Monday, June 13, 2011
OBAMA GIVES NETANYAHU ULTIMATUM ON RESUMING TALKS
Israel Radio Reported Sunday that The United States gave Netanyahu an ultimatum on renewing negotiations with the Palestinians.
According to the ultimatum, Netanyahu has to decide within a month whether he agrees to accept US President Obama’s proposal and resume talks based on 1967 lines.
Washington is pressuring Prime Minister Benjamin Netanyahu to accede to its proposal to resume Israeli-Palestinian peace talks on the basis of U.S. President Barack Obama’s May 19 speech.
An Israeli source who spoke recently with senior officials in Washington said the Americans were very frustrated with Netanyahu’s behavior, feeling that he was impeding America’s efforts to keep the Palestinians from unilaterally seeking UN recognition of a state in September.
Netanyahu’s personal envoy, Isaac Molho, spent last week in Washington, where the Americans presented their proposal for resuming talks on the basis of Obama’s speech. Specifically, Obama’s plan calls for negotiating over borders and security first, while deferring issues such as Jerusalem and the refugees until later. It also calls for the borders to be based on the 1967 lines, with mutually agreed land swaps.
The Americans told Molho that to block European initiatives such as France’s proposal for an international peace conference in Paris, they must have something concrete to offer, like Netanyahu‘s agreement to negotiate on the basis of Obama’s speech.
The U.S. proposal was also given to chief Palestinian negotiator Saeb Erekat, who said the Palestinians would resume talks on this basis.
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SKorea: NKorea may have miniaturized nuke warhead
SEOUL, South Korea – North Korea may be able to load a nuclear warhead atop a missile, though South Korea has no substantive evidence the North has the technology to do it, Seoul's defense chief said Monday.
North Korea conducted two nuclear tests in 2006 and 2009 and is thought to have enough plutonium for at least a half-dozen weapons. But experts doubt whether the North has mastered the miniaturization technology to mount a nuclear warhead on a missile.
Defense Minister Kim Kwan-jin told a parliamentary committee there is a "possibility" the North may have developed such a miniaturized nuclear warhead.
"I judge it's time for it to have succeeded in miniaturization," Kim said, according to a National Assembly-run webcast. "Considerable time has passed (since the two nuclear tests). Looking at other countries' cases, there is a possibility the North may have succeeded."
Kim, who was answering a lawmaker's question, said his belief is just an "assumption" and South Korea has not acquired any intelligence supporting it.
Kim also told lawmakers he believes the North's short-range missile launch two weeks ago was a test of a rocket with improved range and accuracy. "I think the North succeeded in that test," he said.
Earlier Monday, Kim's ministry submitted to the parliamentary committee a report saying North Korea has been conducting naval infiltration drills off its east and western coasts in recent days. "Chances for surprise attacks ... are increasing," Kim said, according to his office.
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Greek debt default would be catastrophe, says Papandreou
GREEK Prime Minister George Papandreou, buffeted by negative polls and continuing protests at economic austerity measures, says he will continue with policies aimed at drastically cutting the country's debt and says the alternative - a default - would be a catastrophe.
"We have taken a decision, that no Greeks should live through the consequences of a default, and to change the country radically so that it is no longer under anyone's supervision and can stand on its own feet," Mr Papandreou said in an interview with Sunday newspaper To Vima.
"Never in my life did I imagine that we would need to slash pensions in order for the state to continue to pay any pensions at all," he added. "We chose the least painful of two options: one (is) difficult, the other - defaulting - is catastrophic."
On Friday, the government unveiled an austerity program running through 2015, aiming to save around €28 billion ($38.42bn). The measures will slap a host of new taxes on austerity-weary Greeks - in spite of previous pledges to avoid more blanket tax increases.
Mr Papandreou faces continued protests and dwindling support in opinion polls. More than 10,000 gathered yesterday afternoon at Syntagma Square in central Athens, while a poll published overnight shows the ruling Socialists trailing the conservative opposition by 4 per cent.
A poll conducted monthly by research company Public Issue and published yesterday in newspaper Kathimerini shows the ruling socialists trailing opposition New Democracy 31 per cent to 27 per cent, while only 8 per cent of respondents say they are satisfied with the government, versus 92 per cent dissatisfied.
WSJ
MORE:
http://www.theaustralian.com.au/business/news/greek-debt-default-would-be-catastrophe-says-papandreou/story-e6frg90o-1226074191243
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Fed prepares for last spurt of easy money flood
The flood of Federal Reserve money that has supported Wall Street and the rest of the U.S. economy for 2-1/2 years will shrink to a trickle with the conclusion of the Fed’s bond purchases announced on Friday.
The Fed said it will buy US$50-billion of Treasuries, the final series of government bond purchases that marks the last phase of the US$600-billion program it launched in November 2010 to prevent another recession.
As a result, once the purchases are concluded on June 30, the financial sector will receive only a fraction of the roughly $100 billion a month in easy money it has been getting from the Fed.
The conclusion of the Fed’s bond-buying program, known as “Quantitative Easing 2,” does not mean the stimulus will come to a complete stop. The Fed will reinvest maturing securities, mainly mortgage-related debt, which analysts predict will run at $12 billion to $16 billion per month.
While still a lot of money, it is a huge step down from stimulus levels at the height of the buying campaign, dubbed by markets as QE2 because it was the second round of Fed asset-buying in the wake of the 2008 financial crisis.
A key aim of QE2 was to hold down long-term interest rates to stimulate investment in capital equipment and risky assets. It came almost eight months after the Fed’s first round of bond purchases, primarily in mortgage-related securities.
The initial bout of quantitative easing, worth $1.73 trillion, began in December 2008 and ended in March 2010. It was created to stabilize the housing sector, which was the epicenter of the financial turmoil and has yet to show signs of recovery.
The Treasury bond component of the first round of purchases totaled $300 billion, from March to October 2009.
The Fed’s buying assets has been controversial from the start. Critics say it is tantamount to printing money, and it has been credited with fueling a stock market rally but blamed for a surge in oil and food prices.
The end of QE2 has been well-flagged. The Fed said at the outset it would run until the end of June 2011.
Still, investors expect stocks, bonds, gold and the euro to fall after it ends, according to a Reuters poll of 64 analysts and fund managers last month.
Thomson Reuters 2011
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