By MARTIN CRUTSINGER, AP Economics Writer
WASHINGTON - Wholesale prices rose again in February as another hefty increase in energy costs offset falling food prices. Outside of food and energy, prices shot up at the fastest pace in 15 months.
In another sign of troubles in housing, construction of new homes fell by a larger-than-expected 0.6 percent in February to an annual rate of 1.065 million units.
The Labor Department reported Tuesday that wholesale prices were up 0.3 percent last month, following an even bigger 1 percent jump in January.
Outside of food and energy, the rise in inflation was a troubling 0.5 percent, the biggest increase for core inflation since a rise of 0.9 percent in November 2006.
The hefty February increase in core inflation raises concerns that relentless increases in energy costs over the past two years are beginning to spread to other areas of the economy.
That could act as a constraint on the Federal Reserve, which is trying to combat a serious economic slowdown by cutting interest rates to jump-start economic growth.
However, if inflation starts to be a problem, the Fed could be caught in the grips of stagflation, the malady of stagnant growth occurring at the same time that inflation is rising.
The February rise in wholesale prices reflected higher costs not only for energy but also for cars and light trucks as well as a 1.3 percent jump in prescription drug prices.
Ian Shepherdson, chief U.S. economist at High Frequency Economics, said that the overall figure will be even worse next month given that energy prices have been soaring. Crude oil prices hit new records last week above $111 per barrel.
For the moment, Fed officials have said they view the threat of a recession as the bigger problem. Financial markets are looking for another aggressive rate cut on Tuesday, especially in light of the collapse over the weekend of Bear Stearns, Wall Street's fifth largest investment bank, and the ongoing troubles in housing.
The drop in new-home construction was a bigger decline than the 0.2 percent drop that Wall Street had been expecting although January was revised up to show a stronger gain than originally reported.
However, building permits, considered a good indication of future activity, plunged by 7.8 percent in February to an annual rate of 978,000 units, the slowest pace in 16 years.
The troubles in housing with falling sales and prices in many parts of the country have acted as a drag on the overall economy, contributing to a serious slowdown that many analysts are worried could push the country into a recession.
The 0.3 percent rise in wholesale prices reflected a 0.8 percent jump in energy costs, driven higher by 2.9 percent jump in gasoline prices and 5.7 percent increase in residential natural gas prices, the biggest jump in this price in more than two years.
Food costs at the wholesale level actually fell by 0.5 percent last month as the cost of vegetables, fruit, dairy products and pork all declined.
For the past 12 months, wholesale prices have risen by 6.4 percent while excluding food and energy, inflation is up 2.6 percent, the biggest 12-month change for core inflation since the period ending last October.
Tuesday, March 18, 2008
Lawmakers probe EPA conflicts
By H. JOSEF HEBERT, Associated Press Writer
WASHINGTON - A House committee opened an investigation Monday into potential conflicts of interest in scientific panels that advise the Environmental Protection Agency.
The House Energy and Commerce Committee cited the case of eight scientists who were consultants or members of EPA science advisory panels assessing the human health effects of toxic chemicals while getting research support from the chemical industry on the same chemicals they were examining.
In two cases, EPA advisers were employed by companies that made or worked with manufacturers of the chemicals being evaluated. the committee said.
Rep. John Dingell, D-Mich., the committee's chairman, said such conflicts appear to be in stark contrast to EPA's decision last summer to remove a public health scientist and expert in toxicology, from a panel examining the health impacts of a flame retardant because of critical comments she made about the chemical.
The American Chemistry Council, the industry trade group, had called for the removal of Deborah Rice, a toxicologist from Maine, as chairman of an independent EPA panel assessing the health risks from "deca", a flame retardant in electronic equipment, after she urged the Maine state legislature to ban the chemical.
"The routine use of chemical industry employees and representatives in EPA's scientific review process, together with EPA's dismissal of Dr. Rice raises serious questions with regard to EPA's conflict of interest rules and their application," said Dingell in a letter Monday to EPA Administrator Stephen Johnson.
Rice, an employee of Maine's Department of Health and Human Services, was never alleged to have any monetary interest associated with deca and her dismissal "seems to argue that scientific expertise ... is a basis for disqualification," the letter continued.
"We will be reviewing the letter and we will respond appropriately," said EPA spokesman Timothy Lyons.
The letter, also signed by Rep. Bart Stupak, D-Mich., chairman of the committee's investigations subcommittee, demanded documents related to Rice's ouster, as well as records related the appointment of scientists with chemical industry ties.
Rice's removal, as chairman of the deca chemical review board "does not seem sensible on its face" given the EPA's acceptance of scientists with ties to the chemical industry and even to companies who make the chemicals being reviewed, the congressmen wrote.
Among the appointments questioned:
• An employee of Exxon Mobil Corp., who served on an expert panel assessing the cancer-causing potential of ethylene oxide, a chemical also made by Exxon Mobil.
• A participant in a panel examining the risk to humans from a widely used octane enhancer in gasoline, who was employed by an engineering company working with makers of the chemical and major oil and chemical companies.
• A scientist who served on a panel examining the health impacts of ethylene oxide, a component in various industrial chemicals, who received research support from Dow Agro, one of the chemicals' manufacturers.
The House committee questioned a case where a consultant to an EPA review panel, promoted his research on a chemical while he also prepared the chemical industry's public comments on the cancer-causing potential of the same chemical. Also cited was a case where a scientist who, while a consultant to an EPA review panel, promoted his own industry-supported research arguing the chemical was not a carcinogen.
In light of Rice's removal, Dingell and Stupak asked the EPA about the appointment of a Harvard University epidemiologist to a recently convened panel reviewing the possible cancer risk from acrylamide, an industrial chemical used as a thickener but also found in some foods. They said that the epidemiologist on a number of occasions has said the exposure to acrylamide through food does not appear to pose a cancer risk.
The examples cited by the House committee were included in a report last month by the Environmental Working Group, a Washington-based advocacy group, that said its investigation found that among seven external EPA review panels, it found 17 reviewers with potential conflicts of interest.
WASHINGTON - A House committee opened an investigation Monday into potential conflicts of interest in scientific panels that advise the Environmental Protection Agency.
The House Energy and Commerce Committee cited the case of eight scientists who were consultants or members of EPA science advisory panels assessing the human health effects of toxic chemicals while getting research support from the chemical industry on the same chemicals they were examining.
In two cases, EPA advisers were employed by companies that made or worked with manufacturers of the chemicals being evaluated. the committee said.
Rep. John Dingell, D-Mich., the committee's chairman, said such conflicts appear to be in stark contrast to EPA's decision last summer to remove a public health scientist and expert in toxicology, from a panel examining the health impacts of a flame retardant because of critical comments she made about the chemical.
The American Chemistry Council, the industry trade group, had called for the removal of Deborah Rice, a toxicologist from Maine, as chairman of an independent EPA panel assessing the health risks from "deca", a flame retardant in electronic equipment, after she urged the Maine state legislature to ban the chemical.
"The routine use of chemical industry employees and representatives in EPA's scientific review process, together with EPA's dismissal of Dr. Rice raises serious questions with regard to EPA's conflict of interest rules and their application," said Dingell in a letter Monday to EPA Administrator Stephen Johnson.
Rice, an employee of Maine's Department of Health and Human Services, was never alleged to have any monetary interest associated with deca and her dismissal "seems to argue that scientific expertise ... is a basis for disqualification," the letter continued.
"We will be reviewing the letter and we will respond appropriately," said EPA spokesman Timothy Lyons.
The letter, also signed by Rep. Bart Stupak, D-Mich., chairman of the committee's investigations subcommittee, demanded documents related to Rice's ouster, as well as records related the appointment of scientists with chemical industry ties.
Rice's removal, as chairman of the deca chemical review board "does not seem sensible on its face" given the EPA's acceptance of scientists with ties to the chemical industry and even to companies who make the chemicals being reviewed, the congressmen wrote.
Among the appointments questioned:
• An employee of Exxon Mobil Corp., who served on an expert panel assessing the cancer-causing potential of ethylene oxide, a chemical also made by Exxon Mobil.
• A participant in a panel examining the risk to humans from a widely used octane enhancer in gasoline, who was employed by an engineering company working with makers of the chemical and major oil and chemical companies.
• A scientist who served on a panel examining the health impacts of ethylene oxide, a component in various industrial chemicals, who received research support from Dow Agro, one of the chemicals' manufacturers.
The House committee questioned a case where a consultant to an EPA review panel, promoted his research on a chemical while he also prepared the chemical industry's public comments on the cancer-causing potential of the same chemical. Also cited was a case where a scientist who, while a consultant to an EPA review panel, promoted his own industry-supported research arguing the chemical was not a carcinogen.
In light of Rice's removal, Dingell and Stupak asked the EPA about the appointment of a Harvard University epidemiologist to a recently convened panel reviewing the possible cancer risk from acrylamide, an industrial chemical used as a thickener but also found in some foods. They said that the epidemiologist on a number of occasions has said the exposure to acrylamide through food does not appear to pose a cancer risk.
The examples cited by the House committee were included in a report last month by the Environmental Working Group, a Washington-based advocacy group, that said its investigation found that among seven external EPA review panels, it found 17 reviewers with potential conflicts of interest.
Man charged with abducting schoolgirl: prosecutor
LONDON (AFP) - A 39-year-old man has been charged with the abduction of a nine-year-old girl found alive after having disappeared for three weeks, prosecutors said Monday. Michael Donovan will appear before Dewsbury Magistrates Court on Tuesday charged with the kidnap and false imprisonment of Shannon Matthews, who was discovered concealed in the base of a bed.
"Having carefully considered all of the material ... we have made the decision that there is sufficient evidence and have authorised that Michael Donovan should be charged with kidnapping and false imprisonment," said Peter Mann, the head of the Crown Prosecution Service's West and North Yorkshire Complex Case unit.
She went missing on February 19 after a school swimming trip in Dewsbury, near Leeds, triggering a huge police investigation amid growing fears she may have been killed.
The schoolgirl, whose picture has been plastered in the media for the last three weeks, was found in a flat in Batley Carr, a short distance from her home.
"Having carefully considered all of the material ... we have made the decision that there is sufficient evidence and have authorised that Michael Donovan should be charged with kidnapping and false imprisonment," said Peter Mann, the head of the Crown Prosecution Service's West and North Yorkshire Complex Case unit.
She went missing on February 19 after a school swimming trip in Dewsbury, near Leeds, triggering a huge police investigation amid growing fears she may have been killed.
The schoolgirl, whose picture has been plastered in the media for the last three weeks, was found in a flat in Batley Carr, a short distance from her home.
Some Wall St banks seen riskier than poor countries
By Peter Apps
LONDON (Reuters) - Turmoil and uncertainty over some of Wall Street's best-known investment banks has left some facing rougher market conditions that price them as riskier than developing countries or banks in volatile areas of the world.
Seen for decades as the power brokers in emerging market finance, Wall St firms' sudden underdog status points to the magnitude of fear surrounding them -- and perhaps a degree of confidence in the longer-term stability of developing countries.
Shortly before it received a Federal Reserve-backed rescue package late last week, the cost of insuring the debt of U.S. bank Bear Stearns (BSC.N) was higher than that for banks in Kazakhstan, one trader said.
On Monday, Bear Stearns was sold for a fraction of its value last week, further undermining global markets and confidence in what were once seen as some of the world's most reliable banks.
Early on Tuesday, before it posted results, the cost of protecting debt at Lehman Brothers was 443 basis points, or $443,000 a year for five years, to protect $10 million of debt with credit default swaps.
After Lehman Brothers (LEH.N) announced a fall in revenue but beat fearful expectations, its credit default swaps traded at 330 basis points according to Phoenix Partners.
One analyst said the bank's position appeared "survivable" -- but protecting its debt is pricier than protecting that of Turkey or Nigeria, traders say.
"You could say Lehman is riskier than Nigeria," one trader said, asking not to be named. "But it's not a trade or a comparison people often try to make."
Turkish credit derivatives swaps were trading at 290/298 despite worries over a wide current account deficit and volatile politics. Nigeria's are relatively illiquid but usually priced in the mid-200s, a trader said.
Goldman Sachs (GS.N) credit derivative swaps tightened to 160 basis points after the bank said its first-quarter earnings fell by half after recording more than $2.5 billion of losses on loans and other assets, but with robust trading helping the bank exceed market expectations.
But liquidity in global debt markets remains poor with the world's largest banks suspecting each other of not coming entirely clean on losses in the U.S. mortgage market, and many analysts saying more bad news is to come.
GREAT UNKNOWNS
"I think with Africa people feel they know what they are dealing with," said Razia Khan, head of Africa economics at Standard Chartered in London. "In contrast, everything else is a great unknown."
That was despite investors being slightly put off by the speed at which Kenya -- a perceived oasis of East African stability -- collapsed into violence after a disputed election in December.
In credit derivative swaps markets, Turkey was trading at the same level as British bank HBOS (HBOS.L), while healthy Brazil with credit derivatives swaps at 191/197 basis points was roughly level with Royal Bank of Scotland (RBS.L), BB Securities said.
That was despite worries over Turkey's wide current account deficit and concerns over an attempt by the country's secular prosecutors to ban the ruling party from politics for allegedly trying to build an Islamic state.
"It gives us some kind of snapshot of relative values," said BB Securities emerging markets research head Paul Hollingworth. "The fundamentals have become secondary to liquidity and technical factors.""
"Most banks in the UK and U.S. are trading well below valuations of top emerging markets banks," he said. "The Brazilian banking system has never had it so good. It is a stark comparison."
The country suffering worst in the credit crisis is not usually seen as a byword for trouble -- Iceland, ranked top in the world according to United Nations human development indicators.
Its highly leveraged banks are laboring under a greater proportion of debt than almost any other bank and this sent the Icelandic crown to all-time lows on Tuesday morning and the credit default swaps of its leading Kaupthing Bank to 864 basis points.
(Additional reporting by Sebastian Tong; editing by Stephen Nisbet)
LONDON (Reuters) - Turmoil and uncertainty over some of Wall Street's best-known investment banks has left some facing rougher market conditions that price them as riskier than developing countries or banks in volatile areas of the world.
Seen for decades as the power brokers in emerging market finance, Wall St firms' sudden underdog status points to the magnitude of fear surrounding them -- and perhaps a degree of confidence in the longer-term stability of developing countries.
Shortly before it received a Federal Reserve-backed rescue package late last week, the cost of insuring the debt of U.S. bank Bear Stearns (BSC.N) was higher than that for banks in Kazakhstan, one trader said.
On Monday, Bear Stearns was sold for a fraction of its value last week, further undermining global markets and confidence in what were once seen as some of the world's most reliable banks.
Early on Tuesday, before it posted results, the cost of protecting debt at Lehman Brothers was 443 basis points, or $443,000 a year for five years, to protect $10 million of debt with credit default swaps.
After Lehman Brothers (LEH.N) announced a fall in revenue but beat fearful expectations, its credit default swaps traded at 330 basis points according to Phoenix Partners.
One analyst said the bank's position appeared "survivable" -- but protecting its debt is pricier than protecting that of Turkey or Nigeria, traders say.
"You could say Lehman is riskier than Nigeria," one trader said, asking not to be named. "But it's not a trade or a comparison people often try to make."
Turkish credit derivatives swaps were trading at 290/298 despite worries over a wide current account deficit and volatile politics. Nigeria's are relatively illiquid but usually priced in the mid-200s, a trader said.
Goldman Sachs (GS.N) credit derivative swaps tightened to 160 basis points after the bank said its first-quarter earnings fell by half after recording more than $2.5 billion of losses on loans and other assets, but with robust trading helping the bank exceed market expectations.
But liquidity in global debt markets remains poor with the world's largest banks suspecting each other of not coming entirely clean on losses in the U.S. mortgage market, and many analysts saying more bad news is to come.
GREAT UNKNOWNS
"I think with Africa people feel they know what they are dealing with," said Razia Khan, head of Africa economics at Standard Chartered in London. "In contrast, everything else is a great unknown."
That was despite investors being slightly put off by the speed at which Kenya -- a perceived oasis of East African stability -- collapsed into violence after a disputed election in December.
In credit derivative swaps markets, Turkey was trading at the same level as British bank HBOS (HBOS.L), while healthy Brazil with credit derivatives swaps at 191/197 basis points was roughly level with Royal Bank of Scotland (RBS.L), BB Securities said.
That was despite worries over Turkey's wide current account deficit and concerns over an attempt by the country's secular prosecutors to ban the ruling party from politics for allegedly trying to build an Islamic state.
"It gives us some kind of snapshot of relative values," said BB Securities emerging markets research head Paul Hollingworth. "The fundamentals have become secondary to liquidity and technical factors.""
"Most banks in the UK and U.S. are trading well below valuations of top emerging markets banks," he said. "The Brazilian banking system has never had it so good. It is a stark comparison."
The country suffering worst in the credit crisis is not usually seen as a byword for trouble -- Iceland, ranked top in the world according to United Nations human development indicators.
Its highly leveraged banks are laboring under a greater proportion of debt than almost any other bank and this sent the Icelandic crown to all-time lows on Tuesday morning and the credit default swaps of its leading Kaupthing Bank to 864 basis points.
(Additional reporting by Sebastian Tong; editing by Stephen Nisbet)
Monday, March 17, 2008
Paterson to become 55th NY governor
By VALERIE BAUMAN, Associated Press Writer
ALBANY, N.Y. - Lt. Gov. David Paterson prepared to take over Monday for Gov. Eliot Spitzer, whose vow as he took office of "Day One, Everything Changes," was unraveled a week ago by revelations of a prostitution scandal.
At his swearing-in as the state's 55th governor, Paterson plans to use his inaugural speech to project confidence and optimism, while relating his own personal struggles to New York's ability to overcome challenges, an aide said.
Paterson will become the state's first black governor — and would be the nation's first legally blind chief executive to serve more than a few days.
President Bush gave Paterson a congratulatory call Monday morning.
"He said that his friends in New York had told him that while it's a big job, that you can handle it," White House press secretary Dana Perino said. Bush said he "knows that Lt. Gov. Paterson will be able to do a great job, and that he looks forward to meeting him soon."
After acknowledging what a difficult week it has been for the state, Paterson plans to talk about the need for Republicans and his fellow Democrats to work together to address pressing issues, including the state budget.
On Sunday, Paterson was catching up on budget details and preparing — and memorizing — his inauguration speech.
Spitzer was scheduled to officially resign at noon Monday, and Paterson will officially take over an hour later before a joint session of the Legislature in the Assembly chamber. He spent much of last week meeting with Democratic and Republican leaders in preparation for his unexpected transition.
The new governor was Spitzer's lieutenant for just 14 months. Paterson has been a Democratic state senator since 1985, representing parts of Harlem and Manhattan's Upper West Side.
He graduated from Columbia University and Hofstra School of Law.
His father, Basil, a former state senator representing Harlem and later New York's first black secretary of state, was part of a political fraternity that included fellow Democrats U.S. Rep. Charles Rangel, former New York City Mayor David Dinkins — the city's first black mayor — and former Manhattan Borough President Percy Sutton.
"It's very daunting" Paterson said Friday. "I definitely feel anxiety ... but in the end, we have a job to do. And we're here to do that job."
Federal prosecutors must still decide whether to pursue charges against Spitzer. The married father of three teenage girls was accused of spending tens of thousands of dollars on prostitutes — including a call girl "Kristen" in Washington the night before Valentine's Day.
ALBANY, N.Y. - Lt. Gov. David Paterson prepared to take over Monday for Gov. Eliot Spitzer, whose vow as he took office of "Day One, Everything Changes," was unraveled a week ago by revelations of a prostitution scandal.
At his swearing-in as the state's 55th governor, Paterson plans to use his inaugural speech to project confidence and optimism, while relating his own personal struggles to New York's ability to overcome challenges, an aide said.
Paterson will become the state's first black governor — and would be the nation's first legally blind chief executive to serve more than a few days.
President Bush gave Paterson a congratulatory call Monday morning.
"He said that his friends in New York had told him that while it's a big job, that you can handle it," White House press secretary Dana Perino said. Bush said he "knows that Lt. Gov. Paterson will be able to do a great job, and that he looks forward to meeting him soon."
After acknowledging what a difficult week it has been for the state, Paterson plans to talk about the need for Republicans and his fellow Democrats to work together to address pressing issues, including the state budget.
On Sunday, Paterson was catching up on budget details and preparing — and memorizing — his inauguration speech.
Spitzer was scheduled to officially resign at noon Monday, and Paterson will officially take over an hour later before a joint session of the Legislature in the Assembly chamber. He spent much of last week meeting with Democratic and Republican leaders in preparation for his unexpected transition.
The new governor was Spitzer's lieutenant for just 14 months. Paterson has been a Democratic state senator since 1985, representing parts of Harlem and Manhattan's Upper West Side.
He graduated from Columbia University and Hofstra School of Law.
His father, Basil, a former state senator representing Harlem and later New York's first black secretary of state, was part of a political fraternity that included fellow Democrats U.S. Rep. Charles Rangel, former New York City Mayor David Dinkins — the city's first black mayor — and former Manhattan Borough President Percy Sutton.
"It's very daunting" Paterson said Friday. "I definitely feel anxiety ... but in the end, we have a job to do. And we're here to do that job."
Federal prosecutors must still decide whether to pursue charges against Spitzer. The married father of three teenage girls was accused of spending tens of thousands of dollars on prostitutes — including a call girl "Kristen" in Washington the night before Valentine's Day.
Deadline looms for Tibetans to surrender
By AUDRA ANG, Associated Press Writers
BEIJING - Tibet's governor denounced anti-Chinese protesters as criminals and threatened harsh consequences for those who do not turn themselves in by a midnight deadline Monday. More clashes erupted in other Chinese provinces.
The threat by China-appointed governor Champa Phuntsok heightened tensions. The Washington, D.C.-based International Campaign for Tibet said residents feared a military sweep after midnight.
The fiercest protests against Chinese rule of Tibet in almost two decades have attracted more international scrutiny of the communist government's human rights record in the run-up to the Beijing Summer Olympics, which is a great source of pride to China.
Tibet's legal authorities issued the surrender notice to demonstrators on Saturday.
"If these people turn themselves in, they will be treated with leniency within the framework of the law," said Champa Phuntsok, an ethnic Tibetan. Otherwise "we will deal with them harshly," he added.
He said those who turn themselves in and inform on others will earn even more leniency.
"No country would allow those offenders or criminals to escape the arm of justice and China is no exception," Champa Phuntsok said at news briefing.
The Dalai Lama, Tibet's exiled spiritual leader, said Sunday that he felt "helpless" in the face of a Chinese ultimatum for protesters to surrender.
"The deadline is at midnight tomorrow. So now every second it goes nearer," the Nobel Peace laureate told reporters at the Himalayan headquarters of Tibet's government-in-exile. "I feel very sad, very serious, very anxious. Cannot do anything."
The unrest in Tibet began March 10 on the anniversary of a failed 1959 uprising against Chinese rule in the region that sent the Dalai Lama and much of the leading Buddhist clergy into exile. Tibet was effectively independent for decades before Communist troops entered in 1950.
But what began as largely peaceful protests by monks spiraled Friday into a melee with Tibetans attacking Chinese and burning their businesses in the Tibetan capital Lhasa. The outburst came after several years of intensifying government control over Buddhist practices and vilification of the Dalai Lama, whom Tibetans still revere.
Secretary of State Condoleezza Rice reiterated on Monday her call for China to show restraint in fighting the protests and urged Beijing to find a way to engage the Dalai Lama, the exiled Tibetan spiritual leader.
"There's been a kind of missed opportunity for the Chinese to engage the Dalai Lama," Rice told reporters Monday. She said the Dalai Lama is a voice of authority, not a separatist, and he could "lend his moral weight" to helping stabilize Tibet.
Champa Phuntsok said the death toll from last week's violent demonstrations in Lhasa was 16 and dozens were injured. The Dalai Lama's exiled Tibetan government in India has said that 80 people were killed — a claim the governor denied.
Over the weekend, Chinese troops on foot and in armored vehicles poured into the streets of Lhasa and enforced a curfew that kept most people off the streets.
Authorities paraded handcuffed Tibetan prisoners in Lhasa on Monday, The Times of London reported on its online edition. The report said four trucks in a convoy drove through the city, with 40 people, mostly young Tibetan men and women, standing in the back, their wrists handcuffed and a soldier behind each one holding the prisoner's head bowed.
Going house-to-house, police checked identity cards and residence permits, detaining any without permission to stay in Lhasa, the Times said.
While Lhasa was still swarming with troops, Chinese troops fanned out to quell sympathy protests that have spread to three neighboring provinces. More forces were mobilizing across western China's mountain valleys and broad plains to deal with protests in Tibetan communities in Gansu, Sichuan and Qinghai provinces.
In Gansu's Maqu county, which borders Sichuan, thousands of monks and ordinary Tibetans clashed with police Monday in various locations, police and a Tibet rights group said.
"We have nothing to protect ourselves and we can't fight back," said an officer at the county police headquarters who refused to give his name or other details. He said about 10 police were injured.
In the city of Lanzhou, about 500 Tibetan students who gathered Sunday on the Northwest Minorities University's soccer field abandoned an overnight vigil. Fifty tried to march into the city, only to be blocked by security forces from leaving the campus, said the London-based Free Tibet Campaign.
A witness in Sichuan said troops moved into Ma'erkang county, next to an area where clashes between monks and police broke out Sunday with unconfirmed reports that as many as seven were killed.
At Central Nationalities University in Beijing, an elite school for ethnic minorities, 100 students held a silent candlelight vigil, sitting down in an outdoor plaza Monday night.
"We're doing this for those who are suffering," said a young Tibetan student.
Uniformed and plainclothes security kept watch but did not interfere with the vigil. Foreign journalists were prevented from taking photos and told to leave.
The government also began to tighten its already firm hold on information. Officials expelled foreign reporters from Tibetan areas in Qinghai and Gansu provinces, contravening regulations that opened most of China to foreign media for the Olympics.
Some of the few independent media remaining in Lhasa were also ordered out, making it difficult to verify casualties and other details.
Police in Lhasa kicked out reporters from three Hong Kong television stations — Cable TV, TVB and ATV — and made TVB delete footage of Friday's violence, TVB reported.
There were also more sympathy protests outside China. In Nepal, police used bamboo batons to disperse about 100 Tibetan protesters and Buddhist monks near the main U.N. office in Katmandu on Monday. Some 44 people were arrested.
In the wake of Friday's violence, Beijing ratcheted up the rhetoric against the Dalai Lama, accusing his supporters of masterminding the riot.
"This was organized, premeditated, masterminded and incited by the Dalai clique and it was created under the collusion of Tibet independence separatist forces both inside and outside China," said Champa Phuntsok.
He said three of the 16 people killed Friday in Lhasa were protesters who jumped out of a building to avoid arrest. He called the other 13 "innocent civilians," — apparently a reference to Chinese killed by demonstrators.
In one case, a person died after being covered in gasoline and then set on fire, he said. In another incident, the protesters "knocked out a police officer on patrol and then they used a knife to cut a piece of flesh from his buttocks the size of a fist," he said.
Champa Phuntsok said calm had been restored to Lhasa. Residents said Monday that police were patrolling the streets and had sealed off key roads in the downtown area, where the riots occurred, but that conditions were not as tense as over the weekend.
"Today, many people went back to work and some schools are open," said a tour guide. "Prices of food, gasoline and other things are soaring."
Another woman said there was "still a general mood of fear about going out. But it's better than a few days ago." She said a public announcement on a local television station was encouraging people to give themselves up.
Champa Phuntsok said he did not know if anyone had surrendered and police and government officials in Lhasa refused to comment.
In a further sign of China's concern about repairing the situation, Tibet's hard-line Communist Party secretary Zhang Qingli — the region's most powerful official — returned to Lhasa over the weekend and met with security forces, the official Tibet Daily newspaper said. Zhang had been attending the national legislature's annual session in Beijing, which ends Tuesday.
The Tibet Daily quoted Zhang as saying security forces "carried out a frontal assault against the thugs" who rioted in Lhasa.
Russia voiced support for the Chinese government over the violence in Tibet, saying it hopes "Chinese authorities will take all necessary measures to stop illegal actions and provide for the swiftest possible normalization of the situation." The Foreign Ministry said any efforts to boycott the Beijing Olympics are "unacceptable."
Olympic officials have also said they oppose any boycott over Tibet.
BEIJING - Tibet's governor denounced anti-Chinese protesters as criminals and threatened harsh consequences for those who do not turn themselves in by a midnight deadline Monday. More clashes erupted in other Chinese provinces.
The threat by China-appointed governor Champa Phuntsok heightened tensions. The Washington, D.C.-based International Campaign for Tibet said residents feared a military sweep after midnight.
The fiercest protests against Chinese rule of Tibet in almost two decades have attracted more international scrutiny of the communist government's human rights record in the run-up to the Beijing Summer Olympics, which is a great source of pride to China.
Tibet's legal authorities issued the surrender notice to demonstrators on Saturday.
"If these people turn themselves in, they will be treated with leniency within the framework of the law," said Champa Phuntsok, an ethnic Tibetan. Otherwise "we will deal with them harshly," he added.
He said those who turn themselves in and inform on others will earn even more leniency.
"No country would allow those offenders or criminals to escape the arm of justice and China is no exception," Champa Phuntsok said at news briefing.
The Dalai Lama, Tibet's exiled spiritual leader, said Sunday that he felt "helpless" in the face of a Chinese ultimatum for protesters to surrender.
"The deadline is at midnight tomorrow. So now every second it goes nearer," the Nobel Peace laureate told reporters at the Himalayan headquarters of Tibet's government-in-exile. "I feel very sad, very serious, very anxious. Cannot do anything."
The unrest in Tibet began March 10 on the anniversary of a failed 1959 uprising against Chinese rule in the region that sent the Dalai Lama and much of the leading Buddhist clergy into exile. Tibet was effectively independent for decades before Communist troops entered in 1950.
But what began as largely peaceful protests by monks spiraled Friday into a melee with Tibetans attacking Chinese and burning their businesses in the Tibetan capital Lhasa. The outburst came after several years of intensifying government control over Buddhist practices and vilification of the Dalai Lama, whom Tibetans still revere.
Secretary of State Condoleezza Rice reiterated on Monday her call for China to show restraint in fighting the protests and urged Beijing to find a way to engage the Dalai Lama, the exiled Tibetan spiritual leader.
"There's been a kind of missed opportunity for the Chinese to engage the Dalai Lama," Rice told reporters Monday. She said the Dalai Lama is a voice of authority, not a separatist, and he could "lend his moral weight" to helping stabilize Tibet.
Champa Phuntsok said the death toll from last week's violent demonstrations in Lhasa was 16 and dozens were injured. The Dalai Lama's exiled Tibetan government in India has said that 80 people were killed — a claim the governor denied.
Over the weekend, Chinese troops on foot and in armored vehicles poured into the streets of Lhasa and enforced a curfew that kept most people off the streets.
Authorities paraded handcuffed Tibetan prisoners in Lhasa on Monday, The Times of London reported on its online edition. The report said four trucks in a convoy drove through the city, with 40 people, mostly young Tibetan men and women, standing in the back, their wrists handcuffed and a soldier behind each one holding the prisoner's head bowed.
Going house-to-house, police checked identity cards and residence permits, detaining any without permission to stay in Lhasa, the Times said.
While Lhasa was still swarming with troops, Chinese troops fanned out to quell sympathy protests that have spread to three neighboring provinces. More forces were mobilizing across western China's mountain valleys and broad plains to deal with protests in Tibetan communities in Gansu, Sichuan and Qinghai provinces.
In Gansu's Maqu county, which borders Sichuan, thousands of monks and ordinary Tibetans clashed with police Monday in various locations, police and a Tibet rights group said.
"We have nothing to protect ourselves and we can't fight back," said an officer at the county police headquarters who refused to give his name or other details. He said about 10 police were injured.
In the city of Lanzhou, about 500 Tibetan students who gathered Sunday on the Northwest Minorities University's soccer field abandoned an overnight vigil. Fifty tried to march into the city, only to be blocked by security forces from leaving the campus, said the London-based Free Tibet Campaign.
A witness in Sichuan said troops moved into Ma'erkang county, next to an area where clashes between monks and police broke out Sunday with unconfirmed reports that as many as seven were killed.
At Central Nationalities University in Beijing, an elite school for ethnic minorities, 100 students held a silent candlelight vigil, sitting down in an outdoor plaza Monday night.
"We're doing this for those who are suffering," said a young Tibetan student.
Uniformed and plainclothes security kept watch but did not interfere with the vigil. Foreign journalists were prevented from taking photos and told to leave.
The government also began to tighten its already firm hold on information. Officials expelled foreign reporters from Tibetan areas in Qinghai and Gansu provinces, contravening regulations that opened most of China to foreign media for the Olympics.
Some of the few independent media remaining in Lhasa were also ordered out, making it difficult to verify casualties and other details.
Police in Lhasa kicked out reporters from three Hong Kong television stations — Cable TV, TVB and ATV — and made TVB delete footage of Friday's violence, TVB reported.
There were also more sympathy protests outside China. In Nepal, police used bamboo batons to disperse about 100 Tibetan protesters and Buddhist monks near the main U.N. office in Katmandu on Monday. Some 44 people were arrested.
In the wake of Friday's violence, Beijing ratcheted up the rhetoric against the Dalai Lama, accusing his supporters of masterminding the riot.
"This was organized, premeditated, masterminded and incited by the Dalai clique and it was created under the collusion of Tibet independence separatist forces both inside and outside China," said Champa Phuntsok.
He said three of the 16 people killed Friday in Lhasa were protesters who jumped out of a building to avoid arrest. He called the other 13 "innocent civilians," — apparently a reference to Chinese killed by demonstrators.
In one case, a person died after being covered in gasoline and then set on fire, he said. In another incident, the protesters "knocked out a police officer on patrol and then they used a knife to cut a piece of flesh from his buttocks the size of a fist," he said.
Champa Phuntsok said calm had been restored to Lhasa. Residents said Monday that police were patrolling the streets and had sealed off key roads in the downtown area, where the riots occurred, but that conditions were not as tense as over the weekend.
"Today, many people went back to work and some schools are open," said a tour guide. "Prices of food, gasoline and other things are soaring."
Another woman said there was "still a general mood of fear about going out. But it's better than a few days ago." She said a public announcement on a local television station was encouraging people to give themselves up.
Champa Phuntsok said he did not know if anyone had surrendered and police and government officials in Lhasa refused to comment.
In a further sign of China's concern about repairing the situation, Tibet's hard-line Communist Party secretary Zhang Qingli — the region's most powerful official — returned to Lhasa over the weekend and met with security forces, the official Tibet Daily newspaper said. Zhang had been attending the national legislature's annual session in Beijing, which ends Tuesday.
The Tibet Daily quoted Zhang as saying security forces "carried out a frontal assault against the thugs" who rioted in Lhasa.
Russia voiced support for the Chinese government over the violence in Tibet, saying it hopes "Chinese authorities will take all necessary measures to stop illegal actions and provide for the swiftest possible normalization of the situation." The Foreign Ministry said any efforts to boycott the Beijing Olympics are "unacceptable."
Olympic officials have also said they oppose any boycott over Tibet.
Stocks gyrate after Bear Stearns deal
By MADLEN READ, AP Business Writer
NEW YORK - Wall Street fell in temperamental trading Monday as investors grappled with news of JPMorgan Chase & Co. buying the stricken Bear Stearns & Co. in a deal backed by the government. The Dow Jones industrials, down nearly 200 points in the early going, fluctuated into positive territory and then pulled back again.
A buyout of Bear Stearns was certainly more appealing than the alternative: letting the investment bank collapse and causing huge losses for anyone linked to it.
And some unprecedented moves by the Federal Reserve gave the market a bit of solace on what many predicted would be a day of precipitous losses in the stock market.
Besides supporting the buyout, the Fed lowered the rate it charges to loan directly to banks by a quarter-point on Sunday night — two days before its scheduled meeting Tuesday. The central bank also set up a lending option for firms, including many non-bank financial services firms, to secure short-term loans for a broad range of collateral.
"This removes the risk of further slides for these companies, the risk that a Bear Stearns incident would happen again," said Robert Pavlik, portfolio manager at Oaktree Asset Management.
The Fed appears to be pledging to do everything in its power to keep the credit crisis from destroying the financial industry and the economy. Policy makers at the central bank are expected to reduce the target fed funds rate — the rate banks charge each other for overnight loans — by at least a half-point on Tuesday, and perhaps even a full point.
Still, the market remained extremely volatile, and a steeper drop Monday was still quite possible. The sale of Bear Stearns — and the fact that JPMorgan valued the fifth-largest Wall Street investment bank at a minuscule $2 a share, or $236 million — stirred fear among investors worldwide about other banks' exposure to the troubled credit markets.
"You're going to have some very weak players pushed out of business," said Joseph V. Battipaglia, chief investment officer at Ryan Beck & Co. He said JPMorgan's buy of Bear Stearns and Bank of America Corp.'s acquisition of mortgage lender Countrywide Financial Corp. are probably not the only rescues the industry will witness during this credit crisis.
The Dow fell 76.04, or 0.64 percent, to 11,875.05, after briefly venturing into positive territory.
Broader indexes also fell in choppy trading. The Standard & Poor's 500 index fell 17.39, or 1.35 percent, to 1,270.75, while the Nasdaq composite index fell 34.22, or 1.55 percent, to 2,178.27.
JPMorgan, one of the Dow components, rose $3.55, or 9.7 percent, to $40.09. The Fed essentially guaranteed JPMorgan that it would backstop any risk involved in taking over the 85-year-old Bear Stearns, which has 14,000 workers worldwide.
Bear Stearns shares fell 86 percent to $4.20 — still above the buyout price, implying that some shareholders believe the deal terms might change. About one-third of Bear Stearns stock is held by its employees.
Bond prices rose as stocks fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.34 percent from 3.44 percent late Friday.
The dollar sank to a record low against the euro and hit a 12 1/2 year low against the yen, while gold prices surged to another record high.
Light, sweet crude dropped $2.47 to $107.74 per barrel on the New York Mercantile Exchange, after rising to nearly $112 a barrel in premarket trading.
The pain for investors in Bear Stearns, which succumbed to losing bets on souring mortgages for borrowers with poor credit, will be sizable. JPMorgan is buying Bear, including its midtown Manhattan headquarters, for about 1 percent of the investment bank's worth little more than two weeks ago. Bear Stearns' buyout arrives after a short-term bailout Friday that JPMorgan led and that the Fed backed.
The market's concern wasn't limited to the Bear sale. DBS Group Holdings Ltd., a large bank based in Singapore, instructed traders via e-mail Monday to disregard an earlier e-mail barring new transactions with Lehman Brothers Holdings Inc., according to Dow Jones Newswires. Earlier Monday, DBS emailed traders and said not to engage in new transactions with Lehman or Bear, according to two people familiar with the situation, Dow Jones reported.
Lehman fell $9.41, or 24 percent, to $29.85.
This week, Lehman and other major investment banks are slated to report quarterly results. Investors will likely be focusing on comments from the companies for insights about their financial well-being.
While investors were focused on the financial sector, fresh economic news offered little solace. The Fed said output at the country's factories, mines and utilities fell by 0.5 percent in February, the biggest decline last October. Many analysts had been expecting a slight increase of one-tenth of one percent.
The Commerce Department also said Monday the broadest measure of foreign trade fell slightly in 2007 as stronger growth in U.S. exports helped make up for a spiking foreign oil bill. The deficit in the current account, which covers not only goods and services but also investment flows between the United States and other countries, dropped by 9 percent last year to $738.6 billion.
Declining issues outnumbered advancers by 5 to 1 on the New York Stock Exchange, where volume came to 619.9 million shares.
The Russell 2000 index of smaller companies fell 10.65, or 1.61 percent, to 652.25.
Overseas, Japan's Nikkei stock average fell 3.71 percent, while Hong Kong's Hang Seng index fell 5.18 percent. In afternoon trading, Britain's FTSE 100 fell 2.32 percent, Germany's DAX index dropped 3.29 percent, and France's CAC-40 lost 2.52 percent.
NEW YORK - Wall Street fell in temperamental trading Monday as investors grappled with news of JPMorgan Chase & Co. buying the stricken Bear Stearns & Co. in a deal backed by the government. The Dow Jones industrials, down nearly 200 points in the early going, fluctuated into positive territory and then pulled back again.
A buyout of Bear Stearns was certainly more appealing than the alternative: letting the investment bank collapse and causing huge losses for anyone linked to it.
And some unprecedented moves by the Federal Reserve gave the market a bit of solace on what many predicted would be a day of precipitous losses in the stock market.
Besides supporting the buyout, the Fed lowered the rate it charges to loan directly to banks by a quarter-point on Sunday night — two days before its scheduled meeting Tuesday. The central bank also set up a lending option for firms, including many non-bank financial services firms, to secure short-term loans for a broad range of collateral.
"This removes the risk of further slides for these companies, the risk that a Bear Stearns incident would happen again," said Robert Pavlik, portfolio manager at Oaktree Asset Management.
The Fed appears to be pledging to do everything in its power to keep the credit crisis from destroying the financial industry and the economy. Policy makers at the central bank are expected to reduce the target fed funds rate — the rate banks charge each other for overnight loans — by at least a half-point on Tuesday, and perhaps even a full point.
Still, the market remained extremely volatile, and a steeper drop Monday was still quite possible. The sale of Bear Stearns — and the fact that JPMorgan valued the fifth-largest Wall Street investment bank at a minuscule $2 a share, or $236 million — stirred fear among investors worldwide about other banks' exposure to the troubled credit markets.
"You're going to have some very weak players pushed out of business," said Joseph V. Battipaglia, chief investment officer at Ryan Beck & Co. He said JPMorgan's buy of Bear Stearns and Bank of America Corp.'s acquisition of mortgage lender Countrywide Financial Corp. are probably not the only rescues the industry will witness during this credit crisis.
The Dow fell 76.04, or 0.64 percent, to 11,875.05, after briefly venturing into positive territory.
Broader indexes also fell in choppy trading. The Standard & Poor's 500 index fell 17.39, or 1.35 percent, to 1,270.75, while the Nasdaq composite index fell 34.22, or 1.55 percent, to 2,178.27.
JPMorgan, one of the Dow components, rose $3.55, or 9.7 percent, to $40.09. The Fed essentially guaranteed JPMorgan that it would backstop any risk involved in taking over the 85-year-old Bear Stearns, which has 14,000 workers worldwide.
Bear Stearns shares fell 86 percent to $4.20 — still above the buyout price, implying that some shareholders believe the deal terms might change. About one-third of Bear Stearns stock is held by its employees.
Bond prices rose as stocks fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.34 percent from 3.44 percent late Friday.
The dollar sank to a record low against the euro and hit a 12 1/2 year low against the yen, while gold prices surged to another record high.
Light, sweet crude dropped $2.47 to $107.74 per barrel on the New York Mercantile Exchange, after rising to nearly $112 a barrel in premarket trading.
The pain for investors in Bear Stearns, which succumbed to losing bets on souring mortgages for borrowers with poor credit, will be sizable. JPMorgan is buying Bear, including its midtown Manhattan headquarters, for about 1 percent of the investment bank's worth little more than two weeks ago. Bear Stearns' buyout arrives after a short-term bailout Friday that JPMorgan led and that the Fed backed.
The market's concern wasn't limited to the Bear sale. DBS Group Holdings Ltd., a large bank based in Singapore, instructed traders via e-mail Monday to disregard an earlier e-mail barring new transactions with Lehman Brothers Holdings Inc., according to Dow Jones Newswires. Earlier Monday, DBS emailed traders and said not to engage in new transactions with Lehman or Bear, according to two people familiar with the situation, Dow Jones reported.
Lehman fell $9.41, or 24 percent, to $29.85.
This week, Lehman and other major investment banks are slated to report quarterly results. Investors will likely be focusing on comments from the companies for insights about their financial well-being.
While investors were focused on the financial sector, fresh economic news offered little solace. The Fed said output at the country's factories, mines and utilities fell by 0.5 percent in February, the biggest decline last October. Many analysts had been expecting a slight increase of one-tenth of one percent.
The Commerce Department also said Monday the broadest measure of foreign trade fell slightly in 2007 as stronger growth in U.S. exports helped make up for a spiking foreign oil bill. The deficit in the current account, which covers not only goods and services but also investment flows between the United States and other countries, dropped by 9 percent last year to $738.6 billion.
Declining issues outnumbered advancers by 5 to 1 on the New York Stock Exchange, where volume came to 619.9 million shares.
The Russell 2000 index of smaller companies fell 10.65, or 1.61 percent, to 652.25.
Overseas, Japan's Nikkei stock average fell 3.71 percent, while Hong Kong's Hang Seng index fell 5.18 percent. In afternoon trading, Britain's FTSE 100 fell 2.32 percent, Germany's DAX index dropped 3.29 percent, and France's CAC-40 lost 2.52 percent.
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