Gingrich angrily rejects marital question at debate

Newt Gingrich

(Reuters) - Republican presidential candidate Newt Gingrich angrily defended himself on Thursday against allegations that he had asked his ex-wife for an open marriage, lashing out in perhaps the most crucial debate yet in the 2012 campaign.

The CNN-sponsored debate got off to a raucous start when moderator John King asked Gingrich to respond to charges put forth by his ex-wife Marianne that he had sought an "open marriage" while having an affair.

The impropriety charges have dogged Gingrich for years and threaten to slow his momentum in South Carolina as he seeks to upset front-runner Mitt Romney in the first primary vote in the South on Saturday.

"I think the disruptive, vicious, negative nature of the news media makes it harder to govern this country," Gingrich fumed. "I am appalled that you would begin a presidential debate on a topic like that."

The Republican crowd roared its approval of Gingrich.

The was the final chance for rivals to chip away at Romney's lead in South Carolina and Gingrich, the former speaker of the U.S. House of Representatives, had perhaps the best shot.

Romney came into the debate under strong pressure to turn back Gingrich, who received the endorsement of Texas Governor Rick Perry who dropped out of the race early Thursday.

Romney, a former private equity executive, insisted the company for whom he worked did in fact help create more than 100,000 jobs despite doubts about that expressed by experts.

Romney's experience at Bain Capital, which bought companies and restructured them sometimes resulting in job losses, has hurt him in South Carolina where unemployment remains around 10 percent. Gingrich lobs frequent attacks at him on this.

Romney said Bain helped nurture companies that created 120,000 jobs while business failures cost about 10,000 jobs for a net increase of 100,000.

"People have evaluated that since I ran four years ago," said Romney, who lost the Republican presidential race in 2008 to Senator John McCain.

Romney will take a huge step toward claiming the Republican nomination if he wins on Saturday.

Fighting for their political lives at the debate were former Pennsylvania Senator Rick Santorum and libertarian Congressman Ron Paul of Texas.

GINGRICH GETS CLOSER

A strong performance in a debate in South Carolina on Monday helped him get within touching distance in the polls of Romney, who has struggled to explain why he has not released his tax forms.

But Gingrich has faced troubling questions that could halt his momentum. His second wife, Marianne, told ABC News that Gingrich had sought an open marriage while having an affair with current wife Callista. She said he should not be considered electable in the race to find a Republican challenger to Democratic President Barack Obama in next November's election.

A new Reuters/Ipsos poll conducted of 656 likely South Carolina voters showed Romney with 35 percent support, Gingrich with 23 percent support, and former Senator Rick Santorum with 15 percent support.

Romney was looking for a rebound to boost his momentum after the surprise news from Iowa on Thursday that he did not receive the eight-vote victory that he had believed on January 3.

A formal count by Iowa election officials gave the nod to Santorum by a mere 34 votes, puncturing the aura of inevitability that Romney's campaign has sought to portray.

Santorum went on the attack on Thursday night against Romney and Gingrich over healthcare. He attacked Romney's healthcare plan in Massachusetts that Democrats say was a model for Obama's unpopular overhaul, and Gingrich for prior support for a provision that individuals be required to buy health insurance.

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Romney says he is taxed at around 15 percent rate

 Republican Mitt Romney

(Reuters) - Republican Mitt Romney acknowledged Tuesday that his income tax rate is "probably closer to 15 percent than anything," suggesting that one of the wealthiest people to ever run for U.S. president pays a much lower rate than most Americans.

His comment, a day after Romney agreed for the first time to release his tax returns -- but not until April when they are generally filed -- added fuel to his Republican rivals' calls for him to be more transparent about his finances.

It also drew fire from the Democratic White House and other critics, who said it reflected how Romney, whose estimated net worth is $270 million, is out of touch with the experiences and concerns of typical Americans.

Romney, a former private equity executive and Massachusetts governor, seemed to feed that narrative on Tuesday. He said that he gets speaker fees "from time to time, but not very much."

Annual campaign financial disclosure forms indicate that he was paid more than $374,000 in speaker fees from February 2010 to February 2011.

Romney's estimate of his income tax rate suggested that like many of the wealthiest Americans, he could earn a large chunk of his income from investments - much of it in capital gains.

Because capital gains generally are taxed at 15 percent compared with the top income tax rate of 35 percent on ordinary wages, those with significant income from capital gains often pay lower tax rates than many Americans.

Such disparity in the rates within the U.S. tax code are a sore point for many Americans, even some of the very rich whose rates are relatively low.

Billionaire investor Warren Buffett, for example, has said he paid $6.9 million in federal income taxes on $39.8 million in taxable income in 2010, a rate of 17.4 percent. Buffett has said it's unfair than his tax rate is lower than his secretary's.

Romney is the prohibitive favorite to win the Republican nomination and the right to face Democratic President Barack Obama in the November 6 elections.

On Tuesday, the White House moved quickly to portray Romney as an elitist, which almost certainly will be a theme of Obama's campaign this fall.

"Everybody who's working hard ought to pay their fair share" of taxes, the White House said in a statement. "That includes millionaires who might be paying an effective tax rate of 15 percent when folks making $50,000 or $75,000 or $100,000 a year are paying much more."

ROMNEY UNDER PRESSURE

Romney has long been reluctant to raise a curtain on his vast financial holdings.

In recent days, Romney's increasingly desperate rivals - former House of Representatives Speaker Newt Gingrich and Texas Governor Rick Perry - repeatedly have questioned whether Romney, in not releasing his tax returns, is hiding something.

Their calls for Romney to release his returns were echoed on Tuesday in a New York Times editorial, which called Romney's "insistence on secrecy impossible to defend now that he appears to be closing in on the nomination and questions have intensified about his personal finances."

During Monday night's Republican presidential debate in Myrtle Beach, Romney said, "I have nothing in (the returns) that suggests there's any problem and I'm happy to" release them around the federal tax filing deadline in mid-April.

"I sort of feel like we are showing a lot of exposure at this point," Romney added. "And if I become our nominee, and what's happened (with past presidential candidates) is people have released them in about April of the coming year, and that's probably what I would do."

FORTUNE INVESTED IN BAIN FUNDS

Tax analysts say Romney may have good reason to be reluctant to release his returns.

His vast fortune is invested in dozens of funds linked to Bain Capital LLC, the powerhouse private equity firm he co-founded and led for 15 years. Several Bain funds have offshore connections and take advantage of tax breaks used only by the U.S. financial elite.

His tax returns could shed light on how Romney and Bain use offshore strategies to avoid taxes, said Daniel Berman, a former U.S. Treasury deputy international tax counsel and now director of tax at Boston University's graduate tax program.

Bain funds in which Romney is invested are scattered from Delaware to the Cayman Islands and Bermuda, Ireland and Hong Kong, according to a Reuters analysis of securities filings.

"Certain interests in foreign investment structures would have to be reported on attachments to his return," Berman said.

On capital gains, Romney's tax returns would not reveal any gains that he has not yet realized, even though those gains would be easy for him to lock in at any time, Berman said.

"I remember as a young lawyer being surprised to see tax returns of very successful investors showing net losses - because they were recognizing net losses" but not yet factoring in unrealized gains, Berman said.

Romney's returns also might not spell out how much he benefits from a tax break used by private equity executives called the carried interest loophole.

This rule allows private equity and hedge fund managers to pay the 15 percent capital gains tax rate, rather than the top income tax rate, on a large portion of their earnings.

A SERIES OF ATTACKS

The demands by Gingrich and Perry are their latest attempt to draw attention to Romney's wealth.

They also echo Gingrich and Perry's criticism of Romney's time at Bain, which he left in 1999. Bain was involved in overhauling dozens of companies, and in some cases laid off thousands of workers.

Gingrich, Perry and others have portrayed Romney as a job killer and, as Perry put it, a "vulture" capitalist. The attacks don't seem to have worked, for Romney is still leading in most public opinion polls.

Gingrich continued to pound on the tax return theme Tuesday.

"It's interesting that Romney agreed that he ought to release his income taxes but he doesn't want to do it until April," by which time Romney could have clinched the Republican nomination, Gingrich said during an interview with CBS.

"I think the people of South Carolina ought to know now -- if there's nothing there, why hide it until April? And if there's something there, don't the people of South Carolina deserve to know before Saturday?"

Gingrich added that he would release his tax returns this week. As Texas governor, Perry has released his each year.

Gingrich and Perry are battling former Pennsylvania U.S. senator Rick Santorum to put together enough conservative votes to block Romney's march to the nomination.

Romney won the Iowa caucuses and New Hampshire primary this month - the first two nomination contests - and is favored to win the South Carolina primary Saturday as well as Florida's primary on January 31.

Santorum, thought earlier this month to be Romney's main challenger, has not been as vocal in calls for Romney to release his tax returns.

A Santorum aide said that he was unsure whether Santorum would press Romney on the matter, but said, "We've been a pretty staunch advocate of airing out all the laundry now."

"We don't need any surprises," the aide said. "We need to know now."

The Romney campaign dismissed the latest calls to release his tax returns as a sign of desperation.

"This is pasta politics," Eric Fehrnstrom, a senior Romney adviser, said. Gingrich is "throwing spaghetti against the wall to see what sticks."

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Iran sends rare letter to U.S. over killed scientist

Mahmoud Ahmadinejad

(Reuters) - Iran said on Saturday it had evidence Washington was behind the latest killing of one of its nuclear scientists, state television reported, at a time when tensions over the country's nuclear program have escalated to their highest level ever.

In the fifth attack of its kind in two years, a magnetic bomb was attached to the door of 32-year-old Mostafa Ahmadi-Roshan's car during the Wednesday morning rush-hour in the capital. His driver was also killed.

U.S. Secretary of State Hilary Clinton denied responsibility and Israeli President Shimon Peres said Israel had no role in the attack, to the best of his knowledge.

"We have reliable documents and evidence that this terrorist act was planned, guided and supported by the CIA," the Iranian foreign ministry said in a letter handed to the Swiss ambassador in Tehran, state TV reported. The Swiss embassy represents U.S. interests in a country where Washington has no diplomatic ties.

The spokesman for Iran's Joint Armed Forces Staff, Massoud Jazayeri, said: "Our enemies, especially America , Britain and the Zionist regime (Israel), have to be held responsible for their actions."

Iran in the past has accused Israel of causing a series of spectacular and sometimes bloody mishaps to its nuclear programme. Israeli officials do not comment on any involvement in those events, although some have publicly expressed satisfaction at the setbacks.

Feeling the heat from unprecedented new sanctions, Iran's clerical establishment has brandished its sword by threatening to block the main Mid-East oil shipping route, starting to enrich uranium at an underground bunker and sentencing an Iranian-American citizen to death on spying charges.

State TV said a "letter of condemnation" had also been sent to Britain, saying the killing of Iranian nuclear scientists began after the head of Britain's MI6 spy service announced intelligence operations against states seeking nuclear weapons.

The West says Iran's nuclear programme is aimed at building a bomb. Tehran says it has the right to peaceful nuclear power.

Tehran has urged the U.N. Security Council and Secretary-General Ban Ki-moon to condemn the latest killing.

After years of international sanctions that had little impact on Iran, U.S. President Barack Obama signed new measures on New Year's Eve that, if fully implemented, would make it impossible for most countries to pay for Iranian oil.

Washington is requiring that countries gradually reduce their purchases of Iranian oil in order to receive temporary waivers from the sanctions.

The European Union is expected to unveil similar measures next week, and announce a gradual oil embargo among its member states, who collectively buy about a fifth of Iran's exports.

The combined measures mean Iran may fail to sell all of the 2.6 million barrels a day of exports it relies on to feed its 74 million people. Even if it finds buyers, it will have to offer steep discounts, cutting into its desperately-needed revenue.

On Tuesday shipping sources told Reuters Iran was storing an increasing supply of oil at sea - as much as 8 million barrels - and was likely to store more as it struggles to sell it.

Iran denies it is having trouble: "There has been no disruption in Iran's crude exports through the Persian Gulf ... We have not stored oil in the Gulf because of sanctions as some foreign media reported," oil official Pirouz Mousavi told the semi-official Mehr news agency on Friday.

The sanctions are causing real hardship on the streets, where prices for basic imported goods are soaring, the rial currency has plummeted and Iranians have been flocking to sell rials to buy dollars to protect their savings.

The pain comes less than two months before a parliamentary election, Iran's first since a presidential vote in 2009 that was followed by eight months of street demonstrations.

Iran's authorities successfully put down that revolt by force, but since then the "Arab Spring" has shown the vulnerability of authoritarian governments in the region to protests fueled by anger over economic difficulty.

CLASH THREAT

Iran has threatened to block the Strait of Hormuz leading to the Gulf if sanctions are imposed on its oil exports, and has threatened to take unspecified action if Washington sails an aircraft carrier through the strait, an international waterway.

Military experts say Tehran can do little to fight the massive U.S.-led fleet that guards the strait, but the threats raise the chance of a miscalculation that could lead to a military clash and a global oil crisis.

The Pentagon said on Friday that small Iranian boats had approached close to U.S. vessels in the strait last week, although it said it did not believe there was "hostile intent."

The United States and Israel have not ruled out military action if diplomacy fails to resolve the nuclear dispute. Iran says it would retaliate if attacked.

The tension has caused spikes in global oil prices in recent weeks, although prices eased at the close of last week's trading on the prospect of reduced demand in economically stricken European countries. Brent crude fell 82 cents to settle at $110.44 a barrel on Friday.

The chances for an imminent easing of tension look even more remote as the nuclear deadlock continues because of Iran's refusal to halt the sensitive nuclear work.

Last week Iran began enriching uranium underground - the most controversial part of its nuclear programme - at a bunker deep below a mountain near the Shi'ite holy city of Qom.

Nuclear talks with major powers collapsed a year ago. Iran says it wants the talks to resume, but the West says there is no point unless it is willing to discuss a halt to uranium enrichment, which can be used to make material for a bomb.

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Taiwan votes in tight presidential polls

Tsai Ing-wen cast her vote shortly before 10 am in a suburb of Taipei, AFP

Taipei - Taiwan began voting on Saturday in a tight presidential election that will decide who will run the island and manage crucial ties with China over the next four years.

Polls opened at 08:00 for the island's 18.1 million eligible voters in an election where the choice is essentially between pro-China incumbent Ma Ying-jeou and his main challenger Tsai Ing-wen, a China-sceptic.

"I voted for Ma because I am doing business with China and I often travel there," said businesswoman Ane Wei as she left a polling station in downtown Taipei.

"It'd be more convenient for me and good for my business if he remains in office."

Ruby Yang, an office worker, said she had cast her ballot in favour of Tsai "because I want to see the first female president in Taiwan".

Tsai cast her vote shortly before 10:00 in a suburb of Taipei, and Ma was expected to vote shortly afterwards.

For the past ten days, no opinion polls have been allowed, but the final surveys published last week showed a race too close to call, with Ma of the Kuomintang (KMT) party leading Tsai by as little as three percentage points.

Beijing and Washington are watching closely, as victory for Ma, 61, would likely be seen as a renewed mandate for policies that have brought about the most dramatic thaw in ties with the mainland in over 60 years.

"The reason why the Chinese mainland is so concerned about the Taiwan election is because we are worried that the idea of 'Taiwan independence' will be further spread by the process, as it was in the past," the state-controlled Chinese paper Global Times said on Friday.

Boosting trade

But it went on to say that "with democracy developing, rationality is growing while extremism is on the wane in Taiwan. In the future, the rotation of ruling parties will have a smaller influence on Taiwan's policymaking".

Ma was elected four years ago on a promise to improve Taiwan's economy by boosting trade and travel links with China and the key achievement of his term is a sweeping trade pact signed in 2010.

A win for 55-year-old Tsai could usher in a period of uncertainty in ties with China, as her Democratic Progressive Party (DPP) has traditionally favoured distancing the island from the mainland.

China and Taiwan have been governed separately since the end of a civil war in 1949, but Beijing still claims sovereignty over the island, and has vowed to get it back, even if it must go to war to make it happen.

The United States, too, is keeping a close eye on the election, hoping the outcome will not upset the stability that the strategically vital Taiwan Straits area has experienced since Ma assumed power in 2008.

Further complicating the race is the third candidate, former KMT heavyweight James Soong, 69, who could cost Ma the result by taking crucial votes away.

Officials believe a relatively large proportion of the eligible voters will cast their ballots because of the tightness of the race.

Both Ma and Tsai staged huge rallies in Taipei on Friday to whip up support and try to win the undecided voters who will decide the outcome.

Chang Poh-ya, chairwoman of the Central Election Commission, said on Friday she expected the turnout rate to reach about 80%, compared with just over 76% in the 2008 vote.

The nearly 15 000 polling stations will close at 16:00. The presidential vote coincides with a poll for Taiwan's 113-member parliament, where the KMT currently has a majority.

News by News24


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Romney eyes New Hampshire win despite late attacks

Romney in talking

(Reuters) - Mitt Romney was poised to take a big step toward the Republican U.S. presidential nomination on Tuesday by capturing New Hampshire, hoping to ride out last-minute attacks labeling him a corporate raider who enjoyed firing workers.

The former governor of neighboring Massachusetts carried a sizeable lead in polls into voting day, a sufficient cushion that should force rivals Ron Paul, Jon Huntsman, Newt Gingrich and Rick Santorum into a battle for second place.

Romney, 63, would be the first Republican who is not an incumbent president to win the first two early voting states, after his slim eight-vote victory over former Pennsylvania Senator Santorum a week ago in the Iowa caucuses.

A more resounding win would provide momentum going into South Carolina on January 21 and Florida on January 31. He leads in polls of both states and victories there could all but sew up his nomination to face Democratic President Barack Obama in the November 6 general election.

A Suffolk University/7 News tracking poll on Tuesday showed Romney with 37 percent support among New Hampshire voters, versus 18 percent for Paul, 16 percent for Huntsman, 11 percent for Santorum, 9 percent for Gingrich and 1 percent for Texas Governor Rick Perry.

Seven percent of voters were undecided in the telephone survey on Sunday and Monday, which had an error margin of 4.4 percentage points.

The same poll on Monday had Romney at 33 percent, Paul at 20 percent, Huntsman with 13 percent, Gingrich at 11, Santorum 10 and undecided at 12 percent.

"You're going to make a big statement tomorrow, let's take it to the next step, give me the boost I need, I hope," said Romney in Bedford on Monday night at his final rally of the day.

It was unclear how much damage had been done by a mess of his own making in which Romney declared "I like being able to fire people who provide services to me," in discussing the need for greater competition between health insurance companies.

Romney's opponents seized on the comment as evidence that the former venture capitalist is an out-of-touch politician and coupled it with attacks over his record at Bain Capital, a firm that bought companies and restructured them.

"Governor Romney enjoys firing people. I enjoy creating jobs," Huntsman said.

In a sharp departure for a party known as friendly to business, Republicans seeking to slow Romney sounded more like populists as they bashed his work as a venture capitalist.

Former House Speaker Gingrich, brooding over negative attacks from Romney and his backers that knocked him out of the front-runner position, has launched the toughest onslaught.

"Mitt Romney was not a capitalist during his reign at Bain. He was a predatory corporate raider," a video produced by a pro-Gingrich group said.

New Hampshire voting stations close at 7 p.m. EST (midnight GMT). About 250,000 people are expected to vote in the Republican primary while 75,000 are likely to vote to endorse Obama's re-election.

In Dixville Notch, the tiny village that traditionally votes at midnight to kick off New Hampshire first-in-the-nation primary, the nine voters were split at two votes each for Romney and Huntsman.

WHO CAN DEFEAT OBAMA?

Some voters expressed strong support for Romney.

"I saw him work as a businessman, he sees what needs to be done and gets it done," said nurse Dennis Hamson, 58, who was voting in Londonderry early on Tuesday.

But not everyone was happy about voting for him.

Eli Haykinson of Bedford said he did not want to vote for Romney but might have to because he could have the best chance to defeat Obama. "I personally don't like his huge campaign style. You don't really get to feel him at all," Haykinson said.

Romney's rivals were mostly waging a fierce battle to sway undecided voters their way and win second place. "He's a homeboy. He's been here for a whole lot of years... you serve in the neighboring state as governor, you've got a lot of advantages in terms of name recognition," Huntsman said on MSNBC.

Both libertarian U.S. Representative Paul and Huntsman, a former Utah governor who was the U.S. ambassador to China, have been on the rise in recent days.

Santorum, who nearly won Iowa by appealing to social conservatives, has not seen that message resonate in New Hampshire.

Voter Luke Breen, 52, a financial analyst voting in Londonderry, where many residents commute to Boston, said he would not support a candidate who seemed intolerant and had backed Huntsman.

"He seemed to be more worldly," he said. "I know gay people and everyone has to have gay rights under our constitution."

Santorum and Perry, along with Gingrich, are looking ahead to South Carolina to challenge Romney.

Romney leads there for now but Gingrich backers have launched $3.4 million worth of ads in South Carolina to try to slow him down in the more conservative southern state.

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Iran Sentences American, 28, to Death

Amir Mirzaei Hekmati

TEHRAN, Iran — An Iranian court has convicted an American man of working for the CIA and sentenced him to death, state radio reported Monday, in a case adding to the accelerating tension between the United States and Iran.

Iran charges that as a former U.S. Marine, Amir Mirzaei Hekmati, received special training and served at U.S. military bases in Iraq and Afghanistan before heading to Iran for his alleged intelligence mission. The radio report did not say when the verdict was issued.

The 28-year-old former military translator was born in Arizona and graduated from high school in Michigan. His family is of Iranian origin. His father, a professor at a community college in Flint, Michigan, has said his son is not a CIA spy and was visiting his grandmothers in Iran when he was arrested.

Behnaz Hekmati, his mother, said in an email to The Associated Press that she and her husband, Ali, are "shocked and terrified" that their son has been sentenced to death. She said the verdict is "the result of a process that was neither transparent nor fair."

Under Iranian law, he has 20 days to appeal. Hekmati has a court-appointed lawyer who was identified only by his surname, Samadi, and there was no word about an appeal.

Gholam Hossein Mohseni Ejehei, spokesman for Iran's judiciary said if the verdict is appealed, it would go to Iran's Supreme Court, the official IRNA news agency reported.

Hekmati's trial took place as the U.S. announced new, tougher sanctions against Iran over its nuclear program, which Washington believes Tehran is using to develop a possible atomic weapons capability.

Iran, which says it only seeks nuclear reactors for energy and research, has sharply increased its threats and military posturing against stronger pressures, including the U.S. sanctions targeting Iran's Central Bank in attempts to complicate its ability to sell oil.

The U.S. State Department has demanded Hekmati's release.

The court convicted him of working with a hostile country, belonging to the CIA and trying to accuse Iran of involvement in terrorism, Monday's report said.

In its ruling, a branch of Tehran Revolutionary Court described Hekmati as a mohareb, an Islamic term that means a fighter against God, and a mofsed, or one who spreads corruption on earth. Both terms appear frequently in Iranian court rulings.

In a closed court hearing in late December, the prosecution asked for the death penalty for Hekmati.

The U.S. government has called on Iranian authorities to grant Swiss diplomats access to him in prison. The Swiss government represents U.S. interests in Iran because the two countries don't have diplomatic relations.

Hekmati is a dual U.S.-Iranian national. Iran considers him an Iranian since the country's law does not recognize dual citizenship.

Similar cases against Americans accused of spying have heightened tensions throughout the years-long standoff over Iran's nuclear program.

Iran arrested three Americans in July 2009 along the border with Iraq and accused them of espionage, though the Americans said they were just hiking in the scenic and relatively peaceful Kurdish region of northern Iraq.

One of them was released after a year in prison, and the other two were freed in September in deals involving bail payments that were brokered by the Gulf sultanate of Oman, which has good relations with Iran and the U.S.

On Dec. 18, Iran's state TV broadcast video of Hekmati delivering a purported confession in which he said he was part of a plot to infiltrate Iran's Intelligence Ministry.

In a statement released the same day, the Intelligence Ministry said its agents identified Hekmati before his arrival in Iran, at Bagram Air Field in neighboring Afghanistan. Bagram is the main base for American and other international forces outside Kabul, the Afghan capital.

It is not clear exactly when he was arrested. News reports have said he was detained in late August or early September.

Hekmati's father said in a December interview with The Associated Press, that his son was a former Arabic translator in the U.S. Marines who entered Iran about four months earlier to visit his grandmothers.

At the time, he was working in Qatar as a contractor for a company "that served the Marines," his father said, without providing more specific details.

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Hormuz Bypass Oil Pipeline Delayed as Iranian Tensions Mount

Ships load fuel at an oil products storage terminal in Fujairah

A pipeline that would allow oil from the United Arab Emirates to bypass the Strait of Hormuz separating it from Iran has been delayed because of construction difficulties, two people with knowledge of the matter said.

As many as 270 construction issues have pushed back the completion date, said the two people, declining to be identified because they’re not allowed to speak publicly on the matter. The $3.3 billion project won’t be ready until at least April, one of them said. Abu Dhabi, holder of the U.A.E.’s oil reserves, had planned to start exports in January 2011 through the pipeline to a port outside the strait, Dieter Blauberg, the project’s former director, said in May 2009.

The 1.5 million barrel-a-day link would ensure the U.A.E. can export crude without risking a blockade at Hormuz, where fully laden tankers exit the Persian Gulf with one-fifth of the world’s traded oil. The chance that Iran might try to close the waterway intensified as Europe prepares to follow tougher U.S. sanctions on the country.

“That pipeline would carry pretty much all of Abu Dhabi’s oil,” Robin Mills, an analyst at Manaar Energy Consulting in Dubai, said Jan. 5. “It’s a critical bit of infrastructure, and it is remarkable it hasn’t been completed.”

The strait, 21 miles wide at its narrowest point, has 14 crude tankers passing through it each day on average, according to the U.S. Energy Information Administration.
Important Chokepoint

Most of the oil exports from Saudi Arabia, OPEC’s biggest producer, as well as crude from Iraq, Kuwait, the U.A.E., Qatar and Iran itself must pass through the waterway, making Hormuz the world’s most important chokepoint with a daily flow of 17 million barrels a day last year, according to EIA data.

An official at International Petroleum Investment Co., the pipeline’s owner, declined to say when the project would start when asked by Bloomberg on Jan. 3 and the company didn’t respond to an earlier e-mail seeking comment. China Petroleum Engineering & Construction Corp., the pipeline’s contractor, didn’t respond to a fax seeking comment on Dec. 15, and a spokesman for its parent China National Petroleum Corp. declined to comment when Bloomberg contacted him that day by phone.

An official at Abu Dhabi Co. for Onshore Oil Operations, or ADCO, the state company assigned to operate the pipeline, referred all inquiries to IPIC, speaking by phone on Jan. 6. Abu Dhabi National Oil Co., or Adnoc, which owns 60 percent of ADCO, did not respond to questions e-mailed on Dec. 21 and public relations officials had no immediate response when contacted by phone that day and on Dec. 22 and Jan. 3.
Across Desert, Mountains

Among ADCO’s minority shareholders, Royal Dutch Shell Plc (RDSA) declined to comment in a Dec. 21 e-mail, as did Exxon Mobil Corp. (XOM) while BP Plc (BP/) declined to comment in a Jan. 3 e-mail and a Partex Oil and Gas official declined to comment by phone on Jan. 4. Total SA (FP) didn’t respond to Dec. 21 e-mail seeking comment.

Once ready, the pipeline will transport crude from Habshan, the collection point for Abu Dhabi’s onshore oil fields, over 230 miles (370 kilometers) of desert and razorback mountains to the port of Fujairah, on the U.A.E.’s eastern coast, facing the Gulf of Oman. The project’s declared aim is to “offset reliance” on Gulf terminals while reducing shipping congestion, according to IPIC, the Abu Dhabi government-run owner.

The line terminates at a kilometer-long (0.6 mile-long) site containing eight white storage tanks and pipes stacked four high over the length of a football field, nestled at the foot of the Hajar Mountains.

Tankers will also save two days sailing time, worth about $38,000, by loading at Fujairah instead of Abu Dhabi, according to data provided by Clarkson Research Services Ltd.
Almost Ready

IPIC initially planned to begin filling the pipeline in September 2010 then load cargoes the following January, Blauberg said in 2009. It later pushed back the start without explanation, saying in a bond prospectus on Oct. 19, 2011, that it expected to deliver first oil in “early 2012.”

The U.S. tightened economic sanctions against Iran over its nuclear program on Dec. 31, and the European Union is weighing a ban later this month on purchases of Iranian crude. Iran held 10 days of naval maneuvers east of Hormuz ending Jan. 3 and warned it would block the strait if prevented from selling its oil, according to Iranian state-run news agencies. Brent crude futures have risen 5 percent so far this month to $133 a barrel.

A potential Hormuz blockade “still remains the ultimate fear in the oil market,” Barclays Plc said in a Jan. 5 note.

‘Tanker War’

Should the Hormuz be closed to ships, the pipeline alone won’t prevent price rallies because most of the oil from the Gulf would still be stopped, Kamel al-Harami, an independent oil analyst said by phone from London on Jan. 6.

Weeks of Iran tension has added about $10 a barrel to Brent crude prices, said al-Harami, who was head of crude and products marketing at state-run Kuwait Petroleum Corp. during the 1980s “Tanker War” when Iran and Iraq attacked each other’s ships.

Still, a closure of the strait by Iran, in response to opposition to the nation’s nuclear program, is not a “high- likelihood event,” David Fyfe, head of the International Energy Agency’s oil market and industry division, said in a Jan. 4 telephone interview from Paris.

A Jan. 5 visit to the Fujairah site marked by a black-and- white sign saying “Abu Dhabi Pipeline Co. Oil Terminal,” showed construction workers in blue overalls and hardhats shuttled into and out of the oil storage facility by bus.

Khaled al-Raeesi, a public relations and securities officer for China Petroleum Engineering & Construction, declined to comment on the pipeline’s status, when questioned at the site that day, deferring all questions to IPIC. Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed al Nahyan visited the project last month, he said.

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Unemployment near three-year low

Employed People in USA

WASHINGTON (Reuters) -

U.S. employment growth accelerated last month and the jobless rate dropped to a near three-year low of 8.5 percent, the strongest evidence yet the economic recovery is gaining steam.

Nonfarm payrolls increased 200,000 in December, the Labor Department said on Friday. It was the biggest rise in three months and beat economists' expectations for a 150,000 gain.

The unemployment rate fell from a revised 8.7 percent in November to its lowest level since February 2009, a heartening sign for President Barack Obama whose re-election hopes could hinge on the state of the labor market.

"The labor market is healing, but we still have a long way to go to recoup the losses we have endured. We may be close to a tipping point where gains can become more self-feeding," said Diane Swonk, chief economist at Mesirow Financial in Chicago.

A string of better-than-expected U.S. data in recent weeks has highlighted a contrast between the recovery in the world's biggest economy and Europe, where the economy is widely believed to be contracting.

The jobs data was overshadowed in financial markets by concerns over Europe's debt crisis. U.S. stocks ended mostly down, while Treasury debt prices rose on safe-haven bids.

The dollar rose to a near 16-month high against the euro.

Republican presidential hopefuls have blasted Obama's economic policies as doing more harm than good.

The latest economic signs, however, could offer him some political protection.

The economy added 1.6 million jobs last year, the most since 2006, and the jobless rate, which peaked at 10 percent in October 2009, has dropped 0.6 percentage point in the last four months.

Obama welcomed the news and urged Congress to extend a two-month payroll tax cut through 2012 to help sustain the recovery.

"We're moving in the right direction. When Congress returns they should extend the middle-class tax cut for all of this year, to make sure we keep this recovery going," he said.

LONG ROAD BACK

Employment remains about 6.1 million below its pre-recession level and at December's pace of job growth, it would take about 2-1/2 years to win those jobs back. There are roughly 4.3 unemployed people for every job opening.

Unseasonably mild weather last month helped fuel a hefty gain in construction employment. Courier jobs also rose sharply, a move the Labor Department pinned on strong online shopping for the holiday season.

Those jobs could be lost in January and the unemployment rate might rise as Americans who had abandoned the hunt for work are lured back into the labor market.

The drop in the jobless rate was mostly due to strong hiring. The labor force shrank only modestly.

A broad measure of unemployment, which includes people who want to work but have stopped looking and those working only part time but who want more work, dropped to an almost three-year low of 15.2 percent from 15.6 percent in November.

Still, all told, 23.7 million Americans are either out of work or underemployed.

With the labor market still far from healthy, the debt crisis in Europe unresolved and tensions over Iran threatening to drive up oil prices, the U.S. economy faces stiff headwinds.

FED STILL IN PLAY

Economists predict the recovery will lose a step early this year after expanding in the fourth quarter at what is expected to be the fastest pace in 1-1/2 years.

While the prospect of a further easing of monetary policy was damped a bit by the jobs data, the shaky outlook means a third round of asset purchases by the Federal Reserve remains an option.

"The Fed will be watching for further credible evidence that this improving trend is gaining traction," said Anthony Karydakis, chief economist at Commerzbank in New York.

New York Federal Reserve Bank President William Dudley on Friday suggested the U.S. central bank was still leaning toward buying more bonds to pull borrowing costs lower, describing the recovery as "frustratingly slow" and the unemployment rate as "unacceptably high."

"I believe it is also appropriate to continue to evaluate whether we could provide additional (policy) accommodation," said Dudley.

GOVERNMENT A DRAG

All the job gains in December came from the private sector, where payrolls rose 212,000 - the most in three months.

Government employment contracted 12,000, with most of the drag coming from local government layoffs. However, the pace of government job losses is moderating as some states report revenue growth after years of being in the red.

For all of 2011, the private sector added 1.9 million jobs, while government employment fell 280,000. A measure of the share of industries that showed job gains during the month rebounded to a five-month high in December after diving in November.

Construction payrolls increased 17,000 after falling 12,000 in November as mild weather has boosted groundbreaking for new homes.

Transportation and warehousing employment jumped 50,200. The bulk of the rise came from the messenger industry, which added 42,000 jobs, reflecting an increase in deliveries of online purchases made during the holiday season.

Manufacturing jobs rose 23,000, the largest increase since July. Factory employment rose 225,000 last year, sustaining gains for the first time since 1997.

But there were soft spots in retail, where payrolls growth slowed to 27,900 after hefty gains in November as retailers geared up for a busy holiday shopping season.

Temporary hiring, seen as a harbinger of future hiring, fell for the first time June, dropping 7,500 in December after gaining 11,200.

Hourly earnings rose a modest four cents, indicating that most of the jobs being created are low paying.

This is a potentially troubling sign for consumer spending, which has been largely supported by a reduction in savings, although it also signals a lack of inflation pressure.

"Firms need to grow wages faster if consumption is to accelerate. There is not a lot of appetite to give raises," said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.

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Congress punts hard payroll tax work to 2012

Barack Obama

(Reuters) - President Barack Obama signed into law a two-month payroll tax cut extension on Friday, capping a year of fierce partisan combat over taxes and spending that will resume in January and play heavily in the 2012 elections.

The Senate and the House of Representatives, by voice votes in chambers nearly emptied for the holidays, passed a $33 billion (21 billion pounds) bill to keep the payroll tax rate at 4.2 percent through February. It had been scheduled to increase on January 1 to 6.2 percent. Obama swiftly signed the bill.

"We have a lot more work to do," the president said at the White House. "This continues to be a make-or-break moment for the middle class ... There are going to be some important debates next year."

Obama heads to vacation in Hawaii with an important political win in his portfolio after he and fellow Democrats prevailed in the message war by backing lower taxes for middle-class Americans in the midst of a fragile economic recovery.

The battle took a toll on House Republicans led by Speaker John Boehner, who were forced to make an embarrassing retreat and agree to a short-term deal Thursday after getting hit by critics on all sides, include their colleagues in the Senate.

The temporary fix lets lawmakers lower the curtain, for now, on a year of political deadlock that in the end produced only a series of inconclusive truces. The fiscal policy debate is set to rage straight through the 2012 election season and beyond.

While Congress is on a long winter break now and does not return to full swing until late January, newly appointed negotiators are expected to begin work soon on figuring out how to pay for extending the payroll tax cut through 2012.

Republicans have sought a continued freeze on federal worker pay and cuts in Medicare benefits for the wealthy. Democrats have rejected both ideas while proposing a surtax on the wealthy to cover the extension's cost. Republicans reject this.

Both sides have been open to cutting federal workers' pension benefits. There also were last-minute Senate negotiations last week on possibly ending some tax breaks for the wealthy, such as a small one involving corporate jets.

Minutes after the bipartisan deal was passed by Congress, the bickering that has come to dominate Capitol Hill resumed.

Republican Representative Tom Price, a leader of House conservatives, immediately criticized the short-term extension, calling it a "two-month punt" and saying it would not have been needed if Senate Majority Leader Harry Reid, a Democrat, and Obama had "been willing to do their job today."

'NOTHING OFF THE TABLE'

In a sign that the battle is far from over, Reid signaled that Democrats could renew their push for a surtax on wealthier Americans. Democrats had dropped that demand during the year-end negotiations that produced the two-month deal.

"There is nothing off the table," he said.

Obama scored a victory in the payroll tax struggle over Tea Party conservatives in the House who tried to block the two-month extension. They backed down on Thursday in the face of bipartisan criticism, but they are not going away.

Representative Tim Huelskamp, a first-term Republican, said on CNN that he was disappointed with Republican leadership caving in to pressure and accepting the two-month deal.

Next year could be a rough one for Boehner, the top House Republican, said Norm Ornstein, a scholar at the American Enterprise Institute, a conservative think tank.

Boehner spent 2011 having to negotiate with many of his own party members on just about every major piece of legislation.

Now that House Republicans have had to go along with Democrats in the payroll tax debate, "the idea that this group of angry Tea Party Republicans, who feel betrayed, now will go along or that Boehner will be more capable of defying them is a little bit wrong-headed," Ornstein said.

Meanwhile, Democrats might be emboldened, believing "they've learned to play poker," he added.

Patrick Griffin, associate director Of American University's Center for Congressional and Presidential Studies, said House Republicans "overplayed their hand. How they interpret that lesson will be very interesting."

Any edge conferred on Democrats might be short-lived, however. The 2012 election cycle is just set to kick off with the Iowa Republican presidential caucus on January 3 and a long road lies ahead until voters go to the polls in November.

The payroll tax funds the Social Security retirement pension system. If it had been allowed to rise, the increase would have hit the wallets of 160 million working Americans.

The $33 billion needed to pay for the two-month extension will be raised by increasing fees charged by housing finance giants Fannie Mae and Freddie Mac for guaranteeing mortgages.

Analysts said the fee hike, which investors will likely pass along to borrowers, could raise financing costs for mortgages, but probably not enough to slow a housing market recovery.

Unemployment benefits set to expire soon were extended as well, while cuts in payments to doctors who treat patients in the government-backed Medicare health insurance program for the elderly were postponed, under the bill signed by Obama.

Also included in it was a Republican initiative aiming to force the administration into fast approval of an oil pipeline opposed by environmentalists and many Democrats. The provision gives Obama 60 days to either approve TransCanada's Keystone XL pipeline from Canada to Gulf of Mexico facilities in Texas, or declare it not in the national interest.

Obama wants more time to evaluate the environmental impact of routing the pipeline through sensitive areas of Nebraska. The White House has said that if pushed for a decision within 60 days, the administration would be forced to reject the project.

Not extending the payroll tax cut, analysts warned, could have jeopardized the recovery, even risking another recession.

The modest two-month fix drew fire from some businesses that said it will complicate payroll processing and tax planning.

The payroll situation "could get more confusing," said Robert Gard, an accountant with Gard and LaFreniere LLC in Alpharetta, Georgia. If the tax is not extended at the end of February, businesses will need to reprogram software, he said.

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Wave of attacks kills dozens amid Iraq's upheaval

Bomb Attack in Baghdad

Baghdad (CNN) -- A wave of explosions in Baghdad Thursday killed at least 63 people and wounded 185, authorities say, raising fears about the stability of the country amid political upheaval that threatens to undo Iraq's government just days after U.S. troops withdrew from the country.

Nine car bombs and six roadside bombs went off and a mortar round was fired in a two-hour period, targeting residential, commercial and government districts in the Iraqi capital, two police officials told CNN.

The deadliest attack was a suicide car bombing outside the offices of the Integrity Commission, the country's main anti-corruption body. At least 23 people were killed and 43 others were wounded in the explosion, which also damaged part of the building, police officials said.

The attacks targeted civilians across all walks of life. One took place at a market. Another, at a school as children were arriving.

CNN's Arwa Damon in Baghdad described it as a "nightmare scenario," eerily reminiscent of earlier days of the Iraq war.

The violence comes as Iraq's Shiite, Sunni and Kurdish political leaders square off over a warrant issued for the arrest of Vice President Tariq al-Hashimi, who is accused of organizing his security detail into a death squad that targeted government and military officials.

Shiite Prime Minister Nuri al-Maliki has demanded that Kurdish lawmakers hand over the Sunni vice president, who has denied the charges and refuses to return to Baghdad from northern Iraq's semi-autonomous Kurdish region.

Finance Minister Rafie al-Issawi told CNN he does not believe the violence is directly connected to the latest political developments, "but there is a good environment for terrorists to be active in these bad circumstances."

Terrorists "will justify their criminal activities" and argue that the solution to Iraq's woes "isn't in the political process," said al-Issawi, a member of the Sunni-backed Iraqiya minority political bloc.

The seemingly coordinated explosions Thursday struck during the height of morning rush hour, hitting a number of Baghdad's primarily mixed Sunni-Shiite neighborhoods.

There have been no immediate claims of responsibility, though the attacks resemble previous bombings that have been claimed by both Sunni and Shiite insurgents as well as al Qaeda in Iraq.

At the Medical City hospital in central Baghdad, doctors treated the wounded whose bodies were peppered with what appeared to be shrapnel from explosions.

Images of bloodied, battered bodies and destroyed storefronts and homes were broadcast on Iraqi television stations.

While violence in Iraq has fallen off in recent years, the latest spate of attacks are among the worst since August when a series of coordinated bombings killed at least 75 people in 17 Iraqi cities.

The attacks come amid heightened sectarian tensions, raising fears that the political turmoil in Iraq could spark a return of sectarian bloodshed that nearly ripped the country apart during the height of the war.

Al-Hashimi has denied the charges against him, saying the accusations are politically motivated amid the rivalry between his Sunni-backed Iraqiya minority political bloc and al-Maliki's Shiite majority bloc.

The warrant for al-Hashimi's arrest was issued just days after Iraqiya suspended its participation in Parliament, claiming it was being cut out of the political process by al-Maliki.

The prime minister has said failing to hand over al-Hashimi or allowing him to flee to another country "could cause problems."

Al-Issawi, the finance minister, told CNN that before U.S. troops left, Iraqi officials made clear their fears of what could happen.

"So many times we warned the Americans, both the political and security situation (are) very fragile. Unfortunately, no one listened."

In a speech this month about bringing the U.S. troops home, President Barack Obama said, "Iraq is not a perfect place. It has many challenges ahead. But we're leaving behind a sovereign, stable and self-reliant Iraq, with a representative government that was elected by its people. "

"There can be no fuller expression of America's support for self-determination than our leaving Iraq to its people. That says something about who we are," Obama added.

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Holiday sales strong, but still discounted

Holiday Shopping

(Reuters) - With six days until Christmas, the U.S. holiday shopping season is better than expected, with discounts deep enough to bring in shoppers who are searching for bargains but not showing the desperation seen in the recession.

Department stores like Macy's Inc are shaping up to be among the big winners, while apparel retailers are being hurt as mild weather limits demand for winter clothes.

"Some of the women's retailers that were doing well earlier in the year are getting hurt this holiday by the resurgence of the department store," said Craig Johnson, president of Customer Growth Partners, a retail consulting firm.

Customer Growth Partners, which has been one of the most bullish forecasters of sales heading into the holiday season, estimated that U.S. retailer sales on Saturday were $26 billion, just shy of the $27 billion spent on "Black Friday," the day after Thanksgiving, which traditionally kicks off the holiday shopping season.

Johnson was one of the most bullish forecasters coming into the holiday season. Now others are joining suit.

ShopperTrak, which monitors traffic at shopping malls, now expects sales in November and December to rise 3.7 percent, up from its September forecast of 3 percent.

Last week, the National Retail Federation raised its forecast, calling for holiday sales to rise 3.8 percent. In October, it forecast a gain of 2.8 percent.

To be sure, that NRF forecast is still less than the 5.2 percent increase reported for 2010. Unemployment was still 8.6 percent in November and lower-income shoppers have been making use of such plans as layaway to paying for holiday items.

So many analysts said sales are not exceptionally strong or exceptionally weak.

"There's more that's normal here than people want to let on," Edward Jones analyst Matt Arnold said.

ShopperTrak cofounder Bill Martin said that discounts were more in the 30 percent to 40 percent range, instead of the 50 percent to 60 percent seen last year.

On Saturday, he said it was hard to find parking spaces at the malls he visited and he saw lots of people with packages. In other words, it was a typical weekend before Christmas.

"It's been a typical shopping pattern," he said.

Overall, traffic to stores may be off a couple of percentage points. But that's because more people are shopping on line, he said.

IBM Benchmark, which tracks transactions on the websites of hundreds of the top retailers, said on Monday it now expects online sales to rise 9.5 percent to 10 percent in December from a year ago.

Trutina Financial Chief Investment Officer Patty Edwards said what she saw at Target this weekend was stocked shelves and normal discounts.

"There weren't any specific markdowns that were overly compelling, but conversely, there didn't seem to be any shortages of items at all," Edwards said

WANT A DEAL? BUY A COAT

Even with retailers managing their pace of discounts and avoiding desperation, higher costs for cotton and other materials are taking their toll. Many retailers' gross margins are likely to decline this holiday season, according to data from Thomson Reuters I/B/E/S.

Over the weekend, 40 percent discounts "seemed to be the cost of doing business," said Nomura Equity Research analyst Paul Lejuez, who follows apparel retailers, adding that "promos are likely to intensify this week."

Among the retailers offering such discounts were Abercrombie & Fitch Co, American Eagle Outfitters Inc, Ann Inc, Gap Inc and Wet Seal Inc, Lejuez said.

Mild weather has cut into sales of winter clothing, said independent retail analyst Brian Sozzi.

"Coats are offering some of the best deals in the mall right now," he said.

One of the featured items on Macys.com on Monday was women's coats for 40 percent to 50 percent off.

"Those cold temperatures that you typically experience in December just haven't been there," said Joe DeRugeriis, senior marketing manager at Planalytics, which provides weather consulting services for businesses.

"People are still going to spend the cash," he said, "but the cash is moving to things more like electronics and not those items that normally sell well this time of the year."

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Last U.S. troops leave Iraq, ending war

Last U.S. convoy leaves Iraq

(Reuters) - The last convoy of U.S. soldiers pulled out of Iraq on Sunday, ending nearly nine years of war that cost almost 4,500 American and tens of thousands of Iraqi lives and left a country grappling with political uncertainty.

The war launched in March 2003 with missiles striking Baghdad to oust President Saddam Hussein closes with a fragile democracy still facing insurgents, sectarian tensions and the challenge of defining its place in an Arab region in turmoil.

The final column of around 100 mostly U.S. military MRAP armored vehicles carrying 500 U.S. troops trundled across the southern Iraq desert from their last base through the night and daybreak along an empty highway to the Kuwaiti border.

Honking their horns, the last batch of around 25 American military trucks and tractor trailers carrying Bradley fighting vehicles crossed the border early Sunday morning, their crews waving at fellow troops along the route.

"I just can't wait to call my wife and kids and let them know I am safe," Sgt. First Class Rodolfo Ruiz said as the border came into sight. Soon afterwards, he told his men the mission was over, "Hey guys, you made it."

For U.S. President Barack Obama, the military pullout is the fulfillment of an election promise to bring troops home from a conflict inherited from his predecessor, the most unpopular war since Vietnam and one that tainted America's standing worldwide.

For Iraqis, though, the U.S. departure brings a sense of sovereignty tempered by nagging fears their country may slide once again into the kind of sectarian violence that killed many thousands of people at its peak in 2006-2007.

Prime Minister Nuri al-Maliki's Shi'ite-led government still struggles with a delicate power-sharing arrangement between Shi'ite, Kurdish and Sunni parties, leaving Iraq vulnerable to meddling by Sunni Arab nations and Shi'ite Iran.

The intensity of violence and suicide bombings has subsided. But a stubborn Sunni Islamist insurgency and rival Shi'ite militias remain a threat, carrying out almost daily attacks, often on Iraqi government and security officials.

Iraq says its forces can contain the violence but they lack capabilities in areas such as air defense and intelligence gathering. A deal for several thousand U.S. troops to stay on as trainers fell apart over the sensitive issue of legal immunity.

For many Iraqis, security remains a worry - but no more than jobs and getting access to power in a country whose national grid provides only a few hours of electricity a day despite the OPEC country's vast oil potential.

U.S. and foreign companies are already helping Iraq develop the world's fourth-largest oil reserves, but its economy needs investment in all sectors, from hospitals to infrastructure.

"We don't think about America... We think about electricity, jobs, our oil, our daily problems," said Abbas Jaber, a government employee in Baghdad. "They (Americans) left chaos."

GOING HOME

After Obama announced in October that troops would come home by the end of the year as scheduled, the number of U.S. military bases was whittled down quickly as hundreds of troops and trucks carrying equipment headed south to Kuwait.

U.S. forces, which had ended combat missions in 2010, paid $100,000 a month to tribal sheikhs to secure stretches of the highways leading south to reduce the risk of roadside bombings and attacks on the last convoys.

Only around 150 U.S. troops will remain in the country attached to a training and cooperation mission at the huge U.S. embassy on the banks of the Tigris river.

At the height of the war, more than 170,000 U.S. troops were in Iraq at more than 500 bases. By Saturday, there were fewer than 3,000 troops, and one base - Contingency Operating Base Adder, 300 km (185 miles) south of Baghdad.

At COB Adder, as dusk fell before the departure of the last convoy, soldiers slapped barbecue sauce on slabs of ribs brought from Kuwait and laid them on grills beside hotdogs and sausages.

Earlier, 25 soldiers sat on folding chairs in front of two armored vehicles watching a five-minute ceremony as their brigade's flags were packed up for the last time before loading up their possessions and lining up their trucks.

The last troops flicked on the lights studding their MRAP vehicles and stacked flak jackets and helmets in neat piles, ready for the final departure for Kuwait and then home.

"A good chunk of me is happy to leave. I spent 31 months in this country," said Sgt. Steven Schirmer, 25, after three tours of Iraq since 2007. "It almost seems I can have a life now, though I know I am probably going to Afghanistan in 2013. Once these wars end I wonder what I will end up doing."

NEIGHBOURS KEEP WATCH

Iran and Turkey, major investors in Iraq, will be watching with Gulf nations to see how their neighbor handles its sectarian and ethnic tensions, as the crisis in Syria threatens to spill over its borders.

The fall of Saddam allowed the long-suppressed Shi'ite majority to rise to power. The Shi'ite-led government has drawn the country closer to Iran and Syria's Bashar al-Assad, who is struggling to put down a nine-month-old uprising.

Iraq's Sunni minority is chafing under what it sees as the increasingly authoritarian control of Maliki's Shi'ite coalition. Some local leaders are already pushing mainly Sunni provinces to demand more autonomy from Baghdad.

The main Sunni political bloc Iraqiya said on Saturday that it was temporarily suspending its participation in the parliament to protest against what it said was Maliki's unwillingness to deliver on power-sharing.

A dispute between the semi-autonomous Kurdish region and Maliki's central government over oil and territory is also brewing, and is a potential flashpoint after the buffer of the American military presence is gone.

"There is little to suggest that Iraq's government will manage, or be willing, to get itself out of the current stalemate," said Gala Riani, an analyst at IHS Global Insight.

"The perennial divisive issues that have become part of the fabric of Iraqi politics, such as divisions with Kurdistan and Sunni suspicions of the government, are also likely to persist."

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Gold ends up, sets biggest weekly drop in 3 months

Gold Bar

(Reuters) - A weakening dollar and short covering drove investors back into gold on Friday, lifting prices to end a sharp four-session pullback that still yielded the biggest weekly decline in almost three months.

Spot gold rallied as much as 1.7 percent to $1,600.49 per ounce, and steadied at $1,596.40 by 4 p.m. EST (2100 GMT,) up from a near 3-month low at 1,560.36 hit in the previous session.

U.S. gold rose 1.31 percent to close at $1,597.90 per ounce, after hitting a high at $1,598.10 per ounce.

David Lee, metals trader at Heraeus Precious Metals Management in New York said he thought gold's push higher on Friday was a function of the yellow metal being temporarily oversold after its nosedive from levels above $1,750 last week.

"Some people were taking the opportunity to scoop it up at lower levels. And, it's still up year to date. So, it wasn't surprising that people wanted to sell it off to raise cash for the year end," Lee said.

He warned, however, that the 1 to 2 percent rebound was not significant relative to the high priced of the yellow metal, adding that prices could come off again if the crisis in Europe worsens before year end.

"If comes back down to the day's low on Sunday night, for example, I'd say dump it really fast. I think it will continue to go down to around $1,550," said Lee.

A slightly weaker dollar against a basket of currencies also

helped boost precious metal prices .DXY. A softer U.S. currency makes dollar-priced commodities, such as gold, more affordable for holders of other currencies.

For the week, bullion lost around 6.60 percent, its biggest fall since late September. It remains vulnerable to a deepening euro zone debt crisis and rising funding stress.

"Gold took a beating this week and today bounced a bit as investors see this as a good moment to buy, but it is still vulnerable," Credit Agricole analyst Robin Bhar said.

"I expect gold will stay under pressure as the funding stress is increasing the need for liquidity, and gold is seen as one of the assets to liquidate."

The need for cash has overwhelmed gold's traditional status as a safe haven in the past few months, putting the metal on course for its first quarterly fall since end-September 2008 when the global credit crunch was at its worst.

Gold has, therefore, benefited recently from developments that have reduced risk aversion and the flight to cash.

It got a boost after Spain attracted solid demand for its bonds on Thursday, helping to ease concerns the country could be among the next to fall in the euro zone's debt crisis.

"At the moment a lot of people are resting their hopes on the fact that physical demand will pull gold back up again, but because of the amount of speculative investment that has gone into this market over the last years, it is obviously exposed on that basis," said Ole Hansen, a senior manager at Saxo Bank.

FUNDING STRESS

Gold benefits when central banks print money or cut interest rates or when money managers diversify assets.

"With access to liquidity being constrained, market participants have increasing problems to refinance," Credit Suisse said in a research note.

"As a result they have to sell their assets - including precious metals - to raise the much-needed cash. This is the main reason why gold prices fall on days of increasing funding stress."

In other precious metals, spot silver gained as much as 2.68 percent to trade at $29.97 an ounce, before pulling back to $29.64 per ounce late in the session.

Spot platinum rose to a high at $1,436.25, then changed hands at $1,415.24, up from $1,404 at Thursday's close.

Palladium climbed to a session high of $632.52 an ounce and then steadied around $620.72, higher than the previous close at $614.25 per ounce.

"As well as tracking gold, for platinum and palladium there are fears over weak industrial growth, and they may be hit harder as people look to liquidate risk," Bhar said.

"Some support however comes from costs. These metals are already trading very close to their costs."

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Comet defies death, brushes up to sun and lives

Comet to Sun

WASHINGTON (AP) — A small comet survived what astronomers figured would be a sure death when it danced uncomfortably close to the broiling sun.

Comet Lovejoy, which was only discovered a couple of weeks ago, was supposed to melt Thursday night when it came close to where temperatures hit several million degrees. Astronomers had tracked 2,000 other sun-grazing comets make the same suicidal trip. None had ever survived.

But astronomers watching live with NASA telescopes first saw the sun's corona wiggle as Lovejoy went close to the sun. They were then shocked when a bright spot emerged on the sun's other side. Lovejoy lived.

"I was delighted when I saw it go into the sun and I was astounded when I saw something re-emerge," said U.S. Navy solar researcher Karl Battams.

Lovejoy didn't exactly come out of its hellish adventure unscathed. Only 10 percent of the comet — which was probably millions of tons — survived the encounter, said W. Dean Pesnell, project scientist for NASA's Solar Dynamics Observatory, which tracked Lovejoy's death-defying plunge.

And the comet lost something pretty important: its tail.

"It looks like the tail broke off and is stuck" in the sun's magnetic field, Pesnell said.

Comets circle the sun and sometimes get too close. Lovejoy came within 75,000 miles of the sun's surface, Battams said. For a small object often described as a dirty snowball comprised of ice and dust, that brush with the sun should have been fatal.

Astronomers say it probably didn't melt completely because the comet was larger than they thought.

The frozen comet was evaporating as it made the trip toward the sun, "just like you're sweating on a hot day," Pesnell said.

"It's like an ice cube going by a barbecue grill," he said.

Pesnell said the comet, although only discovered at the end of November by an Australian observer, probably is related to a comet that came by Earth on the way to the sun in 1106.

As Comet Lovejoy makes its big circle through the solar system, it will be another 800 or 900 years before it nears the sun again, astronomers say.

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Eve Carson, UNC Student, Asked Her Alleged Killer To Pray With Her, Witness Says

Eve Carson

A witness testifying in the murder trial of Laurence Alvin Lovette Jr. has made a startling claim about the victim's last moments.

Raleigh local station WRAL reports that Jayson McNeil testified Lovette told him that University of North Carolina student Eve Carson asked him to pray with her before she was murdered.

"Before (Lovette) even shot her, he explained, she was saying, 'Let's pray,'" McNeil said, according to WRAL. "She wanted them to pray together."

In March 2008, prosecutors say that Lovette and Demario Atwater kidnapped Carson, drove her to various ATMs to withdraw money and then shot her five times, killing the former student body president, according to WRAL.

Atwater pleaded guilty last year to crimes connected to the killing and is currently serving two life sentences.

ABC reports that Carson's body was found in the middle of a Chapel Hill street the same day she was murdered.

Lovette is also accused of killing Abhijit Mahato, a Duke University student whose body was found in his apartment, according to CBS News. A judge has ruled that evidence from that case can be used in the Carson trial, according to the Herald Sun.

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U.S. wants drone back from Iran, Obama says

Barack Obama, US President

President Barack Obama said Monday that the United States has asked Iran to return a U.S. drone aircraft that Iran claims it recently brought down in Iranian territory.

"We've asked for it back. We'll see how the Iranians respond," Obama said in a news conference.

The president's comments come one day after it was reported that an Iranian official said the country would not return the drone.

"No nation welcomes other countries' spy drones in its territory, and no one sends back the spying equipment and its information back to the country of origin," said Gen. Hossein Salami, deputy commander of the Armed Forces, according to the semi-official Fars news agency.

"It makes no difference where this drone originated and which group or country sent it to invade our air space," Salami said. "This was an act of invasion and belligerence."

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Boy escapes from terrorist group after five months in captivity

Kidnapped Boy

A BOY of 14 kidnapped by a terror group linked with al-Qaeda has escaped by fleeing in bare feet through a jungle for two days.

Kevin Lunsmann was missing for five months while Islamic militants made ransom demands to his family.

But he outwitted four armed guards by telling them he was going to wash in a stream, before running away.

Villagers found him the next evening after he followed a river down a mountain on the southern Philippine island of Basilan.

Kevin was flown to the capital Manila and phoned his Filipino-American mum Gerfa, who was in the U.S. She and Kevin’s Filipino cousin Romnick Jakaria were kidnapped with the teenager during a holiday to the country in July.

His mum Gerfa was released by the ­insurgent group in October.

Romnick then managed to escape from the terrorists last month.

Kevin and Gerfa’s family in Virginia had received demands for money to ensure their safe return.

Ransom kidnappings in the region are blamed mostly on Abu Sayyaf, an al-Qaeda-linked group which is ­considered a terrorist organization by the Americans.

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Six Staggering Diabetes Facts

 

Diabetes Facts

• There are about 250 million people with diabetes in the world
• Type 1 diabetes is growing by 3% per year in children and adolescents.
• It is estimated that 70,000 children under 15 develop type 1 diabetes each year (200 children a day).
• Of the estimated 440,000 cases of type 1 diabetes in children worldwide, more than a quarter live in South-East Asia, and more than a fifth in Europe.
• In the US, it is estimated that type 2 diabetes represents between 8 and 45% of new-onset diabetes cases in children
• Over a 20-year period, type 2 diabetes has doubled in children in Japan, so that it is now more common than type.

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U.S. Postal Service Plans Dramatic Service Cuts

United States, Post Office

IOWA CITY, Iowa — The U.S. Postal Service's plan to close 252 mail processing facilities and cut 28,000 jobs by the end of next year may help the agency curb its mounting financial problems, but it faces big practical obstacles.

Deciding which plants to close will be difficult and face opposition from community leaders. Actually closing all of them could take a few years, and most workers will stay employed under union rules. The bulk of the job cuts will actually come from attrition and retirements, not layoffs, while the remaining work force is shuffled into new locations and positions.

What's about to unfold in cities from Reno, Nev., to Chicago will illustrate the complexity of cutting a work force protected by strong union contracts and shrinking operations dependent on intricate logistics.

"The downsizing or the demise of the postal service, it's going to be a mess and it's going to be a mess for a long time," said John Zodrow, a retired Denver attorney and former Postal Service arbitrator who wrote a book about its labor relations. "It's a huge undertaking."

The proposed closures are among several moves aimed at helping the agency avert bankruptcy and adjust to declining mail volume as customers migrate to the Internet to communicate and pay bills. Delivery changes announced Monday would virtually eliminate the chance for stamped letters to arrive the next day for the first time in 40 years and pave the way for closing more than half of the 461 plants where the mail gets processed and sorted.

Postal officials say they can save up to $3 billion by 2015 by following through with the cuts – getting rid of buildings, running equipment more efficiently, operating fewer mail trucks and cutting employees.

The postal service's manager of collective bargaining said Monday that the agency foresaw the "potential for significant attrition" given that more than 20 percent of postal workers were eligible for early retirement. Managers and non-career employees could be laid off while no decisions have been made on how any early retirement incentives will be offered, said the official, Kevin Rachel.

For most workers and communities, the uncertainty is terrible but the economic impact might not be as catastrophic as feared. Most workers in the facilities are represented by the American Postal Workers Union, which reached a four-year contract in May guaranteeing that its 220,000 clerks and maintenance employees cannot be laid off or transferred more than 50 miles away.

Employees in plants that are closed will have to decide whether to relocate to the places where work is consolidated, which will need to rapidly expand in size. If they stay behind, they will fight for remaining jobs in the area and will likely have to switch duties. Many post offices, for instance, have deliberately left open retail clerk and letter-carrying jobs.

"It's, `grab a job before there are no more jobs left to be grabbed.' It's the proverbial musical chairs," Zodrow said.

Zodrow said the turbulence could motivate more workers to take early retirement, which he warned would be a mistake for some. Postal workers do not have skills that transfer well to the private sector and are making more than they would elsewhere, he said.

The outcome of negotiations between the postal service and unions representing mail handlers and letter carriers, which both have deadlines of next week, could be crucial in determining how cost-cutting plans are carried out. Mail handlers, who are represented by a union of 47,000 members, are bargaining about job protections and reassignment rules.

Kate Bronfenbrenner, director of labor education research at Cornell University, said she wonders whether the postal service will get as many retirements as it is counting on. "Nobody in this economy is retiring unless they are really ready. There has to be some incentive," she said.

The agency first has to decide which plants to close.

While they have had a list of 252 prospective targets since September, postal officials say final decisions will not be made until they assess the potential savings, the impact on mail delivery and whether other plants in the area could handle the volume.

There will be intense local opposition. The city council in Reno, Nev., passed a resolution Wednesday protesting any plans to close its processing facility and move 177 jobs to West Sacramento, Calif., one of the proposals under review. Members of Congress in Iowa, Illinois and elsewhere are already going to bat for local plants. Businesses that rely on speedy mail delivery are fighting, too.

Once a closing decision is made, it could take a year or longer to wind down operations and transition work elsewhere, postal service spokesman Richard Watkins said in a phone interview from Kansas City.

The closing of the mail processing center in Sioux, City, Iowa, in October illustrates what may be awaiting other postal workers.

Some mail handlers and clerks moved 90 miles north to the facility in Sioux Falls, S.D., where their operations were transferred. Some union employees filled vacant positions for letter carriers in Sioux City and are now walking routes. Others have been performing temporary assignments while they wait for permanent jobs.

"I can't imagine what the hell they are going to do with all these employees," said Scott Tott, the president of the American Postal Workers Union chapter in Sioux City, who lost his job sorting pallets of magazines but still shows up to work every day. "This is a nightmare."

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