The many faces of Afghanistan's spy chief

Friday 21 December 2012

Kabul, Dec 21 (Newswire): For those that know him best, Asadullah Khalid has always been "a man of action".

His reputation for "assertiveness" has ingratiated the head of the National Directorate of Security (NDS) - the Afghan intelligence agency - with some of the most powerful figures in the nation.

But Khalid's literally hands-on methods have also earned him powerful enemies abroad and a reputation for ruthlessness. He has been accused of assassinations, torture, and drug-dealing as governor of Ghazni and Kandahar provinces.

Despite the allegations, Khalid is a favourite among Afghan President Hamid Karzai's inner circle. So it came as little surprise when Karzai rushed to a Kabul hospital to visit his spy chief hours after a December 6 suicide attack wounded him.

The assailant pretended to be a "messenger of peace and negotation from the Taliban side" before detonating explosives hidden in his underwear at a government guesthouse, an intelligence agency spokesman said. Khalid survived and is now in a US-run military hospital, though the seriousness of his wounds remains unclear.

The Taliban claimed responsibility for the attack, the fifth attempt on Khalid's life in five years.

"Karzai was in shock. His reaction was the same as when he got the news about Ahmad Wali," a high-ranking cabinet official said, referring to the July 2011 assassination of the president's half-brother, who was close to Khalid.

That closeness earned Khalid the respect of the elder Karzai, who named him Afghanistan's intelligence chief in September.

Wahid Monawar, former permanent representative of Afghanistan to the United Nations in Vienna, described Khalid as genuinely loyal to the president, a rare trait that earned the 42-year-old many high-level posts, including governor of Kandahar province.

Three high-level officials spoke to Al Jazeera on condition of anonymity, all citing a fear of offending Khalid and his powerful allies.

An intelligence official within the NDS said Khalid hadn't waited for a ministerial post to begin his fight against the Taliban and foreign elements. Khalid first went up against the Taliban as part of the forces of Abdul Rasul Sayyaf, a current member of parliament and former warlord during the 1990s.

Those who spoke to Al Jazeera all pointed to Khalid as a driving force against the Taliban. When fighters launched an attack in the Arghandab Valley during the summer of 2008, Khalid flew back from the United States "and picked up a gun himself", said the cabinet official.

Khalid has also faced allegations of using his influence to assist Karzai during the 2009 presidential election. Already there's speculation of the role he might play in the next presidential vote, scheduled for April 2014, an official in the Electoral Complaints Commission said.

But some say Khalid represents the exact kind of leadership that is lacking in the Central Asian nation.

Afghans appreciate his style, said the cabinet official, because they know "democracy will not work in Afghanistan. Instead, we need something more akin to dictatorship".

As evidence that a hardline approach works in Afghanistan, the cabinet official highlighted the November executions of 16 "terrorists, murderers, kidnappers, and rapists".

Others in the international community, however, disagree with that approach. Citing "the weakness of the Afghan legal system", New York-based Human Rights Watch called on the Kabul government to halt the "sudden surge of executions".

The European Union, which recently suspended $25m in judicial aid because of a lack of progress in fighting corruption, urged the Afghan government to take "a first step toward definitive abolition of capital punishment".

But the cabinet official said the executions were largely supported by the Afghan people.

"This is not a democratic mindset, but it is prevalent. This is why people support someone like Khalid. He takes definitive steps," the official said.

People have also been swayed by the confidence the NDS chief exudes.

When asked about him, many Afghans cite Khalid as one of the only high-level ministers who walks around freely without a bodyguard.

The NDS official told Al Jazeera that Khalid "did everything on his own accord, he rarely ever consulted anyone else".

But Monawar said that in his conversations with officials in US and Afghan intelligence, it is clear Khalid's "self-realisation and political maturity was borne with his appointment as NDS chief. In a very short period of time, he had impressed many in Washington while managing to make Islamabad increasingly nervous".

Karzai claimed Khalid's attacker entered the country through Pakistan - without implicating the Pakistani state outright. Afghan lawmaker Fawzia Koofi of Badakhshan province was less coy. "For the Afghan government and people, the message of such attacks is to know that Pakistan wants to impose its agendas in Afghanistan."

Colin Cookman, a security policy analyst with the Center for American Progress, a Washington DC-based think-tank, said it was unlikely the attack originated in Islamabad.

"It's not clear to me that Khalid was so uniquely hostile to Pakistani interests as to merit targeted assassination during a period of broader rapprochement. That would suggest either a serious disconnect within the Pakistani security establishment, or minimal involvement on its part."

Khalid's reputation among rights groups and Western governments - unlike the Afghan government - is far less positive.

The cabinet official said Khalid was "a constant point of contention between Karzai and the Canadians" while he was governor of Ghazni and Kandahar provinces.

Richard Colvin, a former Canadian deputy ambassador to Afghanistan who worked closely with Khalid, testified before the Canadian parliament in 2009 that Khalid was directly involved in torture.

Citing "very credible evidence", Colvin said as far back as the summer of 2006, Khalid was known "to have had a dungeon in Ghazni ... where he used to detain people for money ... He was known to be running a narcotics operation. He had a criminal gang. He had people killed who got in his way."

Josh Shahryar is an Afghan journalist based in the United States who met Khalid in 2005.

"Khalid's 'assertiveness' is in essence his disregard for laws and taking matters into his own hands to deal with a problem for which there is the Afghan National Police," said Shahryar.

Khalid's reputation was again called into question by Monawar when he served as Afghanistan's permanent representative to the United Nations in Vienna in 2007. As the leader of the province with the highest rate of poppy production, Khalid was one of two governors invited by the UN to give presentations on creating poppy-free provinces.

"Khalid seemed scattered and often missed important meetings," Monawar said. "He had no clear plan on how to eradicate opium in Kandahar, or even to follow through with existing plans."

What he did have, however, was an excellent rapport with tribal elders, added Monawar.

A 2009 report by Kabul Press, a local syndicated media outlet, cited sources in the presidential palace calling Khalid "the most crucial member of a narcotics producing and smuggling syndicate".

Khalid dismissed the charges as "just propaganda", but when he was being considered for the NDS post in August, Human Rights Watch called on Karzai to appoint a new spy chief whose "integrity and commitment to human rights is above reproach".

Karzai's decision to award him the post despite the outcry "indicates the degree to which Karzai trusts Khalid to protect his interests", said Cookman.

With questions now surrounding Khalid's health, it remains to be seen if the controversial figure will continue to be a major power-broker in Afghanistan's future.

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Draft army handbook wades into divisive Afghan issue

Washington, Dec 21: American soldiers should brace for a "social-cultural shock" when meeting Afghan soldiers and avoid potentially fatal confrontations by steering clear of subjects including women's rights, religion and Taliban misdeeds, according to a controversial draft of a military handbook being prepared for troops heading to the region.

The proposed Army handbook suggests that Western ignorance of Afghan culture, not Taliban infiltration, has helped drive the recent spike in deadly attacks by Afghan soldiers against the coalition forces.

"Many of the confrontations occur because of [coalition] ignorance of, or lack of empathy for, Muslim and/or Afghan cultural norms, resulting in a violent reaction from the [Afghan security force] member," according to the draft handbook prepared by Army researchers.

The 75-page manual, reviewed by The Wall Street Journal, is part of a continuing effort by the U.S. military to combat a rise in attacks by Afghan security forces aimed at coalition troops.

But it has drawn criticism from U.S. Marine Gen. John Allen, the top military commander in Afghanistan, who aides said hasn't—and wouldn't—endorse the manual as written. Gen. Allen also rejected a proposed foreword that Army officials drafted in his name.

"Gen. Allen did not author, nor does he intend to provide, a foreword," said Col. Tom Collins, a spokesman for the U.S.-led coalition in Afghanistan. "He does not approve of its contents."

Gen. Allen hadn't seen the proposed foreword until a portion of the handbook was called to his attention by the Journal, Col. Collins said. Military officials wouldn't spell out his precise objections. But the handbook's conclusion that cultural insensitivity is driving insider attacks goes beyond the view most commonly expressed by U.S. officials.

The version reviewed by the Journal—marked "final coordinating draft" and sent out for review in November—was going through more revisions, said Lt. Gen. David Perkins, commander of the Army's Combined Arms Center at Fort Leavenworth, Kan., whose Center for Army Lessons Learned wrote the manual.

The proposed foreword was prepared by Army staff for Gen. Allen's eventual consideration, and the general's concerns will be taken into account as the military moves ahead with more revisions, he added.

The proposed handbook embraces a hotly debated theory that American cultural ignorance has sparked many so-called insider attacks—more than three dozen of which have claimed the lives of some 63 members of the U.S.-led coalition this year. The rise in insider attacks has created one of the biggest threats to American plans to end its major combat missions in Afghanistan next year and transfer full security control to Afghan forces in 2014.

Afghan leaders say Taliban infiltrators are responsible for most insider attacks. U.S. officials say the attacks are largely rooted in personal feuds between Afghan and coalition troops, though not necessarily the result of cultural insensitivity.

Last year, the U.S.-led coalition rejected an internal military study that concluded that cultural insensitivity was in part to blame for insider killings, which it called a growing threat that represented "a severe and rapidly metastasizing malignancy" for the coalition in Afghanistan.

The study was reported last year by The Wall Street Journal. The U.S. military at the time said the study was flawed by "unprofessional rhetoric and sensationalism."

The 2011 report—"A Crisis of Trust and Cultural Incompatibility"—is now a centerpiece of the draft handbook's advice to soldiers heading to Afghanistan, and it is listed under the draft's references and recommended reading. The report's findings also informed the current manual for troops in Afghanistan, which was released in February, according to Gen. Perkins.

U.S. Army officials didn't make the current version of the manual available for review.

The Army officer who headed up the 2011 study, Maj. Jeffrey Bordin, now is serving as the Army center's liaison to Gen. Allen's coalition headquarters in Kabul.

Maj. Bordin's work was included in the manual as part of a broader assessment of the insider threat in Afghanistan, said Gen. Perkins.

"We are very serious in trying to solve this problem, so we are not discounting any insights that we think are useful," he said. "We are pulling out all the stops to do everything we can to gather lessons learned."

Maj. Bordin didn't respond to email requests to comment, and the military didn't make him available for an interview.

The study, based on interviews with 600 members of the Afghan security forces and 200 American soldiers, painted a grim portrait of opposing cultures with simmering disdain for their counterparts.

The draft handbook uses Maj. Bordin's conclusions to psychologically prepare troops for serving in Afghanistan. A summary includes views of some U.S. soldiers that Afghan forces engage in thievery, are "gutless in combat," are "basically stupid," "profoundly dishonest," and engage in "treasonous collusion and alliances with enemy forces."

The draft handbook offers a list of "taboo conversation topics" that soldiers should avoid, including "making derogatory comments about the Taliban," "advocating women's rights," "any criticism of pedophilia," "directing any criticism towards Afghans," "mentioning homosexuality and homosexual conduct" or "anything related to Islam."

"Bottom line: Troops may experience social-cultural shock and/or discomfort when interacting with" Afghan security forces, the handbook states. "Better situational awareness/understanding of Afghan culture will help better prepare [troops] to more effectively partner and to avoid cultural conflict that can lead toward green-on-blue violence."

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A decade of western folly has erased hope from Afghanistan

Kabul, Dec 21: Clouds of uncertainty and foreboding hang over Kabul as heavily as the traffic pollution, which obscures its once stunning vista of surrounding mountains. Eleven years after the west's military intervention, the withdrawal of US, British and other international forces has started, but no one knows whether their departure will lead to more or less instability for a country that has been mired in civil war for almost 40 years.

Most Afghans say they are happy to see foreign troops depart, yet many are also concerned at the vacuum they will leave, in spite of international pledges of billions of dollars for the next decade. In seven visits to the country since the Taliban were toppled I have never found the Afghan mood so febrile and gloomy.

Disappointment and bitterness are widespread. Long gone are the high hopes sparked by regime change in 2001. The foreigners delivered far less than they promised. Kabul was transformed into a canyon of concrete blast walls and watchtowers shielding enclaves from which foreign diplomats only emerge in armoured vehicles for official contacts. Journalists, NGO staff and independent westerners who have lived here for years sense a rising mood of anger, and most have stopped going around Kabul on foot for fear of hostile looks, insults hissed in Dari or Pashto, or stones being thrown.

While Afghans blame government officials for creaming off much of the aid money, they blame western donors for doing too little to reduce corruption. US military commanders who handed out cash for "quick impact" projects are accused of encouraging it.

Most diplomats still peddle cautious optimism about "progress, albeit fragile", as the US and UK hand military responsibility to hastily trained Afghan National Security Forces (ANSF). Few Afghans share it. The new rich are getting their money or their families out to Dubai and other Gulf states. Many are putting their houses on the market so as to acquire the cash to leave. Used car agents report more sellers than buyers.

While the official narrative speaks of the ANSF increasingly taking the lead on the battlefield, it is obvious they are inferior in experience and equipment. In many instances US commanders no longer provide close air support or medevac facilities to embattled Afghan units – a dramatic sign that Afghans are on their own. One theory for the recent rise in "green-on-blue" attacks by Afghan troops on their western allies is that it flows directly from the rise in joint operations. Working closely with western troops gives Afghans direct experience of the difference in facilities and "culture". They resent the brutality of raids on family compounds in which they are asked to take part.

The withdrawal of US troops has already meant a loss of territory. In provinces where the US has closed forward operating bases, the Taliban and the other main insurgent group, Hezb-i Islami, have moved in to fill the gap. The trend is likely to grow throughout 2013 as the Afghan countryside becomes a much larger patchwork of areas contested between Taliban and government forces than it is today. Few think Kabul will fall in a hurry, but the Taliban will take hold of hundreds of district centres in the Pashtun south and east. Traffic on the main roads will face an array of checkpoints, some controlled by the ANSF, some by the Taliban, and some by local warlords or armed criminal gangs. For ordinary Afghans there will be a perceptible decline in security.

Ten years of relentless anti-Taliban propaganda, the relative safety of Kabul and infusions of money for school and university expansion have produced a new generation in the capital city who sound optimistic. But some young people are leaving. A broadcast journalist said her son was upset because his friends' families were saving up to pay people-smugglers to get them to Europe. He felt isolated and depressed at not going too. In NGO offices around Kabul, activists in their 20s and 30s are still spending donors' money on a host of projects from women's empowerment to mental health centres and the development of independent media. They know their funds will soon be cut.

A massive surge in unemployment is approaching. The vast army of translators, drivers, cooks and bottle-washers who serve the occupation forces will shrink throughout next year. The provincial reconstruction teams – the bases where foreign advisers and consultants sit and monitor aid delivery – will close. The result will be a dramatic curtailment of projects, since foreigners will no longer be able to supervise them.

Optimists in the Afghan elite believe there is still a chance to win popular support for the government in the two years remaining before foreign troops leave. They want to ensure that the presidential and provincial elections, due in 2014, are clean this time. This would weaken the Taliban claim to provide justice more effectively than the predators and brigands who now dominate local and central government. But many doubt that much improvement can be made in a single year when a decade has produced so little.

Outside Afghanistan, public interest has collapsed. In Europe and the US, people want out, and care little whether the whole adventure is seen as a defeat. It was remarkable how minor a role the war played in the US election. There will be less demand for a grand reckoning of policymakers' blunders than there was for Iraq.

The American and British people were largely complicit, since the revenge attack on Afghanistan after 9/11 had widespread approval, and certainly more than the invasion of Iraq. In Kabul there was a greater welcome for the foreign occupiers than in Baghdad or Basra. The Taliban had less of a support base than Saddam Hussein. But with their failure to anticipate that western armies cannot remain popular for long when they invade Muslim countries, Bush and Blair are guilty of as great a folly as they were in Iraq.

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Walmart in talks to buy stake in Turkish retailer: FT

Washington, Dec 21  : Wal-Mart Stores Inc (WMT) is in talks to buy an 80 percent stake in Turkish retailer Migros Ticaret AS (IST:MGROS) from London-based private equity group BC Partners, the Financial Times reported.

According to the paper, this deal would value Migros at more than $4 billion including debt.

Walmart held meetings with Migros managers in recent days in Turkey but it had not placed a bid for the Turkish retailer, the paper said, citing several people familiar with the discussion.

Migros could not immediately be reached for a comment.

Wal-Mart spokesman Kevin Gardner said the company does not comment on rumors and speculation.

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As global consumers shop mobile, Apple outshines rivals

Paris, Dec 21 : Apple's stock may be sliding as investors fret about growing competition, but store visits and interviews with smartphone and tablet shoppers in 10 cities around the world suggest consumers share little of that negativity.

With tablets and other mobile devices the gadgets of choice this holiday season, canvassed over 70 shoppers and store employees across Sydney, Seattle, Palo Alto, Shanghai, Bangalore, Singapore, Paris, London, Mexico City and Boston for insight into what does and doesn't beckon.

Apple stores and electronics retailers were bustling last week, in contrast to the Microsoft pop-up stores in the United States promoting Windows 8 and Surface tablets, which were far less crowded.

Samsung appeared to be marketing aggressively, blanketing stores across major cities with signs for its Galaxy products and other devices, and large displays in many stores. Customers noticed, but only in Singapore and Bangalore did most of those spoken see it as a top choice.

Nokia, meanwhile, seems to have all but vanished from the front lines of the retail wars. Amazon's Kindle devices were also little in evidence, though that likely reflects its greater online sales focus.

Apple and its rivals are duking it out in displays, buying advertising and mobilizing armies of employees to try to win over the swarm of shoppers who will hit malls across the globe in coming weeks.

Loyalty to Apple's compelling orchard of products seemed to be a first line of defense for the Cupertino, California, company as shoppers in Europe, Asia and the United States weighed the pros and cons of switching to rival offerings.

Customers cited existing iTunes music and video libraries plus the traditional Apple virtues of simplicity and ease of use as reasons to stick with the iPhone and the iPad.

"I just taught my Persian grandmother how to use her new iPhone. She's 77 and speaks no English," said Soheil Arzang, a 27-year-old law student in Palo Alto, California. "With a Windows PC there are so many buttons, it's confusing. I converted my parents officially to Apple iPhones, Macs and iPads."

His father "used to go to Best Buy, but now he just says ‘let's go to the Apple store,'" Arzang said at a store near company headquarters.

In Paris, Max Cevenne, a 62-year-old photographer whose iPad was recently stolen, grilled a sales clerk about how Samsung's 10-inch Galaxy tablet would work with his PC at home.

"The Samsung appeals to me because it has an SD (digital memory) card and is more flexible in terms of software and hardware you can use with it," he said at the FNAC electronics store near St Lazare train station. "But I may end up going back to the iPad since I already use other Apple products, and it might be simpler."

Across the English Channel at a John Lewis department store in London, Joanna Sargent cast her eye over Amazon's Kindle Fire, but since she's bought three iPad Minis for her sons, she said she would probably stay with what's familiar.

"I looked at going for another tablet, but although they are cheaper, you have to re-buy everything," she said. "We'd have to buy all the music again, and you have to take that into account."

Train engineer John Owen from Didcot, Oxfordshire, echoed: "Apple's got me in now."

Just three years after their inception, tablet computers are the indispensable item. In a U.S. Ipsos poll, one in three of 1,330 people surveyed were thinking of buying one of the slim gadgets.

Of those predisposed, 42 percent were leaning toward an iPad or iPad Mini, 16 percent were considering the Kindle Fire, and 14 percent a Samsung Galaxy. A mere 4 percent of respondents were drawn to Microsoft's Surface.

Apple has led the mobile industry since it launched its first iPhone in 2007 and then the iPad in 2010. But rivals including Samsung, Google, Amazon and Microsoft are making gradual inroads. IPads accounted for 54 percent of the tablet market this year but are expected to dip to 50 percent by 2016 as competing tablets gain ground, according to market research firm IDC.

Apple has lost a quarter of its value since September as fears grow about its ability to fend off challengers.

Samsung in particular appears to have launched a global marketing blitz at stores and malls around the world.

In Mexico City, its logo was plastered on signs on roads and outside retailers such as Sanborns and Iusacell. Despite that high visibility, an employee at one shop said he's selling about 15 iPads a week.

"The iPad mini is selling out as soon as we receive the shipments. Last week we got 42 and this week 32, and they sold almost immediately. ... A lot of people buy them as gifts," he said.

There are 88.5 million mobile phone users in Mexico, out of which just 15 million have smartphones, according to industry data, an example of the sizeable potential market that Apple, Samsung and others are fighting for.

In India, where mobile phone sales grew at a 47 percent clip in the third quarter, according to Gartner research, iPhones are still the gold standard, and many models were sold out.

But Androids are steadily attracting consumers. In tech-savvy Bangalore, the affordable smartphones are pervasive, replacing many of the Nokia feature phones popular in the past.

IPhones and iPads are too expensive for many Indians, but that didn't discourage a steady stream of keen window shoppers at an electronics market plastered with Samsung advertising.

"You have to pay the Apple premium, but when you consider the ease-of-use and the whole Apple ecosystem, it's well worth the money," said 29-year-old Karthik Venkataraman.

That same stickiness was also a deterrent for many.

"I want to be able to sync to different devices," said Chenelle Brandford, a 17-year-old student from North London.

In Singapore, the Samsung kiosk at a StarHub store was crowded, with customers testing out the South Korean manufacturer's Note 2 phone-tablets.

"I didn't want to get stuck in the Apple ecosystem," said one customer who recently bought an Android phone made by LG.

At a major electronics retailer in downtown Shanghai, most tablet shoppers said their first choice would be an iPad, but Samsung also had its share of fans.

"I don't like the iPad because it is too inconvenient to use. You cannot drag files directly into it but only by using iTunes," said Wang Daliu, 26 and unemployed. "The iPad has a closed system, limiting its capability."

Since Amazon, Google and Microsoft sell most of their tablets online, their devices came up less often than Samsung's and Apple's in interviews with shoppers.

Those companies are building their own ecosystems, but none have neared Apple's success at creating a simple-to-use, closed market of apps, music and content.

Microsoft, worried about declining PC sales, launched its foray into hardware with the Surface tablet in October to compete with the iPad.

The world's largest software company has not revealed sales figures for the tablet, which has won mixed reviews and is only available in its own stores and online in certain countries. Microsoft said it would sell the Surface through more retailers starting this month.

At a mall in Boston, one person wandered into a Microsoft store for every nine who visited a nearby Apple store on a weekday last week. In Palo Alto, 40-year-old Javier Sanchez returned his Surface.

"With the iPad, it's one step, and with this (Surface), it's two or three steps to do the same thing," said Sanchez, who also uses a Mac and an iPhone. "You open (the iPad) and it's ready for you."

Things looked not much brighter on Microsoft's home turf, in the greater Seattle area. A sales assistant at a Best Buy said he had been quizzed about sales of the Windows 8 device.

"A whole bunch of Microsoft guys basically interviewed me, asking me how well things were selling," he said, without going into details.

Another assistant, asked if the same store had 32GB or 64GB Surface tablets in stock, said, laughing: "We got plenty of both!"

Apple is likely to reveal holiday sales only in January, alongside results. For now, the loyalists have spoken.

"We're far more familiar with Apple," said Linda Jenkins at the Carphone Warehouse in London. Her husband, Vaughan, chimed in: "But they haven't taken us over yet!"


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Berkshire buyback seen clashing with estate tax push

New York, Dec 21 : Warren Buffett's $1.2 billion share buyback from a single unnamed investor likely helped that person's estate save substantially on taxes, just one day after the Berkshire Hathaway CEO said the rich should actually be paying more, not less, when they die.

With the "fiscal cliff" looming and estate taxes set to rise dramatically in less than three weeks, the timing was seen as advantageous - and, according to Berkshire watchers, also out of place in the context of Buffett's recent tax activism.

"I would say 'Warren, would you please just keep your nose out of this.' He's not in a position to criticize what's good for America and for everyone else's estate," said Anthony Sabino, a professor of business at St. John's University. "He's no doubt utilized the present tax code to maximum effect."

Berkshire said it bought 9,200 Class A shares from "the estate of a long-time shareholder," whom it did not name, at $131,000 per share, a price in line with where Berkshire has traded in recent weeks.

Buffett's assistant didn't respond to a request for comment on the shareholder's identity. The shares represent 1 percent of Berkshire's Class A stock.

The repurchase came less than a month ahead of the looming "fiscal cliff," automatic tax hikes and spending cuts set for January 1 that the White House and members of Congress have been negotiating to avoid.

Among other levies, the estate tax is expected to rise in the new year package by as much as 20 percentage points, which may have spurred the anonymous shareholder to sell now.

Buffett was a signatory of an open letter released that called for a lower starting point for the tax and a higher taxation rate, beginning at 45 percent.

"We believe it is right to have a significant tax on large estates when they are passed on to the next generation. We believe it is right morally and economically, and that an estate tax promotes democracy by slowing the concentration of wealth and power," the 33 signers wrote in the letter released by the campaign, United for a Fair Economy.

He has also been publicly campaigning for more than a year for higher taxes on the wealthy, even lending his name to a proposal called the "Buffett Rule" that failed in Congress.

Berkshire also said it raised the threshold for future share buybacks to 120 percent of book value from 110 percent, the level it chose when it first approved a repurchase program in September 2011. The higher level allowed Berkshire to complete this latest buyback, which was above the old threshold.

After news of the buyback, Berkshire's shares were up 3.1 percent at $134,850.

Based on the company's book value at the end of the third quarter, the buyback limit would stand for now at $134,061.60. The stock has traded below that level for most of this quarter.

Buffett was always loath to offer share buybacks and consented to it last year only after Berkshire hit historically low valuations. In its most recent quarterly filing, Berkshire said it had not made any repurchases in the first nine months of 2012, after spending just $67.5 million on buybacks in 2011.

"I don't expect a significant repurchase program to be announced as (Buffett) is clear that he is in acquisition mode," said Michael Yoshikami, founder and CEO of Destination Wealth Management and a long-time Berkshire investor.

Berkshire ended the third quarter with $47.78 billion in cash, and Buffett has made no secret of his desire for a purchase in the $20 billion to $30 billion range.

Yet given his wealth and his own self-professed low tax rate, Buffett has been called out in some quarters for not practicing what he preaches.

"I have a problem with Warren, who's basically done with this (issue), to say 'yeah, raise the estate tax,'" Sabino said. "I think, again, with all due respect for his sagacity at selling stocks, he's being incredibly short-sighted."

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AMR creditors prefer all-stock merger with US Airways

New York, Dec 21  : American Airlines creditors want a potential merger with US Airways Group Inc (LCC) to be an all-stock deal rather than one that pays some claims in cash, three people familiar with the matter said, in a move that underscores confidence in a merged airline.

The creditors of American Airlines parent AMR Corp (AAMRQ.PK) want to capture the full upside from a combination if the airline chooses to emerge from bankruptcy in a merger with its smaller rival, the people said this week.

Creditors in bankruptcy often want at least part of their claims paid in cash, rather than in the stock of a reorganized company with an uncertain trading value.

AMR creditors' preference for an all-stock deal could be seen as a vote of confidence in the proposed merger and the potential revenue and cost benefits from a deal that would create one of the world's largest airlines.

US Airways, in hot pursuit of its bigger rival all year, sounded out AMR creditors about how they wanted to be paid off before proposing a formal all-stock merger proposal at a meeting with the creditors committee in November, the people said.

The merger discussions among US Airways, AMR and its creditors are at an advanced stage, with a decision on whether to pursue a combination or emerge as an independent company expected as soon as January, they said.

The people asked not to be named because the matter is not public. Representatives for the creditors committee did not immediately respond to requests for comment.

AMR management prefers to exit bankruptcy as an independent airline, but events since US Airways made a formal merger offer last month indicate a deal looks more likely than before.

The union representing AMR pilots voted to join the merger talks at the invitation of AMR creditors and said the first discussions involving the union are set to begin this week. US Airways' pilots union is also joining the discussions, a spokesman confirmed.

The Allied Pilots' Association, the union representing AMR pilots, is important to the discussions because they recently ratified a new labor contract granting them a 13.5 percent equity stake in a newly reorganized airline.

The APA, which also sits on the airline's nine-member unsecured creditors committee, has said it has lost faith in AMR management led by Chief Executive Tom Horton and strongly supports a merger with US Airways.

"As the new owners of a significant percentage of the restructured airline, it's APA's responsibility to maximize the value of our investment by conducting thorough due diligence," pilots union president Keith Wilson said in a message posted on the union's website.

AMR, in a separate statement sent to managers, said: "American ... determined that union involvement in the discussions is an important step to appropriately evaluate the impact of a merger on labor costs, integration and seniority."

The talks are now narrowly focused on how to integrate labor unions, indicating the negotiations are far along, the people familiar with the matter said. Detailed valuation discussions - how much of the combined carrier each side should own - are expected to come after the parties iron out labor integration issues, they said.

Under the US Airways proposal sent in November, AMR creditors would own 70 percent and US Airways shareholders 30 percent of the merged airline, which could be valued at around $8.5 billion, sources said.

Based on US Airways' fully diluted market value of $2.5 billion and the proposed equity split of 70 to 30, its merger proposal implies a valuation of little less than $6 billion for its larger rival.

AMR creditors think they should own more than 70 percent of the combined company, the people familiar with the matter said. AMR management has told the creditors they believe the equity split should be as high as 80 percent in favor of AMR creditors, the people said.

An 80-20 equity split between AMR creditors and US Airways could suggest a $10 billion valuation for AMR, based on the $2.5 billion fully diluted market value of US Airways. It could also mean that AMR values its smaller rival at a significant discount to its trading value, which would be a tough deal to swallow for US Airways' shareholders and board.

The world's two largest airlines - Delta Air Lines Inc (DAL) and United Continental Holdings Inc (UAL) - have market values of $9 billion and $7.2 billion, respectively.

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Fed ties rates to jobs recovery, adds to stimulus

Washington, Dec 21  : The US Federal Reserve, announcing a new round of monetary stimulus, took the unprecedented step of indicating interest rates would remain near zero until unemployment falls to at least 6.5 percent.

It was the latest in a series of unorthodox measures taken by central banks around the world to battle erratic, sub-par recoveries from the financial crisis and recession of 2007-2009.

The Fed expects to hold rates steady until its new threshold on unemployment was reached as long as inflation does not threaten to break above 2.5 percent and inflation expectations are contained. It also replaced an expiring stimulus program with a fresh round of Treasury debt purchases.

The central bank previously said it expected to hold rates near zero through at least mid-2015, but policymakers were uncomfortable making a pledge based on the calendar rather than the economic goals they hope to achieve.

"By tying future monetary policy more explicitly to economic conditions, this formulation of our policy guidance should ... make monetary policy more transparent and predictable to the public," Fed Chairman Ben Bernanke told a news conference.

Importantly, in the eyes of Fed officials, the new framework should help financial markets assess incoming data in a way that helps them better guess were monetary policy is heading.

Right now, the Fed is engaged in an open-ended program of asset purchases, which it bolstered.

Officials committed to buy $45 billion in longer-term Treasuries each month on top of the $40 billion per month in mortgage-backed bonds they started purchasing in September. They repeated a pledge to keep pumping money into the economy until the outlook for the labor market improves "substantially."

"The committee remains concerned that, without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions," the Fed's policy-setting panel said after a two-day meeting.

The Fed will fund the new Treasury purchases with an expansion of its $2.8 trillion balance sheet. Under the expiring "Operation Twist" program, the Fed bought an identical amount, but paid for them with proceeds from sales and redemptions of short-term debt.

Some policymakers view actions that expand the Fed's balance sheet as economically more potent than actions that do not. However, Bernanke said the dose of stimulus would remain about the same, given that the central bank is still purchasing a combined $85 billion per month in longer-term securities.

"They see an anemic economy, and they're doing all they can to get any economic progress," said Alan Lancz, president of Alan B. Lancz & Associates in Toledo, Ohio.

The Fed's decision initially gave a small lift to U.S. stock prices, but the major indexes closed mostly unchanged, while government bond prices fell. Oil prices rose and the dollar weakened against the euro.

Fed policymakers voted 11-1 to back the new plan. Jeffrey Lacker, president of the Richmond Federal Reserve Bank, dissented, as he has at every meeting this year, expressing opposition both to the bond buying and the new economic thresholds.

The newly unveiled numerical policy guidelines offered the most specific suggestion yet that the Fed is willing to tolerate slightly higher inflation as it tries to juice up a moribund economy and spur stronger job growth.

A drop in the unemployment rate to 7.7 percent in November from 7.9 percent in October was driven by workers exiting the labor force, and therefore did not come close to satisfying the condition the Fed has set for trimming its stimulus.

In response to the financial crisis and recession, the Fed slashed overnight rates to zero almost exactly four years ago and bought some $2.4 trillion in mortgage and Treasury securities to keep long-term rates down.

Despite its unconventional and aggressive efforts, U.S. economic growth remains tepid. Gross domestic product grew at a 2.7 percent annual rate in the third quarter, but a poll published here showed economists expect it to expand at just a 1.2 percent pace in the current quarter.

Businesses have hunkered down, fearful of a tightening of fiscal policy as politicians in Washington wrangle over ways to avoid a $600 billion mix of spending reductions and expiring tax cuts set to take hold at the start of 2013.

Bernanke has warned that running over this "fiscal cliff" would lead to a new recession. He told reporters the Fed could ramp up its bond buying "a bit," but emphasized that monetary policy has limits and could not fully offset the impact.

He said the central bank would look at a range of indicators, not just the rates of unemployment and inflation, in determining when to finally push overnight borrowing costs higher, adding that the Fed was not on "auto pilot."

"Reaching the thresholds will not immediately trigger a reduction in policy accommodation," Bernanke said. "No single indicator provides a complete assessment of the state of the labor market."

Bernanke said the new framework was consistent with the earlier calendar guidance, because officials do not expect the jobless rate to reach 6.5 percent until sometime in 2015.

Indeed, a fresh set of economic projections from the Fed put the rate in a 6 percent to 6.6 percent range in the fourth quarter of 2015. At the same time, the projections showed that at no point over that forecast horizon does the central bank see inflation topping its 2 percent target.

Officials held to their assessment that they could eventually push the unemployment rate down to a 5.2 percent to 6 percent range without sparking inflation, although Bernanke cautioned that policy would have to start tightening before it fell so low. In its statement, the Fed said its long-term asset purchase program would end well before any rate increase.

Fed policymakers see GDP expanding between 2.3 percent and 3.0 percent next year. That is down from the 2.5 percent to 3.0 percent they forecast in September, but is still a bit more optimistic than most private forecasters. The poll of economists found a median U.S. growth estimate of 2.1 percent for next year.

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BoE's King warns of growing currency competition

New York, Dec 21  : The head of the Bank of England warned that too many countries were trying to weaken their currencies to offset the impact of the slow global economy and the trend could grow next year.

"You can see, month by month, the addition to the number of countries who feel that active exchange rate management, always to push their exchange rate down, is growing," Mervyn King said in a speech.

"My concern is that in 2013, what we will see is the growth of actively managed exchange rates as an alternative to the use of domestic monetary policy," he told the Economic Club of New York. King did not identify any countries.

He also criticized what he said was backtracking by the Group of 20 leading economies to fix the imbalance between countries with trade surpluses and those with deficits, despite vows by the group to make rebalancing the world economy a priority after the financial crisis erupted.

Central banks, including the Bank of England, have kept interest rates very low and used unprecedented policies such as massive asset purchases to try to stir growth.

Pumping so much money into developed economies, however, can put upward pressure on currencies of emerging economies, hurting those countries' exports.

Brazil and China, as well as more economically developed Japan and Switzerland, have taken steps to push down the value of their respective currencies in recent years.

The BoE has so far bought 375 billion pounds ($603 billion) mostly in government bonds to help lift the British economy out of the doldrums.

Countries with trade surpluses are often reluctant to boost domestic spending that would allow deficit countries to rebalance by exporting more.

"This is a problem which has to be tackled," King said, citing a divide between some surplus and deficit countries within the euro zone.

The warnings by King, who is set to step down in July, echo those made in October by U.S. Federal Reserve Chairman Ben Bernanke, who delivered a blunt call for certain emerging economies to allow their currencies to rise.

The back and forth of monetary stimulus and foreign-exchange intervention has complicated any coordinated efforts to recover from the Great Recession.

"It is fair to say a recovery of a durable kind is proving elusive," King said in his speech.

Fielding questions later, he said he had "great confidence" that the United States will avoid the worst-case effects of the so-called fiscal cliff of automatic tax hikes and spending cuts due to come into force in January.

It "will find a way, if not avoiding going over the cliff, then hanging on by the finger tips" on the other side, he said.

Some political analysts predict the Republicans and Democrats will fail to agree on raising taxes and cutting spending before January 1 but might do so soon afterwards.

Britain recorded economic growth of 1.0 percent in the third quarter, marking an end to nine months of recession - its second since the 2008-09 financial crisis. But most of the rebound was driven by a technical bounce due to the London Olympics and extra public holidays in the preceding quarter.

The euro zone debt crisis, high inflation and fiscal austerity have weighed heavily on the economic recovery.

The address may be one of King's last in the United States. Mark Carney, currently the head of Canada's central bank, is set to be the first non-Briton to lead the BoE next summer.

King recalled the day his wife saw the surprising news that Carney was named to the post.

"She said, 'You know Mervyn, they'll miss you, or six months down the road they'll miss you,'" King told the audience.

"And then she looked at the TV screen and said: 'He's very young, he's very good looking, he's immensely charming and he's very charismatic.' I think he'll do a great job and they won't miss me at all."

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No respite from cold wave

Srinagar Dec 21 : As held Kashmir shivers due to the ongoing cold wave, the Metrological Department predicted moderate to heavy snowfall in the valley for next one week.

 “As a result of Western disturbances, the entire valley is likely to receive snowfall in coming week. The snowfall might intensify on 13th and 14th of December. The plains will receive light snowfall or rain while the higher places would receive moderate to heavy snowfall,” said an official at MeT department.

“This year, the temperatures have shown a considerable fluctuation from normal while the weather remained cold and dry for the most part.”

Sky in the valley today remained masked with clouds, with most areas reeling under intense cold wave and dry conditions.
 This year the Valley has experienced intense cold wave with both minimum and maximum temperatures deviating from normal, and night temperatures remaining sub-zero.

According to the official, the summer capital Srinagar recorded maximum of 6.5 degree, 2.5 degree below normal and minimum of minus 0.7 degree Celsius. The gateway town of Qazigund recorded minimum of 1.6 degree and maximum of 6.8 degree Celsius.

The tourist destination of Pahalgam recorded minimum of minus 3.4 degree and maximum of 5.4 degree Celsius. The ski resort of Gulmarg recorded minimum of minus 9.5 degree Celsius, while as frontier district of Leh recorded minimum of minus 8.4 degree Celsius and maximum of 2.8 degree Celsius.
 The traffic authorities have advised people to take caution while traveling on the Srinagar-Jammu highway and other high altitude roads.

 Meanwhile, Divisional Commissioner, Kashmir, Asgar Samoon directed all District Development Commissioners, heads of departments and district Superintendents of Police to set activate men and machinery to be in a state of preparedness to ensure minimum disruption of essential services in the Valley due to harsh conditions.

 "More than hundred snow clearance machines of Mechanical Engineering Department are available for snow clearance operations on roads of Valley," Aamir Ali, an official of the Natural Disaster Management Cell said.

 Civil Defence Volunteers have also been asked to assist the administration in snow clearance wherever required, Ali said, adding, Director CAPD Kashmir has been asked to ensure adequate essential supplies of LPG and Kerosene Oil.


‘Confirm status of Sgr-Jmu highway before travel’
The Traffic Police appealed all drivers and passengers who intend to travel by Srinagar-Jammu Highway to necessarily confirm status and condition of the road prior to travelling on it.
“Telephone numbers for confirmation of road situation are Traffic Control Unit Srinagar – 2450022, 2485398, 2455164, Traffic Control Unit, National Highway Ramban- 9419993745 and Traffic Control Unit Jammu- 2459048, 9419147732,” an official spokesman said. “All the drivers and passengers are requested to abide by the directions, for their safe journey.”

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Kargil air courier service takes off

Srinagar, Dec 21 : Over 30 passengers were airlifted from Kargil to Srinagar today by the first flight of Kargil Courier Service, the only means connecting the frontier district with rest of the country during winter.

 "AN-32 Kargil Courier Service of Indian Air Force airlifted 31 passengers from Kargil to Srinagar," an official spokesman said.
 Kargil and Leh districts remain cut-off for six months during winter owing to heavy snowfall along the Zojila Pass which connects held Kashmir with Ladakh via 434-km Srinagar-Leh national highway.

 The highway was closed for traffic early this month. The first Kargil Courier flight was originally planned for December 5, but could not operate due to continued bad weather.

 The flight operated today with the 31 stranded passengers on board along with Chief Executive Councilor, Ladakh Autonomous Hill Development Council (LAHDC) Kargil, Kacho Ahmed Ali Khan, the spokesman said.

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Girl dies after eating stale noodles

Kulgam, Dec 21: A five year old girl died while five other members of a family fell unconscious, allegedly after consuming a pack of Maggi noodles in Manzgam village of this held Kashmir district.

Police said Abroo (5) daughter of Nisar Ahmad Chak fell unconscious along with her parents and three siblings, after they consumed expired noodles. “They were immediately rushed to district hospital Kulgam and after preliminary stomach wash all of them were referred to Srinagar for further treatment,” police sources said.

Abroo, however died on the way to Srinagar, “The rest of the family members are being treated in Srinagar, where their condition is reported to be stable,” police said.

According to police pack of Maggi noodles consumed by the family had expired in 2007.

The children are being treated at GB Pant Hospital, while as their parents are under treatment at the SMHS hospital in Srinagar.
Meanwhile, police have taken cognizance of the matter and initiated inquest proceedings under section 174 of the Cr Pc.
“The shop from where the noodles were bought belongs to the deceased girl’s uncle, Gulzar Ahmad, whose son has also been hospitalized,” said SP Kulgam, Muhammad Shafi.

He said that the police have seized some packs of Maggi noodles from the shop and these have been sent fore laboratory checks.
“We are trying to ascertain whether the noodles were expired or there was some poisonous substance in it. We are waiting for the reports. So far no arrests have been made,” said the SP.

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