Wednesday, March 25, 2009

Oil trades around US$54 on stock market rally

New York Attorney General Andrew Cuomo said Monday that 15 employees who received some of the largest bonuses from American International Group Inc. have agreed to return the money in full.

The commitments amount to more than $30 million of the $165 million in bonuses awarded earlier this month by the troubled insurer.

Cuomo said he still hopes that more AIG employees will return their bonuses.

He expects his office will be able to recoup about $80 million of the money the insurer paid out - roughly the amount of bonuses paid to American employees.

AIG Chief Executive Edward Liddy told Congress last week that some of the employees were willing to give the money back.

AIG has come under heavy criticism because the bonuses were given to employees after the company received $170 billion in government bailout money.

Cuomo had sought the names of the employees who received bonuses from Liddy through a subpoena.

"I applaud the employees who are returning the bonuses," Cuomo said during a conference call with reporters.

"I think they are being responsive to the American people."

Cuomo said 9 of the 10 people receiving the largest awards have agreed to return their bonus.

Additionally, 15 of the top 20 bonus recipients have consented to returning their money.

Cuomo said some have refused to return the money, while others are still considering it.

"We are deeply gratified that a vast majority of Financial Products' senior leadership have expressed a willingness to forsake their recent retention payments," wrote spokeswoman Christina Pretto in a statement e-mailed to The Associated Press.

She added that the company is continuing to review the responses of the other employees. Cuomo said he doesn't plan to release the names of the employees who have agreed to return the bonuses, and said there is no implied threat that if an employee doesn't consent to returning the bonus that their name will be released.

He said his office is continuing to assess the security of the employees.

About 400 employees and future employees in AIG's financial products division received bonuses.

Documents provided by AIG to the Treasury Department said the awards ranged from $1,000 to nearly $6.5 million.

Seven employees were to receive more than $3 million.

Last week Cuomo said AIG paid bonuses of $1 million or more to 73 employees, including 11 who no longer work there.

Separately, Connecticut's consumer protection division has subpoenaed AIG, demanding that the contracts and names of employees who received the bonuses be provided by March 27.

Gov. M. Jodi Rell has said she wants the division to determine whether the bonuses can be voided under the Connecticut Unfair Trade Practices Act.

AIG's financial products division is headquartered in Wilton, Connecticut.

Connecticut Attorney General Richard Blumenthal says his office also demanded the bonus recipients' names and the amounts.

Last week, the House passed a plan to slap a punitive, 90 percent tax on bonuses paid to AIG employees whose family income surpasses $250,000.

Not all of the AIG employees earned more than the income threshold specified by the House bill.

But President Obama has signaled opposition to the House's tax bill on constitutional grounds.

The Senate is soon expected to take up its own plan on the tax. - AP

Latest NYSE, NASDAQ and other business news, from AP-Wire

US stocks surge on bank plan, Dow up 500 points

Wall Street got the news it wanted on the economy's biggest problems - banks and housing - and celebrated by hurtling the Dow Jones industrials up nearly 500 points.

Investors added rocket fuel Monday to a two-week-old advance, cheering the government's plan to help banks remove bad assets from their books and also welcoming a report showing a surprising increase in home sales.

Major stock indicators surged more than 6 percent, including the Dow, which had its biggest percentage gain since October.

Analysts who have seen the market's recent false starts are still hesitant to say Wall Street is indeed recovering from the collapse that began last fall.

But the day's banking and housing news bolstered the growing belief that the economy is starting to heal, and that is what had investors buying.

"It's just hard to argue that there isn't an improvement in economic activity on the horizon," said Jim Dunigan, executive vice president at PNC Wealth Management.

The market began turning around two weeks ago on news that Citigroup Inc. was operating at a profit in January and February.

A spate of more upbeat economic reports helped the market build on its gains, although the rally stalled last Thursday and Friday.

Analysts said they saw more fundamental strength in Monday's buying than they saw at the start of the rally. Dave Rovelli managing director of trading at brokerage Canaccord Adams, said there appeared to be less short covering, which occurs when traders are forced to buy to cover misplaced bets that stocks would fall.

Short covering contributed to the market's surge after the Citigroup news.

"There is definitely new buying," he said. Rovelli also said the approaching end of the quarter can make money managers eager to buy into a market to make the statements they send to clients look stronger.

The market shot higher at the opening and kept going.

The Treasury Department said its bad asset cleanup program would tap money from the government's US$700 billion financial rescue fund and involve help from the Federal Reserve, the Federal Deposit Insurance Corp. and the participation of private investors.

The government's announcement was what the market had waited weeks to hear.

Treasury Secretary Timothy Geithner had announced an outline of the program last month but provided few details then about how it would work, leading to a stock plunge that sliced 380 points from the Dow.

But while analysts were pleased with the market's performance Monday, they were also still cautious; Wall Street more than gave back its big yearend rally and continued falling during January and February.

Subodh Kumar, an independent investment strategist in Toronto, said the Fed's announcement that it would buy government debt and the details on plans to help banks are giving traders hope for recovery.

"The market is shedding some of its excess pessimism. That doesn't mean the market goes straight up," he said.

The National Association of Realtors' existing home sales report was overwhelmingly positive for investors although it showed a decline in home prices in February.

Investors are embracing any sign that a glut in homes for sale may be easing.

Monday's data followed a dose of good housing news last week as housing starts for February came in much better than expected.

The Dow rose 497.48, or 6.8 percent, to 7,775.86, its highest finish since Feb. 13.

It was the biggest point gain for the blue chips since Nov. 13 when they rose 552 points and the biggest percentage gain since Oct. 28. when they rose 10.9 percent.

It was the fifth biggest point gain in the Dow's history.

Broader stock indicators also surged.

The Standard & Poor's 500 index rose 54.38, or 7.1 percent, to 822.92, crossing the psychological milepost of 800.

The Nasdaq composite index rose 98.50, or 6.8 percent, to 1,555.77.

The Russell 2000 index of smaller companies rose 33.61, or 8.4 percent, to 433.72.

The Dow Jones Wilshire 5000 index, which reflects nearly all stocks traded in America, jumped 7 percent.

That's a paper gain of about $700 billion.

More than 10 stocks rose for every one that fell on the New York Stock Exchange, where volume came to 1.9 billion shares.

The Dow is now up 1,228 points, or 18.8 percent, from March 9, when it finished at its lowest point in nearly 12 years, although it's still down 1,000 points in 2009.

The S&P 500 is up 21.6 percent in that time. The Dow and the S&P 500 index remain more than 45 percent below their peak in October 2007.

Collapsing home prices and the damage they have caused banks are at the center of the economy's current problems and are a major focus for the stock market.

Banks have sharply curbed lending after becoming weighed down with loans that have gone bad, especially mortgages.

Investors had been largely disappointed in the government's efforts to date to restore the banks to health, but finally seemed encouraged by the long-awaited announcement of details for the bad loan cleanup plan.

"The actions that we're getting from a policy standpoint are very helpful in removing the sand from the gears," said Alan Gayle, senior investment strategist at RidgeWorth Investments.

"That is going to be good for the financials."

Shares of the country's largest banks, which have been pounded in recent weeks over concerns about their ability to weather the crisis, soared on Monday.

Citigroup Inc. jumped 19.5 percent, and Bank of America Corp. added 26 percent. Even banks seen as being on better footing posted big advances.

JPMorgan Chase & Co. rose 25 percent, while Wells Fargo & Co. rose 24 percent.

Investors welcomed the rise in home sales Monday although the biggest jump in nearly six years came as first-time buyers pounced on deep discounts of foreclosures and other distressed properties.

Analysts say it could be a nascent sign of recovery.

But only weeks ago traders might have dwelled on the 15.5 percent drop in median prices.

"It's like putting on a different pair of glasses and you think you saw something different today than you saw yesterday," Dunigan said.

Bond prices were mixed as stocks rose.

The moves were moderate as investors remained mindful of the Federal Reserve's plan announced last week to buy government debt to help drive down borrowing costs by reducing interest rates.

The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.68 percent from 2.64 percent late Friday.

The yield on the three-month T-bill was flat at 0.19 percent.

Oil rose $1.73 to settle at $53.80 a barrel and the dollar was mixed against other major currencies.

Gold fell.

The price of gold has risen in recent weeks as investors have worried about the faltering economy and a weaker dollar.

Overseas, Britain's FTSE 100 rose 2.9 percent.

Germany's DAX index rose 2.7 percent, and France's CAC-40 rose 2.8 percent. Japan's Nikkei stock average rose 3.4 percent. - AP

Tuesday, March 24, 2009

Home » Features » Data centers and infrastructure » IBM said to be poring over Sun's contracts IBM said to be poring over Sun's contracts

Lawyers for IBM are examining Sun Microsystems' contracts and other documents in a due diligence process that could precede an acquisition, the Wall Street Journal reported Friday, citing unnamed sources.

Such work is common before a merger and suggests that acquisition talks between Sun and IBM, which were reported earlier this week but have not been confirmed by the companies, are still under way. Examining the documents could take a number of days, the Journal said.

The work being done includes an examination of Sun's software license terms to see if any of them conflict with IBM's business practices, the newspaper reported. Sun offers most of its software, including its Solaris OS, MySQL database and Java programming language, under a variety of open-source licenses.

News of the supposed merger talks was broken by the Journal overnight on Tuesday, though Sun and IBM have not confirmed nor denied any discussions. IBM would pay between US$6.5 billion and $8 billion to buy the company, the Journal said Friday.

Observers have been puzzling over whether IBM is interested in Sun for its hardware or its software assets. IBM would gain some of Sun's large corporate customers and widen its lead in the enterprise server market, where it was just ahead of Hewlett-Packard last year, according to IDC.

There would also be significant overlap between the companies' product lines, however. Both have Unix server OS, a RISC chip architecture, at least one enterprise database and a whole line of middleware. Any deal would create uncertainty for customers as to which products IBM would continue to develop and support.

Sun has been struggling to grow its business, particularly lately with the recession. Some of its biggest customers were Wall Street banks that either no longer exist or are in dire straits themselves.

Despite the uncertainty it would create, an acquisition by IBM might be a better outcome for Sun's customers than some of the alternatives, said Dan Olds, principal analyst at Gabriel Consulting Group.

"The economic climate plays against Sun's recovery strategy. I think they have probably made as many cuts as they can without really changing what they do and having to drop something big," he said.

If the reports are accurate and Sun has decided to sell, the decision was probably driven by outside investors, notably Southeastern Asset Management, which increased its stake in Sun to more than 20 percent last year and has been pushing hard for a bigger return on its investment.

"I think those guys are driving the bus at Sun," Olds said. "This isn't a strategic thing or a Jonathan Schwartz thing; it's purely business."

Talk of an acquisition has pushed Sun's share price higher. It closed at $8.63 on Friday, up from $4.97 before the discussions were reported. IBM's share price initially slipped on the reports but recovered slightly on Friday, closing at $92.66.

S.Africa denies Dalai Lama visa over World Cup clash

South Africa said Monday the Dalai Lama has been denied a visa to meet here with other Nobel laureates, arguing his visit would overshadow the country's preparations to host the 2010 World Cup.
His exclusion has prompted the Oslo-based Nobel peace prize committee to announce that it would not participate in the peace conference organised in Johannesburg, unless the 1989 peace prize laureate is granted an entry visa.
"Unless the South African decision is rapidly changed we will not go," Lundestad said.

The Tibetan spiritual leader was billed to attend a Peace Conference this week, backed by the Nobel Peace Committee and hosted by South Africa's three surviving laureates, former presidents Nelson Mandela and FW de Klerk, and Archbishop Desmond Tutu.

Both Tutu and De Klerk confirmed they would no longer be attending the conference, casting doubt on the conference.

"He has confirmed he is not attending," Tutu's spokeswoman Tamu Matose told AFP.

Addressing local media Tutu said: "We are shamelessly succumbing to Chinese pressure. I feel deeply distressed and ashamed."

Former president De Klerk released a statement saying he would "reluctantly not participate in the peace conference... if a visa is not granted to enable the Dalai Lama to attend the conference as well."

The laureates were meant to discuss how soccer can help fight racism and xenophobia, as South Africa gears up for the 2010 World Cup.

But Thabo Masebe, spokesman for President Kgalema Motlanthe, told AFP that "there is no visa" for the Dalai Lama because his visit would draw attention away from the tournament.

Organisers of the conference had not consulted with the government before extending the invitation to the Dalai Lama, Masebe said.

"We in the South African government have not invited the Dalai Lama to visit South Africa, because it would not be in the interests of South Africa," he said.

"The attention of the world is on South Africa because of it being the host country for the 2010 World Cup, and we wouldn't want anything to distract from that," he added.

A spokesman for the spiritual leader said he was "very disappointed" by the decision.

"It is true that South Africa, under intense pressure from the Chinese authorities, have denied a visa to the Dalai Lama," spokesman Thubten Samphel told AFP in Dharamshala, India, home of the Tibetan government-in-exile.

"The Chinese government does not like any government to host the Dalai Lama because they feel his presence attracts media attention to the deplorable human rights conditions in Tibet," he said.

"African states are vulnerable to Chinese pressure because of huge Chinese investments there and so this is a case of business winning over human rights and good behaviour."

South African foreign ministry spokesman Ronnie Mamoepa denied pressure from China had played a role in the visa being denied.

"What is critical to know is we are an independent sovereign country which makes independent sovereign decisions," he said.

During a 1999 visit to South Africa, then-president Thabo Mbeki refused to meet with the Dalai Lama, citing scheduling difficulties, but local media blamed Chinese pressure for the brush-off.

China's minister counsellor at the embassy in Pretoria, Dai Bing, was quoted as saying in local media that his government had urged South Africa to deny the visit or risk damaging bilateral relations.

Dai told the paper that it was an "inopportune time" for the Dalai Lama to visit, coming just after the 50th anniversary of a failed uprising against China's rule of Tibet, which led to the exile of the region's most revered spiritual figure.

South Africa is China's key trading partner in Africa, accounting for 20.8 percent of the total volume of China-Africa trade in 2008 with total trade at some 100 billion rand (10 billion dollars).

US unveils public-private plan to buy up toxic assets

The US Treasury unveiled a long-awaited plan Monday to buy up toxic assets clogging the financial system using government funds, loans to investors and guarantees to attract private capital.
The cornerstone of the plan is a "Public-Private Investment Program for Legacy Assets" funded with 75 to 100 billion dollars from the government -- an idea that has generated some praise but also skepticism.
Officials said this approach would "generate 500 billion dollars in purchasing power" and could expand to one trillion dollars.
The plan, the outlines of which were unveiled last month, is a key to helping the ailing banking system recover from massive losses suffered in the US real estate meltdown and stabilizing the economy.

The Treasury said the plan "ensures that private sector participants invest alongside the taxpayer, with the private sector investors standing to lose their entire investment in a downside scenario and the taxpayer sharing in profitable returns."

Treasury Secretary Timothy Geithner said in announcing the plan, "Our job is to try to fix this problem of the financial system at least cost to the taxpayer."

The statement said that "a broad array of investors are expected to participate" in the program including individual investors, pension plans, insurance companies and other long-term investors.

The Treasury and private capital will provide equity financing and the Federal Deposit Insurance Corp. will provide a guarantee for debt financing, which will be used to buy up mortgages and mortgage securities that are frozen because of massive losses linked to the US housing meltdown.

The initiative will contain two elements, one for pools of mortgages to allow banks to sell these to investors; the second will be a fund directed by asset managers to allow public and private capital to buy distressed mortgage securities.

Mark Zandi, chief economist at Moody's, said the plan "has a good chance of success."

"This plan relies much less on private investors and much more on direct government purchases of banks' troubled assets," Zandi said.

"Only a handful or so of private investors need to participate in this plan to establish workable auctions for the assets and thus determine a fair price for the assets."

Yet some analysts have been skeptical about whether these assets can be priced and sold under current market conditions, and whether banks holding them would be willing to sell at a deep discount, forcing a loss to be recognized.

The purchase of these assets was the original purpose of the 700-billion-dollar Troubled Asset Relief Program passed by Congress last year, but which backed away from this idea.

Nobel economics laureate Paul Krugman said the plan was based on "financial policy despair."

Krugman wrote on his blog that the main flaw in the plan "is the insistence that the bad assets on banks' books are really worth much, much more than anyone is currently willing to pay for them."

Andrew Busch at BMO Capital Markets said that "no one is sure whether banks will sell these assets to create the program. Other than that, the markets are loving it early."

To allow banks to sell loans, the Federal Deposit Insurance Corp. will conduct an analysis to determine the amount of funding it is willing to guarantee. Investors will be able to bid on these, with financing available with a leverage ratio of up to 6-to-1.

For mortgage securities, the Treasury will approve up to five asset managers to handle these sales.

To reduce the likelihood that the government will overpay for these assets, private sector investors competing with one another will establish the price of the loans and securities purchased under the program. Treasury funds will be invested one-for-one on a side-by-side basis with investors.

Robert Brusca at FAO Economics said the Treasury is "providing low interest loans for a fund with an eight percent private capital stake matched by the government."

He said the government gets half the capital and half the funds gain "but it puts up 92 percent of the money," with investors "getting the same sweet deal as a home owner putting eight percent down and the ability to walk away unscathed if it does not work."

Sunday, March 22, 2009

Germany: no sex please we're in recession

Times are difficult down at Berlin's Pussy Club where a new all-in service is on offer: 70 euros for girls, drinks and food.
Like many of its counterparts, the brothel has been hit by the credit crunch and has had to come up with its own stimulus package for a trade that was legalised in Germany seven years ago.
The Belle Escort, another Berlin brothel, has never before faced problems, but the current financial crisis has triggered a sharp decline in clientele, said its owner Isabelle, without giving her surname.
Isabelle rejected the idea of "special deal prostitution" as offered by the Pussy Club but admitted: "We're in trouble.

"I'd estimate that we have at least 20 percent less people coming here," she sighed.

Monika Heitmann works for a support network for prostitutes in Bremen and can only confirm the problems the industry is facing.

"If customers can't even afford to spend money on housing, food and cars, then how can we expect them to spend money on sex?" she asked.

Heitmann has worked with prostitutes for over 20 years and says that business has been going downhill over that time.

"Thirty years ago prostitutes were really dedicated to their work," she said, adding that desperation was now forcing women into the sex trade.

At the beginning of this year, the owner of Frankfurt's oldest brothel, the FKK Sudfass, was forced to sell up after 37 years.

The building will be converted into a hotel over the next year.

Since 2001, prostitution in Germany has been legal and is relatively widespread, especially in big cities like Berlin, Munich and Hamburg, where women tout for business in the show windows of the infamous St Pauli district.

But social stigmatisation persists and Heitmann is concerned that prostitutes' trials and tribulations are not being taken seriously.

"There are a lot of women who come here and just don't know how to get on," Heitmann said. "The crisis means that customers want more service for less money. They're becoming pushy and even blackmailing the ladies."

Hoping for more success, many women are driven from the clubs to the kerbs to sell their bodies on their own terms.

An increasing number of men on a tight budget are also picking up prostitutes on street corners rather than in pricey brothels or "Eros Centres."

Some places have been forced to shut their doors and in January, sex-shop owners and porn producers pushed for state aid, taking their lead from the crisis-hit auto and banking industries.

Erotic trade federation official Uwe Kaltenberg, said that "economic aid would be judicious."

Heitmann is now afraid that waning turnover could damage the industry's reputation even more and that back-street prostitution could escalate.

Barbara Kavemann, professor at the Berlin Research Institute for Social Science and Women Studies, said the full impact of the financial crisis could not be determined because there was no concrete data.

"Firstly, prostitutes don't legally have to be registered, and secondly, who defines who is a prostitute?" said Kavemann.

But Isabelle and other brothel owners do not need empirical data or definitions to confirm the impact of the credit crunch on the sex industry has been hard.

"The only thing we can do now is keep our fingers crossed and hope for better times," she said, "and obviously I wouldn't say no to a state-funded cash injection."

Obama defends Geithner, budget

US President Barack Obama, in an interview to be aired Sunday, threw his weight behind his embattled treasury secretary, saying Timothy Geithner would not be allowed to resign.
Should Geithner offer his resignation, Obama told CBS he would turn down that offer and respond: "Sorry buddy, you've still got the job," according to interview excerpts released Saturday.
Geithner has been under fire for his handling of the economic crisis and a political scandal over massive bonuses paid out by insurance giant American International Group, which has received bailout money funded by taxpayers.
AIG dished out 165 million dollars in bonuses to top executives, including some in the division blamed for putting the once-mighty insurer on life support.

US media reported Saturday that the insurance giant had actually paid 218 million dollars in bonuses, over 50 million more than had been disclosed. AIG has denied the reports.

In an interview with the CBS program "60 Minutes" to be broadcast Sunday, Obama said neither he nor Geithner had discussed a possible resignation by the treasury chief.

Obama also defended his 3.55-trillion-dollar budget and his 787-billion-dollar economic stimulus plan, but he acknowledged public frustration with continued economic woes.

"It's going to take a little bit more time than we would like to make sure that we get this plan just right. Of course, then we'd still be subject to criticism," he said.

"What's taken so long? You've been in office a whole 40 days and you haven't solved the greatest financial crisis since the Great Depression," he quipped.

Earlier, in his weekly radio and video address, Obama said he remained committed to halving the deficit within four years and that his administration was scouring every corner of the budget to produce two trillion dollars in deficit reductions over the next decade.

"In total, our budget would bring discretionary spending for domestic programs as a share of the economy to its lowest level in nearly half a century," he said.

"And we will continue making these tough choices in the months and years ahead so that as our economy recovers, we do what we must to bring this deficit down."

The comments came as Congress was poised to begin debating this week the budget Obama's administration unveiled last month.

But the budget stumbled into hurdles Friday when the nonpartisan Congressional Budget Office (CBO) forecast that the deficit could hit 1.845 trillion dollars this year under the Obama proposal, quadrupling the 2008 record shortfall.

The CBO said its latest budget deficit estimate for fiscal 2009, which ends on September 30, would amount to 13.1 percent of the country's total economic output.

Since its early January estimate of a 1.2-trillion-dollar gap, the CBO said the enactment of the stimulus plan, other measures to revive the economy and additional factors had hiked deficit projections for 2009 and 2010 by over 400 billion dollars.

Republicans immediately seized on the report to blast Obama's economic policies. "It's worse than even the most pessimistic predictions for this budget," said Senate Republican Leader Mitch McConnell.

"If there was ever any doubt that the administration's budget spends too much, taxes too much and borrows too much, it's gone."

But Obama was quick to rebut his critics, arguing that his economic proposals offered a long-term solution to US structural problems and not "a wish list of priorities that I picked out of thin air."

The proposals "are a central part of a comprehensive strategy to grow this economy by attacking the very problems that have dragged it down for too long: the high cost of healthcare and our dependence on foreign oil; our education deficit and our fiscal deficit," he added.

Obama urged lawmakers not to shy away from the magnitude of problems they were facing, saying that Americans were watching them and waiting for them to lead.

"Let's show them that we are equal to the task before us, and let's pass a budget that puts this nation on the road to lasting prosperity," he said.

Liverpool determined to sustain the high

Liverpool head into their match with Aston Villa desperate to avoid another feeling of anti-climax at Anfield.
The Reds know that they will have to win almost all of their remaining nine games in the Premier League to stand a chance of overhauling the leaders Manchester United.
But Rafael Benitez's team will be mindful that the last time they returned to a more modest league encounter, they suffered a major jolt.

Following the high of a 1-0 win over Real Madrid in the Bernabeu, their Premier League hopes suffered a major blow with a 2-0 loss against Middlesbrough.

While Villa are a more dangerous proposition than Gareth Southgate's team, Liverpool accept that this will be seen as another test of their staying power.

Liverpool's title push has often foundered at home, where they have regularly been stifled.

They remain unbeaten in the league at Anfield but have been held to draws in six of their 14 home games.

The 12 points they have dropped - against Stoke, Fulham, West Ham, Hull, Everton and Manchester City - are likely to prove costly come the end the season.

And Benitez, who is sure for a warm reception at Anfield after signing a new five-year contract, knows that his team can not afford any more slip ups if they are to maintain the pressure on Sir Alex Ferguson's men.

He said: "This week has been really good for us. To beat United away and score four goals is massive. But we cannot say anything if we don't go on to beat Aston Villa.

"If we want to be contenders and stay in the title race, clearly it depends on United. But we also have to win our games, starting with three points against Villa.

"The players know we have to win our games and try to be as close as possible to United. We can be talking and talking but all this doesn't matter unless we win.

"I'll think about Villa and see what the position is in a week. To win the title you always have to be almost perfect, and when you are four points behind and they have a game in hand, clearly you have to win almost every game."

The Spaniard has a full squad, apart from long-term absentee Philipp Degen to select from and although all the attention will be on whether the Reds can stay in touch with United, Villa are also coming under pressure.

Having spent much of the campaign pushing for a top four place, they have slipped out of the Champions League places with a miserable run that has seen them fail to win in seven matches in all competitions.

Although Benitez is assured of plenty of cheers from the Reds supporters, the reception given to Gareth Barry, who came close to moving to Anfield last summer, is likely to be far cooler.

Martin O'Neill knows all about how to come away from Anfield with a share of the spoils after picking up a 2-2 draw at Liverpool last season.

He is calling on a repeat of that performance to pull Villa out of their tail-spin and is sure that he can bring the Reds back down to earth.

He said: "They've had a fantastic victory against Manchester United at Old Trafford, they've beaten Real Madrid, so at this moment their form and results have been terrific.

"But last year we went up there, we fought back from a goal behind to get ourselves in front and conceded a late goal.

"What we have to do is keep hold of that self-belief and the players have got to try and remain as strong as possible. They are certainly capable of doing it."

South Koreans rout Venezuela to reach Classic final

South Korea's finest players showed they have the talent to humble US Major League Baseball superstars, overwhelming Venezuela 10-2 to reach the final of the World Baseball Classic.
The reigning Olympic champions booked a berth in Monday's final at Dodger Stadium against the winner of Sunday's semi-final between defending Classic champion Japan, South Korea's arch rivals, and the United States.
Choo Shin-Soo, South Korea's only major leaguer, and Kim Tae-Kyun each blasted home runs while 22-year-old right-handed pitcher Yoon Suk-Min baffled a South American major league all-star squad that led the Classic in hitting.
"This was an unforgettable game," Choo said.

"In terms of skill level, I think there is no difference between Koreans and major leaguers. I've learned a lot from all the Korean players. I hope Koreans will advance to the major leagues in great numbers in the future.

"There's a major difference in style. Major leaguers are always aggressive. Korea is more patient in batting. We have better fundemental skills in terms of meticulousness and how we follow up with each other."

The Koreans, ousted in a semi-final by Japan in the inaugural 2006 Classic, can secure their global supremacy in the only tournament featuring US stars, a key for bragging rights with the sport now off the Olympic calendar.

"I had better be impressed," Major League Baseball commissioner Bud Selig said. "It's a remarkable performance to say the least."

Choo, who plays for the Cleveland Indians, smashed a three-run blow in a five-run first inning while Kim added a two-run homer, his third round-tripper of the tournament, in the second.

"This was very painful," Venezuelan manager Luis Sojo said. "In the first inning the Koreans showed they were here to win. They got a five-run lead and that was basically the game."

Both homers came off Venezuelan starter Carlos Silva, a Seattle Mariners right-hander who surrendered seven runs on six hits in only 1 1/3 innings.

"Choo knew about the pitcher and told us about him," Kim said. "We were able to anticipate the pitches. I knew a lot of sinkers would be thrown and that was helpful."

Yoon, an Olympic hero who led the Korean league with a 2.33 earned-run average last year, scattered seven hits and struck out four in 6 1/3 innings while four Korean relief pitchers blanked Venezuela the rest of the way.

"I felt great. I was proud and confident," Yoon said. "I was not nervous. They were major league batters but I didn't know who they were so I wasn't nervous."

Eight of nine Korean starters reached base in the first two innings off the Venezuelan major league "Dream Team", sending a clear message that South Korea's lack of major leaguers does not mean they lack world-class talent.

Sojo, a five-time World Series champion, expects to see more Korean major leaguers.

"There will be from now on. Trust me," Sojo said. "The way they play is exceptional. This kid, the way he pitched, it opened a lot of eyes. I don't know why there aren't more Koreans in the big leagues but there will be."

Venezuelan fielders made five errors, four in the first four innings, to aid the Korean cause.

Lee Yong-Kyu opened the game with a walk and reached second when Jeong Keun-Woo hit a fly ball to right field that was dropped by Venezuela's Bobby Abreu and muffed by shortstop Marco Scutaro when trying to force out Lee at second.

"I gloved the ball too early. My throw to Scutaro was too short," Abreu said. "That play cost us the whole rally. That out would have meant a lot."

Kim Hyun-Soo slapped a single into left field to score Lee and Kim Tae-Hyun lifted a single over second base to load the bases before Lee Dae-Ho plated Jeong with a ground out to Silva. That set the stage for Choo's homer.

Kim Tae-Kyun made it 7-0 on a homer just inside the left-field pole, taking the Classic lead at batting in runs on 11. He walked from the dugout and tipped his cap to Korea's loud fans among a crowd of 43,378.

"For a moment I felt like we were in Korea," Sojo said.

Yoon was in command from there.

"He's an excellent pitcher. He dominated the game," Abreu said. "He really knows how to switch his pitches. He's really strong, especially his changeup. He has good control."

China sees stimulus package bringing growth

China's huge stimulus package is expected to contribute at least 1.5 percent to the nation's economic growth this year, a top official said Sunday, as the Asian giant continues to fight the crisis.
The stimulus package was unveiled in November in a bid to fight the impact of the global financial crisis.

China has set an economic growth target of about 8.0 percent this year, a level that the government says it needs in order to keep unemployment at a manageable level.

However, just over a week ago, Premier Wen Jiabao admitted this target would be difficult to achieve.

On Wednesday, the World Bank slashed China's economic growth forecast to 6.5 percent in 2009.

Friday, March 20, 2009

North Korea guards detain U.S. journalists

A North Korean soldier looks south on the north side of the truce village of Panmunjom in the demilitarised zone (DMZ) separating the two Koreas in Paju, about 55 km north of Seoul, in this December 6, 2008 file photo.
North Korean security officials have detained two Korean-American journalists who were filming across the Tumen River from the Chinese side of the border, South Korean media and diplomatic sources said on Thursday.
The arrests come at a time of mounting tension on the Korean peninsula, with the North accusing the United States and South Korea of using joint military exercises which end on Friday as preparations to invade the isolated state.

In Washington, a State Department official who spoke on condition that she not be named, said the United States had contacted North Korean authorities about the two, who were detained on Tuesday, and was seeking their immediate release.

"Two American citizens were taken into custody at the Tumen River border between China and North Korea by North Korean border guards," she said. "We have been in touch with North Korean authorities to express our concern about this situation and to secure the immediate release of our citizens."

A diplomatic source said the reporters were on the frozen Tumen river when taken by North Korean security guards. The Tumen runs along the eastern section of the border with China.

The YTN channel earlier quoted a South Korean government official as saying North Korean guards crossed the border into Chinese territory to arrest the two women on Tuesday after they ignored warnings to stop filming.

But the diplomatic source said it was not clear which side of the border they were on at the time.

YTN said the women worked for an online news company based in California but gave no other details. A media source said the two were working for Current TV, a U.S.-based online news company.

Chinese Foreign Ministry spokesman Qin Gang said Beijing was investigating the report and declined to comment further. South Korea's foreign ministry also declined to confirm YTN's report.

YTN said a man was also with the pair from the same news organisation but managed to escape.

"It's difficult to comment on this matter because it involves a U.S. citizen, but our government is aware that a U.S. journalist is in detention in the North," the senior South Korean government official was quoted as saying.

Tensions have escalated on the Korean peninsula in recent weeks.

North Korea has said it will launch a missile early in April as part of its space communications programme, but the United States says the launch is intended to test a rocket that could potentially carry a warhead as far as U.S. territory.

North Korean Premier Kim Yong-il is visiting China, the nearest the impoverished state has to a major ally and a key source of economic aid.

China has avoided openly pressuring the North over its plans to launch the rocket.

In publicly reported comments to Kim, Chinese President Hu Jintao kept to that gentle approach, avoiding direct mention of the rocket issue.

"We hope all sides will take the broader perspective to appropriately resolve existing disputes," Hu told Kim, according to Chinese state radio news.

Thursday, March 19, 2009

Austrian incest dad stuns court with murder plea

Josef Fritzl, the Austrian accused of imprisoning his daughter and fathering seven children with her, stunned his court trial on Wednesday by changing his plea to guilty on all charges.
The retired Austrian engineer said he decided to admit the previously denied charges of murder and slavery after seeing his daughter Elisabeth describe her quarter century of sexual abuse in a dark, damp cellar.
Although Fritzl could yet avoid a life sentence, a psychiatrist told the court that the 73-year-old should be placed in a psychiatric facility as he regarded himself as having been "born to rape".
The defendant, who had tried to hide from photographers and TV cameras earlier this week, made a tearful confession, saying: "I plead guilty to the crimes I've been charged with. I'm sorry."

Media reports that Elisabeth had been smuggled into court the day before and speculation that a face-to-face confrontation with her may have triggered Fritzl's U-turn were fuelled by his own lawyer.

"If some of the victims were present (in court) yesterday, that certainly must have had a strong trigger effect," said Rudolf Mayer .

A court spokesman would not confirm Elisabeth's presence at the closed-door session on Tuesday.

The retired electrical engineer had pleaded guilty to incest, rape and sequestration on Monday but initially denied enslavement and murder, for which he faces a life prison term.

Under Austrian law, the final sentence is softened in the event of a confession.

Despite Fritzl's guilty pleas, the jury will nevertheless have to decide whether to convict him and on what charges. A verdict is expected Thursday.

Asked by the judge what caused him to change his plea, Fritzl replied: "My daughter's videotaped testimony."

Fritzl had to watch Elisabeth's testimony on Monday and Tuesday and was questioned about his treatment of her.

Elisabeth Fritzl, now 42, and her children have sought refuge in a specialist clinic during the trial to avoid publicity. Authorities are attempting to give them a new start in life under a new identity.

Prosecutors have accused Fritzl of murder for letting a baby named Michael die shortly after birth in the cellar. Fritzl had maintained the baby was still-born and said he burnt the body in a boiler.

But he admitted Wednesday that he was present at Michael's birth and that he had developed breathing problems.

"I don't know why I didn't help," he told the court. "I should have noticed that the baby was not doing well. I just hoped it would survive."

A psychiatrist told the court that Fritzl felt he was "born to rape," and said he should be placed in a psychiatric facility because there was a risk he would commit new offences.

"The danger is still very much there that he will reoffend if he is not treated," said Adelheid Kastner.

"It is necessary that he continue being treated until he can no longer be classified as dangerous."

When Kastner quizzed Fritzl as to why he had chosen Elisabeth, the third-eldest of his seven legitimate children, as his victim, "his reply was that she was most like me. She was as stubborn as me, as strong as me. The stronger your opponent, the bigger the victory," she quoted him as saying.

Three children were brought up to live with Fritzl and his wife Rosemarie while three lived with Elisabeth and never left the dungeon until their release last April.

The trial was adjourned so the three judges could compile a catalogue of questions to help the jury decide whether Fritzl was guilty as charged.

The questions would be read to the jury Thursday, after which defence and prosecution would make their closing statements.

The jury would then retire to reach its verdict, which need not be unanimous, but requires a simply majority.

Once the verdict has been reached, the jury and judges would together consider what sentence to hand down.

They could decide to send Fritzl to a mental facility, court spokesman Cutka told journalists.

Experts and judges would then review Fritzl's case on a yearly basis.

"If the expertise concludes there has been an improvement and he can be released from such a facility, he will then serve any remainder of his sentence (in a prison)," Cutka said.

Wednesday, March 18, 2009

Injured actress Richardson flown to US: hospital

Acclaimed actress Natasha Richardson suffered a serious head injury while skiing in Canada and was transferred Tuesday to the United States, hospital officials and media said.
"She was transferred at the request of the family," said Josee-Michelle Simard, a spokeswoman for Sacre-Coeur hospital in Montreal, where the 45-year-old actress was treated following Monday's accident.
The couple's two young sons, Michael and Daniel, are believed to be with relatives in New York.

Richardson's precise medical condition at the time of her release from the Canadian hospital was not immediately clear.

"We know that she has had an accident but we really do not know any more details," Kika Markham, Richardson's aunt, told the British media. "We are very concerned."

The British-born actress is the wife of Irish actor Neeson and the daughter of British stage and screen legend Vanessa Redgrave, 72.

Monday's mishap occurred at the Mont Tremblant ski resort where Richardson had a fall during a ski lesson on a beginner's trail, according to a statement by the Mont Tremblant ski resort in the Laurentian Mountains.

"She did not show any visible sign of injury," the resort said. But following strict procedures, the local ski patrol and her instructor accompanied her back to her hotel and "insisted she should see a doctor."

An hour later, Richardson "was not feeling good" and an ambulance was called to take her to the Centre Hospitalier Laurentien in Ste-Agathe, Quebec. She was later transferred to Sacre-Coeur hospital in Montreal, the resort said.

Officials said the family was to make a statement on Wednesday from the United States.

The website, which first broke the story, quoted a Montreal hospital insider as saying that Richardson had suffered a traumatic brain injury.

Neeson, who has been married to Richardson since 1994, flew to be with his wife following the accident from a movie set in Toronto, a publicist for the film "Chloe" told local media.

In 1998, Richardson won a Tony award for her role in the musical "Cabaret," and she has appeared in films "The Parent Trap," "Maid in Manhattan" and "Evening."

Other movie credits include "The Handmaid's Tale," "Gothic," "A Month in the Country," and "Nell" in which she appeared with Neeson, whose most celebrated screen turn was in the movie "Schindler's List."

Born in May 1963, Richardson was educated in London and trained at the Central School of Speech and Drama in the city, which has groomed a host of British actors.

Her extensive stage experience includes a number of Shakespearean roles, among them Ophelia in "Hamlet" and Helena in "A Midsummer Night's Dream."

Her famed Redgrave clan is one of Britain's most famous stage and screen dynasties.

Vanessa, Corin and their sister Lynn are the children of Rachel Kempson and Michael Redgrave, who played in such British classics as the 1938 "The Lady Vanishes" and 1969 "Goodbye, Mr Chips."

Natasha Richardson's sister Joely is also an actress, who is currently starring in the television drama Nip/Tuck.

If government gets way, Ruth Madoff gets nothing

NEW YORK (AP) - Prosecutors probing Bernard Madoff's massive fraud are determined to leave his wife with almost nothing after telling a Manhattan court that they consider more than $100 million in assets, most of it listed in her name, the fruits of her husband's crimes.

The government even included a $39,000 Steinway piano and $65,000 in silverware, both owned by Ruth Madoff, in items it said it will try to force the Madoffs to forfeit.

The list was in a three-page document filed in U.S. District Court late Sunday.

Brenda Sharton, a lawyer with a Boston firm representing several burned investors, said the government's aggressive approach with Ruth Madoff isn't surprising.

"I don't think it's unusual ... given the magnitude of the fraud," she said.

"It would be unusual if they didn't go after whatever assets they can get."

Bernard Madoff, 70, has been living in a small cell at the Metropolitan Correctional Center in lower Manhattan since he pleaded guilty Thursday to securities fraud, perjury and nine other charges.

He could be sent to prison for up to 150 years at a June sentencing.

If prosecutors get their way, the Madoffs will have to give up all their assets, including three properties listed solely in Ruth Madoff's name; a $7 million Manhattan penthouse bought in 1984, an $11 million Palm Beach, Florida, home purchased in 1994 and a $1 million home in Cap d' Antibe, France.

Another $3 million home bought in 1979 in Montauk, New York, is jointly owned by the couple.

The government also said Madoff and his wife should forfeit:

_ $10 million in furnishings for all of the homes, along with accounts in Ruth Madoff's name that hold $17 million in cash and $45 million in securities.

_ "Bull," a $7 million yacht in France and its $1.5 million boat slip, and "Little Bull," a $320,000 Montauk boat, all in Ruth Madoff's name, as well as a $2.2 million fishing boat in Palm Beach, Florida, that is in Madoff's name.

_ A 1999 Mercedes SLK convertible in Florida, a 2001 Mercedes station wagon and a 2004 Volkswagen, estimated to be worth a total of $25,000.

Not mentioned in the document was $2.6 million in jewelry, although the government did say it would seek "all insured and readily salable personal property" in any of the Madoff properties.

Ruth Madoff has not been charged in the massive swindle.

But Karl Buch, a former federal prosecutor now in private practice, said the government filing shows prosecutors believe she knew about the scam.

"If the government had strong evidence she was an innocent third party, they wouldn't bring a forfeiture," he said.

The assets were first listed in a document made public Friday that listed the couple's combined assets at between $823 million and $826 million, most of it the estimated $700 million value of what is left of Madoff's businesses.

Defense lawyers haven't formally sought to retain any assets, but indicated previously that they might try to keep the Manhattan penthouse and $62 million in cash and securities for Ruth Madoff because those assets were not part of the fraud and were listed in her name.

The lawyers have noted that Madoff and his wife agreed to a freeze of their assets as the government and others recover as much as possible for investors.

Attorneys for Madoff, Ruth Madoff and a federal prosecutor's spokeswoman all declined comment.

So far, about $1 billion in assets have been identified for investors, just a small portion of the $65 billion Madoff told his 4,800 investors that he had on hand in November.

Authorities say they believe the figure included what would have existed if much smaller original investments had grown for decades.

At his plea, Madoff said he began what he thought would be a shortlived Ponzi scheme in the early 1990s in response to a recession.

He said he never recovered and continued making payouts to early investors with money from new investors.

Prosecutors say the fraud began in the 1980s, which would make it harder for Ruth Madoff to argue that she bought the Manhattan penthouse before the fraud began.

In September, Ruth Madoff filed for a homestead exemption to protect her Palm Beach, Florida, home as her primary residence.

It was granted in January, according to Palm Beach County property records.

Florida has some of the most protective laws in the country for debtors seeking to dodge creditors.

"Florida is what we call a debtor haven," said Miami bankruptcy attorney Timothy Kingcade.

But the money to buy the home cannot have resulted from fraud, Kingcade said, noting: "You can't go rob a bank and buy a home and be protected."

Health claims for eating fish causing harm -- study

Sardines are cooked at a restaurant near the beach of Malaga, southern Spain, May 13, 2008. (REUTERS/Jon Nazca/Files)

VANCOUVER, British Columbia (Reuters) - Claims about the human health benefits of eating more fish may be causing more environmental and social harm than good, according to a Canadian study published on Tuesday.

The health claims appear to be overblown, and many of the studies making them ignore the pressure increased consumption puts on the dwindling global fish stocks, according to the article in the Canadian Medical Association Journal.

"Governments and industry tell consumers to eat more fish because it is healthy... but where do we get these fish?" asked Rashid Sumaila, of the University of British Columbia's Fisheries Economics Research Unit.

With the collapse of many fish stocks near the United States, Europe and Japan, the pressure is now on developing countries to allow increased foreign access to their shores or to export the catch of local fishermen.

"In either case, the local markets of developing countries, where basic nutrition and health are challenges, are deprived of an important source of protein for the sake of the developed world, whose major problems are overnutrition and physical inactivity," the researchers wrote.

The report was prepared jointly by ocean and medical researchers, and coauthor by prominent Canadian writer and environmentalist Farley Mowat.

The researchers said while there are studies that indicate a benefit of consuming omega-3 fatty acids found in fish oils, there are also studies that indicate the benefits are minimal and fish eaters already tend to lead healthier lifestyles.

"In contrast to the uncertainty over the value of omega-3 in fish oils in the scientific literature, there is little doubt about the gravity of the fisheries crisis and the prospect of ongoing collapses of the fish stocks," the researcher wrote.

The article said there are also alternatives in the ocean to fish oils for omega-3 fatty acids, such as algae and plants, but warns more clinical study is needed before advocating their widespread use.

The researchers also discount expanding aquaculture because for some fish species, such as salmon, their high protein feed requires requires between 2.5 and 5 kilograms of fish for every kilogram the farm eventually produces.

Sunday, March 15, 2009

Obama picks FDA chief, starts food safety panel

US President Barack Obama (L) speaks to reporters in the Oval Office after meeting with Brazil's President Luiz Inacio Lula Da Silva at the White House in Washington, March 14, 2009. (REUTERS/Jonathan Ernst)
WASHINGTON (Reuters) - President Barack Obama on Saturday chose public health and biological threat expert Dr. Margaret Hamburg to run the troubled U.S. Food and Drug Administration and announced a Cabinet-level food safety group.

Obama also outlined measures to keep diseased cows from entering the food supply and promised to increase the number of FDA food inspectors and modernize food safety labs.

He selected Baltimore Health Commissioner Dr. Joshua Sharfstein to serve as Hamburg's principal deputy.

Hamburg is a former New York City health chief and she worked on policy issues in President Clinton's health department. She has experience on topics ranging from AIDS to reduction of biological threats.

"Dr. Hamburg brings to this vital position not only a reputation of integrity but a record of achievement in making Americans safer and more secure," Obama said in his weekly radio address.

If confirmed by the Senate, Hamburg will take over an agency battered by a string of often deadly food poisoning and drug safety issues, including an ongoing outbreak of salmonella in peanut products that forced the largest food recall in U.S. history.

The choice signals the FDA's priority under the Obama administration will be safety and not necessarily speeding through drug approvals.

The salmonella outbreak has made 683 people in 46 states sick, killed as many as nine and forced the recall of more than 3,000 products.

"When I heard peanut products were being contaminated earlier this year, I immediately thought of my 7-year-old daughter, Sasha, who has peanut butter sandwiches for lunch probably three times a week," Obama said.

"No parent should have to worry that their child is going to get sick from their lunch."


Obama said outdated food safety laws were in part to blame. "Inspection and enforcement is spread out so widely among so many people that it's difficult for different parts of our government to share information, work together, and solve problems," he said.

The FDA "has been underfunded and understaffed in recent years, leaving the agency with the resources to inspect just 7,000 of our 150,000 food-processing plants and warehouses each year. That means roughly 95 percent of them go uninspected," he added.

Obama said he would assign his Health and Human Services secretary -- his nominee is former Kansas governor Kathleen Sebelius -- and Agriculture Secretary Tom Vilsack to head a group to advise on ways to improve food safety laws.

Hamburg led an Institute of Medicine panel that reported on microbial threats in 2003. As New York City health commissioner, she battled an outbreak of drug-resistant tuberculosis fueled by the AIDS epidemic.

"There are few jobs in the federal government that are as tough or important as FDA commissioner," said Jean Halloran, director of food policy initiatives at Consumers Union.

Hamburg's nomination means the FDA will "have the leadership it needs at a time when it faces huge challenges," Halloran added.


Democratic Congressman Bart Stupak said he was pleased Obama went outside the agency for a new chief. He said the FDA had been "plagued by low morale, antiquated systems, inadequate funding and management more interested in protecting the companies they regulate than the American people."

Reports by outside experts have found the FDA underfunded and ill-equipped to manage its oversight of prescription drugs, medical devices, most foods and other products that account for about one-quarter of the U.S. economy.

Obama highlighted a new USDA rule to keep sick and injured cattle out of slaughterhouses to safeguard against mad cow disease.

He praised Sharfstein for "efforts to protect children from unsafe over-the-counter cough and cold medications" and a program to ensure people with disabilities have access to prescription drugs.

The pharmaceutical industry's main lobbying group praised Hamburg's selection but did not comment on Sharfstein, who did previous work for Democratic Congressman Henry Waxman, a harsh critic of drugmakers.

Hamburg "brings managerial skills that are essential for directing science-based activities," said Billy Tauzin, head of the Pharmaceutical Research and Manufacturers of America.

Repaired space shuttle ready for launch try Sunday

Space shuttle Discovery sits on launch pad 39A as rotating service structure rolls back at the Kennedy Space Center in Cape Canaveral, Florida 2009. (REUTERS/Scott Audette)

CAPE CANAVERAL, Fla. (Reuters) -- NASA will try again on Sunday to launch space shuttle Discovery on a construction mission to the International Space Station after fixing a fuel leak that triggered a delay last week.

Blastoff is set for 7:43 p.m. (2343 GMT) from Kennedy Space Center in Florida.

Engineers installed new seals in a fuel vent line, hoping that will solve the problem that postponed NASA's first launch attempt on Wednesday when hydrogen gas leaked from the shuttle's fuel tank, posing a fire hazard.

Technicians were unable to find the exact cause of the leak.

"I was a little surprised that we didn't find something more obvious because it was a healthy leak," shuttle launch director Mike Leinbach told reporters on Saturday.

Still, if the shuttle does not leak when it is fueled for flight on Sunday, it will be safe to fly, he added.

NASA plans to start filling the shuttle's tank with 500,000 gallons of liquid oxygen and liquid hydrogen at about 10:30 a.m. (1430 GMT) on Sunday.

NASA has until Tuesday to launch the shuttle or face a delay until April 7 to avoid a schedule conflict with a Russia-led Soyuz mission to replace the station's prime crew.

Discovery will be carrying the fourth and final solar power module for the U.S. part of the station, a $100 billion project of 16 nations. The crew includes Japanese astronaut Koichi Wakata, who will be left behind to serve as a station flight engineer and the first Japanese to live on the outpost.

Saturday, March 14, 2009

Two hoaxers arrested after German massacre

Two new hoax Internet warnings of school shootings resulted in arrests on Friday in Germany and France, two days after a horrific massacre of 15 people near Stuttgart by a teenage gunman.
The latest hoaxes came after it was separately revealed that the perpetrator of Wednesday's bloodbath, 17-year-old Tim Kretschmer , had not warned of his intentions on the Internet, contrary to what investigators had previously been led to believe.
The arrests take to three the number of hoaxers picked up by European police over threats of copycat attacks made over the Internet. Swedish police arrested a teenager there on Thursday.
Those behind the hoax regional officials initially believed was a chilling warning by Kretschmer have yet to be discovered.

German police in Lower Saxony, hundreds of kilometres (miles) from the scene of Wednesday's rampage, said they arrested a 21-year-old man after he said in a chat room that he would carry out a similar crime.

"I have a gun and I'm going to kill everybody," read the chat-room message, which was alerted to police by a 16-year-old schoolboy in Wuerzburg.

The man, who has not been named and who faces up to three years in jail or a fine, said that it was meant "as a joke."

French police dealt with a similar situation, taking into custody an 18-year-old youth after he too posted a "joke" website warning of a shooting spree at a school in the Paris suburbs.

The youth arrested in France said he had posted the warning on Thursday as a joke, police said, adding that no weapons were found at his home. "In Raincy (high school) there will be blood -- I have weapons," this message read.

On Thursday, Swedish police detained a 17-year-old boy who was suspected of posting a picture of himself posing with a weapon on an Internet forum, along with a threatening message against a high school.

Also on Friday, a school at Ilsfed, near the scene of Wednesday's killing, was searched by police after another Internet threat but it turned out to be a false alert, local police spokesman Roberto Monaci told AFP.

Dressed in black combat gear and armed with a gun taken from his father's bedroom, Kretschmer went on the rampage starting at his old school in the town of Winnenden .

He shot dead eight girls, one boy and three female teachers. He then killed a passer-by outside a psychiatric clinic where he had been due to receive treatment, hijacked a car and shot two others at a car dealership.

By this time hundreds of armed commandos were on his trail, some in helicopters, and Kretschmer died in a shootout with police around 30 kilometres (20 miles) from the school. Police believe he shot himself.

The interior minister of the state where this took place said on Friday that the 17-year-old -- described as unremarkable and reserved if socially awkward and suffering from depression -- had announced his intentions on the Internet.

But on Friday the minister, Heribert Rech, admitted that he had been duped.

"Some crazy person obviously put out this dreadful false message," Rech was quoted as saying by the Sueddeutsche Zeitung daily. "It must have been made up afterwards."

Experts said that the chat never took place. Instead a screen shot of a faked conversation was placed on the website, which said that the reference number was that of a completely unrelated dialogue.

"These days it is incredibly easy to manipulate data in chat rooms," Sebastian Clausz, a computer scientist from Dresden's Technical University told AFP.

After analysing Kretschmer's computer, on which he had spent hours playing "shoot-em-up" video games, a spokesman for local police said no trace had been found of the message.

The website said the warning was "a forgery."

The picturesque town near Stuttgart was still in a state of shock on Friday, with people laying flowers and candles outside the Albertville secondary school, which remained closed.

For the second evening in a row, Winnenden's church was overflowing, with the service transmitted outside on specially-erected screens.

Chancellor Angela Merkel will attend a memorial service on March 21 in the town, her spokesman said on Friday.

Two policemen injured in Wednesday's car park shootout were still in hospital, as were five pupils from the school, police said. Some the pupils had gunshot wounds and others had broken bones after jumping out of windows.

World Wide Web feels its growing pains

The World Wide Web (WWW) on Friday marked its 20th anniversary and one of its founders admitted there are bits of the phenomenon he does not like.
The creation of the web by British computer scientist Tim Berners-Lee and colleagues at the European particle physics laboratory (CERN) paved the way for the Internet explosion which has changed our daily lives.
In March 1989, the young Berners-Lee handed his supervisor in Geneva a document entitled 'Information Management: a proposal".

The supervisor described its as "vague, but exciting" and later gave it the go ahead, according to CERN.

"It was really in the air, something that had to happen sooner or later," said former CERN systems engineer Cailliau, who teamed up with Berners-Lee.

They drew up the global hypertext language -- which is behind the "http" on website addresses -- and came up with the first web browser in October 1990, which looks remarkably similar to the ones used today.

"Everything that people talk about today, blogs and so on, that's what we were doing in 1990, there's no difference. That's how we started," Cailliau told Swiss radio RSR.

The WWW technology was first made available for wider use on the Internet from 1991 after CERN was unable to ensure its development, and the organisation made a landmark decision two years later not to levy royalties.

Cailliau still marvels at developments like wikipaedia that allow knowledge to be exchanged openly around the web, but never imagined that search engines would take on the importance they have assumed today.

"A search engine is very centralised... while the web is totally decentralised, I couldn't have predicted the things that it does," he said.

But the commercial development of the web still irritates some of the founders.

"There are some things I don't like at all, such as the fact that people have to live off advertising," said Caillau, who preferred the idea of direct "micro payments" to information providers.

"And there's the big problem of identity, of course, the trust between the person who is consulting and the person who provides the page, as well as the protection of children," he added.

Berners-Lee, now a researcher at Massachusetts Institute of Technology in the United States and a computer science professor at Southampton University in Britain, still heads the World Wide Web Consortium that coordinates development of the web.

Lynn St. Amour, chief executive of the Internet Society, said the web is often wrongly confused with the wider Internet.

"The Internet is a vast network of networks, interconnected in many different physical ways, yet all speaking a common language," she explained.

"The Web is one -- albeit, the most influential and well known -- of many different applications which run over the Internet."

"The great achievement of Tim Berners-Lee was to recognise the power and potential in the Internet," she added.

Friday, March 13, 2009

Poland hopes to complete U.S. shield talks in April

WARSAW (Reuters) - Poland hopes to complete technical talks on stationing parts of a U.S. missile defence shield on its soil next month, the country's defence minister was quoted on Thursday as saying.

President Barack Obama's administration is reviewing U.S. security policy, including the shield plan, prompting speculation he might shelve a project that has irritated Moscow, with which Washington wants to mend ties.

NATO member Poland has said it still expects the project, designed to counter possible threats from what it calls rogue states such as Iran, to go ahead eventually after the review.

"We have had the penultimate round of talks (on technical issues) and I hope we will finalise negotiations in April," Defence Minister Bogdan Klich told the newspaper Rzeczpospolita in an interview.

Under the deal, agreed last year, Poland will host 10 ground-based interceptors. In return, Warsaw secured a U.S. promise that a Patriot missile battery would be stationed on its territory for a period before the end of 2009.

Warsaw sees the Patriot commitment as a symbolic security guarantee from its U.S. ally to counter an assertive Russia.

"I believe the Americans will stand behind their earlier declarations and that the Patriot rocket battery will come to Poland before the end of this year," Klich said.

U.S. and Polish diplomats say the Patriot deployment will go ahead independently of any decision on the missile shield.

Moscow sees the shield project as a threat to its security. Washington says it is aimed not against Russia but against Iran and possibly terrorist groups which might acquire weapons of mass destruction in the future.

Debris briefly forces astronauts from space station

MIAMI (Reuters) - The astronauts aboard the International Space Station briefly evacuated to a Russian escape spaceship on Thursday when a piece of space debris came too close, NASA said.

The debris was an old motor that probably was once a part of the space station, NASA spokeswoman Laura Rochon said.

The Russian Space Command said the debris had passed the station and the crew were in no danger and had returned.

Iraq shoe thrower sentenced to three years in jail

BAGHDAD (Reuters) - An Iraqi reporter who hurled his shoes at former U.S. President George W. Bush was convicted of attempting to assault a foreign leader on Thursday and jailed for three years, dismaying many Iraqis who regard him as a hero.

Muntazer al-Zaidi, 30, who pleaded not guilty to the charge, told the Baghdad court: "What I did was a natural reaction for the crimes committed against the Iraqi people."

Outside the courtroom, wails erupted from Zaidi's family and other supporters when they heard the verdict. One of his brothers fainted and his sister Ruqaiya burst into tears, shouting: "Down with Maliki, the agent of the Americans".

Zaidi earned instant global fame in December when he threw his shoes at the visiting U.S. leader, who spearheaded the 2003 invasion of Iraq, and called him a dog at a news conference.

Dhiaa al-Saadi, the head of Zaidi's defence team, condemned the sentence as harsh and said it would be appealed.

The government of Iraqi Prime Minister Nuri al-Maliki, who was standing next to Bush at the news conference and tried the block a shoe, described the incident as a "barbaric act".

At the start of his trial in February, Zaidi said Bush's smile as he talked about achievements in Iraq had made him think of "the killing of more than a million Iraqis, the disrespect for the sanctity of mosques and houses, the rapes of women".

Enraged, he removed his shoes and hurled them one by one at Bush, shouting "This is a goodbye kiss from the Iraqi people, dog". Bush ducked, and was not hit by the flying footwear.

In the Middle East, hitting someone with a shoe is considered a major insult.


Zaidi's lawyers failed to convince the court to reduce the charge to insulting, rather than attempting to assault, a visiting head of state. The journalist, who has been detained since December, had faced jail time of up to 15 years.

A political analyst said the final verdict was a light one.

"Most people supported Zaidi and liked what he did, so the verdict reflects public opinion," Hazem al-Nuaimi said.

Zaidi's employer al-Baghdadiya television and a journalist advocacy group pinned their hopes on an appeal or pardon.

"We are confident of his innocence, if we understand his motives and the atmosphere created by the occupation," Baghdadiya said in a televised statement.

"It is now left to wait for a presidential or prime ministerial pardon, because we cannot accept an Iraqi journalist behind bars," said Iraq's Journalistic Freedoms Observatory.

Support for Zaidi in Iraq, where the U.S.-led invasion unleashed years of sectarian bloodshed, has not been universal. Some said a guest of Iraq should not be insulted, and that the incident embarrassed the country and its journalists.

But Zaidi has also been hailed in Iraq and across the Middle East as a hero. His action against Bush has been adopted by many as an act of protest, and shoe-throwing has caught on globally.

"The case is politicised and is an attempt to take revenge on Zaidi. I believe the judges were under political pressure," said Ahmed al-Masoudi, a spokesman for anti-American Shi'ite cleric Moqtada al-Sadr's parliamentary bloc.

However, Ali al-Adeeb, a senior member of Maliki's Dawa party, dismissed the charge.

"If this case was politicised, the punishment would have been harsher, but it was dealt with legally."

Thursday, March 12, 2009

U.S. tries to play down naval confontation with China

WASHINGTON (Reuters) - The United States sought on Wednesday to play down a confrontation between Chinese and U.S. naval vessels as the two sides held high-level talks on reviving growth and reining in North Korea's nuclear program.

Tensions between the two countries rose over a weekend incident in the South China Sea in which five Chinese ships jostled with a U.S. Navy survey vessel off China's southern Hainan island, a major base for Beijing's expanding navy.

U.S. Secretary of State Hillary Clinton said she raised the issue with Chinese Foreign Minister Yang Jiechi, who was to see U.S. Treasury Secretary Timothy Geithner later in the day and, in a rare gesture, to meet President Barack Obama on Thursday.

"We both agreed that we should work to ensure that such incidents do not happen again in the future," Clinton told reporters after a meeting with Yang. They also discussed human rights, North Korea and the ailing global economy.

Clinton said the there was "a range of options," including action in the U.N. Security Council, that could be pursued against North Korea if it tests a long-range ballistic missile, which she said would be a "provocative" act.

She also repeated the long-standing U.S. request that North Korea return to the negotiating table to discuss a multilateral deal under an aid-for-disarmament deal in which Pyongyang agreed to abandon its nuclear programs.

Grappling with North Korea, which tested a nuclear weapon in 2006, is one of a host of issues on a U.S.-Chinese agenda that also covers reviving global growth and restraining global climate change.

Clinton was harshly criticized by rights groups for her comment in Asia last month that U.S. concerns about human rights in China "can't interfere with" joint work on the economy and other issues.

She sought to rebut the criticism, saying that the United States will always raise human rights with China but that it aimed to do so in a way that produced results.

"Human rights is part of our comprehensive dialogue. It doesn't take a front or a back seat or a middle seat," she told reporters. "It is part of the broad range of issues that we are discussing, but it is important to try to create a platform for actually seeing results from our human rights engagement."

Arsenal defeat Roma on penalties in Champions League

AS Roma's Max Tonetto skied his penalty miles over the bar to hand Arsenal a place in the Champions League quarter-finals following a tense match that went to the spot-kick lottery on Wednesday.
Arsenal won the shoot-out 7-6 thanks to Tonetto's sudden death miss after Eduardo and Mirko Vucinic had seen their earlier efforts saved by goalkeepers Doni and Manuel Almunia respectively.
It means all four English teams made it through to the last eight with Italy's three representatives all bowing out -- it is the first time in seven years no Italian team has made it through to the quarters.
The game ended 1-0 to the hosts after 90 minutes, matching the score the Gunners had won by in London two weeks ago.

Despite the four English teams in the next round, Wenger named Barcelona as his favourites to lift the title.

"England can be very proud to have four teams through for the second year now," he said.

"It was very close between Chelsea and Juventus. Between us and Roma it was very close and I heard that Inter (Milan) played well against (Manchester) United, so it looks like Italy are coming back.

"But I give you as favourite a non-English team hoping and English team wins it."

With a first leg deficit to overcome Roma needed all the help they could get but while talisman Francesco Totti was passed fit, France centre-back Philippe Mexes was ruled out with the flu.

It meant that Malian Souleymane Diamoutene -- a transfer window signing from Lecce -- came into the side to make his Champions League debut.

Things looked desperate after just five minutes as Roma's other first choice centre-back Juan walked off the pitch with a hamstring problem.

However the Roma physios patched him up and sent him back on a couple of minutes later and with good reason as it was the Brazilian who slotted in the opener.

Roma opened up Arsenal's right side with some slick passing on nine minutes allowing Totti to cross into the box.

The ball passed between William Gallas and Emmanuel Eboue and was missed by Rodrigo Taddei but Juan, who had stayed up a long time following a corner, was free at the back post to control the ball and slide it under Almunia.

Despite the defeat, Roma coach Luciano Spalletti said he was proud of his patched-up team.

"After a night like this we should be proud, we're going out of the Champions League with our heads held high," he said.

"In the changing rooms I told the lads that they gave their all and they should feel proud."

Roma twice went close to a second on 23 minutes as Marco Motta broke into the box. Almunia saved his near post effort but Motta kept the ball alive and it came out to Taddei whose shot Almunia tipped around the post.

However Juan couldn't continue much longer and Roma were forced into a defensive rejig with John Arne Riise moving into the centre and Julio Baptista coming on in midfield.

Arsenal were creating only half chances and Abou Diaby headed the best straight into Doni's arms from a Samir Nasri cross.

On the stroke of half-time Roma were screaming for a penalty as Motta went down in the box with Gael Clichy chasing him but the referee rightly ignored the appeals.

Roma's makeshift defence was looking vulnerable and on 58 minutes a terrible Riise mistake on the halfway line let Eboue run away down the right but the Ivory Coast international failed to pick out Nicklas Bendtner.

The game was on a knife edge and both sides seemed unwilling to commit too much in attack although Diaby did create some space before firing wide.

With 11 minutes left Roma opened Arsenal up at the back as the ball was switched quickly from Taddei to Totti to Baptista but the Brazilian, playing against his former club, slipped with the goal at his mercy and failed to trouble Almunia.

Arsenal had two good late chances but Robin van Persie's shot was deflected wide and Kolo Toure headed over from close range.

The extra 30 minutes failed to produce any clear cut chances and so the game headed to the spot-kick lottery. And Tonetto's woeful effort sealed Roma's fate.

Wednesday, March 11, 2009

Dow jumps more than 300 as Citi announces profit

NEW YORK – Wall Street got some good news from Citigroup, and responded with a huge rally. Led by financial stocks, the market made its first big move upward in weeks Tuesday after Citigroup Inc. said it had operated at a profit during the first two months of the year. All the major indexes soared more than 4.5 percent, and the Dow Jones industrials shot up more than 300 points.

Still, while word of Citi's performance at least temporarily broke a months-long torrent of bad news from the banking industry, analysts weren't ready to say the stock market was at a turning point and about to barrel higher.

"To have a sustained rally, we have to have a shift in sentiment," said Kurt Karl, chief U.S. economist at Swiss Re. "One day isn't going to make a trend.

But the Citigroup news offered investors some hope that the first quarter will show some signs of improvement.

In a letter sent to employees Monday, Citi Chief Executive Vikram Pandit said the first-quarter performance so far has been the bank's best since the third quarter of 2007 — the last time it recorded net income for a full period. Based on historical revenue and expense rates, Citi's projected earnings before taxes and one-time charges would be about $8.3 billion for the full quarter.

Pandit declined to say how large credit losses and other one-time items have been that would at least partially offset profit.

Citi shares jumped nearly 40 percent while Bank of America Corp. was up more than 26 percent; both are Dow components and helped propel the average higher. Other banking stocks also rose sharply.

Financial stocks have been a primary driver in a market collapse that has left the major indexes at their lowest point in more than a decade. Every report of loan losses and asset writedowns have sent banking stocks to incredible lows — Citi fell below $1 a share last week. And fears that hundreds of billions of dollars in government bailouts wouldn't be enough to save the big banks exacerbated the fears on the Street.

But Ben Halliburton, chief investment officer of Tradition Capital Management warned that the advance was likely just another bear market rally.

A bear market is defined as a drop of 20 percent from a market peak — and stocks passed that point last year and continued to plunge, leaving the Dow and S&P 500 at less than half the record highs they reached in October 2007. A bear market rally is an advance that lifts stocks off their lows, but that quickly evaporates as pessimism remains in the market.

"I would be surprised to see us trade back over 800 in the near term," Halliburton said, referring to the Standard & Poor's 500 index. "The news coming out on the economic front will continue to be rather gloomy."

Analysts suggested that the market's gains, especially among financial stocks, could be attributed to short covering, an investment strategy that tends to drive rallies in volatile markets. Short-sellers are traders who sell borrowed stock and then buy it back later on the hopes that the price will fall. If they believe a stock will be going up, they have to "cover" their positions, or buy shares to repay the loan.

Still, short covering does come in response to a more upbeat sentiment in the market. The question during a short covering rally is whether there is enough positive sentiment to sustain the advance.

Investors were further encouraged by Federal Reserve Chairman Ben Bernanke who called for a revamp of the country's financial regulatory system. Speaking before the Council of Foreign Relations, Bernanke said "too big to fail" companies must be subject to more rigorous supervision to prevent them from taking on excessive risk. Bernanke's remarks come as the Obama administration and Congress begin to devise their overhaul strategies.

In early afternoon trading, the Dow jumped 302.82, or 4.6 percent, to 6,849.87. Dow stocks with the biggest gains included General Electric Co., which rose $1.51, or 20.4 percent, to $8.92. GE has a big financial services division, so it tends to move with banking stocks.

The Standard & Poor's 500 index rose 36.51, or 5.4 percent, to 713.04, while the Nasdaq composite rose 74.98, or 5.9 percent, to 1,343.62.

The Russell 2000 index of smaller companies rose 21.10, or 6.2 percent, to 364.36.

Advancing issues outnumbered decliners by 14 to 1 on the New York Stock Exchange, where volume came to 903.9 million shares.

Citigroup's announcement proved to be the dose of good news Wall Street had been waiting for to spark a bounce, but there was still plenty of pessimism in the market.

"There's nothing that anybody can do to turn the market around," said Harry Rady, chief executive of Rady Asset Management. "This is just a little bear-market blip."

"Citigroup is falling apart. For them to say they are having the best quarter since 2007, I don't believe it," he said.

Halliburton was hesitant to put much stock in Citigroup's announcement for fear of rising loan losses that could eat away at the operating profit. As long as housing prices are declining and loan defaults are increasing, "they are going to have to take asset writedowns," he said. "I don't think this is a game changer."

Government officials have been examining additional ways to stabilize the bank should further problems arise, according to a report in The Wall Street Journal Tuesday citing people familiar with the matter. Late last month, in its third attempt to rescue the bank from collapse, the Treasury Department moved to take up to a 36 percent stake in Citi.

News of more job cuts, a particular sore spot for investors, was not enough to deter the market's upward swing Tuesday.

United Technologies Corp. said it plans to cut 11,600 jobs. The manufacturing conglomerate also lowered its 2009 profit forecast because of an anticipated decline in revenue. Shares jumped $2.52, or 6.7 percent, to $40.08.

Also Tuesday, the Commerce Department said wholesale inventories declined 0.7 percent in January, versus a 1.4 percent decline in December. This was better than the 1 percent drop economists had expected.

Big gainers included tech and industrial stocks. Caterpillar Inc. rose $2.55, or 10.7 percent, to $26.47. Among tech stocks, Intel Corp. rose $1.04, or 8.3 percent, to $13.59. Cisco Systems Inc. rose $1.08, or 7.9 percent, to $14.70.

Bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, jumped to 2.97 percent from 2.88 percent late Monday. The yield on the three-month T-bill, considered one of the safest investments, was unchanged from late Monday at 0.23 percent.

The dollar was mixed against other major currencies, while gold prices sank.

Light, sweet crude for April delivery rose 23 cents to $47.30 a barrel on the New York Mercantile Exchange.

Buoyed by the gains in the U.S., European markets soared. Britain's FTSE 100 rose 4.83 percent, Germany's DAX index jumped 5.26 percent, and France's CAC-40 gained 5.59 percent. Earlier Tuesday, Hong Kong's Hang Seng index jumped 3.08 percent, while Japan's Nikkei stock average fell 0.44 percent.