Obligatory: North Carolina teacher tells student not to criticize Obama

We missed this yesterday as it went viral, but maybe that’s for the best since now I can bring you the exciting conclusion: She’s been suspended (with pay). An employee at the Rowan-Salisbury School System said they have been flooded with calls from around the country on Monday… The district released a statement on Monday. “The Rowan-Salisbury School System expects all students and employees to be respectful in the school environment and for all teachers to maintain their professionalism in the classroom. This incident should serve as an education for all teachers to stop and reflect on their interaction with students.

Breaking: 43 Catholic institutions file suits over HHS mandate

Today’s Roman Catholic calendar lists May 21st as the feast day of St. Christopher Magallanes, a martyr killed for celebrating Mass during the Cristero War in Mexico. Perhaps Catholics today may want to recall St. Thomas More — the patron saint of lawyers, who was executed for refusing to agree to a mandate that gave Henry VIII the prerogative of defining religious expression in England. Dozens of Catholic institutions filed lawsuits today against the Department of Health and Human Services over its mandate and its narrow definition of religious practice: Catholic archdioceses and institutions filed suit in federal district courts across the country Monday against the so-called contraception mandate, claiming their “fundamental rights hang in the balance.” The plaintiffs include a host of schools and organizations, including the University of Notre Dame and the Archdiocese of New York. The lawsuits, though related, were filed individually. The schools are objecting to the requirement from the federal health care overhaul that employers provide access to contraceptive care.

Too late for MA Dems to pull a Torricelli?

Elizabeth Warren may be providing an embarrassing sideshow to the national Democratic effort, but in Massachusetts, she’s the main event. Warren’s use of unsubstantiated claims to slight Cherokee heritage during her career damaged her credibility, but accusations of plagiarism may end up derailing Warren’s career. Is it too late for Democrats in Massachusetts to find a new candidate? The Boston Herald asked the question, and the answer is — unlikely, although not entirely impossible: “The Democratic Party is really stuck,” countered University of New Hampshire political science professor Andrew Smith. “They essentially cleared the path for her as a candidate, and they can’t get rid of her now.

Greek talks collapsed amid anger, insults, “unreality”

This may end up being the political quote of the year, uttered by the president of Greece after talks aimed at forming an emergency government collapsed last week: “Gentlemen, we are finished,” said the patrician President, calling an abrupt halt to two hours of baiting and cat-calling between furious Greek politicians. “I’m starting to get upset myself now. We are finished.” The final collapse of talks to forge a new Greek government triggered repeat elections and fears of a chaotic exit from the euro zone. But it is the manner of that collapse, the acrimony and rancor cited by Karolos Papoulias, that bodes ill for efforts after June polls to pull Greece back from the brink. “It was a complete madhouse,” a source at the socialist PASOK party told Reuters after their leader,Evangelos Venizelos, returned from the May 17 showdown. “The discussion was unbelievable.” The only people who don’t seem to realize the depth of the truth in that quote are the Greeks themselves: Voters infuriated by grinding poverty, spending cuts and corruption, punished Samaras and fellow mainstream party leader Evangelos Venizelos. Leftist Alexis Tsipras, 37, emerged with the power to block them. Greece, he said, could ditch its spending cuts and renounce its debts to EU partners, yet enlist their help in keeping the euro currency some 80 percent of Greeks cherish. “Pythagoras 

Pound Gains, Threatens Economy of UK

The Great Britain pound rose today as the safe haven role of the currency helped it to profit from speculation that Greece may leave the eurozone. The strength of the sterling caused worries that it may hurt the UK economy.

The pound gains appeal as the Swiss franc loses it due to the euro-peg. Economists are worried, though, that a strong currency may harm efforts to bring the United Kingdom out of recession. Ian Stannard, the head of European currency strategy at Morgan Stanley, explained:

The U.K. economic backdrop may not be brilliant, but it’s enjoying a haven status because of the political uncertainty in the euro zone. The advantage of sterling over a traditional haven like the Swiss franc is that its asset market is more liquid. The downside is that the strength of the pound may backfire as it hurts exports.

GBP/USD rose from 1.6063 to 1.6072 and GBP/JPY went up from 128.49 to 128.70 as of 8:18 GMT today.

GBP Falls vs. USD & JPY, Gains vs. EUR Over This Week

The Great Britain pound fell against the US dollar and the Japanese yen this week as growing concerns about the health of the UK economy reduced appeal of the currency. The sterling is still perceived as refuge from Europe’s crisis, therefore it gained versus the euro.

Britain’s economy has entered a recession, significantly hurting prospects for the sterling. The Bank of England refrained from expanding stimulus during its last policy meeting, but most economists agree that the country needs quantitative easing. The pound is supported by its status of a safe haven, but such role looks tenuous considering the economic condition of Britain. Anyway, the problems of Europe allowed added to Britain’s strength against commodity currencies of countries that depend on European demand for their exports.

The pound was drifting down against the greenback and the yen since the end of March and it extended this trend for this week. The euro rose on Friday, but that did not help the shared 17-nation currency to erase its losses versus the sterling. The Canadian dollar was more successful, ending the week almost flat after falling for six consecutive trading sessions.

GBP/USD slid from 1.6133 to 1.6070 and GBP/JPY fell from 128.78 to 128.43. EUR/GBP was down from 0.8062 to 0.8033, while during the week it has reached 0.7994 — the lowest since 2008. GBP/CAD climbed from 1.6067 to 1.6201, but retreated to 1.6076 by the weekend.

Australian Dollar Falls as China Signals About Slowing Growth

The Australian dollar slipped, falling to the lowest level this year against its US peer, as negative macroeconomic data hurt prospects for Australia’s exports and general pessimistic sentiment on the Forex market reduced appeal of growth-related currencies.

The National Bureau of Statistics reported that China’s consumer price index fell from 3.6 percent in March to 3.4 percent in April, being in line with forecasts. Industrial production, on the other hand, frustrated forecasters, falling from 11.9 percent to 9.3 percent, while an increase to 12.1 percent was predicted. Other fundamental reports, including retail sales, were also worse than expected. China is the main trading partner of Australia, therefore its fundamentals have a great impact on the Aussie.

The FX market in general also was not supportive for the Australian currency as traders preferred to stick to safer investments. JPMorgan Chase & Co. announced a $2 billion loss, sparking fear among investors. The MSCI Asia Pacific Index of equities slid 1 percent and posted the second week of losses.

AUD/USD was down from 1.0075 to 1.0019 — the lowest rate since December 20. AUD/JPY dropped from 80.50 to 80.08. EUR/AUD went up from 1.2829 to 1.2887.

Breitbart.com: Document supporting Elizabeth Warren’s ancestry claim doesn’t exist

The exciting conclusion to the Case of the Missing Marriage Application. Remember, after a bit of sleuthing, Michael Patrick Leahy determined that the whole 1/32 claim came down to an 1894 marriage application that had supposedly been unearthed by an amateur genealogist but which no one else had actually seen. Leahy couldn’t reach that genealogist on Friday; today, he did. Mystery solved:

Lynda Smith, the amateur genealogist who unknowingly found herself at the root of the false “Elizabeth Warren is 1/32 Cherokee” meme introduced to the media by “noted” genealogist Chris Child of the New England Historic Genealogical Society, acknowledged in an email to me this past Saturday, May 12, that her statement in a March 2006 family newsletter upon which Mr. Child based his claim of Ms. Warren’s Cherokee ancestry was made with no supporting documentation. It was, in fact, an honest mistake that Ms. Smith now acknowledges is entirely without foundation…

According to Ms. Smith:

“I am rather embarrassed about this posting of mine [on rootsweb about William J. Crawford], especially since it seems to be of some importance…. I’ve been through all papers in my Crawford file and I didn’t find who sent that Cherokee reference to me…”

Read the whole thing for an explanation of Smith’s mistake. The obvious question: Why did the professional genealogist who confirmed Warren’s ancestry for the Boston Herald rely on an amateur’s research instead of demanding to see the original documents? Investigative reporter and genealogist Thomas Lipscomb was wondering that too and sent this e-mail to Powerline:

No reputable genealogist or genealogical organization would ever use a family newsletter by an amateur genealogist as the basis for an opinion. They require direct documentation from a certified copy of a birth or marriage certificate or some other objective evidence. While family newsletters, or family web postings may provide a useful tip as to where the real documentation may be, they are just as likely to be dead wrong encrustations of family myth that may or may not be true, but can’t be proven.

While family members may find these myths of interest, professionals like the New England Historic Genealogical Society and Christopher Child, or the New York Genealogical and Biographical Society, where I have served on the Heraldry Committee, will not accept them as documentation for any kind of genealogical claim. And they certainly won’t take a chance of embarrassing themselves professionally by making a public statement on the basis of flimsy evidence they regard as little more than rumor.

Read all of that too. But wait — you’re not done reading yet. One last piece is William Jacobson’s new post chronicling his e-mail exchange with the New England Historic Genealogical Society and the curious appearance in his comments of someone who’s very interested in spinning what the NEHGS originally told the Herald. Did they really confirm that Warren is Native American, or did they merely confirm that she had an ancestor by the name of O.C. Sarah Smith whom others were claiming was Native American? Spintastic.

Via the Daily Caller, here’s Warren standing by her claim even as Scott Brown’s campaign insists that there’s nothing left of her minority status. Alternate headline: “Elizabeth Warren: I’m very proud of my Native American heritage that apparently no one can document.”

Victory: Federal judge strikes down NLRB’s rule approving “ambush” union elections

Big win, but it’ll probably take electing President Romney to make sure they don’t make it stick on the second try.

“According to Woody Allen, eighty percent of life is just showing up,” Boasberg wrote in an opinion issued today. “When it comes to satisfying a quorum requirement, though, showing up is even more important than that.”

The rule change, challenged in court by the U.S. Chamber of Commerce, simplified and shortened balloting at a time when the unionized share of the workforce is falling, according to labor relations consultant Phillip Wilson. The compressed schedule could have cut the time permitted for voting in half to as few as 15 days, Wilson said.

Unions win 87 percent of elections held 15 days or less after a request, a rate that falls to 58 percent when the vote takes place after 36 to 40 days, according to a February report by Bloomberg Government.

O’s two Democratic appointees wanted to give unions a shot at quietly gathering the necessary signatures for an election and then dumping the petition on management before the company had a chance to make its case to the employees against unionization. The third member of the NLRB, Republican Brian Hayes, opposed the plan. No problem, though — Dems win 2-1, right? Nope. Not if Hayes doesn’t vote:

When the final rule came up, the NLRB’s lone Republican commissioner, Brian Hayes, did not cast a vote. He was given only a matter of hours on the NLRB’s electronic ballot system before the Democratic majority went ahead and published it that day, without anyone requesting a response.

Mr. Becker claimed that Mr. Hayes had “effectively indicated his opposition” and therefore he was “present” even though he was not, in fact, present. Basically, the NLRB argued that the quorum requirement was satisfied because there were three members in office when the rule was “approved.”

With a final vote of just 2-0 on what’s supposed to be a five-member Board, the court ruled that there was no quorum and therefore the rule was invalid. Think of Hayes’s absence as the anti-union version of those Wisconsin Democrats who fled the Capitol last year in order to deny Scott Walker a quorum to pass his collective bargaining reforms. What happens, though, now that Obama’s gone and dubiously recess-appointed a bunch of new members to the NLRB? Presumably the new members will pass the “ambush” election rule with a quorum and then the next court battle will be over whether those recess appointments were in fact valid. That suit has already been filed, in fact; if the next court throws out the recess appointments then the ambush rule stays blocked. If not, then President Romney’s our only hope.

BNP Paribas To Finish Restructuring In Coming Months

- New bank rules alter the way the economy is funded

-- Clear shift by corporates toward bond markets

-- BNP Paribas to focus on its fixed income business

(Adds comment and detail throughout.)

PARIS (Dow Jones)--BNP Paribas SA (BNP.FR) should complete its restructuring plan in coming months, freeing the French bank to focus on growing its presence in the currently booming fixed income market, Chief Executive Jean-Laurent Bonnafe told Dow Jones Newswires Friday.

Bonnafe said new rules that force banks to hold higher levels of capital to protect themselves against bad loans have altered the way corporations finance their ...

Oil drops below $100 for first time since February

NEW YORK — Oil dropped below $100 per barrel for the first time since February following a disappointing U.S. jobs report and warnings of a weakening world economy.

Benchmark West Texas Intermediate crude fell as low as $99.90 Friday before edging back to $100.21 per barrel in New York. Crude prices are down 2.3 percent for the day.

Oil prices have been falling since Wednesday as analysts and traders increasingly focus on the economy. The Labor Department said Friday that the economy added just 115,000 jobs in April — far fewer than the pace of hiring earlier this year. Government data shows that U.S. oil consumption dropped 5.3 percent in the first quarter, and supplies have been growing for the past six weeks and hit a 22-year high in Cushing, Okla., where benchmark crude is delivered.

The European economy also is slowing down as eurozone governments continue to struggle with a mountain of debt.

“We’re fearful that the economy is slowing more than we originally thought,” PFGBest analyst Phil Flynn said.

Oil has crossed the $100 mark 21 times during the past year. It rose as high as $113.93 per barrel last April and fell as low as $75.67 per barrel on Oct. 4.

As demand falls in the West, OPEC has been delivering more oil to world markets in an effort to force prices even lower. And Western nations are planning talks with Iran over its nuclear program, easing fears of a protracted standoff in the Middle East. Concerns about Iran, which is believed to be building a weapon, helped push benchmark oil to its peak near $110 per barrel earlier this year.

The recent drop in oil has helped make retail gasoline cheaper in the U.S. Pump prices have declined by an average of 13 cents per gallon since peaking this year at $3.936 on April 6. The national average hit $3.802 per gallon on Friday, according to auto club AAA, Wright Express and Oil Price Information Service.

OPIS chief oil analyst Tom Kloza said gas prices will head lower for the rest of the year. Kloza expects the national average to drop as low as $3.50 per gallon before the Fourth of July.

In other futures trading, heating oil lost 5.12 cents to $3.0357 per gallon, wholesale gasoline lost 4.55 cents to $3.0045 per gallon, and natural gas lost 4.6 cents to $2.294 per 1,000 cubic feet. Brent crude, which is used to set the price of oil imported into the U.S., lost $1.98 to $114.10 per barrel.

UBS loses bid to dismiss FHFA mortgage debt case

(Reuters) - A U.S. judge has rejected UBS AG's (UBSN.VX) bid to dismiss a federal regulator's lawsuit accusing it of misleading Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) into buying billions of dollars of risky mortgage debt.
U.S. District Judge Denise Cote in Manhattan said on Friday that the Federal Housing Finance Agency may pursue claims that UBS violated federal securities laws by misleading Fannie Mae and Freddie Mac into buying $6.4 billion of subprime and other residential mortgage-backed securities.
The case is one of 17 that the FHFA filed last year against banks over losses suffered by the housing finance giants on approximately $200 billion of mortgage debt. Cote's decision is the first to consider a defendant bank's motion to dismiss, and the judge's reasoning may also be applied in the other cases.
"The court is essentially saying that banks do not get to plead ignorance when they had an obligation to provide information to investors," said Kathleen Engel, a professor at Suffolk University Law School in Boston and co-author of "The Subprime Virus."
"It will give the FHFA a lot of confidence to pursue its cases, and make the banks very skittish."
The FHFA, the conservator for Fannie Mae and Freddie Mac, said the government-sponsored enterprises lost more than $1.1 billion on the securities as more borrowers fell behind or went into foreclosure. It sought to hold UBS responsible for marketing the securities as being safer than they were.
"A Securities Act defendant cannot simply claim that she blindly reported information given to her by third parties and thereby avoid liability for inaccuracies that made their way into the offering materials," Cote wrote in a 66-page decision, referring to a 1933 federal securities law.
She also dismissed claims accusing UBS of negligent misrepresentation.
Bank of America Corp (BAC.N), Barclays Plc (BARC.L), Citigroup Inc (C.N), Goldman Sachs Group Inc (GS.N), JPMorgan Chase & Co (JPM.N) and Royal Bank of Scotland Group Plc (RBS.L) are among the defendants in the other FHFA cases.
UBS spokesman Christiaan Brakman said Fannie Mae and Freddie Mac were sophisticated investors with "expert knowledge" of mortgage industry practices and standards. He said UBS is reviewing Cote's decision and is confident of its case.
Stefanie Johnson, an FHFA spokeswoman, said the regulator is pleased with the decision and will continue to press its case, "which is important to the enterprises and taxpayers."
SERIAL DEVIATIONS
The FHFA lawsuits are among many accusing banks of selling mortgage securities that they knew or should have known were riskier than advertised.
Losses on the securities have been a major contributor to the five-year U.S. housing slump, and were a large factor in the 2008 global financial crisis.
The U.S. government has lost $151 billion on its investments in Fannie Mae and Freddie Mac since it seized the companies on September 7, 2008. FHFA director Edward DeMarco is trying to recoup some of those losses and minimize future losses.
In its case against UBS, the FHFA sought to recover Fannie Mae's and Freddie Mac's losses on debt that the Swiss bank sold in 22 securitizations from September 2005 to August 2007.
It accused UBS of failing to perform adequate due diligence on the underlying loans, and hiding or misstating the quality of the underwriting, the ability of borrowers to make payments and the frequency with which borrowers occupied their homes.
Cote said the FHFA had plausibly alleged that the mortgage originators had "serially deviated" from their underwriting standards, with the result that statements in the securities offering materials that UBS provided were false.
The case is Federal Housing Finance Agency v. UBS Americas Inc et al, U.S. District Court, Southern District of New York, No. 11-05201.
(Reporting by Jonathan Stempel and Grant McCool in New York, and Dave Clarke in Washington, D.C.; Editing by Martha Graybow and Dan Grebler)

Pension Plan Sues Wal-Mart Officials Over Failures

The pension plan, the California State Teachers’ Retirement System, owns about 5.3 million shares in Wal-Mart, worth about $313 million. Although that is a small stake — far less than 1 percent — the suit was filed on behalf of Wal-Mart itself against people the pension plan identified as having failed in their duties to the company.

The suit names the company’s board and several current or former executives or board members as defendants.

The type of lawsuit, called a derivative suit, is not uncommon after accusations of corporate misdeeds. But the pension plan, known as CalSTRS, has never brought such a lawsuit before.

The suit, filed in Delaware, asks that damages from the result of any violations be awarded to Wal-Mart, and that the company reform and improve its corporate governance and internal procedures.

“The severity of this occurrence demands that shareholders step in the role of the board, and act essentially in their stead, to protect the interests of shareholders,” said Jack Ehnes, the pension fund’s chief executive. James D. Cox, a professor of law at Duke Law School, said the suit would probably prompt other lawsuits from small investors. “There’s a lot of piling on in derivative suits,” he said.

Since derivative suits ask that damages be returned to the company, there is not usually a great monetary reward for plaintiffs. But Mr. Cox said a company settling such a suit would often agree to cover plaintiffs’ lawyers’ fees, which can be significant.

Mr. Ehnes of CalSTRS said the fund had not collaborated with other shareholders regarding the lawsuit, but given pension funds’ active involvement with Wal-Mart, he expected a “boisterous” period to follow.

“Our connection to this stems from ensuring that there is a responsible board of directors representing our interests day in and day out, overseeing compliance, overseeing a code of ethics,” he said. “We all need to understand what was going on in the boardroom, and what was going on in the corporate culture.”

A Wal-Mart spokesman, Greg Rossiter, said the company took its responsibility to shareholders seriously, adding, “We are reviewing the lawsuit closely and are thoroughly investigating the issues that have been raised.”

The charges in the suit are largely based on an article published in The New York Times last month that disclosed that Wal-Mart investigators had found credible evidence that the Mexican subsidiary bribed officials in Mexico and that executives at corporate headquarters in Arkansas subsequently shut down the investigation.

The suit is apparently the first by a big, established institutional investor after the bribery accusations. Earlier, leaders of New York City’s pension funds said they would vote their shares against the five directors standing for re-election at the company’s shareholder meeting in June.

Activist pension funds occasionally use derivative suits to compel corporate governance changes — for example, a Massachusetts pension fund filed a derivative suit against Hewlett-Packard in 2010.

But CalSTRS prefers to meet with management rather than bringing suits, Mr. Ehnes said.

Indeed, “it’s unusual that CalSTRS would bring something like this — it signals that they’re very upset,” said Charles M. Elson, a professor specializing in corporate governance at the University of Delaware. “For Wal-Mart, it’s a problem.”

Mr. Cox, the law professor, said that Wal-Mart and the pension fund would grapple next with whether any board members were sufficiently independent to evaluate whether to dismiss or pursue a suit against directors and management. CalSTRS argues in the suit that most of the directors have conflicts of interest that would prevent them from making an unbiased decision.

In a case like this, Mr. Cox said, he expected that “Wal-Mart will find two or three of these directors who are looked at as more holy than the others,” and “set up a special committee that will speak for the company.”

Special committees generally find that the derivative suit ought to be dismissed, he said.

The New York Times reported last month that some Wal-Mart executives, in 2005 and 2006, knew about the bribery accusations and chose to ignore them. It is not clear whether Wal-Mart’s directors were made aware of the accusations.

Since late 2011, Justice Department prosecutors have been monitoring Wal-Mart’s internal investigation of the bribery accusations. Wal-Mart informed the Justice Department after learning of The Times’s reporting. Officials of the Securities and Exchange Commission have also met with Wal-Mart officials about the matter.

Under the Foreign Corrupt Practices Act, American companies are prohibited from bribing foreign officials.

There are also multiple investigations under way in Mexico.

The lawsuit names all of Wal-Mart’s current directors, along with several executives and some former board members and executives. They include Michael T. Duke, Wal-Mart’s chief executive and a board member; H. Lee Scott Jr., also a board member and Mr. Duke’s predecessor as chief executive; Eduardo Castro-Wright, vice chairman of Wal-Mart, and Thomas A. Mars, chief administrative officer.

Brazil expects rates below 8 pct by year's end-paper

* Government sees 50 point cut in base rate in May
* Government expects base rate at 7.5-7.75 pct by end 2012
SAO PAULO May 5 (Reuters) - The Brazilian government expects its benchmark interest rate to fall below 8 percent by year's end after it modernized rules on domestic savings accounts earlier this week, the local Folha de S.Paulo newspaper said on Saturday.
The government of President Dilma Rousseff also sees the central bank cutting the benchmark Selic rate by 50 basis points at its next monetary policy meeting later in May, the paper said, without naming its sources. The rate currently stands at 9 percent annually.
The Selic is 25 basis points above its lowest-ever rate of 8.75 percent, which occurred between early September 2009 and May 2010, when negative economic growth weighed on monetary policy.
On April 18, the central bank cut its base rate by 75 basis points to its current level and said in its subsequently released minutes on April 26 that further monetary easing would continue with care.
The paper said the government has lowered its outlook for a year-end Selic rate to 7.5 percent to 7.75 percent in the wake of a change in the laws on savings accounts' returns and considering the anemic economic growth and benign inflation in recent months.
Rousseff took a bold but risky step to shake Brazil from its economic torpor on Thursday, overhauling 19th century-era rules governing domestic savings accounts to allow interest rates to fall further in coming months.

FCC rejects Liberty Media bid for Sirius XM control

* John Malone company has 40 pct Sirius XM stake

* Liberty Media claimed de facto control over Sirius XM

* FCC dismisses Liberty Media application

By Liana B. Baker

May 5 (Reuters) - A federal regulator dismissed John Malone's Liberty Media Corp's application to take control of Sirius XM Radio Inc with its current stake of 40 percent.

Friday's decision by the U.S. Federal Communications Commission came after Liberty Media, Sirius XM's largest shareholder, in March requested approval to take over the company's operating licenses, arguing that it had de facto control of Sirius XM with its large stake and board seats.

Liberty acquired its 40 percent stake in 2009 as part of deal in which it loaned the satellite radio provider $530 million to help it avoid bankruptcy.

But its strategy to use the FCC to transfer control of Sirius XM's operating licenses failed.

The FCC said Liberty's application was not "sufficient" to show it was in control of the company. Liberty was not able to get passwords, signatures and other information from Sirius XM to properly submit its application, the FCC said.

Liberty still has other options to gain control of Sirius XM, whose 22.3 million subscribers make it the largest U.S. satellite radio provider.

Executives at Liberty have said the company could boost its stake above 49.9 percent. It already holds five of Sirius XM's 13 board seats.

Sirius XM CEO Mel Karmazin said on a conference call last week that Sirius XM was not currently "combative" with Liberty. He said he did not know what Liberty planned to do with its 40 percent stake.

"If the time comes that Liberty's interests are different than the other 60 percent of shareholders, we will do what we have to do to protect the interest of our 60 percent of shareholders," he said.

Sirius XM and Liberty Media did not immediately respond to a request for comment on Saturday.

• Stamp Out Hunger to collect food May 12

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LinkedIn raises outlook, beats on profit

* Q1 adj EPS 15 cents vs Street view 9 cents

* Total revenue jumps 101 pct, beats expectations

* Revises up 2012 revenue outlook

* Shares rise 10 pct in after-hours trading

* LinkedIn to buy SlideShare for $118.75 million

By Jennifer Saba

May 3 (Reuters) - LinkedIn Corp raised its outlook after smashing first- quarter revenue and profit expectations, racking up strong growth from services that help companies find and hire employees.

"The guidance was surprisingly high," said Ken Sena, an analyst with Evercore Partners. "I think it's a matter of them being able to use the data they have more efficiently to drive better results for their partners."

The company increased its 2012 revenue outlook on Thursday by $40 million to a range of $880 million to $900 million.

LinkedIn shares were up 10 percent in after-hours trading at $120.50 from their $109.41 close.

The company, based in Mountain View, California, was one of the first prominent U.S. social networking sites to make a debut in an initial public offering a year ago, whetting the appetites of those eagerly awaiting Facebook's impending IPO.

With more than 161 million members worldwide, LinkedIn is being closely watched by investors to see if its business model is solid.

LinkedIn shares are up nearly 70 percent year-to-date and are more than double its IPO price of $45.

A combination of international growth expansion and a hiring spree in order to generate more sales are behind the company's revised forecast, said Kerry Rice, an analyst with Needham & Co.

"LinkedIn has the best value out there," said Rice about companies seeking employees.

SNAPPING UP SLIDESHARE

LinkedIn also announced on Thursday that it acquired content sharing company SlideShare for $118.75 million in a mix of cash and stock. The service lets professionals upload presentations and share them with others.

The company was started in the living room of former PayPal executive Reid Hoffman, who co-founded LinkedIn in 2002. It makes money by selling services and subscriptions to individuals seeking jobs and companies looking to hire.

LinkedIn reported first quarter revenue rose 101 percent to $188.5 million, besting analysts' average forecast of $178.58 million, according to Thomson Reuters I/B/E/S.

The top line results were bolstered by the strong performance of the company's three units.

Revenue at its hiring solutions division, which represents more than half of total revenue, jumped 121 percent, while it grew 73 percent at its marketing solutions unit that sells display advertising.

"I think marketing solutions is the biggest surprise in terms of how much the numbers beat, given the weakness out of Yahoo," said Herman Leung, a senior analyst with Susquehanna Financial Group, which holds a stake in LinkedIn.

Premium subscriptions -- offered to members for more specialized services -- saw revenue increase 91 percent.

Excluding special items, first-quarter earnings per share of 15 cents was well above analysts' expectations of 9 cents per share.

Net income rose to $5 million from $2.1 million in the same quarter a year ago.

TransCanada files new application for permit to build Keystone XL pipeline ...

WASHINGTON —

The Canadian company seeking to build the Keystone XL pipeline submitted a new permit application on Friday for the segment proposed to carry crude from Alberta, Canada to Nebraska. The move sets off a new round of reviews by the U.S. State Department and triggered more criticism from environmental groups and landowners along the proposed route.

TransCanada, which had its application rejected by the Obama administration in January because no route through Nebraska had been finalized, suggested Friday that the State Department could now rely on thousands of pages of material gathered during three years of reviews for its previous application.
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Russ Girling, TransCanada's president and CEO, said in a news release, "Our application for a Presidential Permit builds on more than three years of environmental review already conducted for Keystone XL.

"It was the most comprehensive process ever for a cross-border pipeline and that work should allow our cross border permit to be processed expeditiously and a decision made once a new route in Nebraska is determined."

But environmental groups said Friday that the process should begin from scratch because the consulting company that led the previous environmental reviews was tainted by its ties to TransCanada.

Moreover, the groups and some Nebraskans said the proposed routes through Nebraska still threaten the ecologically sensitive Sandhills region and the Ogallala Aquifer; concern about the pipeline's passage through those areas stalled the original application last year.

The State Department, which must approve the Canada-Nebraska segment since it crosses an international border, has said a new review could last until early next year. Nebraska's state review is expected to take six to nine months.

The department said in a statement Friday that the new review would use "existing analysis, as appropriate" and examine energy security, health, environmental, cultural, economic and foreign policy concerns.

"We will begin by hiring an independent third-party contractor to assist the department, including reviewing the existing Environmental Impact Statement (EIS) from the prior Keystone XL pipeline review process, as well as identifying and assisting with new analysis."

The proposed pipeline would carry tar sands crude from Alberta and also pick up crude being produced in the Bakken Shale in North Dakota by companies such as Oklahoma City's Continental Resources.

According to TransCanada, the pipeline will be able to move 830,000 barrels per day to refineries on the Texas Gulf Coast.

President Barack Obama late last year delayed a decision on the pipeline because of the controversy over Nebraska. The delay angered congressional Republicans, who used a payroll tax bill to force the administration to make a decision; Obama announced in January that the permit couldn't be approved because there was no settled route.

The southern portion from Oklahoma

TransCanada has announced that it would proceed this summer in building the southern part of the pipeline, which will carry crude from the oil storage supply hub in Cushing to the Texas Gulf Coast.

Obama visited Cushing in March to say his administration would expedite the approval of permits for the southern portion.

Erich Pica, president of the group Friends of the Earth, said Friday that an Environmental Protection Agency official had determined late last year that the southern portion of the pipeline didn't qualify for the type of approval TransCanada was seeking.

"In March, President Barack Obama unconscionably stood in front of piles of TransCanada pipe and gave his blessing to expedite the southern segment," Pica said.

"Pandering to the oil industry and political headwinds with a pro-pipeline photo op is one thing, but encouraging his federal agencies to ram through a project that would ignite catastrophic climate change and leaves Americans on the hook to clean up Big Oil's mess is another matter."

But Girling, TransCanada's president and CEO, said the environmental review completed last summer concluded that the Keystone XL would be the safest pipeline of its kind in the United States.

"The multibillion dollar Keystone XL pipeline project will reduce the United States' dependence on foreign oil and support job growth," Girling said.

Fracturing rule offers a concession

MUCH of our economic debate implies we must choose between going green or going for growth. There is now hard evidence that the real choice is between green growth or no growth at all.

For the first time in the postwar period, energy and other commodity prices are unusually high for this point of the global recovery. Normally the cost of basic materials falls in real terms for at least two years after a recovery begins. In the past, this boosted real incomes, supported spending and fuelled recovery.

Today there is a different phenomenon in the developed world: the ''squeezed middle''. Far from boosting incomes and spending, high energy and material prices have undermined an already fragile recovery buffeted by financial crisis and the legacy of debt. The new pattern has consequences for our future.
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The century-long decline in commodity prices seems to have come to an end. The cause is Asia. China is growing at five times the rate of Britain during its industrialisation, and the numbers of people involved are unprecedented.

We can hope, of course, that new resources will gradually substitute for old as prices rise. The most promising candidate is shale gas, which has expanded dramatically in the US, leaving the gas price there at half the European level.

We will need shale gas to compensate for the costly production of declining oil.

The speed of the US exploitation of shale gas is unlikely to be repeated in more densely populated regions such as Europe. Outside the US, mineral rights are usually owned by governments, which means there is less incentive to drill and more incentive to argue ''not in my backyard''. Many shale-rich areas are short of the water essential to the fracking process.

So far, shale gas has not stopped the rise in global gas prices even though cargoes of conventional gas have been diverted from the US. This partly reflects increased demand from the newly industrialising countries, but it also reflects a switch from nuclear after the Fukushima disaster. We will need a lot of shale gas to compensate for three of the biggest industrial economies - Germany, Italy and Japan - going non-nuclear.

Given these trends, we can hope for cheaper energy in the long run, but it would be rash to bank on it. We should encourage resource-frugal growth where possible.

Energy saving is the win-win: it has potential for job creation and supports growth by cutting bills and boosting spendable income. But there must be a wider agenda for resource efficiency, too - recycling, repairing and reusing - as the Rio+20 summit in June will spell out.

Resource-hungry growth could rapidly stall due to commodity price rises, simply because so many of us want it. If we want sustainable growth, we do not have a choice. We must go green.

GUARDIAN

Chris Huhne is a former British secretary of state for energy and climate change.

Carry-ons to cost as much as $100 on Spirit Airlines

LOS ANGELES — Have an unexpected carry-on you need to bring on your flight? If you’re traveling with Spirit Airlines Inc., it’ll cost you $100.

On Thursday, visitors to company’s website found that fees for baggage and other consumer services are going to jump on Nov. 6 — nearly across the board.

Carry-on bag fees at the gate will cost travelers $100 — more than double the $45 they pay now. Carry-ons noted during an online reservation will cost $35, up from $30. Bags paid for at the airport counter or kiosk will cost $50, a $10 increase.

“We don’t want any of our customers to wait until they get to the boarding gate to pay for their carry-on bags as this delays the boarding process for everyone,” said spokeswoman Misty Pinson in a statement. “We expect that our new $100 fee charged for those who wait until they get to the gate will ensure that customers purchase their bags before arriving at the gate.”

The new fees are uniform across domestic and international flights. The airline calls itself “the unbundling leader” because it takes fees normally included in ticket prices and charges them separately on a case-by-case basis.

Spirit considers itself a discount airline, advertising one-way fares from $19.80. It’s also one of a few airlines that charge for the first carry-on bag.

On Tuesday, Spirit reported its earnings for the first quarter,

Next up to take on Europe's debt crisis: Democracy

LONDON — For more than two years now, they have all imposed their will on Europe's raging debt crisis: German leaders. Panicked governments. Jittery financial markets. Bossy international agencies.

The people? Not so much.

Across the continent, officials have forced through brutal budget cuts despite mass protests from Paris to Prague. In Greece and Italy, technocratic prime ministers have been installed without a single citizen going to the polls. Of the 25 European nations that have agreed to a new treaty limiting public spending, only Ireland is bothering to let voters rule on it.

But on Sunday, the people of France and Greece will have their say, in elections that have the potential to recast the debate over how to solve an economic unraveling that shows little signs of abating.

"Democracy is on its way into the euro crisis," said Hugo Brady of the Brussels office of the London-based Center for European Reform. "While we don't know what that means, it does mean the end of a solely technocratic response to it."

Sunday's elections are likely to see new leaders brought to power on pledges to revisit their countries' strict adherence to the austerity and fiscal discipline prescribed by Germany as the cure for Europe's ills. That the challenges come from these two countries is significant: France has been Germany's most important ally, while Greece sits at the epicenter of Europe's debt problems.

But changes to the current game plan could also unsettle investors allergic to the slightest whiff of uncertainty.

When they open Monday, the markets could greet a possible shift in strategy as welcome recognition that new ideas are needed to pull Europe out of its economic and financial tailspin. Or they could view it as a worrisome relaxation of fiscal stringency and push up borrowing costs for nations such as Spain and Italy, causing another escalation of the crisis.

But popularly elected governments should not allow markets to call the shots, said Juan Somavia, the director-general of the International Labor Organization.

"In a democracy, it is more important to retain the long-term trust of people — especially the most vulnerable groups — than to gain the short-term confidence of financial markets," Somavia wrote in a recent opinion piece.

Popular backlash against the German fixation on austerity has been building momentum for months, in nations whose hurting middle classes say the cuts have only added misery.

Unemployment in the 17-member Eurozone is at a record high of 10.9%, an average that masks the dire predicament of countries such as Spain, where one in four workers is out of a job. At least half a dozen Eurozone nations, including Italy, Ireland and the Netherlands, have tumbled into a double-dip recession.

Increasing numbers of economists and analysts warn that the single-minded focus on belt-tightening is stunting growth, and without growth there is no way out of Europe's financial hole. Many politicians have taken up that theme, coming around to a view that their exhausted constituents have been shouting and marching about for months.

"This austerity has to end, and both the political establishment here and Europe have to get that message," said literature professor Magda Christidou, 48, who joined a May Day protest in Athens. "People are suffering. They're jumping off balconies and hanging themselves because they can't take it anymore. They're sleeping on the streets because they've gone homeless."

Greeks have seen their standard of living plunge after multiple rounds of budget cuts demanded by creditors as a condition of Athens' two international bailouts. Yet another austerity package is to come before lawmakers next month.

Antonis Samaras of the conservative New Democracy party, which leads the opinion polls for Sunday's parliamentary elections, has alarmed some European officials by vowing to renegotiate elements of the rescue deal, which he says is killing, not saving, the Greek economy. Anger over the harsh conditions has also boosted the fortunes of several fringe parties that are expected to win a crop of seats in the Greek Parliament.

Among them is Golden Dawn, a far-right, anti-austerity group that is on track for its strongest showing ever at the ballot box. Similar parties are on the rise across the region, including France, where the vociferously anti-Europe National Front scored a record 18% in the first round of the presidential election on April 22.

But even mainstream politicians are challenging policy decisions made in Brussels rather than in national capitals, or by powerful leaders such as German Chancellor Angela Merkel.

"It's not for Germany to decide for the rest of Europe," declared Francois Hollande, the French left-wing Socialist candidate who is expected to defeat incumbent Nicolas Sarkozy in Sunday's runoff.

Hollande has become the highest-profile and most influential advocate of a reset of the current strategy to combat the debt crisis.

Although leaders and governments in other countries have fallen over the last year because of voter dissatisfaction with austerity, their replacements have not succeeded in changing the direction of Europe's approach to the debt crisis, in part because Merkel and Sarkozy stood firmly together. But a President Hollande, as bland as some of his compatriots think him, would break up that cozy couple.

With public opinion behind him, he has promised to reverse some of Sarkozy's cutbacks. Throwing down the gauntlet to Germany, Hollande also wants to revise the new treaty to cap public spending, which Merkel considers the cornerstone of her crisis-fighting policy.

France has not yet formally ratified the pact. (Neither has Germany, for that matter.) Hollande says that fiscal rigor can't be the be-all and end-all, and insists that Europe come up with an agreement on measures to promote economic growth in suffering countries.

That view is gaining currency across the continent, on the streets and in the corridors of power, so much so that European leaders may cobble together such a deal at a summit next month.

"If they only cut, the economy won't grow. That's obvious," said university student Mariona Cuyas, 18, who took part in a noisy protest in Barcelona last week against Spain's brutal austerity measures. "We need to stimulate the economy, not cut it."

For Brady at the Center for European Reform, time is of the essence. New fiscal compacts and philosophical discussions by leaders and "Eurocrats" are all well and good, but the present reality demands quick action.

"At some point, voters are going to have to step in and say, 'Snap out of this navel-gazing and address the problems here and now,'" he said. "It could be equally destabilizing. But I have faith in democracy to do the right thing at the end of the day."

BBC News See realtime coverage Rosneft and Statoil in Arctic exploration deal

Russian oil giant Rosneft has signed a deal with Norway's Statoil to explore the sea around the Arctic.

It is the third deal Rosneft has signed in the past month, after Arctic exploration agreements with Italy's Eni and US giant Exxon Mobil.

Norway's state-held firm will get ownership of a third of a new joint venture that will explore one of Rosneft's fields in the Barents Sea.

The deals are a sign of Rosneft's growing global ambitions.

The Statoil agreement also covers three Rosneft blocs in the Far Eastern Sea of Okhotsk.

Some media reports put the value of the deal at about $2.5bn (£1.5bn) but Statoil told the BBC that it has "not given any valuation of the deal".

"Pending results further exploration wells could be drilled, and if we are successful in making discoveries there will be substantial investments for developments," Statoil spokesman Bard Glad Pedersen said.

The deal was signed by the two companies' chief executives in the presence of Russian Prime Minister Vladimir Putin, who will return to the presidency in a few days' time.

The Economist See realtime coverage Putting Our Slow Jobs Recovery Into Perspective

Disappointing, but not shocking. The government’s report Friday that the economy created fewer jobs than expected in April—115,000—showed an unwelcome deceleration of America’s job-creating machine. Economists surveyed by Bloomberg News had a median forecast of 160,000 jobs created. In the big picture, though, the nearly three-year-old expansion is proceeding at the same pace as the previous two. Slow recovery, in other words, is the New Normal.

The Bureau of Labor Statistics reported that the unemployment rate fell to 8.1 percent in April from 8.2 percent in March. But that wasn’t great news, because it reflected a decline in the share of the population in the labor force, to the lowest level since December 1981. When people drop out of the labor force they aren’t counted as unemployed, so the jobless rate goes down.

More bad news: Average hourly earnings were essentially unchanged, and there was no increase in the length of the average hourly workweek. One of the few bright spots is that the government revised upward its estimate of job creation in March, to 154,000 from the initially reported 120,000.

What makes this recovery seem so frustratingly slow is that the U.S. is coming out of a deeper hole this time. In the 1990-91 slump, employment fell by 1.6 million. The 2001 slump was worse: 2.7 million jobs lost. But neither comes close to the disaster of the 2007-2009 recession, when employment fell by 8.8 million.

To put it simply, if you fall down a well, you’ll climb out faster if it’s 10 feet deep than if it’s 100 feet deep.

The chart above shows job creation in the months after the economy hit bottom in each of the past three recessions. The last three low points were January 1991, November 2001, and June 2009. (The low point for the economy is designated by the National Bureau of Economic Research and doesn’t necessarily coincide with the low for employment.)

The most important takeaway from the chart is that there is no significant difference between the three recoveries in terms of rapidity. The current recovery is slow, all right, but it’s no slower than the two previous ones.

James Paulsen, the chief investment strategist at Wells Capital Management, called this pattern to my attention in a visit to the magazine this week. Paulsen has a similar chart in the 43-page deck of slides that he shows clients.

“People say the economy is broken,” Paulsen told me. “It’s not. This is the New Normal. And the New Normal is 25 years old.” The New Normal, he says, goes back to the mid-1980s, when the rate of labor-force growth notably slowed.

Growth in output is closely linked to growth in the number of workers, so when labor-force growth slowed, so did the speed limit of the economy, Paulsen says. Since the mid-1980s the economy’s growth rate has rarely exceeded 4 percent. It was 2.2 percent annually in the first quarter of this year.

“I remember in 1979, CEOs used to brag about increasing payrolls,” Paulsen says. Increasing revenue was CEOs’ top objective, so they would staff up accordingly. If they overstaffed, they could wiggle out of trouble by raising prices or counting on population growth to raise demand and bail them out. When population growth and economic growth slowed, CEOs turned more cautious and focused on raising profits through rigorous efficiency.

In contrast, hiring today is a last resort.

The good news for job seekers is that CEOs may well be forced into that last resort, because they have exhausted opportunities for efficiency improvements. Productivity—i.e., output per hour—fell at an annual rate of 0.5 percent in the first three months of 2012, the government reported May 3. It’s impossible to get more work out of the existing staff. So if demand grows now, companies will have to add workers to satisfy it.

CTV.ca See realtime coverage Nuclear-free Japan braces for severe power shortages

(Reuters) - The shutdown of Japan's last working nuclear power plant and the government's failure to convince a wary public about restoring production at dozens of reactors leaves the world's third largest economy facing another summer of severe power shortages.

Hokkaido Electric Power Co shut its nuclear plant late on Saturday - the last of Japan's 50 reactors to go off line - marking the first time since 1970 Japan has been nuclear power-free.

Japan's $5 trillion economy has relied heavily on nuclear power for decades, with its reactors providing almost 30 percent of electricity needs, but last year's massive earthquake and subsequent nuclear crisis spurred a public backlash against atomic energy.

Cabinet ministers have largely failed to win over the public to allow the restart of the country's plants - shut one by one for scheduled maintenance and unable to resume operations because of concerns about safety.

Japan's Asahi newspaper said public sentiment was "wavering between two sources of anxiety" - fear over the safety of nuclear power and doubts on whether Japan can live without it.

"The public shouldn't just criticize (the government) but make its own decision on energy policy that involves burden and responsibility, such as through cooperating in power saving," the paper said in an editorial on Sunday.

The government hopes to come up with an estimate by mid-May of expected shortages this summer, and will then produce a plan to conserve energy that could include compulsory curbs on use of power, Japanese media say.

But setting a long-term energy policy or a clear timeframe for restarting the plants will take time given strong public opposition and a divided parliament that has paralyzed policy-making, analysts say.

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Policymakers are worried about the damage to the budding economic recovery as the power shortages are expected to be more severe and widespread than last summer, when many areas in Japan were still running nuclear reactors.

Some also warn of the long-term fallout as the rising cost of electricity, coupled with a strong yen, hits production and could prompt companies to shift operations overseas.

"Depending on the weather, power supply could constrain output during the summer," the Bank of Japan said.

"But we must be mindful not just of such short-term effects but the chance (the power shortages) could hurt Japan's medium- and long-term growth expectations," the central bank said in a twice-yearly report on the economy issued on April 27.

Japan managed to get through the summer last year without any blackouts by imposing voluntary curbs on the use of power in the aftermath of the earthquake and tsunami that left thousands dead.

Factories operated at night and during weekends to avoid putting too much stress on the country's power grids. Many big firms are already preparing to take similar steps this summer, but some also plan to generate power themselves to cut costs.

The last time Japan went without nuclear power was in May 1970, when the country's only two reactors operating at that time were shut for maintenance, the Federation of Electric Power Companies of Japan said.

Yahoo, Alibaba Working on New, Taxable Deal

BY ANUPREETA DAS AND GINA CHON

Yahoo Inc. has been working on a new deal to sell a portion of its stake in Alibaba Group Holding Ltd. back to the Asian company, and a transaction could be completed within weeks, people familiar with the matter said.

At the same time, they cautioned, the two parties have failed to strike a deal numerous times in the past, and there is no guarantee a deal will be reached this time.

Still, they said, the current plan, under which Yahoo would pay taxes on its gains from the sale, is considered simpler and more doable than a previous effort ...

Two-Notch Debt Downgrade For Citi Could Require $4.7B In Extra Collateral

--Potential additional collateral needed for a two-notch downgrade declined $700 million from three months ago

--Value of Citi's Smith Barney brokerage joint venture with Morgan Stanley (MS) no longer impaired

--A one-notch downgrade for banking subsidiary might now require $2.6 billion, from $3.2 billion

(Adds details about the decrease in collateral requirements in case of a debt downgrade throughout.)

NEW YORK (Dow Jones)--Citigroup Inc. (C), stung by a very public setback in its recovery when regulators vetoed its share buyback, is preparing investors for the worst when it comes to a downgrade of its debt rating.

Hitting Argentina for Oil Seizure Can Hurt US Interests

Argentina’s Lower House voted on Thursday to approve the expropriation of 51 percent of YPF SA, the country’s largest oil company. Expect more international outrage in weeks to come, when President Cristina Fernandez de Kirchner announces how little she plans to pay Spain’s Repsol YPF SA, the previous owner, for its stake, which it values at more than $10 billion.

Then take a deep breath and move on, because most efforts by other nations to punish Argentina promise to be ineffectual and counterproductive. That’s a job best left to the markets.

The YPF takeover is just the latest snook that Argentina has cocked at investors, creditors and policy makers around the globe: In 2007, Fernandez’s predecessor (and husband) Nestor Kirchner began skewing the country’s official inflation rate, prompting censure by the International Monetary Fund. In 2008, Fernandez nationalized $24 billion of private pension funds. In 2009, she did the same to Aerolineas Argentinas SA.

In 2010, Fernandez forced out the central bank’s governor and began tapping its reserves to pay off debt. Yet Argentina still owes the members of the Paris Club $9 billion from its infamous 2001 default, has not settled with several private debt holders, and has more cases pending with the International Center for Settlement of Investment Disputes than any other nation.
High Dudgeon

Argentina’s trading partners and investors have responded to its wayward behavior with high dudgeon. Spain has threatened to cut imports of Argentinian biofuels. The European Union has delayed economic talks. The IMF has closed its office in Buenos Aires and given Argentina until September to rectify its statistics on inflation and gross domestic product. The U.S. announced in September it would vote against multilateral loans for Argentina until further notice, and last month it revoked trade preferences for Argentina because of its failure to pay arbitration awards to two U.S. companies.

Fernandez, however, has Argentine public opinion on her side. Her takeover of YPF was backed by more than 60 percent of those polled. Mixing high drama with low politics, she has repeatedly wrong-footed her weak and disorganized domestic opponents and successfully played on public resentment over the rushed privatizations of the 1990s (which included Aerolineas and the pension funds) and the huge privations that followed after the 2001 default.

Moreover, thanks partly to a commodity boom, Fernandez has kept Argentina’s economy growing and unemployment low, even as she has manipulated economic policies. She has demonstrated time and again that she doesn’t care what the outside world thinks.

That doesn’t mean Argentina should be allowed to violate international agreements and obligations with impunity. Members of the World Trade Organization should vigorously pursue their complaints about Argentina’s rising wall of import restrictions. The IMF and its members should push Argentina to bring its statistics up to snuff. Companies and their national governments should keep the pressure on Argentina to make good on damages that have been awarded.

But if such pressure is not carefully targeted, it can backfire. Consider the U.S. decision to vote against almost all multilateral loans for Argentina. The U.S. lacks the clout to make the ban stick -- at the Inter-American Development Bank, for example, no other country has followed its lead. To the extent that the move sends a signal, it is an unfortunate one: the familiar heavy hand of Uncle Sam, albeit one now holding a rather diminished stick. Moreover, some of these loans -- like one approved last November to buttress Argentina’s finance ministry -- are intended to strengthen the administrative sinews of Argentina’s public sector, whose weakness has been exploited by Fernandez. The U.S. should reconsider what seems a largely self-defeating strategy.
Argentine Borgia

The U.S. should also keep in mind that Fernandez’s political maneuvers have more in common with the Borgias than with Fidel Castro of Cuba or Hugo Chavez of Venezuela. In 1993, she and her husband supported YPF’s privatization. Now she has reversed it. At the same time, she’s also soliciting offers from foreign oil companies to operate some of YPF’s fields. She would doubtless welcome foreign investors willing to develop Argentina’s shale gas reserves -- and, given that they are the world’s third largest, inevitably they will come, regardless of Repsol’s unhappy experience and whatever outlandish terms she sets.

Eventually, her misguided economic policies may cause her government’s undoing. Argentina’s refusal to settle with its holdout creditors has cut it off from global credit markets, and left it reliant on increasingly dubious mechanisms to service its rescheduled debts. Foreign investment is shrinking. Capital flight is growing. Subsidies on utilities and transportation are increasing government deficits, and caps on rates have made it less profitable for energy companies to invest. Private economists put Argentina’s inflation at more than double the government’s stated figure of around 9 percent.

Rather than play the role of outside oppressor in Fernandez’s well-scripted narrative, the U.S. and other countries should let Argentina’s house of cards collapse of its own accord. Don’t restrict visas for Argentinian officials or try to throw it out of the Group of 20, as some have recommended; instead, rely on countries like Mexico and Brazil to apply suasion at June’s G-20 meeting, and otherwise do what can be done to strengthen Argentina’s democratic institutions.

From regional power politics and United Nations peacekeeping to nonproliferation, the U.S. has interests with Argentina that go beyond just collecting unpaid bills. The best way to advance them is to take the high road and the long view.

Financial markets brace for crunch Greek election

NOT only Greece but also Europe braced today for an election that polls indicate will decimate the two main parties and fail to produce a clear winner, sparking market fears about fresh eurozone turmoil.

In comments widely quoted by Greek newspapers on the eve of Sunday's vote, German Finance Minister Wolfgang Schaeuble said that if Greece's new government deviated from its commitments the country would have to "bear the consequences."

"Membership of the European Union is voluntary," the minister from the eurozone's chief contributor to Greece's 240 billion euros ($314.0 billion) in bailouts and the main proponent of European belt-tightening was quoted as saying.

Greece has written off a third of its debts, is in its fifth year running of recession, one in five workers is unemployed, its banks are in a precarious position and pensions and salaries have been slashed by up to 40 per cent.

With Portugal and Ireland also getting aid and Italy and Spain on shaky ground as well, last year there were worries of some sort of break-up of the eurozone. These fears have subsided in recent months but have not completely disappeared.

For markets, it is Greece's vote rather than France's presidential decider, also on Sunday, that "weighs heavier" in investors' minds, said Valerie Plagnol, director of research at the Credit Suisse bank.

Holger Schmieding, economist at Germany's Berenberg Bank, said there was a 40-percent risk of Greece leaving the eurozone this year, with a "high" chance that no stable government willing to implement more reforms can be formed.

Europe's press shared these worries, with Germany's Spiegel saying Greek politicians were behaving like "alchemists", while Belgium's Le Soir said it was "vital" for the eurozone that a new government is formed soon.

Germany's centre-right Frankfurter Allgemeine Zeitung daily said that efforts throughout "southern Europe" to cut spending and implement reforms must continue, otherwise "the crisis could escalate badly."

Election campaigning has been marked by voter anger with Greece's two main parties over the cuts that the country has been forced to promise in return for its bailouts. In June new savings of 11.5 billion euros have to be found.

"People are spending half what they used to," Panos Ioannidis, 41, the owner of a flower shop in an up-market area of Athens, told AFP. "If in June wages go down another 30 percent, we are expecting the worst."

The two main parties, the socialist Pasok and the conservative New Democracy, want to be cut more slack on the terms of the bailout, and many of the smaller parties want to tear up the agreement entirely.

"We need to break from this corrupt political system of lackeys of foreign imperialism," Petros Alachmar, 31, an activist from far-left Syriza party, one of several expected to steal votes from Pasok, told AFP late Friday.

"We have had enough of austerity measures."

Voters are also fed up corruption and cronyism, while immigration has also been an issue. The neo-Nazi Golden Dawn, completed with swastika-like emblem, may enter parliament for the first time in nearly 40 years, polls show.

The election is being fought over "a mixture of economy, immigration and national humiliation," said analyst George Sefertzis.

New Democracy is expected to win the most votes but not enough to govern alone, forcing leader Antonis Samaras into a coalition with smaller parties. If no coalition is formed, new elections could be called.

"Our place in Europe and the euro will be decided on Sunday," Pasok leader Evangelos Venizelos, 55, told a rally in Athens' central Syntagma Square, the focal point of sometimes violent protests in recent years, late Friday.

True love gets burns victim Turia through hell

  MICHAEL Hoskin looks at his partner, Turia Pitt, and says: "She's beautiful."

Don't call her a survivor because she is doing more than "surviving", he says.

She is living every day, every moment at their home on the NSW south coast.

Trapped by a bushfire during an ultra-marathon in the Kimberley last year, Ms Pitt's burns were so bad she was told by doctors she might not make it.

The 24-year-old's fitness, age and incredible will to live got her through those early days and weeks.

It is her love for Michael Hoskin that continues to carry her through her recovery from shocking burns to 64 per cent of her body.

"She doesn't want people to feel sorry for her. She just wants to get on with her life," he said.

"She's beautiful, you know. She's amazing."

Last week, Turia was forced to relive her ordeal when she gave evidence to the West Australian parliamentary inquiry examining what went wrong in the Kimberley wilderness on September 2 last year - when the Race the Planet's 41 competitors were just hours into what was supposed to be a 100km race over seven days.

The inquiry has heard chilling claims that RTP's organisers in Hong Kong were hopelessly under-prepared for such an emergency.

There were communication blackspots because they did not have the proper satellite phones.

WA's Fire and Emergency Services Authority said it was not notified of the race until it was too late, contradicting RTP's claims that all relevant services were given the "necessary approvals".

The authority said that in the middle of a worse-than-normal bushfire season, it would have had the race moved, or even cancelled - had it known about it.

Competitors were briefed about the dangers of snake bite and crocodiles - but not bushfires. Yet organisers knew there were fires on or near the course.

Course director Carlos Garcia Prieto had been out replacing pink plastic tape marking some of the route after it was burnt.

"The risk of harm to competitors in these circumstances is submitted to be simply overwhelming," solicitor Greg Walsh, acting for Ms Pitt and four other runners, said in his submission.

Turia knew little of this when she got off the plane at the Emma Gorge landing strip at the El Questro station at 7.50am that morning with the other runners.

She had the world at her feet. Born in Tahiti, she grew up in Ulladulla, on the NSW south coast, where she met Michael at school. They hooked up three years ago.
Turia Pitt at the West Australian parliamentary inquiry.

TURIA paid her way at university to qualify as a mining engineer doing odd jobs including modelling.

Michael quit the police before they moved to WA last year, where both worked in the mining industry.

He said his super-fit girlfriend wanted to take part in the RTP ultra-marathon but couldn't afford the $1600 entry fee.

The day before the event, organisers contacted Turia and some others and let them enter free because there were not enough competitors and the race was to be filmed.

The inquiry heard from Mr Pietro that about 11am on race day, he was told there was a fire coming towards them and it would reach the second checkpoint within two hours.

Despite this, no runners were warned or held back at the checkpoint.

Competitors recall Turia being "chirpy, happy and talkative" as she left checkpoint two.

Soon after, about 1.30pm, when she and five others reached the top of Salerno Gorge, they heard what was described as the roar of a road train.
Turia Pitt's burns were so bad she was told by doctors she might not make it.

TO their horror, they realised it was a massive fire with the wind behind it. They couldn't outrun the flames or climb to safety.

A "really scared" Ms Pitt began to cry. She stopped and covered her head with her jacket because there was "nowhere else to go", she told the inquiry.

"It just got hotter and hotter and hotter, and I couldn't stand it any more so I jumped up and tried to run and that's when I got burnt," she said.

Fellow competitors heard her scream, including Kate Sanderson, who was already badly burnt. Ms Sanderson, 35, had huddled in a crevice but was burnt when she stood up to try to put out the flames on her jumper.

It took almost four hours for a helicopter to arrive and the other four runners - Michael Hull, 44, Shaun Van Der Merwe, 30, his father, Martin, 56, and Hal Benson, 37 - have been credited with saving the two lives.

They used their jackets and space blankets to shield them from the sun and pooled their water. But the only painkillers they had were paracetamol.

Turia was flown to a Sydney burns unit, lost her fingers and thumb on her right hand, spent five months in hospital and will need at least 10 more operations.

But Mr Hoskin, 27, who left work to care for her because she cannot dress, wash or feed herself, says she feels lucky because she still has the fingers on her left hand.

"She's got crazy energy," Mr Hoskin said.

"She loves the outdoors, she loves the ocean."

Solicitor Mr Walsh, who is preparing to sue RTP, says Turia Pitt is one of the bravest people he has met.

With huge medical bills, the only support Turia and Kate Sanderson received from RTP was a card, some emails and chocolates.

"The degree of negligence is simply overwhelming," Mr Walsh said.