December 2011

AUD/USD Classical Technical Report 12.19

December 19, 2011

AUD/USD: Any rallies are classified as corrective and we continue to see this market in the process of carving out a major top ahead of the next downside extension back below the critical lows …

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USD/CHF Classical Technical Report 12.19

December 19, 2011

USD/CHF: The pair looks like it is in the process of carving a major base ahead of some significant upside over the coming weeks and months. The latest rally seems to be gaining momentum, and we …

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USD/CHF Classical Technical Report 12.19

December 19, 2011

USD/CHF: The pair looks like it is in the process of carving a major base ahead of some significant upside over the coming weeks and months. The latest rally seems to be gaining momentum, and we …

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GBP/USD Classical Technical Report 12.19

December 19, 2011

GBP/USD:Rallies have been very well capped ahead of 1.5800 and it looks as though a lower top has now been carved out by 1.5780 ahead of the next major downside extension back towards the October …

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China’s dam frenzy- By Brahma Chellaney

December 19, 2011

(MENAFN – Jordan Times) China’s frenzied dam-building hit a wall recently in Burma (Myanmar), where the government’s bold decision to halt a controversial Chinese-led dam project helped to ease the …

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Canada’s Eldorado Gold to acquire European Goldfields in USD2.4b deal

December 19, 2011

(MENAFN) Canada’s Eldorado Gold Corp. said that it would acquire European Goldfields Ltd. in a USD2.4 billion deal, reported Associated Press. The gold and iron producer, which operates in China, …

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Jedi knights top 15,000 in Czech census

December 19, 2011

(MENAFN – Jordan Times) More than 15,000 Czechs follow the faith of the Star Wars movies’ Jedi knights, official census data showed Thursday, while half of the country’s 10.5 million people …

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How watching football was nearly the death of a fan

December 19, 2011

(MENAFN – Jordan Times) Watching your favourite football team trying to hang on to a precarious lead in the dying minutes of a match is enough to frazzle anyone’s nerves, but for one Manchester …

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‘Whatever’ deemed most annoying word – poll

December 19, 2011

(MENAFN – Jordan Times) Do you want to kill a conversation? Try saying “whatever”. Words like “you know” and “like” might be irritating to hear, but for the third year in a row, it’s “whatever” that …

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Dutch pot sales to foreigners go up in smoke

December 19, 2011

(MENAFN – Jordan Times) The reputation of the Netherlands as the go-to country for a legal joint will begin to vanish like a puff of smoke next year as sales to foreigners of cannabis and hashish in …

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Chinese fugitive caught after 15 years on the run

December 19, 2011

(MENAFN – Jordan Times) A man who tunnelled his way out of a Chinese prison cell nearly 15 years ago has been caught by police, state media said on Thursday. Li Junlin was awaiting trial in 1997 …

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Six-pack hunks are more than Singapore can bare

December 19, 2011

(MENAFN – Jordan Times) Shirtless men clad in red sweatpants have been lining up for days in Singapore’s prime shopping district, part of an advertising gimmick revealing not just muscle but also a …

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Greek man claims for 19 kids – none real, police say

December 19, 2011

(MENAFN – Jordan Times) A former Greek policeman who invented 19 fictional offspring to claim benefits for what would have been the largest family in Greece has been arrested for benefit fraud, …

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UK’s government plans to restructure banks

December 19, 2011

(MENAFN) British Business Secretary, Vince Cable, said that the government would support a plan to restructure the county’s banks in order to make sure that Britain’s economy is safe, reported …

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White House To Republicans: ‘Get The Job Done’

December 19, 2011

With some Republican opposition toward a short-term payroll tax cut extension out in the open, the White House responded on Sunday with its own intentions. In a rare Saturday session, the Senate easily passed a measure that extends the popular middle-class cut. The deal was expected to pass in the House on Monday — until sources said that Republicans are threatening to squelch the two-month resolution. White House Communications Director Dan Pfeiffer released a statement Sunday evening, prodding the GOP to refrain from resorting to politics on this issue. The bipartisan compromise passed in the Senate yesterday received 89 votes, including 39 Republican votes, and Speaker Boehner himself just yesterday called it a “good deal” and a “victory.” The near 90 percent approval by the Senate reflected the view by the overwhelming number of Senate Republicans — as well as Democrats — that the best way to achieve the President’s goal of ensuring that taxes were not increased on 160 million Americans as we enter the New Year was to support this bipartisan compromise. If House Republicans refuse to pass this bipartisan bill to extend the payroll tax cut, there will be a significant tax increase on 160 million hardworking Americans in 13 days that would damage the economy and job growth. After months of opposition, we are glad that Republicans were finally showing a willingness to not raise taxes on middle class families. As the President said yesterday, it is inexcusable to do anything less than extend this tax cut for the entire year, and Congress must work on a one year deal. But they should pass the two month extension now to avoid a devastating tax hike from hitting the middle class in just 13 days. It’s time House Republicans stop playing politics and get the job done for the American people. Earlier in the day, House Speaker John Boehner (R-Ohio) confirmed that House Republicans oppose the deal passed by the Senate. Boehner appeared on NBC’s “Meet The Press,” making it clear that his GOP cohorts are against any type of short-term solution. “I believe that two months is just kicking the can down the road,” Boehner said. “It’s time to just stop, do our work, resolve the differences and extend this for one year.” The two-percent payroll tax break has been reaped by some 160 million Americans over the last year. Within Saturday’s Senate measure, President Barack Obama and Democrats were willing to concede on the contentious Keystone XL pipeline — agreeing to language requiring the administration to make a decision within 60 days.

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Esther Loewy: Show N’ Tell: Innovating the 30 Second Elevator Pitch

December 18, 2011

What’s so challenging about that elevator pitch? Have it down pat? Well has it impressed an investor? What if English is not your native tongue? Ah, well that’s where our story begins. Getting to the 30th Floor: What’s the driving force behind an effective elevator pitch? The old adage that one never has a second chance to make a first impression is ever so true when approaching an investor. Of course, no matter how compelling, no one will invest a seed or A round of capital based on just the 30 second elevator pitch. However thinking from day one about positioning, allows an entrepreneur to begin developing skills on what it takes to spark interest from a potential investor or strategic partner. The purpose of the 30 second elevator pitch is getting exciting and capturing the interest of a potential investor so s/he sticks with you ’till the 30th floor’ — to be sufficiently curious to request a presentation or meeting. Should sensationalism guide you on that elevator ride? No but a little daring, enthusiasm and a bold statement can only separate you from the crowd of other entrepreneurs vying for investors’ attention. One size does not fit all. Entrepreneurs often err by assuming investors are the same. Big mistake. Each investor has a unique focal point; a particular area of interest. Pitching a late-stage communications investor on your early-stage social media business will find you as much cash as there is water in the Sahara desert. Before the first pitch, an entrepreneur must understand the characteristics of the ideal investor — and seek them out. These characteristics include level, area, and stage of investments, level of involvement, relationships and networks — all in addition to the required capital. Made in the USA — not necessarily. We’ve seen that investors in Germany, the UK, Russia and yes even the US -especially in the past year — have moved from local to global in seeking the next blockbuster technology. We’ve seen investors attracted to Israel’s track record as the “Start-Up Nation as well as to Turkey’s mystique and skill at bootstrapping their start-ups. All are seeking tomorrow’s winner. Innovation and opportunity is a global game -there’s a whole world yet to be yet uncovered outside traditional geographies. Entrepreneurs in Silicon Valley or New York have learned the ABC’s of pitching almost from grade school. As a European investor once described to an audience of entrepreneurs in Kiev, the skills we learn from first grade onward by presenting Show N Tell to our classmates primes Americans to begin perfecting their pitch early on. Do entrepreneurs across the Atlantic thereby have a disadvantage in appealing to investors from the US or Europe? Do they need a better widget, better tech team, more patents to ‘overcome’ this alleged deficiency? I would argue no. Rather the art -which comes so naturally to Americans – can be taught, practiced and finessed. Passion, intelligence, experience and know-how will work together to bring that 30 second initial elevator pitch to a near pitch perfect. In fact the home court advantage I would posit, lies with non-Americans. We’ve seen Israeli, Turks, Russians, Bulgarian entrepreneurs, work harder than their American or native English speaking counterparts to demonstrate why their product or service merits global attention. That focus, discipline, persistence has paid off with an intensity that often impresses investors seeking the next great technological breakthrough — beyond American start-ups. In the hundreds of companies we identify, screen, filter and work with at BootCamp Ventures, we continue to see that each non-Western nationality brings more than the sum of its parts to the game when championing his (unfortunately too few women) venture to global investors. Israelis bring an unbeatable spirit, daring, determination. Turks — a humbleness that prompts them to work that much harder-bootstrapping their way to profitability. Yet there is a learning curve — often entrepreneurs from these countries focus on their exceptional technology without spending sufficient time-marketing the company; or underestimate how critical the go-to-market strategy is. They sometimes need time to buy into the concept that there can never be enough preparation before approaching investors. 5 Ways to Perfect that Pitch (applicable to Americans, Israelis, Turks, all Western and Eastern Cultures: 1. Be energetic — the first impression should convey the passion and excitement you have for your venture. If you’re not excited, why should your listener be interested? 2. Capture attention with large numbers you can substantiate. “10 billion market which our widget will capture 10%. But don’t offer hubris or lies 3. Begin by describing a problem people can relate to; then how your product/service will creatively address this concern 4. Dare to question: Begin with a question to engage the investor — get them involved from the get go so they are keen to follow your train of thought 5. Don’t ramble. Short, succinct, pithy sentences always trumps long-winded explanations and demonstrates clarity and focus

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David Isenberg: Pedagogic Military Contractors: Blackwater, the Academy and the "ιδιωτικές στρατιωτικές ανάδοχος"

December 18, 2011

The famous American writer F. Scott Fitzgerald once said, “There are no second acts in American lives.” He was, of course, wrong. America is the land of second chances and second acts, from Pilgrims fleeing religious oppression in England to set up Plymouth colony in Massachusetts and brunettes going to their hair stylist to emerge as blondes, to blowhards like Donald Trump who manages to convince some people that he is worth taking seriously, as well as Newt Gingrich, who manages to make some people think he is qualified to be president, to name just a few examples In fact, in America, people and groups are not just limited to second acts. They can have third acts. That, of course, brings us to the never ending rhetorical journey of the private security company once known as Blackwater. Sometimes one has to pity Blackwater; when it comes to public image it resembles the legend of the Flying Dutchman; the ghost ship that can never make port, doomed to sail the oceans forever. Those who prefer more literary allusions can read Samuel Taylor Coleridge’s The Rime of the Ancient Mariner . In Blackwater’s case, the name may change but it seems doomed to be remembered by what happened to its contractors in Fallujah in 2004 and what its contractors did in Baghdad in 2007. Still, no harm in trying to change. As they say, if at first you don’t succeed, try, try again. And that is what Blackwater previously did. In February 2009, Blackwater announced that it would be changing its name to “Xe Services LLC.” Xe was short for Xenon, a chemical element with the symbol Xe and atomic number 54. Personally I thought naming yourself after a colorless, heavy, odorless noble gas, which only occurs in the Earth’s atmosphere in trace amounts and is generally unreactive, was a smart idea. In its primary form it consists of nine stable isotopes which don’t bother anyone. Fortunately the press never picked up on the fact that there are also over 40 unstable xenon isotopes that undergo radioactive decay. That, however, was not all bad. For example, radioactive xenon-135 is produced from iodine-135 as a result of nuclear fission, and it acts as the most significant neutron absorber in nuclear reactors. A smart PR person could have pointed out that the company, like its isotopic counterpart, prevents things from going critical. But I digress. For whatever reason, Xe, which has brought in new management in the past few years, decided it was time for a name upgrade. So, on December 12, Ted Wright, Xe’s president and chief executive, announced a new name, Academi. Mr. Wright said Academi will try to be more “boring.” The new corporate identity is supposed to emphasize the company’s focus on regulatory compliance and contract management, in addition to its job of protecting clients. All well and good, at first glance. I mean, it conjures up images of a bunch of academics discussing in measured, sober tones the pros and cons of private military and security contracting. Perhaps PMC will stand for Pedagogic Military Contractors. After all, the “academy” has an ancient and honorable lineage. The Academy was founded by Plato in 387 BC in Athens. Aristotle studied there for twenty years before founding his own school, the Lyceum. One can picture Plato and his disciples rationally debating the strengths and weakness of private military companies, or ” ιδιωτικές στρατιωτικές ανάδοχος ” as the Greeks called them. Perhaps there was a representative of the ” διεθνούς σταθερότητας εργασίες σύνδεσης ” the spiritual ancestor of today’s International Stability Operations Association, there to tout the benefit of outsourcing and privatization. Doubtlessly there were people there arguing that it was cheaper for the Greek polis (city-state) to contract with mercenaries instead of hiring a standing force. After all, it seemed to work fairly well for Philip II of Macedon. And without Philip we never would have Alexander the Great. But, on second thought, there are some problems with using Academy as your brand. If you’ve ever dealt with someone who has a PhD you’ll know what I mean. It is not for nothing that people say academics fight the most vicious battles over the most trivial matters. It’s not exactly the reputation you want attached to people who carry guns for a living. Plus, another definition of PhD is: Piled Higher and Deeper; not exactly the image of the efficiently organized, quick acting operator you want preserving your life. Not to mention that most academics spend a good part of their career striving to achieve tenure, hence the “publish or perish” phenomenon. What does a PMC do: contract, by hook or by crook, or perish? Still, as what was Blackwater, then Xe, sails off into the sunset and Academi unfurls its sails, I wish it well. As they say, third time’s the charm.

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The ‘World’s Worst Ecological Oil Catastrophe’

December 18, 2011

USINSK, Russia (AP) — On the bright yellow tundra outside this oil town near the Arctic Circle, a pitch-black pool of crude stretches toward the horizon. The source: a decommissioned well whose rusty screws ooze with oil, viscous like jam. This is the face of Russia’s oil country, a sprawling, inhospitable zone that experts say represents the world’s worst ecological oil catastrophe. Environmentalists estimate at least 1 percent of Russia’s annual oil production, or 5 million tons, is spilled every year. That is equivalent to one Deepwater Horizon-scale leak about every two months. Crumbling infrastructure and a harsh climate combine to spell disaster in the world’s largest oil producer, responsible for 13 percent of global output. Oil, stubbornly seeping through rusty pipelines and old wells, contaminates soil, kills all plants that grow on it and destroys habitats for mammals and birds. Half a million tons every year get into rivers that flow into the Arctic Ocean, the government says, upsetting the delicate environmental balance in those waters. It’s part of a legacy of environmental tragedy that has plagued Russia and the countries of its former Soviet empire for decades, from the nuclear horrors of Chernobyl in Ukraine to lethal chemical waste in the Russian city of Dzerzhinsk and paper mill pollution seeping into Siberia’s Lake Baikal, which holds one-fifth of the world’s supply of fresh water. Oil spills in Russia are less dramatic than disasters in the Gulf of Mexico or the North Sea, more the result of a drip-drip of leaked crude than a sudden explosion. But they’re more numerous than in any other oil-producing nation including insurgency-hit Nigeria, and combined they spill far more than anywhere else in the world, scientists say. “Oil and oil products get spilled literally every day,” said Dr. Grigory Barenboim, senior researcher at the Russian Academy of Sciences’ Institute of Water Problems. No hard figures on the scope of oil spills in Russia are available, but Greenpeace estimates that at least 5 million tons leak every year in a country producing about 500 million tons a year. Dr. Irina Ivshina, of the government-financed Institute of the Environment and Genetics of Microorganisms, supports the 5 million ton estimate, as does the World Wildlife Fund. The figure is derived from two sources: Russian state-funded research that shows 10-15 percent of Russian oil leakage enters rivers; and a 2010 report commissioned by the Natural Resources Ministry that shows nearly 500,000 tons slips into northern Russian rivers every year and flow into the Arctic. The estimate is considered conservative: The Russian Economic Development Ministry in a report last year estimated spills at up to 20 million tons per year. That astonishing number, for which the ministry offered no elaboration, appears to be based partly on the fact most small leaks in Russia go unreported. Under Russian law, leaks of less than 8 tons are classified only as “incidents” and carry no penalties. Russian oil spills also elude detection because most happen in the vast swaths of unpopulated tundra and conifer forestin the north, caused either by ruptured pipes or leakage from decommissioned wells. Weather conditions in most oil provinces are brutal, with temperatures routinely dropping below minus 40 degrees Celsius (minus 40 Fahrenheit) in winter. That makes pipelines brittle and prone to rupture unless they are regularly replaced and their condition monitored. Asked by The Associated Press to comment, the Natural Resources Ministry and the Energy Ministry said they have no data on oil spills and referred to the other ministry for further inquiries. Even counting only the 500,000 tons officially reported to be leaking into northern rivers every year, Russia is by far the worst oil polluter in the world. —Nigeria, which produces one-fifth as much oil as Russia, logged 110,000 tons spilled in 2009, much of that due to rebel attacks on pipelines. —The U.S., the world’s third-largest oil producer, logged 341 pipeline ruptures in 2010 — compared to Russia’s 18,000 — with 17,600 tons of oil leaking as a result, according to the U.S. Department of Transportation. Spills have averaged 14,900 tons a year between 2001 and 2010. —Canada, which produces oil in weather conditions as harsh as Russia’s, does not see anything near Russia’s scale of disaster. Eleven pipeline accidents were reported to Canada’s Transport Safety Board last year, while media reports of leaks, ranging from sizable spills to a tiny leak in a farmer’s backyard, come to a total of 7,700 tons a year. —In Norway, Russia’s northwestern oil neighbor, spills amounted to some 3,000 tons a year in the past few years, said Hanne Marie Oeren, head of the oil and gas section at Norway’s Climate and Pollution Agency. Now that Russian companies are moving to the Arctic to tap vast but hard-to-get oil and gas riches, scientists voice concerns that Russia’s outdated technologies and shoddy safety record make for a potential environmental calamity there. Gazpromneft, an oil subsidiary of the gas giant Gazprom, is preparing to drill for oil in the Arctic’s Pechora Sea, even as environmentalists complain that the drilling platform is outdated and the company is not ready to deal with potential accidents. Government scientists acknowledge that Russia does not currently have the required technology to develop Arctic fields but say it will be years before the country actually starts drilling. “We must start the work now, do the exploration and develop the technology so that we would be able to … start pumping oil from the Arctic in the middle of this century,” Alexei Kontorovich, chairman of the council on geology, oil and gas fields at the Russian Academy of Sciences, told a recent news conference. The same academy’s Barenboim said, however, that Russian technology is developing too slowly to make it a safe bet for Arctic exploration. “Over the past years, environmental risks have increased more sharply compared to how far our technologies, funds, equipment and skills to deal with them have advanced,” he said. In 1994, the republic of Komi, where Usinsk lies 60 kilometers (40 miles) south of the Arctic Circle, became the scene of Russia’s largest oil spill when an estimated 100,000 tons splashed from an aging pipeline. It killed plants and animals, and polluted up to 40 kilometers (25 miles) of two local rivers, killing thousands of fish. In villages most affected, respiratory diseases rose by some 28 percent in the year following the leak. Seen from a helicopter, the oil production area is dotted with pitch-black ponds. Fresh leaks are easy to find once you step into the tundra north of Usinsk. To spot a leak, find a dying tree. Fir trees with drooping gray, dry branches look as though scorched by a wildfire. They are growing insoil polluted by oil. Usinsk spokeswoman Tatyana Khimichuk said the city administration had no powers to influence oil company operations. “Everything that happens at the oil fields is Lukoil’s responsibility,” she said, referring to Russia’s second largest oil company, which owns a network of pipelines in the region. Komi’s environmental protection officials also blamed oil companies. The local prosecutor’s office said in a report this year that the main problem is “that companies that extract hydrocarbons focus on making profits rather than how to use the resources rationally.” Valery Bratenkov works as a foreman at oil fields outside Usinsk. After hours, he is with a local environmental group. Bratenkov used to point out to his Lukoil bosses that oil spills routinely happen under their noses and asked them to repair the pipelines. “They were offended and said that costs too much money,” he said. Activists like Bratenkov find it hard if not impossible to hold authorities to account in the area since some 90 percent of the local population comprises oil workers and their families who have moved from other regions of Russia, and depend on the industry for their livelihood. Representatives of Lukoil denied claims that they try to conceal spills and leaks, and said that no more than 2.7 tons leaked last year from its production areas in Komi. Ivan Blokov, campaign director at Greenpeace Russia, who studies oil spills, said the situation in Komi is replicated across Russia’s oil-producing regions, which stretch from the Black Sea in the southwest to the Chinese border in Russia’s Far East. “It is happening everywhere,” Blokov said. “It’s typical of any oil field in Russia. The system is old and it is not being replaced in time by any oil company in the country.” What also worries scientists and environmentalists is that oil spills are not confined to abandoned or aging fields. Alarmingly, accidents happen at brand new pipelines, said Barenboim. At least 400 tons leaked from a new pipeline in two separate accidents in Russia’s Far East last year, according to media reports and oil companies. Transneft’s pipeline that brings Russian oil from Eastern Siberia to China was put into operation just months before the two spills happened. The oil industry in Komi has been sapping nature for decades, killing or forcing out reindeer and fish. Locals like the 63-year-old Bratenkov are afraid that when big oil leaves, there will be only poisoned terrain left in its wake. “Fishing, hunting — it’s all gone,” Bratenkov said. ___ Bjoern H. Amland contributed to this report from Oslo, Norway. ___ Nataliya Vasilyeva can be reached at http://twitter.com/natvasilyevaap Environmentalists estimate at least 1 percent of Russia’s annual oil production, or 5 million tons, is spilled every year. That is equivalent to one Deepwater Horizon-scale leak about every two months. Crumbling infrastructure and a harsh climate combine to spell disaster in the world’s largest oil producer, responsible for 13 percent of global output. Oil, stubbornly seeping through rusty pipelines and old wells, contaminates soil, kills all plants that grow on it and destroys habitats for mammals and birds. Half a million tons every year get into rivers that flow into the Arctic Ocean, the government says, upsetting the delicate environmental balance in those waters. It’s part of a legacy of environmental tragedy that has plagued Russia and the countries of its former Soviet empire for decades, from the nuclear horrors of Chernobyl in Ukraine to lethal chemical waste in the Russian city of Dzerzhinsk and paper mill pollution seeping into Siberia’s Lake Baikal, which holds one-fifth of the world’s supply of fresh water. Oil spills in Russia are less dramatic than disasters in the Gulf of Mexico or the North Sea, more the result of a drip-drip of leaked crude than a sudden explosion. But they’re more numerous than in any other oil-producing nation including insurgency-hit Nigeria, and combined they spill far more than anywhere else in the world, scientists say. “Oil and oil products get spilled literally every day,” said Dr. Grigory Barenboim, senior researcher at the Russian Academy of Sciences’ Institute of Water Problems. No hard figures on the scope of oil spills in Russia are available, but Greenpeace estimates that at least 5 million tons leak every year in a country producing about 500 million tons a year. Dr. Irina Ivshina, of the government-financed Institute of the Environment and Genetics of Microorganisms, supports the 5 million ton estimate, as does the World Wildlife Fund. The figure is derived from two sources: Russian state-funded research that shows 10-15 percent of Russian oil leakage enters rivers; and a 2010 report commissioned by the Natural Resources Ministry that shows nearly 500,000 tons slips into northern Russian rivers every year and flow into the Arctic. The estimate is considered conservative: The Russian Economic Development Ministry in a report last year estimated spills at up to 20 million tons per year. That astonishing number, for which the ministry offered no elaboration, appears to be based partly on the fact most small leaks in Russia go unreported. Under Russian law, leaks of less than 8 tons are classified only as “incidents” and carry no penalties. Russian oil spills also elude detection because most happen in the vast swaths of unpopulated tundra and conifer forestin the north, caused either by ruptured pipes or leakage from decommissioned wells. Weather conditions in most oil provinces are brutal, with temperatures routinely dropping below minus 40 degrees Celsius (minus 40 Fahrenheit) in winter. That makes pipelines brittle and prone to rupture unless they are regularly replaced and their condition monitored. Asked by The Associated Press to comment, the Natural Resources Ministry and the Energy Ministry said they have no data on oil spills and referred to the other ministry for further inquiries. Even counting only the 500,000 tons officially reported to be leaking into northern rivers every year, Russia is by far the worst oil polluter in the world. _Nigeria, which produces one-fifth as much oil as Russia, logged 110,000 tons spilled in 2009, much of that due to rebel attacks on pipelines. _The U.S., the world’s third-largest oil producer, logged 341 pipeline ruptures in 2010 – compared to Russia’s 18,000 – with 17,600 tons of oil leaking as a result, according to the U.S. Department of Transportation. Spills have averaged 14,900 tons a year between 2001 and 2010. _Canada, which produces oil in weather conditions as harsh as Russia’s, does not see anything near Russia’s scale of disaster. Eleven pipeline accidents were reported to Canada’s Transport Safety Board last year, while media reports of leaks, ranging from sizable spills to a tiny leak in a farmer’s backyard, come to a total of 7,700 tons a year. _In Norway, Russia’s northwestern oil neighbor, spills amounted to some 3,000 tons a year in the past few years, said Hanne Marie Oeren, head of the oil and gas section at Norway’s Climate and Pollution Agency. Now that Russian companies are moving to the Arctic to tap vast but hard-to-get oil and gas riches, scientists voice concerns that Russia’s outdated technologies and shoddy safety record make for a potential environmental calamity there. Gazpromneft, an oil subsidiary of the gas giant Gazprom, is preparing to drill for oil in the Arctic’s Pechora Sea, even as environmentalists complain that the drilling platform is outdated and the company is not ready to deal with potential accidents. Government scientists acknowledge that Russia does not currently have the required technology to develop Arctic fields but say it will be years before the country actually starts drilling. “We must start the work now, do the exploration and develop the technology so that we would be able to … start pumping oil from the Arctic in the middle of this century,” Alexei Kontorovich, chairman of the council on geology, oil and gas fields at the Russian Academy of Sciences, told a recent news conference. The same academy’s Barenboim said, however, that Russian technology is developing too slowly to make it a safe bet for Arctic exploration. “Over the past years, environmental risks have increased more sharply compared to how far our technologies, funds, equipment and skills to deal with them have advanced,” he said. In 1994, the republic of Komi, where Usinsk lies 60 kilometers (40 miles) south of the Arctic Circle, became the scene of Russia’s largest oil spill when an estimated 100,000 tons splashed from an aging pipeline. It killed plants and animals, and polluted up to 40 kilometers (25 miles) of two local rivers, killing thousands of fish. In villages most affected, respiratory diseases rose by some 28 percent in the year following the leak. Seen from a helicopter, the oil production area is dotted with pitch-black ponds. Fresh leaks are easy to find once you step into the tundra north of Usinsk. To spot a leak, find a dying tree. Fir trees with drooping gray, dry branches look as though scorched by a wildfire. They are growing insoil polluted by oil. Usinsk spokeswoman Tatyana Khimichuk said the city administration had no powers to influence oil company operations. “Everything that happens at the oil fields is Lukoil’s responsibility,” she said, referring to Russia’s second largest oil company, which owns a network of pipelines in the region. Komi’s environmental protection officials also blamed oil companies. The local prosecutor’s office said in a report this year that the main problem is “that companies that extract hydrocarbons focus on making profits rather than how to use the resources rationally.” Valery Bratenkov works as a foreman at oil fields outside Usinsk. After hours, he is with a local environmental group. Bratenkov used to point out to his Lukoil bosses that oil spills routinely happen under their noses and asked them to repair the pipelines. “They were offended and said that costs too much money,” he said. Activists like Bratenkov find it hard if not impossible to hold authorities to account in the area since some 90 percent of the local population comprises oil workers and their families who have moved from other regions of Russia, and depend on the industry for their livelihood. Representatives of Lukoil denied claims that they try to conceal spills and leaks, and said that no more than 2.7 tons leaked last year from its production areas in Komi. Ivan Blokov, campaign director at Greenpeace Russia, who studies oil spills, said the situation in Komi is replicated across Russia’s oil-producing regions, which stretch from the Black Sea in the southwest to the Chinese border in Russia’s Far East. “It is happening everywhere,” Blokov said. “It’s typical of any oil field in Russia. The system is old and it is not being replaced in time by any oil company in the country.” What also worries scientists and environmentalists is that oil spills are not confined to abandoned or aging fields. Alarmingly, accidents happen at brand new pipelines, said Barenboim. At least 400 tons leaked from a new pipeline in two separate accidents in Russia’s Far East last year, according to media reports and oil companies. Transneft’s pipeline that brings Russian oil from Eastern Siberia to China was put into operation just months before the two spills happened. The oil industry in Komi has been sapping nature for decades, killing or forcing out reindeer and fish. Locals like the 63-year-old Bratenkov are afraid that when big oil leaves, there will be only poisoned terrain left in its wake. “Fishing, hunting – it’s all gone,” Bratenkov said. ___ Bjoern H. Amland contributed to this report from Oslo, Norway. ___

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Cities That Have Fired Their Police Forces

December 18, 2011

On December 1, Youngtown, Ariz., joined the ranks of the many U.S. cities and towns that have fired their local police forces. In recent years, it has become somewhat of a trend across the country for municipalities to disband police departments, most often due to financial restrictions. 24/7 Wall St. has identified six cities and towns that have completely dissolved their local law enforcement groups.

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Ian Fletcher: Why Free-market Economics Is A Fraud

December 18, 2011

If there’s one thing everyone in America knows, it’s that free-market economics is true and free markets are best. After all, we’re not Communists, are we? They starved and lost the Cold War because they believed otherwise. And their watered-down European cousins, the socialists? More of the same, only less so. Even liberals get this nowadays. All hail the free market! Trouble is, things “everyone” knows are often wrong. And this is no exception. It’s time to start getting honest about a very simple fact: Nobody, but nobody, really believes in free markets. That’s right. Not the Republican Party, not the libertarians, not the Wall Street Journal , nobody. Here’s why: a truly free market is a perfectly competitive market. Which means that whatever you have to sell in that market, so does your competition. Which means price war. Which means your price gets driven down. Which means little or no profit for you. Oops! Naturally, businesses flee perfectly competitive markets like the plague. In fact, the fine art of doing so is a big part of what they teach in business schools. That’s why businesses use strategies like product differentiation, so their competition is no longer selling the exact same product they are. That’s why they use strategies like branding, so their buyers don’t think the products are the same. Businesses will, in fact, do almost anything to get out of the hell of pure head-to-head competition. They don’t do it because they’re crooked; they do it because they have an intrinsic economic incentive to. Always. This is part of the innate essence of capitalism. It is not a flaw or a defect. It is part of what makes the whole system go . It is part of what makes capitalism capitalism. People are the same way. Consider your own career. Why do you get paid more than the minimum wage? (I’m hoping you do.) Probably because you have some skill that everybody else doesn’t have. So you don’t have to bid against every unemployed person in your area to hold your job. Just a few of them. Which pushes your wage above the legal minimum. That skill of yours is what economists call a “barrier to entry” — entry into the market for your job, that is. And if you’re anything other than a damn fool, you’ll cherish it like your very life. I sure do. Now let’s consider the other side of the equation. We’ve looked at free markets in things you sell. Now let’s consider free markets in things you buy. Here everything gets turned around. If I’m buying something, I want the freest possible market in that product. I don’t, to take an example recently on my mind, want there to be only one market for live Christmas trees in my town. I want there to be two (or more), and right next to each other so I can easily comparison shop. And I want to shop for more-easily shippable goods on the Internet, if possible, where I can potentially find the lowest price in the entire world. I want, in other words, every seller’s nightmare. Which every smart seller will use every legal trick in the book to avoid. As a result, nobody with any wits about them really believes in free markets. People believe in them when it’s in their interest, but not when it’s the other way around. This is a systemic, structural condition, so anyone who tells you they believe in “free markets” is either lying, stupid, or hasn’t thought the whole concept through properly. The latter category is quite common. Many people do their thinking about political ideology in an entirely different — and dreamily disconnected — mental space than they use for managing real life. Frankly, everyone I’ve ever met gets the truth well enough in practice , in their own personal life or in how they run their business, so I just don’t believe anymore that anyone does believe in free markets. Like any rational person, I’m open to counter-examples if anyone can show me any. But I’ve been asking around for a while on this, and haven’t come up with much. This is not just an esoteric point, still less yet one more example of the familiar fact that people are hypocrites in politics. Here’s why it matters. The political players in America today who claim to support free markets don’t. They support free markets in the things their backers buy, but maximum barriers to entry in the things their backers sell. For example, one of the great unnoticed achievements of the Republicans (and their Democrat collaborators) from Reagan onward has been to gut U.S. antitrust law. Having a monopoly, or a cozy oligopoly with friendly rivals, is one of the best barriers to entry around. As recently documented in Barry Lynn’s fine book Cornered: The New Monopoly Capitalism and the Economics of Destruction , American industry is now concentrated as it hasn’t been since before the era of Teddy Roosevelt and his trustbusters. (There’s a different kind of Republican for you, by the way. These truths are not liberal or conservative.) Most Americans don’t realize this has happened because, unlike in the old days of Standard Oil, oligopolies today are cunning about masking their existence. To take just one example, America’s eyeglass frame industry is now dominated by the conglomerate Luxottica. That’s why frames are so expensive. And any company, like Oakley the sunglass maker, that tries to break into the market? They find themselves shut out of a Luxottica-controlled distribution system. And retailers are now afraid to receive distribution from anyone else, lest they be cut off. It’s a remarkably well-oiled scheme, and it has its parallels in many other industries. But the average consumer has no idea about this, because the range of brands , if not suppliers, in optical shops remains diverse. We’re fat, dumb and happy. We’ve been fooled. But behind the smiling mask of a hundred labels smirks a single monopolist. But aren’t there laws against this sort of thing? Well, there sure used to be, enforced by unsung lawyers and bureaucrats (horrors!) at the Justice and Commerce Departments. Whom nobody considered very glamorous, but who were doing the rest of us a big favor. Talk about forgotten wisdom! Consider some other examples: • Tyson in chicken • Smithfield in ham • Menu Foods in pet food • Frito-Lay in chips • InBev and MillerCoors in beer • PepsiCo, Coca-Cola, and Nestlé in bottled water • Dickinson in medical devices • Microsoft in operating systems • Iron ore (three companies) • Aluminum • Cement • Railroads • Banking The number of problems caused by letting monopoly power — whose key consequence is known as “pricing power” — is astonishing. For one thing, this is a huge part of what ails American farmers. Family farmers are caught between the agribusiness monopolies who push up the price of their inputs (feed, seed, fertilizer, etc.) and the agribusiness monopolies who push down the price of their outputs. (The economists’ term for the latter is “monop s ony,” with an “s” — but it works the same way as monopoly.) It’s the perfect racket. And it’s no surprise that on the other side of the equation, “free” market politicians are very diligent in imposing genuinely free markets where this suits the interests of the multinational “American” corporations that fatten their campaign coffers. This is done, of course, as a matter of high principle and sophisticated economic rationality. It’s remarkably easy to make wonderful after-dinner speeches about free markets. Let’s start with labor. Post-Nixon Republicans have genuinely supported just about every policy designed to weaken the pricing power of labor. This starts with weakening unions and letting the inflation-adjusted minimum wage fall, but it doesn’t end there. You think Ronald Reagan got in 1986, and George W. Bush wanted in 2007, amnesties for illegal immigrants because they were nice, compassionate people? To ask the question is to answer it. Whatever the ultimate merits of amnesty as policy, for them it was about cheap labor, plain and simple. The reality is that the past prosperity of America has never been based on pure free markets — starting with the fact that we had the highest average income in the world in 1776 because the colonies had structurally tight labor markets due to the open frontier. (Europeans and other Old World peoples were trapped by the iron law of wages because they had nowhere to go.) Free, or nearly free, markets do have their rightful place in many parts of the economy, and it would be foolish to sabotage them. But in other areas — above all, in labor markets — our prosperity was based on pricing power. A number of areas other than labor also worked better thanks to a healthy dose of pricing power. Try advanced technology, for a start. The patent system, which is not natural, is a fairly recent invention, and does not de facto exist even today in much of the world, is one. Innovation doesn’t come cheap, and without pricing power for innovators, few companies could afford it. Even the existence of scale economies, which are intrinsic to modern, large-scale, capital-intensive industry, implies markets that are less than free. Why? Because scale economies intrinsically imply a small number of large producers and thus give rise to oligopoly, with the consequences mentioned earlier. This is why most other industrialized nations aren’t romantics about free markets, are honest about their frequent nonexistence, and focus their policies on taming the negative effects of oligopoly while capturing the positive ones. They understand, for one thing, that big corporations are necessary but often pirates, and focus on making them share their loot with their crews. We, on the other hand, live in a state of denial about the piracy. So the next time someone tells you to believe in “free” markets, just tell them you’ll believe as soon as they do. When pigs fly.

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Dr. Doom Of The 1970s: Euro Crisis Could Prompt U.S. Credit Crunch

December 18, 2011

Euro-zone bank failures could lead to a credit squeeze in the United States, hurting an already subpar U.S. economic recovery, warned the well-known Wall Street economist Henry Kaufman. A deterioration in the European financial system “could cause some of the American financial institutions to become more conservative and limit their own balance sheet expansion, a credit squeeze that would place a limit on the American economy,” Kaufman said in an interview with Reuters. “A failure in the euro-zone area, a malfunctioning of the euro, would have negative repercussions for the U.S. not just in terms of a slowdown in U.S. exports to Europe, but also because of linkage between American financial institutions and European institutions,” said Kaufman, who is president of the economic and financial consulting firm bearing his name. Kaufman earned the sobriquet Dr. Doom in the 1970s – long before Nouriel Roubini acquired the title in recent years. Like Roubini, Kaufman was prescient in his warnings about excessive debt in the financial system. These days, with markets focused on Europe’s excessive debt, he says severe spending cuts in southern Europe could send those countries into a downward spiral with no prospect of recovery. “Debtor countries need to expand their economies and austerity measures diminish those countries’ ability to grow and service their debt,” Kaufman said. Before establishing his eponymous firm in 1988, Kaufman spent 26 years at Salomon Brothers Inc. His prediction on August 17, 1982, that interest rates would fall sparked a stock market rally that helped kick off the 1980s bull market. This year, the stock market has been held back by worries about Europe, where rising borrowing costs signify concerns that the debt contagion that has hit smaller nations will engulf large nations and large banks. The fear is exposure to European banks will hurt U.S. banks as well. Big banks in Europe have sold large amounts of insurance in the form of financial instruments known as credit-default swaps to protect against the risk of countries defaulting on their sovereign debt, That has increased the number of parties that could incur losses if such defaults occur. “We don’t know the full depth of these links,” Kaufman said in an interview with Reuters. That makes the European financial situation “hazardous” despite the ongoing effort by European policymakers to gain time, he said. An expert on how credit flows through the economy, financial system and financial markets, Kaufman, who received the Foreign Policy Association’s Statesman Award – presented by former Federal Reserve Chairman Paul Volcker earlier this month – said Europe will probably need “a major overhaul of its institutional arrangements” to escape its financial quagmire. A combination of strategies will probably be needed to solve the euro-zone problem, he said. One would be to gain time for debtors to re-establish their economic capacity. The head of Europe’s bailout fund said on Friday around 600 billion euros ($782.82 billion) were available to fight Europe’s debt crisis, more than Italy’s and Spain’s combined funding needs for 2012. Another strategy would be to reduce the debt of borrowers like Greece, Portugal or Italy, a reduction to which creditors would have to agree. “That would require some private-sector institutions to take losses and/or that the debt of these marginal borrowers be transferred directly or indirectly to some official European institution such as the European Central Bank,” he said. Banks are resisting pressure to help indebted euro-zone countries by using cheap money lent by the European Central Bank to buy more sovereign bonds. “Since none of these alternatives are easy, the conclusion must be that risks in Europe remain high,” Kaufman said. DEBT STANDS IN THE WAY OF RECOVERY One huge obstacle in the path of more normal U.S. growth is the amount of non-financial debt relative to U.S. gross domestic product, Kaufman said. On the eve of the 2008 financial crisis, non-financial debt exceeded U.S. gross domestic product by $19 trillion, while 20 years earlier, non-financial debt exceeded U.S. GDP by just $4 trillion, he observed. “There are no easy ways to close that gap … to return to a path of more sustainable U.S. economic growth,” he said. Households have been reducing their debt. Federal Reserve data showed household debt service levels fell in the third quarter, continuing a pullback from a peak reached in the third quarter of 2007. Still, “total household indebtedness is still quite high by historical standards,” Kaufman said. Without the large borrowings of the U.S. government, the recession would have been deeper and the business recovery, subnormal as it is, would have been delayed, Kaufman said. While the growth of U.S. government debt will have to slow in coming years, it is “quite unlikely” the U.S. government will adopt “appropriate fiscal policies” soon, he said. “Near-term pressures are not strong enough to impose discipline, U.S. interest rates are historically low, and buyers of our debt are still easy to find,” he said. (Reporting By Ellen Freilich; Editing by David Gaffen and Jan Paschal) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Analysis: Americans Shedding Debt, Becoming ‘Radically Different Consumers’

December 18, 2011

WASHINGTON (Reuters) – Americans are making progress in working down their heavy debt burden, but are struggling to break out of another funk holding back the economy: their deep pessimism. Some economists point to a big drop in household debt as a sign that American consumers – once considered the driving force of the world economy – are primed to return to more spendthrift ways. But standing in the way of a stronger recovery, and possibly President Barack Obama’s re-election as well, are unprecedented levels of concern that better days may not lie ahead. Research suggests that economic growth will suffer from a sinking feeling among consumers that their incomes will continue to lose ground to inflation. Even though households are digging themselves out of debt, the painful 2007-2009 recession could leave a lasting scar on their willingness to spend. “Given people’s expectations, the outlook going forward does not suggest much upside for consumption,” said Jeff Greenberg, an economist at Nomura in New York. “A lot of people will be radically different consumers.” Polls show record levels of pessimism about future income despite slow improvements in the economy. Indeed, Gallup surveys have found Americans are even gloomier about their finances now than they were during the recession’s darkest days. Americans should be feeling better. They have made big strides whittling down the mountain of debt left after the explosion of the housing bubble and the subsequent recession. Debt payments have already fallen to the smallest fraction of income since 1994. Households spent 11.09 percent of after-tax income servicing their debt in the third quarter. In 2007, that rate hit a record high 14 percent. Many borrowers have been helped by the Federal Reserve’s push to lower interest rates. Others are simply walking away from mortgages. PROTRACTED MALAISE Shaking the painful debt hangover is widely seen as crucial for getting the economy growing faster again. But it might not be enough. Derek Thompson, a salesman at a credit card company in Fort Lauderdale, Florida, recently refinanced his mortgage to lower his monthly payments. But given a sobering outlook for future income, he says he will use the extra money to pay off other debts rather than buy new stuff. Thompson needs to start paying off the $50,000 he borrowed to get a bachelor’s degree in criminal justice, and he plans to switch careers to get into law. At the same time, he fears he will take a pay cut due to a tough job market. “I want to wait until the financial situation straightens out a bit before I make any other changes,” he said. Thompson is far from alone in his unease over the economy. Americans’ median guess of how much their incomes would rise in the coming 12 months fell to 0.2 percent this month, the lowest in records going back to 1978, according to the Thomson Reuters/University of Michigan sentiment survey. That reading cratered in late 2008 after the collapse of U.S. investment bank Lehman Brothers. Views on wage gains never recovered, and now only 8 percent of Americans expect incomes to grow faster than inflation over the next year. Perhaps even more worrisome, views of future inflation-adjusted income have been moving lower since around 2003, a trend that was only exacerbated by the recent recession. That bodes poorly for growth. Research by JPMorgan economist Michael Feroli found inflation-adjusted income expectations might be the best single indicator for predicting future consumption. His crunching of real income expectations implicit in the University of Michigan survey found they correlated better with spending growth than changes in the stock market, wider measures of consumer sentiment or even the actual growth in people’s wages. This is scary not just because pessimism is so rampant, but because top policymakers like Obama and Fed Chairman Ben Bernanke have limited sway over the national mood. “People (need) to really believe that sustained strong growth is coming, which is like solving a problem by presuming its solution,” Feroli said. “It’s hard for the Fed to directly affect households’ psychology regarding their real income expectations.” Other recent research also points to the importance of expectations, suggesting that shifts in the collective mood may have been the driving force behind the ups and downs of the U.S. economy over the last six decades. Working together, economists from the University of British Columbia, City University of Hong Kong and the Dallas Federal Reserve Bank found positive turns in sentiment led to substantial pick-ups in investment and hours worked. The opposite held for a souring mood. It seems hard to imagine a quick turnaround in the current malaise. Feroli suggests that allowing a little extra inflation could prompt people to buy more homes and boost investment, perhaps leading to more growth and optimism. Others propose tax cuts or more government spending to get more money in people’s pockets. Both ideas face big hurdles, with lawmakers currently embracing austerity and central bankers at the Fed divided over how much inflation can be tolerated. Yet the national mood has shifted quickly before. In the early 1980s, after a tumultuous period marked by recession and high inflation, Americans suddenly began to believe in real wage gains as the Fed tamed prices and then-President Ronald Reagan cut taxes and boosted military spending. “It’s amazing how quickly it can turn around,” said Hersh Shefrin, an economist and professor of behavioral finance at California’s Santa Clara University. (Reporting By Jason Lange; Editing by Chizu Nomiyama; and Jan Paschal) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Time Running Out For S&P 500 To End Positively, As Euro Crisis Looms

December 18, 2011

NEW YORK (Reuters) – With two weeks left in the trading year, the euro zone debt crisis will remain the primary impediment to pushing the S&P 500 index into positive territory for 2011. Uncertainty over progress in the region, along with the potential for credit rating downgrades on euro zone countries, have kept investors on edge and market volatility high. Even with a fairly busy U.S. economic calendar, which includes a batch of data on the housing market, the final reading on gross domestic product and durable goods orders, markets will focus on developments from Europe. “What everybody is going to look at is the same thing they’ve been looking at — every time a German official opens their mouth we get crushed,” said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont. “I’m keeping my fingers crossed that Santa Claus is out there. But we’ve got to see something.” The benchmark S&P 500 index is down about 3 percent for the year and would need to climb above 1,257.64 in order to end higher for the year. A rally by stocks on Friday fizzled, and the market ended with only modest gains after the latest credit warning about possible downgrades of European nations. For the week, the Dow fell 2.7 percent, the S&P lost 2.9 percent and the Nasdaq was down 3.5 percent. Italy’s prime minister urged European policymakers on Friday to beware of dividing the continent in the effort to contain the debt crisis, warning against a “short-term hunger for rigor” in some countries, in a swipe at Germany. Stocks have been whipsawed as investors weigh the threat from the euro zone crisis against modest improvement in U.S. economic data and stocks that many regard as cheap. “There do appear to be some improving economic indicators domestically, but it’s hard to see how they win the day if Europe continues to be a big concern. It’s not like the valuations are at such bargain-basement prices that it becomes a one-way bet,” said Stephen Massocca, managing director at Wedbush Morgan in San Francisco. As volumes begin to dry up and market moves become more exaggerated during the holiday period, the volatility may help lift the stock market into the plus column. CHANCE OF RALLY “Can you see an upside rally? Certainly, because you are going to have some asset managers in the end who are going to try and just push it so the market ends at the very least flat on the year, if not higher,” said Ken Polcari, managing director at ICAP Equities in New York. “If there is going to be a rally at all, it will happen on light volume because there will be fewer and fewer participants. When there is less volume, you do have the ability to have those exaggerated moves, but people will take advantage of that.” Volatility in individual shares could also be affected by corporate earnings preannouncements. There have been 97 negative earnings preannouncements issued by S&P 500 corporations for the fourth quarter, compared to 26 positive preannouncements, resulting in a negative-to-positive ratio of 3.7. That’s the highest in 10 years, according to Thomson Reuters data. Companies that have provided outlooks in recent weeks include DuPont , Intel Corp , United Technologies Corp and Texas Instruments Inc . Unexpected management shakeups could also be on the horizon and increase the tumult in stocks. Both Cablevision Systems Corp and the New York Times Co saw high-level executives suddenly leave their posts. But stock movements next week will ultimately be dictated by actions taken in Europe, with the light volume exacerbating market swings. “The only thing that is going to be of any interest is certainly the continuing headlines on Europe, whether or not they come any closer to what looks like a potential agreement,” said Polcari. “You may get a little bit of a push to the 1,250 to 1,270 range, but much beyond that I don’t see why it would go any higher unless you get some explosive announcement out of Europe.” (Reporting By Chuck Mikolajczak; Editing by Kenneth Barry) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Loan Modification Process ‘Adding Uncertainty To The Market,’ Delaying Recovery

December 18, 2011

WASHINGTON (Reuters) – Shirley Burnell, a community activist from Oakland, California, has been trying to get her subprime loan restructured since 2007. She never missed a payment, but the adjustable rate mortgage she got in 2004 shot up to a monthly payment she could no longer afford. First she provided documents without getting any response, then she was denied in April by her servicer, Bank of America, for not providing documents it never actually asked for. As one part of the bank appealed that decision and approved her for a trial modification, another part denied her again – twice – providing two new reasons in part based on inaccurate calculations, according to documents reviewed by Reuters. When asked about Burnell’s case, a bank spokesman said she was unable to qualify under “imminent default provisions,” a third reason that Burnell said she had never been given. At one point, Burnell even received notice the bank would accelerate foreclosure proceedings, despite her perfect payment record and the letter itself saying the bank owed her $281.01. “They gave you a funky loan in the first place, and now they’re refusing to work with people to get it worked out,” Burnell said. “It just keeps you upset all the time.” Bank of America is “committed to keeping customers in their homes whenever the homeowner has the financial wherewithal to make reasonable payments and the desire to keep the home,” a spokesman for the bank said. Three years after the foreclosure crisis began, the process to apply for a loan modification remains a bureaucratic nightmare that is complicating the housing recovery and could dull the impact of any Obama administration initiatives in the works. The administration’s biggest foreclosure-prevention effort, the Home Affordable Modification Program (HAMP), targeted to help 3 million to 4 million homeowners, has reached only about a quarter of that since its 2009 inception. The program pushed mortgage servicers to cut interest, extend terms, or defer parts of a loan in an effort to reduce monthly payments and keep borrowers in their homes. But servicers have dragged their feet on providing wide-scale modifications. They continue to lose documents, use inaccurate numbers to issue denials, or both approve and deny applications at the same time, according to housing advocates. “It delays resolution of the problem of defaulting loans and it is adding uncertainty to the market,” said Susan Wachter, a housing expert at the Wharton School of the University of Pennsylvania. Around one in every 12 mortgages in the country is delinquent, and only a fraction of them have received modifications. “Somehow the borrower is unreachable, or the servicer hasn’t found the right way to reach the borrower, but the fact is, we see (modifications) piercing maybe 10 to 25 percent of the potential population,” said Diane Westerback, a managing director of global surveillance analytics at Standard & Poor’s. Banks have stepped up efforts to deal with the foreclosure crisis since 2009. Chase, for example, set up 82 centers around the country specifically to deal with struggling homeowners. Wells Fargo hosts one-day fairs for homeowners to bring in all of their paperwork and potentially get approved for a modification on the spot. Bank of America says it has completed almost 1 million modifications since 2008, and Wells Fargo says it initiated or completed more than two modifications for every one foreclosure of owner-occupied homes in the past two years. But the majority of homeowners, advocates say, still get stuck in byzantine mazes, with no real enforcement mechanism to pursue under HAMP. “If you get a minor traffic ticket, you get a right to an impartial hearing, but if you are applying for federal home saving assistance, the bank is judge, jury, and executioner,” said Joseph Sant, a lawyer at Staten Island Legal Services who helps defend homeowners facing foreclosure. ‘GOING IN CIRCLES’ It took nearly one year for Hakan Tale to convince his servicer, Chase, that it overvalued his house by more than $100,000 in rejecting a modification. Once he was able to convince Chase of that mistake, it rejected him again, dropping his monthly income by almost $4,000 and determining he didn’t make enough money to qualify, even though his actual income had not changed. In November, more than two years after Tale first sought a modification, Chase asked him to submit an entirely new application. “Maybe they don’t want me to be an example for other people,” said Tale, who lives with his wife and three children in Staten Island, New York. “Any excuse they find, they deny it.” “We have worked with the customer and reviewed his application multiple times, and have been involved in multiple mediation meetings,” a Chase spokesman said. Another Staten Island resident, 77-year-old Hamson McPherson, was first denied a modification two years ago by his servicer, Wells Fargo, after it miscalculated his income. The bank then served him with a foreclosure summons and complaint, which in New York can lead to court-supervised settlement conference. But it stalled on moving forward for so long that McPherson triggered the proceedings himself in August 2011 to try to negotiate an alternative to foreclosure. In October, more than two years after he first applied for a modification, the bank told him there was an investor restriction on the loan, which meant it couldn’t modify it. That investor agreement was public, Wells Fargo told him. But after confronting the bank with that agreement, which did not include any such restriction, the bank told him there was a previously undisclosed secret document that included the restriction. “It’s a nightmare,” McPherson said, “when you have these things, you don’t get proper sleep at all.” In an ironic twist, the hold music played when he called Wells Fargo once was a song called, “Going in Circles.” “I listened to it for five minutes and then hung up because I was so upset,” he said. A Wells Fargo spokesman said the bank has “worked for some time to find payment assistance within the investor guidelines of the loan.” “We continue to work with him to find alternatives to foreclosure,” the spokesman said. ‘NOT DOING THEIR JOB’ Even with staff additions — Chase, for example, added some 10,000 employees to deal with defaults, and Bank of America increased its 5,000 employees to 40,000 — individual negotiators can still have hundreds, or even thousands of cases open, according to housing advocates. Employees can be so overwhelmed that applications languish for months. Banks consider financial documents “stale” within two or three months, forcing homeowners to provide updated documents all over again. While housing counselors have seen some improvements in the past few years, many borrowers are still not even able to email applications in; they have to fax them in, thus creating no real paper trail. Carlos Cespedes, an advocate with the Neighborhood of Affordable Housing in Boston, said his files include 25 faxes of the same document, provided over and over to a servicer that said it never received it or lost it. One of his clients traveled to Central America to obtain her deported husband’s signature on a document renouncing his interest in the property, but had to send that same document six times to her servicer who kept losing it. “These are institutions that have taken a huge amount of bailout money. There should be a level of responsibility to communities,” said Josh Zinner, an advocate with the Neighborhood Economic Development Advocacy Project in New York. “HAMP is far from perfect, but the biggest problem is servicers not doing their job.” (Reporting by Aruna Viswanatha; Editing by Xavier Briand) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Loan Modification Process ‘Adding Uncertainty To The Market,’ Delaying Recovery

December 18, 2011

WASHINGTON (Reuters) – Shirley Burnell, a community activist from Oakland, California, has been trying to get her subprime loan restructured since 2007. She never missed a payment, but the adjustable rate mortgage she got in 2004 shot up to a monthly payment she could no longer afford. First she provided documents without getting any response, then she was denied in April by her servicer, Bank of America, for not providing documents it never actually asked for. As one part of the bank appealed that decision and approved her for a trial modification, another part denied her again – twice – providing two new reasons in part based on inaccurate calculations, according to documents reviewed by Reuters. When asked about Burnell’s case, a bank spokesman said she was unable to qualify under “imminent default provisions,” a third reason that Burnell said she had never been given. At one point, Burnell even received notice the bank would accelerate foreclosure proceedings, despite her perfect payment record and the letter itself saying the bank owed her $281.01. “They gave you a funky loan in the first place, and now they’re refusing to work with people to get it worked out,” Burnell said. “It just keeps you upset all the time.” Bank of America is “committed to keeping customers in their homes whenever the homeowner has the financial wherewithal to make reasonable payments and the desire to keep the home,” a spokesman for the bank said. Three years after the foreclosure crisis began, the process to apply for a loan modification remains a bureaucratic nightmare that is complicating the housing recovery and could dull the impact of any Obama administration initiatives in the works. The administration’s biggest foreclosure-prevention effort, the Home Affordable Modification Program (HAMP), targeted to help 3 million to 4 million homeowners, has reached only about a quarter of that since its 2009 inception. The program pushed mortgage servicers to cut interest, extend terms, or defer parts of a loan in an effort to reduce monthly payments and keep borrowers in their homes. But servicers have dragged their feet on providing wide-scale modifications. They continue to lose documents, use inaccurate numbers to issue denials, or both approve and deny applications at the same time, according to housing advocates. “It delays resolution of the problem of defaulting loans and it is adding uncertainty to the market,” said Susan Wachter, a housing expert at the Wharton School of the University of Pennsylvania. Around one in every 12 mortgages in the country is delinquent, and only a fraction of them have received modifications. “Somehow the borrower is unreachable, or the servicer hasn’t found the right way to reach the borrower, but the fact is, we see (modifications) piercing maybe 10 to 25 percent of the potential population,” said Diane Westerback, a managing director of global surveillance analytics at Standard & Poor’s. Banks have stepped up efforts to deal with the foreclosure crisis since 2009. Chase, for example, set up 82 centers around the country specifically to deal with struggling homeowners. Wells Fargo hosts one-day fairs for homeowners to bring in all of their paperwork and potentially get approved for a modification on the spot. Bank of America says it has completed almost 1 million modifications since 2008, and Wells Fargo says it initiated or completed more than two modifications for every one foreclosure of owner-occupied homes in the past two years. But the majority of homeowners, advocates say, still get stuck in byzantine mazes, with no real enforcement mechanism to pursue under HAMP. “If you get a minor traffic ticket, you get a right to an impartial hearing, but if you are applying for federal home saving assistance, the bank is judge, jury, and executioner,” said Joseph Sant, a lawyer at Staten Island Legal Services who helps defend homeowners facing foreclosure. ‘GOING IN CIRCLES’ It took nearly one year for Hakan Tale to convince his servicer, Chase, that it overvalued his house by more than $100,000 in rejecting a modification. Once he was able to convince Chase of that mistake, it rejected him again, dropping his monthly income by almost $4,000 and determining he didn’t make enough money to qualify, even though his actual income had not changed. In November, more than two years after Tale first sought a modification, Chase asked him to submit an entirely new application. “Maybe they don’t want me to be an example for other people,” said Tale, who lives with his wife and three children in Staten Island, New York. “Any excuse they find, they deny it.” “We have worked with the customer and reviewed his application multiple times, and have been involved in multiple mediation meetings,” a Chase spokesman said. Another Staten Island resident, 77-year-old Hamson McPherson, was first denied a modification two years ago by his servicer, Wells Fargo, after it miscalculated his income. The bank then served him with a foreclosure summons and complaint, which in New York can lead to court-supervised settlement conference. But it stalled on moving forward for so long that McPherson triggered the proceedings himself in August 2011 to try to negotiate an alternative to foreclosure. In October, more than two years after he first applied for a modification, the bank told him there was an investor restriction on the loan, which meant it couldn’t modify it. That investor agreement was public, Wells Fargo told him. But after confronting the bank with that agreement, which did not include any such restriction, the bank told him there was a previously undisclosed secret document that included the restriction. “It’s a nightmare,” McPherson said, “when you have these things, you don’t get proper sleep at all.” In an ironic twist, the hold music played when he called Wells Fargo once was a song called, “Going in Circles.” “I listened to it for five minutes and then hung up because I was so upset,” he said. A Wells Fargo spokesman said the bank has “worked for some time to find payment assistance within the investor guidelines of the loan.” “We continue to work with him to find alternatives to foreclosure,” the spokesman said. ‘NOT DOING THEIR JOB’ Even with staff additions — Chase, for example, added some 10,000 employees to deal with defaults, and Bank of America increased its 5,000 employees to 40,000 — individual negotiators can still have hundreds, or even thousands of cases open, according to housing advocates. Employees can be so overwhelmed that applications languish for months. Banks consider financial documents “stale” within two or three months, forcing homeowners to provide updated documents all over again. While housing counselors have seen some improvements in the past few years, many borrowers are still not even able to email applications in; they have to fax them in, thus creating no real paper trail. Carlos Cespedes, an advocate with the Neighborhood of Affordable Housing in Boston, said his files include 25 faxes of the same document, provided over and over to a servicer that said it never received it or lost it. One of his clients traveled to Central America to obtain her deported husband’s signature on a document renouncing his interest in the property, but had to send that same document six times to her servicer who kept losing it. “These are institutions that have taken a huge amount of bailout money. There should be a level of responsibility to communities,” said Josh Zinner, an advocate with the Neighborhood Economic Development Advocacy Project in New York. “HAMP is far from perfect, but the biggest problem is servicers not doing their job.” (Reporting by Aruna Viswanatha; Editing by Xavier Briand) Copyright 2011 Thomson Reuters. Click for Restrictions .

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U.S. Offers 11 Swiss Banks Deal To Avoid Criminal Prosecution On Tax Evasion

December 18, 2011

ZURICH (Reuters) – U.S. officials are offering 11 Swiss banks, among them Credit Suisse , a deal that allows them to avoid criminal prosecution in exchange for revealing full details of their U.S. offshore business to Washington, a paper reported on Sunday. Famed for the care with which it protects account holders’ anonymity, the Alpine state has been forced to act by a series of U.S. probes into alleged tax evasion by Americans concealing their assets in Swiss banks. In 2009, the Swiss parliament approved a deal to allow UBS to reveal details of around 4,450 U.S. clients and pay a $780 million fine to end lengthy tax proceedings that had threatened the future of the country’s biggest bank. The Swiss government has been in talks with U.S. authorities for months to try to get an investigation into 11 banks dropped, in return for expected hefty fines on the banks and the handing over of the names. Credit Suisse , Julius Baer and Basler Kantonalbank are among the banks under investigation. Citing an unnamed source, the newspaper SonntagsZeitung reported that 11 banks would each be offered a deal like the one to which UBS agreed. In exchange, the banks would have to accept U.S. requests for administrative assistance in tax evasion cases that would mean delivering all information on their U.S. offshore business via Bern to the United States, the paper reported. The paper described a meeting between Swiss officials and representatives on Friday in Berne. The paper also said the banks would likely accept the deal. Yet a spokesman for the State Secretariat for International Financial Matters (SIF), which has represented the Swiss government in negotiations with the United States, said talks between the United States and Switzerland were still ongoing and that the meeting on Friday was part of a regularly scheduled series of talks. SIF Spokesman Mario Tuor declined further comment. FURTHER DETAILS As part of an agreement the names of the U.S. clients would be blacked out and the banks would also be fined, the paper said, adding that the banks had until Tuesday to agree to the terms in writing. According to the paper, the information the banks would have to hand over included: – Correspondence between a bank and its U.S. clients, including notes from telephone conversations and meetings. – Internal notes about U.S. client business from the relevant business units and management – Correspondence between banks and third parties, such as independent wealth managers concerning U.S. clients – All documents about the U.S. business model and about U.S. funds that were transferred to third parties. The paper said the 11 institutions would have to reveal the names of the bankers who conducted the offshore business, though criminal cases against individuals would not be taken up. Credit Suisse, Basler Kantonalbank and HSBC Switzerland would have to deliver material by December 31, the paper said. A spokesman for Credit Suisse declined to comment. The Swiss Bankers Association was not immediately available for comment. Neither was a spokesman for Julius Baer. A spokesman for the State Secretariat for International Financial Matters, which has represented the Swiss government in negotiations with the United States, was also not immediately available. (Reporting by Catherine Bosley; Editing by Jon Loades-Carter) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Obama Defends Policy Towards Israel

December 18, 2011

(MENAFN – Qatar News Agency) U.S. President Barack Obama said that his administration did all it could do to support Israel’s security adding, “Don’t let anybody tell you otherwise. It is a …

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Hong Kong Tops Financial Development Index

December 18, 2011

(MENAFN – Qatar News Agency) For the first time in an Asian country’s history, Hong Kong has leapfrogged the UK and US to top the World Economic Forum’s Financial Development Index. According to …

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Russia Approved to Join World Trade Organization

December 18, 2011

(MENAFN – Qatar News Agency) World Trade Organization (WTO) ministers on Friday officially adopted Russia’s WTO terms of entry at the 8th Ministerial Conference in Geneva. Russia Minister of …

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US congress passes spending bill to keep gov’t running

December 18, 2011

(MENAFN – Saudi Press Agency) The U.S. Senate on Saturday passed a $915 billion bill to fund most federal agency activities through next September and avert a government shutdown, Reuters …

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Fitch: Comprehensive euro zone deal ”beyond reach”

December 18, 2011

(MENAFN – Saudi Press Agency) A comprehensive solution to the euro zone debt crisis is beyond the region’s reach, rating agency Fitch said, warning that six of its economies including Italy and …

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Asian Activities Report for December 19, 2011: NTT Data (TYO:9613) to Commence a Demonstration Program in Beijing to Tackle Traffic Congestion

December 18, 2011

http://www.abnnewswire.net/rss2/menafn/abn_menafn_en.asp NTT Data Corporation (TYO:9613) is planning to commence a demonstration program in late January 2012 in Beijing, China. The program is aimed …

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Iran’s agricultural output to reach 118m tons by Mar 2012

December 18, 2011

(MENAFN) Iran’s deputy agriculture minister, Mohammad-Ali Nikbakht, said that by the end of the current Iranian calendar year (March 20, 2012), the country’s agricultural production would reach 118 …

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Iran’s agricultural output to reach 118m tons by Mar 2012

December 18, 2011

(MENAFN) Iran’s deputy agriculture minister, Mohammad-Ali Nikbakht, said that by the end of the current Iranian calendar year (March 20, 2012), the country’s agricultural production would reach 118 …

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Rum Jungle Resources (ASX:RUM) Gains Washington H Soul Pattinson as Substantial Shareholder

December 18, 2011

http://www.abnnewswire.net/rss2/menafn/abn_menafn_en.asp Rum Jungle Resources (ASX:RUM) is delighted to report that a substantial shareholder notice has been received from Washington H Soul …

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New Zealand consumer confidence fell in 2011′s last quarter

December 18, 2011

New Zealand consumer confidence fell during the fourth quarter as concerns enlarged about the negative impacts that are driven by the escalating European sovereign debt crisis, which may lead to a …

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China’s home prices reached its worst performance

December 18, 2011

China’s home prices reached its worst performance this year, where more than half of the biggest seventy Chinese cities declined in November after the government eased plans to maintain the …

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Malaysia Airlines to cut some ME routes

December 18, 2011

(MENAFN) Malaysia Airlines unveiled plans to shed some of its Middle Eastern flights, as part of its plan to cut projected losses this year and in 2012, Arabian Business reported. The company …

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Cornell receives USD350m for a campus in New York

December 18, 2011

(MENAFN) Cornell University received a USD350 million finance to build up a proposed engineering campus in on Roosevelt Island, New York City, Bloomberg reported. The news came hours after …

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Asian Week: Eyes on the BoJ and RBA Minutes

December 18, 2011

The Asian Pacific is gearing for significant data in the upcoming week amid the global economic slowdown that is driven by the on-going sovereign debt crisis, where the significant includes the RBA …

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European Week: Euro area center of attention as final sentiment shaping for the end of the year with UK GDP and Minutes in focus

December 18, 2011

The week before Christmas and the sentiment is starting to shape up for the end of the year with the heavy liquidations and settlement evident since last week and the volumes will start to take a …

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Russia’s Tatneft, Iran’s NIOC to sign USD700m oil contract

December 18, 2011

(MENAFN) National Iranian Oil Company’s (NIOC) director for planning affairs, Abdolmohammad Delparish, said that the company would ink a USD700 million deal with Russia’s Tatneft in order to develop …

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Russia’s Tatneft, Iran’s NIOC to sign USD700m oil contract

December 18, 2011

(MENAFN) National Iranian Oil Company’s (NIOC) director for planning affairs, Abdolmohammad Delparish, said that the company would ink a USD700 million deal with Russia’s Tatneft in order to develop …

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Iran will need USD300b FDI to achieve development plan’s targets

December 18, 2011

(MENAFN) Iranian deputy finance and economic affairs minister, Behrouz Alishiri, said that in order to achieve the foals of the fifth five-year development plan (2010-2015), the country would need …

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Toyota cooperates with BMW and Tesla Motors

December 18, 2011

(MENAFN) Toyota Motor Corp agreed team up with BMW AG and Tesla Motors Inc. in a historic partnership that aims to produce future electric vehicles, Bloomberg reported. Under the accord, Toyota …

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Iran’s national fleet adds 25 passenger aircrafts

December 18, 2011

(MENAFN) Iran’s roads and urban development minister, Ali Nikzad, said that since June, the country added 25 passenger aircrafts to its national fleet, reported Tehran Times. Nikzad added that …

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London’s prime real estate prices up USD1,865 a day

December 18, 2011

(MENAFN) UK Knight Frank, the real estate company, said that over the past year, prices of prime real estate in London grew exceeding USD1,865 a day, reported Arabian Business. The company added …

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US MidAmerican to acquire 49% stake in power plant

December 18, 2011

(MENAFN) MidAmerican Energy Holdings said that it would acquire a 49 percent stake in NRG Energy’s 290-megawatt Agua Caliente power plant in Yuma County, Arizona, reported Gulf News. The company, …

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US Nov consumer prices remain flat

December 18, 2011

(MENAFN) The US Labor Department said that last month, the country’s consumer prices remained flat, following a decline of 0.1 percent in October, reported Gulf News. The department added that in …

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Moody’s downgrades Belgium rating to Aa3

December 18, 2011

(MENAFN) Moody’s Investors Service said that it downgraded Belgium’s credit rating from Aa1 to Aa3, a decline by two levels, with a negative outlook, reported Gulf News. Moody’s added that the …

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