US stocks end with $1 trillion loss

After a string of warnings that Europe and the United States must do more to put their economies in order, the Federal Reserve on Wednesday provided the straw that broke the market’s back.

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The bank’s warning, that there are “significant downside risks to the economic outlook,” sent stocks into a tailspin with the Dow Jones industrial average losing nearly 800 points over the next 24 hours.

By the end of Thursday an estimated $103 billion had been wiped off the value of that 30-member index.

But the sea of red did not end with the blue chips.

According to figures from the Wilshire 5000, the broadest index available for the US equity market, around $1 trillion was lost during the week.

That made it the second worst week since October 2008 — the height of the financial crisis.

Stocks eventually halted their downward slide on Friday, with the Dow ending the day just above the break-even mark despite ongoing gloom about the state of the global economy.

The bounce-back came despite a tepid view of policymakers’ responses to the rekindled crisis.

A pledge from G20 finance ministers to mount a powerful response to global recovery threats appeared to do little to assuage fears.

The finance chiefs noted “heightened downside risks from sovereign stresses, financial system fragility, market turbulence, weak economic growth and unacceptably high unemployment.”

That drew a muted response on Wall Street.

“The market is worried about the European situation and that the officials are moving too slow in terms of their action of getting things under control,” said Scott Marcouiller of Wells Fargo Advisors.

“It’s fear and uncertainty, the two things that the markets hate the most, it is continuing to dominate the marketplace.”

The Dow ended the week down 6.4 percent at 10,771.48 points.

The broader S&P 500 fell 6.5 percent to 1,136.43 and the tech-heavy Nasdaq Composite fell 5.3 percent to 2,483.23.

Traders predicted more choppiness ahead.

“It’s going to be a period of tremendous volatility,” said Gina Martin of Wells Fargo Securities.

“It will depend on what happens with policy in Europe, fiscal policy in the US, and probably the eco data and how much weaker the eco data gets.

“We’re starting to price in weaker data, it’s just a matter of how much weaker the economy gets. If the data says a recession is more likely the market will suffer.”

Socceroos launch World Cup campaign

The Australians have lost only once in 11 matches under German Osieck this year among wins over Germany and Wales and are vying for their third consecutive finals’ appearance in Brazil in three years time.

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Osieck is blending the big-name Socceroo stars with emerging overseas-based talent and the best of the domestic A-League, to be reinforced this season with the return from Europe of senior internationals Harry Kewell and Brett Emerton.

Everton star Cahill, the team’s talisman with 23 goals in 52 internationals, believes a new era in Australian football is evolving.

“I think our depth is fantastic after seeing players like (Michael) Zullo, James Troisi or (Adam) Sarota come through,” Cahill said Thursday.

“I focus on what we have here and the players that bring so much to the team.

“And I was really impressed with what I saw in (the recent 2-1 friendly win against) Wales.

“It’s fantastic to be a part of the last era and move forward to this era with these players. The transition is perfect.”

The Thais, coached by German Winfried Schaefer, are ranked 98 slots below Asia’s second-ranked team Australia and face a stiff test in their first outing in Group D.

Thailand won through to the group stage after a 3-2 two-legged playoff against Palestine, but Schaefer, who led Cameroon to the 2002 World Cup, is confident his team can trouble the fancied Australians.

“Australia play a high standard of football, but I think we can give them a good game,” Schaefer said.

“I think we have the speed with our short-passing game to upset them, but you must fight, you must run and you must play with courage against Australia.”

Australia won 4-0 the last time the two teams met in a 2007 Asian Cup match in Bangkok.

Thailand have been offered a team bonus of two million baht (around US$65,000) to bring off an upset win over the Socceroos.

“We have never offered this amount of money before, but this is because it is an important match and we don’t want to miss the chance to qualify for the World Cup,” said Thai FA board member Samart Suppoj.

Cahill insists there will be no Australian complacency.

“It’s all about attitude and the way we apply ourselves. Respect to them, they’ll be difficult, but hopefully we’ll get off to a flying start,” he said.

Manning ‘had Assange contact info’

Investigators say they found contact information for Julian Assange on a computer hard drive belonging to US soldier Bradley Manning, who is accused of spilling secrets to Assange’s WikiLeaks organisation.

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Testifying on Monday at a hearing to determine if Manning should face a court-martial, the investigators also said they found evidence of online chats between the US Army private and a computer user identified by the handle “Julian Assange”.

In addition, the US Army digital forensics experts said they recovered State Department cables, US military field reports from Iraq and Afghanistan and other classified material from Manning’s computers and storage devices.

The testimony, which came on the fourth day of the hearing being held at this sprawling army base, was the most compelling government evidence yet linking Manning to one of the most serious intelligence breaches in US history.

Manning, who turned 24 on Saturday, could face life in prison if convicted of “aiding the enemy,” the most serious of the 22 charges he is facing.

ASSANGE CONTACTS

Mark Johnson, a private contractor who works for the US Army’s Computer Crime Investigative Unit (CCIU), said a computer hard drive obtained from Manning had contact information for Assange, the Australian-born WikiLeaks founder.

US Army prosecutors showed a screenshot of a message said to be taken from a file on the drive. “You can currently reach our investigations editor directly in Iceland – 354 862 3481 – 24 hour service – Ask for Julian Assange,” it said.

The investigators also said they had recovered online chats between Manning and a user by the name “Julian Assange” during which WikiLeaks was discussed.

Assange, who is in Britain fighting extradition to Sweden on sexual assault charges, has consistently denied knowing the source of the material received by his site but has expressed support for Manning.

CABLES FOUND

The investigators said they had found a file on an SD card recovered from Manning’s aunt’s house that contained 91,000 US military field reports from Afghanistan and another 400,000 from Iraq.

They did not specifically state that the reports matched those released by WikiLeaks but the anti-secrecy site published approximately the same number.

Special Agent David Shaver, head of the CCIU’s digital forensics and research branch, said investigators had also found 10,000 State Department cables that were apparently not passed on to WikiLeaks because of a corrupted file.

Among the documents Manning is suspected of giving WikiLeaks are some 260,000 State Department cables which led to an embarrassing string of revelations for the United States and other governments.

Shaver also said an additional 100,000 complete State Department cables which had been encoded were found on a computer used by Manning between November 2009, when he was deployed to Iraq, and May 2010, when he was arrested.

THE HEARING

The courtroom was cleared twice – over defense objections – on Monday of the general public and the media to allow for discussion of classified material.

Defense attorneys have argued that Manning struggled with gender issues and emotional problems but his superiors repeatedly failed to provide counselling, take disciplinary action or revoke his top secret security clearance.

His defense attorneys have also suggested that Manning, who is gay, had difficulty serving in a US military that was operating under the “Don’t Ask, Don’t Tell” policy towards homosexuals which has since been repealed.

Pentagon Papers whistleblower Daniel Ellsberg was escorted out of the hearing on Monday after approaching the defense table and introducing himself to Manning during a break in the proceedings, witnesses said.

Ellsberg was told by security officers it was a violation of the court rules to approach Manning but was allowed to return when the hearing resumed.

Thai PM-in-waiting confident she will be cleared

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Document”> Thai prime minister-in-waiting Yingluck Shinawatra said Wednesday that she was confident that alleged campaign irregularities which are holding up her appointment would be dismissed.

Thailand’s Election Commission on Tuesday put off a decision on whether to approve Yingluck and 141 other candidates, including outgoing premier Abhisit Vejjajiva, as members of the 500-seat lower house.

“There’s still time left under the law. I think the EC is trying to finish its investigation,” she said. “I hope and am confident that the EC will treat me and my Puea Thai Party with fairness and justice.”

Any move to disqualify Yingluck — the sister of fugitive ex-premier Thaksin Shinawtra — would infuriate the opposition “Red Shirt” protest movement that was behind mass rallies in Bangkok last year that turned deadly.

Yingluck has formed a six-party coalition that will control about three fifths of the lower chamber.

The new parliament must convene within 30 days of the July 3 election to select a house speaker, and has another 30 days to pick a prime minister.

The election commission is investigating complaints by Abhisit’s Democrat Party that banned politicians such as Thaksin were involved in its rivals’ campaign, whose slogan was “Thaksin thinks, Puea Thai does.”

Yingluck has denied the accusations, saying she received only guidance from her brother, who was ousted in a 2006 coup and lives in self-imposed exile to avoid a jail sentence for corruption.

“He merely offered ideas and advice but was not involved in the party administration and decisions,” she said of Thaksin, who is widely seen as the de facto opposition leader.

The election commission has rejected a separate complaint that Yingluck sought to buy votes by giving away noodles she cooked during campaigning.

Two Thaksin parties have been dissolved by the courts in the past and their top executives, including the former leader, were banned from politics.

Abhisit is also being investigated by the poll body over complaints that the sale of discount goods at a fair he attended constituted vote buying.

He said he was surprised by the EC announcement, but confident he had not breached regulations.

“I am not worried and I’m ready to explain every case because I was not breaking any law,” he told reporters.

He called on Yingluck to tell the Red Shirts not to pressure authorities, after about 100 members of the movement gathered peacefully in support of her Puea Thai party outside Tuesday’s election commission meeting.

“They should stop, and I want Yingluck to clearly state that she does not support this kind of behaviour, otherwise conflict will be unending,” he said.

The commission is due to announce further endorsements of candidates on July 19.

China opposes ‘unilateral’ sanctions on Iran

China said it opposed “unilateral” sanctions against Iran, after US President Barack Obama signed into law new measures targeting the Islamic republic’s central bank.

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Washington’s move came after the United States, Britain and Canada said in November they were slapping additional sanctions on Iran, citing evidence that Tehran is pursuing nuclear weapons.

Tehran denies the allegations, saying its nuclear programme is exclusively for medical and power generation purposes, and China has repeatedly said sanctions will not resolve the issue.

“China opposes placing one’s domestic law above international law and imposing unilateral sanctions against other countries,” said foreign ministry spokesman Hong Lei in response to a question about US sanctions on Iran.

China and Iran have become major economic partners in recent years, partly due to the withdrawal of Western companies in line with sanctions against Tehran.

In July last year, the two countries signed a series of agreements worth $4 billion for infrastructure projects in the water, mining, energy and industrial sectors.

Hong acknowledged that China has regular “open and transparent economic and energy interactions with Iran”.

“These interactions do not violate UN Security Council resolutions and will not impair third party interests,” he said. “Therefore these interactions should not be affected.”

The new US sanctions — signed into law at the weekend — aim to further squeeze Iran’s crucial oil revenues, as most of those funds are processed by the nation’s central bank.

Under the measures, foreign firms will have to choose between doing business with the Islamic republic or the economically mighty United States.

Iranian leaders and military officials have warned that such sanctions could push them to close the strategic Strait of Hormuz at the entrance to the Gulf, through which 20 percent of the world’s oil flows.

Already in November, Britain said it was ceasing contact between its financial system and that of Iran, while Canada announced new sanctions targeting most transactions with Tehran.

At the time, the United States announced sanctions against Iran’s energy sector and warned firms against dealing with the Islamic republic’s financial sector, naming the country “a primary money laundering concern”.

But China and Russia — key allies of Iran — have often sought to take a softer stance on the Islamic republic than their fellow members of the UN Security Council.