NEWS,11.12.2012

  Italy petrol strike threatens to hit economy

Italian petrol stations began a 60-hour strike today to protest against rising costs and falling profits, causing long queues as drivers rushed to fill up before pumps closed.Hitting at the peak shopping period before Christmas, the strike comes at unwelcome time for retailers.Weak consumer spending has been a key factor in Italy's sluggish economy, which has been dipping in and out of recession since 2008."It is incredible, with all that petrol costs us nowadays, that they can even think of going on strike," Rome resident Ida Lauro said as she queued in her car.Unions have agreed to maintain minimum service on motorways, with at least one station open every 100 km.In a joint statement, unions said they called the strike to combat "a true aggression against the roughly 24,000 small businesses and 120,000 workers in the sector".They say oil companies have forced stations to absorb the costs of discounting campaigns, allowing them a profit of just one euro for every 100 euros ($155) or 55 litres of petrol sold.Oil distributors in Italy Esso and Shell were not immediately available for comment. A government attempt to come to an agreement with the unions this week fell through.Workers will demonstrate outside government buildings in Rome later today to pressure the state to intervene.The strike will end on Friday morning on ordinary roads and late on Thursday on motorways.Between December 17 and 22 the petrol stations will refuse to pay oil companies for refills. Then, between Christmas and New Year, they will refuse credit and debit card payments in protest at bank charges on electronic payments.Mario Monti's technocrat government has cut spending and raised taxes since it was appointed last year to pull Italy out of a debt crisis, and is the focus of increasing protests.The government was thrown into crisis last week when the party of former Prime Minister Silvio Berlusconi withdrew its support, prompting Monti to announce he would resign once the 2013 budget bill is passed before Christmas.

US to keep strong presence in Mideast

The US military will retain a "strong presence" in the Middle East despite a strategic shift to Asia, Defence Secretary Leon Panetta said on Tuesday during a visit to Kuwait. The US plans to deploy a majority of its naval fleet to the Asia-Pacific along with other advanced weaponry but Panetta insisted that a robust American force would remain in place in the Middle East.Panetta spoke to journalists aboard his plane travelling to Kuwait City on a two-day visit to discuss bolstering security ties amid tumult in the region and tensions with Iran."Let me assure you that the United States is strong enough that we can maintain a strong presence in the Middle East as well as in the Pacific," he said.He acknowledged that the US had to be "flexible" in managing its forces in a more austere era and that it would have only one aircraft carrier in the Middle East for about two months to allow for maintenance work on another carrier, the USS Nimitz.The American military still had nearly 50 000 troops and warships positioned across the region, he said."But in the end, I am very confident that we're going to be able to maintain the ships and forces we need in order to respond to any contingency."The US has deployed more ships and aircraft in the strategic Gulf over the past year after Iran threatened to close the strategic Strait of Hormuz if Western countries boycotted Iranian oil exports.Kuwait's emir, Sheikh Sabah al Ahmad al Sabah, held talks at his residence with Panetta in the presence of the crown prince, the prime minister, defence minister and senior officials, the state-run Kuna news agency reported.Kuna provided no details about the talks.During the visit, which ends on Wednesday, Panetta also plans to meet some of the 13 500 US troops stationed in the Gulf state to thank them for their service ahead of the Christmas holidays.His visit is the first to the emirate by a Pentagon chief in five years."We share a history of co-operation that goes back to the first Gulf War," in 1991 that ousted Iraqi occupation forces, Panetta said of Kuwait, calling the country an "important partner"."I look forward to discussing with the government of Kuwait how can we enhance that co-operation in the face of regional security challenges in the area," he said."Our presence in Kuwait and throughout the Gulf helps enhance the capabilities of partner nations, deters aggression and helps ensure that we're better able to respond to crises in the region."Panetta's visit coincides with a wave of protests in the oil-rich Gulf state, with thousands of opposition demonstrators demanding fresh elections due to a bitter dispute over amendments to the country's electoral law.Kuwaiti activists have called for protesters to camp outside parliament next Saturday on the eve of its opening session.

N Korea removes rocket from launch pad

North Korea has removed a long-range rocket from its launch pad for repair, South Korean media reported on Tuesday, a day after Pyongyang extended the widely-criticised mission's launch window.According to analysis of the latest satellite imagery, the entire three-stage Unha-3 carrier has been removed to a nearby assembly facility, Yonhap news agency quoted a military source as saying."It seems that North Korea has pulled down the rocket from the launch pad to fix technical problems," the source said.The defence ministry refused to confirm the report which, if true, would signal a lengthy delay in the launch schedule.North Korea says the rocket is being used to put a satellite into orbit, but the United States and its allies insist the launch is a disguised ballistic missile test.North Korea had originally provided a 10-22 December window for launching the rocket, but that was extended by another week on Monday when a "technical deficiency" was discovered in the first-stage engine.Yonhap's military source said Pyongyang was expected to go ahead with a launch after repair works are completed.The North's decision to try and launch the rocket in winter has led analysts to suggest a political imperative behind the timing, which may have overruled technical considerations.New leader Kim Jong-Un is believed to be extremely keen that the launch falls around the first anniversary of the death of his father and former leader Kim Jong-Il on 17 December.The possibility that the launch has been rushed has been backed by missile experts, sceptical that the problem which resulted in the failure of the North's last rocket launch in April could have been resolved in just eight months.North Korea is banned from conducting missile tests under UN resolutions triggered by Pyongyang's two nuclear tests in 2006 and 2009.The latest planned launch has been condemned by the United Nations, as well as the United States and its main military allies in Asia, Japan and South Korea.Russia has joined international calls for Pyongyang to cancel the mission, while China, North Korea's sole major ally and its biggest trade partner and aid provider, has expressed concern.EU foreign ministers said on Monday that an eventual launch would be a "provocative act" in breach of UN resolutions and require an international response.UN diplomats inside and outside the Security Council have started consultations behind the scenes on what action to take if Pyongyang goes ahead with the launch.According to Japanese reports, Japan, the United States and South Korea have agreed to demand the UN Security Council strengthen sanctions on North Korea to levels that match those on Iran.That would include increasing the list of financial institutions, entities and individuals already subject to asset freezes.

Berlusconi, Monti set fiery campaign tone

Italy's Silvio Berlusconi on Tuesday set the tone for his election campaign saying nobody should care about bond spreads, and accusing Mario Monti of being "German-centric" as the prime minister said he had spared Italy from the same fate as Greece."Who cares about the spread?" the 76-year-old Berlusconi, who is running for the sixth time in two decades, said in an interview with Canale 5 television part of his media empire."The spread is a trick and an invention with which they tried to bring down the majority that ruled this country," said the three-time prime minister and billionaire, referring to his last government which collapsed in November 2011 following a parliamentary revolt and panic on the markets.The spread is the differential between Italian and benchmark German 10-year sovereign bonds  a closely watched measure of investor confidence.The spread had narrowed to below 300 points last week but has widened since Berlusconi's People of Freedom (PDL) party said on Thursday that it was withdrawing its support for Monti's government.Berlusconi then announced he would run for prime minister and Monti said he would resign as soon as parliament approves next year's budget, bringing forward the likely date for elections to February.There is growing speculation that Monti will also decide to run in the election although he has so far declined to comment, saying only that he is not considering the option "at this stage".The spread was around 349 points on Tuesday, while the stock market inched up 0.64% in afternoon trading - a day after it trailed other European bourses reacting to the weekend of political drama and the re-emergence of Berlusconi.Polls say the favourite to win is centre-left leader Pier Luigi Bersani, a cigar-chomping former communist and two-time minister who spearheaded a liberalisation drive when he was in office.Berlusconi on Tuesday also criticised Monti as "too German-centric" and said that all the main economic indicators had worsened since the former Eurocrat was installed in power.He continued saying that Italy's record-high public debt of nearly $2.6 trillion, or around 120% of gross domestic product, was "not as high as they want to make you think".Monti also gave an interview to Rai public television in which he said that the government had to be "very careful" and "calm" about bond spreads.In a rare moment of candour on his personal life, he revealed his own grandson had been nicknamed "spread" at his kindergarten and recognised the word as his own name when he heard it on television.Monti also warned about rising populism ahead of the elections, saying: "There is a tendency to over-simplify things, to present magical solutions."And he defended his record in government saying: "We have made great progress but at a cost. In the short term, there has not been growth."I would appreciate it if someone could explain to me how it would have been possible financially to spare Italy from suffering the same fate as Greece and make it grow at a rapid rate," he said.Newspaper Il Fatto Quotidiano's online edition said the contrasting interviews with Monti and Berlusconi on Tuesday were a "head-on clash"."Each one used their own language, but this really is a challenge at a distance," the paper said.Berlusconi also announced that only 10% of the party's candidates in elections now expected in February would be chosen from current lawmakers.Fifty percent of the candidates will come from the business community, 20% from local government and 10% from the world of culture, he said, without explaining where the remaining 10% would come from.The PDL has been riven by infighting and hit by a series of fraud investigations since Berlusconi stepped down last year and retreated from the political fray before suddenly returning last week to the dismay of several dissident party members. Berlusconi also said he would be holding talks later on Tuesday with Roberto Maroni, leader of the populist Northern League party, on forming a possible coalition.Berlusconi's PDL and the Northern League won the last general election in 2008 but there have been tensions between the two parties in recent years.

NEWS,02.12.2012

Osborne sticking with UK austerity plan

British finance minister George Osborne said on Sunday that he would stick with his deficit-reduction programme when he presents a half-yearly fiscal statement on Wednesday. The Chancellor of the Exchequer declined to comment more specifically on whether he would be able to meet debt targets, but stressed he did not believe Britain should borrow more or increase spending. At his "Autumn statement" on Wednesday, Osborne is expected to defend his stringent economic policies as the only credible way of solving the government's biggest political problem - its failure to deliver a strong recovery. "It's clearly taking longer to deal with Britain's debts, it's clearly taking longer to recover from the financial crisis than anyone would have hoped, but ... to turn back now ... would be a complete disaster for our country," he said in a BBC television interview. British media reported on Sunday that Osborne plans to cap the amount of tax relief high earners receive on their pension contributions alongside reining in the welfare budget. Osborne declined to comment on the reports, but did not reject the proposals directly when questioned in the interview. He also declined to say if the country's independent fiscal watchdog would show him still on track to eliminate Britain's underlying budget deficit within the next five years, or to have debt as a share of national income on a downward path by the 2015/16 tax year.

Merkel not ruling out Greek 'haircut'

German Chancellor Angela Merkel has not ruled out a so-called "haircut", or write-down, on Greek debt in the next few years, in an interview with a Sunday newspaper, marking an apparent softening in position.After being vehemently opposed to accepting a "haircut," Merkel told Bild am Sonntag that it could be considered from 2014 if Greece's financial situation improves, according to a pre-released article."If Greece one day again manages with its revenue without getting new debt, then we must look at and assess the situation. That is not the case before 2014/15 if everything goes according to plan," she told the paper.Opposition politicians have accused Merkel of playing down the need for a write-down of Greek debt holdings by public institutions such as other eurozone governments and the European Central Bank, because of federal elections expected to take place on September 22.In the Bild interview, Merkel contested that she had refused a "haircut" due to the looming elections."The current aid programme for Greece runs until 2014, for the achievement of certain budgetary goals we have given the Greeks two years more time until 2016," she said.Many in Germany consider a write-down of Greek debt holdings inevitable.But on Friday, Finance Minister Wolfgang Schaeuble said speculation on a "haircut" sent "the wrong incentive" to Greece because it reduced the pressure on the Athens government to enact structural economic reforms.Some eurozone states have said they would "not exclude" the possibility of writing off some debt from 2015 onwards.Merkel also said she favoured considering tougher sanctions for indebted eurozone states."In the long term I am definitely of the opinion that we consider how we develop in our law procedures for states which do not comply with their commitments," she said.Merkel also told Bild that she understood the scepticism of many of her compatriots over Greece but that she saw a determination in Athens to reorganise the country and that rescuing Greece from economic collapse was in Germany's best interests.On Friday she secured the vote from German lawmakers to release €43.7bn in aid to debt-wracked Greece agreed after tortuous talks between eurozone finance ministers.

UK over-50s ignorant about retirement

Britain's over-50s are in blissful ignorance of how little their pension pots will pay out and need an urgent financial health check if their retirements are to be as comfortable as they expect, an industry report said. Workers approaching retirement in the next 15 years need to see their pension pots grow by almost 80% to meet their expectations, the National Association of Pension Funds (NAPF) said on Friday. "Millions of people are within a decade of their state pension but have still not thought about how long their retirement might last," Joanne Segars, chief executive of the NAPF, said in a statement. The burden of managing a pension at retirement has increasingly fallen on employees, as defined contribution (DC) pensions, rather than final-salary schemes, become the more dominant form of retirement saving. The introduction of the government-backed auto-enrolment scheme where people are required to opt out rather than opt into retirement saving could lead up to 8 million additional workers being signed up for pensions, which will likely be DC pension memberships. Yet a third of workers aged 52 to 64 remain ignorant about what their private pension income may provide in retirement, while 59% of workers have never thought about how many years of retirement they need to finance, a report by the Institute for Fiscal Studies and supported by the NAPF said. Women in their 50s are living to an average of 88 - four years longer than expected - while men are living to 85, overshooting life expectancy by around two years, when compared with national projections of life expectancy, the report said. Annuities, which many British retirees buy to ensure a steady income, are meanwhile becoming more expensive, meaning people will expect their savings pots to generate a higher annuity income than it actually does. Private pension firms have also been accused of failing to disclose some of the costs they levy on customers' investment funds, leaving people unaware that their pension savings were being eroded by the charges. The NAPF represents 1 300 pension schemes in the UK with 16 million members and assets of around £900bn.

North Korea plans new rocket launch

North Korea said it would carry out its second rocket launch of 2012 as its youthful leader Kim Jong-un flexes his muscles a year after his father's death, in a move that South Korea and the US swiftly condemned as a provocation.North Korea's state news agency announced the decision to launch another space satellite on Saturday, just a day after Kim met a senior delegation from China's Communist Party in the North Korean capital of Pyongyang.China, under new leadership, is North Korea's only major political backer and has continually urged peace on the Korean peninsula, where the North and South remain technically at war after an armistice, rather than a peace treaty, ended the 1950 - 1953 conflict.No comment on the planned launch was available from Beijing's foreign ministry.In Washington, US State Department spokesperson Victoria Nuland condemned the launch plan as a provocative threat to the Asia-Pacific region that would violate UN resolutions imposed on Pyongyang after past missile tests."A North Korean 'satellite' launch would be a highly provocative act that threatens peace and security in the region," she said in a written statement."North Korea must abide by its international obligations under UN Security Council resolutions that clearly articulate what it can and cannot do with respect to missile technologies," said Pentagon spokesperson George Little.Seoul's foreign ministry called the move a "grave provocation". Japan's Kyodo news agency said Prime Minister Yoshihiko Noda had ordered ministries to be on alert for the launch."North Korea wants to tell China that it is an independent state by staging the rocket launch and it wants to see if the United States will drop its hostile policies," said Chang Yong-seok, a senior researcher at the Institute for Peace Affairs at Seoul National University.North Korea is banned from conducting missile or nuclear-related activities under UN resolutions imposed after earlier nuclear and missile tests. The country says its rockets are used to put satellites into orbit for peaceful purposes, but that assertion is not widely accepted outside of Pyongyang.Washington and Seoul believe that the impoverished North is testing long-range missile technology with the aim of developing an intercontinental ballistic missile capable of carrying a nuclear warhead.Pyongyang's threats are aimed, in part, at winning concessions and aid from Washington, analysts say.The failed April rocket launch took place to celebrate the 100th anniversary of the birth of North Korea founder Kim Il Sung and the latest test will take place close to the 17 December date of the death of former leader Kim Jong-il.It will also come as South Korea gears up for a 19 December presidential election in a vote that pits a supporter of closer engagement with Pyongyang against the daughter of South Korean dictator Park Chung-hee.The April test was condemned by the UN, although taking action against the North is hard as China refuses to endorse further sanctions against Pyongyang.North Korea is already one of the most heavily sanctioned states on earth thanks to its nuclear programme.Pyongyang has few tools to pressure the outside world to take it seriously due to its diplomatic isolation and its puny economy.The state that Kim Jong-un inherited last December after the death of his father boasts a 1.2 million-member military, but its population of 23 million, many malnourished, supports an economy worth just $40bn annually in purchasing power parity terms, the US Central Intelligence Agency asserts."The North's calculation may be that they have little to lose by going ahead with it at this point," said Baek Seung-joo of the Korea Institute for Defence Analyses in Seoul.Baek said the test planned for December would likely be no more successful in launching a satellite than the April one that crashed into the sea between China and North Korea after flying just 120km. "Kim Jong-un may be taking a big gamble trying to come back from the humiliating failure in April and in the process trying to raise the morale for the military," Baek said.North Korea's space agency said on Saturday that it had worked on "improving the reliability and precision of the satellite and carrier rocket" since April's launch.

NEWS,15.11.2012

Gaza rocket lands near Tel Aviv as death toll rises

Two rockets fired from the Gaza Strip have landed close to Tel Aviv raising the stakes in a military showdown between Israel and the Palestinians that is moving towards all-out war.
It was the first attack on Israel's biggest city in 20 years.
Earlier, a Hamas rocket killed three Israelis north of the Gaza Strip, drawing the first blood from Israel as the Palestinian death toll rose to 16.
On the second day of an assault that Israel said might last many days and culminate in a ground attack, its warplanes bombed targets in and around Gaza City.
Plumes of smoke and dust furled into a sky laced with the vapour trails of outgoing rockets over the crowded city, where four young children killed yesterday were buried.
The sudden conflict, launched by Israel with the killing of Hamas's military chief, pours oil on the fire of a Middle East already ablaze with two years of revolution and an out-of-control civil war in Syria.
In brief:

• Israel has launched a major offensive in the Hamas-controlled Gaza Strip
• It says the attack is in response to Palestinian rocket strikes
• One air strike killed Hamas's military chief Ahmed Al-Jaabari
• Two rockets have landed near Israel's biggest city - Tel Aviv
• Some 270 rockets have been fired at Israel since its operation started
• At least 16 people (including five children) have been killed in the Gaza Strip
• Three Israelis have also been killed in the town of Kiryat Malachi

Egypt's new Islamist President Mohamed Mursi, viewed by Hamas as a protector, led a chorus of denunciation of the Israeli strikes by Palestinian allies.
Mursi's prime minister, Hisham Kandil, will visit Gaza on Friday local time with other Egyptian officials in a show of support for the enclave, an Egyptian cabinet official said.
Israel promised that the delegation would come to no harm.
Israel says its attack is in response to escalating missile strikes from Gaza.

Tel Aviv
Israel's bombing has not yet reached the saturation level seen before it last invaded Gaza in 2008, but Israeli officials have said a ground assault is still an option.
Israeli police said three Israelis died when a rocket hit a four-story building in the town of Kiryat Malachi, some 25km north of Gaza, the first Israeli fatalities of the latest conflict to hit the coastal region.
Air raid sirens sent residents running for shelter in Tel Aviv, Israel's commercial centre. A security source said the rocket - claimed by Islamic Jihad - landed in the sea.
The second was said to have landed in an uninhabited area of the Tel Avivi suburbs.
Tel Aviv residents said an explosion could be heard.The Tel Aviv metropolitan area holds more than three million people - more than 40% of Israel's population.
In remarks broadcast after rockets were fired at Tel Aviv, Israel's Defence Minister Ehud Barak said: "This escalation will exact a price that the other side will have to pay."
He also announced he had ordered the military to enlist more reservists "so that we can prepare for any development".
'Double war crime'
Israeli Prime Minister Benjamin Netanyahu said Hamas was committing a double war crime, by firing at Israeli civilians and hiding behind Palestinians civilians.
"I hope that Hamas and the other terrorist organisations in Gaza got the message," he said. "If not, Israel is prepared to take whatever action is necessary to defend our people."
Hamas spokesman Fawzi Barhoum said Israel would pay a heavy price "for this open war which they initiated".
After watching powerlessly from the sidelines of the Arab Spring, Israel has been thrust to the centre of a volatile new world in which Islamist Hamas hopes that Mursi and his newly dominant Muslim Brotherhood in Egypt will be its protectors.
Hamas's prime minister, Ismail Haniyeh, urged Egypt to do more to help the Palestinians.
"We call upon the brothers in Egypt to take the measures that will deter this enemy," he said.
Instability
The new conflict will be the biggest test yet of Mursi's commitment to Egypt's 1979 peace treaty with Israel, which the West views as the bedrock of Middle East peace.
"The Israelis must realise that this aggression is unacceptable and would only lead to instability in the region and would negatively and greatly impact the security of the region," Mursi said.
The Muslim Brotherhood, which brought Mursi to power in an election after the downfall of autocrat Hosni Mubarak, has called for a "Day of Rage" in Arab capitals on Friday.
The Brotherhood is seen as the spiritual mentors of Hamas.
Al-Jabaari
The Israeli offensive "Pillar of Defence" began on Wednesday when a precision Israeli airstrike killed Hamas military mastermind Ahmed Al-Jaabari. Israel then began shelling the enclave from land, air and sea.
The 15 killed in Gaza included Jaabari and six Hamas fighters plus eight civilians, among them a pregnant woman with twins, an 11-month old boy and three infants, according to the enclave's health ministry. Medics reported at least 130 wounded.
The Israeli army said 156 targets were hit in Gaza, 126 of them rocket launchers.
It said 200 rockets had struck Israel since the start of the operation, 135 of them since midnight local time.
Israel's Iron Dome interceptor system has so far shot down more than 80 rockets headed for residential areas, the military said.
Israeli warplanes dropped leaflets in Gaza telling residents to stay away from Hamas and other militants.

Euro zone falls into recession

The euro zone fell into a recession in July-September, the second since the global financial crisis in 2009, as French resilience could not make up for a slump across Europe and the three-year debt crisis slowed Germany to a crawl.Economic output in the 17-country euro zone fell 0.1% in the third quarter, the EU's statistics office Eurostat said on Thursday, following a 0.2% drop in the second quarter.Those two quarters of contraction put the euro zone's 9.4 trillion euro ($14.7 trillion) economy officially in recession, although Italy and Spain have been contracting for a year already and Greece is suffering an outright depression.Germany and France, the euro zone's biggest economies, could not save the bloc from a double-dip recession even though both countries managed 0.2% growth in the quarter.Large countries like Italy, Spain and the Netherlands all contracted and Belgium, a big exporter, stagnated.Protests against cuts Millions of people across Europe protested against government spending cuts that EU policymakers say are crucial to ending the debt crisis but which others blame for the economic contraction."We are now getting into a double dip recession which is entirely self-made," said Paul De Grauwe, an economist with the London School of Economics."It is a result of excessive austerity in southern countries and unwillingness in the north to do anything else," he said.Not everyone shares that view and the European Commission says labour costs are falling and exports are rising for Greece, Portugal, Spain and Ireland, arguing that austerity is a necessary evil to bring down unsustainable budget deficits.The European Commission sees a 0.4 % contraction for the euro zone in all of 2012.Demand for goods drying up Hopes for a recovery next year are also fading, with the European Commission saying the economy will grow just 0.1% in 2013.A rebound in the euro zone could be vital for the rest of the world as the United States and China struggle with the impact of the crisis on their companies' ability to grow and prosper.In one positive sign, Eurostat said separately that the euro zone's annual inflation fell to 2.5% in October from 2.6% in September, suggesting an end to a run of stubborn inflation that has contributed to the difficult environment.But after months of resilience, Germany, Europe's largest economy, is seeing its companies unnerved by the crisis and demand for its goods in the euro zone and abroad is drying up.While German gross domestic product expanded by 0.5% in the first quarter, it slowed to 0.3% in the second and weakened again in the third quarter.Economists expect a worse performance in the fourth quarter.

Wall Street down

Wall Street dropped today, after Wal-Mart's profit outlook disappointed.Shares of Wal-Mart fell, last down 3.7%, after the retail giant predicted that its fourth-quarter profit will drop."Current macroeconomic conditions continue to pressure our customers," Charles Holley, Wal-Mart's executive vice president and chief financial officer, said in a statement.There was plenty of evidence of that pressure, exacerbated by the effects of Hurricane Sandy. Applications for unemployment benefits jumped more than expected, rising 78,000 to 439,000 in the week ended November 10, according to Labor Department data. A worrying sign indeed. "We will likely see a step back in job growth," Ryan Sweet, senior economist at Moody's Analytics in West Chester, Pennsylvania, told Reuters.Separately, data from the Philadelphia Federal Reserve Bank and the New York Federal Reserve Bank showed that indexes of manufacturing shrank in those regions this month. The latest data only add to the need for President Barack Obama and lawmakers to find a way to avoid the so-called fiscal cliff, a mix of tax increases and spending cuts that will kick in automatically on January 1 and risk hampering the already-fragile economy.In afternoon trading in New York, the Dow Jones Industrial Average dropped 0.38%, while the Standard & Poor's 500 and the Nasdaq Composite Index each shed 0.48%. In Europe, the Stoxx 600 Index ended the day with a 1% slide from the previous close. The FTSE 100 and Germany's DAX each dropped 0.8%. France's CAC 40 shed 0.5%. There was more bad news for the euro zone economy. The latest data showed that the region's gross domestic product dropped 0.1% in the quarter, after a 0.2% decline in the second quarter.A  poll of more than 70 economists predicted the bloc's new recession will extend until the end of the year and 2013 promises little better than stagnation. Conducted before today's data were released, the consensus was for a 2012 contraction of 0.5% and only 0.1% growth next year."The euro zone as a whole has slipped back into recession," Nicholas Spiro, managing director of Spiro Sovereign Strategy in London, wrote in an e-mail to Bloomberg News. "Europe's economic downturn has not only deepened, it has also broadened with the core of the euro zone now much more affected. The bleak economic data out of Europe will further undermine sentiment," according to Spiro.In other news, BP said it reached a settlement with the US government to pay US$4.5 billion in penalties, settling all criminal charges and resolving securities claims relating to the Deepwater Horizon oil spill.

NEWS,24.04.2012.

North Korea's nuclear test ready 'soon'

North Korea has almost completed preparations for a third nuclear test, a senior source with close ties to Pyongyang and Beijing said, which will draw further international condemnation following a failed rocket launch if it goes ahead.The isolated and impoverished state sacrificed the chance of closer ties with the United States when it launched the long-range rocket on 13 April and was censured by the UN Security Council, including the North's sole major ally, China.Critics say the rocket launch was aimed at honing the North's ability to develop an intercontinental ballistic missile capable of hitting the United States, a move that would dramatically increase its military and diplomatic heft.
Now the North appears to be about to carry out a third nuclear test after two in 2006 and 2009."Soon. Preparations are almost complete," the source said when asked whether North Korea was planning to conduct a nuclear test.This is the first time a senior official has confirmed the planned test and the source has correctly predicted events in the past, telling Reuters about the 2006 test days before it happened.
The rocket launch and nuclear test come as Kim Jong-Un, the third of his line to rule North Korea, seeks to cement his grip on power.Kim took office in December and has lauded the country's military might, reaffirming his father's "military first" policies that have stunted economic development and appearing to dash slim hopes of an opening to the outside world.Washington, Seoul and Tokyo, which have most to fear from any North Korean nuclear threat, are watching events anxiously and many observers say that Pyongyang may have the capacity to conduct a test using highly enriched uranium for the first time.Defence experts say that by successfully enriching uranium, to make bombs of the type dropped on Hiroshima nearly 70 years ago, the North would be able to significantly build up stocks of weapons-grade nuclear material.It would also allow it more easily to manufacture a nuclear warhead to mount on a long-range missile.The source did not specify whether the test would be a third test using plutonium, of which it has limited stocks, or whether Pyongyang would use uranium.
South Korean defence sources have been quoted in domestic media as saying a launch could come within two weeks and one North Korea analyst has suggested that it could come as early as the North's "Army Day" on Wednesday.Other observers say that any date is pure speculation.The rocket launch and the planned nuclear test have exposed the limits of China's hold over Pyongyang. Beijing is the North's sole major ally and props up the state with investment and fuel."China is like a chameleon toward North Korea," said Kim Young-Soo, professor of political science at Sogang University in Seoul. "It says it objects to North Korea's provocative acts, but it does not participate in punishing the North."Reports have suggested that a Chinese company may have supplied a rocket launcher shown off at a military parade to mark this month's centenary of the birth of Kim Il-sung, the state's founder, something that may be in breach of UN sanctions.China has denied breaching sanctions.
The source said there was debate in North Korea's top leadership over whether to go ahead with the launch in the face of US warnings and the possibility of further UN sanctions, but that hawks in the Korean People's Army had won the debate.The source dismissed speculation that the failed launch had dealt a blow to Kim Jong-Un, believed to be in his late 20s, who came to power after his father Kim Jong-Il died following a 17-year rule that saw Nort.Korea experience a famine in the 1990s."Kim Jong-Un was named first secretary of the [ruling] Workers' Party and head of the National Defence Commission," the source said, adding that the titles further consolidated his grip on power.North Korean media has recently upped its criticism of South Korean President Lee Myung-bak, who cut off aid to Pyongyang when he took power in 2008, calling him a "rat" and a "bastard" and threatening to turn the South Korean capital to ashes.Pyongyang desperately wants recognition from the United States, the guarantor of the South's security. It claims sovereignty over the entire Korean peninsula, as does South Korea."North Korea may consider abandoning [the test] if the United States agrees to a peace treaty," the source said, reiterating a long-standing demand by Pyongyang for recognition by Washington and a treaty to end the 1950-1953 Korean War, which ended in a truce.

NEWS,14.04.2012.

North Korea's rocket launch failure an embarassment

 

North Korea said its much hyped long-range rocket launch failed, in a very rare and embarrassing public admission of failure by the hermit state and a blow for its new young leader who faces international outrage over the attempt.The isolated North, using the launch to celebrate the 100th birthday of the dead founding president Kim Il-sung and to mark the rise to power of his grandson Kim Jong-un, is now widely expected to press ahead with its third nuclear test to show its military strength.

"The possibility of an additional long-range rocket launch or a nuclear test, as well as a military provocation to strengthen internal solidarity is very high," a senior South Korean defense ministry official told a parliamentary hearing.The two Koreas are divided by the world's most militarised border and remain technically at war after an armistice ended the Korean War in 1953.The United States and Japan said the rocket, which they claimed was a disguised missile test and the North said was to put a satellite into orbit, crashed into the sea after travelling a much shorter distance than a previous North Korean launch.Its failure raises questions over the impoverished North's reclusive leadership which has one of the world's largest standing armies but cannot feed its people without outside aid, largely from its only powerful backer, China."(There is) no question that the failed launch turns speculation toward the ramifications for the leadership in Pyongyang: a fireworks display gone bad on the biggest day of the year," said Scott Snyder of the Council on Foreign Relations.In a highly unusual move, the North, which still claims success with a 2009 satellite that others say failed, admitted in a state television broadcast seen by its 23 million people that the latest satellite had not made it into orbit.The failure is the first major and very public challenge for the third of the Kim dynasty to rule North Korea just months into the leadership of a man believed to be in his late 20s."It could be indication of subtle change in the North Korean leadership in how they handle these things, something that may be different from the past," said Baek Seung-joo of the Korea Institute of Defense Analyses a thinktank affiliated with South Korean Defence Ministry."I mean it would have been unthinkable for them to admit this kind of failure in the past, something that could be seen as an international humiliation. The decision to have come out with the admission had to come from Kim Jong-un."Embarrassingly, the rocket flew for just a few minutes covering a little over 100km to explode over a sea separating the Korean peninsula and China, far less than the last rocket in 2009 that travelled 3,800km, alarming Japan which it over-flew.The launch is in breach of United Nations Security Council sanctions and drew condemnation from the United States, Russia, South Korea and Japan.But North Korea looks to have avoided the threat of fresh UN sanctions - which neighbor Japan is pushing for - after Russian Foreign Minister Sergei Lavrov said that at talks with his Chinese and Indian counterparts they had agreed new sanctions would do nothing to help resolve the situation.Regional powers are worried that the North is using launches to perfect technology to enable it to build a missile capable of delivering a nuclear warhead to the United States.North Korea has repeatedly defended its right to launch rockets for what it says are peaceful purposes and may have invested hundreds of millions of dollars in the failed launch.China, the North's main backer, again appealed for "calm", although its failure to dissuade Pyongyang from undertaking the launch despite propping up the ailing and impoverished state, showed the limitations of its diplomacy, analysts said."North Korea's provocative action threatens regional security, violates international law and contravenes its own recent commitments," White House spokesman Jay Carney said.The North American Aerospace Defense Command, NORAD, said the first stage fell into the sea west of South Korea and the remainder was deemed to have failed."No debris fell on land," NORAD said. "At no time were the missile or the resultant debris a threat."

Chavez vows to knock out rivals despite tiring treatment

 

Feisty Venezuelan President Hugo Chavez acknowledged today that radiation treatment for cancer was wearing him down, but he vowed to squash his opponents in October's presidential election.Ramping up the political rhetoric at a huge rally to mark the 10th anniversary of his return to power after a brief coup, Chavez said three sessions of radiation therapy in Cuba had taken their toll.But he was more combative than usual, vowing to win the October 7 "by a knock-out," repeatedly denouncing his opponents as upper-class "bourgeoisie losers," and launching a new anti-coup force that would prevent any repeat of the events of 2002."I continue to recover from the surgery. The radiation has an impact on my body, it has some impact on my physical strength, but I am doing well. We will be alright, thank God," he told tens of thousands of supporters clad in red T-shirts in honor of his ruling Socialist Party.Chavez, 57, said his doctors had not decided whether he was fit to attend a summit of the hemisphere's leaders, including U.S. President Barack Obama, this weekend in Colombia.If he did attend, it would only be for a few hours before continuing on to Havana for a fourth session of radiation treatment. This time, he told the rally from the balcony of the Miraflores presidential palace in Caracas, he would spend the whole week in Cuba - longer than his recent trips.The president said he wanted to avoid "coming and going."His frequent visits to a tightly guarded hospital on the Communist-led island means he is taking himself off the political stage for much of the time, just as the opposition's candidate Henrique Capriles pushes on with a national campaign.The political temperature has heated up with the coup anniversary. All week, state TV has played video of the dramatic events of April 11-13, when big marches by both sides clashed in the streets around Miraflores and about 20 people died.Chavez was ousted from power for two days until giant demonstrations by his supporters, and allies in the military, returned him to power in a saga that has taken on almost religious overtones for some passionate "Chavistas."A decade later, they still fume at the illegality of how he was ousted from office. It is also an emotional date for some in the opposition who had a brief taste of long-sought power and a sense of what a post-Chavez Venezuela might feel like.Others in the opposition were happy to see him replaced, if only temporarily, but remain upset by how it happened.Chavez routinely accuses his political foes of plotting another attempt to seize power by force."Prepare yourselves to receive the biggest and most crushing defeat," he said as the crowd cheered.He gave very few details of the new anti-coup force he launched today, but his fiery comments set the stage for a bitterly contested election.They follow threats he made recently to nationalize private banks and any other local businesses that he said were supporting the opposition in its "violent plan" to topple him."We will make them repent forever," he said last month.While he has a solid 13 percentage point lead over Capriles in the most recent poll published last month, many Venezuelans remain undecided and Chavez faces his toughest electoral challenge.His illness has cast further doubt over the future of the man who has dominated politics in South America's biggest oil exporter during his 13 years in office.Very little is known about Chavez's health, including the type of cancer he is battling. He has undergone three operations in Cuba in less than a year and rumors persist that he is more ill than he has admitted.

NEWS,09.04.2012.

Police investigate racially-charged comments in Oklahoma shootings

 Alvin Lee Watts and Jacob Carl England are seen in a combination of undated pictures released by Tulsa County Sheriff's Office 

Authorities were investigating racially charged comments on the Facebook page of a suspect in the shootings of five black people in Tulsa.Police arrested two white men on Sunday morning, two days after the shootings killed three people in a mostly black Tulsa neighborhood.There was no connection between the victims and the suspects and without a motive, talk of hate crime charges was premature, authorities said."You could look at the facts of the case and come up with would appear to be a logical theory, but we're going to let the evidence take us where we want to go," Tulsa Police Chief Chuck Jordan to old reporters on Sunday."I certainly couldn't make that determination right now."Roommates Jake England, 19, and Alvin Watts, 32, were arrested in the early Friday shootings.Authorities say they don't know which one pulled the trigger, but are charging both.Shortly before the killings, England had lamented on his Facebook page that two years had passed since his father was killed by a black man, whom he referred to with a racial slur."I'm gone in the head," England wrote.Watts, England's roommate, offered words of support to his friend in response to the posting.Investigators are unsure to what extent the killing of England's father played a role in the shootings, said Tulsa Police Major Walter Evans.Among the dead was one woman, identified as Dannaer Fields, 49, and two men, Bobby Clark, 54, and William Allen, 31.The two wounded men, who were not identified, were expected to survive.Oklahoma authorities have said the suspects will likely face state murder charges.A handgun was recovered when the pair was arrested at a home in Turley, a small town north of Tulsa about four miles from the home they shared.A white pickup truck, similar to that described by a witness, was recovered about 10 miles from the suspects' house, police said.The vehicle had been burned, they said.Sometime after the shootings, England posted another Facebook comment complaining: "people talking (expletive) on me for some (expletive) I didn't do it just mite be the time to call it quits ... I hate to say it like that but I'm done if something does happen tonight be ready for another funeral later."Tulsa City Councilman Jack Henderson said he believed the two suspects simply had a grudge against black people.If that proves to be true, he said, he hopes prosecutors pursue twin charges of murder and committing a hate crime."I think that's probably what will happen," said Henderson, the only black member of the Tulsa City Council and whose northside district is where the shootings took place.Before the arrests, some residents worried about whether it was safe to attend church on Easter Sunday, Henderson said.Police had few clues in the shootings and pleaded for help from the public on Saturday afternoon."We were desperate for leads," Jordan said.About 10 of the 40 telephone tips received proved helpful, Jordan said.

 

Renegade North Korean rocket is ready to go

North Korean space officials have moved all three stages of a long-range rocket into position for a controversial launch. The country has vowed to go ahead with the launch in defiance of international warnings against violating a ban on missile activity.Yesterday foreign news agencies were allowed a look at preparations under way at the coastal Sohae Satellite Station in the northwest of the country.North Korea announced plans last month to launch a communications satellite using a three-stage rocket during mid-April celebrations of the 100th anniversary of the birth of North Korean founder Kim Il-sung.Engineers said the satellite would orbit Earth and send back data for weather forecasts and crop surveys.The US, Japan, Britain and other nations have urged North Korea to cancel the launch, warning that firing the rocket would violate UN resolutions and North Korea's promise to refrain from engaging in nuclear and missile activity.North Korea maintains the launch is meant to display its scientific achievement.Experts say the Unha-3 rocket scheduled for liftoff between April 12 and 16 could test long-range missile technology that might be used to strike the US and other targets.

North Korea has tested two atomic devices, but is not believed to have mastered the technology needed to mount a warhead on a long-range missile.Yesterday, reporters were taken by train to North Korea's new launch pad in the hamlet of Tongchang-ri in North Pyongan province, about 50km south of the border town of Sinuiju along North Korea's west coast.All three stages of the rocket were seen in position at the launch pad, with fuelling due to begin soon, satellite station general manager Jang Myong Jin said during a tour of the Tongchang-ri facilities.He said preparations were on track for liftoff and that international space, aviation and maritime authorities had been advised.Japan and South Korea said they were prepared to shoot down any parts of the rocket that threatened to fall in their territory - a move North Korea's Foreign Ministry warned would be considered a declaration of war.

NEWS,17.03.2012.

North Korean rocket plan draws condemnation

North Korea says it will launch a long-range rocket carrying a "working" satellite to mark the centenary of founder Kim Il-sung's birth next month. The move has drawn international condemnation and could scuttle US plans to resume food aid. The United States warned North Korea that such a launch could violate Pyongyang's February agreement to stop nuclear tests, uranium enrichment and long-range missile launches and to allow checks by nuclear inspectors. UN Secretary-General Ban Ki-moon, a former South Korean foreign minister, urged North Korea to comply with UN Security Council resolutions banning launches using ballistic missile technology. Russia, South Korea, Japan, Britain, France and others also expressed concern. Russia's Foreign Ministry called for "maximum restraint from all sides," suggesting aggressive responses by North Korea's neighbours also would be ill-advised. Experts said the launch was clearly another long-range missile test, and could be seen as an act of brinkmanship to pressure Washington into more talks in return for aid. Analysts said the launch also was aimed at boosting the communist country's new leadership. US Secretary of State Hillary Clinton said the announcement was highly provocative and called on North Korea to honour its obligations including the UN Security Council resolutions banning ballistic missile launches.” Such a missile launch would pose a threat to regional security and would also be inconsistent with North Korea's recent undertaking to refrain from long-range missile launches," she said in a statement. The State Department said a launch could force the United States to halt plans for food aid that were announced alongside the nuclear deal and seen as a step to ease tensions following the December death of North Korean leader Kim Jong-il and the ascent of his young and untested heir, Kim Jong-un.South Korea, still technically at war with the North after signing only an armistice to end the 1950-53 Korean War, and Japan said the ballistic launch threatened regional security. North Korea pledged that next month's launch would not impact neighbouring countries. Pyongyang has provided few details on the new satellite, but has said it will be a "working" satellite developed using indigenous technology. The launch will take place between April 12-16, North Korea's official KCNA said. It is due to occur at around the time South Korea holds a parliamentary election, and just over three weeks after a global nuclear security summit in Seoul. Any launch by North Korea, whether for a satellite or not, that uses ballistic missile technology violates Security Council resolutions, the Japanese government said.” We urge North Korea to exercise restraint and refrain from the launch," said the top government spokesman, Chief Cabinet Secretary Osamu Fujimura.China, the reclusive state's only main ally, was more restrained in its response, but stressed the need to maintain peace on the divided peninsula.” Protecting the peace and stability of the Korean Peninsula and North East Asia suits the joint interests of all parties and is the consistent expectation of the international community. This requires that all relevant parties take a constructive role," Foreign Ministry spokesman Liu Weimin told reporters at a regular news briefing. In April 2009, North Korea conducted a similar ballistic rocket launch that resulted in a new round of toughened UN sanctions, squeezing the secretive state's already troubled economy and deepening its isolation. That launch, dismissed as a failure after the first stage fell into the Sea of Japan without placing a satellite in orbit, provoked outrage in Tokyo, which had threatened to shoot down any debris or rocket that threatened its territory. Another test failed in similar circumstances in 1998.Russia urged North Korea not to set up obstacles to the revival of six-nation talks over its nuclear program."We call on Pyongyang not to put itself in opposition to the international community, to refrain from actions that increase tension in the region and create additional complications for the relaunch of six-sided negotiations about the nuclear issue on the Korean peninsula," the Foreign Ministry said. Britain’s UN Ambassador Mark Lyall Grant told reporters that such a rocket launch would likely be a violation of U.N. Security Council resolutions. French Foreign ministry spokesman Bernard Valero added, "North Korea must give up this project, which goes against UN Security Council resolutions.” Washington says the North's long-range ballistic missile program is moving ahead quickly and former Defense Secretary Robert Gates said last year that the American mainland could come under threat within five years.” The DPRK is to launch a working satellite, Kwangmyongsong-3, manufactured by itself with indigenous technology to mark the 100th birth anniversary of President Kim Il-sung," the North's official KCNA said, quoting a spokesman for the Korean Committee for Space Technology.KCNA said the launch would be conducted from a base near its border with China, indicating it would take place at a newly constructed missile testing site believed to be larger and more advanced than the site used to launch previous rockets. The launch will be made southwards and debris generated from the flight will not impact neighbouring countries, it said. Pyongyang has been planning massive celebrations for years to mark Kim Il-sung's birthday on April 15, and has boasted the occasion would also mark its emergence on the international stage as a "strong and prosperous" nation. The state's new young leader Kim Jong-un, who became the third member of the Kim family to lead the state after his father's death in December, has presented a militaristic image to his countrymen since taking power. He has visited several military sites and been seen mixing with top brass in what analysts say is a move designed to win the all-powerful army's backing for the succession process. The United States had planned to deliver 240,000 tons of food aid over the next year to the impoverished country, which suffered a crippling famine in the 1990s that killed an estimated one million people.