Wednesday, June 24, 2009
Pensions crisis: 96% of final salary schemes are doomed... OAPs worst off in Britain... and state funds withering on the vine
The extent of the pensions crisis was laid bare yesterday by a 'triple whammy' of worrying reports.
Almost all blue-chip companies now admit their final salary schemes are 'unsustainable', according to a major survey.
At the same time, two separate studies said that Britain's state pension was the worst in the Western world.
The reports confirm that private sector workers face a bleak future, with the state handout withering on the vine and dozens of generous company schemes on the verge of being wound up.
However, most gold-plated public sector schemes - funded by the taxpayer - remain untouched.
Almost 90 per cent of state employees receive final salary pensions, compared with just 16 per cent in the private sector.
Opposition parties and campaign groups said last night that the three studies provided yet more evidence of the growing crisis in pension provision.
Liberal Democrat work and pensions spokesman Lord Oakeshott said: 'Gordon Brown has been in charge of our pensions for the past 12 years.
'He should be ashamed of these shocking statistics, showing Britain's miserable means-tested state pension right at the bottom of the world pension league.'
Prior to 1997, Britain's state pension pot was in relatively good health. But in one of his first acts as chancellor, Mr Brown scrapped the tax relief on dividends paid into pension funds, costing them around £100billion.
It triggered the shutdown of final salary schemes covering hundreds of thousands of workers.
Yesterday's 'triple whammy' of bad news comprised:
- A survey of 1,000 blue-chip companies by Pricewaterhouse Coopers, which found that 96 per cent believe their final salary schemes are unsustainable.
- A study by the influential Organisation for Economic Cooperation and Development (OECD), placing Britain at the bottom of a 'pensions' league table for those yet to retire.
- Research by the UK-based Office for National Statistics, which confirmed just how little the state pension is now worth.
The House of Lords also released a report yesterday criticising Chancellor Alistair Darling's Budget for removing a series of tax breaks on pension contributions.
Tory pensions spokesman Theresa May said: 'This is yet more bad news for cash-strapped pensioners who are the innocent victims of this recession.'
Some 16 per cent of the firms which responded to the PWC survey had already closed their final salary schemes to current members.
A further 55 companies said they intended to freeze their schemes for existing members within the next five years.
Meanwhile, the report from the OECD showed that younger British workers will get far less generous state payouts than their counterparts in France, Germany and Spain.
Those entering the labour market today can expect to receive a state pension worth just four times their average annual earnings of £31,500 over the course of their retirement.
In contrast, Germans will receive more than seven times their average salary, while the French will get more than nine times their annual pay.
The figures from the ONS, which measured how state pensions reflect previous salaries, revealed that Britain has the least generous arrangement of any OECD country. The basic state pension is just £95.25 per week for an individual and £152.30 for a couple.
Michelle Mitchell of Age Concern said: 'It's a national disgrace that more than two million UK pensioners are trapped in poverty.
'With British pensioners receiving one of the lowest state pensions in Europe, the Government must go further to improve the situation for the country's poorest older people.'
The latest round of dismal news comes as unemployment reached its highest level since the end of 1996 - just before Labour came to power.
Many workers are suffering from pay freezes, leaving little spare cash to save for their retirement.
Pensions minister Angela Eagle said last night: 'It's absolute nonsense to suggest this Government is not committed to pensioners.
'Measures such as pension credit and winter fuel payments mean that even the poorest pensioners in the UK are still better off than the poorest pensioners in other countries.'
貿 協強調，今年食品展的國際化程度是歷來最高的一次，包含日本、美國、歐洲、中南美洲及東南亞與東北亞等國都有參與；其中日本館規模甚大，包含越光米、烏龍 麵、新鮮魚片等都有展出；美國館則有各類有機食品與冷凍疏果漁產等。墨西哥、秘魯及英國也展出異國風味香料、醬料及英式茶飲文化。
至 於參展廠商與買主一對一洽談的「2009年台灣優質食品採購商談會」，計有中國大陸、歐美、東北亞及東南亞等14國參與，合計100位採購高層來台。經濟 部國貿局局長黃志鵬說，據食品所執行產業技術知識服務計畫（ITIS計畫）估算，97年台灣的食品總產值達新台幣5264億元，較96年成長 10.46%，附加價值達到2111億元，成為台灣主要獲利產業。
MEXICO CITY (AFP) — A fisherman was reported missing in heavy seas as the first Pacific hurricane of the season, Andres, swept up the western coast of Mexico.
In Miami, Florida, the US National Hurricane Center upgraded Andres from a tropical storm to a Category-One hurricane with sustained winds of 75 miles per hour (125 kilometers per hour).
Authorities in the western Mexican state of Guerrero said "the disappearance of a person who was fishing" was reported in the costal town of Tecpan de Galeana.
The hurricane was moving in a northwesterly direction parallel to Mexico's Pacific coast and was not expected to make landfall.
But it was expected to pass near the western state of Jalisco, where authorities went through seven municipalities warning residents to be prepared to go to shelters.
The US National Hurricane Center in Miami said Andres was expected to dump three to six inches of rain over west central Mexico before losing its punch in the coming days.
"Although Andres has become a hurricane today, weakening is forecast in the next day or two," it said.
North Korea issued a warning over the weekend to mariners of upcoming live-fire missile exercises. The exclusion zone cited in the notice covers a stretch in the Sea of Japan, 279 miles by 68.2 miles, off the coast of Wonsan, North Korea. The warning lasts from June 25 to July 10, from approximately 8 a.m. to 8 p.m. local time, a U.S. counterproliferation official said.
U.S. defense and counterproliferation officials say intelligence suggests that North Korea is likely to fire short- and medium-range missiles, based on the splashdown zone referenced in the notice and other activities that are consistent with such launches.
The officials spoke on condition of anonymity to discuss sensitive intelligence.
The Yomiuri Shimbun reported last week that North Korea was expected to test-fire a long-range ballistic missile by sending it in the direction of Hawaii.
In reaction, Defense Secretary Robert Gates ordered deployment of a ground-based mobile missile intercept system and a sea-based radar system to Hawaii. Together they could shoot down an incoming missile in midair.
Experts say North Korea has not yet built a ballistic missile that can reach Hawaii, which is about 4,500 miles from North Korea.
U.S. defense officials told Congress earlier this month they think North Korea is still three to five years away from being able to hit the West coast of the United States with a long-range Taepodong-2 missile.
U.S. officials said they have not seen preparations for the launch of a Taeopodong-2 missile similar to that launched on April 5.
It took North Korea about 12 days to stack and fuel that missile, which it claimed was a space-launch vehicle intended to put a satellite into orbit. It failed sometime in its second or third stages, splashing down into the ocean after traveling about 2,000 miles.
Pyongyang has also not mastered mounting a nuclear bomb on a long-range missile despite recently conducting its second underground nuclear test. The yield was estimated by U.S. intelligence as a "few" kilotons.
The communist regime has vowed to bolster its nuclear arsenal and threatened war to protest U.N. sanctions in the wake of its second nuclear test. It conducted its first nuclear test in October 2006, and there are suspicions it is preparing for a third.
BAGHDAD -- Next week, Iraqi officials plan a welcome-back party for Big Oil.
The government intends to auction off oil contracts to foreign companies for the first time since Iraq nationalized its oil industry more than three decades ago. If all goes according to plan in the first round, foreign oil companies will move in to help Iraq revive production at six developed fields that have suffered from years of war and neglect.
But Iraq's fractious politics have complicated the process. Some lawmakers and oil officials have called for a delay of the auction. The man behind the plan, Oil Minister Hussain al-Shahristani, appeared before parliament on Tuesday, where some lawmakers questioned the legality of the proposed contracts and what they called favorable terms for the foreign companies. But the auction appears to have sufficient political support to go ahead on schedule, and Mr. Shahristani and other government officials vowed to plow ahead.
Mr. Shahristani's oil deals are crucial to this war-torn country's economy. Iraq is thought to have one of the world's largest supplies of crude oil, with 115 billion barrels in proven reserves. But foreign know-how is key to its plans to boost oil output to four million barrels a day within four to five years, from 2.4 million barrels currently.
Despite security risks, Western oil companies are clamoring to get in. Iraq is still relatively unexplored, offering big companies a potentially easy-to-tap source of growth. Some are touting Iraq as the most important opening of petroleum fields since the discovery in 2000 of the giant Kashagan field in the Caspian Sea.
Some 120 companies expressed interest in bidding for the contracts at the June 29 and 30 auction, according to the oil ministry. Thirty-five companies qualified to bid, including Exxon Mobil Corp., Royal Dutch Shell PLC, Italy's Eni SpA, Russia's Lukoil and China Petroleum & Chemical Corp., or Sinopec. The six oil fields at stake are believed to hold reserves of more than 43 billion barrels. Foreigners won't get the most prized piece of the action -- ownership stakes in the reserves -- but will be paid fees for ramping up output.
Just over 20 of Iraq's roughly 80 known oil fields have been fully or partially developed, and most of its production comes from just three giants, North and South Rumaila and Kirkuk. Because lots of the black gold is considered relatively easy to extract, oil experts estimate that exploration and development in Iraq costs $1.50 to $2.25 a barrel, compared with about $5 in Malaysia or $20 in Canada.
"We're talking about a huge volume of crude flowing through their system for the companies who win the bids," says Samuel Ciszuk, IHS Global Insight's Middle East Energy analyst. "On the other side, Iraq desperately needs technology, and these companies can bring it."
But Mr. Shahristani, architect of the plan, is under attack from many quarters. Falling oil prices have triggered a budget crisis, and he is being blamed for not boosting production enough to make up the difference. Lawmakers and some oil officials, meanwhile, say the auction will give foreigners too much access to Iraq's resources. Mr. Shahristani also has been called to appear before parliament for questioning about alleged corruption and mismanagement at the ministry.
"He should not continue," says Jabber Khalifa al-Jabber, secretary of the parliament's powerful Oil and Gas Committee. "Let someone who is qualified do the job....I can't name one accomplishment."
Prime Minister Nouri al-Maliki's spokesman, appearing earlier this month with the oil minister, voiced confidence in him and reaffirmed that the auction would take place as scheduled.
In a recent interview, Mr. Shahristani, 66 years old, says he has done nothing wrong, and that lawmakers critical of him have a political agenda. He says he looks forward to answering questions from parliament about corruption and mismanagement.
"I'm not a political animal, and I don't enjoy politics," he says. "The only reason I've accepted and continue with my responsibility is to protect the Iraqi wealth from unclean hands."
Deals in Iraq often are reached over cups of tea late at night, but Mr. Shahristani doesn't like schmoozing. In a capital built on patronage, he has denied plum jobs to longtime friends. He's earned a reputation as a stickler for rules, including cumbersome purchasing regulations that other oil officials blame for slowing down Iraqi oil development. He has refused even small gifts, such as neckties, from visiting oil executives, he says.
In his three years as oil minister, Mr. Shahristani has emerged as a key lieutenant to Mr. Maliki. After violence started to ebb in Iraq in 2008, Messrs. Maliki and Shahristani and a handful of other former Iraqi exiles have pushed an ambitious set of economic reforms.
Western oil companies were kicked out of Iraq in 1972, part of a wave of Mideast petroleum nationalization. Oil production hit at least three million barrels a day before Iraq invaded Kuwait in 1990, then fell sharply to 300,000 barrels after economic sanctions and trade embargoes were imposed. Production rebounded to about 2.5 million barrels before the U.S. invasion in 2003.
Iraqi lawmakers have squabbled for years over a draft petroleum law that would set a legal framework for foreign companies to start drilling again. Tired of waiting, Mr. Shahristani in 2008 unilaterally invited oil companies to bid on contracts. Because global companies are reluctant to explore undeveloped fields in Iraq without an oil law, Mr. Shahristani has focused on getting foreign help pumping from existing fields. "We have done what we can with our national resources, and now we need outside help," he says.
He says the contracts don't need approval from parliament, though he insisted they fit the conditions outlined in the draft oil law, which is now being redrafted in the cabinet. Some of the terms, he says, are particularly beneficial to Iraq: Winners of the auction must fork over hundreds of millions of dollars of cash in upfront loans to the government.
Mr. Shahristani, who grew up in Karbala in a prominent, religious family, is a nuclear scientist by training. After studying in Moscow and spending time in London, he earned masters and doctorate degrees in nuclear chemistry at the University of Toronto. In 1978, he became chief adviser to the Iraqi Atomic Energy Commission.
Saddam Hussein had consolidated power and become president. According to Mr. Shahristani and others, he wanted a nuclear weapon. In a face-to-face meeting with Mr. Hussein, Mr. Shahristani reminded him that Iraq had signed a nonproliferation treaty and was bound by it. Mr. Hussein told him to concentrate on science and leave politics to him, according to Mr. Shahristani and two other scientists at the meeting.
A few days later, in December 1979, security officials took him to Iraq's Internal Security facilities, where he was tortured for three weeks, he says. Mr. Shahristani says his torturers offered him palaces and riches if he would reconsider his refusal to work on nuclear weapons. He declined and was put into solitary confinement, where he remained for 10 years, he says. "But I never lost my will, I never lost my faith," he says.
In 1990, he was released from solitary confinement. A year later, the U.S. bombardment of Baghdad during the first Gulf War sowed chaos at the prison. Another inmate stole some intelligence-corps uniforms and arranged for a getaway car.
One evening, Mr. Shahristani and two others managed to evade guards, duck into a storage room and put on the stolen uniforms. After hiding for several hours, they snuck past some visiting intelligence officers playing cards and hustled out the prison gate.
They met up with their families and snuck across the border into Iran. For the next few years, Mr. Shahristani helped Iraqi dissidents and refugees. In 1995, he and his wife, a Canadian, set up the Iraqi Refugee Aid Council. He became an outspoken critic of Mr. Hussein's regime and of nuclear proliferation.
After U.S. troops poured into Baghdad in April 2003, he returned. He was identified by American officials as a top contender for the prime minister's job. He declined the position because it wasn't an elected one, he says, instead becoming deputy speaker of Iraq's parliament.
Around that time, Mohammed Baqir, a family friend who had helped Mr. Shahristani escape from prison, asked for his help in finding government jobs for relatives. Mr. Shahristani refused. "Shahristani's problem is he is too straight and clean," Mr. Baqir says. "As a politician, you need to be flexible."
After a new government led by Mr. Maliki was formed in 2006, the prime minister named him oil minister. His new ministry, like other government agencies at the time, was overrun by militia members, and corruption was rampant, according to Mr. Shahristani and other current and former oil officials.
Over the next two years, hundreds of ministry employees were murdered or kidnapped. By the end of 2007, many top technocrats had fled the country, and various political parties had filled the ministry with patronage employees, according to Mr. Shahristani and the other officials.
Mr. Shahristani fired 250 members of the ministry's security staff thought to be militia members, and replaced top security officials with people he trusted. He turned over evidence of wrongdoing to the ministry's inspector general, and fired or transferred those suspected of malfeasance.
"Before, there was lots of interference in the ministry from political blocs, but he got rid of all that," says Abdul Mahdy al-Ameedi, head of the ministry's contracts department.
The purge stirred resentment. Some employees claimed they were wrongly targeted. Others accused Mr. Shahristani of being too by-the-book. He cracked down on absenteeism and introduced a card-scan check-in system. He scaled back bonuses.
But boosting oil production significantly proved difficult. Insurgents were attacking pipelines and refineries. Without a legal framework in place, foreign companies were reluctant to come to Iraq. The oil law stalled in parliament.
An impatient government in the semiautonomous Kurdish north decided to move without Baghdad. In September 2007, Kurdish officials signed a deal with Texas-based Hunt Oil Co.
Mr. Shahristani criticized the deal, saying it had no legal standing. The Kurdish government accused him of moving too slowly, and pressed ahead with its deal.
A Western official in Baghdad who has dealt with Mr. Shahristani says he and others advising the government agreed that Mr. Shahristani was moving too slowly. Oil prices were sky-high, and foreign oil executives were eager to get into Iraq. The country needed a "wheeler-dealer type," this official says.
Recently, he dropped his longtime opposition and allowed the Kurdish government to begin exporting oil. He yielded after the Kurds agreed to have Baghdad's central government receive payments for the exports.
In this month's auction, Western firms also are competing to develop two natural-gas fields. All these deals are so-called technical-service contracts. Essentially, Iraq will pay companies a fee for boosting output. The contracts will last 20 years. Oil executives would prefer "production sharing" agreements, which give companies a share of profits, and typically allow them to book new reserves. They are nonetheless eager to get their feet in the door. Mr. Shahristani says companies that offer the lowest costs and most profit for Iraq will win. If the auction succeeds, the winners are expected to begin work in November.
The Oil Ministry is planning a second round of bidding, to cover oil fields that have been explored but not fully developed. Nine of the 38 companies that applied to participate have been chosen as bidders. Those contracts will be awarded at the end of this year.
Mr. Shahristani's term ends when a new government is formed after elections early next year. He plans to return to the Iraqi National Academy of Science, which he established in 2003. "I am not a politician," he says.—Munaf Mustafa and Jabbar al-Obedi in Baghdad contributed to this article.
By GINA CHON
Veteran Chinese pro-democracy activist Liu Xiaobo in a March 1995 file photo.
Mr. Liu has been in police custody since they took him away on Dec. 8, a day before the political document was released.
"Liu has been engaged in agitation activities, such as the spreading of rumors and defaming of the government, aimed at subversion of the state and overthrowing the socialism system in recent years," Xinhua News Agency quoted a Beijing police statement as saying.
It gave no other details. Mr. Liu's lawyer said he has not been informed officially of the charges.
It marks the highest-profile arrest of a Chinese dissident since human rights activist Hu Jia was detained last year ahead of the Beijing Olympics. Mr. Hu was sentenced to 3 1/2 years in prison for sedition last April.
China has always reacted sharply to any challenges to its one-party system, but is also cracking down on any dissent ahead of a gala celebrating the communist regime's 60th anniversary on Oct. 1.
Mr. Liu's lawyer, Mo Shaoping, said he was only made aware of the Xinhua report when journalists started calling him for confirmation.
According to Xinhua, police have obtained permission from the courts to arrest Mr. Liu on suspicion of committing a crime. Mr. Mo said this indicates the investigation into Mr. Liu's case is still continuing and that he has yet to be formally charged. The next step would be indictment.
Agitating to subvert is a less serious charge than subversion and can be punished with five years in prison or less, or a period of deprivation of political rights, Mr. Mo said. Subversion carries a maximum sentence of life in prison.
Mr. Liu, 53, is a former university professor who spent 20 months in jail for joining the 1989 student-led protests in Tiananmen Square.
In his writings, most published only on the Internet, Mr. Liu has called for civil rights and political reform, making him subject to routine harassment by authorities.
He was among more than 300 lawyers, writers, scholars and artists who signed "Charter 08" in December calling for a new constitution guaranteeing human rights, election of public officials, freedom of religion and expression, and an end to the Communist Party's hold over the military, courts and government.
Police detained Mr. Liu a day ahead of the charter's release, possibly because they considered him a key organizer, in addition to his role in drafting and revising the document, Mr. Mo has said.
The singling out of Mr. Liu for prosecution also seems to be an effort to warn others involved in the charter. Other signatories have been called in for talks with police but not arrested. A Peking University law professor, He Weifang, was reassigned to a post in the far western Xinjiang region after signing the document in an apparent rebuke.
Earlier this month, the leader of the U.S. House of Representatives, Democrat Nancy Pelosi, called for Mr. Liu's "immediate and unconditional release." She also wrote a letter to Chinese President Hu Jintao last month asking that Mr. Liu and other Chinese "prisoners of conscience" be released.
Mr. Liu has been held in an unknown location since December. The San Francisco-based Dui Hua Foundation said earlier this month he was being kept at a hotel on the outskirts of Beijing – a claim that could not be verified.
Chinese law limits such "house arrest" to six months and Mr. Mo demanded on June 8 that Mr. Liu be released immediately, saying that it was illegal to hold him any longer.
The National Transportation Safety Board recommended three years ago that Metro replace or refurbish the type of train car involved in Monday's fatal crash - a suggestion that the District's heralded transit agency failed to aggressively follow.
The day after the deadliest crash in Metro's 33-year-history was filled with more questions about what caused one Red Line train to slam into a stopped train Monday evening near the Fort Totten station, killing at least nine people and injuring about 80.
Revisiting the crash
The investigation into Monday's fatal Metro crash that killed nine people is focusing on radarlike sensors that failed to alert a red line train that other trains were stopped on the track, John B. Catoe Jr., the agency's general manager, said Tuesday morning.
Mourners held a prayer service outside the transit agency's headquarters in Northwest, and federal investigators briefed Metro's board of directors on details of the horrific accident.
D.C. fire officials turned over control of the crash scene in Northeast to the National Transportation Safety Board at 1 p.m. Board member Debbie Hersman said investigators already had determined that the moving train had been in automatic mode at the time of the crash and that the train's emergency brake was engaged, although it was not clear whether it was depressed prior to the crash by operator Jeanice McMillan, who was killed in the accident.
Ms. Hersman said that the crash occurred on a curved portion of the track where speed was restricted and that maintenance had been performed on the train-control system - a computerized sensor system that can alert a train that other trains are stopped on a track - between Fort Totten station and New Hampshire Avenue overpass earlier this month.
She said investigators also planned to study Ms. McMillan's work history, medical records and toxicology reports, along with cell phone records and nine recorders pulled from the stopped train.
"We're going to leave no stone unturned," she said.
Metro General Manager John B. Catoe Jr. likened the computerized sensor system to an air-traffic-control system and said it can stop trains when a problem occurs on a track. He said the system also has a mechanical override that did not engage during the afternoon rush-hour crash Monday, but he declined to speculate on why it did not engage.
Mr. Catoe also discounted reports that the moving train that caused the crash was overdue for scheduled maintenance, saying all documentation had been handed over to NTSB investigators.
連日來，中國媒體紛紛到周森鋒工作學習地方“大起底”，披露他確實出身農村平凡家庭，父母都是 農民，在當地瓷磚廠打工，一名弟弟也考入清華大學，目前讀研究生；中學老師指，周森鋒讀書時很勤力，“不服輸”。上大學的費用多靠自己打工掙錢，基本上沒 讓父母承擔。而周森鋒的同事則指，他“每一次進步都是自己奮鬥出來的”，例如他任規劃局副局長時，利用自己的專業學識，很快進入角色，為當局解決了不少問 題。
相片被中國多個網站轉貼，網民議論紛紛：“天又沒有下雨，好牛氣！就你的皮膚嬌嫩！”“真有派 頭！這樣就能顯示出官威了？”有網民更指，“他明知道有人照相，還特意擺出POSE，可見看出，腦海是怎麼想的！”“這種官老爺作風，學的也太快了一點 吧？”也有網民指，“工作5年換了這麼多地方，一個地方就做幾個月，這樣的升遷，太讓人起疑了！”
WASHINGTON - Dramatically hardening the U.S. reaction to Iran's disputed elections and bloody aftermath, President Barack Obama on Tuesday condemned the violence against protesters and lent his strongest support yet to their accusations the hardline victory was a fraud.
Obama, who has been accused by some Republicans of being too timid in his response to events in Iran, declared himself "appalled and outraged" by the deaths and intimidation in Tehran's streets - and scoffed at suggestions he was toughening his rhetoric in response to the criticism.
He suggested Iran's leaders will face consequences if they continue "the threats, the beatings and imprisonments" against protesters. But he repeatedly declined to say what actions the U.S. might take, retaining - for now - the option of pursuing diplomatic engagement with Iran's leaders over its suspected nuclear weapons program.
"We don't know yet how this thing is going to play out," the president said. "It is not too late for the Iranian government to recognize that there is a peaceful path that will lead to stability and legitimacy and prosperity for the Iranian people. We hope they take it."
Obama borrowed language from struggles throughout history against oppressive governments to condemn the efforts by Iran's rulers to crush dissent in the wake of June 12 presidential elections. Citing the searing video circulated worldwide of the apparent shooting death of Neda Agha Soltan, a 26-year-old young woman who bled to death in a Tehran street and now is a powerful symbol for the demonstrators, Obama said flatly that human rights violations were taking place.
"No iron fist is strong enough to shut off the world from bearing witness to peaceful protests of justice," he said during a nearly hourlong White House news conference dominated by the unrest in Iran. "Those who stand up for justice are always on the right side of history."
The eighth extended news conference of Obama's presidency also veered into the intricacies of the U.S. health care reform debate, the effectiveness of the economic stimulus package and a revealing personal moment in which he acknowledged he still is an occasional smoker despite trying to quit.
The past 10 days in Iran have posed the strongest challenge to that nation's clerical rule since the system was established 30 years ago in the 1979 Islamic revolution. Before Tuesday, Obama mostly kept to a modulated response, calculating that, given Iranians' distrust of American involvement in their country, anything viewed as internal meddling from the White House would do the demonstrators more harm than good.
He also is deeply interested in preserving his promised policy concerning Iran and the threat its nuclear program poses: He contends the danger has only grown through decades of ruptured diplomatic relations between the U.S. and Tehran, particularly in the past eight years under President George W. Bush, and it is time to try to change that by re-establishing direct talks.
But Obama has been taken to task by some Republicans, accused of being too passive. Even with Iran's blackout of foreign press and attempted communications shutdowns, chaotic images of riot police beating and shooting protesters have seized the world's attention. At least 17 people have been killed.
Last Sunday, Sen. Lindsey Graham, a Republican, said: "The president of the United States is supposed to lead the free world, not follow it. He's been timid and passive more than I would like."
Obama chose a less cautious approach on Tuesday, more directly challenging Iran's leaders to ease off and holding out the possibility of consequences if they do not.
"The Iranian government should understand that how they handle the dissent within their own country, generated indigenously, internally, from the Iranian people, will help shape the tone, not only for Iran's future, but also its relationship to other countries," Obama said.
He made clear that one recent overture to Iran - the authorization for U.S. embassies to invite Iranian officials to July 4 Independence Day parties - was likely to disappear without changes. "That's a choice the Iranians are going to have to make," Obama said.
With an array of U.S. sanctions already in place against Iran, there are few options at Obama's disposal other than withdrawing his offer to talk. Regardless, Obama said it is too early for him to be more specific. "We are going to monitor and see how this plays itself out before we make any judgments about how we proceed," he said.
Obama was plainer than ever that the protesters' beliefs that the election was stolen from opposition candidate Mir Hossein Mousavi may be legitimate. The government declared an overwhelming re-election victory for President Mahmoud Ahmadinejad and, while promising to look into scattered reports of irregularities, has ruled out annulling those results.
"We can't say definitively what exactly happened at polling places throughout the country," Obama said. "What we know is that a sizable percentage of the Iranian people themselves, spanning Iranian society, consider this election illegitimate. It's not an isolated instance, a little grumbling here or there. There is significant question about the legitimacy of the election."
In Obama's comments, there also was a notable shift away from previous respectful references to Iran's most powerful cleric, Ayatollah Ali Khamenei, as the "Supreme Leader." Obama didn't use the term on Tuesday.
Asked if his stronger language was influenced by pressure from Republicans such as Graham and Sen. John McCain, Obama scoffed: "What do you think?" And he shot back at Republican critics: "Only I'm the president of the United States."
Advisers realize the new tone poses a risk that the U.S. president will become a scapegoat for Iran's leaders - just what Obama has sought to avoid. Administration officials, speaking on condition of anonymity to describe a sensitive strategy, said the disturbing images of the past few days warranted the tougher stance.
"I congratulate him for that, and we need to keep the pressure on them," House Minority Leader John Boehner, said after the news conference.
AP National Security Writer Anne Gearan contributed to this story.
The troubled banking giant, which to many symbolizes the troubles in the nation’s financial industry, intends to raise workers’ base salaries by as much as 50 percent this year to offset smaller annual bonuses, according to people with direct knowledge of the plan.
The shift means that most Citigroup employees will make as much money as they did in 2008, although some might earn more and others less. The company also plans to award millions of new stock options to employees in an effort to retain workers and neutralize a precipitous drop in the value of their stock holdings.
Like Citigroup, financial companies, like Bank of America and Morgan Stanley, are raising employees’ base salaries to try to shift attention away from bonuses and curb excessive risk-taking. So are banks like UBS and other European competitors.
The Citigroup proposals, discussed internally this week, present a crucial test for the Obama administration, which has vowed to rein in runaway compensation at companies that have received large taxpayer-financed bailouts. Citigroup has gotten not one but two rescues from Washington. Soon the government will assume a 34 percent stake in the company, whose share price has plunged nearly 84 percent in the last year.
Despite Washington’s new role at Citigroup, and public anger over big paydays on Wall Street, administration officials have little power to prevent the company and others in the industry from raising salaries for rank-and-file employees.
Kenneth R. Feinberg, the administration’s new “pay czar,” has the authority to set compensation for only the top 100 employees at troubled companies. The rest — which at Citigroup, means fewer than 300,000 people — can be paid as executives see fit, provided any increase does not rank them among the 100 most highly paid workers.
Outsize pay on Wall Street, particularly the industry’s bonus culture, is widely seen as having encouraged the risk-taking that led to the gravest financial crisis since the Depression. But industrywide, total compensation is expected to rise 20 to 30 percent this year, approximately to the levels of 2005, before the crisis, according to Johnson Associates, a compensation consulting firm. Total industry pay would still be below the record levels of 2007, but only a bit.
“You can say it is outrageous,” said Alan Johnson, the president of the firm. “But maybe it’s a little like the canary in the mine, and you say that things are getting better.”
Indeed, despite the simmering anger over Wall Street pay, some of the 10 big banks that repaid their federal aid this month — a big step toward disentangling themselves from the government — are gearing up to pay outsize bonuses. For many, profits are up, despite the troubled economy. On Monday, Goldman Sachs, which returned $10 billion of bailout funds, denied reports that it planned to pay out the highest bonuses in its 140-year history.
Mr. Feinberg, the special master for compensation, is the person who ensures that companies receiving federal bailout money are abiding by executive pay guidelines. This week, Mr. Feinberg, who oversaw the federal government’s compensation fund for victims of the Sept. 11, 2001, terrorist attacks, held introductory meetings with Citigroup executives and their counterparts at several other companies that have received two federal bailouts. He will start reviewing pay packages for the 25 highest-paid employees, as well as compensation formulas for the next 75, in the next two months. He declined to comment on Tuesday.
For months, Citigroup executives have sought guidance from the Treasury Department about how to alter compensation. But after reviewing the new rules, the bank determined it did not need Mr. Feinberg or other government officials to sign off on pay for the rank and file. While Mr. Feinberg can request information on the pay polices at financial companies that have received two federal bailouts, the companies can reject his guidance.
Citigroup executives are so eager to keep employees from fleeing, that in some cases, they are offering them guaranteed pay contracts. Managers began notifying bank employees of the proposed changes this week. They could take effect shortly.
For some Citigroup investment bankers and traders, the changes could mean salary increases of as much as 50 percent, depending on their position. Legal and risk management employees, as well as those in the credit card and consumer banking units, whose pay is typically skewed toward salary, rather than bonuses, are expected to receive smaller increases.
Citigroup executives said the changes were aimed at retaining employees. Some Citigroup workers have already left for small, boutique investment banks or large rivals that are not so beholden to the government.
Citigroup officials declined to discuss the issue on the record, given its sensitive nature. But they said that the changes would bring the bank’s compensation plan in line with the widespread view on Wall Street that bonuses were not one-time payouts, but rather a form of deferred salary. They said the new system would let them adjust bonuses more sharply to reflect employees’ performance.
Stephen Cohen, a Citigroup spokesman, said that any changes would be intended to adjust the balance between salaries, which are fixed, and bonuses, which vary from year to year.
Citigroup also plans to introduce a new stock option program later this year. Under the plan, it will award employees one stock option for every share of restricted stock they have accumulated. The program could open the floodgates for the release of tens of millions of stock options that could be cashed out over the next three years.It is unclear what the strike price will be. But the hope is that the options program will give employees another incentive to stay despite offers from rivals.
Unrest in Tehran
The Intelligence and Security Department of the Tehran Police has declared that the building -- located on Tehran's Haft-e-Tir Square -- was investigated on Monday night after a search warrant was obtained, IRNA reported.
The plotters have been arrested and are currently under investigation.
Documents found in the building indicate an ongoing plot against Iran's security was being implemented, the police said in a statement.
“After scrutinizing the building, which was the campaign office of a presidential candidate, it was discovered that the organization of illegal gatherings, the promotion of unrest, and efforts to undermine the country's security were carried out from the building,” the statement added.
Evidence has been found in the building that reveals the role of foreign elements in planning post-election unrest.
The building has in fact been a “headquarters for a psychological war against the country's security,” the police said.
The building, sources told Press TV, was used by a Mir-Hossein Mousavi election campaign.
(1) At this stage of the global systemic crisis' process of development, contrary to the dominant political and media stance today, the LEAP/E2020 team does not foresee any economic upsurge after summer 2009 (nor in the following 12 months)
(2) On the contrary, because the origins of the crisis remain unaddressed, we estimate that the summer 2009 will be marked by the converging of three very destructive rogue waves.
(3) illustrating the aggravation of the crisis and entailing major upheaval by September/October 2009. As always since this crisis started, each region of the world will be affected neither at the same moment, nor in the same way
(4) However, according to our researchers, all of them will be concerned by a significant deterioration in their situation by the end of summer 2009
This evolution is likely to catch large numbers of economic and financial players on the wrong foot who decided to believe in today's mainstream media operation of "euphorisationâ€�.
In this special Summer 2009 edition, our team describes in detail these three converging rogue waves and their impact, and gives a number of strategic recommendations (currencies, gold, real estate, bonds, stocks, currencies) to avoid being swept away in this deadly summer.
LEAP/E2020 believes that,
(5) instead of green shoots (those which international media, experts and the politicians who listen to them kept perceiving in every statistical chart in the past two months),
(6) what will appear on the horizon is a group of three destructive waves of the social and economic fabric expected to converge in the course of summer 2009, illustrating the aggravation of the crisis and entailing major changes by the end of summer 2009â€¦ more specifically, debt default events in the US and UK, both countries at the centre of the global system in crisis. These waves appear as follows:
1. Wave of massive unemployment: Three different dates of impact according to the countries in America, Europe, Asia, the Middle East and Africa
2. Wave of serial corporate bankruptcies: companies, banks, housing, states, counties, towns
3. Wave of terminal crisis for the US Dollar, US T-Bond and GBP, and the return of inflation
In fact, these three waves do not appear in quick succession like the sisters rogue waves. They are even more dangerous because they are simultaneous, asynchronous and non-parallel. Hence their impact on the global system accentuates the risks because they hit at various angles, at different speeds and with varying strength. The only certain thing at this stage is that the international system has never been so weak and powerless to face such a situation. The IMF and global governance institutions' reforms announced by the London G20 are at a standstill
(7) The G8 becomes more like a moribund club whose utility is increasingly questioned
(8) US leadership is the shadow of what it used to be, mostly concerned by desperately trying to find purchasers for its T-Bonds
(9) The global monetary system is in a process of disintegration, with the Russians and Chinese in particular accelerating their positioning in the post-Dollar era. Companies foresee no improvement in the business climate and speed up the pace of layoffs. A growing number of states falter under the weight of their accumulated debt created to "rescue banksâ€� and are about to be faced with a welter of failings by the end of this summer
(10) And, last but not least, the banks, once they have squeezed money out of naive savers thanks to the market upsurge orchestrated in the past few weeks, will be have to admit that they are still insolvent by the end of summer 2009.
In the United States and United Kingdom in particular, the colossal public financial effort made in 2008 and at the beginning of 2009 for the sole benefit of large banks became so unpopular that it was impossible to consider injecting more public money into banks in spring 2009, despite the fact that they were still insolvent
(11) It then became necessary to invent a "fairy taleâ€� to convince the average saver to inject his/her own money into the financial system. By means of the Â« green shoots Â» story, overpriced stock indices based on no real economic grounds and promises of Â« anticipated public funding repayment Â», the conditioning was achieved. Hence, while big investors from oil-producing and Asian countries
(12) withdrew capital from these banks, large numbers of small individual investors returned, full of hope. Once these small investors discover that public funding repayment is only a drop in the ocean of public aid granted to these banks (to help them dispose of their toxic assets) and that, after three or four months at best (as analyzed in this GEAB NÂ°36), these banks are again on the verge of collapse, they will realize, powerless, that their share is worth nothing once again.Intoxicated by financiers, world political leaders will be surprised - once again â€“ to see all the problems of last year reappear, all the more severe since they were not addressed but only buried under piles of public money. Once that money has been squandered by insolvent banks compelled to rescue even more insolvent rivals, or by ill-conceived economic stimulus plans, problems will re-emerge, further exacerbated. For hundreds of millions of citizens in America, Europe, Asia and Africa, the summer 2009 will be a dramatic transition towards lasting impoverishment due to the loss of their jobs, with no hope of finding new ones in the next two, three or four years, or due to the disappearance of their savings invested in stocks or capital-based pension funds, or in banking investments linked to stock markets or denominated in US dollars or British pounds, or investment in shares of companies pressured to desperately wait for an improvement not coming soon.
(1) Not even the Â« jobless recovery Â» many experts are trying to make us believe in. In the United States, United Kingdom, Eurozone and Japan, it is a Â« recoveryless recovery Â» we must expect, i.e. a pure invention aimed at convincing US and UK insolvent consumers to start buying again and keeping US T-Bonds' and UK Gilts' country purchasers waiting as long as possible (until they decide that there is really no future selling their products to the lands of the US Dollar and British Pound.
(2) Rogues waves are very large and sudden ocean surface waves which used to be considered as rare, though we now know that they appear in almost every storm above a certain strength. Â« Rogue waves Â» can reach heights of 30 meters (98 ft) and exert tremendous pressure. For instance, a normal 3 meter-high wave exerts a pressure of 6 tons/mÂ². A 10 meter-high tempest wave exerts a pressure of 12 tons/mÂ². A 30 meter-high rogue wave can exert pressure of up to 100 tons/mÂ². No ship yet built is able to resist such pressures. One specific kind of rogue wave is called the "three sistersâ€�, i.e. a group of three rogue waves all the more dangerous in that, even if a ship had time to react properly to the first two waves, there is no way she could be in the right position to brave the third one. According to LEAP/E2020, it is a similar phenomenon that the world is about to encounter this summer; and no country (ship) is in a favourable position to face them, even if some countries are more at risk than others, as explained in this GEAB (NÂ°36).
(3) LEAP/E2020 estimate that their anticipations of social and economic trends in the various regions of the world - published in GEAB NÂ°28 (10/16/2008) â€“ are still relevant.
(4) More precisely, in every region, media and stock markets will no longer be able to hide the deterioration.
(5) Our readers have not failed to notice that the same people, media and institutions, considered everything was for the best in the best of worlds 3 years ago, that there was no risk of a severe crisis 2 years ago, and that the crisis was under control a year ago. Their opinion is therefore highly reliable!
(6) As regards US economic statistics, it will be interesting to follow the consequences of the revision of the indexing formula by the Bureau of Economic Analysis due to take place on 07/31/2009. Usually, this type of revision results in further complexity of historical comparisons and favourable modification of important figures. For example, some previous revisions enabled the division of the average level of measured inflation by three. Source: MWHodges, 04/2008.
(7) Except at a regional level where each political entity is organized the way that it wants. For instance, the EU is taking advantage of the political fading away of the UK - mired in a financial, economic and political crisis - and taking supervisory control of the City of London (source: Telegraph, 06/11/2009). It is likely that summer 2009 will be the end of 300 years of the City's supremacy at the centre of British power. On this subject, it is instructive to read George Monbiot's article in The Guardian dated 06/08/2009 and take the time to read John Lanchester's brilliant essay published in the London Review of Books dated 05/28/2009 entitled It's finished.
(8) Who cares any more about G8 final statements, such as that following the June 13th G8-Finance meeting (source: Forbes, 06/13/2009), at a time when each player in fact plays by his own rules: Americans on one side, Canadians and Europeans on another, British and Japanese in the middle, while the Russians play a complete different game?
(9) US Treasury's Secretary of State, Timothy Geithner, recently suffered a very embarrassing experience whilst giving a speech in front of Beijing University students: his audience simply burst into laughter when he reassured that the Chinese government had made the right choice investing their holdings in US T-Bonds and Dollars (source: Examiner/Reuters, 6/02/2009)! There is nothing worse than arousing irony or ridicule when you are an established power because that power is nothing without respect (on the part of both friends and enemies), especially when the one mocking is supposed to be "trappedâ€� by the one mocked. According to LEAP/E2020, this laughter is worth a thousand explanations of the fact that China does not feel at all trapped by the US dollar and the Chinese authorities know exactly what tracks greenbacks and Tâ€“Bonds are following. This kind of situation was unthinkable only 12 months, maybe even 6 months ago, first because the Chinese were still naive, second because they thought it was in their interest to make everyone believe they were naive. Obviously, on the eve of summer 2009, this situation has vanished: no need to pretend anymore, as highlighted by this survey of 23 famous Chinese economists, published on the first day of Timothy Geithner's visit to Beijing, and revealing that most of them deem US assets risky (source: Xinhuanet, 05/31/2009). This student burst of laughter will continue to echo for many months to come...
(10) Not only in the US will shareholders be systematically prejudiced by the state under the pretext of higher common interest, as in the case of pension fund and bondholder losses related to the Chrysler and GM bankruptcies, or when the US government and Federal Reserve pressured Bank of America to hide the calamitous state of Merrill Lynch from its shareholders at the time of the latter's takeover. Sources: OpenSalon, 06/10/2009 / WallStreetJournal, 04/23/2009. In the UK, Europe and Asia, the same causes will produce the same effects: the raison d'etat has always been the simplest excuse to justify large-scale plundering ... and severe crises are perfect times to call in the raison d'etat.
(11) Germany has a similar problem due to next September's national election. After the election, the country's banking problems will be in the headlines, as several hundreds of billions of risky assets on the balance sheets of a number of banks, mainly regional ones, will need dealing with. It is far from the scope of US and UK banking problems, nevertheless Berlin will probably be faced with a number of potential bank failures. Source: AFP/Google, 04/25/2009. In the United States, the banks bailed out by the federal state have simply lowered the amount of loans granted when they are supposed to do the contrary. Source: CNNMoney, 06/15/2009