Clashing visions weigh on U.S. drive for Taliban talks

Thursday, 11 July 2013

Islamabad, July 12 (Newswire): As the United States makes a fresh attempt to start talks with the Taliban, competing visions in Afghanistan and neighbouring Pakistan over what an eventual peace process might look like have emerged as one of the biggest hurdles.

Washington's hopes of negotiating with the insurgents to stabilise Afghanistan before most foreign troops leave by the end of 2014 had appeared to achieve a breakthrough last week when the Taliban opened an office in the Qatari capital Doha.

But the process was plunged into uncertainty when Afghan President Hamid Karzai refused to send negotiators to the Gulf state after the Taliban raised a flag at its new premises, infuriating the Afghan government and prompting frantic attempts by U.S. officials to resuscitate the planned dialogue.

While global attention has focused on the debacle in Doha, tensions between Afghanistan and Pakistan - whose cooperation will be vital to any deal - have made the prospects of meaningful progress towards a settlement even less sure.

Since the Doha office was opened, Pakistani officials have made a series of comments suggesting that Karzai, who is due to step down at elections in April, 2014, is already irrelevant to what should be wide-ranging talks on Afghanistan's future.

"His expiry date has come," said a Pakistani government official, who is close to Pakistan's discussions with the U.S. and other allies on Afghanistan. "The principle is a fundamental overhaul."

Pakistan is in a position to influence the talks because its security forces backed the Taliban's rise to power in Afghanistan in the mid-1990s and continue to serve as gatekeepers to insurgent commanders living on its territory.

While the government official's view does not reflect the public position of Pakistan, which has pledged to support the Afghan government's reconciliation drive on the basis of the existing Afghan constitution, it does provide a window into a strand of thinking within Islamabad's ruling establishment.

However, it is unusual for senior officials in the government to discuss Afghan policy in detail.

The view that Karzai is a hindrance to talks was reflected in comments by three senior Pakistani officials occupying key positions in the foreign ministry and the army, which holds sway over relations with Afghanistan, in recent months. Karzai was installed as president after U.S.-backed troops overthrew the Taliban government in 2001.

"Right now, Karzai is the biggest impediment to the peace process," a top Pakistani Foreign Ministry official said in March. "In trying to look like a saviour, he is taking Afghanistan straight to hell."

The thrust of Pakistan's criticism is that Karzai is too erratic to handle negotiations. Pakistani officials also argue that the most important protagonists for any peace process are the United States, the Taliban, and the Northern Alliance, a group of Afghan ex-warlords who fought the Taliban in the 1990s and now wield significant influence in Kabul.

This view was laid out in detail in a front-page story published in Pakistan's privately owned Express Tribune newspaper after the Taliban office opened, quoting Pakistani military and diplomatic sources as saying Karzai had no place in any deal.

The sources described the Afghan president as "unstable" and a "poisonous roadblock."

Afghan officials and commentators suspect that Pakistan's frustration with Karzai stems from its desire to ensure that any future government in Kabul overturns the Afghan president's policy of cultivating warmer ties with India, Pakistan's nuclear rival. They also maintain that Pakistan has backed the Taliban through the 12 years of war against U.S.-backed troops.

"We pleaded with Pakistan for peace, but Pakistan's policy and intentions towards Afghanistan have always been hostile and evil," said Bashir Bezhan, a Kabul-based political analyst.

Washington praised Pakistan last week for helping to nudge insurgents towards the negotiating table in Doha, a contrast with acrimonious exchanges in previous years over allegations that Pakistan continued to covertly support the Taliban.

Against this backdrop of suspicions of Pakistan, an attack by the Taliban on the presidential palace in Kabul cast fresh doubt on whether Karzai would be prepared to participate in peace talks.

U.S. President Barack Obama later called Karzai and the two agreed on the need for an Afghan-led peace process and to support the presence of the Taliban office in Doha, the White House said. But no date has been set for any negotiations.

Pakistan foreign ministry spokesman Aizaz Chaudhry said Islamabad remained committed to supporting reconciliation in Afghanistan. "The official position of the government is to support an all inclusive, inter-Afghan dialogue," he said.

The Pakistani government official who is close to Islamabad's thinking on Afghanistan, said one possible way forward at Doha would be far-reaching talks akin to the conference held in the German city of Bonn in December, 2001, which laid the foundations of Karzai's administration.

The key players would be the United States, the Taliban and members of the Northern Alliance, who Pakistan has been carefully courting for more than a year - but not Karzai.

"It would be in a real sense a Bonn 2," the government official said. "Pakistan will have a ringside view...In the ring you'll have Americans and Afghans."

Such a view cuts a complete contrast with the position of Karzai's government, which believes the insurgents must lay down their arms, accept the constitution and find a role within the new Afghanistan that grew from the ashes of the Taliban theocracy toppled by U.S.-led forces in 2001.

The "Bonn 2" proposal may, however, just be wishful thinking within Pakistan's military, which might see such a conference as a chance to promote its preferred factions.

There would also seem to be little appetite among Karzai's Western allies to go back to the drawing board in Afghanistan at a time when NATO countries are seeking to scale back their engagement.

The Afghan government declined to comment on any "Bonn 2" kind of meeting. Washington has repeatedly said the Taliban must accept the Afghan constitution and U.S. officials said they were unaware of any proposal for a new Bonn-style conference.

For now, the United States is sticking to its plan to coax Karzai's government and the Taliban together in Qatar, even as the tensions between Afghanistan and Pakistan remain unresolved.

"In the Pakistani military's eyes, Karzai is a lame duck, irrelevant," said Cyril Almeida, a columnist with Pakistan' Dawn newspaper. "The problem is that his is the only Afghan government there is."

Continue Reading | comments

Freak Afghan hailstorm grounded scores of Nato helicopters

Kabul, July 12 (Newswire): A freak hailstorm over one of the biggest Nato airbases in Afghanistan grounded more than 80 helicopters, putting several of them out of action for more than three weeks, it has emerged.

The half-hour storm in late April split rotor blades, cracked windows, ruptured the choppers' metal skin and damaged other parts. The hail was so intense that after an intensive repair programme eight of the choppers were still inoperable more than three weeks later, according to a Nato spokesman.

Videos show hailstones the size of golf balls pelting down on the airbase, which is at the edge of a desert and in summer endures temperatures that can climb above 50C.

The storm killed three Afghans in Kandahar, according to a local military blogger who posted pictures of picnic tables with holes punched through.

Replacement parts for the helicopters, mostly blades, had to be rushed to Kandahar from across Afghanistan, Kuwait and even from the US.

"The sheer number of airframe repairs required after the hailstorm provided five years' worth of experience for the airframe mechanics," Regional Command South, the coalition headquarters based in Kandahar, said in a news release about the repairs.

The damage did not affect troops on the ground, the statement said. "The enemy had no opportunity to take advantage of the impact on our aircraft," said Colonel Allan Pepin, commander of Task Force Falcon, 3rd Combat Aviation Brigade, the unit whose helicopters were hit by the storm.

The size of the fleet in Afghanistan and the frequency of operations means many helicopters and aeroplanes are stationed outside on runway aprons rather than sheltered in hangers.

Freak heavy hailstorms are not unprecedented in the region. Scientists recently said they believed a hailstorm had killed hundreds of pilgrims whose remains were discovered more than a millennium later at India's haunting "skeleton lake".

Continue Reading | comments

Ethnically-charged demonstrations continue to flare in Takhar

Kabul, July 12 (Newswire): For three days demonstrations have surged in northeastern Takhar province in reaction to the dismissal of provincial Police Chief, Khair Mohammad Timoor, more than a month ago.

The demonstrators', who are for the most part ethnically Uzbek, claimed grievance over the replacement of the former Uzbek Police Chief by a new Tajik one in what they said is an already Tajik-dominated provincial government.

The demonstrators, who blocked the Takhar-Badakhshan and Takhar-Kundoz highways all morning and into the early afternoon today, demanded the dismissal of the new government-appointed Police Chief, Haji Aqa Gul Qataghani.

"We want the Police Chief and Governor to be dismissed. They are both from the same ethnicity," said a resident of Takhar province who had participated in the demonstrations.

Officials from the Ministry of the Interior have assured that they will not allow any groups to turn the demonstrations into a more destructive form of unrest. "The national police are ready to prevent any illegal activities. We ask all the tribal elders and leaders to not lose control of the people's energy and make their demands known legally," said Sediq Sediqi, a spokesman of the Ministry of the Interior.

One such group that has fueled the demonstrations is the National Islamic Movement of Afghanistan, which has implored the government to consider the protesters demands.

According to reports, the new Police Chief of Takhar belongs to the Jamiat-e-Islami Party – a traditionally Tajik oriented political party. But as of now the Party has distanced itself from the controversy, saying that they refuse to intervene in any selections of local officials in the province.

"The Jamiat-e-Islamic did not interfere in the selection of local officials in the province. Anyone who was selected as Police Chief did not become so because of us. This relates to security organizations," said Abdul Satar Murad, an advisor of Jamiat-e-Islami.

However, a spokesman for the governor of Takhar province explained that ethnicity is a factor considered in the selection of officials. Though how much it played a role in the Police Chief swap under focus in the current unrest is unclear.

Meanwhile, it is said that the demonstrations have caused serious disruption in the province, causing medical patients traveling for care to be delayed and lose their lives as well as shutting down local business.

"The tensions should end. We cannot keep our shops closed. We poor people need food," said one Takhar resident whose local business has suffered since the start of the demonstrations.

The provincial Governor has discussed blocking the continuation of the demonstrations.

After one month of since Timoor was dismissed, ethnic tension and civil unrest has engulfed much of the Takhar province. Without a sure end in sight, the tense situation has begun to take its toll on the province, surfacing deep ethno-political divisions that none seem eager to compromise over.

Continue Reading | comments

Extremely rare jaguar spotted near Arizona mountains

London, July 12 (Newswire): Photos of an extremely rare jaguar roaming Forest Service land near Arizona's Santa Rita Mountains have been published by the Arizona Daily Star, which got the images from the U.S. Fish & Wildlife Service.

The male jaguar, believed to be the lone known unconfined jaguar in the U.S., has been in the area since at least September 2012, when its image was captured by a hunter's motion-detector camera.

Jeff Humphrey, public outreach specialist with the Fish & Wildlife Service, who spoke with Yahoo News, explained that around the time the hunter captured the photo, the Fish & Wildlife Service and the University of Arizona began using funds supplied by the Department of Homeland Security to monitor the movement of jaguars along the Mexico border. The mission of that project is to learn how border patrols affect jaguars, Humphrey explained.

As part of the project, the university installed motion-activated cameras. For the past seven months, "whenever [researchers] go and download the pictures of things moving in the woods, they've collected photos of the jaguar as well as ocelots."

It's presumed, he noted, "that it's from a wild population of jaguars that occur in northwest Mexico."

Humphrey added that there has been no attempt to capture the jaguar. "We're letting the jaguar do its thing," he said. "We're trying to ascertain what area it is using by using photo detection."

According to a news release from the U.S. Fish & Wildlife Service, "Once fully operational, up to 240 paired cameras will be in place throughout the project area to capture images of ... detected animals."

Federal wildlife officials are considering whether to designate more than 1,300 square miles in New Mexico and Arizona as a critical habitat for the jaguar.

Continue Reading | comments

From Egypt petition drive, a new grassroot wave

Cairo, July 12 (Newswire): Teenager Gehad Mustafa wears an ultraconservative veil over her face and was raised in a family of staunch Muslim Brotherhood supporters.

Yet for the past weeks, she has been walking though chaotic street markets and crowded subway stations, collecting signatures on a petition demanding Islamist President Mohammed Morsi step down.

The months-long petition campaign by the group "Tamarod," Arabic for "rebel," is now culminating in nationwide protests in which the opposition hopes to bring out millions to force Morsi out of office, a year after his inauguration.

But Tamarod's organizers say they are not stopping there. No matter what happens, they say they have created through their petition drive a real grassroots network, an opposition version in the spirit of the Islamists' expert street organizing, and have brought forth a sort of second generation of street activists, like Mustafa, after the first that led the revolt against autocrat Hosni Mubarak in 2011.

They want to use that network going ahead, to keep the public involved and to pressure the secular and liberal opposition parties, who the activists say have wasted opportunities through infighting and fragmentation, to get their act together.

On a recent day, Tamarod's main office, steps away from Cairo's Tahrir Square, was bustling with several dozen volunteers as young as 13 and as old as their 50s and 60s. University professors, government employees, students and housewives sipped tea, smoked and chatted while going through the organization's prize possession: the sheaves of signed petitions still coming in from around the country, filling the office.

The pages of signatures, they say, are proof of how deeply the country of 90 million has turned against the Muslim Brotherhood. They plan to announce their full count ahead of the protests but have claimed to have as many as 20 million signatures, which they collate, confirm and record in a database in a precise operation, knowing their count will be questioned.

Among the volunteers was 17-year-old Mustafa. She said she turned against Morsi and his Muslim Brotherhood after the first protesters were killed under his administration in late 2012. "I saw the reality," she said. "You told us that the blood of the martyrs will not go in vain. But there were more ... falling under your rule."

She joined Tamarod, which launched in late April, and volunteered to canvas the street for signatures. At one point, while passing out petitions in the subway, a man wearing the beard of a Muslim conservative attacked her, pulling the veil off her face. But other commuters then wrestled the man away in support of her.

"This strengthened me. I felt what I am doing is right," she said.

Organizers say Tamarod mushroomed across the country. Founded by five activists, its leadership is a central group of about 25, connected to a network of coordinators in Egypt's 27 provinces, each with a team of volunteers in towns and villages.

Collecting signatures in itself is a breakthrough, overcoming Egyptians' engrained resistance to signing onto any paper presented by a stranger, especially political, from the Mubarak days when doing so could get you a visit from state security or even arrested. Volunteers carrying the petitions brought politics into every corner — weddings, slum alleys, buses and subways. Volunteers included strangers to political campaigning, from men selling cigarettes in kiosks to impoverished women selling in vegetable markets.

Ahmed el-Masry, one of the founders of Tamarod, calls the success "astonishing."

"I can't tell how many members out there. I can think that millions of Egyptians are members," he said.

"At one point, people gave up (on Morsi) ... it reached a point where a new class of Brothers are gaining higher status in society that to join them, you have to let your beard grow. We reached a point where no one is heard but the president and his tribe."

Brotherhood officials cast doubt on the signatures, claiming forgeries and multiple names. While Morsi says peaceful demonstrations are a legitimate form of expression, he and his allies also say Mubarak loyalists are behind the campaign and protests, trying to use the streets to topple an elected leader.

A spokesman for the Brotherhood's Freedom and Justice Party said he sympathizes with some activists in Tamarod — "the young revolutionaries who had great expectations out of the revolution. Due to their inexperience and age, they wanted to see change too fast and too soon and that is what I call frustration."

But Abdel-Mawgoud el-Dardery said "opportunist politicians" are exploiting them for their political agenda and that former regime elements are exploiting both the politicians and the activists.

"There is unholy alliance among these groups. They have insisted on having one enemy and that is President Morsi," he said.

Tamarod activists say it is they who are leading the politicians of the mainly liberal and secular opposition parties and factions, trying to drag them into a better connection with the public. The campaign's plan calls for Morsi to leave, the chief justice of the Supreme Constitutional Court to become a largely symbolic interim president while a technocrat Cabinet governs, a panel would write a new constitution and presidential elections would be held in six months.

Ahmed Abdu, one of the first Tamarod street campaigners, said the group will pressure the opposition to coalesce behind a candidate.

If they can't get organized "we will pick one away from all the top leaders of opposition and we will be able to rally support to him."

He blamed liberal parties for running multiple candidates in last year's presidential election, which resulted in a runoff between Morsi and a former Mubarak prime minister, forcing people to choose between an Islamist and a loyalist of the regime just ousted.

"I hope they don't let us down again," Abdu said.

Tamarod's nationwide network and pavement-pounding methods contrast with many of the political parties, which have struggled to establish a nationwide presence. That is in large part what opened the way for the Muslim Brotherhood, an 83-year-old organization that has highly disciplined cadres nationwide, and harder-line Islamist with their own organizations to dominate parliament elections in late 2011-early 2012, to ensure the constitution passed a December referendum, and to boost Morsi to victory.

Tamarod's volunteers — some former Morsi supporters, others who disliked him from the start — had varying stories of what brought them to the campaign. Most said they were dismayed by what they call the Brotherhood's opportunism and determination to control the system rather than reform state institutions and police. That is a frequent refrain from critics of Morsi. His allies insist they are not trying to monopolize, that opponents have refused to work with them and that old regime loyalists have sabotaged their attempts at reform.

At the Tamarod office, Doaa Mohammed, a young Justice Ministry employee, said the day after Morsi's election, a man on the street spit at her face and yelled, "Tomorrow, Morsi will get rid of you all."

Mohammed wears a stylish scarf covering her hair, less strict than the more cloaking coverings and veils that hard-liners believe women should wear.

She said managers in her ministry were replaced by Brotherhood sympathizers.

"From day one, I have been treated like a second-class citizen. The Sister enjoys higher status than me just because she belongs to the group," she said, referring to the Muslim Sisters, the women's branch of the Brotherhood.
The heart of Tamarod is its petitions. Through Facebook and Twitter, volunteers could download the form, copy it and distribute them among friends and family members or hit the streets for signatures, then get back in touch with coordinators to return the papers.

At the Tamarod office, a psychology university lecturer-turned-volunteer explained how the papers are sorted by province, counted, scanned and entered into a database to ensure there are no doubled ID numbers and that the numbers — which have prefixes by province — match where they're said to come from. Much of the work takes place in a room labeled "Control Room. No Entry."

Secrecy is tight. The university lecturer spoke on condition of anonymity — he goes by the nickname "Maestro" — so he could not be singled out for pressure by anyone trying to get to the petitions. He said only two of the founders know the whereabouts of the originals of the signed forms and are responsible for moving them every few days to new locations.

"We are working in the daylight but they don't want us to work in the daylight," he said and added, "we are holding a pen and a paper. This is our weapon. And this is how we tell them, Enough"

Continue Reading | comments

In Sanford, Fla., Zimmerman trial keeps a shaken community on edge

New York, July 12 (Newswire): Outwardly, Sanford, Fla., is "just an old Southern middle-class town," where races may be segregated socially and culturally, but where most folks feel part of the same community, says resident Susan Mooty.

That recent sense of community, shared by blacks as well as whites, was nevertheless hard-won, following, as it did, a racist history that famously included running Jackie Robinson out of town lest he play a spring training game with white players.

But the bullet that took the life of a black youth named Trayvon Martin on Feb. 26, 2012, shattered that recent comity. In its stead, a palpable racial tension arose that lingers on these brick-laid streets more than a year after civil rights groups and the New Black Panthers crowded the riverwalk to protest the Sanford Police Department's original decision not to arrest Trayvon's killer, a local neighborhood watch captain named George Zimmerman.

After nationwide protests, Mr. Zimmerman ultimately was charged with second-degree murder, and today his face is on every TV screen in town as TV stations run live feeds from his trial.

"Look at this street: Usually everybody is out and about, walking around," says Jimmy Franklin, an African-American former Marine, who lives in Sanford's predominantly black Goldsboro neighborhood. "But everybody is inside, watching the trial on TV."

Scrutiny of the case, meanwhile, is serving to air Americans' attitudes toward racial stereotyping and discrimination – the trial has already featured testimony that Trayvon told a friend on the phone that a "creepy-ass cracker" was following him – as well as notions about self-defense and gun-carry regulations.

Want your top political issues explained? Get customized DC Decoder updates.

The real legacy of the Zimmerman trial, however, some historians go so far as to suggest, is its capacity to deliver a verdict that could either relieve some of America's pent up tension around race or serve as the fuse of a racial powder keg, the last straw in decades of poverty, frustration and a sense of injustice in America's poorer black communities, including the small peeling bungalows of Goldsboro, where faded "Justice for Trayvon" posters still hang in windows.

"The George Zimmerman trial is powerful because it's defining the moment we're in," particularly with respect to racism and bigotry in the age of Obama, says George Ciccariello-Maher, a professor of history and politics at Drexel University, in Philadelphia. "We see the same old dynamics emerging in a different guise, which is we have questions of hoodies, clothing, all these aesthetic issues that are ultimately about race. In that, the George Zimmerman trial can both explain what's changed in [Sanford and around the country] but can also run the risk of obscuring … what's really going on."

More immediately, it's hard not to say that the trial is challenging Sanford's painful and circuitous road away from its Jim Crow history. The Trayvon Martin case and ensuing Zimmerman trial have deeply upset this city of 53,000 people. "This is a nightmare of community in terms of trying to come to terms with what's happening," says Gary Mormino, author of "Land of Sunshine, State of Dreams: A social history of modern Florida."

To be sure, there's a sense here that this case could be playing out in any town, anywhere in America, not just in Sanford. "Everyone is trying to blow [the race question] up bigger than it is," says Ms. Mooty, who is white.

In that way, painting the entire community of Sanford with a racist broad brush, as many feel that civil rights activists and the media have done, may be unfair.

"One way people are looking at this trial is as a reminder of deep-seated cultural fears that go back hundreds of years, where we can have laws and Supreme Court decisions, but it's hard to change people's hearts, especially people who have been separated culturally and legally for so long," says Rebecca Watts, a professor at Stetson University in DeLand, Fla., and author of "Contemporary Southern Identity: Community through Controversy." "And even though legal separation technically isn't there, people still live largely separated lives racially in a lot of the country, and the South is included in that."

Yet Florida, and Sanford, just north of Orlando, have a unique racial history, in part because the state doesn't have its own slave heritage since it was settled largely after the Civil War. Even today, there are as many Northern transplants as Southerners in most Florida cities (Sanford's population has grown by 40 percent since 2000 alone), all of which hasn't stopped the occasional race riots across the last 80 years in places like Tampa, Ocoee, and, most recently, Miami in 1980.

While Sanford's history museum doesn't gloss over the city's racist past, featuring a display documenting Robinson's mistreatment, it does give more prominent treatment to documenting the area's Swedish immigrants, who quickly rose to become civic stalwarts while founding the community of New Uppsala.

Arguing that racist attitudes persist, many locals say, is as ridiculous as arguing that the city's namesake, Henry Sanford, is still relevant to the discussion because of his plan to return US blacks to the Congo, which he called "[t]he ground to draw the gathering electricity from the black cloud spreading over the Southern states."

But after Trayvon's killing last year, Sanford City Manager Norton Bonaparte, who is black, acknowledged the feeling among many residents that, had the situation been reversed and Zimmerman was black, he would have ended up in jail. Police said they were forced to let Zimmerman go when they couldn't disprove his self-defense claim.

In subsequent NAACP hearings, one speaker, Hannibal Duncan, noted the pervasiveness of that feeling in black America, as reported: "You can go from town to town, city to city, and you could pack churches like this with African-Americans, explaining that this is just a part of their everyday life."

Moreover, while Florida was in part settled by whites who drove mule teams down from Georgia, modern Florida is polyglot, as evidenced by Zimmerman's German last name but Hispanic heritage, and testimony from Rachel Jeantel, who is of Creole descent. Teasing out purely racial stereotyping, experts say, becomes complicated, if not impossible, in such a melting pot state.

"The South is not a simple place anymore, and this is a trial defined by complexity," says Mr. Mormino, who's also a professor at the University of South Florida, in St. Petersburg.

Trayvon Martin's utterance of "creepy-ass cracker" and Zimmerman's seething "These assholes always get away" comment on a 911 tape, suggest that racial acrimony persists.

But if violence sprung from racialized fears and dislike between Zimmerman and Martin, could it happen to a whole community?

That question epitomizes the distinct pins and needles feeling in Sanford today, where visitors now ask if this little riverside city is "safe" to visit, where police acknowledge they've become "the most hated police force in America," and where carpenter Jim Groves suggests that people are "packing" for a not-guilty verdict – and not "packing" as in taking a trip either, but packing as in "packing heat."

The Zimmerman trial concluded its first week of testimony. A jury of five white women and one Hispanic woman – five of them mothers – are hearing a case that comes down to a few murky moments when a black teenager and a part-Hispanic man wrestled and fought on the ground at the Retreat at Twin Lakes, arguably Sanford's nicest neighborhood, before a gun went off and the unarmed Trayvon Martin, with $40 and a bag of Skittles in his pocket, died.

While the trial itself seems to illustrate America's stubborn racial divides, some US political experts say its outcome could equally illuminate a different post-2008 clash in America. On one side is the old civil rights guard claiming that institutional bigotry still persists. On the other are more conservative Americans emboldened by the election of a black president to frame the Zimmerman trial as a test not of racial attitudes, but of constitutional guarantees of one's right to protect one's home and property.

"This is a moment of sort of creeping dissatisfaction and frustration where people are realizing that very little has changed under a black president, and there's nothing that contributes more to unrest than dashed expectations – the idea that things were going to change and the sudden realization that they haven't," says Mr. Ciccariello-Maher at Drexel University.

Continue Reading | comments

Why states that ban gay marriage are resting easy after Supreme Court rulings

Washington, July 12 (Newswire): The two gay marriage rulings from the US Supreme Court this week have prompted big sighs of relief coming from the 35 states with bans on same-sex marriage.

Nothing in the high court's actions imperil their bans, say officials from those states, and in fact the justices affirmed the rights of states to define legal marriage how they see fit.

That may seem counterintuitive, given that gay rights supporters heralded the Supreme Court's moves, and that, as a result of its actions, gay marriages will soon resume in California, despite that state's voter-approved ban known as Proposition 8.

States with gay marriage bans can feel confident that those laws are not in legal jeopardy because the justices did not rule on the merits of same-sex marriage itself, only on the issue of federal benefits for those whom states deem to be married, says John Dinan, a political scientist and state constitutional expert at Wake Forest University in Winston-Salem, N.C. In the case involving the federal Defense of Marriage Act, the majority opinion, written by Justice Anthony Kennedy, describes the burden of DOMA on same-sex couples, but it does not venture into territory such as advising states with bans to change course or make adjustments.

"Legally, we're in the same place today that we were at the beginning of the week. No real new ground has been broken in that direction," Professor Dinan says. "Nothing came out of the two decisions that changed the legal terrain that would make those states vulnerable."

"The US Supreme Court ruled that states, not the federal government, retain the constitutional authority to define marriage. Michigan's constitution stands, and the will of people to define marriage as between one man and one woman endures in the Great Lakes State," said Michigan Attorney General Bill Schuette in a statement released soon after the ruling. Michigan's voter-approved constitutional ban of same-sex marriage was established in 2004.

US Rep. Tim Huelskamp (R) of Kansas told reporters that the "one good thing out of the decision was the court did not declare that there was a constitutional right for same-sex marriage" and that Kansas "will be able to maintain its marriage amendment" prohibiting gay marriage.

In a 5-to-4 decision issued, the Supreme Court said Congress cannot treat same-sex married couples differently than opposite-sex married couples for purposes of qualifying for some 1,100 federal benefits, thereby overturning the guts of the federal Defense of Marriage Act (DOMA). As a result, same-sex couples residing in one of the 13 states where gay marriage is legal are soon to be entitled to all the federal benefits that heterosexual married couples receive.

In a separate ruling issued the same day, the high court dismissed the appeal from backers of California's Proposition 8, saying they did not have legal standing. That means a lower federal court ruling that California's ban is unconstitutional prevails in that state.

Thirty-five states define marriage as between a man and a woman, according to the National Conference of State Legislatures. In 29, the gay-marriage ban is enshrined in a state's constitution, adopted by the state legislature after a popular vote. The other six bans are statutes – the result of action taken by state legislatures. There is little distinction between the two, says Dinan. The constitutional amendments may make it harder for a state court to step in and overturn them.

Some argue that the rulings may even embolden those in states with statutory bans to push for full-fledged constitutional amendments prohibiting gay marriage. In Indiana, for example, the General Assembly in 2011 approved such an amendment, but it waited for this week's Supreme Court decisions to make a final vote. Once that vote takes place, the constitutional amendment will be put to voters next year. Indiana House Speaker Brian Bosma (R) told the Indianapolis Star this week that he expects the amendment to lock into place next year. "Hoosiers should have the right to speak on this issue," he said.

Although the Proposition 8 ruling will result in the resumption of same-sex marriages in California, it should not be interpreted as laying groundwork for challenges to other states' bans, says Jack Tweedie of the National Conference of State Legislatures. All the court did was to refuse to hear an appeal by supporters of the ban.

"Even though the headlines said same-sex advocates won, they didn't win anything legal that you can take to another case [in another state] and challenge," Mr. Tweedie says.

His organization reports that 13 states plus the District of Columbia permit gay couples to marry.

None of this, however, means that states with gay-marriage bans won't see efforts to overturn them. Gay rights advocates are expected to try to persuade the electorate in some of those states to undo their bans, and will likely push for legislation and ballot measures that favor gay marriage in places where public support for their cause is growing.

One state that veered first one way and then the other, in just a few years, is Maine. Voters banned same-sex marriage in 2009. Last November, they turned around and backed a referendum in support of gay marriage.

Already, signs are of a fight ahead. The American Civil Liberties Union hired Republican political strategist Steve Schmidt, who worked for President George W. Bush and was a senior adviser to Sen. John McCain's 2008 presidential campaign, to lead an effort to gain Republican support for gay marriage in the states. The ACLU also said it will spend nearly $10 million in gay marriage battleground states such as Illinois, Oregon, Hawaii, New Mexico, and others over the next four years.

"The trend of history is pretty clear: We're going to see this fight go state by state," says Daniel Urman, director of the doctorate in law and policy program at Northeastern University in Boston. "The lesson is democratic legitimacy, no matter what is decided. Each state is learning lessons from other states. To me, the judges play a role, but it's still up to the people themselves."

Continue Reading | comments

Whitey Bulger on trial, but FBI's bad behavior is recounted, too

New York, July 12 (Newswire): Officially it is former crime boss James "Whitey" Bulger who's on trial, but this week a lot of incriminating evidence pointed in another direction: at Boston FBI agents whose job was to take down organized crime.

Retired FBI supervisor John Morris was on the witness stand, describing behavior that could have landed him in jail if he hadn't gotten an immunity deal for his willingness to testify.

Mr. Morris acknowledged that he accepted money and gifts from Mr. Bulger, that he helped to feed sensitive information to Bulger, and that he signed off on misleading reports about what information Bulger was sharing with the Federal Bureau of Investigation.

Bad behavior by the FBI doesn't mean that Bulger is likely to win the "not guilty" jury verdict that he hopes for. He's being tried on racketeering counts that include 19 alleged murders.

But the trial is opening a new window on a cautionary chapter in FBI history.

Four decades ago, in an era when the agency's focus was on attacking Italian-American organized crime, its Boston office developed a cozy and corrupt relationship with the Irish-American crime group led by Bulger and a few colleagues.

Want your top political issues explained? Get customized DC Decoder updates.

The FBI listed Bulger and his partner, Stephen "The Rifleman" Flemmi, as top informants against other criminals. But Bulger's handler, a former Morris subordinate named John Connolly, went from being lauded for his anti-Mafia successes to serving prison time as a convicted felon.

Morris acknowledged that he panicked when Bulger and Mr. Flemmi were indicted in 1995 because he knew his acceptance of bribes from Bulger could be exposed.

"I was worried about whether I could be prosecuted," Morris said. "I certainly did not want my bad behavior known in any manner, shape, or form."

Mr. Connolly was convicted of tipping off Bulger to the 1995 indictment, which had prompted Bulger to flee Boston in what became a 16-year stint as a fugitive. Flemmi is in prison. Bulger was captured in 2011, while living in California, and is now immersed in a trial that could last through the summer.

Morris said he agreed to cooperate with prosecutors because he "wanted to set things straight" after taking actions he knew were wrong. He ended up testifying for the prosecution when Connolly was convicted of second-degree murder, in 2008.

Connolly was alleged to have passed along information to the Bulger group in 1982 that one of its associates might become a cooperative witness. The potential witness, John Callahan, was shot by a Bulger colleague, and now Bulger is charged with participating in the same murder plot.

Bulger's defense attorneys are eager to cast doubt on the credibility of prosecution witnesses – and to call into question the notion that Bulger was truly an informant, a role that's not exactly held in high regard among criminals. The lawyers contend that the FBI's informant file on Bulger may be riddled with fabrications (and with information that came more from Flemmi than from Bulger) – all designed as a cover for a relationship that was resulting in lucrative payoffs.

Key rebuttal points for the prosecution: Just because some in the FBI were corrupt doesn't prove that Bulger wasn't an informant. And it would strain credulity to argue that none of the information attributed by the FBI to Bulger came from him.

Morris acknowledged that he signed off on several FBI reports relating to Bulger that he knew were inaccurate or misleading.

He described accepting $7,000 in cash, plus two cases of wine, that he understood to be from Bulger.

Morris testified about another alleged Bulger murder. In 1982, a Bulger associate named Brian Halloran was killed – allegedly by Bulger after Connolly told him that Mr. Halloran was cooperating with authorities.

Morris said that he had told Connolly about Halloran's cooperation. But Morris said he doesn't believe he had a "direct role" in the murder.

The testimony of Morris offers insight on the controversial role that confidential informants play in law enforcement. Informants continue to be viewed as an invaluable tool, but ensuring that they are handled wisely and ethically is no easy task.

Boston Globe columnist Kevin Cullen reported that Morris was the Globe's source for a 1988 report that Bulger was serving as an FBI informant. Morris said he was trying to end the Bulger relationship, since "if the Globe outed Whitey, the FBI would be forced to close him out as an informant," Mr. Cullen said in his column.

Bulger's view was that Morris was trying to get him killed by other criminals, Cullen said.

As it turned out, neither outcome happened. The FBI denied that Bulger was an informant, and his life in crime went on.

But that backstory may help explain why Bulger blurted out that Morris is a "liar," prompting Judge Denise Casper to say that Bulger must let his lawyers do the talking as other witnesses are called.

Continue Reading | comments

Vatican official arrested in corruption plot

Vatican City, July 12 (Newswire): A Vatican official has been arrested by Italian police for allegedly trying to illegally bring 20 million euros ($26 million) in cash into the country from Switzerland with a private jet.

Prosecutor Nello Rossi says Monsignor Nunzio Scarano is accused of corruption and slander stemming from the plot and was being held at a Rome prison.

He was allegedly asked by friends to bring back the money that had been given to financier Giovanni Carenzio in Switzerland. Scarano is supposed to have asked Giovanni Zito, a military official, to bring the money back by jet, avoiding customs.

Scarano was allegedly due to pay Zito a commission of 600,000 euros for the work. He paid only an initial installment of 400,000 euros before being arrested.

Continue Reading | comments

S&P 500 posts best first half since 1998

New York, July 12 (Newswire): The S&P 500 ended the session with its strongest first half of any year since 1998 after reaching record highs in May on a rally underpinned by the Federal Reserve's massive monetary stimulus.

While the S&P 500 closed down for the month of June on concerns that the Fed might begin reducing its bond-buying program, the benchmark index ended the second quarter with a gain - marking its first positive second quarter in four years. The Dow Jones industrial average and the Nasdaq also dipped in June, but rose in the second quarter.

"I think the momentum that was established at the end of the first quarter kind of gave us a phenomenal start," said Randy Billhardt, head of capital markets at MLV & Co. in New York.

"The low interest-rate environment has really been the foundation of the stock market performance for this second quarter."

The Dow and the S&P 500 fell in the volatile session, ending three straight days of gains. At the closing bell, the Nasdaq had eked out a tiny gain. Stocks opened lower on weakness in technology shares, then fluctuated between steep losses and moderate gains for much of the day.

The losses were broad, with eight of the 10 S&P 500 industrial sectors declining. Only utilities and consumer discretionary shares closed higher.

Despite the ups and downs, analysts said volatility has decreased as investors have come to terms with the fact that the Federal Reserve's stimulus program will eventually end. The CBOE Volatility Index (^VIX), Wall Street's favorite barometer of investor anxiety, fell nearly 11 percent in the past week. In the session alone, the VIX ended flat at 16.86.

Volatility surged last week after Federal Reserve Chairman Ben Bernanke suggested the central bank could slow its $85 billion a month in bond purchases before the end of the year if the economy is strong enough.

After two Fed speakers seemed to back away from Bernanke's comments, Fed Governor Jeremy Stein and Richmond Fed President Jeffrey Lacker sounded a more aggressive tone on when the central bank's unprecedented policy accommodation might be reduced.

"The mixed signals from both the economic data and the Fed's direction have caused a lot of anxiety and some opportunistic buying and selling, and it's just created a much less predictive environment going forward," said Steven Baffico, chief executive officer of Four Wood Capital Partners in New York.

Both the S&P 500 and Nasdaq snapped a seven-month winning streak, while the Dow broke a six-month surge. For the month, the Dow fell 1.4 percent, the S&P 500 lost 1.5 percent and the Nasdaq dropped 1.5 percent.

Volume was the second highest of the year as some 10 billion shares changed hands on U.S. exchanges. Trading surged toward the close, with about half of the day's shares traded in the last 30 minutes as investors anticipated a final update from Russell Investments for the annual reconstitution of its indexes.

The Dow Jones industrial average (^DJI) fell 114.89 points or 0.76 percent, to end at 14,909.60. The S&P 500 (^GSPC) slipped 6.92 points or 0.43 percent, to finish at 1,606.28. The Nasdaq Composite (^IXIC) added 1.38 points or 0.04 percent, to close at 3,403.25.

The three major U.S. stock indexes had climbed for three straight days on diminished concern that the Federal Reserve would bring an imminent end to its $85 billion a month in bond purchases, known as quantitative easing.

For the week, the Dow rose 0.7 percent, the S&P 500 gained 0.9 percent and the Nasdaq advanced 1.4 percent.

For the second quarter, the Dow gained 2.3 percent, the S&P 500 advanced 2.4 percent and the Nasdaq jumped 4.2 percent.

In the session, Accenture PLC (ACN) dropped 10.3 percent to $71.96, making it the biggest drag on the S&P 500 after the company cut its full-year outlook. The results also prompted investors to sell some shares of competitor International Business Machines (IBM). IBM's stock fell 2.3 percent to $191.11. It was the biggest drag on the Dow.

U.S.-listed shares of Research in Motion (BBRY.O) plunged 27.8 percent to $10.46 after the BlackBerry maker reported an unexpected quarterly operating loss, a dearth of details on sales of its make-or-break new line of devices and no return to profit expected in the current quarter.

Arch Coal Inc (ACI) rose 5 percent to $3.78 after the company agreed to sell its Canyon Fuel subsidiary for $435 million in cash.

Continue Reading | comments

How Gazprom's $1 trillion dream has fallen apart

Moscow, July 12 (Newswire): Zoya Danilina, who owns some 700 shares in Gazprom (GAZP.ME), says investors don't have to look far to understand that Russia's most powerful company has lost its way.

Danilina remembers when her shares were worth over 300 roubles each. Now they fetch about 100 roubles.

"There have been much better days, when tables were served with black and red caviar," she said on the sidelines of Gazprom's annual general meeting in Moscow, looking at a plate of boiled buckwheat, a popular staple food in Russia.

In the caviar era, Gazprom head Alexei Miller, a close ally of President Vladimir Putin, was overseeing a company with the world's third-largest market value at $360 billion. In 2007, he promised to boost it to $1 trillion.

Fast forward several years and Gazprom, still the world's largest gas producer and holder of 15 percent of global gas reserves, is worth $77 billion and could fall further as it faces a series of setbacks.

The biggest blow came from a shale gas revolution that has unlocked vast reserves in the United States.

U.S. prices have crashed, closing America as a prospective market for Gazprom, diverting cheaper liquefied natural gas (LNG) cargoes not needed in the United States to Europe, undermining Gazprom's position in its core market.

Europe, tied to Gazprom by a Soviet-built pipeline network, has balked at its contracts that tie gas prices to more expensive oil.

Last year, Miller was forced to offer billions of dollars in what Gazprom described as "rebates" to European buyers.

Germany's RWE (RWEG.DE) said it won an arbitration case against Gazprom, which further loosened the price link to oil and raised the prospect of more price concessions.

Gazprom expects its 2013 earnings to fall by 10 percent, marking a second yearly decline.

The stock market now values Gazprom - the world's third-biggest company by earnings behind ExxonMobil (XOM.N) and Apple (AAPL.O) - at only two times its 2012 earnings of $38 billion. That makes it the cheapest large-cap stock on an already cheap Russian market.

Investors could possibly forgive those setbacks if they were confident Gazprom could expand in the fast growing global LNG markets, while charging rising prices at home.

"Our goal is to control around 15 percent of the global market for liquefied natural gas," Miller, 51, told the annual general meeting.

But such hopes were dealt heavy blows over the past month.

Putin signaled last week the gradual end of Gazprom's monopoly on exports of LNG and opened the way for rivals Novatek (NVTK.MM) and Rosneft (ROSN.MM) to compete for huge new Asian markets.

"We offer to lower restrictions gradually on liquefied natural gas exports," Putin said in a speech at an economic forum in St Petersburg, both his and Miller's hometown.

Putin also said that monopolies would be able to raise prices only in line with inflation, reducing hopes for much higher returns on the domestic market.

Gazprom's domestic industrial customers pay $114 per 1,000 cubic meters - little more than half of the $201 it receives for exports after being adjusted for transportation and duties.

"Investors are structurally underweight Gazprom as they do not believe in significant change at the company," said Kingsmill Bond, chief strategist at Sberbank Investment Research in Moscow.

Under Miller, hired by Putin in 2001, Gazprom often served as a Kremlin political tool, as described by EU officials.

"The Kremlin has decided that Gazprom is part of Russia's national security and geopolitics - not a commercial company," said Chris Weafer, founder of Macro Advisory, a Russia-focused consultancy.

"We are going back to Soviet days, when Gazprom was a government ministry. The market is valuing it like a ministry."

Using Gazprom as a weapon has proved to be a double-edged sword, poisoning relations with Ukraine, the transit route for most of Gazprom's Europe-bound gas, after several pricing disputes, which cut gas flows to Europe during several winters.

Gazprom is now investing billions of dollars in new export routes to circumvent is ex-Soviet neighbor - Nord Stream to Germany and the still-to-be built South Stream to Italy.

Investors fear those projects may never pay out.

Finally, Gazprom has failed to sign a supply deal with China, the world's largest energy market, despite first signing a memorandum of understanding as long ago as 2006.

Should the deal be signed before the end of the year, it may still not be enough to revive the appetite of investors, who have long criticized Gazprom's for overspending.

"The mega-projects will guarantee rapid growth in costs, while future revenues are absolutely uncertain," said Mikhail Korchemkin of consultancy East European Gas Analysis.

Continue Reading | comments

Fed's Stein puts focus on September as time to assess QE3

New York, July 12 (Newswire): September could be an opportune time for the Federal Reserve to consider scaling back its assets purchase, an influential official of the U.S. central bank said, as he stressed that the Fed must take a long view of economic progress and not be blinded by the most recent data.

The remarks by Fed Governor Jeremy Stein drew the attention of economists and investors after he ticked off several examples of improvement in the labor market since the Fed launched its bond-buying program last September.

Stein's speech, and a separate one by Jeffrey Lacker, president of the Richmond Fed, had some parallels to efforts by other Fed officials earlier this week to soothe market anxieties about a pullback in the bond purchases.

Nonetheless, Stein and Lacker took a more aggressive tone on when the central bank's unprecedented policy accommodation might be reduced.

Even so, differences within the Fed over the strength of the economy were in view as a third policymaker, John Williams, president of the San Francisco Fed, shelved his earlier view that the Fed could stop buying bonds by late 2013, saying, "It's too early to cut back on our programs right now."

The Fed's purchase of Treasuries and mortgage bonds at a monthly pace of $85 billion has provided a huge flow of liquidity into financial markets, driving up assets from stocks to bonds.

Yields on the benchmark 10-year Treasury note rose after Stein's remarks, a sharp reversal of stabilization in the market earlier in the day.

Markets had dropped hard in the days after Fed Chairman Ben Bernanke last week said the Fed expected to pare back on its bond purchases, known as quantitative easing, later this year and to halt it altogether by mid-2014, as long as the economy progresses as expected. Unemployment will likely have fallen to about 7 percent by then, he said.

But Stein, in an unusual move, trained investors' attention on the Fed's September policy meeting, though the policy-setting Federal Open Market Committee next meets in July.

"The best approach is for the committee to be clear that in making a decision in, say, September, it will give primary weight to the large stock of news that has accumulated since the inception of the program and will not be unduly influenced by whatever data releases arrive in the few weeks before the meeting," said Stein, a voting member of the policy committee.

Data from early September "will remain relevant for future decisions," even if it does not play a primary role in any policy decision in September, he said, in a speech at the Council on Foreign Relations in New York.

"If the news is bad, and it is confirmed by further bad news in October and November, this would suggest that the 7 percent unemployment goal is likely to be further away, and the remainder of the program would be extended accordingly," he said.

Stein's comments drew a sharp reaction on expectations of the Fed's policy path.

"Stein's remarks cannot be lightly dismissed and raise risks that some on the committee may have already essentially decided on September," said Michael Feroli, chief U.S. economist at JP Morgan in New York.

Lacker also put September in focus, saying the Fed meeting that month "is certainly a candidate" for when the Fed could first reduce its pace of buying, though he said that economic data would be key.

Nearly half of the economists polled this month expect the Fed to start reducing the pace of asset purchases in September.

Williams, who is a voter on Fed policy this year, gave no preferred timeline for reducing bond purchases, saying only that doing so would be appropriate "at some point." If inflation continues to come in below expectations, that could point to the need for more stimulus, not less, he said.

He called the recent rise in Treasury rates a "healthy" development because it suggests markets no longer assume the Fed will keep rates low forever.

Lacker, one of the central bank's most hawkish officials and a persistent critic of the latest round of bond buying, said it was "wise" for Bernanke to clarify the Fed's views on future bond buying, but he stressed policy would still be loose as the Fed reduces "the pace at which it is adding accommodation." Lacker is not a voter on policy this year.

Financial markets should brace for more volatility as they digest news of a reduction in quantitative easing, Lacker told a judicial conference in West Virginia, adding that it "should not interfere with the moderate-growth scenario that I have presented."

Williams said that the sudden rise in rates suggests some investors had become complacent about low rates and that froth had been building in some areas of financial markets.

"It's healthy to get some froth out of the market," he told reporters after his speech.

On the labor market, where unemployment remains high at 7.6 percent, Stein noted the rate was 8.1 percent when the bond purchase program was launched last year. Monthly job growth has jumped dramatically since then, he said, adding Fed forecasts are also more optimistic.

Stein said the Fed can be more specific about its plans for QE3 as it approaches its policy goals. The timeline Bernanke articulated illustrates a "greater willingness to spell out what the committee is looking for, as opposed to a 'we'll know it when we see it' approach," he said.

Still, Stein stressed that reducing the pace of QE3 is highly conditional on the economy. He added it did not mark a change in policy and was meant only to clarify things for investors.

Stein, a relatively new but highly respected member of the powerful Fed board, turned some heads back in February when he warned the massive asset purchases were showing signs of inflating price bubbles in junk bonds and other markets.

But he said while financial stability should play a roll in monetary policy decisions, the benefits of QE3 have surpassed the costs of the program, including such stability risks.

Continue Reading | comments

Fitch affirms US AAA rating but outlook still negative

New York, July 12 (Newswire): Fitch Ratings affirmed the United States' top level credit rating at AAA but held the outlook at negative, saying still-elevated debt levels leave the country vulnerable to shocks without more deficit reduction.

The affirmation reflects strong economic and credit fundamentals, the firm said in a statement. In addition, Fitch cited the decline in the federal budget deficit to levels "consistent with debt stabilization."

U.S. market reaction was muted by the late hour of the announcement. Benchmark 10-year U.S. Treasury yields briefly dipped immediately after the news but quickly returned to their prior level of 2.48 percent.

Fitch said it will conduct a further review of the credit rating by the end of 2013, although it technically now has until June of next year to do so under its existing guidelines.

"The outlook remains negative due to continuing uncertainty over the prospect for additional deficit-reduction measures necessary ... over the medium to long term," Fitch said.

Fitch also said the negative outlook reflects "near-term risks associated with the expiration of federal appropriations authority at the end of the current fiscal year" September 30.

Fitch highlighted the diversity of the U.S. economy, its "extraordinary monetary and exchange rate flexibility," global reserve currency status of the U.S. dollar as well as the depth and liquidity of its financial markets as underpinnings for the top credit rating.

"Fitch's current assessment is that the economic recovery is gaining traction as the headwinds from private sector debt deleveraging ease. This is underpinned by a pick-up in the housing market and gradual decline in unemployment," the firm said.

In August, 2011, rival ratings agency Standard & Poor's cut the U.S. credit rating to AA-plus from AAA. On June 10, S&P revised its outlook on the credit to stable from negative, removing the near-term threat of a downgrade because of an improving economic and fiscal outlook.

Moody's Investors Service holds the U.S. rating at Aaa with a negative outlook, a position it has held since August 2011.

On May 14, the non-partisan Congressional Budget Office said the U.S. federal budget deficit is shrinking faster than expected, and forecast this fiscal year would end with the smallest shortfall since 2008.

The CBO slashed the deficit forecast for the current fiscal year by $203 billion from its February estimate of $642 billion,.

Fitch said deficit reduction got a boost from a budget deal struck by Congress on New Year's Day 2013 to head off $600 billion in automatic spending cuts and tax increases.

Fitch expects gross debt level of the federal government to stabilize next year and over the rest of the decade at around 74 percent of gross domestic product. It expects the general government debt, which includes state and local governments, to stabilize at 107 percent of GDP over the same time period.

Both debt levels are below thresholds Fitch had identified as inconsistent with the U.S. retaining its AAA status. The threshold it set for federal debt was 80 percent, with a 110 percent threshold for general government gross debt levels.

In May, the CBO said a U.S. debt limit increase may not be needed until November, easing fears of a summer debt-limit showdown in the U.S. Congress. When S&P made its historic decision to cut the U.S. credit rating two years ago it cited political brinksmanship and gridlock in Washington for delaying an otherwise routine raising of the nation's debt ceiling.

"Fitch assumes that even in the unlikely event that the debt limit is not raised in a timely fashion, there is sufficient political will and capacity to ensure that Treasury securities will continue to be honored in full and on time," the firm cited as one of its key assumptions.

Continue Reading | comments

Consumer sentiment ends June to near six-year high

New York, July 12 (Newswire): Consumer sentiment improved in late June, ending the month close to a near six-year high set in May, as optimism among higher-income families rose to its strongest level in six years, a survey released showed.

The University of Michigan's final reading on the overall index on consumer sentiment was 84.1 points, just slightly below a near six-year high of 84.5 in May. The late-June figure was higher than the preliminary reading of 82.7.

"Consumers believe the (economic) recovery has achieved an upward momentum that will not be easily reversed," survey director Richard Curtin said in a statement.

He added the recent drop in stock prices and the jump in mortgage rates have not caused a deterioration in consumers' view on the economy.

"To be sure, few high or low income consumers expect the economy to post robust gains or think the unemployment rate will drastically shrink during the year ahead," Curtin said.

Consumer sentiment is considered by some economists as a predictor on consumer spending, which accounts for 70 percent of the U.S. economy.

The latest University of Michigan data was consistent with the June consumer confidence readings from the Conference Board released earlier this week. The research group's U.S. consumer confidence index rose to 81.4 this month, the highest since January 2008.

Household expenditures, however, have remained sluggish despite improving optimism. Consumer spending grew at an annualized 2.6 percent in first quarter, faster than the 1.8 percent pace in the last three months of 2012 but slower than an earlier government estimate of 3.4 percent.

The barometer of current economic conditions ended at 93.8 in June, down from 98.0 in May. This was above an early June reading of 92.1 and economists' forecast of 92.8.

The survey's gauge of consumer expectations ended June at its highest level since October at 77.8, up from 75.8 in May. The latest reading was stronger than the preliminary June figure of 76.7. Economists had projected a late-June figure of 77.0.

Other areas of the U.S. economy have been uneven, which economists have blamed on higher taxes and federal budget cuts. Weak overseas growth especially in China has been a drag on business activities and hiring, economists say.

The Institute for Supply Management-Chicago said its index on Midwest business activity posted a steeper-than-expected drop in June to 51.6. A reading below 50 points suggests business contraction.

"It's not firmly in expansion territory where businesses are ready to hire and invest," said Tim Quinlan, an economist with Wells Fargo Securities in Charlotte, North Carolina.

There was a divergence in outlook between higher-income families and lower-income ones, according to the latest University of Michigan consumer survey.

Higher-income households showed increased optimism about their incomes and wealth, while lower-income ones reported less optimism. Families in the top third income bracket were the most optimistic since the June 2007 survey.

Rising home and stock prices likely bolstered sentiment among wealthier families, although gains on Wall Street were reduced by a recent market sell-off due to worries that the Federal Reserve might pare its $85 billion monthly bond purchases later this year.

Still, the Standard & Poor's 500 index is currently up 2.1 percent for the quarter and 12.4 percent for the year, its best first-half performance since 1998, though it is on track for its first monthly loss since October.

Domestic single-family home prices posted their biggest annual gain in seven years in April, according to data from S&P/Case Shiller released.

The survey's one-year inflation expectation ended June at 3.0 percent down from 3.1 percent in May and from the 3.2 percent in early this month.

The survey's five-to-10-year inflation outlook ended unchanged at 2.9 percent for a third straight month. It dipped from 3 percent in early June.

Continue Reading | comments

China bank regulator says liquidity ample, debt risks manageable

Shanghai, July 12 (Newswire): China's chief banking regulator said that liquidity in China's banking system is sufficient and pledged to control risks from local government debt, real estate and shadow banking.

Despite a cash squeeze that sent money-market interest rates soaring over the last two weeks, banks have more than enough reserves to meet settlement needs, Shang Fulin, chairman of the Chinese Banking Regulatory Commission (CBRC), said at a financial forum.

"Over the last few days, due to multiple factors, the problem of tight liquidity has appeared in the market. But overall, liquidity in our banking system really isn't scarce," Shang said at a speech to the Lujiazui Forum in Shanghai

Shang said total excess reserves in China's banking system totaled 1.5 trillion, which he said was more than double the amount necessary for normal payment and settlement needs.

On the issue of banks' asset quality and, in particular, banks' exposure to local government debt and the real estate market, Shang acknowledged risks but said they were manageable.

"Recently, some international organizations and industry insiders have expressed worry about a slowdown in China's economic growth, local government debt, the real estate market, and related areas," Shang said.

"Currently everyone is fully aware of the risks. As long as we take proper risk control measures, these risks are controllable," Shang said.

On local debt, Shang pledged to closely monitor and control the growth in local borrowing and "alleviate hidden risks".

Outstanding bank loans to local government financing vehicles totaled 9.59 trillion yuan at the end of the first quarter, Shang said.

Amid the cash squeeze earlier this month, CBRC repeated previous orders to banks to report all forms of local government debt exposure to regulators, including funds channeled through wealth management products (WMP).

The central bank, which had let short-term borrowing costs spike to record highs to drive home a message to banks that they could no longer count on cheap cash to fund riskier operations, said it would ensure policy supported a slowing economy. (CN/)

On the topic of WMPs, which have exploded in recent years as households and firms have searched for higher-yielding alternatives to traditional deposits, Shang said the development was positive but also highlighted risks.

"In reality, wealth management products are investment products. Wealth management products are not the same as savings. Investors have to bear investment risk. When banks do these products, are they clearly explaining the risks to investors?" Shang said.

Analysts have said that many WMP investors believe that many products carry an implicit guarantee from state-backed banks, even if no legal guarantee exists.

Bank-issued WMPs totaled 8.2 trillion yuan ($1.34 trillion) by the end of the first quarter, of which 70 percent were invested in the real economy.

Though Shang did not elaborate, the comments implied that the remaining 30 percent was invested in interbank assets, whose explosive growth was a key factor in the recent interbank liquidity squeeze.

On the real estate market, Shang downplayed the risk to the banking system, despite a three-year campaign by the central government to restrain housing prices.

Real estate loans totaled more than 13 trillion yuan by the end of April, of which mortgages comprised about 70 percent, Shang said.

"Chinese people are creditworthy. The non-performing loan ratio on mortgages is extremely low, far below 1 percent," Shang said.

Continue Reading | comments

Indian troops martyr one more innocent Kashmiri youth

Srinagar, July 12 (Newswire): In occupied Kashmir, Indian troops, in their fresh act of state terrorism, martyred one more innocent Kashmiri youth in Kishtwar district.

The troops killed the youth in Sarawan area of the district during a siege and search operation.

An Assistant Sub Inspector (ASI) of Indian police was found dead under mysterious circumstances at Trade Facility Centre in Poonch.

Meanwhile, Indian policemen beat up and critically injured a youth, Shabbir Ahmad Shah s/o Ghulam Ahmad Shah in Shopian town.

Continue Reading | comments

Illegal detention of Hurriyet leaders, activists condemned

Srinagar, July 12 (Newswire): In occupied Kashmir, the Chairperson of Dukhtaran-e-Millat, Aasiya Andrabi has condemned the illegal detention of all pro-freedom leaders and activists, languishing in different jails inside and outside the territory.

Aasiya Andrabi, in a media interview in Srinagar, said that all the detainees, particularly the youth, were arrested by the puppet authorities on false charges. "A large number of the Kashmiri detainees is still behind bars despite serving their sentences," she added.

She said that the authorities had detained the pro-freedom leaders and activists including veteran Kashmiri Hurriyet leader, Syed Ali Gilani and the President of High Court Bar Association, Mian Abdul Qayoom under the draconian law, Public Safety Act (PSA), just for raising voice over killings of innocent Kashmiris. "India and its stooges in the occupied territory were filling the jails with innocent people to suppress the ongoing freedom movement," she deplored.

Appealing the people to keep unity among their ranks to make the liberation struggle a success, she said that the people of Kashmir had given matchless sacrifices to take the movement to its logical conclusion.

On the other hand, the President of Kashmir University Teachers Association (KUTA), Dr Muhammad Yousuf Ganai, in a statement issued in Srinagar, denounced the continued atrocities on the innocent Kashmiri people by Indian troops in the occupied Valley.

He said that instead of resolving the Kashmir dispute, India was using coercive means to muzzle the just voice of the Kashmiri people for their right to self-determination.

Continue Reading | comments

Crackdown against youth: 150 detained in Kashmir valley

Srinagar, July 12 (Newswire): In occupied Kashmir, in a major crackdown on protesters, Indian police have detained nearly 150 youth from across the Kashmir Valley for participating in anti-India protests during the past fortnight.

Police sources told mediamen that following the widespread protests against the killings of teenagers including a woman in Indian Central Reserve Police Force (CRPF) and police action, scores of youth had been detained in the Srinagar city. They said that nearly 40 youth had been taken into custody from the old city while arrests had also been made in other parts of the city.

The sources said that the police rounded up nearly 40 youth in Sopore town, after the killing of two youth by the paramilitary CRPF troops, last month. They added that the police also detained more than 30 youth in Islamabad town particular from Malkhnag, Cheeni Chowk and Reshi bazaar areas during the nocturnal raids in past two weeks.

The residents of Bandipore and Handwara towns told newsmen that the Indian police was summoning the youth to police stations, after the protests. The police have taken 30- 40 youth in custody from these areas.

Continue Reading | comments

Sweet way to detect pre-diabetes

Islamabad, July 12 (Newswire): Having discovered a dramatic increase of an easy-to-detect enzyme in the red blood cells of people with diabetes and prediabetes, Johns Hopkins scientists say the discovery could lead to a simple, routine test for detecting the subtle onset of the disease, before symptoms or complications occur and in time to reverse its course.

Pilot studies show the enzyme O-GlcNAcase is up to two to three times higher in people with diabetes and prediabetes than in those with no disease: "That's a big difference, especially in an enzyme that's as tightly regulated as this one is," says Gerald Hart, Ph.D., the DeLamar Professor and director of biological chemistry at the Johns Hopkins School of Medicine.

Building on their previous research, which showed how an abundant but difficult-to-detect sugar switch known as O-GlcNAc (pronounced oh-GLICK-nack) responded to nutrients and stress, the Hopkins team knew this small molecule was elevated in the red cells of patients with diabetes. "The question was whether the elevation happened in the earliest stages of diabetes and therefore might have value as a diagnostic tool," Hart said.

To find out, Kyoungsook Park, a graduate student of biological chemistry working in Hart's lab, focused on levels of O-GlcNAcase, an enzyme that removes O-GlcNAc in red cells. O-GlcNAc modifies many of the cell's proteins to control their functions in response to nutrients and stress. Nutrients, such as glucose and lipids, increase the extent of O-GlcNAc modification of proteins affecting their activities. When the extent of O-GlcNAc attached to proteins becomes too high, as occurs in diabetes, it is harmful to the cell.

First, Park purified human red blood cells by depleting them of their main constituent, hemoglobin. The samples had been collected by two sources -- the National Institute of Diabetes, Digestive and Kidney Diseases, or NIDDK, and Johns Hopkins Diabetes Center in collaboration with Christopher D. Saudek, M.D. -- and characterized as normal (36 samples), prediabetes (13 samples) and type 2 diabetes (53 samples) according to traditional tests that require patient fasting.

Defined as normal hemoglobin A1c with impaired fasting glucose, prediabetes is an intermediate state of altered glucose metabolism with a heightened risk of developing type 2 diabetes and other associated complications.

Then, she measured and compared the amount of the enzyme protein within the red cells associated with the sugar molecule, O-GlcNAc.

"When I checked the enzyme levels and saw how dramatically different they were between the prediabetic cells and the controls, I thought I did something wrong," Park says. "I repeated the test five times until I could believe it myself."

Hart speculates that in diabetes and prediabetes, it's not a good thing for the increased amount of sugar to be attached to proteins, so the cell is responding by elevating the enzyme that gets rid of it.

"This is an example of how basic research is directly affecting a serious disease," Hart says, adding that his team's pilot studies encourage further investigation of a method that potentially could fill the void that currently exists for an easy, accurate routine test for prediabetes.

"Only a much larger clinical trial will determine if, by measuring O-GlcNAcase, we can accurately diagnose prediabetes."

Continue Reading | comments

Severe angina poses three times coronary artery disease risk for women than men

Islamabad, July 12 (Newswire): Women who have the most serious form of angina are three times as likely to develop severe coronary artery disease (CAD) as men with the same condition, according to the July issue of the Journal of Internal Medicine.

Canadian researchers looked at the records of 23,771 patients referred for first diagnostic angiography over a six-year period.

They found that women over the age of 60 with CCS Class IV angina (as defined by the Canadian Cardiovascular Society) faced a 21% higher absolute risk of developing CAD than men. The trend was robust, even in younger women under 60, who faced an 11% higher absolute risk than men in the same age group.

However, when the data was adjusted for other variables commonly associated with CAD -- diabetes, high blood pressure, high cholesterol, smoking and age -- Class IV angina increased the risk by 82% in women and 28% in men. That means that women with severe angina face a three times greater risk of developing severe CAD than men.

"CAD is the leading cause of ill health and death in men and women in the western world, accounting for over a third of deaths" says lead author Catherine Kreatsoulas from the Department of Clinical Epidemiology and Biostatistics at McMaster University, Canada. "In fact, more women die from CAD than breast disease every year. Despite this, there is still a persistent perception that CAD is a man's disease.

"However, our research found that women with CCS Class IV angina, which means they are unable to perform any activity without symptoms and even suffer angina at rest, are significantly more likely to develop severe CAD than men with the same condition."

The authors believe that this information is vital for clinicians deciding which patients to refer for coronary angiography.

Severe CAD was defined by the authors as left main stenosis (abnormal narrowing of the blood vessels) of 50% plus, three-vessel disease with 70% plus stenosis or two-vessel disease including proximal left anterior descending stenosis of 70% plus. Angina was defined according to the Class 0-4 grades laid down by the Canadian Cardiovascular Society.

The researchers broke the patients studied down into two groups: younger (up to 60 years of age) and older (61 plus).

Continue Reading | comments

Hereditary kidney disease linked to genetic location

Islamabad, July 12 (Newswire): An in-depth study of a family with multiple generations affected by kidney disease has identified a previously unknown location for a gene abnormality causing focal segmental glomerulosclerosis (FSGS), according to a study published in the Journal of the American Society of Nephrology (JASN).

"We identified a region in the human genome on chromosome 2p that is linked to FSGS in a large family with more than 12 affected individuals," comments Rasheed Gbadegesin, MD, MBBS (Duke University Medical Center, Durham, NC).

"This discovery may eventually improve our understanding of the disease mechanisms of FSGS and may lead to identification of specific and less toxic therapy."

Gbadegesin and Michelle P. Winn, MD, Lead Investigator (Duke University Medical Center) are part of an international research team looking for new causative genes for FSGS, a disease that is characterized by progressive scarring of the kidney.

It is a common cause of kidney failure worldwide, especially in children and young adults. The study included six families that were affected by familial FSGS but had none of the gene abnormalities previously shown to cause the disease.

The new chromosome 2p locus was found in one Central European family. This family -- with information going back five generations -- had at least 12 members affected by FSGS. The affected family members developed kidney disease at different times, from their childhood or teen years, yet rapidly progressing to end-stage kidney failure before age 30.

The study only shows the location ("locus") of the abnormal gene. "Our ultimate goal is to identify the defective gene in this family and try to understand how it causes FSGS," says Gbadegesin. "Presently we have narrowed the disease to a region of one million bases, out of over three billion bases present in humans."

Most cases of FSGS are not inherited. However, the researchers hope their discovery will lead to new insights into how FSGS develops and to improved treatments.

"The available therapies for FSGS are not effective -- they are nonspecific and have significant side effects," Gbadegesin explains. "Understanding the disease mechanisms has the potential for identification of specific and less toxic therapy down the road."

The researchers note that the chromosome 2p abnormality appears rare. "We have not been able to identify additional families with defects in the same region of this disease locus" says Gbadegesin.

Continue Reading | comments