16 May, 2008 | No comments

U.S. general wary of withdrawal plan

WASHINGTON (AP) The U.S. military commander in one of the more troubled areas of Iraq said Friday that embracing Sen. John Warner’s call to begin troop withdrawals before the end of the year would be “a giant step backward.”

Army Maj. Gen. Rick Lynch, commander of troops south of Baghdad, said that in such a scenario, militants pushed from his sector in recent operations would quickly return.

TOP GOP SENATOR: «www.usatoday.com»

“If coalition soldiers were to leave, having fought hard for that terrain, having denied the enemy their sanctuaries, what’d happen is the enemy would come back,” said Lynch.

“He’d start building the bombs again, he’d start attacking the locals again and he’d start exporting that violence into Baghdad and we would take a giant step backward,” Lynch told Pentagon reporters in a video conference from Iraq.

He said that recent gains resulted from the buildup of troops in Iraq and that he needs all the forces he has until Iraqis are able to step up and take over, perhaps some time next year.

Lynch was asked to respond to comments by Warner that President Bush should announce at least a small reduction in forces by Christmas.

Warner, R-Va., former chairman of the Armed Services Committee and Navy secretary during the Vietnam War, said Thursday that Bush would be sending a powerful message to Iraq’s government that the U.S. commitment there is not open-ended.

Warner says the president should get to decide when and how many troops should leave. He also did not mention any places where he thought reductions were possible in Iraq, where some regions are worse than others.

In another reaction Friday, the top Republican on the House Intelligence Committee also said he disagreed with Warners’s idea, but that Bush needs to move away from trying to establish democracy in Iraq and concentrate instead on security and stability.

“Establishing a democracy in the time frame that we’ve wanted to do it, over the period of three to five years, was too big of a reach,” Michigan Rep. Pete Hoekstra said.

Still, Warner’s call for troop withdrawals is likely to ratchet up pressure on Bush, who has opposed setting a date for any drawdown and contends that conditions on the ground should dictate deployments.

“I’m hopeful that this (redeployment) could lead to more emphasis on the Iraqi forces taking the major responsibility, as it relates to the internal insurgency in that country,” the Virginia Republican said.

Warner’s suggestion comes as a new intelligence assessment says Iraqis have failed to govern effectively or reach the political compromises believed necessary to tamp down sectarian violence.

Overall, the report finds that Iraq’s security will continue to “improve modestly” over the next six to 12 months, provided that coalition forces mount strong counterinsurgency operations and mentor Iraqi forces. But even then, violence levels will remain high as the country struggles to achieve national political reconciliation, and the Iraqi government led by Prime Minister Nouri al-Maliki is likely to become increasingly vulnerable because of criticism from various Shiite, Sunni and Kurdish factions.

“The strains of the security situation and absence of key leaders have stalled internal political debates, slowed national decision-making, and increased Maliki’s vulnerability” to factions that could form a rivaling coalition, the document says.

Democrats say the grim report and Warner’s conclusion bolster their position that Bush should change course and start bringing troops home this fall. Party leaders this year tried to pass legislation ordering troops home this fall, but repeatedly fell short of the 60 votes needed in the Senate to pass.

“Our military has performed their duties excellently, but the purpose of the escalation in Iraq was to create a secure environment in which political change could occur, and it is clear that the Iraqi leaders have failed to make progress,” said House Speaker Nancy Pelosi, D-Calif.

Republican leaders countered that the intelligence assessment bolsters their position that U.S. troops should stay. The report warns that limiting the mission of U.S. forces to a support role and counterterrorist operations Д as Democrats and some Republicans suggest Д would “erode security gains achieved thus far.”

“The fact that Democratic leaders continue to push for precipitous withdrawal despite the significant progress our troops are making shows just how deeply invested they are in failure,” said House Minority Leader John Boehner, R-Ohio.

Democrats agree the military has made substantial gains in Iraq, but they say the progress made is useless if the Iraqi government is unable to take control.

16 May, 2008 | No comments

A Mars a day? Not if you’re a vegetarian

VEGETARIANS with a sweet tooth may find many chocolate treats are off-limits, because they are now being made with animal products.

A recipe change to some of the UK’s most popular chocolate bars by giant confectionery manufacturer Masterfoods will prevent strict vegetarians being able to enjoy a range of the UK’s most popular chocolate brands.

Mars, Bounty, Snickers, Twix and Milky Way, as well as Maltesers and Minstrels, are now off the menu, because they will include whey containing animal rennet, a by-product of the slaughter process.

Trade magazine The Grocer said yesterday it had seen a letter to a consumer from Masterfoods which explained that, due to a change in the ingredients used in their chocolate recipes from 1 May, 2007, many of the products now contain whey.

The company explained that this was a by-product of the cheese-making process and uses rennet from an animal source.

Masterfoods corporate affairs manager Paul Goalby said: “Since changing the sourcing of our ingredients, we are no longer able to ensure our chocolate will be animal rennet-free and so we made the principled decision to admit it was not guaranteed to be vegetarian.

“If the customer is an extremely strict vegetarian, then we are sorry the products are no longer suitable, but a less strict vegetarian should be fine to enjoy our chocolate.”

Products with a best-before date up to 1 October are not affected by the change and remain suitable for vegetarians. The company is offering a refund on any bar that has a later best- before date to those who cannot eat animal rennet.

The Vegetarian Society said in 2004, the last full year for which figures are available, the meat-free foods market was estimated at 626 million, a 38 per cent rise on the 1999 level. Data from the Office of National Statistics also shows that confectionery sales in the UK continue to rise.

A Vegetarian Society spokesman said: “There are about three million vegetarians in the UK, which is a significant part of the market. It is very disappointing that Masterfoods products are no longer vegetarian-friendly. We hope the company will reconsider this move.”

George Rodger, a representative of the society in Aberdeen, said he deplored the change, which he believes is being made for economic reasons, to the detriment of UK farmers.

“Ninety per cent of the cheese produced in this country is produced with non-animal rennet. One must suspect Mars is going overseas to get whey products,” he said.

He described the move as unnecessary, and criticised the company for their avoidable use of other animal products. LEAVING AN UNPLEASANT TASTE

THIS is not the first time foodstuffs have been “outed” for including animal products somewhere in their manufacture.

In 2002, fast-food giant McDonald’s agreed to pay $10 million (5 million) in an out-of-court settlement after Hindus living in the US claimed the company used beef extract in the oil with which it cooked French fries. In Britain, a majority of wines are “fined” using meat and fish products, including bull’s blood, to improve their clarity. And supermarket apples are often given their shine by a coat of shellac, a protective covering derived from the shells of insects.

16 May, 2008 | No comments

British Airways, Korean air fined $300 million

WASHINGTON (AP) Two major airlines were fined $300 million apiece Thursday after admitting they conspired to fix prices on international flights and agreeing to help prosecutors investigate other airlines.

British Airways PLC, Britain’s largest airline, and Korean Air Co., South Korea’s national carrier, pleaded guilty to antitrust conspiracy charges. They acknowledged colluding with rivals over cargo rates and fuel surcharges, which were added to fares in response to rising oil prices. That meant higher costs for international shippers and passengers.

U.S. District Judge John D. Bates said the case “involved considerable commerce and reflected long-term and widespread conduct involving major airlines and players.”

Both saw their potential fines reduced because they cooperated with Justice Department investigators. Korean Air’s fines could have been twice as high and British Airways could have faced fines closer to $900 million, but the Justice Department and the judge credited the company with cooperating.

“Any anti-competitive behavior is to be condemned at British Airways or at other companies. It will not be tolerated and we remain vigilant in this respect,” British Airways Chief Executive Willie Walsh said in a statement released after court.

Korean Air released a statement saying it was “committed to antitrust compliance” and was taking steps to make sure the conduct was never repeated. Neither company addressed the extent of its cooperation or how widespread the practice was in the industry.

Earlier this month, authorities in London announced $246 million in fines for British Airways in a parallel trans-Atlantic investigation. Both inquiries are ongoing.

Scott D. Hammond, deputy assistant attorney general for criminal antitrust issues, said the sentences proved that “those who violate the antitrust laws and seek to deny American consumers and businesses the benefits of competition will be held accountable.”

Other companies were not named, but Virgin Atlantic has been identified in London but is not expected to face a fine there because it reported its misconduct to authorities.

As part of their plea deals, the airlines acknowledged they colluded with other unidentified companies from 2000 to 2006. The cargo rate scheme meant higher shipping costs for businesses. For passengers, the scheme meant more expensive tickets because the surcharges were wrapped into the ticket fare.

Between 2004 and 2006, fuel surcharges rose from about $10 to about $120 per ticket for a round-trip, long-haul flight on BA or Virgin.

Bates credited both British Airways and Korean Air with turning over hundreds of thousands of documents, some of which needed to be translated, and making executives available for interviews with investigators. As foreign companies, they could have challenged the probe and refused to cooperate.

The $300 million criminal fines were the second-largest antitrust sanction by the Justice Department since 1995. The largest antitrust fine, $500 million, was against vitamin giant F. Hoffman-La Roche in 1999 in a price-fixing case.

16 May, 2008 | No comments

Bond Prices Up On Weak Housing Data, Lowest Consumer Confidence Since 2005

Treasury debt prices rose Tuesday after data suggesting weaker economic growth supported investor expectations that the Federal Reserve would continue to cut benchmark interest rates.

Data released Tuesday showed a continued deterioration in the housing market, while consumer confidence fell to a two-year low. Also on Tuesday, two major retailers, Lowe’s and Target, issued warnings about earnings and September sales, respectively.

Gains were more pronounced in the shorter end of the Treasury curve, which has a higher sensitivity to changes in interest rates from the Fed.

The two-year Treasury note traded 3/32 higher in price for a yield of 4.00%, from 4.05% late Monday, while the benchmark 10-year note traded 2/32 higher in price for a yield of 4.63%, from 4.64% on Monday.

Data showed last month’s resales of U.S. homes fell a sharp 4.3% to an annualized rate of 5.50 million units, the National Association of Realtors said. Economists had expected an annual 5.49-million-unit pace.

While the drop in sales was not quite as strong as forecast, analysts were surprised that inventories of single-family homes and condos rose 0.4% to a 10-month supply and the highest since records began being kept in 1999.

In another report, home prices in the 10 largest U.S. cities fell 4.5% in July compared with a year earlier, the sharpest drop in 16 years, according to the S&P/Case-Shiller national home price index.

The bad news on the housing front appeared to be taking its toll on consumers. The Conference Board said its gauge of consumer confidence fell to 99.8 in September, the lowest since November 2005.

Fed fund futures suggest traders are pricing in a 90% chance the central bank will cut rates by 25 basis points at their Oct. 30-31 policy meeting, up from about a 72% chance late Monday.

The five-year note traded 6/32 higher in price for a yield of 4.27%, from 4.31% late Monday, while the 30-year bond traded 6/32 lower in price for a yield of 4.90%, from 4.89% on Monday.

16 May, 2008 | No comments

Gulf Reserves Swell to $1.6 Trillion

While the soaring price of oil and subsequent buildup of reserves have garnered the attention of currency analysts to the MidEast, it is China and its $1.2 Trillion which generates the majority of forex reserves commentary. However, this may soon change. In a recent report, The Institute of International Finance noted that the collective foreign exchange reserves of the six-member Gulf Cooperation Council now total $1.6 Trillion. Further, as the price of oil predictably increases over the summer, the reserves will only grow larger, which should ensure that the region remains a mainstay of forex punditry. The Financial Times reports:

The UAE, Saudi Arabia and Kuwait account for the bulk of the GCCs $1,550bn of foreign asset holdings, according to the IIF. The overall holdings represented 225 per cent of the GCCs grossdomestic product.

Read More: http://www.ft.com/cms/s/b6faf9c4-0fac-11dc-a66f-000b5df10621.html

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