NEWS,16. AND 17.05.2013

Pope rails against economic dictatorship

Pope Francis issued a strong call for world financial reform on Thursday, condemning a heartless "dictatorship of the economy" and saying the economic crisis had made life worse for millions in rich and poor countries.
"Money has to serve, not to rule," he told ambassadors in the first major speech about finance since his election in March in which he also urged states to take greater control of their economies and protect the weakest.
The economic crisis had created fear and desperation, diminished joy of life and increased violence and poverty as more people struggled to get by in "undignified" ways, the pope said.
There was a "need for financial reform along ethical lines that would produce in its turn an economic reform to benefit everyone," he added.
"We have created new idols. The worship of the golden calf of old has found a new and heartless image in the cult of money and the dictatorship of an economy which is faceless and lacking any truly humane goal," he said.
The reference was to the Book of Exodus in the bible, when the Israelites worshipped a golden calf while Moses was at the top of Mount Sinai receiving the Ten Commandments.
While Francis' predecessor Benedict also called for changes in economic systems, he did so in often dense intellectual language.
Francis seemed to be expressing very personal views forged from his experience with the poor in Latin America.
Francis, who has said he wants the 1.2 billion-member Catholic Church to defend the poor and be more austere itself, urged more state control over economies.
"While the income of a minority is increasing exponentially, that of the majority is crumbling," he said.
"This imbalance results from ideologies which uphold the absolute autonomy of markets and financial speculation, and thus deny the right of control to states, which are themselves charged with providing for the common good," he added.
Market tyranny
Speaking of financial markets he said: "A new, invisible and at times virtual, tyranny is established, one which unilaterally and irremediably imposes its own laws and rules."
In many cases, the value of people was judged by their ability to consume, he added.
The pope's comments add to growing expressions of concern about a global economic malaise that has left millions out of work or hanging on to insecure, short-term jobs.
Francis, the former Cardinal Jorge Bergoglio of Buenos Aires, said his pontificate would side with the poor on social and economic issues.
"The Pope loves everyone, rich and poor alike, but the Pope has the duty, in Christ's name, to remind the rich to help the poor, to respect them, to promote them," he said.
Francis, who will visit a slum during his trip to Brazil in July, urged "those in power to be truly at the service of the common good of their peoples" financial leaders "to take account of ethics and solidarity".

Pressure too much for some top CEOs

On approaching his 60th birthday this year, long-serving Tullow Oil boss Aidan Heavey told staff he felt "like two 30 year-olds".
A handful of recent shock departures by 50-something chief executives at European blue chip companies - none of them under any obvious pressure to quit - suggest some of his peers either lack that vigour, or want to channel it elsewhere.
Peter Voser is giving up one of the world's most challenging CEO roles at Royal Dutch/Shell next year, before his 55th birthday, in pursuit of a "lifestyle change".
Swiss engineering group ABB's 55-year old boss Joe Hogan is also going, for "private reasons". Pierre-Olivier Beckers, 53, is walking out on Belgian retailer Delhaize , and Paul Walsh, 57, is waving goodbye to drinks multinational Diageo.
All four are about average European CEO age.
While the rising financial rewards of running a modern multinational have been well publicised, executive recruiters say the pressures of the job have also been ratcheted up in recent years, and not just because of the tough economic times.
"The reality is it's gruelling. It's really tough, and there comes a point where you don't want to do it any more," said Ian Butcher, who headhunts board-level and senior executives for MWM Consulting.
"The quarterly reporting, the governance, the regulatory aspects, it just becomes very wearing - the level of scrutiny, the pace at which things are moving, the short-term nature of how people look at any given situation. Even over the past five years these things have made CEO a tougher position to hold, and the travel that people have to undertake in these jobs - it's just something they run out of steam on."
Some recent early retirees, while still well short of traditional retirement age, also got to the top spot early.
"They're still in their early fifties, with energy and a desire to do something, but they want to do something different, something quite significantly different sometimes," says Butcher.
Voser fits that bill. He has no plans to collect well-paid chairmanships and non-executive directorships, as many ex-CEOs have done in the past. Former Tesco chief Terry Leahy has also resisted that gravy train since he left two years ago.
As for the early starters, executive search industry professionals point at people like Andrew Witty, the CEO of GlaxoSmithKline, who took on the job aged 44 in 2008 and would have to stay in harness for another decade to reach 60 in the role.
Blue-chip bosses as young as Witty are still rare, but over a quarter of Europe's current crop have less than two years in the job, and more than half have less than four, according to data from executive search specialists BoardEx.
Median CEO age is 55 years
The BoardEx data, collected for Reuters from 238 companies in the main stock indexes of Germany, Britain, France, Spain, Italy, Belgium, the Netherlands and Denmark, puts the median CEO age at 55, and the median tenure at four years. Only 16 percent of the group have held on for 10 years and more.
The longest serving of them is Martin Gilbert of the British fund Aberdeen Asset Management. Though younger, at 57, Gilbert pips the 28.3-year tenure of Tullow's double thirty year-old Heavey, with 29.8 years at the helm.
There are 17 top European CEOs who have been in the job for less than six months, and the youngest of the 225 in the group for whom ages were available is Vitaly Nesis, 37, who runs Polymetal International, the London-listed Russian precious metals miner.
While the recent spate of quitters are looking for something else to do, there are still some who appear to want nothing but.
In the BoardEx group there are four over 70, and the oldest by eight years is Albert Frere, CEO of Group Bruxelles Lambert .
Perhaps some linger on for fear that the pension pot is still a little light. Frere will have put such qualms behind him long ago. At 87, he is Belgium's richest man.

China steps up inspection of meat trade

China has begun a crackdown on the sales of fake, diseased and tainted meat products after a series of scandals that have further dented public confidence in the food industry, the official Xinhua news agency said on Thursday.

It said the State Council, China's cabinet, recently ordered local government departments to step up checks on meat and processed meat products, and carry out detailed inspections of rural factories, workshops and warehouses as well as private slaughterhouses. 

"The current water-injected meat, fake beef and mutton, dead livestock and other types of toxic and hazardous meat has aroused widespread concern," said the report.

"Local governments at all levels should strengthen their organisation and leadership, to severely crack down on fake beef and mutton and other illegal and criminal activities."

Pork and poultry prices have suffered this year as a result of a series of food safety scandals, a bird flu outbreak and crackdown on expensive government banquets. 

China has long been plagued by poor food safety standards, but many of the recent scares have involved its meat trade.

Earlier this month, the police said it had uncovered a crime ring that passed off more than $1m rat and small mammal meat as mutton. 

It came after pictures of thousands of dead pigs dumped in rivers supplying Shanghai caused widespread outrage. 

A media report last year uncovered excessive levels of hormones and antiviral drugs in chicken meat supplied to KFC, whose parent company is Yum Brands, and McDonald's. 

Beijing has repeatedly called for greater inspection of food processing facilities to tackle food safety problems, but such actions appear to have done little to improve standards.

The latest clampdown will encourages local governments to offer rewards to people who inform on illegal activities.

The government also called for implementation of measures for the proper disposal of livestock that had died from disease.

Tycoon: Mining firms treated as ATMs

Australia's richest person Gina Rinehart on Friday accused the government of using the mining industry as an ATM, warning of an unhealthy reliance on the sector and unsustainable debt levels.

In a speech to be delivered at the Australian Mines and Metals Association conference, the outspoken tycoon, chairman of Hancock Prospecting, cautioned that without reform Australia risked the debt problems faced by countries like Greece.

"Let's not be too proud to admit that we're really just a large island with a small population with record debt," she said, according to extracts of the pre-recorded speech.

"Plenty of Australians know this in a casual way.

"What few seem to properly understand even people in government  is that miners and other resources industries aren't just ATMs (cash machines) for everyone else to draw from without that money first having to be earned and, before that, giant investments are made."

Australia's economy has been driven by the mining industry but the boom is approaching an investment peak and a bumpy transformation lies ahead as alternative sources of growth are sought.

Mining projects have faced headwinds from depressed conditions in Europe and the United States, softening growth in China and increased competition from other producers as well as falling commodity prices.

Earlier this week, the government revealed a significant plunge in revenues due to sluggish corporate tax earnings and announced an $18bn budget deficit for 2013/14, having previously forecast a surplus.

Rinehart said the government had been complacent in managing the commodities boom and its debt levels which are forecast to peak in 2014/2015 at 11.4 percent of GDP were unsustainable.

"It is incredible that after the last six years of record commodity boom times, we now find the once lucky country in record debt, with the budget tipped to deliver yet another deficit, to further increase our record debt," she said.

"Without mining and its related companies this country has no hope of repaying our record debt without facing the problems Greece and other countries faced with overspending and consequent debt traumas."

Rinehart has been a fierce critic of the government's mining and carbon taxes, saying that along with red tape and high wages it had made Australia "cost uncompetitive".

According to the Australian Financial Review, she was also to use her speech to urge Australia to borrow from the economic policies of Singapore, using low taxes to encourage investment and development.

NEWS,11.01.2013

British manufacturing output slumps

British manufacturing output fell in November and industrial production was weaker than expected, official data showed on Friday, sparking renewed speculation that the economy shrank at the end of 2012.Manufacturing output contracted by 0.3% in November from activity in October and dived by 2.1% on a 12-month comparison, the Office for National Statistics (ONS) said in a statement. That was worse than market expectations for a monthly increase of 0.5% and an annual drop of 2.1%, according to analysts polled by Dow Jones Newswires. Manufacturing suffered a sharp downturn as construction industry output fell by 3.4% in November from activity in October - which was the biggest monthly decline for seven months - and tumbled 9.8% on an annual basis. "November's disappointing UK industrial production and construction figures provided yet more evidence that the economy probably contracted in the fourth quarter of last year," said Vicky Redwood, chief UK economist at British research group Capital Economics. The wider measure of industrial production - which includes also mining and quarrying, electricity, gas and water supply - rose by 0.3% in November from October, but fell 2.4% on an annual basis. The ONS said that the modest increase in industrial output was caused by the return to production of the North Sea's Buzzard Oil field, which was closed throughout September and October for maintenance. As a result, oil and gas extraction soared 11.3% in November compared with October. That was the biggest monthly gain since January 1968."Although overall production posted a 0.3% monthly rise, this just reflected a bounce-back in the energy sector," added Redwood. The ONS will publish its initial estimate for British gross domestic product (GDP) in the fourth quarter, or October-December period, on January 25.Britain, which has suffered two recessions since the 2008 financial crisis, will suffer a triple-dip recession should GDP contract in both the fourth quarter of last year and first quarter of 2013.

Japan unveils $226bn stimulus package

Japan's new government unveiled a massive $226.5bn stimulus plan on Friday in the latest bid to boost the world's number three economy, with plans to rebuild disaster-hit areas and beef up the military. Japanese investors welcomed the news, with the Nikkei index surging to a 22-month high and the yen tumbling, but analysts questioned its long-term effect and warned it could lead to more misery further down the line. Prime Minister Shinzo Abe, who came to power in a landslide election victory last month, followed through with one of his key pledges by outlining details of a big-spending plan designed create jobs and end deflation. "With the measures, we will achieve real GDP growth of two percent and 600 000 jobs will be created," he told a briefing. Japan's economy shrank by 0.6% in 2011, while last year's gross domestic product figures are yet to be released. "It is crucially important to break out of prolonged deflation and the high yen," he added. A hawkish Abe also repeated his call for Tokyo and the Bank of Japan to "join hands" on driving growth, comments that have stoked tension between the him and BoJ chief Masaaki Shirakawa over perceived threats to its independence and policy decisions. The new premier had pledged before the election that he would press the BoJ to carry out more aggressive monetary easing and warned that if it did not agree to a two percent inflation target he would change the law regarding its remit. While the total size of Friday's package came in at ¥20.2 trillion, Tokyo's direct spending on economic stimulus and pension financing amounts to about ¥13 trillion, with local governments and the private sector kicking in the rest, Abe said. Rebuilding disaster-struck areas, making more schools and hospitals earthquake resistant, and upgrading ageing infrastructure were among the planned measures. It will also see ¥180.5bn spent on missiles, fighter jets and helicopters to beef up the military as Tokyo is embroiled in an increasingly bitter territorial row with China over a group of uninhabited islands in the East China Sea.Friday's stimulus is the latest unveiled by successive governments who have tried to lift the economy from years of anaemic growth. Investors gave a big thumbs up, with the Nikkei surging 1.5% in the afternoon to levels not seen since before the March 2011 quake tsunami. The yen also tumbled to ¥89.35 against the dollar, its lowest since June 2010 and a far cry from the record high 75 it hit in late 2011, which hammered exporters. But the big spending plans have stoked fears over Japan's already tattered fiscal health, the worst among industrial countries with public debt standing at more than twice the size of the economy. "Huge spending of this size will, of course, have a one-time effect on boosting the economy. But if it fails to ignite a sustained recovery, Japan could fall into a vicious cycle of needing more stimulus spending," said Taro Saito, senior economist at NLI Research Institute. Saito also raised fears that some of the money would fall into a black hole of "wasteful spending". "If that is the case, it would only have a negative impact on Japan's fiscal health and a limited effect on boosting the economy," he said. Abe, however, insisted the package was not just a return to form for his Liberal Democratic Party (LDP), which has a history during its decades-long domination of what critics say is pork-barrelling, especially in the vote-rich countryside. "There is a suspicion that it is a kind of wasteful spending on white elephant projects that the LDP did in the past. That's wrong," Abe said on Friday. "Fiscal discipline is quite important. However, without a strong economy... we cannot improve our fiscal health."

Banks Officially No More Than Giant Babies: Seven And A Half Things To Know

Thing One: Are You Comfortable, Banks? Can We Get You Anything? When it comes to big banks, we're like overly doting parents: Four years after the financial crisis, we just can't stop babying them.Apparently, despite the personal guarantee of Warren Buffett that the banks are okey-dokey, they still need our assistance. Their profit margins are getting squeezed in several ways, writes Robin Sidel in the Wall Street Journal (as we'll observe when they report fourth-quarter earnings, starting with Wells Fargo today). For one thing, they have way too many deposits, on which they must pay interest. For another, they're having a hard time finding anybody they want to loan money, so they're not getting as much interest back. As a result, their net interest margins are too thin. Meanwhile, they also just can't seem to stop getting into trouble and paying hefty fines all of the time, which is also not great for business. Big lenders will take hits totaling about $20 billion in fines this quarter from their various settlements with the government, Sidel notes settlements that weren't too awfully onerous and that almost never involved any criminal charges being filed, mind you. Even as we speak, they're getting into more trouble: A couple of top UBS executives testifying before a UK parliamentary commission yesterday expressed shock and ignorance about rampant Libor fraud at their bank, for which it has paid $1.5 billion in fines. And Reuters reports that JPMorgan Chase will soon get a strongly worded letter from the U.S. government that it needs to do a better job of keeping an eye on the money going through its coffers, lest it run afoul of money-laundering laws, as HSBC, Standard Chartered and many other banks have before.Meanwhile, banks complained so much about the fragile state of housing that they won some key concessions in the new mortgage-lending rules announced yesterday by the Consumer Financial Protection Bureau, notes Peter Eavis in the New York Times. The rules may prevent some of the pre-crisis abuses in mortgage lending that helped lead to the housing collapse, but they will take effect over many years, and the CFPB offered possibly unnecessary protections to the banks against being sued by homeowners. In another sop to the banks, the recent government settlement with mortgage lenders over their shoddy foreclosure practices was based on a belief that actually reviewing cases of foreclosure abuse was just way too hard, and that it's better for everybody (except homeowners) just to let lenders handle things as they see fit, as Jessica Silver-Greenberg in the NYT reminds us (and EleazarDavid Melendez and Ben Hallman wrote earlier this week).All of this follows the most profound bank concession of all: the retreat earlier this week on tougher bank capital and liquidity standards by the Basel III regulators. Some commentators suggested this surrender was a good thing, otherwise these tender banks would be so fragile as to not be able to lend money any more. That's just completely wrong. The banks already aren't lending money, as Sidel's WSJ story today points out, either because they're being too finicky or because the economy is weak or because there's just not that much demand for loans, or all of the above. Distant-future capital and liquidity standards are not really a big part of the equation. Sure, business is bad, and we help industries when business is bad. But we shouldn't sacrifice the future safety of the financial system in the process. It's time to stop spoiling these banks.

Thing Two: More Stimulus For Japan: The government of new Japanese Prime Minister Shinzo Abe approved a $116 billion stimulus plan for that country this morning, the latest in a long series of measures aiming to jolt that moribund economy back to life. The move puts pressure on Japan's central bank to pitch in with its own monetary stimulus measures later this month, writes Reuters.

Thing Three: Dreamliner Nightmare Won't End: Another day, another set of mishaps on Boeing 787 Dreamliner airplanes. This time both incidents happened in Japan, one involving a fuel leak and another involving a cracked windshield. Both planes were operated by All Nippon Airways. Earlier this week, two separate Japan Airlines flights had trouble at Boston's Logan International Airport. The FAA is launching an investigation with a press conference in Washington later today.

Thing Four: Google's European Vexation: U.S. antitrust regulators may have given Google a pass, but European regulators aren't going to be such pushovers. The European Union's competition chief told the Financial Times that the search giant will have to "change the way it presents search results in Europe or face antitrust charges."

Thing Five: Fed To America: You're Welcome: Well, this should help with the deficit, a little: The Federal Reserve turned a record profit of $88.9 billion last year, the WSJ writes. That will go straight to the Treasury Department. Funny thing is, that profit came from the Treasury Department, in the form of interest payments on the mountain of Treasury bonds the Fed holds as a result of its stimulus programs.

Thing Six: Shell Game: A Shell oil rig that ran aground off the coast of Alaska last week might have been in motion only because Shell was trying to avoid paying taxes, according to a letter from Rep. Edward Markey (D-Mass.) to Shell's CEO. Shell denies the claim and says the rig was being moved for safety reasons. But a Shell spokesman last month told a local paper the timing of the rig's move was influenced by tax considerations, Reuters writes.

Thing Seven: Not-So-OK Computer: Some years back the RAND Corporation touted far and wide the benefits of switching health records from paper to electronic systems as a way of improving health-care efficiency and cutting costs, and the government spent tons of money to help speed up the process. Now, after a new study, RAND admits that it can see little benefit from the switchover, the New York Times writes. Awesome show, RAND. Great job!

Thing Seven And One Half: A Day In The Life: As a public service, to provide you a yardstick against which to measure your own life, Uproxx has unearthed an old AP story with a chronological list of all of the things Hunter S. Thompson ingested in a typical day. (Hint: Cocaine is well-represented.) It's a miracle he survived to that afternoon, much less the age of 67.

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Shell Kulluk Rig May Have Been Moved To Avoid Paying Millions Of Dollars In Taxes: Lawmaker

Shell may have moved an oil rig that ran aground off Alaska last week partly to avoid millions of dollars in taxes, U.S. Rep. Ed Markey said, raising even more questions about the oil company's decision on the timing of the move. The letter from the top Democrat on the House of Representatives Natural Resources Committee adds to the already-intense political scrutiny of Royal Dutch Shell's ambitious and troubled Arctic drilling foray last year. Shell's 30-year-old Kulluk drillship ran aground on New Year's Eve in what were described as "near hurricane" conditions while it was being towed south for the winter. In a letter to Shell's top U.S. executive, Marvin Odum, Markey said the decision to move the rig "may have been driven, in part, by a desire to avoid...tax liability on the rig. "In late December, a Shell spokesman told a local newspaper, the Dutch Harbor Fisherman, that it was "fair to say the current tax structure related to vessels of this type influenced the timing of our departure." But Shell said in response to Markey on Thursday that its decision was guided by safety, not taxes. Markey, an outspoken critic of the oil and gas industry, said his office received information about Shell and taxes from Alaska's revenue department. Shell could have been exposed to a state tax if the rig had remained in the state until January 1, as Alaska law says an annual tax of 2 percent can be assessed on drilling equipment on that date, Markey said in the letter sent on Wednesday.The company spent $292 million on upgrades on the rig since purchasing it in 2005, so the liability could have been about $6 million, he wrote. In total, Shell has spent $4.5 billion since 2005 to develop the Arctic's vast oil reserves. Jim Greeley, Anchorage-based petroleum property assessor for the Alaska Department of Revenue, explained that the tax applies to property used for exploration, production or transportation of oil or natural gas. He could not say whether the Kulluk would have been taxed or whether Shell's actions avoided a tax. The issue was complicated by the fact that Shell's drilling was in federal waters. "There's no tax precedent for that," at least in recent times, Greeley said, adding that department officials were researching the tax practices from two decades ago when there was a flurry of drilling offshore Alaska.The decision would have to be made by the time the state publishes its tax rolls on March 1.Shell's Arctic work has been closely watched by many in the industry and especially by ConocoPhillips ahead of its planned Alaska offshore drilling program slated for 2014.According to the U.S. government, the Beaufort and Chukchi seas hold an estimated 23 billion barrels of recoverable oil  equivalent to a tenth of Saudi Arabia's reserves. A Shell spokeswoman said the plan for the Kulluk this winter was always to move it in December. "While we are aware of the tax environment wherever we operate, the driver for operational decisions is governed by safety." She said an approved tow plan for the rig included weather considerations. Winter transit in northern waters is not unusual for rigs. Just this month, a rig owned by contractor Seadrill was due to arrive in Norway to start work for Statoil, while another was headed to Canada for Exxon Mobil Corp. The Kulluk accident is only Shell's latest problem in Alaska. Its 2012 Arctic drilling season was plagued by delays due to lingering ice and problems getting a mandatory oil spill containment vessel certified by the Coast Guard. Also, the U.S. Environmental Protection Agency said late on Thursday it issued notices of violation for air pollution in 2012 for the Noble Corp-owned Discoverer, Shell's other Arctic rig, and for the Kulluk. The EPA also terminated a temporary, more lenient permit granted to Shell in September for the Discoverer and said Shell's application for a less strict air permit was still under review. The U.S. Department of the Interior said this week it would review Shell's Arctic oil drilling program to assess the challenges it faced and to guide future Arctic permitting. Markey's committee does not have the power to stop drilling. His investigation would focus on why the rig was being towed along the coast down to Washington state in such severe weather and on Shell's safety policies, an aide to Markey said. Any permitting changes or delays resulting from the Interior Department review could threaten Shell's 2013 drilling plans, as the company has a limited drilling window during the summer. The Kulluk, before heading south, had previously been at a private facility in Unalaska/Dutch Harbor operated by Kirkland, Washington-based Offshore Systems Inc, which serves fishing and other vessels in Alaska. Harbormaster Jim Days said it was there for at least a month after completing its Beaufort Sea drilling. The environmental impact of the Kulluk accident is so far limited. The incident response team has located all four survival ships and one rescue ship that were dislodged from the drillship when it ran aground. The survival ships all had 68-gallon-capacity fuel tanks and two had been breached. None of the 155,000 gallons of fuel and other oil products aboard the Kulluk itself had leaked.

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,03.04.2012.

Crazy gas prices driving German consumers mad

A price board at a petrol station in Berlin, Germany on March 30. The price for "super" at 1.71 euro per liter is approximately $8.56 a gallon.  “Oh nein,” there is another traffic jam at my local gas station.Normally, German drivers only encounter severe congestion on their famed autobahns, where traffic flow is often hampered there by the large number of construction sites regularly installed by the German government to keep its state-of-the-art highways "in order."These days, though, it is not unusual for gas prices to change up to five times per day at German gas stations, a phenomenon which traffic experts refer to as the “yo-yo effect.” When prices are lowered, many inner-city gas stations in Germany see drivers pull up in hordes.Given costs of up to 1.70 Euro (and more) per liter of unleaded fuel  the equivalent of $8.56 per gallon – it should come as no surprise that Germany's drivers have become bargain hunters. (One gallon is equal to 3.78 liters).Critics say that the yo-yo phenomenon is fueled by the highly competitive market and dominance by leading suppliers in the German market, like Aral, Jet or Shell.Retailers and consumers, who see a lowering of prices during lower-demand times and a hike during rush hours or school holidays, are increasingly calling for prices to be directed by supply and demand."When the prices are high in the morning during rush hour and then suddenly drop when most people are at work, our customers often get upset and complain heavily," said Ferdinand Raker, who has been running an independent gas station in the town of Molbergen since 1998."On some days, we see a lowering or raising of the prices by up to 14 euro cents ($0.18) per liter," said Andreas Hoelzel from German automobile club ADAC in Munich. "We understand that there is a competitive market situation, but the extent of price fluctuation is just enormous."It is all about a plethora of petrol pumps in Germany, representatives from the industry argue."This shows that we have a functioning business competition in the German petroleum market, which in comparison to other European countries has an above-average volume of gas stations with its nearly 14,700 outlets nationwide," said Karin Retzlaff from the Association of the German Petroleum Industry, known as MWV.This argument, however, has neither satisfied the average driver nor officials from automobile clubs, who represent Germany's now grumpy motorists.Reports about illegal price fixing among multinationals could not be proven in recent investigations by Germany’s Federal Cartel Office, but experts and media reports are still accusing oil firms of implementing “methods of systematic confusion.“On Monday, weekly “Der Spiegel” news magazine headlined its cover “The Fuel Cartel – How Oil Firms Manipulate the Fuel Prices” and argued in its seven-page analysis that the leading gas companies are using their power in the market to deliberately inflate fuel prices.Frustration over high fuel costs has also set off a high level of fuel thefts across the country, officials say.According to police in Germany's most populous state, Northrhein-Westphalia, diesel thefts, for example, have increased over the course of the past year. (More than 40 percent of German cars are powered by diesel.) An internal survey, which listed all cases with diesel thefts above 100 liters, showed 111 cases in January and 83 in February in this local state alone.The statistics indicate that criminals are mainly targeting fuel depots, heavy construction machines and large trucks. In 2011, state police in Northrhein-Westphalia recorded 986 cases with a total of 344,000 liters (90,875 gallons) stolen.Thieves have become increasingly creative. Police have recorded incidents in which criminals have drilled holes into gas tanks of private cars or used stolen or fake licence plates so that they can remain unidentified at gas stations when they drive off without paying the bill."Last month, I lost 10,000 liters of fuel after thieves signed up for a special debit card with false identifications and then pulled up numerous times with different vehicles to steal my petrol," says Raker, the Molbergen gas station owner. “Police caught the culprit," he said, "but he was broke and I was left with the damage.”With anger on all sides, the mass-circulation BILD newspaper offered a sign of possible relief soon with the headline "Finally! A law against fuel rip-off.“ The article referred to a meeting of Germany's upper house of parliament last Friday, where politicians debated proposals for a new law, which could help calm down fluctuating gas prices.Politicians in Berlin suggested that oil firms should be required to warn of new fuel prices by 2 p.m. on the day before the change, and the altered prices would have to remain unchanged for at least 24 hours.Prices could also be stored in a central public database under a new law, which would give motorists the ability to check the cheapest pump prices in their vicinity with the help of the Internet or modern smart phones.Yet, a decision on a possible new law is not expected before the end of the summer (or, as some believe, might not come at all).And, despite the fact that there now appears to be light at the end of Germany's tunnels in regard to regulations that could stop the rollercoaster ride at the pump, the underlying price for crude oil on the world market is unlikely to fall dramatically any time soon.

BREAKING NEWS,19.02.2012.

Iran halts oil sales to Britain, France

 President of Iran Mahmoud Ahmadinejad speaking on TV 

Iran has stopped selling crude to British and French companies, the oil ministry said today, in a retaliatory measure against fresh EU sanctions on the Islamic state's lifeblood, oil.” Exporting crude to British and French companies has been stopped ... we will sell our oil to new customers," spokesman Alireza Nikzad was quoted as saying by the ministry of petroleum website. The European Union in January decided to stop importing crude from Iran from July 1 over its disputed nuclear programme, which the West says is aimed at building bombs. Iran denies this. Iran’s oil minister said on February 4 the Islamic state would cut its oil exports to "some" European countries. The European Commission said last week the bloc would not be short of oil if Iran stopped crude exports, as they have enough in stock to meet their needs for around 120 days. Industry sources told Reuters on February 16 Iran's top oil buyers in Europe were making substantial cuts in supply months in advance of European Union sanctions, reducing flows to the continent in March by more than a third - or over 300,000 barrels daily. France’s Total has already stopped buying Iran's crude, which is subject to fresh EU embargoes. Market sources said Royal Dutch Shell has scaled back sharply. Among European nations, debt-ridden Greece is most exposed to Iranian oil disruption. Motor Oil Hellas of Greece was thought to have cut out Iranian crude altogether and compatriot Hellenic Petroleum along with Spain's Cepsa and Repsol were curbing imports from Iran.Iran was supplying more than 700,000 barrels per day (bpd) to the EU plus Turkey in 2011, industry sources said. By the start of this year imports had sunk to about 650,000 bpd as some customers cut back in anticipation of an EU ban. Saudi Arabia says it is prepared to supply extra oil either by topping up existing term contracts or by making rare spot market sales. Iran has criticised Riyadh for the offer. Iran said the cut will have no impact on its crude sales, warning any sanctions on its oil will raise international crude prices. Brent crude oil prices were up $1 a barrel to $118.35 shortly after Iran's state media announced last week Tehran had cut oil exports to six European states. The report was denied shortly afterwards by Iranian officials."We have our own customers ... The replacements for these companies have been considered by Iran," Nikzad said. EU's new sanctions includes a range of extra restrictions on Iran that went well beyond UN sanctions agreed last month and included a ban on dealing with Iranian banks and insurance companies and steps to prevent investment in Tehran's lucrative oil and gas sector, including refining. The mounting sanctions are aimed at putting financial pressure on the world's fifth largest crude oil exporter, which has little refining capacity and has to import about 40% of its gasoline needs for its domestic consumption.