The Informational

Economy, not debt rating, will send markets lower

2011-08-10T03:31:00.002-07:00

NEW YORK - US investors will have their first chance Monday to react to Standard & Poor's decision to strip the US government of its top credit rating. But the bigger issues facing Wall Street and stock markets worldwide remain debt-ridden countries in Europe and concerns that the global economy is weakening.
The downgrade of US long-term debt from AAA to AA+ wasn't unexpected and may have little impact on interest rates. But it's the kind of news that stock markets don't need when investors are nervous. As a result, financial analysts interviewed Sunday said they expect markets to be volatile this week - and beyond.
That view was echoed by former Federal Reserve Chairman Alan Greenspan, who appeared on NBC's "Meet the Press" Sunday and said he expected the stock market slide to continue.
Beyond the downgrade, though, investors have plenty of reason to be selling. Last week, the Dow Jones industrial average fell nearly 700 points, or 6 percent. Investors were worried because the economic signals in the US and overseas were pointing toward trouble:
-On July 29, the government dramatically lowered its estimate of how much the economy grew during the first quarter. It had said the economy grew at an annual rate of 1.3 percent, but revised that number down to 0.4 percent. That meant the economy barely grew. Second-quarter growth was also weak, a 1.3 percent rate.
-The first reports on the economy during the third quarter have been mixed. Manufacturing, which helped pull the economy out of the recession, fell to its weakest level since July 2009. That was the month after the recession officially ended. The Labor Department said 117,000 jobs were created last month. But that came after 99,000 jobs were created in May and June combined - and 250,000 new jobs are needed each month to reduce unemployment.
-European officials are trying to help Italy avoid the kind of bailouts that Greece, Portugal and Spain were forced to accept to prevent them from defaulting on their debt. And those bailouts haven't solved all the problems in those countries.
To investors, the downgrade made it all worse.
"We are in unchartered territory and, therefore, should all brace for volatility over a number of days if not weeks," said Mohamed El-Erian, CEO and co-chief investment officer of the bond mutual fund company PIMCO.
Greenspan noted that S&P had "hit a nerve" with its downgrade. The ratings agency said it was lowering the US rating not just because of the country's debt load, but because S&P doesn't believe Congress has the ability to resolve the country's debt problems. And it warned that another downgrade could be forthcoming.
On Saturday, David Beers, S&P's global head of sovereign ratings, said his agency was concerned about "the degree of uncertainty about the political policy process" in Washington.
S&P was looking for $4 trillion in budget cuts over 10 years. The deal that Congress passed on Tuesday would bring $2.1 trillion to $2.4 trillion in cuts over that time. S&P said it was also concerned about the ability of Congress to implement those cuts because of the division between Republicans and Democrats.
"Right now, the markets don't believe anybody anywhere and the uncertainty premium is very high. Since the end of World War I, the United States has been an unquestioned AAA credit, until now," said David Kotok, chairman and chief investment officer of Cumberland Advisors.
Investors are worried about debt not only because countries and many people are overwhelmed by it. Debt is what financed economic growth for decades. Now countries and people are cutting back on debt - deleveraging is what economists call that process - and that means economic growth in the future will be slower. Economists had widely expected the US economy to pick up in the second half of the year after its soft patch in the spring. But the stock market, which looks six to nine months ahead, doesn't see an improvement until well into 2012.
They may get more insight on Tuesday. The Federal Reserve holds a regularly scheduled meeting on the economy and interest rates. It's expected the central bank will state that interest rates will need to remain at their current low levels for at least another year.
Even with this bleak outlook, some analysts see a chance for stocks to rise, at least in the short run.
The stock market could recover next week if European leaders make progress in averting another debt crisis in that region, said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research.
Still, even if stocks do rise, there are so many economic and political problems to be resolved that any rally may well be very short-lived.

ECB to buy eurozone bonds to curb debt crisis

2011-08-10T03:31:00.000-07:00

BERLIN - The European Central Bank (ECB) held a conference call late on Sunday ahead of the market opening, pledging the ECB will step in to buy eurozone bonds with efforts to forestall the euro zone's debt crisis from spreading.
The ECB said it will actively implement its plan to buy bonds issued by eurozone governments on the secondary markets in bids to curb the debt crisis.
The ECB welcomed Italian and Spanish announcement on fiscal and structural reforms and commitment of eurozone countries to contribute efforts to alleviate the impact of the debt crisis.
It is fundamental for member states to "activate European Financial Stability Facility (EFSF) in the secondary market" if ECB recognizes the existence of "exceptional financial market circumstances and risks to financial stability," said the ECB in a statement.
The ECB has, after considering the current situations, decided to "actively implement its Securities Markets Program" to "ensure price stability in the euro area," it said.
It is anticipated that the ECB's actual purchase of problematic eurozone bonds would likely prompt a considerable relief on global markets.
The finance ministers and central bankers of the G7 member states -- Britain, Canada, France, Germany, Japan, Italy and the United States -- were expected to talk before the financial markets open in Asia at 0000 GMT on Monday.
Germany's Der Spiegel and other journals has been anticipating a "Black Monday" on the markets, in the wake of world leaders' flurry of meeting of phone calls.
German Chancellor Angela Merkel and French President Nicolas Sarkozy issued a joint statement on Sunday, expressing their "commitment" to the full implementation of the measures agreed on eurozone debt at a summit in July.
"In particular through the following instruments: a precautionary program, finance recapitalization of financial institutions and to intervene in secondary markets on the basis of an ECB analysis," the statement said.
They welcomed budget reform plans in Spain and Italy, saying "complete and speedy implementation of the announced measures is key to restoring market confidence."
However, former British Prime Minister Gordon Brown was sharply critical of the mishandling of the spiralling debt crisis, saying that last month's eurozone summit was "yet another European chance of recovery thrown away."
"No number of phone calls can solve what is a financial, macroeconomic and fiscal crisis rolled into one," Brown said to tell the Independent on Sunday newspaper, that "Europe needs a radical restructuring of both Europe's banks and the euro."
"Every time the big questions are avoided, and every time the outcome is a patchwork compromise, the next crisis gets ever closer and threatens even more danger," the former prime minister and finance minister said.

It's dim up North, so people need bigger brains

2011-08-10T03:30:00.005-07:00

LONDON - People from northern parts of the world have evolved bigger brains and larger eyes to help them to cope with long, dark winters and dim skies, scientists said on Wednesday.
Researchers from Oxford University studied the eye sockets and brain capacity of 55 human skulls from 12 different populations across the world and found that the further human populations live from the equator, the bigger their brains.
It's not because they are smarter, however, but because they need bigger vision areas in the brain to cope with the low light levels at high latitudes, the scientists said in a report of their findings in the journal Biology Letters.
"As you move away from the equator, there's less and less light available, so humans have had to evolve bigger and bigger eyes," said Eiluned Pearce from Oxford's School of Anthropology, who led the study. "Their brains also need to be bigger to deal with the extra visual input.
"Having bigger brains doesn't mean that higher latitude humans are smarter, it just means they need bigger brains to be able to see well where they live."
The skulls used in the study dated back to the 1800s and included samples from indigenous populations of England, Australia, Canary Islands, China, France, India, Kenya, Micronesia, Scandinavia, Somalia, Uganda and the United States.
The researchers plotted the volume of the eye sockets and brain cavities against the latitude of the central point of each individual's country of origin and found that the size of both the brain and the eyes could be directly linked to the latitude of the country.
Oxford's Robin Dunbar, who also worked on the study, said the results showed the speed at which humans had evolved to cope with the challenges of new habitats.
"Humans have only lived at high latitudes in Europe and Asia for a few tens of thousands of years, yet they seem to have adapted their visual systems surprisingly rapidly to the cloudy skies, dull weather and long winters," he said.
The researchers said that from measuring the brain cavity, the study suggested the biggest brains belonged to populations who lived in Scandinavia, and the smallest belonged to Micronesians.

Space station to plunge into ocean in 2020

2011-08-10T03:30:00.003-07:00

MOSCOW - A Russian space official said Wednesday that once the mammoth International Space Station is no longer needed it will be sent into the Pacific Ocean.
It's a plan that's long been in the works and is a step to avoid the station becoming dangerous space junk. It was supposed to plunge into the ocean as early as 2015. The US recently extended its life until at least 2020, and there's been talk of keeping it going even longer.
Vitaly Davydov, deputy head of the Russian space agency, said the orbiting outpost will be destroyed in a controlled descent to Earth "so that there is no space junk left behind."
Russia sank its Mir space station in the Pacific in 2001 after 15 years in operation. Skylab, America's first space station, fell from orbit in 1979 after six years in space.
The International Space Station is the biggest orbiting outpost ever built and can sometimes be seen from the Earth with the naked eye. It's now big enough for six residents.
It now consists of more than a dozen modules built by the US, Russia, Canada, Japan and the European Space Agency.

Norway PM: Attacks response to be 'more democracy'

2011-08-10T03:30:00.001-07:00

OSLO, Norway -- Norway's prime minister struck a defiant tone Wednesday, saying the response to twin attacks that have rocked his country will be "more democracy."
Jens Stoltenberg told reporters that Norwegians will defend themselves by showing they are not afraid of violence and by participating more broadly in politics.

Norwegian Prime Minister Jens Stoltenberg gestures during a news conference in Oslo, July 24, 2011. Stoltenberg said on Wednesday that Norway would review police reponse and security measures after a mourning period for attacks that killed at least 76 people.[Photo/Agencies]

"It's absolutely possible to have an open, democratic, inclusive society, and at the same time have security measures and not be naive," he said.
The vicious attacks in the normally placid country have left Norwegians appalled and shaky, but determined to move forward. Some government workers were planning to return to work in their offices in the buildings where the bomb blasts blew out most windows.
At least 76 were killed in the attacks on the government quarter in Oslo and a rampage on an island youth camp. Denmark said Wednesday a 43-year-old Danish woman, Hanne Balch Fjalestad, had died in the attacks, marking the first confirmed foreign death.

She was working as a first aid medic at Utoya island. She leaves behind four children, including a 20-year-old daughter, Anna, who survived the island shooting.
Anders Behring Breivik has confessed to the attacks, saying he was trying to save the Western world from Muslim colonization. Stoltenberg said that extremist views are legitimate in a democracy but implementing them violently is not.
Meanwhile, the leader of Norway's Delta Force defended the special operations team, saying the breakdown of a boat didn't cause a significant delay in efforts to reach the island where Breivik's shooting rampage killed 68 people.
Police have come under close scrutiny over how long it took them to reach the island after first reports of shots being fired at the island youth camp Friday. Although the island is only about 25 miles (40 kilometers) from the Norwegian capital, police needed 90 minutes to get to the scene.
A media helicopter was already hovering over the island when police arrived. Marius Arnesen, a cameraman for broadcaster NRK who shot video of the massacre at Utoya island, told The Associated Press that his helicopter arrived some time between 6 p.m. and 6:10 p.m. Police say got to the island at 6:25 p.m.
Police were already grappling with the wide damage inflicted by a bomb in the downtown government quarter that Breivik claims to have set off. When word of the shooting came, police drove rather than take a helicopter because the crew of the sole chopper available to them was on vacation. Then the first boat they tried to take to the lake island broke down.
Anders Snortheimsmoen told reporters the team immediately jumped into another, better boat. He said his team arrived at the harbor at the same time as local police and the boat mishap caused no delay.
At the same news conference, Justice Minister Knut Storberget praised the team, saying it helped "limit the tragedy" on Utoya island and the bombing in the city center. Friday's twin terrorist acts together claimed at least 76 lives.
Norwegian media are suggesting that police knew Breivik's identity even before they reached the island, tracing him through a rental car company from which he rented the panel van in which the bomb was planted.
Dag Andre Johansen, Scandinavian CEO of Avis car rental company, told The Associated Press that Breivik had rented two vehicles, including a Volkswagen Crafter van. He said police contacted the company after the bombing and got Breivik's identity confirmed. But he declined to say whether that contact came before Breivik was arrested on the island.
Many in Oslo felt a new twinge of worry on Wednesday morning when parts of the capital's rail and bus complex was evacuated because of a suspicious abandoned suitcase. Police later said no explosives were found and that the evacuation order had been lifted. The Norwegian news agency NTB said a bus driver turned in the alarm after seeing a passenger leave the suitcase and walk into the station at a fast clip.
Police officially released the first four names of victims on Tuesday, and Norwegian media published the names and photos of some of the other victims. At least some were immigrants or their descendants.
Tens of thousands of Norwegians have rejected the suspect's rhetoric, laying thousands of flowers around the capital in mourning. Entire streets were awash in flowers, and Oslo's florists ran out of roses.
Norway's Crown Prince Haakon and Foreign Minister Jonas Gahr Stoere attended a packed memorial Tuesday in the World Islamic Mission mosque in Oslo. After the ceremony, Pakistani-born Imam Najeeb ur Rehman Naz said the massacre had brought Norwegian residents of all backgrounds closer together.
"Everyone realizes that terrorism and this kind of activity doesn't have anything to do with any religion," he told the AP. "They are individuals who can be found in any community who don't represent the majority at all."
Many of those killed were involved in the governing Labor Party, which suspect Breivik rails against in his manifesto for allowing Muslims to immigrate to Norway.
One of the victims on the island of Utoya was Gunnar Linaker, a regional secretary of the party's youth wing, which organized the camp there. His father, Roald, called the 23-year-old from the northern village of Bardu "a calm, big teddy bear with lots of humor and lots of love."
His voice weak and trembling, Roald Linaker said he was on the phone with his son when the shooting started: "He said to me: 'Dad, dad, someone is shooting,' and then he hung up."
Police identified Gunnar Linaker and three victims of the bombing: Tove Aashill Knutsen, 56, Hanna M. Orvik Endresen, 61, and Kai Hauge, 33. Police say they're being cautious in releasing the names and are making sure families are notified and approve.
Knutsen, a secretary with the electricians and information technology workers' union, had left the office and was on her way to a subway station when the bomb exploded in Oslo's government office quarter, union head Hans Felix said.
Hauge owned a downtown Oslo bar and restaurant that was dark Tuesday. A flower arrangement outside the bar included notes from friends and a photo of him. A note beside the locked front door, handwritten in black marker, read: "Closed due to death."
The national newspaper Dagbladet posted the names and photos of 30 people it said were killed in the attacks or missing. The information, apparently received from friends or relatives, showed three victims who did not appear to be ethnic Norwegians, including Ismail Haji Ahmed, who the newspaper said had recently appeared on the "Norway's Talents" television show. Another, reported as missing, was a 20-year-old native of Iraq, Jamil Rafal Yasin.
NTB said police detonated explosives at Breivik's farm about 100 miles (160 kilometers) north of Oslo on Tuesday. Breivik said in his manifesto that he had rented the farm and created a fake business there as cover for ordering six metric tons of fertilizer _ an integral component of the Oslo bomb.

Blast kills Kandahar mayor

2011-08-10T03:29:00.005-07:00

Blast kills Kandahar mayor

KANDAHAR, Afghanistan - Explosion killed Kandahar Mayor and wounded another in southern Afghanistan on Wednesday, an official said.
"An explosion ripped through in Municipality department of Kandahar city, the capital of Kandahar province this morning, killing Kandahar Mayor Ghulam Haider Hamidi," spokesman for the provincial administration Zalmai Ayubi told Xinhua.
Meantime, a press release issued by Kandahar provincial administration described the blast as a suicide attack.
"Mayor Hamidi was meeting with some people when a man planed explosive device in his turban entered the meeting hall and blew it up, killing the Mayor and injured another," the press release added.
The attacker was also killed in the explosion, it stated.
In the press release, the enemies of peace, a term used by Afghan officials against Taliban for organizing the attack, but the outfit fighting Afghan and NATO-led troops has yet to make comment.
Kandahar, the birthplace of Taliban 455 km south of capital city Kabul has been the scene of increasing insurgency over the past couple of years.

DPRK demands peace treaty with US

2011-08-10T03:29:00.003-07:00

SEOUL - The Democratic People's Republic of Korea (DPRK) on Wednesday renewed calls for a peace treaty with the United States to officially end the Korean War, nearly 60 years after fighting ended, arguing it could be the first step toward the denuclearisation of the peninsula.
Pyongyang issued its latest pleas for a treaty amid an easing of tensions with rival South Korea and during a visit by a top DPRK diplomat to the United States to discuss the resumption of stalled nuclear disaramament talks.
"Concluding a peace agreement may be the first step for settling the Korean issue, including denuclearisation," KCNA state news agency said in a commentary on the anniversary of the ceasefire in the 1950-53 war.
The two Koreas are still technically at war because fighting stopped with only a truce, not a treaty.
The North has for years tried to persuade the United States to agree to a peace treaty, hoping to force the withdrawal of some 30,000 American troops from the South.
Pyongyang walked out of aid-for-denuclearisation talks in 2009 after the United Nations imposed a new round of sanctions for nuclear and missile tests. Last year, it said it wanted to rejoin the forum.
Washington and Seoul point to DPRK's revelations of a uranium enrichment programme last year as a sign it is not serious about giving up its plans to develop atomic weapons. The country has twice tested plutonium-based nuclear devices.
DPRK's Vice Foreign Minister Kim Kye-gwan arrived in New York on Wednesday where is he is expected to meet Washington's envoy for Korean peninsula affairs, Stephen Bosworth.
Hopes are building that the six-party talks, which also involve China, Russia and Japan, will restart soon after the nuclear envoys and foreign ministers of the two Koreas met last week.

Asiana Airlines' cargo plane crashes in waters off Jeju Island

2011-08-10T03:29:00.001-07:00

SEOUL - An Asiana Airlines' cargo plane crashed into the sea off Jeju Island Thursday, killing two people, South Korea's Coast Guard said.
Debris of the Boeing-744 aircraft, which departed from the Incheon International Airport at 3:05 am for China's Pudong of Shanghai, was found in waters about 107 kilometers west of the city of Jeju by a Coast Guard patrol boat at 6:40 am, the Coast Guard was quoted by the Yonhap News Agency as saying.
The Asiana plane with one pilot and one crew member disappeared from radar at 4:09 am while returning to the Jeju International Airport after reporting some mechanical trouble, officials said.
Asiana Airlines is South Korea's second-largest flagship carrier.

Rains, mudslides kill 36 in Seoul

2011-08-10T03:28:00.004-07:00

SEOUL, South Korea - Walls of mud barreling down a hill buried 10 college students sleeping in a resort cabin and flash floods submerged the streets and subway stations in Seoul, killing at least 36 people Wednesday in South Korea's heaviest rains this year.

Rescue workers remove a dead body from a collapsed house after a landslide caused by heavy rainfalls in Seoul July 27, 2011.[Photo/Agencies]

The students were engulfed by a landslide in Chuncheon, about 68 miles (110 kilometers) northeast of Seoul, said fire marshal Byun In-soo. A married couple and a convenience store owner also died.
Witnesses interviewed on television said the landslide sounded like a massive explosion or a freight train. They described people screaming as buildings were carried away by rivers of mud.
About 670 firefighters, soldiers, police and others rushed to rescue those trapped and extract the dead from the mud and wreckage in Chuncheon, where 24 others were injured and several buildings destroyed.
Yonhap news agency reported the 10 students attended Inha University in Incheon, but did not confirm they all were South Korean. The group was volunteering at a local elementary school.
In southern Seoul, 16 people died when mud crashed through homes at the foot of a mountain. The National Emergency Management Agency reported seven deaths due to flooding in a stream just south of the capital and said the toll was expected to rise as dozens of people were missing.
Fast-moving mudwaters filled the streets in Seoul on Wednesday, sending residents scrambling to the roofs of their partially submerged cars.
Water filled some subway stations and spewed from sewers. TV images showed people in one flooded subway station using shovels, brooms and a wooden board in an effort to keep more rain from coming in. Yonhap reported Internet and wireless connections failed in southern Seoul due to power failures.
Footage showed officials rescuing hikers stranded on mountainsides. People plodded down streets covered with knee-deep water, many barefoot, their pants rolled up. In Seoul's center, cars were restricted from entering the lower part of a submerged two-level bridge.
The heavy rain since Tuesday left about 620 people homeless and flooded 720 houses and about 100 vehicles throughout South Korea, the emergency management agency said.
About 17 inches (440 millimeters) of rain fell on Seoul and more than 13 inches (340 millimeters) on Chuncheon in the last two days, about 15 times more than the average two-day rainfall at this time of year, according to the state-run Korea Meteorological Administration.
Weather officials said another 10 inches (254 millimeters) could fall in northern South Korea, including Seoul, through Friday.
The Seoul Metropolitan Police Agency issued a traffic emergency, mobilizing more officers to deal with the inclement weather.
Seoul, a bustling capital of 10 million, shut down portions of two major highways stretching along each side of the main Han River because of high water, said disaster official Kim Ji-hwan.
A dam located just east of Seoul was discharging 16,400 tons of water per second, said Cha Jun-ho from the Han River Flood Control Office. The dam already discharged about 1,000 tons per second days before the recent downpours.
People in Seoul, where smartphones are ubiquitous, posted dozens of photos on Twitter and Facebook showing inundated streets and mud-covered cars. Many complained online that Seoul had neglected to prepare for the downpours.

Geithner says he will stay at Treasury

2011-08-10T03:28:00.002-07:00

US Treasury Secretary Timothy Geithner speaks at the Clinton Global Initiative in Chicago, in this file photo taken June 30, 2011. Geithner has told President Barack Obama that he intends to stay on the job, Treasury said in a statement on August 7, 2011. [Photo / Agencies]

WASHINGTON - Timothy Geithner has told President Barack Obama that he will remain on the job as Treasury secretary, ending speculation he would leave the administration.
The Treasury Department released a statement Sunday saying Geithner had informed the president of his decision to remain in the administration.
Geithner is the only remaining top official on Obama's original economics team.
In late June, people close to Geithner said he was considering leaving after the debt limit was raised in August. They said he was tired of commuting to New York, where his son will be finishing up his last year in high school.
However, various administration officials including White House chief of staff William Daley had been lobbying Geithner to stay. Geithner has enjoyed a close working relationship with Obama.
"The president asked Secretary Geithner to stay on at Treasury and welcomes his decision," White House spokeman Jay Carney said in a statement.
Geithner informed the president Friday morning that he had decided to remain in the Cabinet.
That discussion took place before credit rating agency Standard & Poor's informed Treasury officials Friday afternoon that they planned to downgrade the government's credit rating from AAA to AA-plus.
Investors are watching nervously to see how financial markets react to that announcement which came late Friday after markets had closed.
In addition, Geithner and other finance ministers from the world's largest economies have been discussing what actions need to be taken to stabilize markets following renewed worries about Europe's debt problems.
A series of Obama's economic advisors have departed including Lawrence Summers, the first head of the president's National Economic Council, and two of the president's chief economic advisers, first Christina Romer and then Austan Goolsbee, who left this past week.
Obama has also had to replace his first budget director, Peter Orszag.
Before joining Obama's administration, Geithner served as president of the Federal Reserve Bank of New York, a job that put him on the front lines of the central bank's efforts to battle the financial crisis and to get credit flowing more freely. He has a close working relationship with Federal Reserve Chairman Ben Bernanke.
During the administration of President Bill Clinton, Geithner held top positions at the Treasury Department dealing with international financial crises that occurred during that administration.

Talks try to calm nervous markets

2011-08-10T03:28:00.000-07:00

TOKYO / SEOUL - Global policymakers held an emergency conference call on Sunday to discuss the twin debt crises in Europe and the United States that are causing market turmoil and stoking fears of the rich world sliding back into recession.
After a week that saw $2.5 trillion wiped off global stock markets, political leaders are under mounting pressure to reassure investors that Western governments have both the will and ability to reduce their huge and growing public debt loads.
South Korea said finance deputies from the Group of 20 (G20) major and emerging economies discussed the European debt crisis and the US sovereign rating downgrade on Sunday morning.
A Japanese government source said finance leaders from the Group of Seven (G7) developed economies would also discuss the crises and may issue a statement later.
The European Central Bank (ECB) was scheduled to hold a rare Sunday afternoon conference call. Investors are anxiously looking for the central bank to start buying Italian and Spanish debt on Monday to stabilize prices, a move that has split the ECB governing council.
In Washington, a White House economic adviser castigated ratings agency Standard and Poor's (S&P) for downgrading the US credit rating to AA+ from AAA, a move that over time could ripple through markets by pushing up borrowing costs and making it more difficult to secure a lasting recovery.
Washington's Asian allies rallied round the battered superpower, with Japan and South Korea both saying their trust in US Treasuries remained unshaken.
"I expressed our country's position on the (G20 conference) call that there will be no sudden change in our reserve management policy," South Korean Deputy Finance Minister Choi Jong-ku told Reuters, referring to Seoul's heavy ownership of US bonds out of more than $300 billion in foreign reserves.
"There's no alternative that provides such stability and liquidity," added Choi, who declined to elaborate further on the G20 discussion.
There was no confirmation of the timing of a G7 call for finance ministers and central bankers, but a second Japanese government source said it "would be normal" for it to take place before Asian markets opened on Monday.
The most immediate concern for financial markets was the debt crisis in the eurozone, where yields on Italian and Spanish debt have soared to 14-year highs on political wrangling and doubts over the vigor of budget cuts.
Investors saw the ECB's failure to include Italy and Spain in a re-launch of its bond purchases late last week as a sign of the depth of political divisions over the role of the eurozone currency.
German officials want to see stiffer austerity programs in place before the ECB shoulders more Italian and Spanish debt.
Defending its downgrade of the US credit rating, S&P cited the acrimonious debate in Washington on raising the debt ceiling and near political paralysis over the best way to reduce the country's $14.3 trillion debt, which on the current trajectory could climb above 100 percent of national output this decade.
The US Treasury said the rating agency's debt calculations were wrong by some $2 trillion.
S&P has confirmed it changed its economic assumptions after discussions with the Treasury Department but said that did not affect its decision to downgrade, a decision slammed by US President Barack Obama's National Economic Council head Gene Sperling.
"It smacked of an institution starting with a conclusion and shaping any argument to fit," Sperling said in a statement.
Obama called on lawmakers once again on Saturday to set aside partisan politics and work together to put the nation's fiscal house in order.
China, the largest foreign holder of US debt, has yet to comment officially on the downgrade.
But some Chinese economists have expressed concern about the worsening debt situation in the US and Europe.
Chen Daofu, an economist with the Development and Research Center of the State Council, said that the market has been panicked by the US economy.
If it continues to worsen and the US Federal Reserve decides to launch a new round of quantitative easing (QE) and depreciates the dollar, it will surely hurt China's interests as a key US debt holder. China holds $1.16 trillion in US Treasury bonds.
Increasing the US money supply will increase inflationary pressure in China and make the European debt crisis more difficult to solve, he said.
Chen said that China should reduce its holdings of foreign financial assets and increase investment in the real economy.
Li Daokui, a professor of finance at Tsinghua University and an academic member of the central bank's monetary policy committee, said that China must prepare for a new round of QE, which will force investors to sell long-term US bonds.
He Fan, a researcher with the Chinese Academy of Social Sciences, predicted that a global financial crisis might happen next year because of the sluggish US economy and the debt crisis in Europe, according to news portal 163.com.
Before the US downgrade was announced, Foreign Minister Yang Jiechi on Friday urged the US to adopt a responsible monetary policy and ensure the safety of other countries' assets in the US, according to the Foreign Ministry's website.

Top 10 wealthiest IT families in China

2011-08-10T03:26:00.000-07:00

The top 10 richest families in IT in China are:

Gu Wei & family 顾伟家族

Gu Wei

Company: Shenzhen MTC Co., Ltd. 深圳市兆驰股份有限公司

Shares: 58.83 percent

Wealth: 5.1 billion (US$792.1 million)

Founded in April 2005, Shenzhen MTC Co., Ltd. is a professional digital products manufacturer. Its main products, such as LCD/LED TVs, digital set-top boxes, DVD players, Blu-ray disc players, portable DVDs and Portable TVs, are sold in more than 60 countries and regions including Europe, North America, Asia and Oceania. The company has good partnership with Philips, Siemens, Carrefour, TCL and other well-know companies in China and the world. It was listed on the Shenzhen Stock Exchange in June 2010.

Adjust font size:

Huang Li & family 黄立家族

Huang Li

Company: Wuhan Guide Infrared Co. Ltd. 武汉高德红外股份有限公司

Shares: 73.05 percent

Wealth: 5.2 billion (US$807.6 million)

Founded in 1999, Wuhan Guide Infrared Co. Ltd. is a high-tech enterprise engaged in the development, manufacturing and sales of the infrared thermal imaging system. Its products are widely used in electric power, petrochemical, metallurgy, architecture, fire protection, scientific research, public security and night vision for transportation. The company has agencies in over 70 countries and regions in the world and a branch in Belgium. It was listed on the Shenzhen Stock Exchange in July 2010.

Xue Xiangdong & family 薛向东家族

Xue Xiangdong

Company: DHC Software Co. Ltd. 东华软件股份公司

Shares: 55.07 percent

Wealth: 6 billion (US$931.8 million)

Founded in January 2001, DHC Software Co. Ltd is engaged in software development, computer information system integration and information technology services. The company has nearly 200 kinds of software products with proprietary intellectual property rights. It provides products and services for the government and industries such as medical care, finance, telecommunications, electric power, coal, oil, petroleum, petrochemical, transportation, national defense, insurance, science and education, and manufacturing. The company was listed on the Shenzhen Stock Exchange in August 2006.

Adjust font size:

Cai Dongqing & family 蔡东青家族

Cai Dongqing

Company: Guangdong Alpha Animation and Culture Co. Ltd. 广东奥飞动漫文化股份有限公司

Shares: 75 percent

Wealth: 6.4 billion (US$994 million)

Guangdong Alpha Animation and Culture Co. Ltd. was founded in June 2007 based on its former company named Guangdong Auldey Toy Industry Co. Ltd. The company is engaged in animation production, books distribution, invention and manufacturing of toys and other derivatives and image authorization. It was listed on the Shenzhen Stock Exchange in September 2009.

Fu Liquan & family 傅利泉家族

Fu Liquan

Company: Dahua Technology Co. Ltd. 浙江大华技术股份有限公司

Shares: 48.76 percent

Wealth: 6.4 billion (US$994 million)

Dahua Technology Co. Ltd. is a professional manufacturer and solution provider of security and surveillance products. It is now leading the development trend of embedded digital video recorder in China, and its products are widely used in many fields such as banking, public security, energy resources, intelligent-building and intelligent-transportation. Its business has expanded overseas to the Asia-Pacific, North America, Europe and Africa. The company was listed on the Shenzhen Stock Exchange in May 2008.

Adjust font size:

Zhang Changhong & family 张长虹家族

Zhang Changhong

Company: Shanghai Great Wisdom Co., Ltd. 大智慧网络技术有限公司

Shares: 63.95 percent

Wealth: 7 billion (US$1.1 billion)

Founded in December 2000, Shanghai Great Wisdom Co. Ltd. is engaged in the development, production, sales and support of information technology products to financial sector. It offers software that provides services in the fields of financial database, real-time quotes transmission, real-time quotes reveal and investment analysis software, financial education system, information dissemination and web services to brokerage, fund companies, listed companies and individual investors. The company was listed on the Shanghai Stock Exchange in January 2011.

Adjust font size:

Wang Wenjing & family 王文京家族

Wang Wenjing

Company: UFIDA Software Co., Ltd. 用友软件股份有限公司

Shares: 41.57 percent

Wealth: 7.5 billion (US$1.2 billion)

Founded in 1988, UFIDA Software Co., Ltd. is a major provider of management software solutions and e-business services. Its key products, including enterprise management/ERP software and solutions, have bolstered the group's position as the largest management software supplier in China and the Asia-Pacific. For years, UFIDA has been consistently recognized as a key software enterprise and leader in China's software industry. The company was listed on the Shanghai Stock Exchange in May 2001.

Nan Cunhui & family 南存辉家族

Nan Cunhui

Company: CHINT Electrics Co., Ltd. 浙江正泰电器股份有限公司

Shares: 46.13 percent

Wealth: 8.4 billion (US$1.3 billion)

Founded in 1997, CHINT Electrics Co., Ltd. is the largest manufacturer and seller of low-voltage electrical products in China, specializing in the R&D, production and sales of low-voltage electrical products with over 100 series and 10,000 specifications. It provides the most efficient, easy-to-use electrical products and technical services for industry users of electric power, power grid, petrochemical, manufacturing, real estate and construction. Its products have been exported to more than 90 countries and regions around the world. The company was listed on the Shanghai Stock Exchange in January 2010.

Adjust font size:

Gong Hongjia & family 龚虹嘉家族

Gong Hongjia

Company: Hikvision Digital Technology Co., Ltd. 杭州海康威视数字技术股份有限公司

Shares: 24.8 percent

Wealth: 10.2 billion (US$1.6 billion)

Founded in 2001, Hikvision Digital Technology Co., Ltd. is one of the world's leading suppliers of video surveillance products and solutions. Its products of security protection, including hybrid DVRs, NVRs, standalone DVRs, digital video servers, compression cards, high-definition IP cameras and speed domes, are used in more than 100 countries around the world. The company has established branches in 31 cities on mainland China and regional branch offices in Los Angeles, Amsterdam and Dubai, joint ventures in India and Russia, as well as a maintenance center in Hong Kong. Hikvision was listed on the Shenzhen Stock Exchange in May 2010.

Adjust font size:

Jiang Bin & family 姜滨家族

Jiang Bin

Company: GoerTek Inc. 歌尔声学股份有限公司

Shares: 55.16 percent

Wealth: 10.6 billion (US$1.6 billion)

Founded in June 2001, GoerTek Inc. is a leading designer and manufacturer of acoustic components and audio consumer electronic products, including earphones and microphones. It provides audio solutions for leading companies in communication and mobile industries. The company was listed on the Shenzhen Stock Exchange in May 2008.

S. Korean navy fire shots near sea border

2011-08-10T03:22:00.003-07:00

South Korea's Navy fired shots after a shell presumably fired by the Democratic People's Republic of Korea (DPRK) fell near disputed western sea border, the Joint Chiefs of Staff (JCS) said Wednesday.

The Navy heard the sound of shelling and fired three shots in response, and later confirmed one of the DPRK shells landed near the sea border the DPRK does not acknowledge.

South Korea is keeping tabs on the DPRK, which might have been engaged in routine drills, according to the JCS.

The DPRK shelled a South Korean island near the disputed sea border last November, killing four South Koreans. Pyongyang said the incident was provoked by a drill of Seoul.

UK violence spreads north

2011-08-10T03:22:00.001-07:00

Riots again hit Britain on Tuesday evening for the fourth night in succession. London was largely quiet with 16,000 police officers on the streets, but rioting broke out in cities to the north.

Riot police seal off a street in Croydon, south London, Britain, Aug. 9, 2011. [Xinhua]

BBC reported that crowds of young people looted shops and set fire to buildings and cars in Manchester, Salford, Wolverhampton, Nottingham, Leicester and Birmingham.

Police were battling through the early and mid-evening with a crowd which eyewitnesses said was about 2,000 strong in Manchester city center. Shop windows were smashed and a women's clothes shop was petrol-bombed, and several businesses -- including a jeweler's and clothes shops -- were looted, according to Xinhua.

Earlier police had clashed with a much smaller group of youths in the neighboring city of Salford, where a community building was set on fire and several businesses attacked.

Police in the West Midlands reported trouble in Birmingham city center, town of West Bromwich and the nearby city of Wolverhampton, which had both been spared violence on earlier nights.

In Birmingham, a 200-strong gang of youths with sticks was confronted by riot police amid reports of attacks on shops and a car being set on fire.

Police in Wolverhampton had made 20 arrests by mid-evening. In West Bromwich hooded youths blocked a road and set fire to dustbins but later dispersed after burning two vehicles.

In the east London area of Canning Town, some youths were reported to have built barricades and stoned passing vehicles.

Theaters in London riot-hit areas such as the Battersea Arts Center, the Dalston Arcola and the Greenwich Playhouse, cancelled their evening's performances, and many shops closed earlier than usual. Many office workers left earlier to avoid being in the city if rioting began again.

The Global Post said one civilian has died and 111 Met officers have been injured in the four days of rioting since Saturday’s protest in London‘s Tottenham neighborhood turned violent.

Riot erupted in London following protests over the death of 29-year-old Mark Duggan, who was shot dead by police last Thursday. Rioters have attacked police with bottles, planks, bricks and even driven cars at them. Five police dogs have also been hurt.

NW China's Zhouqu mourns victims, steps up reconstruction one year after devastating mudslide

2011-08-08T11:26:00.003-07:00

People attend the memorial ceremony for victims of the landslide occurred a year ago in Zhouqu, northwest China's Gansu Province, Aug. 8, 2011. The mudslide devastation in the county on Aug. 8, 2010 left more than 1,700 people dead or missing and some 60,000 houses damaged.(Xinhua/Zhang Yongjin)

ZHOUQU, Gansu, Aug. 8 (Xinhua) -- Thousands of people gathered Monday morning and stood in silence to mourn more than 1,500 people killed in a mudslide in northwest China's Zhouqu County exactly one year ago.

At around 9 a.m., government officials and residents presented flowers at an 8.8-meter-high monument built to commemorate the victims of the Aug. 8, 2010 mudslide.

The monument, surrounded by a wall bearing the names of all of the victims, was built on the former site of the village of Yueyuan. The village was completely destroyed by the mudslide.

China's Civil Affairs Minister Li Liguo attended the memorial, expressing condolences to the victims and respect to the soldiers and people engaged in relief and reconstruction efforts.

Zebazo, deputy governor of Gansu, said the province will continue to focus on rebuilding the county. The reconstruction is projected to cost a total of 5.02 billion yuan (781 million U.S. dollars), with funds for reconstruction earmarked by central, provincial and county governments. More than 26 percent of the funds have already been spent, with 137 out of the 170 planned rebuilding projects already under way, he said.

Feng Duping, a quake survivor who lost seven of his family members in the disaster, said the reconstruction projects have given him more hope.

"They (the quake victims) are also looking at the changes from heaven. What was once rubble has been turned into construction sites," said Feng. "Reconstruction brings us hope."

More than 360,000 evacuated in east China as tropical storm Muifa approaches

2011-08-08T11:26:00.001-07:00

Photo taken on Aug. 8, 2011 shows the big waves hitting the bank in the sea near Yantai, east China's Shandong province. More than 360,000 people were evacuated in east China's Shandong Province on Monday as tropical storm Muifa continues to move along the country's eastern coast. (Xinhua/Chu Yang)

JINAN, Aug. 8 (Xinhua) -- More than 360,000 people were evacuated in east China's Shandong Province on Monday as tropical storm Muifa continues to move along the country's eastern coast.

More than 20,000 fishing boats were called back to harbor by early Monday morning, local authorities said.

No casualties in the province have been reported yet.

According to the provincial meteorological observatory, the storm, which weakened from a powerful typhoon on Sunday, has unleashed torrential rains in the coastal areas of Shandong, soaking as many as 85 counties and villages with precipitation levels of 50 to 100 mm.

The storm was located about 50 km southeast of the province and was moving north at a speed of 25 km per hour as of 11 a.m. Monday.

Muifa, the ninth typhoon to hit China this year, swirled into the East China Sea on Friday morning.

It is predicted to skirt the Shandong Peninsular and land somewhere between north China's Liaoning Province and the Democratic People's Republic of Korea (DPRK) on Monday evening.

A total of 756 temporary shelters have been set up in Liaoning's border city of Dandong, according to the Liaoning flood control and drought relief headquarters. The shelters are capable of accommodating over 1 million people, the headquarters said.

China to boost education for ethnic minority children

2011-08-08T11:25:00.005-07:00

BEIJING, Aug. 8 (Xinhua) -- China has pledged to step up efforts to improve education for ethnic minority children over the next decade, according to the Outline for the Development of Chinese Children (2011-2020) released Monday.

China will "vigorously promote bilingual education" for both Chinese and ethnic minority languages and "respect and safeguard the rights of ethnic minority children to receive education in their own languages," said the outline released by the State Council, China's Cabinet.

The country will also intensify its training of teachers in ethnic minority areas while further enhancing educational support for developed regions and large- and medium-sized cities, it said.

China vows to guarantee women's participation in politics, stresses gender equality

2011-08-08T11:25:00.003-07:00

BEIJING, Aug. 8 (Xinhua) -- An official document released on Monday said that local governments above the county level should employ more women in leadership positions to ensure that the country's women are properly represented in political affairs.

The Outline for the Development of Chinese Women (2011-2020) issued by the State Council, or China's cabinet, said that the central government will continue to boost women's participation in the management of state and social affairs, stressing that the number of female leaders should be gradually increased over the next decade.

The document said that the government has set a target of enshrining the concept of gender equity into more laws over the next ten years.

"At least 30 percent of the members of any given villagers' committee should be female, and at least 10 percent of the heads of villagers' committee should be women," the outline said.

For members of urban neighborhood committees, the proportion of women should be around 50 percent, it said.

The document promised to gradually increase the number of female officials in the leadership of China's central, provincial and city governments.

The 30,000-word document outlined goals, policies and measures to ensure women's legitimate rights and interests regarding health care, education, employment, social security and participation in state affairs.

The outline aims to ensure that women equally exercise their democratic rights in accordance with the law, participate in economic and social development and enjoy the fruits of national reform and development.

The outline also vowed to eliminate gender discrimination in employment.

"Women should account for at least 40 percent of the employed population," the outline said.

It also stated that departments at various levels should create conditions of education and training programs for women to ensure that they account for 35 percent of senior professional and technical personnel over the next ten years.

Chinese FM says friendly ties with Sudan not to change

2011-08-08T11:25:00.001-07:00

KHARTOUM, Aug. 8 (Xinhua) -- Chinese Foreign Minister Yang Jiechi said on Monday that China will not alter its policy to develop friendly cooperation with Sudan no matter how Sudan's internal situation and regional situation changed.

China will continue to keep the friendly exchanges at all levels, enhance mutual understanding and strengthen the mutual political trust, Yang said during his two-day official visit to Sudan.

He told the press that China will expand more practical collaboration with Sudan to achieve mutual benefits. "We are willing to step up the cooperation in oil industry and encourage and support more qualified Chinese companies to invest in Sudan."

He said the cooperation in the fields of agriculture, mining, energy, water conservancy, electricity, roads and bridges engineering and communications will also be expanded.

Meanwhile, China is ready to continue to provide aid and assistance to Sudan within its capability, Yang said.

The minister said that China will strengthen the coordination and cooperation with Sudan in international and regional affairs. "We will enhance the communication and collaboration with Sudan in the important issues such as the reform of the UN Security Council, climate change and food security, to preserve the legitimate rights of the developing countries."

Yang said that the two countries established diplomatic relationship in 1958, and after more than 50 years of development, have formed a stable, long-lasting and comprehensive relationship of friendly cooperation.

Chinese economy's growth pace fluctuating within normal range

2011-08-08T11:24:00.001-07:00

BEIJING, Aug. 8 (Xinhua) -- It's normal for China's economy to grow at a speed that fluctuates within a certain range, an official with the National Bureau of Statistics (NBS) said Monday.

The growth momentum of the world's second largest economy is still strong with slight risks of a sharp decline in its growth rate, the NBS deputy chief Xie Hongguang said in his latest article.

"Despite a moderate economic slowdown during the first two quarters, the economy still operates in territory of relatively stable and fast development, with the growth momentum steering from policy stimulating to self-initiated growth," said the article posted on the NBS website.

The country's gross domestic product rose by 9.5 percent year-on-year in the second quarter of 2011, tapering off slightly from the 9.7-percent growth posted in the first quarter and 9.8 percent in the fourth quarter of last year, the NBS data show.

The 9.6-percent economic growth rate in the first six months, though 1.5 percentage points lower than that of last year, is in line with the government's macro-regulation and not low compared with other countries, Xie said.

Xie attributed the growth deceleration to the government regulation and the removal of policy incentives.

Xie expected the country's investment to continue growing at a fast pace fueled by investment increases at local levels. Consumption will be further boosted by the growing incomes of urban and rural residents and the enhanced social security network.

The scale of the country's trade surplus will maintain a sizeable scale despite contractions over recent months, Xie said.

Meanwhile, Xie said that the government should keep its policies consistent and stable while making them more focused, flexible and foresighted, as the country still faces complex economic situations both at home and abroad.

The country's trade surplus fell 18 percent from a year ago to 44.9 billion U.S. dollars in the first half, data from the General Administration of Customs indicated.

Yingluck receives royal endorsement as Thai PM

2011-08-08T11:23:00.002-07:00

BANGKOK, Aug. 8 (Xinhua) -- His Majesty the King endorsed the election of Yingluck Shinawatra as Thailand's 28th Prime Minister on Monday following the House Speaker's audience.

House Speaker Somsak Kiatsuranont had an audience with the King Bhumibol Adulyadej at Siriraj Hospital where he has been staying since September 2009 due to health problem.

Yingluck was elected as Thailand's first female prime minister with 296 lawmakers in the 500-seat lower house of parliament voting in favor on Friday.

An inaugural ceremony will be held on Monday evening at the headquarters of the ruling Pheu Thai Party.

Yingluck is scheduled to give a brief speech right after the swearing-in ceremony.

Although her political experience has been questioned, the 44- year-old business woman is the youngest prime minister in the history of Thailand. As she is a younger sister of the ousted prime minister Thaksin Shinawatra, she has risen to the top post within 49 days.

She is the third prime minister from Shinawatra family after her brother Thaksin and brother-in-law Somchai Wongsawat.

U.S. stocks tumble on first day after credit cut

2011-08-08T11:23:00.000-07:00

The Standard and Poor's building in New York, August 2, 2011. The U.S. Treasury Friday night hit back against a Standard and Poor's downgrade of U.S. top-notch credit rating, saying that the agency's judgment was flawed. (Xinhua/Reuters Photo)

NEW YORK, Aug. 8 (Xinhua) -- The Wall Street opened broadly lower on Monday, the first trading day after Standard & Poor's downgraded U.S. triple-A credit rating, with the NASDAQ and The Standard & Poor's 500 tumbling over 2 percent.

The Dow Jones industrial average lost 219.37 points, or 1.92 percent, to 11,225.24. The Standard & Poor's 500 was down 24.59 points, or 2.05 percent, to 1,174.75. The Nasdaq Composite Index dropped 54.92 points, or 2.17 percent, to 2,477.49.

The Dow were down over 200 points after the opening bell but struggled back for a while. Then another round of sell-off pushed the blue-chip index dropped over 200 points again.

It seemed that investors had no more options but to sell the stocks. Reflecting the panic mood, safe-haven asset gold soared above 1,700 dollars an ounce for the first time on Monday.

Even the positive news from European failed to stop the sell-off.

The European Central Bank pushed a dramatic intervention in bond markets, driving the yields of Spanish and Italian bonds down sharply

Walking the high wire while battling the wind

2011-08-08T11:22:00.000-07:00

Samit Ijon walks on a 15-meter long steel rope which is suspended 30 meters above the ground by two hot air balloons in Shaoyang, Central China's Hunan province, August 7, 2011. Ijon is the seventh descendant of the Xinjiang Darwaz, an acrobatics show of high wire walking. He successfully finished the 30-meter high walk. But his attempt to walk 100 meters above the ground was thwarted by the strong winds that caused him to lose balance. [Photo/CFP]

Samit Ijon finishes his walk on a 15-meter long steel rope suspended 30 meters above the ground by two hot air balloons in Shaoyang, Central China's Hunan province, August 7, 2011. [Photo/CFP]

Burst pipe leaves 1,000 no water in Beijing

2011-08-08T11:21:00.001-07:00

A man stands on the road after a water pipe burst at the west entrance of Huangzhuang community in Haidian district, Beijing, August 7, 2011. [Photo / CFP]

More than 1,000 residents, living in Zhongguancun in Haidian district, had to make do without water on Sunday after a water pipe burst at the west entrance of Huangzhuang community.

The water rose rapidly in some areas before the Beijing Waterworks Group cut off the water supply in the region.

Repair work is proceeding cautiously as there are thought to be gas pipes next to the water pipe.

The Beijing Waterworks Group has delivered water to the communities around the site, but said as yet they are unable to tell when the water supply will be resumed.

E China provinces brace for typhoon Muifa

2011-08-08T11:20:00.001-07:00

High billows strike the seashore in Lianyungang, East China's Jiangsu province, August 7, 2011. Typhoon Muifa, the ninth typhoon to hit China this year, is weakening as it moves further north along the country's affluent and densely-populated eastern coast, forcing the evacuation of 610,000 residents on its course, authorities said Sunday. Shipping services in Lianyungang and seashore swimming activity were suspended due to the typhoon. [Photo / Xinhua]

High billows are seen in Zhanqiao sea area in Qingdao, East China's Shandong province, August 7, 2011. Typhoon Muifa, the ninth typhoon to hit China this year, is weakening as it moves further north along the country's densely-populated eastern coast, forcing the evacuation of 610,000 residents on its course, authorities said Sunday. The typhoon, bringing gusts up to 178 km per hour, is moving at 25 km per hour towards the coast of Shandong Province. [Photo / Xinhua]