NEWS,05.06.2013

Netanyahu ready to consider peace plan

Prime Minister Benjamin Netanyahu signalled readiness on Wednesday to consider a 2002 Arab peace plan whose terms were recently softened to include possible land swaps between Israel and the Palestinians.
"We are listening to every initiative the Arab initiative has been mentioned and we are prepared to discuss initiatives that are proposals and not edicts," he said in a speech in parliament.
Netanyahu spoke during a debate on the plan, proposed at an Arab League summit 11 years ago. Israel had rejected the initiative that offered normalised ties for it with much of the Arab world, citing its call for complete withdrawal from land captured in the 1967 Middle East war as a main stumbling block.
Israel occupied the West Bank, Arab East Jerusalem and the Gaza Strip, areas Palestinians seeks for a future state, in that conflict.
Echoing previous Israeli leaders, Netanyahu has ruled out a return to pre-1967 war frontiers, calling them indefensible.
But a month ago, Arab states appeared to soften the 2002 plan when Sheikh Hamad bin Jassim al-Thani, Qatar's prime minister and foreign minister, said Israel and the Palestinians could trade land rather than conform exactly to the 1967 lines.
Netanyahu, who heads the right-wing Likud party, has never endorsed the idea of territorial exchange publicly. A 2009 US diplomatic cable released by Wikileaks in 2010 said he expressed support for the concept in a meeting with US legislators.
In his address to the legislature, Netanyahu repeated a call to Palestinian President Mahmoud Abbas to return unconditionally to peace talks that collapsed in 2010 over continued Israeli settlement building on occupied land.
Abbas has said Israel must first stop settlement construction in the West Bank and East Jerusalem before the U.S.-hosted negotiations can resume.
"Since he (Abbas) doesn't speak Hebrew, and my Arabic is not great, I am calling on him in a language we both know and saying to him, 'Give peace a chance', Netanyahu said, switching to English to utter the phrase.
"Don't miss the opportunity," he added, saying he was prepared to make "difficult decisions to move negotiations ahead" but cautioning he would take no moves that would jeopardise Israeli security.
Abbas said on Tuesday "the ball is in the Israeli court" and Israel needed to accept the Palestinians' demand for a settlement freeze so that talks could begin.
US Secretary of State John Kerry has been trying to restart the negotiations. He has made four trips to the region since taking office four months ago and a State Department spokeswoman said on Tuesday he could return to Israel and the Palestinian territories as early as next week.

Rice to be Obama's security advisor

President Barack Obama will name UN ambassador Susan Rice as his new national security advisor Wednesday, months after her hopes of becoming the top US diplomat were scuppered by the Benghazi affair.
Rice will take over from Obama's current national security advisor Tom Donilon in July, in a shake-up of his foreign policy team that will see former aide and genocide expert Samantha Power take the top United Nations job.
The move marks a swift turnaround in fortunes for Rice, 48, who pulled out of consideration to be Obama's second term secretary of state, a victim of the controversy over the attack on the US mission in Benghazi, Libya.
"The President will announce that after more than four years at the National Security Council, Tom Donilon will be departing as National Security Advisor in early July and will be succeeded by Ambassador Susan Rice," a US official said.
The official said that Obama would also use the ceremony to name Power, a former foreign policy aide, genocide expert and Pulitzer prize-winning author, to replace Rice as US ambassador to the United Nations, the official said.
Donilon has been at Obama's side since he entered the White House in 2009, and took over from the president's first national security advisor, retired general James Jones, in 2010.
He was at the center of the decision to pull US troops out of Iraq, to withdraw combat troops from Afghanistan by the end of next year and the killing of Al-Qaeda chief Osama bin Laden in Pakistan.
Donilon has also been a key figure in China policy, masterminding Obama's diplomatic 'pivot' to Asia, and recently traveled to Beijing to prepare for the visit of Chinese President Xi Jinping to California for talks with Obama later in the week.
His retirement has long been expected this year.
Donilon has kept a low public profile as national security advisor but has been a dominant force in the Obama administration. He is known for scrupulous preparation, driving staff hard and as an expert bureaucratic player.
He is also liked and respected by many colleagues, despite a recent profile on the Foreign Policy website which aired criticism of his personal style.
Rice, who served as an assistant secretary of state for Africa in the Clinton administration, has long been one of Obama's closest foreign policy aides, dating back to his 2008 campaign.
She was widely expected to be named secretary of state to follow the departing Hillary Clinton.
But she was accused by Republicans of deliberately misleading Americans over the origins of the attack on the Benghazi mission on September 11 last year, which killed four Americans including the ambassador.
However, recently released email traffic between top administration officials shows she had no role in crafting the talking points on the attack which she used on Sunday television talk shows to argue that the assault was part of a spontaneous anti-US protest rather than a planned terrorist attack.
At the time, Obama angrily rejected "outrageous" Republican attacks on Rice, saying she had done "exemplary work" at the UN, showing "skill and professionalism and toughness and grace."
Rice's removal from the race to be secretary of state opened the door for former senator John Kerry to take over a post he has long coveted.
She won plaudits in the White House for her work at the United Nations, lining up tough sanctions on Iran over its nuclear program.
She is known for a robust personal style and reputedly has sharp elbows, but she will derive considerable power from her status as one of Obama's original inner circle of foreign policy advisors.
Rice does not need to obtain Senate confirmation to serve as national security advisor, the president's closest foreign policy aide, so any residual opposition from Republicans will not be a problem for her.
Power, 42, formerly served Obama as a special assistant focusing on multilateral affairs and human rights. Before entering government, she won a Pulitzer Prize for a book focusing on American foreign policy and genocide.
The job of US ambassador to the United Nations will remain a cabinet position, a US official said.

New Pakistan PM vows to improve economy

As he stepped into the prime minister's job for the third time Wednesday, Nawaz Sharif vowed to improve Pakistan's limping economy and end American drone strikes. It was a nod to the voters who elected a man viewed as a pro-business conservative to tackle problems including a fiscal meltdown, power outages, and spillover from the war in neighboring Afghanistan.
His success in an office he was forced out of by a military coup in 1999 will hinge on how quickly he can address Pakistanis' most basic needs such as electricity and jobs, but many analysts believe his strong mandate at least gives him a fighting chance at success.
Sharif was elected by parliament Wednesday after his party won the 11 May nationwide elections. He was sworn in hours later by Pakistani President Asif Ali Zardari.
The country of 180 million people that Sharif must now lead is weighed down with a host of problems: unemployment, electricity blackouts, inflation, corruption and militancy. In a speech long on rhetoric but short on specifics, Sharif vowed to address the country's myriad of problems.
"I will do my best to change the fate of the people and Pakistan," he said.
Sharif is the first Pakistani leader to serve three terms. He was elected prime minister in 1990 and then again in 1997, thrown out of office in 1999 by a military coup, spent nearly eight years in exile, and then five years in opposition before returning to power.
During the campaign, he sometimes lashed out at the US and its policy of using unmanned aerial vehicles to kill militants in the tribal areas of Pakistan. Speaking to parliament after being elected, he once again called for an end to the drone policy.
"This daily routine of drone attacks, this chapter shall now be closed," Sharif said to widespread applause. "We do respect others' sovereignty. It is mandatory on others that they respect our sovereignty."
But he gave few details on how he might end the strikes. Many in Pakistan say the strikes kill large numbers of innocent civilians, something the US denies, and end up breeding more extremism by those seeking retribution with the US
The US considers the drone program vital to battling militants such as al-Qaeda, who use the tribal areas of Pakistan as a safe haven.
Many analysts say such anti-American sentiment may mellow or take a backseat to more pressing economic concerns in Sharif's administration. Pakistan will require American support for the likely economic bailout it will need from the International Monetary Fund, and the two sides both have an interest in finding a peaceful solution to the war in neighboring Afghanistan.
Sharif has also said that he would like good relations with the US and in his speech noted the need to pay attention to the concerns of "other countries."
But for most Pakistanis the drones are secondary to the issues that will define Sharif's tenure in office: the economy and electricity.
Over the last five years of the previous administration, power outages, some as long as 20 hours, have plagued the country. People suffer through sweltering summers, and in recent years gas shortages in the winter have left people unable to heat their houses.
Companies struggle to find a way to run businesses without a reliable source of electricity.
Sharif and his team of advisors have been meeting continuously with officials from the country's power-related industries and interim government officials from affected ministries to map out a strategy.
The new prime minister listed a litany of problems facing Pakistan during his speech, including unpaid loans, unemployment, a disillusioned youth, extremism and lawlessness, and widespread corruption.
Pakistani voters will be watching closely to see what he does to solve those problems.
Outside the parliament, Mohammed Aslam, who came from Sharif's hometown of Lahore to the capital for the ceremony, said he voted for Sharif because he promised to solve the electricity crisis. But he warned that Pakistanis will not tolerate bad governance for another five years.
"If he fails, he will go home next year," he said.
One thing going in Sharif's favor is his strong mandate. The previous Pakistan People's Party government kept their fragile coalition together for five years but had to constantly make concessions to smaller partners.
Sharif's party has a 176-seat majority in the 342-member house and a strong platform from which to address the country's economic problems. Sharif, who comes from a Pakistani business family that made its wealth in the steel industry, has widespread business support.
"I do actually see a lot of resolve. They have a very strong mandate," said Werner Liepach, Pakistan country head for the Asian Development Bank.
Sharif made little mention of the militant attacks and the fighting in Pakistan's tribal areas that have killed thousands of civilians and security forces. He has been accused of failing to go after extremist groups accused of sectarian violence that have a fairly open presence in Punjab province, despite the fact that Sharif's PML-N has controlled the province and its police for the last five years.
Sharif noted the historic nature of Wednesday's ceremony. His assumption of office marks the first time a democratically elected government has handed over power to another in the country's 65-year history.
"Now it should be decided forever that Pakistan's survival, protection, sovereignty, progress, prosperity and respect in the international community depends upon strengthening democracy in Pakistan," he said.

NEWS,29.4.2013

Japan PM to meet Putin, a first in 10yrs

Japanese Prime Minister Shinzo Abe was to meet Russian President Vladimir Putin in Moscow on Monday for the first such top-level visit in a decade that aims to break years of stalemate in a territorial dispute dating from World War II.

The failure of the two sides since the 1950s to agree a peace treaty owing to the dispute over ownership of the Pacific Kuril islands chain has held up full potential of bilateral ties.

However since returning to power in December, Abe has made a priority of improving relations with Russia. Before leaving Tokyo, he reaffirmed his desire to restart stalled talks over the dispute.

"I would like to build a trusted personal relationship with President Putin," Abe told reporters in Tokyo ahead of his departure for the three-day trip.

"I will work on boosting Japan-Russia relations so that this visit will mark a restart in stalled negotiations over a peace treaty," Abe said.

Abe and Putin were expected to release a joint statement confirming they would restart territorial talks, a Japanese government source told Kyodo News.

Biggest delegation ever

Abe and Putin are due to hold one-on-one talks at the Kremlin, followed by meetings involving business delegations from both sides. They were then to give a joint news conference.

The last such top-level official visit was by then Japanese Prime Minister Junichiro Koizumi, who travelled to Moscow to meet Putin in January 2003.

Former prime ministers Yasuo Fukada and Taro Aso visited in 2008 and 2009 for shorter, lower-level trips.

Abe's visit is also taking place after an intriguing trip to Moscow in February by Abe's close ally, the former Prime Minister Yoshiro Mori, who delivered a message from the new premier to Putin.

Abe is being accompanied by a business delegation of 120 people, the biggest ever such group to join a Japanese prime minister on a visit to Russia.

Japan is particularly interested in increasing its import of Russian energy resources as it seeks to diversify supplies in the wake of the Fukushima nuclear disaster

'Unforgivable outrage'

Russia's trade with Japan reached $32bn in 2012. But Russia, despite its size and proximity, was only Japan's 15th most important trading partner, in a sign of the unrealised potential of relations.

The dispute surrounds the southernmost four of the Kuril islands - known in Japan as the Northern Territories - which have been controlled by Moscow since they were seized by Soviet troops at Stalin's behest in 1945 at the end of World War II.

The Kremlin said in a statement that Russia believed that "dialogue in the interests of arriving at a mutually acceptable solution must be held in a calm, respectful atmosphere."

Yet there remains little hope of an immediate breakthrough, with Tokyo insisting the four islands currently inhabited by around 16 500 Russians are its territory and Moscow showing no hint of a compromise.

Russian Prime Minister Dmitry Medvedev has twice visited the island of Kunashir, called Kunashiri in Japan, infuriating Tokyo.

Medvedev's first visit to the island, which juts out past the north-eastern tip of Japan's Hokkaido island, in November 2010 - when he still held the post of president - was condemned by Tokyo as an "unforgivable outrage".

One solution mooted in the past could involve Russia ceding control of the two smallest islands of Shikotan and Khabomai and keeping the much larger Kunashir and Iturup (known as Etorofu in Japan).

But even this would require massive concessions from both sides that would be unacceptable for nationalists.

After Russia, Abe was due to visit Saudi Arabia, the United Arab Emirates and Turkey for talks with leaders there.

 

Mine strife a test for private equity

 

With the world's largest miners flocking to sell assets, cost cuts across the industry and a virtual drought in buyers, private equity funds may finally be tempted into a sector long seen as potentially lucrative but risky.
Industry veterans say the coming months will be a test of whether private equity funds can turn intentions into investments and become more than niche players in an industry that has traditionally relied on public markets for cash.
"Interest from private equity in the sector is the highest I have ever seen," one veteran industry banker said.
Another senior industry adviser described a "now or never" moment despite volatility in commodity prices, citing what could be a drawn out period of low valuations in which traditional buyers - largely, other miners - are kept out by demands they refocus and cut back rather than grow.
Volumes certainly point to increased interest.
According to research and data group Preqin which studies private equity, eight natural resources funds focused solely on mining raised an aggregate $8.5bn in 2012, more than the years 2006-2010 combined, though data did not show how much was spent on acquisitions.
Analysis by consultancy Ernst & Young suggests that private capital investors accounted for 21% of mining deal activity globally in the nine months to September 30 last year, against just 12% for the same period in 2011.
Smaller miners and developers are also eager to tap alternative sources for funding. In a sign of how tough the markets now are, the Toronto stock exchange - the prime destination for emerging producers - has not had one mining IPO in the first quarter, for the first time in a decade.
"There are a lot of buying opportunities, and for those who have the funds, you might find there is less competition, and that is what private equity looks for - a good deal," said Jason Burkitt, UK mining leader at PricewaterhouseCoopers.
Gold rush?
Private equity firms have so far steered clear of mining because of the scale and political risk involved in many operations.
Volatile commodity prices and long time horizons are also off-putting, not to mention that the investment firms often lack the manpower or expertise to cover global projects.
Typically, funds have stuck to niche assets, like high-end aluminium products for the aerospace and auto industry, in the case of Alcan Engineered Products, later Constellium, bought from Rio Tinto by funds led by Apollo in 2011.
Now, however, heavyweights like Apollo but also KKR and Carlyle are joining specialised energy-focused First Reserve, Denham Capital and Resource Capital in betting more heavily on the sector, drawn in by the prospect of an extended period of cheap prices and an unprecedented funding drought.
Apollo, which aims to invest $100m to $500m per transaction, closed a $1.3bn natural resources fund in 2012 which will invest in areas including oil, gas and mining.
The fund was one of several to look at BHP Billiton's majority stake in Canadian diamond mine EKATI, which also elicited interest from rival KKR before being sold to miner Dominion Diamond Corp.
KKR has also been named as a potential suitor for Rio's majority stake in the Northparkes copper-gold mine.
Smaller firms in pole position
However industry bankers and specialist funds both questioned whether big name private equity firms would be able to successfully compete in the mining sector.
"Size sometimes can be a disadvantage in our environment. You need to make decisions quickly - you need to have the coal face not too far removed from decision making process, so you can react quickly," Sierra Rutile's chief executive, John Sisay, said. The Sierra Leone-focused mineral sands producer's largest shareholder is specialist fund Pala.
"Smaller firms are able to do that better."
Traditional funds may also lack the extensive specialist teams needed to evaluate projects across commodities and across the world, and may be unable to invest for the longer term.
One of the top shareholders in EMED Mining, a London-listed company redeveloping the former Rio Tinto copper mine near Seville, is specialist Resource Capital.
"If you are playing the development game you are playing the development timeline," EMED's chief executive, Harry Anagnostaras-Adams, said.
Bert Koth, a Perth, Australia-based director at Denham Capital, also questioned the idea that traditional firms would step in. Although mining firms are shedding assets at a pace not seen for decades, many are doing so at auctions which can drive up prices - something private equity is likely to want to avoid.
"Generalist PE firms have a pretty poor track record as they don't fully understand the risks involved. I query whether they really appreciate what they are getting into," Koth said.

Iran squeezed by higher edible oil costs

Iran is having to pay a premium for basic foodstuffs such as cooking oil, highlighting the increasing strain on Tehran from Western sanctions aimed at its disputed nuclear programme, even though the sanctions don't cover food.
Wilmar International, the world's largest listed planter, and Mewah International, a $570m edible oils processor - both listed in Singapore - are driving sales to Iran on long-term contracts, with Middle Eastern trading sources reporting premiums of up to $30 a tonne to the cash benchmark.
Food shipments are not targeted under the sanctions, but the financial squeeze has cut off firms operating in Iran from much of the global banking system and pushed inflation above 30%. Oil exports, Iran's major source of hard currency, have more than halved since 2011.
Food exporters largely shun Iranian deals, with a volatile rial currency deepening risk and foreign banks wary of financing the food trade for fear of reputational damage.
A shopkeeper in Tehran told Reuters he had put up his price of imported cooking oil by up to 30% this month. A 900 millilitre bottle of cooking oil costs around 39 000 rials ($3.18), compared to a 1 litre bottle that sells for $3.10 in Britain and $1.20 in palm oil-producing Malaysia. Another storekeeper said prices had been stable for weeks.
"One woman man"
Iran has shifted to Southeast Asian palm oil as sanctions and limited supplies have disrupted imports of soybeans and oil from Argentina. Malaysia, the world's second-largest palm oil producer, saw exports to Iran jump 60% last year to a record 548 603 tonnes - still less than 5% of Malaysia's total exports of about 17 million tonnes.
Wilmar and Mewah dominate the trade with Iran where demand for high-value refined palm olein, used in cooking oil, can reach 500 000-700 000 tonnes a year.
Wilmar sells to Saudi Arabian food company Savola, which buys palm oil to feed its edible oil processors in Iran, three Middle Eastern trading sources told Reuters.
They said Wilmar demands a premium of $20-$30 per tonne to cover potential payment delays and interest charges.
Wilmar said it does not comment on specific contracts. Savola did not respond to requests for comment.
"Savola is a one woman man. It sticks to one palm oil company to supply its refineries and it's Wilmar for the past few years," said a Dubai trading source close to Savola. "Payments can be slow, but there are ways around it. The money will be banked in (Saudi) riyals, euros and US dollars from Turkish banks. Sometimes, the money will come via India."
Mewah last month shipped 75 310 tonnes of palm oil to Iran, its best month so far this year, shipping documents show.
"Mewah is the go-to person for Iran. It buys the palm oil from Malaysian firms and then sells it to Iran," said a trading executive from a Malaysian plantation who deals with Mewah. "They are established in the Iran trade and have deep pockets to withstand payment delays."
Planters who have sent cargoes to Iran with Mewah include subsidiaries of IOI Corp, Kuala Lumpur Kepong and a Malaysian unit of Wilmar, cargo surveyor documents show. Officials at those companies declined comment.
Shipping documents obtained by Reuters show Wilmar exported at least 114 000 tonnes of refined palm oil to Iran from the Indonesian island of Sumatra alone last year. In January of this year, Wilmar shipped another 10 700 tonnes to Iran from Sumatra.
"Wilmar doesn't do high stakes gambling. So it has taken a corporate guarantee from Savola's head office in Saudi Arabia," said a Southeast Asian trading source who has done deals with Savola. "It's become standard practice."
Savola has 832,000 tonnes of annual capacity in Iran, giving it nearly 40% market share in a country of over 74 million people. The firm's revenues from Iran increased by almost a third last year to 4.4bn riyals ($1.17bn), about 42% of its global edible oil sales.
Captive market
Iran is proving more profitable than price-sensitive China, where competition means Wilmar only profits from refining margins. And India, the world's top palm oil buyer, has imposed higher import taxes to stem the flow of cheap refined edible oil from Indonesia and Malaysia.
With more than half a million hectares of oil palm estates in Indonesia and Malaysia, Wilmar makes most of its sales, and profits, from trading with India and China.
"Indonesia is looking for new markets for its refined palm oil. Iran is a natural choice, it has captive consumers. They desperately need the oil and they will pay a premium," said a Singaporean trader, who didn't want to be named as he is not authorised to speak to the media.
So far this year, shipping records show Mewah has exported 168 100 tonnes of palm oil from Malaysia to ports in Iran. Most cargoes are taken up by private Iranian buyers though state food procurement firm GTC is also an occasional buyer, traders said.
"We do come into the palm oil market from time to time to buy. These are private deals," a GTC official told Reuters from Tehran. He declined to discuss the deals.

Central banks prop up global economy

Five years after the onset of the global financial crisis, the world economy is in such a chronic condition that the European Central Bank might cut interest rates this week and the Federal Reserve is likely to indicate no let-up in the stimulus it is providing the US economy.
With the eurozone economy in recession, momentum is building for the ECB to lower interest rates for the first time since July 2012, according to senior sources involved in the deliberations.
If the bank does not act on Thursday, a quarter-point cut in June is considered a racing certainty.
The ECB is the most conservative of the world's main central banks. Its main short-term rate, now at 0.75%, is higher than the equivalent rate of the Fed, the Bank of England and the Bank of Japan. And unlike its peers the ECB has not engaged in quantitative easing - printing new money to buy bonds.
But the ECB seems to be softening. "I would argue that the ECB should be thinking of easing policy; whether they are currently is more debatable," said Stephen King, global chief economist for HSBC in London.
Only a small majority of 76 economists polled by Reuters expected a cut as early as this week.
The swing factor for King is what is happening to Germany, the eurozone's largest economy. Until recently, Germany had been showing resilience thanks to its export sector. But April's survey of purchasing managers and the Munich IFO institute's monthly poll were distinctly soft.
"Germany is becoming more like everybody else. It is being dragged down, whether it likes it or not, through weakness in southern Europe, slowing growth in China and the depreciation of the Japanese yen," he said.
"None of these things are good for Germany. So the weaker Germany becomes, the easier it is to agree on a common monetary policy," he added.
China's official purchasing managers' survey for April, to be released on Wednesday, is likely to provide more evidence that the world's second-largest economy is shifting down to a lower trend rate of growth after three decades of averaging around 10 percent a year.
Economists polled by Reuters expect the index derived from the survey to have edged up to 51.0 from 50.9 in March, holding above the threshold of 50 that demarcates month-on-month expansion from contraction.
Jian Chang, who tracks the Chinese economy for Barclays in Hong Kong, prefers to describe the economy as being in a stabilisation rather than a recovery phase.
"As long as the PMI comes in above 50 it will show that modest, slow growth is continuing," she said.
Global markets have become addicted to the drug of super-fast Chinese growth and tend to react badly to signs of softness. But Chang said the authorities in Beijing, intent on guiding the economy to a more sustainable growth rate, are not panicking.
There has been no big investment package, for example, to support the government's urbanisation drive.
Policymakers will be comfortable as long as growth for the year as a whole comes in above their target of 7.5%, she said. Barclays is forecasting an outcome of 7.9%.
Whether that target is met will depend in part on an improvement in exports to the European Union and to the United States, which on Friday reported a disappointingly soft first-quarter gross domestic product growth rate of 2.5%.
The pace of expansion has averaged just 1.4% over the last two quarters and 1.8% over the past year, noted Jay Feldman, director of US economic research at Credit Suisse in New York.
"All in all, growth is persistent, but decidedly underwhelming. At this trajectory, achieving a labour market recovery beyond the fits-and-starts progress of the last few years will be a challenge," he told clients.
Figures this week are likely to fit into the same pattern.
The Institute of Supply Management's April manufacturing survey is forecast to dip to 51.0 from 51.3 in March, while the economy is likely to have generated 150 000 jobs in April, up from just 88 000 in March but not enough to reduce the jobless rate from 7.6%.
Because the Fed has pledged to stick to its super-loose policy until unemployment falls to 6.5%, the central bank is expected to confirm at this week's policy meeting that it will keep buying $85bn in bonds every month to keep bond yields low and encourage investment.
Talk had started to grow that the Fed might start to wind down, or taper its quantitative easing programme. But after the latest economic data, the central bank's tone is likely to change, according to Steve Ricchiuto, chief US economist for Mizuho Securities in New York.
"They're going to come out of this meeting with a more balanced view on tapering and say, 'we could increase or we could taper'," he said.
Indeed, price pressures are so muted because of slack in the economy that some Fed policymakers have raised the prospect of injecting even more stimulus.
The core personal consumption expenditure deflator, the Fed's favourite inflation gauge, rose just 1.3% in the year to March, Friday's GDP report showed.
"Low inflation leaves that much more leeway for the Fed to focus on growth and jobs. If the core PCE index falls much farther, look for 'inflation being too low' to show up in more Fed communications," Feldman said.

Netanyahu: Iran hasn't crossed red line

Prime Minister Benjamin Netanyahu said on Monday, Iran had not crossed the "red line" he set for its nuclear programme, despite an assessment to the contrary by a former Israeli intelligence chief.

At the UN in September, Netanyahu drew a red line across a cartoon bomb to illustrate the point at which he said, Iran will have amassed enough uranium at 20% fissile purity to fuel one nuclear bomb if enriched further.
He said then that Iran could reach that threshold by mid-2013.
Last week, Amos Yadlin, a former chief of Israeli military intelligence, told a security conference in Tel Aviv, that "the Iranians have crossed the red line" Netanyahu drew at the UN General Assembly.
Without referring directly to Yadlin, Netanyahu said at a meeting on Monday of his Likud-Beitenu parliamentary faction, that Iran's nuclear activities remained short of his benchmark.
"Iran is continuing with its nuclear programme. It has yet to cross the red line I presented at the UN, but it is approaching it systematically," he said in broadcast remarks.
"It must not be allowed to cross it."
Uranium usage
The Islamic republic says it is enriching uranium only for peaceful energy and medical purposes.
Israel, widely believed to be the Middle East's only nuclear-armed power, has issued veiled warnings for years, that it might attack Iran if international sanctions and big power diplomacy fail to curb what it regards as a drive by Tehran to develop atomic weapons.
Israel has long insisted on the need for a convincing military threat and setting clear lines beyond, which Iran's nuclear activity should not advance.
It says this is the only way to persuade Iran to bow to international pressure, by curbing enrichment activity and allowing unfettered UN inspections.

Venezuela signs $1bn agreement with Cuba

Venezuelan President Nicolas Maduro wrapped up a two-day visit to Cuba late on Sunday in which the two allies reaffirmed their strategic alliance, signing $1bn in co-operation agreements.

The visit, which came just two weeks after Maduro's election to replace the late Hugo Chavez, was hailed as great success by state media, which said it will help Havana and Caracas "strengthen our union."

The two countries said they signed 51 agreements encompassing health, education, transportation, sports, energy and special "social missions".

Maduro, before he departed the island, hailed his nation's relationship with Cuba as "a strategic alliance that transcends the times; more than an alliance, it is a brotherhood".

Cuba is only the second country Maduro has visited since his 14 April election victory.

Maduro held talks with President Raul Castro, who reaffirmed Cuba's "unyielding will to continue co-operation in solidarity with Venezuela, determined to share our fate with the heroic Venezuelan people".

He also held a separate, five-hour meeting with Fidel Castro, aged 86, the retired leader of the Cuban revolution, who paid homage to his dear friend Chavez and the alliance that the two nations forged in October 2002.

12-year-old leftist relationship

The relationship has been crucial to Cuba, shoring up a Soviet-style economy that has floundered since the collapse of the Soviet Union in 1989.

The deal is Cuba's biggest source of cash, well ahead of money sent home by expatriate Cubans, tourism or exports of nickel and tobacco.

The two allies also have engaged in a variety of joint projects, like a refinery in Cienfuegos, Cuba.

An estimated 40 000 Cuban doctors, technicians and advisers work in Venezuela, which supplies Cuba with 130 000 barrels of oil a day as part of a 12-year-old relationship that has closely bound together their leftist, anti-US governments.

But the Cuban connection also remains a point of heated contention in Venezuela, which split 50.8-49 in the elections to succeed Chavez and saw some 700 000 people switch to the opposition.

During the election campaign, opposition candidate Henrique Capriles repeatedly attacked the "gifts" sent from Venezuela to Cuba, calling Maduro "Cuba's candidate" and demanding that Caracas cut off oil supplies to Havana.

Venezuela's National Electoral Council plans to begin an expanded audit of the results on Monday, but cautioned the move cannot overturn Maduro's win.
The opposition has until the end of next week to file suit with the Supreme Court to contest the outcome.

NEWS,02.02.2013

U.S. Gun Deaths Since Sandy Hook Top 1,280 

 

It was Christmas night when Sincere Smith, 2, found his father’s loaded gun on the living room table of their Conway, S.C., mobile home. It took just a second for Smith’s tiny hands to find the trigger and pull. A single bullet ripped into his upper right chest and out his back. His father, Rondell Smith, said he had turned away to call Sincere’s mother, who had left to visit a friend. His back was turned to the toddler, he said, for just that moment.Sincere was still conscious when his father scooped him up and rushed him to the hospital, just a few minutes away.Eleven hours earlier, Sincere Smith had woken up to Christmas  the first that he was old enough to appreciate. His father remembered their last morning well his son ripping through wrapping paper, squealing with delight with each new gift his first bike, a bright toy barn.It was quite a sight seeing Sincere so happy around a cloud of crinkled wrapping paper. “We bought him a little barn thing,” Smith said. “He knew what a barn is. He just seen it ‘Oh Mommy, Daddy! Barn!’ He went crazy over it. … He lit up like a Christmas tree.”Smith, 30, lit up too. “I just wanted to see him open them up,” he said. His own parents were teenagers when they had him. He had vowed to be there for his five children, giving up college and a possible basketball career to take care of them. With Sincere, he promised his wife he’d be a hands-on parent. He said he considered Sincere his best friend.The two kept close that day visiting relatives for more presents and a Christmas dinner of chicken and macaroni and cheese. “Everything was normal,” Smith said. “He was happy. Everything was good then.”Two weeks earlier, Smith had bought a .38-caliber handgun to protect his family after bandits had tried to break into their home. He doesn’t know what to say about the national gun-control debate. He just wants that lost second back. “I would say, man, keep them out of your house,” he offered. “It’s just. Boy. All it takes is a second. Just a second to turn your head. I don’t know, sir.”Sincere died on an ambulance gurney as he was transferred to a second hospital in Charleston.He never got to ride his new blue Spiderman bike outside. It sits in the trunk of his grandmother Sheila Gaskin's car. "He didn't get to ride his bike," she explained. "It was cold [on Christmas]. My daughter doesn't want to take it back to the store."Gaskin lives across the street from her daughter and Smith. She saw Sincere every day of his life. "He hear me coming down the road, my gospel music blasting and he hollering 'Nana!'" she recalled. Now, she said she visits his grave every day. She hasn't gotten a full night's sleep since the accident. "It's just killing me," she said.After Sincere was shot, Rondell Smith thought about taking his own life, Gaskin said. "It's just not good," she said. "It's not good at all. He just has to stay prayed up. ... That's all he can do is give it to God."Smith wasn't at Sincere's side when he died in the ambulance. He was being interrogated by the police, who eventually charged him with involuntary manslaughter. His next court date is Feb. 8.As he was rushing Sincere to the hospital, Smith said he told his son that he loved him. "He couldn't really talk," Smith said. "Last thing I heard him say was, 'Daddy.' He kept trying to say 'Daddy.' Believe me I hear it every day."There were 29 other shooting deaths across the U.S. on Christmas. A soldier was shot and killed in his barracks in Alaska. A man was murdered in the parking lot of Eddie's Bar and Grill in Orrville, Ala. A 23-year-old was shot at a party in Phoenix. A Los Angeles County Sheriff's Department employee was killed in a drive-by.A 20-year-old Louisville, Ky., man was shot and killed after walking his sister home. On Christmas Eve, he had posted an R.I.P. on his Facebook page for a friend and former classmate, who had been gunned down that day.A 10-year-old in Memphis, Tenn., Alfreddie Gipson, was accidentally shot to death by gun purchased by an older brother, who had gotten the weapon after being bullied at school. Gipson was jumping on a bed when the gun slipped out of a mattress. It discharged when his 12-year-old brother tried to put it back, their mother said at a vigil.There were at least 41 homicides or accidental gun deaths on New Year's Eve. On New Year's Day, at least 54 people died from bullet wounds.Through Google and Nexis searches, The Huffington Post has tracked gun-related homicides and accidents throughout the U.S. since the schoolhouse massacre in Newtown, Conn., on the morning of Dec. 14. There were more than 100 such deaths the first week after the school shooting. In the first seven weeks after Newtown, there have been more than 1,280 gunshot homicides and accidental deaths. Slate has counted 1,475 fatal shooting incidents since Newtown, including suicides and police-involved shooting deaths, which The Huffington Post did not include in its tally.A 17-year-old took his last breath in the backyard of an abandoned house in New Orleans. Prince Jones, 19, was found bleeding to death in a 1998 Buick LeSabre in Nashville, Tenn. A woman was slumped over the steering wheel in Houston, the engine still running.A 52-year-old man was shot and killed at a Checkers parking lot in Atlanta. A 26-year-old man was shot to death in a church parking lot in Jacksonville, Fla. Steven E. Lawson, 28, was shot and killed just outside a church in Flint, Mich., where he was attending a funeral for another gunshot victim.On a Tuesday morning in Baton Rouge, La., police knocked on Alean Thomas' door and told her: "You have a young man dead in your driveway." It was her 19-year-old son. Three days later, a 17-year-old in California was killed visiting family for his birthday.On a Thursday afternoon in New Orleans' Sixth Ward, Dementrius Adams was murdered on his way to buy groceries for his mother. He was 28 and had a 5-year-old daughter. "He was a hard-working man," his sister said told a reporter. "He was so proud of his job. ... He was a good brother, a good father he was a loveable man."Adams had just been promoted from a dishwashing job to cook at a New Orleans restaurant.The dead included grandmothers and a 6 month old. There were police officers and a Texas prosecutor. There was a Bodega worker in Queens, N.Y., and a gas station attendant in East Orange, N.J.A high school majorette, a college freshman at Auburn University and a man planning to get his GED in Bradenton, Fla., were killed. One victim became Chicago's 500th murder of 2012. Another was his town's 40th. One was found frozen and bloody in an alley Tacoma, Wash.'s first slaying of 2013. The victim, a mother, was planning to move with her daughters to Manhattan."I am lost, hollow," said the mother of the GED aspirant gunned down at a Chevron station on New Year's Day.In Newport News, Va., after a shooting broke out, a mother ran outside to protect her two sons, ages 5 and 7. She yelled at one of the gunman and was killed.A Davidson, N.C., husband murdered his wife, then shot himself . Their 3-year-old daughter was found watching T.V. in another room.There were murder-suicides in Florida, Kentucky, Oregon, Texas and California. Most were men killing women, husbands killing wives, boyfriends killing girlfriends, sons killing mothers.There were so many drive-bys. On Jan. 11, in Baltimore, Devon Shields, 26, was found lying in a street with a fatal gunshot wound to the chest. Three hours later, Delroy Davis was found lying face-up between two houses. Two-and-a-half hours later, Baltimore police rushed to a double-shooting that left one man dead with multiple gunshot wounds. The next day, Sean Rhodes was found "lying face-down in a pool of blood," according to the Baltimore City Paper. Two others survived gunshot wounds. Silly arguments became final arguments. A man was murdered over two broken cigarettes. Another after getting into a spat at a taco truck. Travis Len Massey, 23, was shot and killed by his sister's boyfriend in a family dispute over a missing gun. A 52-year-old Jacksonville man shot and killed a longtime friend over an argument, according to police. When asked what the argument was about, the gunman said he didn't remember, according to a television report.A 6-year-old accidentally killed a 4-year-old. A different 4-year-old accidentally killed a 58-year old.Alexander Xavier Shaw, 18, put a gun to his head to show how safe it was. "Witnesses told officers that Shaw, his uncle, grandparents and some friends were on the back patio talking when he showed them a .38-caliber revolver," a St. Petersburg, Fla., newspaper account said. The gun accidentally fired, killing Shaw.

Spain PM denies corruption claims

Spain's Prime Minister Mariano Rajoy on Saturday denied allegations that he received undeclared payments from his ruling party, as he sought to douse a major corruption scandal.Rajoy vowed not to resign despite the publication of documents purportedly showing secret payments to him and other top party officials, branding the damaging reports "harassment".He promised to publish full details of his income and assets, speaking at an emergency meeting of his conservative Popular Party as angry demonstrators outside called for him to step down."I have never received nor distributed undeclared money," he said, adding that he would publish online "statements of income, patrimony and any information necessary" to refute the allegations."I commit myself personally and all of my party to maximum transparency."Rajoy, aged 57, was speaking out for the first time since being named in the scandal which struck at a tense time as the government imposes tough spending cuts on Spaniards suffering in a recession.Last year he defied speculation that the country would need a financial bailout only for the political scandal to erupt in the new year.Leading centre-left newspaper El Pais on Thursday published account ledgers purportedly showing that donations were channelled into secret payments to him and other top party officials.The newspaper said the alleged fund was made up of donations, mostly from construction companies, adding that such payments would be legal as long as they were fully declared to the taxman.Rajoy said the ledgers were false.The allegations fuelled anger among Spaniards suffering in a recession that has thrown millions out of work."We must not allow Spaniards, of whom we are demanding sacrifice to think that we do not observe the strictest ethical rigour," Rajoy said.Protesters say ordinary Spaniards are being made to pay for an economic crisis brought on by the collapse of a construction boom which many blame on corrupt politicians and unscrupulous banks.As Rajoy spoke, demonstrators yelling "Thieves!" gathered near the party headquarters, kept at some distance by police barriers.Among them, 54-year-old school teacher Maxi Sanchez Pizarro vented his anger at the politicians he blamed for economic hardship."My sister is on the verge of being evicted and I didn't get my Christmas bonus, while those ladies and gentlemen not only got their Christmas bonuses but have also been robbing our money," he said."They are shameless crooks and thieves," he added. "I hope they have the honour to resign and call an election."An online petition at change.org calling for Rajoy to resign, launched on Thursday, had gathered nearly 650 000 signatures by Saturday afternoon.On Thursday El Pais cited ledgers kept by former party treasurer Luis Barcenas, apparently showing payments including €25 200 a year to Rajoy between 1997 and 2008.Barcenas was already under investigation in connection with a separate corruption case, with reports that he had millions of euros in a Swiss bank account.Rajoy said that case had nothing to do with the party and that it had never had foreign bank accounts.

Japan PM vows to block China from islands

Japan's prime minister has vowed to defend disputed remote islands from escalating threat from China.Prime Minister Shinzo Abe called on Japan's Self-Defence Forces on southern Japan on Saturday, saying the disputed islands in the East China Sea are under increasing threat.Abe said he will defend them "at all costs".The uninhabited islands are controlled by Japan but also claimed by China. Japan's nationalisation of the islands in September triggered violent protests across China, hurting Japanese companies there and the economy.China has sent surveillance ships regularly to waters near the islands, and aircraft from the two sides have trailed each other, raising the risk of missteps that could trigger a clash.Japan has recently launched diplomatic efforts to ease tensions, with China-friendly officials visiting Beijing for talks.Japan's coast guard has detained a Chinese fishing boat for "alleged unauthorised coral fishing" near Okinawa, China's official Xinhua news agency reported on Saturday, quoting the Chinese Consulate General in the city of Fukuoka.The vessel was detained off Miyako, some 150km from islands in the East China Sea at the centre of a simmering dispute between the two countries.

South Korea, US in naval drill

South Korea and the US will hold a joint naval exercise next week, a report said on Saturday, a move seen as a warning to North Korea ahead of its widely expected nuclear test.The three-day exercise involving a US nuclear submarine and other warships will begin on Monday in the Sea of Japan (East Sea) off the South Korean port city of Pohang, Yonhap news agency reported."It will include anti-submarine and anti-air trainings and maritime manoeuvrings," a military official was quoted as saying in the report.The exercise comes as tensions run high on the Korean peninsula, with Pyongyang threatening to carry out its third nuclear test in response to UN sanctions imposed for a long-range rocket launch it carried out in December.The North said the launch was a scientific mission aimed at placing a satellite in orbit, but most of the world saw it as a disguised ballistic missile test.South Korea's Joint Chiefs of Staff Jung Seung-Jo said on Friday the drill aims to test combat readiness between Seoul and Washington while guarding against possible North Korean provocations involving submarines, according to Yonhap.A 6 900-ton US nuclear submarine USS San Francisco and a 9 800-ton Aegis destroyer USS Shiloh were being mobilised for the exercise."The presence of a US nuclear submarine here would itself serve as a message to North Korea", Jung said.North Korea has reportedly covered the entrance to a tunnel at its nuclear test site in an apparent effort to avoid satellite monitoring of its ongoing preparations for a possibly imminent detonation.A camouflage net was placed on the tunnel entrance at Punggye-ri in the north-eastern North Korea, the site of the two previous nuclear tests in 2006 and 2009.But a government source in Seoul said that increased activity had been spotted at the site, which has three tunnel entrances and multiple support buildings."At a tunnel in the southern part of the test site in Punggye-ri, we've found that work presumed to be part of preparations for a nuclear test has entered its final stage," the unnamed source told Yonhap on Saturday."The North may conduct the test at either the western or southern tunnels. But the activities spotted near the southern one could be aimed at distracting us from the more likely place of the western tunnel."