from international lenders in 2010 - which has come at the price of painful austerity cuts.The traditional summer break has allowed the fragile conservative-led coalition to enjoy relative calm on the streets since narrowly coming to power on a pro-euro, pro-bailout platform, but unions say the lull is over."Yesterday the Spaniards took to the streets, today it's us, tomorrow the Italians and the day after - all the people of Europe," Yiorgos Harisis, a unionist from the ADEDY p u blic sector group told demonstrators."With this strike we are sending a strong message to the government and the troika that the measures will not pass even if voted in parliament, because the government's days are numbered."About 3000 police - twice the number usually deployed - stood guard in the centre of Athens, which last saw serious violence in February when protesters set shops and banks ablaze as parliament approved an austerity bill.Police formed a barricade outside parliament, and officers blocked a pensioner who tried to move towards Samaras's office holding a banner with pictures of Greek prime ministers under the title: "The biggest traitors in Greek history".Ships stayed docked, museums and monuments were shut to visitors and air traffic controllers walked off the job for a three-hour stoppage. Train service and flights were suspended, public offices and shops were shut, and hospitals worked on skeletal staff as part of the general strike."Destroying our lives" Much of the union anger is directed at spending cuts worth nearly 12 billion euros over the next two years that Greece has promised the European Union and International Monetary Fund in an effort to secure its next tranche of aid.The bulk of those cuts is expected from cutting wages, pensions and welfare benefits, heaping a new wave of misery on Greeks who say repeated rounds of austerity have pushed them to the brink and failed to transform the country for the better."We can't just sit by idly and do nothing while the troika and the government destroy our lives," said Dimitra Kontouli, a 49-year-old local government employee whose salary was cut to 1100 euros a month from 1600 euros previously."My husband has lost his job, we just can't make ends meet."A survey by the MRB polling agency last week showed that more than 90% of Greeks believe the planned cuts are unfair and burden the poor, with the vast majority expecting more austerity in coming years.Unions argue that Greece should remain in the euro but default on part of its debt and ditch the current recipe of austerity cuts in favour of higher taxes on the rich and efforts to nab wealthy tax evaders.But with Greece facing certain bankruptcy and a potential euro zone exit without further aid, Samaras's government has little choice but to push through the measures, which have also exposed fissures in his coalition.With Greece in its fifth year of recession and nearly one out of four jobless, analysts say patience is wearing thin and a strong public backlash could tear apart the weak government."What people want to tell Samaras is that they are hurt and Samaras could use this to demand concessions from the troika," MRB polling director Dimitris Mavros said."The people are willing to give the government time, but on certain conditions like cracking down on tax evasion and securing a bailout extension. If the government succeeds in that, its life will also be extended."

Greek protests cast shadow over the euro

Protests in Spain and Greece put the European sovereign debt crisis centre stage, renewing investors' worries about the risk the euro zone's problems pose to global growth and corporate profits.Those concerns are underpinning demand for fixed-income securities including US Treasuries, and helped fuel appetite for today's auction of US$35 billion of five-year bonds. "It was a good auction," Charles Comiskey, head of Treasury trading at Bank of Nova Scotia in New York, which as a primary dealer is obliged to bid in US debt offerings, told Bloomberg News. "It is suggesting more and more fear - that things could spiral out of control in Europe. The demand for dollars and Treasuries continues to rise."All eyes are on Spain, which is scheduled to announce its budget tomorrow. And on Friday, Moody's will publish its latest review of the nation's credit rating. In contrast to rising demand for US government bonds, the yield on Spain's 10-year bond surged more than 30 basis points back through the 6% mark.Figures released on Tuesday suggested Spain will miss its public deficit target of 6.3% of gross domestic product this year, and on Wednesday the Bank of Spain said the economy continued to shrink markedly in the third quarter, according to Reuters.Spain's prime minister, Mariano Rajoy, has so far resisted the calls to ask for an EU financial bailout but may not be able to hold out much longer. In a speech in New York earlier today, Rajoy said all Spaniards were going to have to make sacrifices.Europe's Stoxx 600 Index ended the session with a 1.8% slide. National benchmark indexes in Germany, France and the UK dropped. So did Spain's IBEX 35 Index, closing 3.9% lower. In late afternoon trading in New York, the Dow Jones Industrial Average shed 0.16%, the Standard & Poor's 500 declined 0.38%, while the Nasdaq Composite Index fell 0.62%. Meanwhile, the latest indicator on the US housing market continued to underwrite the view that at least this part of the economy is gaining forward momentum.Sales of new homes eased 0.3% to a 373,000 annual pace in August after a revised 374,000 rate in July that was better than previously estimated and the strongest since April 2010, according to Commerce Department data. And the average price of a home in the US has now risen to its highest since March 2007."There are increased signs that the housing recovery is now on a more sustainable path, though its impact on overall economic activity will remain relatively modest at best over the near-term.

Spain unveils austerity budget

Squeezed by financial markets and denounced in the streets, Spain's government will adopt on Thursday a 2013 austerity budget which could be a precursor to a full-blown bailout.The final step before a rescue is likely to come a day later, analysts say, when Madrid unveils an independent audit of its limping banks to determine how much capital they need.Spain's eurozone partners have agreed to provide a rescue loan of up to €100bn to help the banks recover from bad loans built up after a 2008 property crash.But Madrid insists €60bn will be enough.Once that matter is dealt with, the eurozone's fourth-largest economy will have all the data it requires to seek a broader, sovereign rescue from the eurzone's bailout funds.If Spain bends to the will of the markets and some of its eurozone partners by formally requesting the bailout, it would trigger a bond-buying programme for troubled states outlined by the European Central Bank on September 6.That would have the effect of curbing Spain's borrowing costs.Before making the leap, however, Prime Minister Mariano Rajoy wants to know what the conditions would be.The conservative leader likely wanted to make progress on the budget for next year, also, before making the request.The basic outline for the budget has been known since July: the plan to be adopted by the cabinet on Thursday is expected to enact spending cuts and tax increases worth a combined €39bn.The government aims to claw back a total of more than €150bn between 2012 and 2014: €62bn this year, €39bn next year and €50bn in 2014.On the austerity menu for 2013: an increase in sales tax and other taxes is expected to rake in €15bn and nearly seven billion euros will be found from cuts in the regions, which manage health and education.Other savings come from lowering unemployment benefits and social assistance, as well as a freeze in public sector hiring.But Spain will probably have to go further, said Juan Ignacio Conde Ruiz, deputy director of the Foundation of Applied Economic Studies (FEDEA)."To be credible with the markets, which is the government's ultimate goal, it would seem hard to avoid touching retirement pensions, which account for 25 percent of total spending," he said.Rajoy's election campaign promise to maintain pensions by inflation would cost €3bn - €3.5bn, Conde Ruiz said."There won't be the means to do it"That, he said, would make it impossible for Spain to meet its commitment to slash the public deficit to 6.3% of gross domestic product this year from a runaway 8.9% last year."There won't be the means to do it," added Jesus Castillo, southern European specialist at French bank Natixis. "So we should not be surprised by a freeze in pensions," he said, or even a cut so as to stay on track with the 2013 target of a deficit equal to 4.5%.Despite the analysts' doubts, Spain's Popular Party government insists pensions are going up, not down, as it faces growing protests to the austerity measures including hundreds taking to Madrid's streets Tuesday.Deputy Prime Minister Soraya Saenz de Santamaria said the new level for pensions would be decided in November."Will pensions go up? Yes, pensions are going to go up. Pensions will obviously be adjusted for the cost of living," she said.At the Spanish investment bank Inversis, analysts predict the public deficit forecasts will be revised higher for 2012 and 2013 in line with a deeper than expected recession.On Thursday, a new package of reforms negotiated with Brussels to stimulate business activity and exports also will be announced, "which could be the stage prior to a bailout request", said a report by Spanish brokerage Renta4.If Spain fails to take convincing action, the verdict could come quickly.Moody's Investors Service has until Sunday to decide whether to downgrade Spain's debt after a review. If it does so, it could be the first agency to rate the nation's debt at the equivalent of a junk bond.Spain's hesitation before seeking a rescue could be "highly risky", European Competition Commissioner Joaquin Almunia warned on Monday in an interview with AFP.The country's budget and economic reform announcements on Thursday are aimed at addressing just those concerns, said Conde Ruiz."The idea is to anticipate the conditions the aid would impose, and thus to introduce them now in the budget," he said, adding that this would ease the political sting.

NEWS,16.09.2012

JPMorgan, Bank Of America Probed Over Money-Laundering Allegations: New York Times

Regulators are investigating whether several major U.S. banks failed to monitor transactions properly, allowing criminals to launder money, according to a New York Times story. The newspaper cited officials who it said spoke on the condition of anonymity.The Office of the Comptroller of the Currency, the federal agency that oversees the biggest banks, is leading the money-laundering investigation, according to the Times. The report said the OCC could soon take action against JPMorgan Chase & Co., and that it is also investigating Bank of America Corp. Money laundering allows people to make money often obtained illegally appear like it came from another source.The OCC, JPMorgan and Bank of America declined to comment.The financial industry is struggling to mend its public image. Four years after the financial crisis, banks are getting closer scrutiny. And regulators are under pressure to show that they're not missing any questionable activity.This summer, British bank Barclays PLC settled charges that it had manipulated a key global interest rate. Standard Chartered PLC, also based in the U.K., agreed to settle charges that it had improperly processed money for Iran, brought by the New York Department of Financial Services after the bank voluntarily informed regulators that it was reviewing relevant practices. In the spring, JPMorgan surprised shareholders with an unexpected trading loss.If the OCC takes action, it could be similar to a cease-and-desist order that it filed against Citigroup in April. At the time, the OCC said that Citi had deficient internal controls and anti-money laundering procedures. In bank regulation, a cease-and-desist order doesn't mean that a bank has to shut down, but it is a serious sanction that requires a bank to change its practices. Citi had already told the regulator that from 2006 to 2010, it had "failed to adequately monitor" some of its transactions connected to "foreign correspondent banking."The order in April didn't make any new, specific accusations. But it did instruct Citigroup to tighten its rules so it could improve compliance with the Bank Secrecy Act and related regulations. The act requires financial institutions to report suspicious activity and to put rules in place to try to make money laundering impossible for customers.Last year, JPMorgan paid $88 million to settle charges from the Treasury that it had unlawfully processed money for Cuba, Iran, Sudan and Liberia.At the time, JPMorgan said it had had no intent to violate regulations. It pointed out that it oversaw "hundreds of millions of transactions and customer records per day, and annual error rates are a tiny fraction of a percent."It's not expected that banks would be accused of trying to show support for countries like Cuba and Iran. It's more likely that they would be accused of faulty oversight that made any unlawful transactions possible. The industry has maintained that such violations are almost always unintentional.According to the Times, the Justice Department and the Manhattan district attorney's office are also involved. The Manhattan U.S. attorney's office and the Manhattan district attorney's office declined to comment.

 

Iran's Nuclear Timeline

 

Iran is nuclear capable. If Iran's leaders decided they wanted a nuclear bomb, they could build one. They have the material, the technical ability, and likely have a design. They have had these capabilities for at least five years, when they accumulated enough raw material that could be converted into the core of a bomb.But Iran does not have a bomb now. U.S. intelligence officials have high confidence that Iranian leaders have not made the decision to build a bomb. There is much confusion  some of it intentionally spread about how long it would take Iran to build a weapon.An outstanding team of seasoned national security experts has just published a clear, detailed explanation of Iran's nuclear timeline. The report of the Iran Project was endorsed by 34 security leaders, including Brent Scowcroft, Sam Nunn, Gen. Tony Zinni, Adm. James Fallon, Gen. Frank Kearney, Carla Hills, Anne Marie Slaughter, Chuck Hagel, Adm. Joe Sestak, Jessica Mathews, Zbigniew Brezinski, Nicholas Burns and this author.Here is an excerpt from the report (on p. 22) that provides a sound basis for debating what actions should be taken to convince Iran not to build nuclear weapons. This report is intentionally conservative. There may be serious technical problems that make the timeline much longer. I have highlighted in bold key phrases.While there are differences of opinion on this issue, we believe it would be extremely difficult for Iran to hide a nuclear program devoted to weapons development. No monitoring and detection system is failure-proof, but Iran has little reason to be confident that it could get away with creating a secret program to produce fissile material for a weapon.Were Iran to attempt to produce a single bomb's worth of highly enriched uranium (HEU), it would take at least one month (although some experts believe the timeline could be as long as four months or more). It is important to note that while the ability to build a single bomb is a somewhat useful theoretical construct, it has little or no correspondence to how nuclear weapons programs function in the real world.Historically, no country in the nuclear age has sought as its goal to build one nuclear weapon; nor has any country adopted a strategy of building one weapon knowing that as a consequence, its program would be exposed. The timeline for producing a single bomb's worth of HEU is subject to change, depending on the number and type of operational centrifuges available as well as the size of Iran's stockpile of already enriched uranium, particularly 20% enriched uranium. Conservatively, it would take Iran a year or more to build a military-grade weapon, with at least two years or more required to create a nuclear warhead that would be reliably deliverable by a missile.In short, it is likely that the United States would receive some warning and have at least a month to make a decision on action -- military or other. Understanding the difference between the one-month timeline of producing sufficient fissile material in order to produce a weapon, and the two-year timeline of creating a nuclear warhead, is critical when considering the likely success of military action.After a month, the weapons-grade uranium (WGU) could be reduced significantly in size (25 kilograms); if properly encased, it could be easily hidden and would be highly mobile. This would be a very hard target to detect and destroy. While it would take some additional time for Iran to translate the WGU into a meaningful military capability, the ability for the United States or others to launch preventive military strikes would be reduced. In contrast, the facility used to enrich the WGU is immobile and large and therefore an easier and somewhat vulnerable target (unless deeply buried)....The more apparent the decision to make a weapon, the more persuasive the justification for military action would be to the international community, including the United Nations Security Council. While Israel's more limited military capabilities and earlier "red line" create a closing window of opportunity to take military action, the U.S. could afford to wait for its red line to be crossed Iran undertaking a dedicated weapons program before deciding whether to take preventive military action....Given the deepening mutual distrust between the U.S. and Iran; congressional sympathy for Israel's perspective on a nuclear-capable Iran; and the conviction among some parties that Iran has already secretly decided to build a nuclear weapon, we believe the most likely military scenario is one in which preemptive, unilateral action against Iran is initiated by the U.S. and/or Israel, under conditions of some uncertainty about Iran's real intentions.