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Obama: Fix Financial System or Risk Another Meltdown
President Barack Obama arrives at JFK International Airport in New York, 22 Apr 2010, on his way to deliver a major economic speech at Cooper Union in Manhattan
He said the financial meltdown cost millions of jobs, trillions of dollars and wrecked the dreams of families and small businesses across the nation. The president spoke Thursday in New York City, a short distance from the most important financial district in the United States.
Mr. Obama urged key financial executives in his audience to stop “furious efforts” to lobby Congress and block reforms that the president says will help Wall Street as well as ordinary people.
He said reforms must include consumer protection, limits on how large banks can grow and how much risk they can take, as well as changes in the way executives are paid.
The president also urged more public disclosure of the details of trading derivatives. Those are the complex financial deals that sometimes went sour and are blamed for much of the financial crisis.
A bill addressing concerns about derivatives passed a key committee vote on Wednesday. An overall reform bill may come up for Senate consideration next week. The lower House has already passed its own version of regulatory reform.
Facebook overtakes Google, Twitterers prefer social to news
Facebook has overtaken Google in the US to be the most visited website, according to analysis from Hitwise. In related news, Twitter is exploding in terms of upstream traffic to social media sites over news and media sites.
According to Hitwise analyst Heather Dougherty, Facebook recently reached the No 1 ranking on Christmas, Eve, Christmas Day and New Year’s Day, as well as the weekend of 6-7 March.
“The market share of visits to Facebook.com increased 185pc last week as compared to the same week in 2009, while visits to Google.com increased 9pc during the same time frame.
“Together, Facebook.com and Google.com accounted for 14pc of all US internet visits last week,” Dougherty said.
Twitter, meanwhile, is fast emerging as a key traffic source to news and media sites. According to Hitwise analyst Heather Hopkins, Twitter.com accounted for 0.14pc of upstream visits to news and media sites last week. This compares to 3.64pc from Facebook and 1.27pc from Google News. Facebook was the No 3 source of visits to news and media websites last week. Google News was the No 11 site and Twitter.com ranked No 39.
“Twitter has enjoyed explosive growth, nearly tripling share of US internet visits year over year last week,” Hopkins said. “However, news and media companies have not seen similar growth rates in upstream traffic from Twitter.
“Upstream visits from Twitter.com to news and media sites have grown by 54pc over the past year. Compare this to upstream visits to all categories of websites, for which visits from Twitter.com have more than doubled (138pc).
“So where are all those Twitter.com visitors going? As illustrated in the chart below, the majority (60pc) are going to social networks and entertainment sites (mainly photography and video-sharing sites).”
By John Kennedy
BILL CLINTON’S NETWORK Special Contacts Aided Release
Former president Bill Clinton’s central role in the return of two journalists detained by North Korea has once again cast a spotlight on his vast web of financial and political contacts, a network that troubled senators who weighed whether to confirm his wife as secretary of state.
In the case of the detainees, Clinton tapped wealthy business people to execute a mission that, without a special federal waiver for the aircraft to travel to North Korea, would have been illegal. A few weeks ago, one of his business contacts had the ear of Hillary Rodham Clinton in her role as secretary of state, an uncomfortable reminder of the former president’s far-flung interests and associates.
The intersection of power and connections blurred the exact nature of Bill Clinton’s trip to North Korea. He agreed to meet with leader Kim Jong Il two days after North Korea called his wife a “primary schoolgirl” because she had likened the country to an unruly child. The Obama administration took pains to distance itself from the mission, though officials conceded they had repeated contact with North Korean officials in the days leading up to the trip to confirm the journalists would be released if the former president traveled to Pyongyang.
Hillary Clinton, who was touring Africa while images of her husband meeting with Kim flashed on television sets around the world, felt compelled to address the conflicting messages when she spoke with NBC from Nairobi on Wednesday. “I want to be sure people don’t confuse what Bill did, which was a private humanitarian mission to bring these young women home, with our policy, which continues to be one that gives choices to North Korea,” she said. “Our policy remains the same.”
But, in a sign that diplomatic benefits may flow from her husband’s missions, she averred, saying: “Perhaps they will now be willing to start talking to us.”
No taxpayer money was used to fund the trip, with the exception of the salaries of the Secret Service agents traveling with Clinton. But the former president procured aircraft and crews by tapping companies and contacts that have previously underwritten his endeavors. With some assistance from the Obama administration, he handpicked the team that would accompany him, according to sources involved in the planning.
Dow Chemical, which has contributed as much as $50,000 to the William J. Clinton Foundation, provided the plane that ferried the former president from his home in Westchester County, N.Y., to Burbank, Calif. There, he boarded an all-business-class Boeing 737 jet provided by wealthy Hollywood producer Steve Bing. Clinton was accompanied by a team that included John D. Podesta, who was his White House chief of staff, and a former State Department expert on North Korea. Read more…
Satellite Crash: Who’s to Blame?
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According to some experts, this Feb. 10 incident, the first known collision between two fully intact satellites – Iridium 33 and Russia’s spent Cosmos 2251 communications craft – is a sign of things to come as the orbital environment gets more crowded.
“While it took 50 years for Earth orbit to become sufficiently congested that we would expect such an event, it will take only about 10 years before another can be expected,” said Don Kessler, an orbital debris expert who previously worked for NASA.
“The probability of impact has been steadily going up and at some periods at an increasing rate,” said John Higginbotham, chief executive of satellite control software provider Integral Systems of Lanham, Md. “We’re definitely in one of those periods and I expect to see an increase in the coming years.”
According to a Feb. 11 e-mail alert issued by NASA, Russia’s 1,984-pound (900-kg) Cosmos 2251 -launched in 1993 but out of service since 1995 – collided with the 1,234-pound (560-kg) Iridium craft at 11:55 a.m. EST at an altitude of 490 miles (790 km). Bethesda, Md.-based Iridium Satellite LLC alerted the U.S. Air Force after losing contact with the Iridium 33.
Space traffic tracking
Although the Air Force operates a space surveillance network that currently tracks some 19,000 orbital objects, some as small as a baseball, the service cannot monitor all possible collision scenarios, experts said. Bob Hall, technical director of Analytical Graphics Inc. of Exton, Pa., said the Iridium 33-Cosmos 2251 collision was not even in the top 150 of potential close calls being monitored by his company during the week.
“It wasn’t even the closest of all predicted Iridium conjunctions,” Hall said, referring to close approaches between satellites.
Nick Johnson, an orbital debris expert with NASA’s Johnson Space Center in Houston, said it is not the Air Force’s role to stay on top of every potential collision involving satellites in Earth orbit. He said that with enough resources, it might be possible to have such a capability, in which case Iridium’s loss potentially could have been avoided. But he added that it is impossible to predict with certainty whether a collision between two space objects will occur and said there frequently are near-misses involving the Iridium system, which consists of 66 operating satellites in low Earth orbit and eight in-orbit spares.
“There’s no such thing as space traffic control and that’s one of the problems,” added Higginbotham.
According to Johnson, Cosmos 2251 drifted down from a higher orbit to the Iridium satellite’s altitude.
In a written response to questions Feb. 13, Iridium spokeswoman Liz DeCastro said the company was not notified by the Air Force of the danger posed by Cosmos 2251, and did not attempt to maneuver its satellite out of danger. Industry sources said that typically, satellite operators conduct their own analyses and request information from the Air Force when it appears that a close approach, or conjunction, involving one of their craft is likely.
In a statement issued to media Feb. 11, Iridium said it would move one of its in-orbit satellites within 30 days to permanently replace the lost satellite. The company announced Feb. 13 that it had completed a “service hole patch” as a stopgap measure against limited services disruptions resulting from the loss of the satellite.
Watching the wreckage
NASA and the Air Force are monitoring the potential threat posed by the debris to any U.S. spacecraft, including the International Space Station. Johnson characterized the risk to the space station posed by the debris as “very, very low.”
NASA’s large Earth observation satellites, which orbit at 705 kilometers, “are of highest interest for immediate consideration,” NASA said in its notification about the incident.
Two years ago, a group of commercial satellite operators began exchanging information to help monitor the risks of collision.
“As the fleets of the commercial satellite operators have grown in size and complexity, operators have had to be creative and resourceful in how they manage those fleets,” said Richard DalBello, vice president of legal and government affairs at Intelsat General, Bethesda. “The first thing the operators did was to establish protocols for sharing data and communications between operators. Recently, this has led to a proposal among the large operators to create a data center where information could be exchanged rapidly … in a common format.”
An insurance industry source said the collision could affect the way insurance policies are written and rates are figured in the future. “Until a few days ago, this was seen by the insurance industry as a non-issue. Now everyone’s taking a hard look at this,” the source said.
Asked whether a given company’s process for monitoring potential threats factors into how insurance rates are calculated, the source said, “We have not in the past but we will be now.”
WASHINGTON – The in-orbit collision that destroyed an operational Iridium communications satellite over Siberia last week underscores the difficulty of predicting and avoiding such events despite the increasingly sophisticated orbital surveillance technology in use, U.S. government and industry experts said.
FOREX-Dlr gives up gains, yen stays bid; mkt digests US plan
* FX markets digest US financial rescue plan
* Dollar index off 0.2 pct at 85.50 .DXY, yen up
* Sterling down as BoE inflation report, UK jobs data loom
LONDON, – The dollar gave back on Wednesday some gains made the previous session as dealers digested the implications of the latest U.S. financial rescue plan, while weak equity markets continued to support the yen.
The consensus was that the plan — which could total over $2 trillion — covered the key areas needed to stem the banking sector bleeding. However, it lacked fresh details and failed to meet the high expectations built into financial markets.
Rising aversion among investors to perceived risky assets such as equities and emerging market and higher yielding currencies generally benefit the yen, Swiss franc and dollar. This is how markets traded on Tuesday.
The dollar slipped back against most major currencies on Wednesday as dealers booked some profits, but the yen retained its broad gains as European equity markets followed Asia and Wall Street lower in early trade.
Sterling was the biggest mover among the majors, falling against the dollar and euro before the Bank of England’s quarterly inflation report and latest UK employment data, which are both expected to point to easier monetary policy.
The Swedish crown fell sharply after the country’s central bank surprised markets with a larger-than–expected interest rate cut of 100 basis points to 1.0 percent.
The main issue in currency markets on Wednesday, however, remained the bank plan unveiled by U.S. Treasury Secretary Timothy Geithner on Tuesday.
“The general sense is the market still has to come to grips with how it feels about the plan. There was nothing bad about the plan but it just perhaps wasn’t as bombastic as expected,” said Michael Hart, currency strategist at Citigroup in London.
“The hurdles for any kind of redemption (in the eyes of the market) are pretty high … but there are a lot of positives and negatives in this,” Hart said, adding that the markets are likely to adopt a more measured stance on Wednesday.
At 0840 GMT the dollar index was down 0.2 percent on the day at 85.40 <.DXY, and the euro was up 0.5 percent at $1.2965.
The dollar fell a third of a percent against the yen at 90 yen <JPY=>, while the Japanese currency posted larger gains against sterling and the Australian and New Zealand dollars.
Japanese investors were absent for a national holiday.
The pound was down half a percent against the dollar at $1.4425 <GBP=> and the euro was up 1 percent against the pound at 89.90 pence <EURGBP=>.
ALL ABOUT RISK
(For more on Geithner’s measures, which included a plan to set up a public-private fund that could absorb up to $1 trillion in bad assets from banks’ books, see [ID:nN102559])
Disappointment over the bank plan overshadowed passage of a $838 billion economic stimulus package by the Senate.
However, the Senate and the House of Representatives will now have to haggle over the shape and size of the final plan, leaving much uncertainty over the final size and scope of spending and tax cuts. [ID:nN10309684]
Should markets fail to warm to the plan, analysts at Credit Suisse expect the dollar to remain supported and so-called “riskier” currencies to suffer.
“The absence of a specific U.S. commitment to a bad bank structure is likely to put renewed pressure on sterling and, to a lesser extent, the euro relative to the dollar,” they said in a note on Wednesday.
In terms of data releases, the global economic picture remained pretty bleak.
Trade data from China released on Wednesday showed a 17.5 percent drop in January exports from a year earlier, and a 43.1 percent decline in imports.
The BoE will publish its quarterly inflation report at 1030 GMT, which could give clues on further interest rate cuts. The central bank is set to revise lower its estimate for growth. UK jobs figures for January will be released at 0930 GMT. [ECON]
U.S. offers $2 trillion bank plan but stocks slump
WASHINGTON – U.S. Treasury chief Timothy Geithner on Tuesday unveiled a new bank rescue plan that would put $2 trillion to work mopping up bad assets and restoring credit, but stock markets plunged on fears it would not work.
Global markets had intensely awaited Geithner’s ideas for a plan mixing private and public funding to stabilize a financial system tottering under the weight of bad mortgages, but were disappointed over the scant details provided.
The Dow Jones industrial average ended down 4.6 percent — its biggest one-day percentage drop since December 1 — with bank stocks hit particularly hard. U.S. government bonds rose as investors scrambled for safe-haven debt.
In a speech on television and in Capitol Hill testimony, Geithner made his case for how the Obama administration plans to handle the roughly $350 billion left in a $700 billion financial bailout fund approved by Congress in October.
Geithner said the lack of public confidence in prior rescue efforts had made it all the more difficult to stop “a dangerous dynamic” in which a lack of credit undercuts the economy and leads to more weakness among banks, worsening the recession.
“This is very complicated to get it right,” he said in an interview on Bloomberg Television. “We are going to try to get it right before we give the details so that we don’t add further to uncertainty in these markets.”
He steered clear of saying whether the administration might have to ask Congress for more money to fix the banks, restore credit and counter recession, but did not rule it out.
“We’re going to consult with the Congress carefully to try to make sure the world understands that the resources necessary to solve this will be available over time,” Geithner told CNBC, adding: “The important thing is that … we send a basic signal, working with the Congress, that we will do what’s necessary to fix this.”
The lack of details frustrated many market participants.
“Investors want clarity, simplicity and resolution. This plan is seen as convoluted, obfuscating and clouded,” said James Ellman, president of Seacliff Capital in San Francisco.
But Thomas Priore, president of ICP Capital in New York, gave Geithner credit for candidly laying out the depth and difficulty presented by the problem of how to restart credit flows when banks are burdened by hard-to-value, weak assets.
“He told it like it is. That’s a start,” Priore said.
LEVERAGING PRIVATE MONEY
Geithner defended his decision to put forward what he called a framework instead of waiting until a detailed proposal was ready.
“If we wait and we take the approach that we don’t lay that out, ever, until we’ve solved every problem and every detail, then I think that itself will create greater uncertainty,” he said, acknowledging he was “very sensitive” to criticism about the approach.
A centerpiece of the renamed “Financial Stability Plan” is a proposal to set up a public-private investment fund, in partnership with the Federal Deposit Insurance Corp, a bank watchdog, and the Federal Reserve.
Seeded with public money, it would leverage up to $500 billion — and possibly as much as $1 trillion — so that toxic assets can be purged from a weakened banking system.
Geithner told an invited audience at the U.S. Treasury that $50 billion in federal rescue funds will be used to try to stem home foreclosures and soften the crushing impact of the deep housing crisis now afflicting the entire economy.
The plan would also expand a Fed program aimed at expanding credit card, student, auto and small business lending.
The facility will grow from its current $200 billion limit to up to $1 trillion, thanks to a jump in Treasury funding to $100 billion from $20 billion.
The lending program would be extended to cover some mortgage-related assets.
The Treasury also said it would continue to pump capital into banks, as the former Bush administration did, but Geithner said there will be conditions attached to ensure the money is lent and that top executives heed restraints on their pay.
In return for the capital, the government would receive preferred shares in the banks that could convert to common stock.
BANK FIX PART OF LARGER PLAN
Geithner said it was critically important to restore credit flows in order for a separate $800-billion-plus package of tax cuts and government spending measures to lift the economy.
Shortly after Geithner announced the plan, the U.S. Senate cleared an $838 billion stimulus package, which needs to be reconciled with a separate bill approved by the U.S. House of Representatives.
The Treasury is tussling with the worst financial crisis since the Great Depression as careless lending fueled a housing boom gone bust, dragging the U.S. economy — and much of the rest of the world — into a deep recession.
President Barack Obama said on Monday that cleaning up banks’ balance sheets was a priority and did not rule out the possibility that it will take more money than the $700 billion Congress already has approved to complete the job.
“We don’t know yet whether we’re going to need additional money or how much additional money we’ll need until we see how successful we are at restoring a level of confidence in the marketplace,” Obama told a news conference.
Hands On With the New Nokia 5800
The touchscreen 3G Nokia 5800, set to launch in North America later this month, will give the mobile world a pleasant surprise. This iPhone rival brings plenty of hardware goodies, but can it compete with Apple’s crown jewel?
The 5800 will launch on February 26th, and will be available in an unlocked version, which can be used on either AT&T’s or T-Mobile’s network, for $399. I’ve been using the Nokia 5800 as my primary phone for the past few days to see how well it performed–and how well it compares with my iPhone.
The Good
+ 3.2-megapixel camera with autofocus, dual-flash, and geotagging
+ VGA video recording at 30 frames per second, and TV out
+ Wi-Fi, Bluetooth, FM Radio with RDS, GPS, and USB 2.0
+ Accelerometer, proximity sensor
+ Nokia OVI integration
+ Rich retail package and relatively affordable price (for an unlocked phone)
The Bad
– Immature and cumbersome user interface
– Not the best touchscreen sensitivity
– Unpolished web browser
– Llimited 3rd party apps availability
– Separate charger/syncing ports
– Additional paid license needed for voice-guided GPS navigation
The Hardware
What struck me immediately about the Nokia 5800 is that it lacks external music controls–and it’s supposed to be a music-centric handset. On its right side, you’ll find SIM and memory card slots, with stereo speaker grills underneath. On the left side are volume controls, a sliding screen lock, and a camera shutter. At the top of the phone, there’s a power/profile switching button, plus a microUSB slot and a standard 3.5mm audio jack. A pleasant surprise was the included stylus, housed at the bottom right corner of the handset’s back.
One of Nokia’s 5800 most important assets is located at the back of the phone. The 3.2-megapixel autofocus camera sports Carl Zeiss lens with dual LED flash (take that, iPhone). Nokia just upgraded 5800’s firmware last night, adding geotagging for photos (using the built-in GPS antenna), among other features.
The 5800 features a 3.2-inch 16:9 aspect ratio touchscreen (360 x 640 pixels), which has three control keys underneath it: call, menu and hang up. The front of the phone also has a secondary VGA camera for video calling. Above the touchscreen, there’s a tiny touch sensitive area can be found that brings up five onscreen shortcuts for music, pictures, media sharing, movies, and Web.
Music is the central point of the Nokia 5800, and the phone delivers. The sound quality is excellent, and the 5800 has a dedicated music chip built in, offering a listening experience on a par with a dedicated music device like the iPod and the iPhone. The music player offers plenty of functionality, including the ability to create playlists, view cover art, and an adjustable equalizer. The new firmware also allows users to modify song information in MP3 ID tags. As usual, iTunes DRM protected songs are not supported.
It’s worth noting that the Nokia 5800 is almost 50 percent thicker than the iPhone but around half-inch narrower and quarter-inch shorter. In contrast with the iPhone’s poor retail package, Nokia’s 5800 package is quite rich, coming with PC and video cables, headset and remote control, extra stylus, a stand and wrist-strap with an alternative stylus. A 8GB microSD card and a carrying case come bundled as well.
The Software
The Nokia 5800 is based on the Symbian S60 platform, and its touch-optimized user interface is where the 5800 scored the least points with me. Unlike the iPhone’s excellent interface, the one found on the 5800 is not very user-friendly. I also found that the touchscreen was not very responsive; I had to press very hard with my finger, though I did have better luck with the stylus.
Nokia didn’t really optimize the Symbian S60 mobile operating system for touchscreen input, though you do get haptic feedback (via gentle vibrations). Scrolling down is still achieved using a regular bar, making it virtually impossible to be done with your finger. This is quite inconvenient, especially when you have to scroll down through a long list of songs or artists in the music player.
In addition, I found the 5800 slow when accessing menus and switching applications. Even after installing the new Nokia firmware update, the phone still felt slow in comparison to the iPhone or even the T-Mobile G1. And while I’m making comparisons, there are not enough applications out there for the Nokia 5800 right now (but Nokia is expected to launch an AppStore soon).It’s worth noting, though, that the 5800 supports features long-craved by iPhone users, such as copy and paste and multitasking with applications allowed to run in the background.
Messaging on the Nokia 5800 can be difficult, as well. The touchscreen makes finger typing on the full-screen QWERTY keyboard cumbersome. Nokia offers a mini-QWERTY keyboard, an alphanumeric one, and also handwriting recognition, all done best with the stylus. Unfortunately, the e-mail client doesn’t take advantage of the large screen and doesn’t display HTML e-mail either–just text (text size can be adjusted in large, medium and small formats).
Though Nokia’s 5800 own web browser uses the same WebKit rendering engine as Safari on the iPhone, the browsing experience is not comparable. Browsing the Web on the 5800 is fast, but zooming in and out of columns and pages is by far not as smooth and functional as on the iPhone.
The Bottom Line (So Far)
The Nokia 5800 is by no means an iPhone replacement, as I discovered from a few day of using it as my primary phone. But if you’re not into the iPhone and you want a good music handset with a decent camera, this might be the one for you, especially if you get the handset bundled with Nokia’s Comes With Music offer, which gives you unlimited music downloads for a year. Also, given the recent firmware upgrade, it seems that Nokia is actively working to improve the phone’s features and responsiveness. We may also see another firmware update after the phone is available in the US.
Regardless, if you’re looking for a more powerful, full-featured touchscreen phone from Nokia, maybe it’s worth waiting a few more months for the N97 to get released.
Back in Europe, Nokia announced that it already sold over one million units of the 5800. Do you think the phone will be successful in the US? Will you be queuing up to get a Nokia 5800 for the full price (unlocked)? Please let me know in the comments.
Intel to invest $7 billion in chip manufacturing
Plus: Dow plunges after bank bailout plan revamp; Genentech pushed for $112 a share from Roche; AMD delays shareholder vote Despite the worldwide recession, Santa Clara computer chip giant Intel said today that it will invest $7 billion over the next two years on state-of-the-art chip manufacturing in the United States, adding that its plans have drawn praise from President Obama.The expenditure will revamp existing Intel plants in Oregon, Arizona and New Mexico so they can manufacture the company’s most advanced 32 nanometer chips, which have circuits shrunk to 32 billionth of a meter or about one millionth of an inch. Currently, 45 nanometer chips are the smallest semiconductors on the market. During a speech today in the nation’s capital attended by several hundred business leaders at the Economic Club of Washington, Intel’s Chief Executive Officer Paul Otellini said the company was making the investment because “you can’t stop innovating,” even when the economy has turned sour. Otellini added that Obama called him Monday night to congratulate the company for planning to spend heavily on developing the new chips Dow plunges 382 points: Investors are frustrated with the government’s latest bank bailout plan — and showing it by unloading stocks. Financial stocks led the market lower today, reflecting Wall Street’s growing concerns about the government’s ability to restore the health of the banking industry. Traders and investors said the lack of specifics from Treasury Secretary Timothy Geithner on how the government would direct more than $1 trillion in public and private support was troubling. The plan is aimed at restoring proper functioning to credit markets, which seized up over worries about bad debt after the September bankruptcy of Lehman Brothers Holdings. The latest plan calls for a government-private sector partnership to help remove banks’ soured assets from their books. Genentech sought $112 a share from Roche: Roche said it started a hostile $86.50-a-share bid for Genentech after talks in which the biotechnology company said it wanted $112 a share, or 29 percent more. Roche disclosed details of its negotiations with Genentech in documents filed Monday with the U.S. Securities and Exchange Commission. Roche’s disclosure of the $112-a-share figure is the first indication of the price Genentech thinks it is worth. The view was dismissed by Roche Chairman Franz Humer, who according to the filing told Genentech the price wasn’t “an appropriate starting point for negotiations.” On Jan. 30, Roche lowered its $89-a-share offer made in July, saying it would take the bid directly to shareholders. Roche, based in Basel, Switzerland, owns about 56 percent of South San Francisco-based Genentech and wants to buy the remainder to gain full ownership of the U.S. company’s cancer medicines. AMD delays shareholder vote: Advanced Micro Devices, the second-largest maker of computer processors, rescheduled a meeting meant to let investors vote on the spin off of its plants as part of an investment from the Abu Dhabi government. There weren’t enough shareholders at the meeting to reach quorum, the Sunnyvale-based company said today in a statement. The meeting will reconvene on Feb. 18 at 10 a.m. local time at the Hilton Austin Airport hotel in Texas. The cash infusion would be a lifeline for AMD, which analysts expect to report its fourth annual loss this year. The chipmaker has failed to keep up with investments by Intel — the dominant maker of personal-computer processors, with 80 percent of the market. Earlier today, Intel said it plans to spend $7 billion over the next two years on U.S. plants alone. Silicon Valley tech stocks: Up: SiRF Technology and Virage Logic Down: Apple, Cisco, Genentech, Google, Hewlett-Packard, Intel and Yahoo The tech heavy Nasdaq composite index: Down 66.83, or 4.20 percent, to 1,524.73. The blue-chip Dow Jones industrial average: Down 381.99, or 4.62 percent, to 7888.88. And the Standard & Poor’s 500 index: Down 42.73, or 4.91 percent, to 827.16.
Mumbai attacks not discussed with Holbrooke, says Pakistan
Stresses need for resolving Kashmir dispute for peace in the region
ISLAMABAD: On his first day of meetings with the Pakistani leadership here, U.S. Special Representative Richard C. Holbrooke heard that Pakistan would be better able to combat terrorism and militancy in its north-western frontier regions with “a calm” eastern front, and the need for resolving the Kashmir issue for peace in the region.
Without explicitly pushing for an expansion of his mandate to include India, Pakistan’s civilian leaders told the special envoy that “a regional” approach was required to deal with the issues of terrorism, militancy and extremism.
They stressed that American missile strikes and other incursions inside Pakistani territory were “counterproductive,” and urged the U.S. to hurry instead with proposed legislation for more non-military financial aid to Pakistan to spur economic development in the country, particularly its tribal regions. They also called for dialogue with “reconcilable elements” of the Taliban for peace in Afghanistan.
Contrary to expectation that the Mumbai attacks would figure in the discussions, Foreign Minister Shah Mahmood Qureshi said “interestingly enough, in our interaction, [the] Mumbai [attacks] did not surface.”
The Minister virtually ruled out any move by Pakistan for the inclusion of India or Kashmir in Mr. Holbrooke’s mandate but said he had flagged the importance of good relations with India.
“Let us be very clear. His mandate is Pakistan, Afghanistan. Period,” Mr. Qureshi said in response to questions at a press conference after his meeting with the U.S. official.
“But having said that, I did point out that if Pakistan has to focus on its western front, a calm eastern front is in everybody’s advantage.” He thanked the U.S. for playing a “positive role in defusing tensions” with India after the Mumbai attacks.
Calls for early resolution
Prime Minister Yousuf Raza Gilani, who also met Mr. Holbrooke, urged that the Kashmir issue had “bedevilled” India-Pakistan relations for over six decades and called for an “early resolution of the dispute” to ensure lasting peace and stability in the region.
Mr. Holbrooke, who said as he arrived on Monday that he had come to “listen and learn the ground realities” in Pakistan, also met President Asif Ali Zardari as well as Army chief General Ashfaq Parvez Kayani.
According to official statements on the meetings, President Zardari emphasised the need for a “cohesive and integrated regional approach” to defeating extremism and terrorism.
Similarly, Mr. Gilani is said to have told Mr. Holbrooke that Pakistan would “like to engage with the U.S. to build a new global strategic consensus for peace, security and stability in the region.”
U.S. concerned about Chinese blogger
WASHINGTON — Days before U.S. Secretary of State Hillary Clinton heads to Asia on her first international trip, the State Department Tuesday voiced concern about an imprisoned Chinese blogger whose trial has been indefinitely delayed.
U.S. Secretary of State Hillary Clinton will raise concerns about China’s human rights record on her visit to China.
“We are disturbed that prominent Chinese human rights activist Huang Qi remains in detention,” acting deputy spokesman Gordon Duguid told CNN. “We call on the Chinese government to release Mr. Huang as soon as possible.”
Huang was detained last June after working working to help the families of children killed in the May 12, 2008, Sichuan earthquake because of the collapse of shoddily constructed school buildings, Duguid said. He was charged with illegal possession of state secrets after posting the appeals and complaints of the families online.
Huang’s trial was scheduled for February 3 but was indefinitely postponed a day before it was supposed to start.
Duguid says the United States has raised its concerns about the case several times with Chinese officials in Washington and Beijing and have requested permission to send an official to attend his trial.
In addition to releasing Huang, Duguid called on China to “ensure that all legal and administrative proceedings against him are conducted in a manner that is both transparent and consistent with Chinese law and international human rights norms.
Don’t Miss
“Mr. Huang has consistently worked within China’s legal system to protect the rights of his fellow citizens,” Duguid said. “We believe these types of activities support China’s efforts to institute the rule of law.
The U.S. concern about Huang come in advance of Clinton’s visit to China next week, when acting spokesman Robert Wood said she will raise long-standing concerns about China’s poor human rights record.
“On this trip, human rights is going to be an important issue,” Wood said, but declined to give details about any specific cases Clinton would raise with Chinese officials.
The Obama administration is already facing criticism for not making good on its pledge to make human rights a priority, refusing to participate in a United Nations review of the human rights records of several major countries.
The U.N. Human Rights Council is reviewing the records of 16 countries with shoddy human rights records, including China and Indonesia — two countries Clinton will visit on her swing through Asia.
The State Department said Tuesday that U.S. officials are sitting in on the Geneva meetings and taking notes but are not taking part in the discussions, which has prompted criticism from Congress and human rights groups.
“I was shocked and disappointed to learn that for the last week, the U.S. delegation has been silent,” said Rep. Frank Wolf, R-Virginia, a leading advocate of human rights in Congress.
Wolf said the United States “is off to the wrong start on making human rights a priority,” adding he planned to write to Clinton to take a strong stand on the matter when she visits Beijing.
Wood promised that human rights remained a top priority but said that the administration was reviewing its stance toward the human rights council, which was criticized by the Bush administration as coddling countries which abused human rights while focusing on criticizing Israel.
Iran Offers ‘Dialogue With Respect’ With U.S.
TEHRAN — After the icy mutual hostility of the Bush era, President Mahmoud Ahmadinejad of Iran on Tuesday made a conditional offer of dialogue to the Obama administration, saying Tehran was ready for “talks based on mutual respect and in a fair atmosphere.”
Mr. Ahmadinejad spoke at a rally on Tuesday in Tehran marking the 30th anniversary of the Islamic revolution in 1979.
But he coupled the offer with an attack on former President Bush, calling for him to be “tried and punished” for his policies and actions in the Middle East and the Persian Gulf region.
Mr. Ahmadinejad’s remarks came in a televised address to a rally marking the 30th anniversary of the Islamic revolution in 1979 which deposed Shah Mohammed Reza Pahlavi, ended the close relationship between Washington and Tehran, and replaced it with decades of confrontation that culminated in former President Bush’s description of Iran as part of an “axis of evil.”
Since the inauguration of President Obama last month, however, Washington has sounded a more conciliatory tone, despite profound differences over Iran’s nuclear program and its support for political groups in the Middle East that the United States considers to be terrorists.
“The new U.S. administration has said that it wants change and it wants to hold talks with Iran,” President Ahmadinejad said.
“It is clear that change should be fundamental, not tactical, and our people welcome real changes,” he said. “Our nation is ready to hold talks based on mutual respect and in a fair atmosphere.”
Mr. Ahmadinejad went on to say that Iran could cooperate with the United States to uproot terrorism in the region. “The Iranian nation is the biggest victim of terrorism,” he said.
But he referred to former President Bush as one of reasons for insecurity in the region and said, “Bush and his allies should be tried and punished.”
“If you really want to uproot terrorism, let’s cooperate to find the initiators of the recent wars in the Middle East and the Persian Gulf region, try them and punish them,” he said.
His comments follow a series of overtures from Washington and seemed to move away from an earlier call by Mr. Ahmadinejad for the United States to apologize for actions in the relationship with Iran dating back 60 years.
Shortly after his inauguration, Mr. Obama told the Arabic-language television station Al Arabiya that “if countries like Iran are willing to unclench their fist, they will find an extended hand from us.”
Referring to Iran on Monday, Mr. Obama said at a news conference that he was “looking at areas where we can have constructive dialogue, where we can directly engage with them.”
“My expectation,” he said, “is that in the coming months we will be looking for openings that can be created where we can start sitting across the table face to face.”
Last weekend, Vice President Joseph R. Biden Jr. indicated at a security conference in Munich, Germany, that the United States would take a nuanced approach toward Iran. He suggested that the administration was willing to be more conciliatory than Mr. Bush had been, but also to continue his tough policies if necessary.
“We are willing to talk to Iran,” Mr. Biden said, but quickly tacked back to a refrain common during the last years of the Bush presidency, offering Iran’s leader a choice: “Continue down your current course and there will be pressure and isolation; abandon the illicit nuclear program and your support for terrorism, and there will be meaningful incentives.”
Many western nations, including the United States, reject Iran’s insistence that its nuclear program is designed solely for generating energy, suspecting that it is no more than a screen for a nuclear weapons program what would upset the regional power balance and potentially threaten Israel.
Washington also objects to Iran’s close ties to militant Islamic groups such as Hezbollah in Lebanon and Hamas in Gaza.
Mr. Ahmadinejad’s choice of the 30th anniversary of the Islamic revolution seemed particularly significant. The United States had been a close supporter of the shah, but after his fall, radical students stormed the American Embassy in Tehran and held 52 Americans hostage for 444 days. Washington broke off diplomatic relations with Tehran in 1980.
Mr. Ahmadinejad’s comments came two days after a former Iranian president, Mohammad Khatami — a reformist politician who advocated more détente with the West — announced that he would challenge Mr. Ahmadinejad in presidential elections next June.
Mr. Khatami, who won an overwhelming victory in 1999 and was president until 2005, was elected on promises to grant greater political and social freedom and improve foreign relations.
Mr. Ahmadinejad’s presidency, by contrast, has been marked by economic mismanagement, surging inflation and international isolation.
U.S. stock futures lower ahead of bank rescue plan
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U.S. stocks were range bound Monday with eyes trained on developments in Washington. The Dow industrials fell 9 points, the Nasdaq Composite was barely moved and the S&P 500 rose a point.
Obama presses case for stimulus
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WASHINGTON (Reuters) – U.S. President Barack Obama took his case for an $800 billion (538 billion pounds)-plus stimulus package directly to the American public, but investors worried about whether a separate bank bailout plan would be enough to stem the global financial crisis.
Fearing deepening banking problems, currency markets wobbled on a report in Japan’s Nikkei business daily that Russia will request negotiations with European and other foreign banks to postpone repayment on up to $400 billion of private sector debt.
The euro fell over 1 percent, but trimmed losses after the head of Russia’s regional banks association, Anatoly Aksakov, said the report — which had quoted him — was untrue.
U.S. Treasury Secretary Timothy Geithner was due to unveil a plan to rescue stricken banks later on Tuesday, while the stimulus bill was expected to be passed by the Senate but could still faces days of wrangling before its final approval.
At a televised prime-time news conference on Monday, Obama urged Congress to approve the bill without delay before the recession worsened.
“With the private sector so weakened by this recession, the federal government is the only entity left with the resources to jolt our economy back to life,” Obama said.
“This is not your ordinary, run-of-the-mill recession. We are going through the worst economic crisis since the Great Depression.”
Dallas Federal Reserve President Bank Richard Fisher said he does not expect the U.S. economy to grow in 2009, and that “a lot hangs” on the impact of the stimulus package
The global downturn began with a U.S. housing market slump that triggered a crisis in debt-derivatives markets and wiped out nearly $14 trillion in global stock market value last year as banks ran into trouble, requiring government bailouts.
The financial crisis has in turn triggered recessions in all of the big industrialised economies, sharp slowdowns elsewhere and put millions of jobs on the line.
BAILOUT PLAN
Geithner was set to present his bank rescue plan at 11 a.m. (4 p.m. British time), outlining how the administration will revamp the bailout programme his predecessor, Hank Paulson, persuaded Congress to approve last year.
Three sources briefed on the plan told Reuters it included a public-private partnership to take up to $500 billion of bad assets off financial institutions’ balance sheets, but not a standalone government “bad bank.”
Asian share indexes and U.S. stock futures fell due to uncertainty about the details of the plan.
“It’s starting to seem as if the economic stimulus plan will be approved one way or another, but the bank bailout is really important, and this uncertainty is growing,” said Takashi Ushio, head of the investment strategy division at Marusan Securities.
“What sort of partnership? Will the $500 billion be enough? There’s a lot of unknowns that make it hard to trade at this point, though at the very least it does seem as if the government may abandon the idea of handling the ‘bad bank’ on its own.”
The U.S. stimulus bill — a mix of tax cuts and public spending measures — passed a key procedural hurdle in the U.S. Senate on Monday, paving the way for the chamber to pass the bill on Tuesday.
The Senate version must be reconciled with one the House of Representatives has passed, which may require several days of negotiations. Obama wants a final version by this weekend.
RUSSIAN DEBT
The Nikkei said a proposal for postponing private sector debts had been submitted to the Russian government and some foreign banks had already agreed to negotiations.
But Aksakov said the report was inaccurate, adding that an idea for a unified restructuring plan for Russian corporate debt was discussed at bankers’ meeting last week but no proposals had been put to the government.
A Russia government spokesman later said it was not considering a corporate debt restructuring plan and was not in talks with foreign banks on such a move.
The Nikkei report follows a cut in Russia’s sovereign debt rating last week that underscored worries a downturn in Eastern Europe could add another drag on the euro zone.
Western European banks have lent heavily to Russia and other Eastern European countries.
Highlighting how the downturn has spread from the rich world to export-driven emerging markets, South Korea’s new finance minister said its economy would contract this year for the first time since the 1997-98 Asian financial crisis.
Yoon Jeung-hyun said Asia’s fourth largest economy would likely shrink by 2 percent due to falling domestic demand and exports, a dramatic revision after the government had previously said it aimed to achieve 3 percent growth.
In China, consumer price inflation slowed to 1 percent in January from 1.2 percent in December, the ninth consecutive monthly drop in consumer inflation, giving the central bank plenty of room to cut interest rates further to support the economy and stave off the threat of deflation.
In Britain, which the IMF expects to be the worst-hit of the big developed economies by the recession, retail sales rose in January for the first time since last May, but the increase was driven by food sales and heavy price cutting.
In the gloomiest prediction yet by a senior minister, Schools Secretary Ed Ball, a close ally of Prime Minister Gordon Brown, said the country faced the worst recession in more than 100 years.
“This is a financial crisis more extreme and more serious than that of the 1930s,” he said. “The economy is going to define our politics … in Britain in the next five years, the next 10 years and even the next 15 years.”
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