Tuesday, February 14, 2012

Moody's warns may cut AAA-rating for UK and France

Moody's warns may cut AAA-rating for UK and France

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A pedestrian walks past a mural by French street artist Tilt, which includes the lyrics to the Sex Pistols ''Anarchy in the UK'' in the Shoreditch area of London January 14, 2012. REUTERS/Andrew Winning
NEW YORK | Tue Feb 14, 2012 3:48am EST
(Reuters) - Rating agency Moody's warned it may cut the triple-A ratings of France, Britain and Austria and it downgraded six other European nations including Italy, Spain and Portugal, citing growing risks from Europe's debt crisis.
Moody's move was less aggressive than rival agency Standard & Poor's, but its action puts London's prized top credit rating in jeopardy for the first time.
It said it was worried about Europe's ability to undertake the reforms needed to address the crisis and the amount of funds available to fight it. It also said the region's weak economy could undermine austerity drives by governments to fix their finances.
The euro and sterling fell after the announcement, with pound falling 0.4 percent to $1.5703 and the single currency dipping 0.3 percent to $1.3154. European and U.S. equity index futures were also lower.
The U.S. rating agency said it changed the outlooks for the ratings of France, Britain and Austria to negative due to "a number of specific credit pressures that would exacerbate the susceptibility of these sovereigns' balance sheets."
Germany's top-tier rating was described as "appropriate" by Moody's, and it affirmed the triple-A rating on the euro zone's bailout fund, the European Financial Stability Fund (EFSF).
Moody's, which said late last year it was reconsidering its European ratings, cut the ratings of Italy, Portugal, Slovakia, Slovenia and Malta by one notch. It downgraded Spain by two notches.
Moody's said the scope of the downgrades was limited due to "the European authorities' commitment to preserving the monetary union and implementing whatever reforms are needed to restore market confidence."
The announcement came a day after Greece's parliament approved a deep new round of budget cuts in the hope of securing new bailout funds and avoiding a chaotic default in March.
Bart Oosterveld, managing director at Moody's sovereign risk group, declined to comment on the state of the negotiations between Athens and its creditors, but said that if Greece were to leave the European Union the impact on financial markets and credit ratings "would be quite profound."
And he warned that European credit markets may still deteriorate despite efforts by the European Central Bank to ease financing pressures with its three-year refinancing operations.
"The markets are better in the short term but probably not in the longer term," Oosterveld told Reuters in an interview. "We think the markets remain quite fragile."
The rating outlooks of the nine countries affected by Moody's action was set to negative, "given the continuing uncertainty over financing conditions over the next few quarters and its corresponding impact on creditworthiness," Moody's said.
BRITAIN, FRANCE UNDER PRESSURE
Britain's finance minister responded by saying the country must keep its promise to slash its large budget deficit.
"This is proof that, in the current global situation, Britain cannot waver from dealing with its debts," Finance Minister George Osborne said. "This is a reality check for anyone who thinks Britain can duck confronting its debts."
The government in Britain has come under increasing pressure to soften its austerity measures to give a stalling economy room to breathe.
The French government said it would press ahead with its policies to improve competitiveness and growth while reducing the government deficit.
"The government is determined to press ahead with its actions to boost growth and competitiveness, notably the reform of the financing of welfare, of employment and the reduction of public deficits," Finance Minister Francois Baroin said in a statement.
The precarious state of European sovereign finances was underlined on Monday, when the head if China's sovereign wealth fund brushed aside an appeal from German Chancellor Angela Merkel to buy European government debt, saying such bonds were "difficult" for long-term investors.
A retreat from European government debt has already been boosting relatively high-yielding Australian and New Zealand debt, as cashed-up Asian sovereign wealth funds and other major bond investors look for safe havens to diversify their holdings.
Reserve Bank of Australia Assistant Governor Guy Debelle said on Tuesday that net purchases of Australian debt by foreigners over the first three quarters of 2011 amounted to more than 3 percent of gross domestic product, markedly larger than Australia's current account deficit.
"Our discussions with market participants suggest that a sizeable share of recent purchases has been by sovereign asset managers," said Debelle.
Moody's move on Monday follows one last month by Standard & Poor's, which stripped France and Austria of their triple-A status, while Italy, Spain, Portugal, Cyprus, Malta, Slovakia and Slovenia were downgraded. S&P also cut the EFSF by one notch.
Also in January, rating agency Fitch downgraded the sovereign credit ratings of Belgium, Cyprus, Italy, Slovenia and Spain, indicating there was a 1-in-2 chance of further cuts in the next two years.
(Reporting by Rodrigo Campos in New York, Daniel Flynn in Paris, Matt Falloon in London, Alex Richardson in Singapore and Wayne Cole in Sydney; Editing by Leslie Adler, Andrew Hay and Andre Grenon)

Tibetan monk sets fire to himself in latest anti-China protest

Tibetan monk sets fire to himself in latest anti-China protest

Monk, 19, is second person to self-immolate in three days and the 23rd to do so in the last year
A Tibetan monk set himself alight in south-west China on Monday, an overseas Tibetan rights group said, in the latest reported incident of anti-Chinese protest.
The Free Tibet group said Lobsang Gyatso, 19, set fire to himself in Aba county, known as Ngaba in Tibetan, in Sichuan province.
"Chinese state security personnel extinguished the flames and forcibly removed him from the scene. Lobsang's whereabouts and wellbeing are unknown," the group said in an emailed statement.
Reuters was unable to reach government officials in Sichuan to request comment.
The monk is the 23rd Tibetan to self-immolate in the last year. He is also the second Tibetan teenager to do so in the last three days in Aba.
China's Xinhua state news agency confirmed that a nun who set herself on fire on Saturday had died.
The self-immolations are a small but potentially destabilising challenge to China's regional policies, and the government has branded those who set themselves alight as terrorists. Activists say China violently stamps out religious freedom and culture in Tibet, the mountainous region that has been under Chinese control since 1950. China rejects criticism , saying its rule has ended serfdom and brought development to a backward region.
Protests by self-immolation have become more common in Tibet and in ethnic Tibetan regions of China and at least 15 Tibetans are believed to have died from their injuries. Exiled Tibetan leaders say they fear a crackdown in the region to coincide with the Tibetan new year on 22 February. The exiled Tibetan spiritual leader, the Dalai Lama, has blamed the self-immolations on "cultural genocide" by the Chinese but he has not called for them to stop.

China issues new rules to limit foreign TV shows

China issues new rules to limit foreign TV shows

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Zhang Yingqi wakes up for her college graduation ceremony as her father Zhang Hong watches television at their house living-room in Shanghai July 2, 2011. REUTERS/Carlos Barria/Files
BEIJING | Tue Feb 14, 2012 10:21am IST
(Reuters) - China's media regulator has issued new rules banning foreign television shows from being shown at primetime as the country tries to encourage domestic programming, state media reported on Tuesday.
Foreign television series must be capped at a total of 50 episodes and the running time for an imported series must not exceed 25 percent of the total time a given channel dedicates to broadcasting such shows, the official China Daily reported.
Most foreign television series shown on Chinese channels are from Hong Kong, Taiwan, South Korea, Thailand and India.
U.S.-made shows are highly popular, but mostly watched online or via pirated DVDs which are widely and cheaply available on the streets.
According to the announcement by the State Administration of Radio, Film and Television, Chinese stations are prohibited from airing foreign series between 7 pm and 10 pm, and must not "intensively" broadcast shows from just one country.
Chinese networks are forbidden too from airing unapproved shows produced by companies outside of China and foreign series that contain violent or vulgar material, the rules state.
"Regulatory bodies around the country must increase their supervision over foreign television shows broadcast on television stations at all levels, and increase fines levied for those who break the rules," it said.
The China Daily said the regulations were "to protect domestic cultural products and ... help create a favourable environment for TV shows made by companies on the Chinese mainland".
China periodically tries reining in its state-run television channels, which increasingly have to rely on attracting advertisers and therefore viewers as government subsidies are reduced.
In 2002, Beijing pulled the plug on the Taiwan-made soap opera "Meteor Garden", fearing that the decadent lifestyle portrayed by boy band "F4" would corrupt young Chinese minds. China described the series as "electronic heroin".
(Reporting by Beijing newsroom; Editing by Ben Blanchard)

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Arizona Bill Would Likely Prohibit Teachers And Professors From Teaching Any Book With ‘Profanity’

Arizona Bill Would Likely Prohibit Teachers And Professors From Teaching Any Book With ‘Profanity’

A new bill in Arizona is seeking to impose harsh restrictions on teachers’ conduct, even in their own homes. The bill, SB 1467, states that educators at the state’s public schools and universities can be fined, suspended and ultimately fired if they “engage in speech or conduct that would violate the standards adopted by the Federal Communications Commission concerning obscenity, indecency and profanity if that speech or conduct were broadcast on television or radio.”
That does a great deal to limit what can be taught in classrooms. Banning books is certainly not a new practice, but this law would cover far more than controversial books. Here’s a look at some of the key books that would be outlawed in Arizona classrooms:

Worse, as Angus Johnston notes, the bill is so ineptly drafted that it could intrude deeply into teacher’s private lives. SB 1467 doesn’t just ban public speech or conduct, but all speech and conduct. That means public school teachers in Arizona will be forbidden from engaging in any FCC-regulated activities no matter where they are. That means no sex, no going to the bathroom, no cursing and no showering. Ever.
One of the bill’s five sponsors, State Senator Lori Klein (R-AZ), has some experience in the national spotlight. Last summer she raised eyebrows when, during an interview with a reporter from the Arizona Republic, she took out a loaded handgun and pointed it at the reporter’s chest. And in the middle of Herman Cain’s sexual harassment scandal, Klein dismissed the allegations against Cain because he had “never been anything but a gentlemen” to her, “and I am not an unattractive woman.”



Murdoch facing battle with staff in Sun showdown

Murdoch facing battle with staff in Sun showdown

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Sun arrests pile pressure on Murdoch (01:28)
LONDON | Mon Feb 13, 2012 2:19pm EST
(Reuters) - Rupert Murdoch will face hostile and angry staff when he arrives in Britain this week seeking to face down a growing rebellion within his newspaper business and end the talk that his flagship Sun could close following a string of arrests.
Those close to the media mogul expect the 80-year-old to show far more composure and calculation when he addresses journalists on a hostile newsroom floor, compared with his conduct last July when he suddenly shut the News of the World paper in the face of public revulsion over phone hacking.
"No one can imagine quite the pressure he was under in July," said one person familiar with the situation.
"The pace of it was incredible, it was very emotional and traumatic. This is very different."
Unlike in July, readers and, most importantly, advertisers have shown little reaction to news over the last two weeks that nine current and former senior staff have been arrested and questioned over payments made to police and other officials.
Politicians, who spectacularly turned on Murdoch following the admission that his journalists hacked into the phones of murder victims and Britain's war dead, have also held back in the knowledge that calling for the closure of the biggest selling newspaper would be a dangerous move to make.
But despite the different scenario, Murdoch is still under huge pressure. The FBI and other American government agencies have stepped up their hunt for signs of illegality at a U.S.-based company. A case brought under the Foreign Corrupt Practices Act could result in fines of millions of dollars.
He is also under fire from within, having opened an internal investigation that resulted in the latest arrests and led to the talk among frightened and angry staff of a witch-hunt.
And he has few options as bankers say no company would want to buy the Sun or his Times newspapers until they have been thoroughly investigated. For so long one of the most powerful men in Britain, Murdoch is now effectively powerless to act.
Speaking from his experience as the editor of the Sunday Times for 11 years, Andrew Neil told Reuters: "The Sun has turned against Rupert Murdoch."
"He has put in place things he cannot stop. The Sun was the (UK paper) most loyal to Murdoch. It was closest to his heart. Now Sun journalists believe he has launched a witch-hunt to protect himself.
"He won't be welcomed. They won't believe his promises. They're sullen. They're resentful. They feel betrayed."
THROWN OFF A CLIFF
One company source told Reuters that staff felt let down and as if they had been thrown off a cliff by a man who used to champion their work. The source said the provocative tabloid had long been the 'apple of Rupert's eye', generating cash that enabled expansion elsewhere in Britain.
Now staff are bracing themselves for more arrests. A sense of siege mentality has developed while journalists are openly consulting lawyers to discuss the law and their rights.
"This is not just rank and file staff but people in the editorial chain of command of the Sun who are livid at the way their colleagues have been treated," a company insider said.
Much of the anger within News International, Murdoch's British newspaper arm, is directed at the unit set up by News Corp to root out any evidence of illegal behavior, a group that includes the award winning journalist Will Lewis, previously the editor of the rival Daily Telegraph.
The Management and Standards Committee was set up at the height of the furor over phone hacking and was designed to rescue the company's reputation. However to some, it has become part of the problem as Murdoch now has little control.
The small committee is working alongside up to 100 personnel from top London law firms as well as forensic advisers and computer experts searching through more than 300 million emails, expense claims, phone records and other documents.
Some 15 or 20 police officers are actually embedded with the cleanup team and the committee is often asked to conduct specific searches and pass information back to the police.
While the committee has come under intense fire, there is practically very little that the group can do. Any attempt to hide information from the police or tip off journalists could result in criminal charges for those involved.
It also redacts any sensitive information to prevent police from learning the identities of confidential sources. Despite this, fears have grown that well placed sources will no longer want to talk to the Sun and Times journalists.
In a sign of the ill feeling towards the group, staff on the MSC file in to their office through special security to avoid other News International staff and work in soundproofed offices.
ALTERNATIVE OPTIONS
Analysts and bankers are adamant that however uncomfortable, efforts to clean up the paper are vital if News Corp is to ever consider selling the papers.
According to people familiar with the work of the MSC, it could take at least another 18 months.
In a sign of how important the committee's work is considered within the wider News Corp group, the company's new top corporate lawyer Gerson Zweifach has joined the committee, a separate source familiar with the situation told Reuters.
Roy Greenslade, a London professor of journalism who has worked for Rupert Murdoch, said the media veteran was in a very difficult place because he could not order the MSC to pull back their efforts, meaning he is instead left to try and appease seething journalists.
"I can't imagine he'll close the Sun," he said. "It's a hugely profitable paper, it keeps the Times and Sunday Times going and it would literally be him saying goodbye to his whole kingdom and I think that is a step too far at this stage.
"Last July was the first time he's ever done something out of panic but I think he'll be back to coldly calculating on this I'm sure. He's very aware of the fickleness of the public. The steps he will take will be very cleverly measured."
(Additional reporting by Paul Sandle and Victoria Howley in London, Yinka Adegoke in New York Editing by Maria Golovnina)

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