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Aug 03 2011

Evening Edition

Evening Edition is an Open Thread

From Yahoo News Top Stories

Lawrence H. Summers is the Charles W. Eliot University Professor at Harvard and former U.S. treasury secretary. He speaks and consults widely on economic and financial issues. The opinions expressed here are his own.

1 A debt deal that solves the wrong problem: Summers

Lawrence H. Summers, Reuters

1 hr 19 mins ago

CAMBRIDGE, Massachusetts (Reuters) – At last, Washington has reached a deal that raises the debt limit and averts a default that would have been a national embarrassment and an economic and geopolitical catastrophe.

The forces shaping the deal and the deal itself are multifaceted, and so is the right reaction to it. Mine has a number of elements.

Relief. There will be no first default in U.S. history; no economy-damaging short-run austerity; no attack on the nation’s core social protection programs or on universal health care; and no repeat of the last month’s shabby spectacle for at least 15 months. All of this was in doubt even a week ago as congressional intransigence threatened to make the problem of acceptably raising the debt limit insoluble.

2 Egypt’s Mubarak in Cairo to face trial

By Samer al-Atrush, AFP

13 hrs ago

Months after an uprising ended his 30-year-rule, Egypt’s ex-president Hosni Mubarak goes on trial Wednesday on murder charges, in a historic moment for the Arab region whose leaders are rarely held to account.

Mubarak arrived at the Police Academy in a Cairo suburb where he is to face trial accused of murder and corruption, shortly after being flown to the Almaza military airport in Cairo.

Television footage showed an ambulance driving up to the courthouse, amid intense security and a heavy army presence.

3 Egypt puts Mubarak on trial, transfixing Arab world

By Sarah Mikhail and Dina Zayed, Reuters

2 hrs 40 mins ago

CAIRO (Reuters) – Egypt’s Hosni Mubarak, accused of corruption and involvement in killing protesters, went on trial Wednesday, delighting those who overthrew him and ringing an alarm bell for other autocrats around the Arab world.

In a scene that Egyptians would have found unthinkable just eight months ago, the man who ruled them for 30 years was wheeled behind the bars of a courtroom cage in a hospital bed to hear charges that could carry the death penalty.

Mubarak is the first Arab leader to stand trial in person since popular uprisings swept the Middle East this year.

4 Bed-ridden, caged, Egypt’s Mubarak goes on trial

By HAMZA HENDAWI, Associated Press

4 hrs ago

CAIRO (AP) – An ailing, 83-year-old Hosni Mubarak, lying ashen-faced on a hospital bed inside a metal defendants cage with his two sons standing protectively beside him in white prison uniforms, denied charges of corruption and complicity in the killing of protesters at the start of his historic trial on Wednesday.

The spectacle, aired live on state television, was a stunning moment for Egyptians. Many savored the humiliation of the man who ruled with unquestionable power for 29 years, during which opponents were tortured, corruption was rife, poverty spread and political life was stifled.

After widespread skepticism that Egypt’s military rulers would allow one of their own – a former head of the air force – to be prosecuted in front of the world, the scene went a long way to satisfy one of the key demands that has united protesters since Feb. 11, when Mubarak fell following an 18-day uprising.

5 UN Syria talks stumble amid pressure on US

AFP

13 hrs ago

The UN Security Council meets again Wednesday as it struggles over how to respond to the Syria crisis Russia warns is veering toward civil war, amid growing pressure on the US to take a tougher line.

Divisions remained among the 15 nations on the wording of any condemnation of President Bashar al-Assad’s crackdown on protests and whether it should be a formal resolution or a less weighty statement.

European nations, which agreed to change their draft resolution on Syria following pressure from opponents, said progress had been made. But Russia said there was still not the “required balance” in the new version.

6 Famine declared in three new Somali regions: UN

By Peter Martell, AFP

59 mins ago

Famine has spread to three new regions of Somalia, including the capital Mogadishu and the world’s largest camp for displaced people, the United Nations said Wednesday.

In Washington, a US senator warned the catastrophe could be worse than Ethiopia’s 1980s famine that claimed nearly one million lives and criticised the international community for its inadequate response to the crisis.

The new famine areas designated by the UN include two sites where hundreds of thousands of Somalis have fled in desperate search of food as internally displaced people (IDP).

7 New, harsher questioning of Norway attacker: police

By Marc Preel, AFP

4 hrs ago

The self-confessed perpetrator of last month’s twin attacks in Norway was reportedly interrogated for a third time Wednesday as police said they would be harsher and more confrontational in their questioning.

The Norwegian daily VG published a picture on its website of a van it said had transported the confessed killer, rightwing extremist Anders Behring Breivik, to Oslo police headquarters at around 9:00 am (0700 GMT) for interrogation.

While police prosecutor Paal-Fredrik Hjort Kraby would not confirm the report, he told a news conference questioning would happen this week and “we can say that what will be central to that interrogation is that it will be more confrontational.”

8 Huge cyber spying effort revealed, China suspected

By Chris Lefkow, AFP

2 hrs 24 mins ago

The United States, United Nations, defense contractors and the International Olympic Committee were targets of a massive global cyber spying campaign, a computer security firm said on Wednesday, with China seen as the likely culprit.

California-based McAfee said in a report it had identified 72 victims in 14 countries of a sophisticated hacking effort dubbed “Operation Shady RAT,” which it traced back to at least 2006.

McAfee vice president for threat research Dmitri Alperovitch described it as a “five-year targeted operation by one specific actor” but declined to identify the country responsible.

9 Italy to hold crisis talks with eurozone chief

AFP

13 hrs ago

Italy’s finance minister holds crisis talks Wednesday with eurozone chief Jean-Claude Juncker, as Europe’s biggest debtor after Greece faced meltdown on money markets.

Giulio Tremonti, already battling links to a corruption probe in Italy after admitting making cash payments for rent to one of the probe’s targets, meets Luxembourg Prime Minister Juncker in a downtown hotel at 9:50 am (0750 GMT).

The talks follow a dramatic day on bond markets, when investors sold down Italian and Spanish government debt, firing concerns amid slowing economic growth in the third- and fourth-biggest eurozone economies that could ultimately threaten the euro.

10 Obama seeks to salve debt deal wounds

By Stephen Collinson, AFP

1 hr 49 mins ago

President Barack Obama on Wednesday sets about mending deep political damage suffered in the debt showdown with Republicans, heading to his Chicago hometown for an eve-of-50th birthday fundraising blitz.

Obama, stuck for weeks in dysfunctional Washington, will seek solace among Democratic supporters and has a first chance to put a political spin on a deal which averted a US debt default but was scored as a defeat for the White House.

Aides also said that Obama would embark on a bus tour through unemployment-riddled midwestern states later this month which could prove crucial in his increasingly complicated bid for reelection next year.

11 China says US fails to defuse ‘debt bomb’

By Allison Jackson, AFP

4 hrs ago

China warned Wednesday that tortured efforts to raise the US limit on borrowing had failed to defuse Washington’s “debt bomb”, and signalled it would further diversify its holdings away from the dollar.

After months of bitter negotiations with his Republican rivals, US President Barack Obama finally signed an emergency bill on Tuesday that averted what would have been a disastrous debt default for the world’s biggest economy.

But in a blistering commentary, China’s official Xinhua news agency ridiculed the US political process and warned that the deal had done nothing to change the country’s addiction to borrowing.

12 EU says capacity to solve debt crisis in doubt

By Jan Strupczewski and James Mackenzie, Reuters

3 hrs ago

BRUSSELS/ROME (Reuters) – The European Union acknowledged on Wednesday that investors now doubt whether the euro zone can overcome its debt crisis and Italy’s Silvio Berlusconi called for more action to ward off market attacks.

European Commission President Jose Manuel Barroso said a surge in Italian and Spanish bond yields to 14-year highs was cause for deep concern although they did not reflect the true state of the third and fourth largest economies in the currency area.

“In fact, the tensions in bond markets reflect a growing concern among investors about the systemic capacity of the euro area to respond to the evolving crisis,” Barroso said in a statement.

13 World growth at risk as service sector slows

By Jonathan Cable and Pedro da Costa, Reuters

4 hrs ago

LONDON/WASHINGTON (Reuters) – Growth in much of the world’s service sector was anemic in July as firms around the world worried about the debt crisis in Europe and the U.S. as a well as slowing consumer demand, business surveys showed on Wednesday.

World stocks tumbled, with the U.S. S&P 500 stock index falling to a new low for the year as worries grew that fiscal cutbacks and stagnating output would prolong a global economic slowdown and aggravate Europe’s debt crisis.

The vast U.S. services sector expanded at its weakest pace since February 2010, with an index from the Institute for Supply Management falling to 52.7 in July from 53.3 in June. Employment conditions also weakened, boding poorly for a closely-watched U.S. jobs report on Friday.

14 Service sector growth slowest since 2010

By Leah Schnurr, Reuters

3 hrs ago

NEW YORK (Reuters) – The pace of growth in the services sector ticked down unexpectedly in July to the lowest level since February 2010 and the number of jobs created by the private sector also slowed, reports showed on Wednesday.

Taken alongside disappointing data on the manufacturing sector earlier in the week, the services data showed an economy that was frustrating hopes for a rebound in the second half of the year after a very weak first half.

“It looks like this confirms that we are in a bit of a soft patch here,” said Rudy Narvas, senior economist at Societe Generale in New York.

15 Analysis: World poorly placed to meet new economic crisis

By Andrew Torchia and Paul Carrel, Reuters

3 hrs ago

LONDON/FRANKFURT (Reuters) – With financial markets in turmoil and economic growth slowing, policymakers around the world may once again be forced to cooperate to try to head off a crisis, as they did successfully in 2008-2009. But this time, they have fewer good options.

Central banks have less room to ease monetary policy than they did three years ago; cash-strapped governments cannot afford to boost spending as much; and political disarray in some countries may make concerted global policymaking harder.

“What can you do? On monetary policy, clearly no one agrees with anyone. On fiscal policy, everyone is blocked,” said Deutsche Bank economist Gilles Moec.

16 Default avoided but fears on economy remain

By Andy Sullivan and Jeff Mason, Reuters

7 hrs ago

WASHINGTON (Reuters) – The United States stepped back from the brink of default on Tuesday but congressional approval of a last-ditch deficit-cutting plan failed to dispel fears of a credit downgrade and future tax and spending feuds.

President Barack Obama and lawmakers from across the political divide expressed relief over the hard-won compromise to raise the country’s borrowing authority after weeks of rancorous partisan battles.

Nevertheless, U.S. stocks tumbled, turning negative for the year, as investors shifted their attention to the increasingly grim state of the U.S. economy and the potential for a downgrade of America’s gold-plated debt rating.

17 SNB cuts rates to counter soaring Swiss franc

By Katie Reid and Martin de Sa’Pinto, Reuters

1 hr 17 mins ago

ZURICH (Reuters) – The Swiss National Bank announced a shock cut in interest rates and threatened more action to cap a soaring Swiss franc, but the impact was expected to be short-lived given the currency’s safe-haven appeal amid mounting concerns about global growth.

The SNB said on Wednesday it would cut its target rate to “as close to zero as possible” from an already rock-bottom 0.25 percent, and said it would very significantly increase the supply of francs to the money market over the next few days.

It said it would not tolerate the effective tightening of monetary conditions imposed by what it called a “massively overvalued” franc which was threatening economic growth and increasing downside risks to price stability.

18 Big media’s profits defy gloomy outlook, for now

By Yinka Adegoke, Reuters

4 hrs ago

NEW YORK (Reuters) – Big media’s results are holding up well in the face of a bleak economic outlook. Now, the question is how long can they outrun high unemployment, a lousy housing market and low consumer confidence?

Comcast Corp, Time Warner Inc and CBS Corp beat Wall Street forecasts because of a mix of content licensing deals, movie box office receipts and advertising growth.

But shares in Time Warner, parent of CNN, HBO and Warner Bros, fell as much 4.5 percent after Wednesday’s results as investors seemed less than impressed by its marginal increase in its forecast for the year.

19 Tropical Storm Emily nears Dominican coast, Haiti

By TRENTON DANIEL, Associated Press

37 mins ago

PORT-AU-PRINCE, Haiti (AP) – Rain-packed Tropical Storm Emily brushed past Puerto Rico and headed Wednesday toward the Dominican Republic and Haiti, where more than 630,000 people are still in tents and flimsy shanties after last year’s earthquake.

Forecasters said the center of the storm was expected to pass over the southwestern corner of the Dominican Republic late Wednesday and is likely to weaken somewhat in the high mountains that divide the country from Haiti. But intense rain poses a threat, said Diana Goeller, a meteorologist with the U.S. National Hurricane Center.

“This storm has a lot of heavy rainfall with it,” Goeller told The Associated Press. “So in those mountainous areas, there could be very dangerous, life-threatening mudslides or flash floods.”

20 Okla. woman claims famed hijacker is her uncle

AP

2 hrs 1 min ago

OKLAHOMA CITY (AP) – An Oklahoma woman claims an uncle who planned something “very mischievous” over the holidays in 1971 was D.B. Cooper, the never-captured hijacker who jumped out of a plane with $200,000.

Marla Cooper of Oklahoma City – who was 8 years old at the time of the hijacking – told ABC News in an interview broadcast Wednesday that she is certain her uncle Lynn Doyle Cooper leaped from a Northwest Orient plane not far from her grandmother’s home in Sisters, Ore. She said she made the connection after piecing together remarks made by her father in 1995 and her mother in 2009. She did not say why she chose to speak out now.

“My two uncles, who I only saw at holiday time, were planning something very mischievous. I was watching them using some very expensive walkie-talkies that they had purchased,” she said on “Good Morning America.”

21 Earth’s two moons? It’s not lunacy, but new theory

By SETH BORENSTEIN, AP Science Writer

2 hrs 5 mins ago

WASHINGTON (AP) – In a spectacle that might have beguiled poets, lovers and songwriters if only they had been around to see it, Earth once had two moons, astronomers now think. But the smaller one smashed into the other in what is being called the “big splat.”

The result: Our planet was left with a single bulked-up and ever-so-slightly lopsided moon.

The astronomers came up with the scenario to explain why the moon’s far side is so much more hilly than the one that is always facing Earth.

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