Pesky Persia

Spain and Italy's borrowing costs soar as Angela Merkel remains defiant over eurobonds

The German Chancellor told her party conference that Europe faced its "toughest hour since the Second World War" - but that Germany would not support launching 'eurobonds' to solve the crisis.

Instead Ms Merkel said she would push for changes to European treaties to introduce sanctions for financially lax countries and the adoption of a financial transaction tax - with or without Britain.

David Cameron warned that the European Union would be "in peril" unless politicians agreed radical reforms. Speaking at the Lord Mayor's banquet last night, he said markets were "understandably tense" since the eurozone was not "a place to admire and emulate... but a source of alarm and crisis".

Traders sold equities and bonds amid doubts that politicians will act in time to prevent a recession. Eurostat said industrial production in the eurozone fell 2pc between August and September, the biggest monthly fall for two years. The Organisation for Economic Cooperation and Development (OECD) added that the slow-down is likely to continue in all developed economies. France's CAC index fell 1.3pc and Germany's Dax, 1.2pc.

In the bondmarkets, Italy was forced to pay 6.29pc to raise €3bn (£2.6bn) of five-year bonds - a eurozone debt auction record, despite the promise of a new government under Mario Monti. Italy, which still lacks a cabinet, needs to raise a further €46bn in debt before the end of the year.

Panicked traders looking for the next eurozone victim turned on Spain pushing bond yields above 6pc for the first time in three months. Spain faces more hurdles this week with the auction of up to €3.5bn of short term bonds today - and a further €4bn in 10-year bonds on Thursday.

Despite its far lower public debt level levels, traders bet that Spain would follow Italy into "bail-out territory." French bank Societe Generale said: "Spain is now joining Italy on the radar screen". Warren Buffett, the US investor, said bond markets were displaying a "partial run on Europe." British borrowing costs fell to just 2.2pc.

Michel Barnier, the EU markets commissioner, said he wanted to ban credit rating agencies from rating bonds from bailed-out countries. He told French radio that the agencies could lose the "right to rate certain countries for a certain time that are receiving an international support programme from the IMF or European Union." But few could see how the ban could be imposed.

In Athens, a debate over Lucas Papademos' leadership starts in the Greek parliament today. The new premier has to win a confidence vote tomorrow and then prepare next year's draft budget to take to his first showdown with eurozone finance ministers in Brussels on Thursday.

Antonis Samaras, leader of the Greek opposition, warned that he would not support Mr Papademos' interim government for more than three months without elections. His objections are said to be barring the disbursement of the €8bn tranche of international aid to Greece.

The Telegraph

Iran will have five nukes by April 2012. Only 2-3 months left for military option

Iran's late missile chief Brig. Hassan Moghadam

According to the briefing given to a closed meeting of Jewish leaders in New York Sunday, Nov. 13, the window of opportunity for stopping Iran attaining a nuclear weapon is closing fast, DEBKAfile's sources report. It will shut down altogether after late March 2012. The intelligence reaching US President Barak Obama is that by April, Iran will already have five nuclear bombs or warheads and military action then would generate a dangerous level of radioactive contamination across the Gulf region, the main source of the world's energy.

Sunday, too, President Barack Obama said the sanctions against Iran had taken an "enormous bite" out of its economy. He also said that the "US is united with Russian and Chinese leaders in ensuring Iran does not develop an atomic weapon and unleash an arms race across the Middle East."
He spoke after talking to Russian President Dmitry Medvedev and Chinese President Hu Jintao at the Asian Pacific Economic Cooperation summit in Hawaii about the new evidence submitted by the International Atomic Energy Agency that Iran was engaged in clandestine efforts to build a bomb.

He said both shared the goal of keeping a bomb out of Iran's hands.
As to sanctions, Russian Foreign Minister Sergey Lavrov told a news conference that sanctions against Iran had been exhausted and "now the problem should be solved though diplomatic channels."
DEBKAfile's analysts note that tough sanctions are pretty much off the table now. In any case, it is obvious that they failed to slow down Iran's work on a bomb as confirmed by the latest IAEA report.

The road of diplomacy, favored by Moscow, has proved worse than ineffectual. Its only result was to buy time for Tehran to carry on with its military atomic project free of international pressure.

Obama went on to say Sunday that, while his strong preference was to resolve the Iran issue diplomatically, "We are not taking any options off the table. Iran with nuclear weapons would pose a threat not only to the region but also to the United States."

This was the first time the US president had called a nuclear-armed Iran a threat to the United States. Until now, official statements limited the threat to "America's regional interests and influence."

The Jewish leaders meeting Sunday were informed that the Obama administration had intelligence data that the US and Israel have no more than a couple of months left for striking down Iran's military weapons development by force. This will not longer be viable after Iran is armed with five nuclear bombs or warheads.
DEBKAfile's military and intelligence sources refute the wild rumors alleging that the American CIA or Israeli Mossad was responsible for the massive explosion Saturday at a Revolutionary Guards base west of Tehran in which Iran's missile chief Brig. Hassan Moghadam was killed.
While both organizations have formidable capabilities which Iran has experienced in the past, there is no way -  even with a UAV - they could have hit a single missile warhead in the middle of a Guards base at the very moment that IRGC chiefs were gathered around considering how best to improve its precision.

All the evidence garnered in the two days since the attack indicates that a single warhead blew up by accident while it was being handled,  rather than by sabotage.

A Huge Drought Is Pushing Food Prices Even Higher

A drought affecting one-third of the lower 48 states has hurt several key food crops, driving up prices this year and assuring widespread food inflation well into 2012.

According to the National Climatic Data Center, the drought has caused more than $10 billion in losses to agriculture and cattle, a number it expects to keep rising as the drought continues.

Meteorologists blame the drought on a La Niña weather pattern expected to last at least through the winter.

Crops most affected include corn and peanuts. In addition, the lack of rain dried cattle grazing pastures to dust, which has translated to higher beef prices.

"Yes, we are going to see higher prices this Thanksgiving," Purdue University agricultural economist Corinne Alexander told The Atlantic.

The American Farm Bureau estimates that a Thanksgiving meal for 10 will cost 13% more this year than it did last year.

The U.S. economy already has inflationary pressure as a result of the stimulative policies of the U.S. Federal Reserve pumping it with hundreds of billions of dollars.

"Ultra-low interest rates and excess money supply growth are what's been driving inflation," said Money Morning Global Investing Strategist Martin Hutchinson. "They raise commodity prices, which over time feeds into inflation in general."

Now the drought is pushing food inflation higher than overall inflation.

The Consumer Price Index (CPI) in September was up 3.9% over the previous year, while the increase for food alone was up 4.7%. Over the past five years, world food costs have risen 68%.

Earlier in the year, grocery stores were eating most of the price increases, somewhat insulating U.S. consumers. But in recent months that's begun to change.

"The era of grocers holding the line on retail-food cost increases is basically over," John Anderson, a senior economist at the Farm Bureau in Washington, told Bloomberg News.
The Biggest Bites

Prices are going up the most dramatically in the categories of food most affected by the drought. Beef is up 10.1%, for instance.

With pastures drying up over the summer, many ranchers were forced to sell off cattle before they could reproduce. While that briefly increased the supply of beef, the current shortage of cattle - the U.S. herd was at a 38-year low this summer - is impacting prices.

The drought has caused the price of hay to skyrocket from $80 a ton to $200 a ton, which, because it's used as forage for farm animals, has contributed to a 10.2% spike in dairy prices.

More expensive corn also has contributed to higher beef prices, as well as inflation in the pork and poultry industries.

But perhaps the hardest hit crop has been peanuts. The U.S. Department of Agriculture has projected a 13% drop in peanuts for 2011, which has caused the price for a ton of runner peanuts (used in peanut butter) to surge from $450 to $1,200 in the past year.

That has led to massive price hikes among the major peanut butter makers. Kraft Foods Inc. (NYSE: KFT) raised the price for its Planters brand of peanut butter by 40% earlier this month, The J.M. Smucker Company (NYSE: SJM) raised the price of Jif by 30%, and ConAgra Foods Inc. (NYSE: CAG) raised the price of Peter Pan by 20%.
La Niña Returns

The La Niña weather pattern responsible for this year's drought has reformed this fall. La Niña is the name meteorologists have given to an unusually cool Pacific Ocean that in turn causes dry conditions over much of the Southwestern United States.

"This means drought is likely to continue in the drought-stricken states of Texas, Oklahoma and New Mexico," said Mike Halpert, deputy director of the National Oceanic and Atmospheric Administration's Climate Prediction Center. "The odds do not favor the south getting out of drought, at least before next spring or summer, and even that could be a reach."

In Texas, which has by far borne the worst of the drought, government weather officials fear that the dry conditions could persist for a decade or longer.

That's especially bad news for the cattle industry, as it takes three years to raise cattle to slaughtering size, and the herds were already severely reduced over the past summer. A years-long drought will further delay recovery and drive steep increases in beef prices.

The only good news is that experts don't foresee any food shortages, just food inflation.

Read more: http://moneymorning.com/2011/11/14/crop-killing-drought-to-push-food-inflation-even-higher/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+USMoneyMorning+%28Money+Morning%29&utm_content=Google+Reader#ixzz1dm9wYLJW

The great crash ahead from Harry Dent

Iran blames Israel for deadly blast

For the first time since Saturday's deadly blast in a military base outside Tehran that killed 17 people, Iranian sources say that Israel was behind the explosion, which also claimed the life of a senior Revolutionary Guards officer.

According to a report in the Guardian, a source with close links to the Iranian regime said Israel's Mossad was involved in the blast outside Tehran, which rattled windows in Iran's capital Saturday.

The source, who spoke to the Guardian on condition of anonymity and was identified as a former director of a state-run organization, was quoted as saying: "I believe that Saturday's explosion was part of the covert war against Iran, led by Israel."

The ex official said the mysterious explosion was similar to a blast in October 2010 at a Revolutionary Guards missile base located near the city of Khorramabad, the source said.

"I have information that both these incidents were the work of sabotage by agents of Israel, aimed at halting Iran's missile program," the former official was quoted as saying.

'More bullets to come'

Earlier Monday, a Western intelligence source told Time Magazine that he estimates the Mossad was behind Saturday's explosion.

"Don't believe the Iranians that it was an accident," the official said, referring to official accounts of the incident.

According to the Time report, the same anonymous source said that more sabotage is being planned to impede Iran's ability to develop and deliver a nuclear weapon.

Saturday's blast killed at least 17 people and wounded 16 others, some of them gravely. Earlier reports put the number of fatalities at 27, but a Revolutionary Guards spokesman said the numbers were inflated as result of a "fax error."

A senior officer in Iran's weapons industry was killed in the explosions, officials in the country said. The officer, identified as Hassan Tehrani Moqaddam, held a rank parallel to brigadier general in Iran's elite Revolutionary Guards, the Fars news agency said.

Ynet

Major world economies 'on course for slowdown'

OECD data designed to anticipate turning points in economic activity suggested that signs of a faltering recovery were increasing across the board.

The OECD's monthly composite leading indicators (CLIs) index fell to 100.4 for the OECD area, from 100.9 in August, where 100 represents the long-term trend of economic activity. Among the G7 countries the index fell to 100.6 from 101.1.

"Compared to last month's assessment, the CLIs point more strongly to slowdowns in all major economies," the OECD said.

The eurozone fell to 99.1 in September from 99.9, and the UK was also worse off, falling to 99 in September from 99.8 in August.

It was the seventh successive monthly fall for the UK, and at below 100, suggested the economy has fallen below long-term trend levels.

"The further deterioration in the OECD leading indictor in September clearly ties in with mounting concern that the UK could be heading back into recession," said Howard Archer, economist at IHS Global Insight.

A poll by ComRes on ITV News showed two thirds of the British public believe the UK is on course for another recession.

The Telegraph

Italy's 10-year bonds jumped back up to 6.7pc

Yields on Italy's 10-year bonds jumped back up to 6.7pc after Bundesbank chief Jens Weidmann dashed hopes for muscular intervention by the European Central Bank to stabilise bond markets and buy time for the new government of Mario Monti."Monetary policy cannot and must not solve solvency problems of states and banks," he told a Frankfurt forum, calling for a halt to incessant pressure from the rest of the world for the ECB to violate its own legal mandate with debt monetisation.

Hours later, Germany's Chancellor Angela Merkel called for a "breakthrough to a new Europe, and political union" but ruled out Eurobonds, debt-pooling or any form of fiscal transfers to weaker EMU states in a speech to the Christian Democrat (CDU) party conference in Leipzig.

The body language from Germany has washed away any alleged benefits from installing EU technocrats in power in Rome and Athens. Spanish yields have once again crossed the danger line of 6pc.

Credit default swaps measuring bond risk have reached a record highs of 203 basis points for France and 322 for Belgium, with major knock-on effects in Eastern Europe and the Baltics.

"What investors want to know is whether the ECB is ready to stand behind the bond markets because it is not clear who else is going to buy €350bn of Italian debt over the next year," said Hans Redeker from Morgan Stanley. "If we had seen a credible government in Italy six months ago it might have turned market sentiment, but it may be too late now.

"What is really dangerous is that the market is losing confidence in France even though Paris is delivering a €65bn austerity package. We are nearing the point where French bond yields will force rating agencies to downgrade France," he said.

The Swiss bank Pictet said Europe is sliding into a catastrophic slump with its policy mix of fiscal austerity, a credit crunch, and the lack of any lender of last resort. "The German recipe for solving the crisis is geared towards deleveraging all economic agents simultaneously. This is utopian. This policy will brutally depress aggregated demand. It is the route that led towards the Depression of the 1930s," it said.

Mr Weidmann is unrelenting. He said that the ECB is prohibited by treaty law from acting as a lender-of-last resort for states, whether directly or covertly through the International Monetary Fund.

What chilled markets most was his comment that Italy's bond yields are "no big deal" and that the country must sort out its own problems. "Monetary financing will set the wrong incentives. Fixing an interest rate for a country is certainly not compatible with our mandate," he said.

Many investors had assumed the ECB would step in to cap Italian yields once Silvio Berlusconi had the left office, giving Mr Monti a "dowry" of lower borrowing costs to help him shake up the labour markets as demanded the EU authorities.

"The markets want a quick win and the ECB is not willing to give it to them," said David Bloom from HSBC. "It is going to take us to the edge the abyss first. There is a lot of 'Game Theory' going on. But this can go awry if the debt cancer spreads."

Mrs Merkel is giving mixed signals. She said Europe was facing its "hardest hour" but there was no hint that Germany is ready to shoulder further debt risks. Days earlier she shot down proposals from Germany's five "Wise Men" for a temporary sinking fund to mutualise €2.3 trillion of eurozone bonds.

Mrs Merkel's version of "Fiskalunion" is not what is meant in the rest of Europe. It is essentially a "stability union" where Brussels acquires greater powers to police the deficits of sinner states.

Berlin wants limited EU changes under the Lisbon Treaty's "ratchet clause"– avoiding the need for ratification – to make it easier to impose discipline, including an EU "austerity commissioner" with powers to administer delinquent nations.

Mrs Merkel may wish to go further – and her finance minister Wolfgang Schauble is a diehard integrationist – but her hands are tied by Germany's Basic Law, the anchor of German democracy, and the constitutional court. The judges ruled in September that the fiscal powers of the Bundestag may not be transferred to EU bodies.

"There is little leeway left for giving up core powers to the EU. If one wants to go beyond this limit... then Germany must give itself a new constitution. A referendum would be necessary," said chief justice Andreas Vosskuhle.

The pro-European wing of the CDU is floating plans for changes to the Basic Law to allow for a quantum leap to a European superstate. This is vehemently opposed by Bavaria's Social Christians, and part of the CDU itself. It would require a two-thirds majority in both houses of parliament. There is a high likelihood that German voters would reject the plan. It would in any case take two or three years to push through.

Yet the crisis is escalating by the day. Moody's said it is not clear whether Europe's EFSF bail-out machinery can "fund itself in the markets at low cost", raising doubts about its ability to contain the debt crisis. The rating agency said plans to leverage the EFSF to €1 trillion have come to little, leaving it with just €266bn after funding Ireland, Portugal and Greece. "This limits the EFSF's role as an important pillar of the euro area crisis management strategy," it said.

There is nothing yet standing behind the system as Europe spins wildly into the eye of the storm.

The Telegraph

Merkel Eyes Constitution Revamp to Boost EU Powers

Virtually nothing is more sacred to Germans than their constitution, which is known as the Basic Law. It was originally planned as a stopgap measure, but it has seen the Federal Republic of Germany through the past 62 years. During the Cold War, political parties may have squabbled over conservative Chancellor Konrad Adenauer's political commitment to Western Europe and the United States -- and they had their differences over left-leaning Chancellor Willy Brandt's Ostpolitik policy of normalizing relations with communist Eastern Europe, particularly with East Germany -- but they immediately and unanimously praised the Basic Law. "We have one of the best constitutions in the world," German Chancellor Angela Merkel once said.
Now, it looks as if Merkel herself may order an overhaul of the German constitution. At the party conference of the chancellor's conservative Christian Democratic Union (CDU) which commenced on Monday morning, Nov. 14, it is expected to approve a plan that could change the face of Europe -- and perhaps make it necessary for the Germans to rewrite their constitution.

This operation to amend the constitution has already become one of the government's most delicate political initiatives. If it succeeds, it would remove one of the euro's biggest problems: The 17 euro-zone countries have a common currency but do not have a common finance policy, a fact which partly explains why the euro is teetering at the edge of an abyss. This is tackled in the key sentence of the new paper. "We need more Europe in key policy areas," it says.

Merkel hesitated for a long time before making such a statement in public. It was three quarters of a year ago that German Finance Minister Wolfgang Schäuble reportedly took the chancellor aside and explained to her that the euro crisis could not be resolved with spur-of-the-moment policies. He told the chancellor that he was in favor of using the crisis to advance Europe's political unity.

Avoiding U-Turns

At the time, Merkel rejected the idea. A reform of the European Union treaties would never meet the approval of French President Nicolas Sarkozy, she reportedly said -- but that was only half the story. Merkel was also afraid of the German Constitutional Court in Karlsruhe: In its ruling on the Lisbon Treaty, the court made it clear that the German constitution allows for practically no further transfers of power to Brussels.

Consequently, Germany's policy on Europe stagnated for months. The chancellor managed to put out the fires sparked by the currency crisis, but she still needed to convey a fundamental vision of the future of the monetary union. As the grumbling about her aimless policy on Europe grew louder, she changed course. After the CDU had shed its political skin so many times, she didn't want to reap criticism for allegedly abandoning the party's legacy on European policy.

She convinced Sarkozy that there could only be one effective response to the tottering euro project: The monetary union had to be revamped. And she yielded to Schäuble and gave the CDU party conference a new focus: European policy.

The resolutions made at the party conference will not be empty words. Instead, Merkel and Schäuble want them to serve as a foundation of a two-stage plan to reform the EU. As a first step, they want to amend EU treaties to allow notorious debtors in the euro zone to be placed under mandatory supervision by Brussels.

Offenders on a Short-Leash

They aim to make the Stability Pact more binding in the future. That would mean the European Court of Justice could take action against budget offenders. If necessary, even a Brussels cost-cutting commissioner would be able to keep budget offenders on a short leash. According to the plan, this individual would have the power to draw up guidelines for a debtor country's budget - without, however, being able to influence details such as tax law and social policy.

The Chancellery wants this aspect of the EU reform approved as quickly as possible. Merkel wants to show the financial markets that Europe has the strength to push through sweeping changes. Internally, Merkel's staff expect that the EU reform convention will complete its work by the end of next year, a view shared by CDU parliamentary floor leader Volker Kauder.

As a second step, Merkel and Schäuble want the EU to move towards becoming a political union. This entails transferring more sovereign rights to the EU -- and it would mean amending Germany's constitution. This could either be accomplished under Article 23, requiring a two-thirds majority in Germany's federal parliament, the Bundestag, as well as the Bundesrat, the upper legislative chamber that represents the states. A more challenging alternative would be to change Article 146 of the constitution via the direct participation of the population. According to this scenario, the Germans would drop the Basic Law and embrace a totally new constitution.

Power for Brussels

This may all seem somewhat far-fetched, but there are members of the German government who are openly speculating this may happen. Schäuble believes that a national referendum on the German constitution would be an essential step in reforming the EU -- and with good reason, since the constitutional judges in Karlsruhe have now made it clear on a number of occasions that the constitution leaves little leeway to relinquish more power to Brussels.

This is precisely the point where opinions diverge sharply within the ranks of the government. The Foreign Ministry believes that the CDU's ambitious plans would, at best, be suitable for an introductory seminar on European politics -- but not in practice. Ministry officials would be happy if the EU states could agree on a few instruments to bring the euro crisis under control.

In a six-page paper published by the Foreign Ministry ("Required Integration Policy Improvements for the Creation of a Stability Union"), they write that to amend the EU treaties "a ('small') convention that is precisely limited in terms of content should be called quickly," which would then "rapidly" present proposals.

The Bavarian sister party to the CDU, the Christian Social Union (CSU) -- which also shares power in the federal government coalition with the CDU -- flatly rejects a complete reorganization of EU bodies. EU opponents currently call the shots in Bavaria, such as German Interior Minister Hans-Peter Friedrich, who even voted against the Constitutional Treaty, which was never ratified and was eventually superseded by the Lisbon Treaty. "Every disempowerment of national parliaments leads us further away from democratic processes," he says.

Future European Integration?

The CSU intends to resist further transfers of power to Brussels. The answer to the currency crisis is not more Europe, but rather less, argues CSU General Secretary Alexander Dobrindt. "When it comes to talking some sense into debtor countries that are unwilling to reform," he says, "this won't be achieved by (EU Commission President José Manuel) Barroso or (EU Council President Herman) Van Rompuy, but rather it can only be accomplished by Merkel and Sarkozy." Dobrindt contends: "It would be grossly incorrect, especially now during the crisis, to weaken the stability of the nation states and delegate the struggle to resolve the crisis to the relatively unsuccessful eurocrats in Brussels."

Now, the members of Merkel's governing coalition of the CDU/CSU and the business-friendly Free Democratic Party (FDP) are racking their brains in Berlin to find a way to meet the demands of the judges in Karlsruhe. The conservatives' parliamentary secretary Peter Altmaier, for instance, recently went to Karlsruhe to find out how the judges view the prospect of future European integration with regard to constitutional law. Ultimately, the conservatives calculate that the judges won't dare to stand in the way of European unity.

By contrast, some members of the opposition Social Democratic Party (SPD) would like to see a national referendum held as quickly as possible. "The next amendment to the European treaties should be linked to a national referendum," a paper written by Michael Roth, the European policy spokesman for the SPD parliamentary group, proposes.


Spiegel

Celente:They took my money!!!!!

India’s Inflation Exceeds 9% for 11th Month

India’s inflation exceeded 9 percent for an 11th straight month, crimping the central bank’s scope to keep interest rates unchanged and shield the economy from a faltering global recovery.

The benchmark wholesale-price index rose 9.73 percent in October from a year earlier, the commerce ministry said in a statement in New Delhi today. That compares with a 9.72 percent jump in September and the median forecast of 9.65 percent in a Bloomberg News survey of 19 economists.

Asian nations from Indonesia to South Korea are either cutting rates or keeping them on hold to protect expansion as Europe’s debt crisis threatens to trigger a global slump. India’s central bank last month signaled it’s nearing the end of monetary tightening, provided inflation slows, after it raised rates for the 13th time since mid-March 2010.

“Prices are not coming off,” said Madan Sabnavis, chief economist at Mumbai-based ratings company Credit Analysis & Research Ltd. “The RBI will have to probably revisit its guidance if inflation remains elevated.”

The BSE India Sensitive Index declined 0.4 percent at the close in Mumbai. The yield on the 8.79 percent government security due November 2021 rose two basis points, or 0.02 percentage point, to 8.97 percent. The rupee fell 0.4 to 50.29 per dollar.

The currency has tumbled more than 11 percent this year, a decline the central bank has said risks stoking inflation.
Fuel Costs

Indian Oil Corp., the nation’s biggest refiner, increased local gasoline prices on Nov. 4 for the third time in six months to stem losses, saying the rupee’s decline boosted costs.

The Reserve Bank of India on Oct. 25 said that its monetary tightening will help curb inflation and that the likelihood of a rate action in the December policy meeting is “relatively low.”

India’s inflation will start to decline from December and ease to 7 percent by March before moderating further in the first half of the next fiscal year starting April 1, according to the central bank. Beyond December, “if the inflation trajectory conforms to projections, further rate hikes may not be warranted,” the Reserve Bank said.

RBI Deputy Governor Subir Gokarn said the October inflation data was on expected lines and there is no reason for a change in the guidance put out by the central bank in its monetary policy last month.“Our guidance in October policy was based on current expectations of growth and inflation,” Gokarn told reporters today. “We haven’t seen anything after that, which might suggest that we need to revise that guidance based both on growth and inflation.”

Boomberg

There Is ‘No Way Out’ for Europe: Economist

There is no solution to the current debt crisis plaguing the euro zone, and it’s an illusion to think that one lies on the horizon, an economist told CNBC Monday.

"There is no way out, I never thought there was, not for any of the countries that are in trouble. Once one of these countries goes into this sort of problem, there is no escape," Roger Nightingale, economist at RDN Associates, said.

He dismissed the current, positive sentiment among investors regarding Italy as temporary and fleeting.

"In a few days time or a few weeks, things will go wrong again, yields will go up and the whole thing will skid into decline. It's a foregone conclusion most of Europe is already in recession. It is relatively uncompetitive, and it is facing extra bond yields, extra interest rates which of course it can't live with, and (it) will have slower rates of growth," he added.

Nightingale was scathing about the possibility of the new interim heads of government - Mario Monti in Italy and Lucas Papademos in Greece - being able to deliver their countries out of the current crisis.

"These politicians can do nothing, there is no solution. I'm amazed that the media keeps on as if there's an obvious solution and that these politicians know what it is," he said.

He said the existing group of politicians and central bankers would be the last people in the universe to come up with the solution, if one indeed existed.

"It is somewhat ironic that the prime minister in Italy is Monti. He was a member of the European Commission. He was one of the architects of the system that caused all the problems. Why on earth would you put him in place? It would be a semi-miracle if the solution works" Nightingale said.

CNBC

Netanyahu: Iran closer to bomb than assumed

Prime minister tells government Israel has more information beyond IAEA report
Itamar Eichner

Iran is closer to acquiring nuclear weapons than what is commonly believed, Prime MinisterBenjamin Netanyahu told government ministers Sunday.

Referring to the latest International Atomic Energy Agency report on Iran’s nuclear program, the PM said: “The IAEA’s report only detailed information that can be proven; facts that can be presented in court.”

“In practice there are many other things we see, and hence the leading states in the world must decide what to do in order to stop Iran,” he said. “The efforts thus far did not prevent Iran from progressing towards a bomb, and it is closer to acquiring it, sooner than what people think.”

Following Netanyahu’s remarks, the ministers were briefed by several top officials, including Foreign Minister Avigdor Lieberman. The briefings indicates, among other things, that the IAEA report included detailed information that has never been published before regarding Iran’s preoccupation with nuclear arms.
Further addressing the IAEA report, PM Netanyahu said that it confirmed the charges made by several states, which accused Iran of methodically developing nuclear weapons.

“Every responsible government in the world must draw the required conclusions,” the prime minister said. “The international community must stop Iran’s race to nuclear arms on time; this race threatens peace worldwide.”

Ynet

New York police blasts protesters

Turkey to take ‘resolute stance’ against Syria, says no longer possible to trust Damascus

Turkey ratchetted up its rhetoric against former friend Syria on Monday after protesters attacked its diplomatic missions in Syria.

“We will take the most resolute stance against these attacks and we will stand by the Syrian people’s rightful struggle,” Foreign Minister Ahmet Davutoglu told the Turkish parliament, referring to the attacks on the diplomatic missions.

Davutoglu said it was no longer possible to trust the Syrian government, according to Reuters.

A group of 1,000 Assad supporters attacked the Turkish embassy in Damascus on Saturday evening, throwing stones and bottles before Syrian police intervened to break up the protest, Turkey's state-run Anatolian news agency said.

Turkey on Sunday called on the international community to act together in dealing with Syria and called on Syria to guarantee the safety of Turkish diplomats and prosecute those behind the embassy attacks. Ankara also warned its citizens against non-essential travel to Syria.

Syria's opposition, meanwhile, has asked Turkey for permission to open a representative office in the country, a Turkish diplomat said Monday.

The Syrian National Council, the country’s largest and most representative opposition grouping, put the request to Turkey’s Foreign Minister Davutoglu during talks on Sunday, the diplomat said.

“Discussions and work will take place towards this end,” said the diplomat, without specifying whether Ankara had approved the request, according to AFP.

Davutoglu, who met previously with the council on Oct. 18, said Syria’s future “belonged to the Syrians and would be built by them,” added the diplomat, who declined to be named.

Turkey, a close ally of Syria before unrest swept the country earlier this year, has strongly condemned government repression of opposition protests, and Prime Minister Recep Tayyip Erdogan has said he has cut ties with the regime of President Assad.

Al Arabiya News