Commentary says China not a "savior" for Europe (Reuters)

BEIJING (Reuters) – Europe should not expect China to ride to the rescue as its "savior" from the debt crisis, though Beijing will do what it can to help a friend in need, state-run news agency Xinhua said in a commentary on Sunday.

The head of Europe's rescue fund sought to entice China on Saturday to invest in the facility by saying investors may be protected against a fifth of initial losses and that bonds could eventually be sold in yuan if Beijing desires.

Though China has expressed confidence that Europe can survive its crisis, it has made no public offer to buy more European government debt.

Xinhua, in an English-language commentary, said China could not stand by while its largest trading partner foundered.

"Beijing's good-will gesture is a good response to those who see China as a threatening rival to Europe. Despite differences in politics, economy and culture, China and the EU are still good friends and partners," it wrote.

"However, amid such an unprecedented crisis in Europe, China can neither take up the role as a savior to the Europeans, nor provide a 'cure' for the European malaise," Xinhua added.

"Obviously, it is up to the European countries themselves to tackle their financial problems. But China can do within its capacity to help as a friend."

Such commentaries offer an insight into government thinking, even if they do not reflect official policy.

China's pile of $3.2 trillion in foreign exchange reserves, the biggest in the world, keeps growing thanks to trade surpluses and capital inflows.

Analysts estimate that China holds about a quarter of its foreign exchange in euro assets and there are few other places for it to park investments of such a scale.

The government has said it has confidence in the euro and in the European Union's efforts to tackle the crisis. But comments from Chinese economists and in state media have also revealed anxieties about the security of euro assets.

Expanding the European Financial Stability Facility (EFSF) to 1 trillion euros is key to the euro zone's latest anti-crisis plan, put together at a Eurozone summit last week.

Details on how this would be done have yet to be finalized and European leaders are under pressure to show the plan will work.

Xinhua said Europe needed to make "more concerted efforts".

The G20 summit in Cannes next month should accord China the respect it deserves, the commentary added.

"It is advisable that at the summit European leaders take heed of the voices of emerging economies, whose remarkable contribution to world economic recovery and growth deserves better understanding and reciprocal treatment."

(Reporting by Ben Blanchard; Editing by Ron Popeski)

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Kabul suicide bomb kills 13 troops, civilian workers (Reuters)

KABUL (Reuters) – A suicide car bomber on Saturday killed 13 troops and civilian employees of the NATO-led force in Kabul, including Americans and a Canadian, in the deadliest single ground attack against the coalition in 10 years of war in Afghanistan.

"Five International Security Assistance Force (ISAF) service members and eight ISAF civilian employees died following a suicide vehicle-born improvised explosive device attack in Kabul earlier today," ISAF said in a statement.

A Canadian military spokesman said one of the dead was a Canadian soldier. The Pentagon said earlier all 13 of the ISAF fatalities were American. But after the Canadian death was reported, a Pentagon spokesman said Americans were among the dead but that authorities were checking the identities of those killed.

Three other civilians and a police officer were also killed in the attack on a convoy of military vehicles, a spokesman for the Afghan Interior Ministry said.

Lethal attacks are relatively rare in the heavily guarded capital, Kabul, compared with the south and east of Afghanistan, but Saturday's killings came less than two months after insurgents launched a 20-hour assault on the U.S. Embassy in the capital.

The assault on the ISAF convoy took place late in the morning in the Darulaman area in the west of the city, near the national museum.

The former royal palace, now in ruins, is also in the area, along with several government departments and Afghan and foreign military bases.

The Taliban later claimed responsibility for the attack, saying it packed a four-wheel-drive vehicle with 700 kg (1,500 pounds) of explosives.

SECURITY HANDOVER

The attack is likely to heighten worries about the reach of insurgent forces as the United States and its allies prepare to hand over responsibility for security to Afghan forces by 2014.

"We are confident we can undertake the transition," NATO's senior civilian representative in Afghanistan, Simon Gass, said at a meeting in Kabul on Saturday before the attack. "If we compare the security situation to how it was two years ago, we can see very dramatic improvements in many areas."

In two other attacks on Saturday, three Australians and an Afghan linguist were killed in Uruzgan province in southern Afghanistan when an attacker wearing an Afghan National Army uniform opened fire on them, authorities in neighboring Kandahar province said.

In Kunar province, east of Kabul, a teenage female suicide bomber killed herself and wounded several National Directorate of Security members in an attack on the NDS building.

ISAF commander General John Allen condemned the attacks in a statement later on Saturday, as did the U.S. Embassy in Kabul.

"Our common enemy continues to employ suicide attackers to kill innocent Afghan fathers, mothers, sons and daughters, as well as the Coalition forces who have volunteered to protect them," Allen said in a statement.

A spokesman for U.S. Defense Secretary Leon Panetta said the Pentagon chief was determined the United States would continue its "aggressive pursuit of the enemy."

Violence across Afghanistan is at its worst since the start of the war 10 years ago, according to the United Nations, despite the presence of more than 130,000 foreign troops.

ISAF says there has recently been a fall in attacks by insurgents, but that data exclude attacks that kill only civilians and attacks on Afghan security forces operating without international troops.

On Thursday, insurgents armed with rifles and rocket-propelled grenades attacked two bases used by foreign troops in southern Afghanistan. An Afghan interpreter working for ISAF was killed in that attack, which stretched into Friday before the last of the four insurgents were killed.

There has been a series of high-profile assassinations, as well as day-to-day attacks by Taliban raiders, over the past year.

More than a dozen people were killed in the September attack on the U.S. Embassy and ISAF headquarters.

(Reporting by Christine Kearney; Writing and additional reporting by Daniel Magnowski in Kabul, Susan Cornwell in Washington and Janet Guttsman in Toronto; Editing by Peter Cooney)

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Iraq can't defend itself fully before 2020: general (Reuters)

BAGHDAD (Reuters) – Iraq's defense chief has said his military will not be fully ready to defend Iraq from external threats until 2020 to 2024, according to a U.S. inspector's report released on Sunday.

Lieutenant General Babakir Zebari has repeatedly warned that Iraq's security forces, rebuilt after the 2003 invasion that ousted strongman Saddam Hussein, would not be ready for years.

President Barack Obama announced on October 21 that American troops would fully withdraw from Iraq by year-end, as scheduled under a 2008 security pact between the two countries.

Both Iraqi and U.S. military leaders have said the army and police are capable of containing internal threats from Sunni insurgents and Shi'ite militias that launch scores of attacks monthly, but that they lag in external defense.

"General Zebari suggested that the MOD (Ministry of Defense) will be unable to execute the full spectrum of external-defense missions until sometime between 2020 and 2024, citing ... funding shortfalls as the main reason for the delay," said the report from the U.S. Special Inspector General for Iraq Reconstruction (SIGIR).

Zebari said the air force would not be able to defend Iraqi airspace until 2020 and is not capable of supporting ground combat operations, citing a long-delayed deal to buy F-16 warplanes from the United States, the SIGIR report said.

"An army without an air force is exposed," the report quoted Zebari as saying.

Iraq delayed its purchase of F-16s earlier this year to divert money to social programs.

Officials said in late September that Iraq had signed a deal to buy 18 of the combat jets. The first delivery is not expected for several years.

Washington has around 39,000 troops still in Iraq, down from a peak of about 170,000 during the war. Violence has dropped sharply from the sectarian bloodbath of 2006-07 when tens of thousands died.

As it tries to reintegrate itself into the region after years as a pariah, Iraq is warily eyeing neighbors such as Iran, Saudi Arabia, Turkey and Syria.

Iraqi leaders have accused neighbors of meddling, and U.S. military officials say Iran arms Shi'ite militias in Iraq.

"While we have no enemies, we also have no real friends," the SIGIR report quoted Zebari as saying of the Iraqi government's relations with its neighbors.

(Reporting by Jim Loney; Editing by Alistair Lyon)

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Kenyan jets bomb southern Somali town, 12 killed (Reuters)

MOGADISHU (Reuters) – At least 12 people were killed Sunday when two Kenyan jets bombed the southern Somali town of Jilib, residents and officials said, as the east African nation fights to rid Somalia of Islamist al Shabaab rebels.

Kenya moved its troops into Somalia in mid-October in pursuit of Somali insurgents it blames for a series of kidnappings on Kenyan soil and frequent assaults on its security forces in the border province of North Eastern.

"Twelve civilians died including six children and 52 others were injured after Kenyan jets bombarded an IDP (internally displaced people) camp in the town," said Mohamud Ali Harbi, a local elder in Jilib, 120 km (74 miles) north of the port of Kismayu.

Emmanuel Chirchir, the Kenyan military spokesman, could not immediately confirm the raid when contacted by Reuters, saying they were waiting for an operational update from the ground.

"The jets bombarded two places, an al Shabaab base and a nearby IDP camp," Hassan Abdiwahab, a resident in Jilib, told Reuters.

But al Shabaab said the five bombs dropped by the planes hit a bus stop, the IDP camp and an area just outside of the town.

A top official of the group, Sheikh Muktar Robow Abu Mansoor, Thursday urged their followers to attack Kenya with "huge blasts" in retaliation for the campaign that is being carried out jointly with Somali government troops.

The call followed two grenade attacks in the capital Nairobi that killed one person and injured over 20 more Monday. Unknown militants also carried out two attacks on vehicles in the remote northern Kenya.

Mohammud Farah, spokesman for the Ras Kamboni militia that is allied to the Somali Transitional Federal Government said they seized a four-by-four vehicle laden with explosives that was headed to Kenya.

"Our forces in patrol found the car 8 km away from the town on its way to Kenya and we have discovered different types of explosive materials in the car," Farah told Reuters from Dhobley town, which is close to the border.

The vehicle was carrying 10 passengers, four of whom were identified as al Shabaab fighters, he added.

Kenya said Saturday it was committed to withdrawal from Somalia once it is satisfied that it has stripped the al Qaeda-linked group's capacity to carry out attacks across the border.

Although the Kenyan chief of defense forces said his troops had chased al Shabaab from the whole of Gedo region, the two-week old campaign has been slowed considerably by heavy rains.

Chirchir said the intense rains had started to abate, allowing Kenyan forces to plan an offensive of Afmadow in Lower Juba region, where al Shabaab has been digging in after reinforcing with fighters from other areas.

"Now that the rains have subsided, the taking of Afmadow is likely. It should be very soon," he said.

Two Ugandan soldiers were injured Saturday when African Union troops came under an al Shabaab attack in Mogadishu.

Rwanda's President Paul Kagame, South Africa's President Jacob Zuma and Tanzania's Jakaya Kikwete expressed their support for Kenya's military action in Somalia, the Kenyan presidency said in a statement from Perth, Australia, where President Mwai Kibaki was attending the Commonwealth summit.

(Additional reporting by Feisal Omar; Writing by Duncan Miriri)

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'Shrek' spinoff 'Puss in Boots' tops box office (AP)

NEW YORK – The "Shrek" spinoff "Puss in Boots" landed on all fours, opening with an estimated $34 million to top the box office.

The DreamWorks 3-D animated film, distributed by Paramount Pictures, proved the popular character voiced by Antonio Banderas was a big enough draw outside of the "Shrek" franchise. The PG-rated "Puss in Boots" scored with family audiences on the weekend before Halloween.

Paramount was also able to claim the weekend's second top performing more with the low-budget horror flick "Paranormal Activity 3." That film took in $18.5 million in its second week of release, bringing its cumulative total to $81.3 million.

"The Rum Diary," the Hunter S. Thompson adaption starring Johnny Depp, opened weakly, earning just $5 million.

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Rescue efforts suspended at Kansas grain elevator (AP)

ATCHISON, Kan. – Crews temporarily suspended their search Sunday for three people missing since an explosion at a Kansas grain elevator that killed three workers and left two critically injured with severe burns.

Atchison City Manager Trey Cocking said officials with Bartlett Grain Co. decided it was unsafe for anyone to be inside the facility until later Sunday, when some heavy equipment was expected to arrive to assist them.

The explosion blew off a chunk of a grain distribution building that sits directly above the elevator, and Cocking said officials were fearful the building could fall on top of rescue crews amid the search. The efforts were already called off overnight because of darkness.

"It's a fairly dangerous situation. We don't feel comfortable putting fire crews in," Cocking said.

Although crews were considering the effort a recovery mission, Cocking said they hadn't given up hope that the one elevator company worker and two state grain inspectors might be found alive.

Family members of one of the missing, Travis Keil, 34, of Topeka, headed Sunday to Atchison to await news about his whereabouts. Gary and Ramona Keil, who made the drive from Salina with Travis Keil's three children, ages 8, 12 and 15, said their son was a war veteran who had been working as a site inspector for 16 years.

"We have all our prayers working for him," Gary Keil said.

Two other victims who were admitted to the burn unit of University of Kansas Hospital in Kansas City, Kan., were listed in critical condition there Sunday morning, hospital spokesman Dennis McCulloch said.

Cocking said four other people associated with the explosion escaped without injuries. No names were being released pending notification of families.

With smoke still billowing from the facility Sunday, train traffic past the elevator was being rerouted. A few emergency crews, including Union Pacific Railroad, drove to the scene as daylight broke.

The explosion could be seen and felt across Atchison, shaking homes and businesses up to four miles away. The cause was not immediately known, though grain elevator accidents can occur after grain dust becomes suspended in the air and turns explosive in the right conditions.

Bartlett Grain President Bill Fellows said in a statement that workers were loading a train with corn when the explosion occurred about 7 p.m. Saturday. The company planned to issue an updated statement Sunday.

Explosions are a leading hazard at grain elevators. According to the Occupational Safety and Health Administration, there have been more than 600 explosions over the last four decades, killing more than 250 and injuring more than 1,000. Grain dust is the main source of elevator blasts, as the dust can become airborne and explosive — needing only a slight ignition source, such as electrical sparks, to cause a blast.

OSHA says suffocations are the leading killer at grain bins when workers become trapped in cascading grain. A study by Purdue University and cited by OSHA found 26 suffocation deaths at grain bins in 2010, the highest number on record at the time.

An explosion at a grain elevator in Bartley, Neb., in April 2010, caused no injuries but sent workers scrambling out of the way, while another in Gothenburg, Neb., in December 2010, scattered debris over nearby railroad tracks and a highway, also without injuries, authorities reported at the time.

Elsewhere, explosions or fires were reported at two grain elevators in Illinois in 2010 while a fire burning at a grain elevator in the Toledo, Ohio, area in September 2010 forced people to evacuate from a nearby mobile home park and businesses as a precaution. There also have been explosions or fires at elevators in South Dakota and Louisiana that year, none of them fatal.

Authorities said two workers were killed in June 2010 when they were buried under a load of wheat at an elevator in the central Kansas town of Russell though no explosion occurred there.

Paul Moccia, 57, lives in Atchison about a half mile from the grain elevator. He said the explosion shook his house and that lights flickered across his neighborhood for about 30 seconds.

"It was extremely loud. It was kind of like to me a double whomp, — a bomp bomp. It reverberated, and kind of echoed down through the valley. ... kind of like a shock wave," he said. "Everybody came outside. Neighbors were trying to figure out what was going on. It was quite a thump."

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Skeptic finds he now agrees global warming is real (AP)

WASHINGTON – A prominent physicist and skeptic of global warming spent two years trying to find out if mainstream climate scientists were wrong. In the end, he determined they were right: Temperatures really are rising rapidly.

The study of the world's surface temperatures by Richard Muller was partially bankrolled by a foundation connected to global warming deniers. He pursued long-held skeptic theories in analyzing the data. He was spurred to action because of "Climategate," a British scandal involving hacked emails of scientists.

Yet he found that the land is 1.6 degrees warmer than in the 1950s. Those numbers from Muller, who works at the University of California, Berkeley and Lawrence Berkeley National Lab, match those by the National Oceanic and Atmospheric Administration and NASA.

He said he went even further back, studying readings from Benjamin Franklin and Thomas Jefferson. His ultimate finding of a warming world, to be presented at a conference Monday, is no different from what mainstream climate scientists have been saying for decades.

What's different, and why everyone from opinion columnists to "The Daily Show" is paying attention is who is behind the study.

One-quarter of the $600,000 to do the research came from the Charles Koch Foundation, whose founder is a major funder of skeptic groups and the tea party. The Koch brothers, Charles and David, run a large privately held company involved in oil and other industries, producing sizable greenhouse gas emissions.

Muller's research team carefully examined two chief criticisms by skeptics. One is that weather stations are unreliable; the other is that cities, which create heat islands, were skewing the temperature analysis.

"The skeptics raised valid points and everybody should have been a skeptic two years ago," Muller said in a telephone interview. "And now we have confidence that the temperature rise that had previously been reported had been done without bias."

Muller said that he came into the study "with a proper skepticism," something scientists "should always have. I was somewhat bothered by the fact that there was not enough skepticism" before.

There is no reason now to be a skeptic about steadily increasing temperatures, Muller wrote recently in The Wall Street Journal's editorial pages, a place friendly to skeptics. Muller did not address in his research the cause of global warming. The overwhelming majority of climate scientists say it's man-made from the burning of fossil fuels such as coal and oil. Nor did his study look at ocean warming, future warming and how much of a threat to mankind climate change might be.

Still, Muller said it makes sense to reduce the carbon dioxide created by fossil fuels.

"Greenhouse gases could have a disastrous impact on the world," he said. Still, he contends that threat is not as proven as the Nobel Prize-winning Intergovernmental Panel on Climate Change says it is.

On Monday, Muller was taking his results — four separate papers that are not yet published or peer-reviewed, but will be, he says — to a conference in Santa Fe, N.M., expected to include many prominent skeptics as well as mainstream scientists.

"Of course he'll be welcome," said Petr Chylek of Los Alamos National Lab, a noted skeptic and the conference organizer. "The purpose of our conference is to bring people with different views on climate together, so they can talk and clarify things."

Shawn Lawrence Otto, author of the book "Fool Me Twice" that criticizes science skeptics, said Muller should expect to be harshly treated by global warming deniers. "Now he's considered a traitor. For the skeptic community, this isn't about data or fact. It's about team sports. He's been traded to the Indians. He's playing for the wrong team now."

Muller's study found that skeptics' concerns about poor weather station quality didn't skew the results of his analysis because temperature increases rose similarly in reliable and unreliable weather stations. He also found that while there is an urban heat island effect making cities warmer, rural areas, which are more abundant, are warming, too.

Among many climate scientists, the reaction was somewhat of a yawn.

"After lots of work he found exactly what was already known and accepted in the climate community," said Jerry North, a Texas A&M University atmospheric sciences professor who headed a National Academy of Sciences climate science review in 2006. "I am hoping their study will have a positive impact. But some folks will never change."

Chris Field, a Carnegie Institution scientist who is chief author of an upcoming intergovernmental climate change report, said Muller's study "may help the world's citizens focus less on whether climate change is real and more on smart options for addressing it."

Some of the most noted scientific skeptics are no longer saying the world isn't warming. Instead, they question how much of it is man-made, view it as less a threat and argue it's too expensive to do something about, Otto said.

Skeptical MIT scientist Richard Lindzen said it is a fact and nothing new that global average temperatures have been rising since 1950, as Muller shows. "It's hard to see how any serious scientist (skeptical, denier or believer — frequently depending on the exact question) will view it otherwise," he wrote in an email.

In a brief email statement, the Koch Foundation noted that Muller's team didn't examine ocean temperature or the cause of warming and said it will continue to fund such research. "The project is ongoing and entering peer review, and we're proud to support this strong, transparent research," said foundation spokeswoman Tonya Mullins.

___

Online:

The Berkeley Earth Surface Temperature site: http://www.berkeleyearth.org/index.php

Santa Fe climate conference: http://bit.ly/rQknVi

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Solyndra scandal probe widens as White House orders new review (The Christian Science Monitor)

The Obama administration has ordered an independent review of loans made by the Energy Department to energy companies – a clear response to the controversial and now-bankrupt Solyndra Inc. solar energy company.

It’s the latest step in the face of growing criticism over the $528 million government loan to Solyndra, which was part of the administration’s economic stimulus package meant to advance green energy. Last month, FBI agents and investigators from the Department of Energy's Office of Inspector General searched Solyndra headquarters in California for documents and other information.

Heading the review announced Friday is former Treasury official Herbert Allison, who oversaw the Troubled Asset Relief Program, part of the 2008 Wall Street bailout.

"Today we are directing that an independent analysis be conducted of the current state of the Department of Energy loan portfolio, focusing on future loan monitoring and management," White House chief of staff Bill Daley said Friday afternoon – the traditional time for burying announcements. "While we continue to take steps to make sure the United States remains competitive in the 21st century energy economy, we must also ensure that we are strong stewards of taxpayer dollars."

Announcement of the internal review of procedures dealing with Solyndra was not enough to satisfy congressional critics.

Leaders of the Energy and Commerce Committee subcommittee on oversight and investigations say they’ll meet this coming week to consider a resolution authorizing the issuance of a subpoena for internal White House communications relating to the Solyndra loan guarantee.

“Subpoenaing the White House is a serious step that, unfortunately, appears necessary in light of the Obama administration’s stonewall on Solyndra,” Fred Upton (R) of Michigan and Cliff Stearns (R) of Florida said in a statement. “Since we launched the Solyndra investigation over eight months ago, the Obama administration has unfortunately fought us every step of the way, even forcing us to subpoena documents from [the White House Office of Management and Budget].”

Apparently, White House officials weren’t the only ones pushing special consideration for green energy.

Sen. Orrin Hatch (R) of Utah, who has criticized the Obama administration’s backing of Energy Department loan guarantees to Solyndra, pushed for more than $20 million in government funding for a clean energy firm in his home state, reports USA Today.

“Hatch aides [said] earlier this month that the Republican lawmaker had never pushed for taxpayer money to be used for Raser Technologies, which operated a geothermal power plant in southern Utah and also developed hybrid plug-in vehicles,” the newspaper reported Friday. “But on Friday, Hatch spokesman Matthew Harakal said that after an internal audit following publication of the USA Today story on Hatch's support for Raser, the Utah senator's office found that Hatch actually requested seven earmarks for more than $20 million from 2006 to 2008 to help fund research and development projects for the automotive wing of the company.”

None of the requests were funded, and Raser Technologies filed for bankruptcy in April.

Meanwhile, the Solyndra scandal – if that’s what it is – has indirectly touched at least one Republican presidential hopeful.

“Mitt Romney is facing scrutiny this week for associating himself with a lobbyist whose firm worked for failed California solar panel company Solyndra,” The Hill newspaper in Washington reported this week. “Lobbyist Alex Mistri co-hosted a Romney fundraiser Wednesday that included a number of lobbyists and members of Congress, held at the American Trucking Association near Capitol Hill.”

Also attending the Romney fundraiser co-hosted by lobbyist Mistri was Rep. Darrell Issa (R) of California, chairman of the House Committee on Oversight and Government Reform investigating Solyndra.

Material from the Associated Press was used in this report.

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Insight: Dreaded "Brazil cost" may dim Foxconn's iPad dreams (Reuters)

JUNDIAI, Brazil (Reuters) – The nondescript stretch of asphalt is an unlikely symbol of Brazil's attempt to lift its economy into a new high-tech era.

If officials in the industrial town of Jundiai get their way, it will soon be named Steve Jobs road -- in homage to the late Apple Inc co-founder and a nod to the expected windfall that producing iPads and iPhones here will bring.

Brazil's government has loudly proclaimed a deal it says is worth $12 billion for Taiwanese technology giant Foxconn to produce iPads and build a whole new industry based around screens used in an array of consumer electronics from smartphones to televisions.

But the infamous "Brazil cost" -- shorthand for the bureaucracy and high taxes that plague business in the country -- is already overshadowing the deal, complicating negotiations with Foxconn over the broader investment plan. The likely need for large state subsidized loans to lure Foxconn also revives concerns about the state's heavy hand in Brazil's economy.

The deal's transformative potential for Brazil is clear -- a home-grown technology industry could move the commodities giant up the value-added chain to join the likes of Taiwan and South Korea, reducing its dependence on manufactured imports from Asia.

Yet critics say Brazil's shallow labor pool and poor infrastructure make it ill-prepared to make the leap to high-end work and that it risks being stuck at the low end -- assembling components designed and made elsewhere. At first, Foxconn will have to fly in most of the key components such as semiconductors, modems and screens from China, as Brazil attempts to raise its ability to produce more of them locally.

"We are selling our market very cheaply, giving tax incentives for a company to come and produce something that is already developed in the world market," said Joao Maria de Oliveira, a researcher at the government-linked Institute for Applied Economic Research, or IPEA. "It's not something that adds much value and it won't leave much here."

The amount of value added to Apple products by Foxconn's approximately one million workers in China is a mere $10 or so per device, according to a study by researchers at the University of California, Irvine.

Brazil has cut taxes and duties on tablet production in a move that should reduce the retail price by about a third and is phasing in production requirements to foster a local components industry.

Separately, it is in talks with Foxconn on a package of incentives, including priority customs access, more tax breaks and subsidized loans from state development bank BNDES to secure the bigger investment in high-end screens.

It isn't hard to see what's in it for Foxconn, Apple and other foreign companies, including Motorola Mobility Holdings Inc and Samsung Electronics Co Ltd that have expressed interest in making tablets here.

Apple will gain better access to Brazil's voracious consumers, who have faced high prices for its products due to hefty import tariffs, and will create a jumping-off point for other rapidly growing Latin American countries.

Foxconn, the world's largest contract electronics company, with around a third of the global market, would gain a vital foothold in Latin America's largest economy and reduce the risks of having so much Apple production in China.

Producing in Brazil would also give Foxconn and Apple preferential access to Brazil's partners in the Mercosur customs union -- Argentina, Paraguay and Uruguay.

But the "Brazil cost" raises doubts over whether Apple will be able to make the iPad cheaply enough for the Brazilian market and use it as a major base to export to the United States and Latin America.

Brazil's consumer market is a huge draw for companies such as Apple, but analysts say the domestic industry will likely take years to move beyond assembly to higher-end production.

"It will take at least five, six years to create the entire ecosystem there," said Satish Lele, vice president, consulting, Asia Pacific at Frost & Sullivan in Singapore.

"I don't think they (Brazil) are ready to support huge growth as far as the electronics sector is concerned."

THE BRAZIL COST

The Foxconn factory near "Steve Jobs" road is rumored by Brazilian media to already be producing iPhones and is expected to start churning out iPad tablets by December for sale to Brazil's growing middle class. The company, whose main listed vehicle is Hon Hai Precision Industry Co Ltd, has already hired more than 1,000 people in Jundiai, a medium-sized city an hour away from Sao Paulo, to work at a new plant.

Jundiai is planning to build a technology park and nearby towns are also looking to draw more such investment.

"We're the BRICs of Brazil," said Carmelo Paoletti Neto, a spokesman for the town, comparing the region to role played the emerging powerhouses Brazil, Russia, India and China on the global stage.

But the starting monthly wage for members of the metalworkers' union in Jundiai is about 1,058 reais ($605) -- nearly double the 2,000 yuan ($315) minimum wage Foxconn paid in China as of last October.

Those wage pressures are likely to make it hard for the iPad price to fall any time soon to a range that would give it the mass-market appeal it enjoys in the United States.

Tablet sales in Brazil will jump to 450,000 this year from 105,000-110,000 last year, according to consulting firm IDC, surging to above 1 million next year. That is significant growth -- but the 60 percent of Brazilian households without a computer won't necessarily rush out to buy tablets, cautioned Jose Martim Juacida, an analyst with the company.

"The first computer purchase is usually a desktop or a laptop, because a desktop can be shared," he said.

(Additional reporting by James Pomfret in Hong Kong; Lee Chyen Yee and Clare Jim in Taiwan; editing by Kieran Murray, Martin Howell and Andre Grenon)

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Israeli archaeologists: tiny Christian relic found (AP)

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Obama vs. GOP on jobs: Let the blame game begin (The Christian Science Monitor)

The partisan debate over jobs creation has descended into a blame game between President Obama and congressional Republicans.

“Over and over, they have refused to even debate the same kind of jobs proposals that Republicans have supported in the past – proposals that today are supported, not just by Democrats, but by Independents and Republicans all across America,” Obama complained in his radio address Saturday morning. “Meanwhile, they're only scheduled to work three more weeks between now and the end of the year.

Republicans in the House respond that they’ve passed 15 job-creating bills only to have those measures bottled up in the Democrat-controlled Senate.

“We call these bills the 'forgotten 15',” Rep. Bobby Schilling of Illinois said in the Republican address Saturday.

“These are common-sense bills that address those excessive federal regulations that are hurting small business job creation,” said Rep. Schilling, a freshman lawmaker whose family owns a pizza business in Moline. “A number of them have bipartisan support. Yet the Senate won't give these bills a vote, and the president hasn't called for action.”

The essence of the divide remains: Increase federal investment to stimulate job creation versus easing environmental and other regulatory restrictions that critics say can hinder job creation.

As with much of the debate in Washington these days – including the effort by the bipartisan congressional “super committee” to cut the federal deficit by $1.2 trillion before draconian budget cuts kick in automatically – this one can’t avoid the subject of taxes.

A new report by the non-partisan Congressional Budget Office gives Obama ammunition for his assertion that “millionaires and billionaires” can afford to pay more.

The CBO reported this week that while the rich got a lot richer over the past 30 years, the rest of American society struggled to keep up.

The CBO found that average after-tax income for the top 1 percent of US households had increased by 275 percent while middle-income households saw just a 40 percent rise and for those at the bottom of the economic scale, the jump was 18 percent.

"The distribution of after-tax income in the United States was substantially more unequal in 2007 than in 1979," CBO Director Douglas Elmendorf said in a blog post. " Income a€| for households at the higher end of the income scale rose much more rapidly than income for households in the middle and at the lower end of the income scale.a€

Obama says he’s doing what he can through executive order because GOP lawmakers refuse to consider his proposals.

On Friday, Obama directed government agencies to shorten the time it takes for federal research to turn into commercial products in the marketplace. The goal is to help startup companies and small businesses create jobs and expand their operations more quickly.

The president also called for creating a centralized online site for companies to easily find information about federal services. He previously had announced help for people who owe more on their mortgages than their homes are worth and for the repayment of student loans. The White House also challenged community health centers to hire veterans.

"We can no longer wait for Congress to do its job," Obama said Saturday. "So where Congress won’t act, I will."

Material from the Associated Press was used in this report.

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Studies challenge wisdom of GOP candidates' plans (AP)

WASHINGTON – Key proposals from the Republican presidential candidates might make for good campaign fodder. But independent analyses raise serious questions about those plans and their ability to cure the nation's ills in two vital areas, the economy and housing.

Consider proposed cuts in taxes and regulation, which nearly every GOP candidate is pushing in the name of creating jobs. The initiatives seem to ignore surveys in which employers cite far bigger impediments to increased hiring, chiefly slack consumer demand.

"Republicans favor tax cuts for the wealthy and corporations, but these had no stimulative effect during the George W. Bush administration, and there is no reason to believe that more of them will have any today," writes Bruce Bartlett. He's an economist who worked for Republican congressmen and in the administrations of Presidents Ronald Reagan and George H.W. Bush.

As for the idea that cutting regulations will lead to significant job growth, Bartlett said in an interview, "It's just nonsense. It's just made up."

Government and industry studies support his view.

The Bureau of Labor Statistics, which tracks companies' reasons for large layoffs, found that 1,119 layoffs were attributed to government regulations in the first half of this year, while 144,746 were attributed to poor "business demand."

Mainstream economic theory says governments can spur demand, at least somewhat, through stimulus spending. The Republican candidates, however, have labeled President Barack Obama's 2009 stimulus efforts a failure. Instead, most are calling for tax cuts that would primarily benefit high-income people, who are seen as the likeliest job creators.

"I don't care about that," Texas Gov. Rick Perry told The New York Times and CNBC, referring to tax breaks for the rich. "What I care about is them having the dollars to invest in their companies."

Many existing businesses, however, have plenty of unspent cash. The 500 companies that comprise the S&P index have about $800 billion in cash and cash equivalents, the most ever, according to the research firm Birinyi Associates.

The rating firm Moody's says the roughly 1,600 companies it monitors had $1.2 trillion in cash at the end of 2010. That's 11 percent more than a year earlier.

Small businesses rate "poor sales" as their biggest problem, with government regulations ranking second, according to a survey by the National Federation of Independent Businesses. Of the small businesses saying this is not a good time to expand, half cited the poor economy as the chief reason. Thirteen percent named the "political climate."

More small businesses complained about regulation during the administrations of Bill Clinton and George H.W. Bush, according to an analysis of the federation's data by the liberal Economic Policy Institute.

Such findings notwithstanding, further cuts in taxes and regulations remain popular with GOP voters. A recent Associated Press-GfK poll found that most Democrats and about half of independents think "reducing environmental and other regulations on business" would do little or nothing to create jobs. But only one-third of Republicans felt that way.

The GOP's presidential hopefuls are shaping their economic agendas along those lines.

Former Massachusetts Gov. Mitt Romney says his 59-point plan "seeks to reduce taxes, spending, regulation and government programs."

Businessman Herman Cain would significantly cut taxes for the wealthy with his 9 percent flat tax plan. Rep. Michele Bachmann of Minnesota said in a recent debate, "It's the regulatory burden that costs us $1.8 trillion every year. ... It's jobs that are lost."

The candidates have said little about another national problem: depressed home prices, as well as the high numbers of foreclosures and borrowers who owe more than their houses are worth.

After the Oct. 18 GOP debate in Las Vegas, a center of foreclosure activity, editors of the AOL Real Estate site wrote, "We didn't hear any meaningful solutions to the housing crisis. That's no surprise, considering that housing has so far been a ghost issue in the campaign."

To the degree the candidates addressed housing, they mainly took a hands-off approach. "We need to get government out of the way," Cain said. "It starts with making sure that we can boost this economy and then reform Dodd-Frank," which is a law that regulates Wall Street transactions.

Bachmann, in an answer that mentioned "moms" six times, said foreclosures fall most heavily on women who are "losing their nest for their children and for their family." She said Obama "has failed you on this issue of housing and foreclosures. I will not fail you on this issue." Bachmann offered no specific remedies.

Romney told editors of the Las Vegas Review-Journal: "Don't try and stop the foreclosure process. Let it run its course and hit the bottom. Allow investors to buy homes, put renters in them, fix the homes up and let it turn around and come back up."

Perry spokesman Mark Miner said the Texas governor's "immediate remedy for housing is to get America working again. ... Creating jobs will address the housing concerns that are impacting communities throughout America."

Bartlett, whose books on tax policy include "The Benefit and the Burden," recently wrote in the New York Times: "People are increasingly concerned about unemployment, but Republicans have nothing to offer them."

The candidates and their supporters dispute this, of course. A series of scheduled debates may give them chances to explain why their proposals would hit the right targets.

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Turkey ends search for survivors, toll nears 600 (Reuters)

ERCIS, Turkey (Reuters) – The death toll from last week's earthquake in southeast Turkey rose to 596 Sunday, the day after authorities stopped searching for survivors and focused on helping thousands of homeless families in crisis.

In Ercis, the town hit hardest by the 7.2 magnitude quake that devastated Van province on October 23, some shops reopened on Sunday, electricity was switched back on in parts of town and one bank's ATM started working.

But with barely any of Ercis's nearly 100,000 residents ready to return to their damaged homes with strong aftershocks still rattling the area, life is anything but normal. One aftershock Sunday morning registered at magnitude 5.3.

Winter is fast approaching, temperatures plunge at night, and young and old in particular are falling sick in tent encampments set up by relief agencies on the outskirts of town.

The government's disaster management website said more than 43,000 tents had been handed out in Van. Officials say that is more than needed because people whose homes are not so badly damaged are demanding tents as they feel safer under canvas.

"Our house is in good shape but we live in a tent due to fear. We will go back once the aftershocks are gone and the government says our house is safe," said Fadli Kocak, owner of a bakery in Ercis, who hopes to be back in business in a week.

Many people were queuing to register for tents Sunday, a first step to having an inspection done of their home, as authorities say they will hand them out only after verifying that a building is too risky to live in.

"The problem here is that you can't give 100,000 tents in a town whose population is equal to that," Yalcin Mumcu, who coordinated search and rescue operations in Ercis, told Reuters.

"Our people need to the trust the government, too. Everybody is asking for tents. They need to be patient, if the Prime Minister says they are going to build a new, better Van, I am sure they will," he said.

The relief operation is politically sensitive as the southeast is where most of Turkey's Kurdish minority lives, and the army has been fighting a separatist insurgency there that has cost more than 40,000 lives since it first erupted in 1984.

After criticism in the first days of the disaster, state authorities cranked up relief operations, asking for foreign help providing tents, containers and prefabricated houses.

Hoardes of people in provincial capital Van have also clamored for tents even though far fewer buildings collapsed there. Villagers in surrounding hills are seen as more in need because most of their primitively built houses were destroyed and they would be caught in the open if there is early snow.

"Most of us sleep outside. The village has received coal and blankets but no tents," said Mehmet Siddik Demirtas, headman at Yukari Isikli village, about 10 km (6 miles) from Ercis.

"We go every day to the city of Ercis to ask for tents but they tell us to wait," he said.

(Writing by Simon Cameron-Moore; Editing by Louise Ireland)

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Drunk, naked driver smashes 12 cars in Moscow (AP)

MOSCOW – Russian police say a drunk and naked driver has wreaked havoc in central Moscow, damaging 12 cars before being caught by police.

The city police said they started pursuing the man Sunday after he ignored a road sign banning a turn and refused orders to stop. In the ensuing chase, the motorist nearly hit a school bus, rammed through a police vehicle and smashed several other cars before being caught. When police got him he was completely naked.

Footage broadcast by Russian television stations showed him lying on the pavement and shouting "don't cover me!" to officers who tried to cover him with clothes.

The man said he came from the ex-Soviet nation of Moldova and was in distress over an unhappy relationship.

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Dog survived gas chamber, up for adoption in NJ (AP)

ROCKAWAY, N.J. – A stray beagle mix that cheated death in an Alabama dog pound's gas chamber is up for adoption in New Jersey.

Volunteers began looking for a new home for the dog known as Daniel after the animal walked out unscathed from the carbon monoxide administered by the Animal Control Department in Florence, Ala., on Oct. 3.

The nonprofit Eleventh Hour Rescue group arranged to have the dog flown to New Jersey, where it is awaiting adoption at its shelter in Rockaway.

Volunteer Roger Keyser told The Star-Ledger of Newark the dog "has got to have some destiny."

Phil Stevenson, a Florence city spokesman, said Friday that no one is sure why Daniel was the lone survivor.

"It may be that his breathing was shallow because of a cold or something. Or maybe God just had a better plan for this one," Stevenson said.

Stevenson said the gas chamber is a stainless-steel box that's roughly the size of a pickup truck bed. A computer-controlled pump slowly feeds carbon monoxide into the chamber once it's sealed, and an operator presses a button.

"It sort of rocks them to sleep slowly. It's like the cases you hear about where people are overcome by carbon monoxide in their home and just never wake up," he said.

A new operator placed the dog into the chamber with other animals and started the machine, Stevenson said, although it's unclear how many animals were in the chamber in all, or what species.

Three animals have survived the gas chamber in the last 12 years or so, and every effort is made to find new homes for any that do survive, Stevenson said.

Alabama lawmakers passed a law in June to ban the use of gas chambers effective Dec. 31. At the time, Florence was one of only two places in the state using the chambers.

___

Associated Press writer Jay Reeves in Birmingham, Ala., contributed to this report.

___

Information from: The Star-Ledger, http://www.nj.com/starledger

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Cardinals stun Texas, force World Series to Game 7 (AP)

ST. LOUIS – Hours after David Freese's home run plunked down on the grass patch beyond the center field wall, long after the ballpark emptied, a message still burned bright on the scoreboard: "See you TOMORROW NIGHT for Game 7 of the World Series!"

Whatever happens, whether the St. Louis Cardinals or Texas Rangers win, they'll have a hard time topping Thursday night.

"You had to be here to believe it," St. Louis manager Tony La Russa said.

In one of the greatest thrillers in baseball history, the Cardinals twice rallied when they were down to their last strike of the season. First, Freese saved them with a two-run triple in the ninth, then Lance Berkman delivered a tying single in the 10th.

And when Freese led off the bottom of the 11th with his shot to beat Texas 10-9 and stomped on the plate, this Game 6 had already been stamped forever.

"Turned out to be one for the ages," said Daniel Descalso, who keyed a Cardinals comeback.

A Series that was dismissed by many around the country before it began for lacking glamour teams suddenly has turned into must-see TV. And fans can savor the prospect of the first World Series to reach Game 7 since 2002, when the Angels beat the Giants.

After it was over, La Russa wasn't willing to announce his starter — many believe it will be ace Chris Carpenter on three days' rest for only the second time in his career.

"I learned what my body's going to feel like, what my stuff's going to be like," Carpenter said. "You go out there and you make pitches. We'll see what happens."

Matt Harrison is set to start for Texas. Derek Holland, who pitched shutout ball into the ninth inning in Game 4, could've been ready on regular rest after Wednesday's rainout. Instead, Texas manager Ron Washington used him in relief.

Home teams have won the last eight Game 7s in the World Series, a streak that started with the Cardinals beating Milwaukee in 1982.

Oh, and this: By far, the Cardinals have won the most Game 7s in Series history, going 7-3.

"There is tomorrow, now, for us," Cardinals star Albert Pujols said.

A sloppy game that made for terrible viewing turned terrific in the late innings. Freese added to the lore created by the Carlton Fisk homer in Game 6 of the 1975 Series and Bill Buckner's error in Game 6 of the 1986 Series.

"A ridiculous game, weird game," Texas second baseman Ian Kinsler said. "But I bet it was fun for the fans. We just came out on the wrong end."

To Freese, who was raised in the St. Louis area and was MVP of the NL championship series, it all reminded him of a game-ending home run Jim Edmonds hit in the 2004 playoffs.

"Growing up or whatever, and you see stuff like that happen, those become memories," said Freese, who immediately donated his bat and jersey to the Hall of Fame.

Tremendous theater, that is, except for Texas. The Rangers were that close to winning their first championship.

"I understand it's not over till you get that last out," Texas manager Ron Washington said. "I was just sitting there praying we got that last out. We didn't get it."

This was just the third time that a team one out from elimination in the World Series came back to win the game, according to STATS LLC. The New York Mets did it with Buckner's mistake and wound up winning the championship. In 1911, the New York Giants rallied past the Philadelphia A's in Game 5, but lost the next game.

Freese's tying triple off the wall and just over right fielder Nelson Cruz came on a 1-2 pitch from closer Neftali Feliz. In the 10th, after Josh Hamilton had homered to give Texas a two-run lead, Berkman's two-strike, two-out single made it 9-all.

"Initially I was like `Are you kidding me? My first AB off Feliz in this situation ever,'" Freese said. "I just beared down, got a pitch to hit. Initially I thought I hit it pretty good, I thought (Cruz) was going to grab it, so just a lot of emotions on that one."

Berkman came through on a 2-2 pitch from Scott Feldman, finishing off a two-run rally in the 10th.

"I was one strike away," Feldman said. "That pitch there, I didn't quite get it in enough and he was able to get enough of the bat on it to knock it into center field."

Busch Stadium was still in frenzy when Freese opened the 11th with his homer off Mark Lowe. Freese thrust his arm in the air as he rounded first base, and the crowd was delirious.

"Just an incredible feeling, seeing all my teammates at the dish waiting for me," said Freese, whose shirt was torn off during the celebration.

Texas trudged off the field as Freese circled the bases, having been so close to that elusive title. Much earlier, team president Nolan Ryan was high-fiving friends in the stands as Adrian Beltre and Cruz opened the seventh with home runs that helped Texas take a 7-4 lead.

"I'm not going to lose any sleep over it," Hamilton said. "We're just going to do everything we can to prepare. Guys are already talking about it. We're ready for Game 7. Shake it off and come back tomorrow. That's just our mentality. But it goes both ways. Seems like they had that mentality. too."

Allen Craig's solo homer in the eighth began the Cardinals' comeback. Jake Westbrook wound up with the win.

NOTES: Texas was 0 for 11 with two outs and runners in scoring position in the Series until Kinsler's RBI double. ... Berkman hit his first Series home run. He was moved up a spot to cleanup for this game. ... David Eckstein, MVP of the 2006 Series for St. Louis, threw out the first ball. ... Ninety-year-old Hall of Famer Stan Musial rode in on a golf cart during pregame festivities. ... The crowd of 47,325 was a record for 6-year-old Busch Stadium.

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Total, Chevron profits lifted by firm oil price (Reuters)

(Reuters) – Chevron Corp and Total posted higher quarterly profits on Friday, the latest two major oil companies to reap the benefit of firm oil prices and rosier refinery conditions.

The third-quarter profits from Total and Chevron capped a week of earnings figures that saw gains at Exxon Mobil, Royal Dutch Shell and BP Plc as benchmark Brent oil prices hover near $112 per barrel, nearly 50 percent higher than the year-earlier quarter.

Still, oil prices were slightly down from the second quarter of the year, which helped the companies' refineries to post higher margins and profits.

Chevron Corp, the second-largest U.S. oil company behind Exxon, said its profits more than doubled, helped by a gain of about $500 million from the sale of its Pembroke refinery to Valero Energy Corp.

Total's profits climbed a more modest 24 percent, but met market expectations, as its output fell by 1 percent because of disruptions in Libya.

Chevron also posted a decline in output to 2.6 million barrels of oil equivalent per day (bpd), down from 2.74 million a year ago.

It July, Chevron had said a slower Gulf of Mexico project ramp-up and a Thai pipeline problem would trim its 2011 production by about 30,000 bpd.

Like their peers, Chevron and Total have struggled to increase oil production in recent years.

Disappointment about the trend has hit oil stocks, and Total has been punished by investors more harshly than its rival -- until a rally that has lifted its stock 27 percent since September 26 when it raised its 2010-15 average output goal to 3 percent per year from 2 percent.

Total has made over $10 billion of acquisitions in the past 18 months, expanding its geographical footprint beyond its historical heartland of Africa to Australia, Canada and Russia.

Shares in Total fell about 2 percent in Friday trading, while Chevron shares climbed less than 1 percent.

(Reporting by Marie Maitre in Paris, Braden Reddall in San Francisco and Matt Daily in New York, editing by Dave Zimmerman)

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Pressure mounts on MF Global to strike a deal (Reuters)

(Reuters) – Shares of MF Global Holdings Ltd hit another all-time low and its bonds were in freefall on Friday as troubles intensified for the U.S. futures brokerage that is looking to sell off units in order to retain customers and to survive.

The company run by former Goldman executive Jon Corzine has shed 63 percent of its market capitalization this week. That could hamper MF Global's dealmaking ability, while at the same present possible buyers with assets at big discounts.

Goldman Sachs Group Inc, State Street Corp and Macquarie are all eyeing MF Global or parts of it, The Wall Street Journal reported.

In the last few days, the brokerage posted a quarterly loss and two ratings agencies cut its debt rating to junk -- underscoring the bad bets MF Global made on bonds of countries in the euro zone, which is now battling a debt crisis.

MF Global stock dropped as much as 31 percent in early trading to 99 cents, its lowest ever, but later rebounded to $1.35. It was the second most actively traded stock on the New York Stock Exchange.

"The MF Global team has no choice but to quickly shrink its balance sheet to raise cash and then to sell the cash into the market to show 'strength'," Brad Hintz, a senior analyst at Bernstein Research, wrote to clients.

"These events play out in days."

The company's bonds were trading at distressed levels in the mid-40s, after touching a morning low of 38 cents on the dollar. That was down from Thursday when the bonds, maturing in 2016 with a 6.25 percent coupon, were at 70.

MF Global, which is emerging as one of the hardest-hit U.S. firms in the fallout from Europe, had offered the notes at par in August.

The company tapped Evercore to advise it on strategic options including a possible sale, said a source familiar with the situation. A second source, who was briefed on the matter, said the company is "focused on doing a smart deal, a fair deal," and that it did not enter the talks with "specific targets and objectives."

"We believe MF could generate proceeds from sale of its customer asset portfolio or Futures Commission Merchant which frees up capital," Keefe Bruyette & Woods analyst Niamh Alexander wrote to clients. "However, we cannot quantify the cost of wind down or exiting broker positions that could offset those proceeds and wipe out equity," she wrote.

MF Global has declined to comment on its troubles.

CORZINE AND EUROPE'S FALLOUT

Some customers are diverting money from the New York-based brokerage, according to hedge funds, rivals and analysts, though the extent of the outflows remained unclear. (Graphic of MF Global's market share among futures commission merchants: http://link.reuters.com/syz64s )

MF Global's bank loans were lower Friday amid rumors the company drew down its revolving credit lines, separate sources said. The extended revolver due 2014 is quoted 60-65 on Friday after a large piece of the paper is said to have changed hands on Thursday at 70, the sources said.

Corzine, who became CEO in March last year after a term as New Jersey's governor, has been trying to transform MF Global from a brokerage that mainly places customers' trades on exchanges into an investment bank that bets with its own capital.

But its bets on bonds from euro zone countries, including those issued by Italy, Spain, Portugal and Ireland, have gone bad, prompting regulators to press it to boost capital and ratings agencies to issue their warnings.

The loss of its investment grade rating could hasten the exodus of customers away from MF Global.

"Given the uncertainty around timing of the agencies' next move, management needs to move quickly in order to avoid client defections and either work on strategic options or work with the agencies to get back to stable status," Deutsche Bank analyst Michael Carrier wrote to clients.

European Union leaders stuck a deal this week to relieve the continent's sovereign debt crisis -- potentially good news for MF Global -- but many details of the EU deal still need ironing out.

In Asia, the Singapore Exchange said MF Global's unit in the city state is meeting its financial obligations as a clearing member. That echoes assurances Thursday by U.S. clearers CME Group Inc, IntercontinentalExchange Inc and options clearinghouse OCC.

(Reporting by Jonathan Spicer, John Balassi, Philip Scipio, Paritosh Bansal, Jeanine Prezioso and Herb Lash in New York, and Charmian Kok in Singapore; Editing by Matthew Lewis and Phil Berlowitz)

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Wall St edges lower as indexes pause after rally (Reuters)

NEW YORK (Reuters) – Stocks edged lower on Friday as investors paused after a rally that lifted the S&P 500 index almost 20 percent from near bear market levels where it had sunk earlier this month.

Stock indexes had soared 3 percent in the previous session after a deal on European debt. The S&P index closed above its 200-day moving average for the first time since August, a sign of an improving trend for stocks after five straight months of losses.

Thursday's gains came after European Union leaders struck a long-awaited agreement to help contain Europe's two-year debt crisis.

Concerns that the euro zone debt crisis would spread and erode domestic bank profits have contributed to recent weakness in stocks, with the S&P at one point dipping into bear market territory, defined as a 20 percent decline from a recent peak, in intraday trading on October 4.

The S&P 500 now is up more than 13 percent this month, on pace for its biggest monthly gain since October 1974.

Some investors remained skeptical over the debt deal as many details were still to be worked out before the EU can show its can contain the crippling sovereign debt crisis.

"When you're up about 20 percent in 18 days, and coming off a 3 percent move, you have to catch your breath," said Mike Gibbs, managing director and chief market strategist at Morgan Keegan in Memphis, Tennessee.

The head of Europe's bailout fund played down hopes of a quick deal with China for that country to throw its support behind efforts to resolve the crisis but said he expects Beijing to continue to buy bonds issued by the rescue fund.

"There are still a lot of unanswered questions about the plan and what happens next, so we'll probably be in a trading range for a while, but this is a win for bulls that the market is holding on today," Gibbs said.

The Dow Jones industrial average was down 11.65 points, or 0.10 percent, at 12,196.90. The Standard & Poor's 500 Index was down 4.09 points, or 0.32 percent, at 1,280.50. The Nasdaq Composite Index was down 10.96 points, or 0.40 percent, at 2,727.67.

Hewlett-Packard Co led the Dow higher, rising 2.3 percent to $27.62 a day after it said it was ditching a plan to spin off its personal computers unit, a plan that was expected to have cost billions of dollars in expenses and lost business.

A pair of stronger-than-expected earnings from Dow components also contributed to the blue chip index's modest gains. Merck & Co Inc rose 1.8 percent to $34.93 after its profit and sales beat analyst estimates, and Chevron Corp's profit more than doubled. The stock rose 0.3 percent to $109.

MF Global Holdings Ltd fell 2.8 percent to $1.39, well off earlier lows. Some customers are moving money away from the futures brokerage, rivals, hedge fund officials and analysts said, though the extent of the outflows is unclear.

Economic data on Friday showed U.S. consumer sentiment improved in October for the second month in a row as consumers felt more upbeat about the economy's prospects.

(Editing by Kenneth Barry)

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Vigils for injured vet, police clear Tenn. protest (AP)

By TERRY COLLINS and JASON DEAREN, Associated Press Terry Collins And Jason Dearen, Associated Press – 1?hr?47?mins?ago

OAKLAND, Calif. – Anti-Wall Street demonstrators held vigils for an Iraq War veteran seriously injured during a protest clash with police in California as some Occupy encampments came under growing pressure from authorities to abandon sites in parks and plazas.

A crowd of at least 1,000 people, many holding candles, gathered Thursday night in Oakland in honor of 24-year-old Scott Olsen, who is hospitalized with a fractured skull.

Many in the crowd shooed away Oakland Mayor Jean Quan who retreated back into City Hall after trying to address them during a tense late-night appearance. She apologized to Olsen during a hospital visit earlier Thursday.

"I am deeply saddened about the outcome on Tuesday. It was not what anyone hoped for, ultimately it was my responsibility, and I apologize for what happened," Quan said in a written statement to protesters late Thursday. "I cannot change the past, but I want to work with you to ensure that this remains peaceful moving forward."

In Nashville, police cracked down overnight on an Occupy protest camp near the Capitol under a new policy setting a curfew for the complex. Officers moved in a little after 3 a.m. and arrested about 30, who were later released after a judge wouldn't sign the warrants. About 20 protesters who stayed on a nearby sidewalk were not arrested and were still there later in the morning as state troopers stood guard at the steps to the Capitol.

Protesters also held a vigil for Olsen in Las Vegas, which drew a handful of police officers. Afterward, protesters invited them back for a potluck dinner.

"We renewed our vow of nonviolence," organizer Sebring Frehner said.

The Marine veteran, who won medals in Iraq, has become a rallying cry for the Occupy Wall Street demonstrators across the nation, with Twitter users and protest websites declaring, "We are all Scott Olsen."

Joshua Shepherd, 27, a Navy veteran who was standing nearby when Olsen got struck, called it a cruel irony that Olsen is fighting an injury in the country that he fought to protect.

Despite the financial underpinnings of the protests, Olsen himself wasn't taking part out of economic need.

His friends say he makes a good living as a network engineer and has a nice apartment overlooking San Francisco Bay. Still, he felt so strongly about economic inequality in the United States that he fought for overseas that he slept at a protest camp after work.

"He felt you shouldn't wait until something is affecting you to get out and do something about it," said friend and roommate Keith Shannon, who served with Olsen in Iraq.

It was that feeling that drew him to Oakland on Tuesday night, when the clashes broke out and Olsen's skull was fractured. Fellow veterans said Olsen was struck in the head by a projectile fired by police, although the exact object and who might have been responsible for the injury have not been definitively established. Officials are investigating exactly where the projectile came from.

Even as the vigil was held in Oakland, protest organizers prepared to defy Oakland's prohibition on overnight camping on the now patchy, manure-smelling lawn outside City Hall.

Shake Anderson, an organizer with Occupy Oakland, said half a dozen tents were erected on the plaza by midday Thursday where police armed with tear gas and bean bag rounds disbanded a 15-day-old encampment Tuesday. More than two-dozen tents had been erected as food and supplies arrived late Thursday.

"We believe in what we're doing," Anderson said. "No one is afraid. If anything, we're going to show there's strength in numbers."

Few police were seen in the area during late Thursday, as Quan in her written statement said that she and interim police chief Howard Jordan hope to meet with protesters and urged them again not to camp at the plaza.

Elsewhere across the United States, protesters brushed off pressure from authorities and maintained the camps that have sprung up in opposition to growing economic inequality.

Protesters at San Francisco's Justin Herman Plaza braced for a police raid early Thursday that never came. Still, police have warned the protesters that they could be arrested on a variety of sanitation or illegal camping violations.

Officials told protesters in Providence, R.I., that they were violating multiple city laws by camping overnight at a park.

Anti-Wall Street protesters camped out in downtown Los Angeles said they're planning to continue their demonstration indefinitely, although both they and the mayor's office were eyeing alternate sites.

Meanwhile, Olsen has been improving. Doctors transferred him from the emergency room to an intensive care unit and upgrading his condition to fair on Thursday.

Dr. Alden Harken, chief surgeon at Highland Hospital, said Olsen was still unable to speak but had improved dramatically since he was hospitalized unconscious with a fractured skull and bruised brain that caused seizures.

Harken said Olsen was interacting with his parents, who flew in from Wisconsin, doing math equations and otherwise showing signs of "high-level cognitive functioning." The doctor said he may require surgery, but that's unlikely.

"He's got a relatively small area of injury and he's got his youth going for him. So both of those are very favorable," Harken said.

Olsen smiled during Quan's visit and expressed surprise at all the attention his injury has generated, hospital spokesman Vintage Foster said.

His uncle in Wisconsin told The Associated Press that Olsen's mother was trying to understand what had happened.

"This is obviously a heartbreaker to her," George Nygaard said. "I don't think she understands why he was doing this."

The group Iraq Veterans Against the War blamed police for Olsen's injury. Jordan said the next day that Oakland police will investigate whether officers used excessive force.

Police have said they responded with tear gas and bean bag rounds only when protesters began throwing bottles and other items at them.

On Tuesday, Olsen had planned to be at the San Francisco protest, but he changed course after his veterans' group decided to support protesters in Oakland after police cleared a two-week long encampment outside City Hall.

"I think it was a last-minute thing," Shannon said.

A video posted on YouTube showed Olsen being carried by other protesters through the tear gas, his face bloodied. People shout at him: "What's your name? What's your name?" Olsen just stares back.

People at OPSWAT, the San Francisco security software company where Olsen works, were devastated after learning of his injuries. They described him as a humble, quiet man.

Olsen had been helping to develop security applications for U.S. defense agencies, building on expertise gained while on active duty in Iraq, said Jeff Garon, the company's director of marketing.

Olsen was awarded seven medals while serving in the U.S. Marine Corps, which he left as a lance corporal in November 2009 after serving for four years. One of them was the Navy-Marine Corps Achievement Medal.

Olsen moved to the Bay Area in July, and quickly found friends in the veterans against the war group.

His tours of duty in Iraq made him more serious, Shannon said.

"He wasn't active in politics before he went in the military, but he became active once he was out ... the experience in the military definitely shaped him," Shannon said.

___

Dearen reported from San Francisco. Associated Press writers Dinesh Ramde in Milwaukee, Garance Burke in San Francisco, Julie Watson in San Diego, Lucas L. Johnson II in Nasvhille, Tenn., and Michelle Rindels in Las Vegas contributed to this report.

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Analysis: Mortgage probe may open new path for housing relief (Reuters)

(Reuters) – A controversial weapon could be deployed soon in the U.S. fight against the housing crisis as states and top banks near a deal in their dispute over mortgage abuses -- cutting the mortgage debt owed by homeowners.

Five major banks could be required to commit roughly $15 billion to reduce principal balances for struggling homeowners and modify loans in other ways under a proposed deal to settle allegations linked to the "robo-signing" scandal.

That amount would be part of broader sanctions that could total $25 billion, small change for the giants of Wall Street but potentially sowing the seed for a new approach to tackling the housing crisis.

Settlement talks continue with the banks, state attorneys general and some federal agencies over foreclosure shortcuts and other abuses. A deal could be struck within a month, according to people familiar with the matter.

Much of the exact language has yet to be hashed out but it could provide for the first broad use of principal writedowns, something economists and housing advocates say is a drastic but needed step to help set right the housing market.

Investors and the government-controlled mortgage finance giants Fannie Mae and Freddie Mac -- which own around half of all U.S. mortgages -- have long resisted the idea.

There are concerns it could encourage some borrowers to stop paying in order to qualify for a reduction in their overall mortgage.

Fannie and Freddie's regulator has been wary of allowing principal reductions, doing so would lower the value of the assets held by the taxpayer-supported firms.

More broadly, public anger over the possibility of bailouts for homeowners who got out of their depth in debt is seen as one of the origins of the conservative Tea Party movement.

Given the political sensitivity, the Obama administration has so far trodden carefully to help homeowners. It wants to let more borrowers refinance to lower interest rates and stretch out the terms of loans to reduce monthly payments.

Some officials at the Federal Reserve say the central bank should buy more mortgage debt to bring down borrowing rates.

But those efforts do little to address the underlying problem, that many borrowers owe more than their homes are worth.

Under a potential settlement, the five banks -- Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, and Ally Financial -- would have to meet dollar targets to reduce principal for underwater borrowers.

"I think it will be a step in the right direction," said Ira Rheingold, executive director of the National Association of Consumer Advocates. "The AGs hope this could work as a pilot program, and show how principal reduction could work."

To be sure, the reductions will have limited impact. The deal is unlikely to touch mortgages held by Fannie and Freddie. And according to a back-of-the-envelope calculation, $15 billion in reduction at $50,000 per borrower could reach around 300,000 borrowers, a fraction of the 11 million underwater homeowners.

But a deal may prompt banks to expand the limited principal reduction programs that they have so far directed toward only the riskiest loans in their portfolios.

The settlement could lay the groundwork for a broader program, if Fannie and Freddie are swayed to test it out themselves as an alternative to the costly process of foreclosing on struggling borrowers.

"Fifteen billion (dollars) is a drop in the bucket, but here might well be the very opportunity to conduct an experiment," said Ken H. Johnson, a professor at Florida International University's business school.

PRIOR EFFORTS

One model could be the 2008 settlement between Countrywide, the mortgage lender bought by Bank of America in that year, and state attorneys general. It provided a framework for loan modifications that became the basis for the administration's Home Affordable Modification Program which has so far had only a modest impact.

That deal set up the now widely used "waterfall" approach to trying to lower a borrower's monthly payment through a series of steps that include reducing the interest rate, extending the term of the loan and deferring some principal.

The states are hopeful a settlement on foreclosure abuses could have a similar ripple effect.

Not all states are satisfied with Bank of America's compliance with the 2008 settlement, presaging some concerns that could arise in any new settlement. Nevada and Arizona sued the bank saying it did not honor its obligations and engaged in "deceptive" practices in dealing with distressed borrowers.

Shum Preston, a spokesman for the California attorney general, also said that his office continues to receive complaints from Countrywide borrowers.

But Massachusetts, which last year extracted an additional commitment from Bank of America to reduce around $3 billion in principal on some of its riskiest loans across the country, said the bank had been complying with the settlement.

A spokesman for the attorney general's office in the state, Brad Puffer, said around 2,600 residents have received loan modifications under the settlement, saving some $125 million in mortgage payments, including both principal reductions and other types of modifications.

Bank of America said it had extended 49,000 offers to reduce principal for underwater borrowers nationwide, forgiving almost $3 billion in principal payments, since the agreement.

That settlement, and a similar one by Wells Fargo, were directed at the riskiest loans, leaving largely untouched more traditional mortgages that still deep underwater due to cratering home prices.

Wells says it has provided $4 billion in principal reduction as part of 96,000 modifications completed since the Wachovia acquisition. In addition, since 2010, Wells has participated in a HAMP principal reduction program.

"We're never been here before so we can't look to past experience," said Johnson, the business school professor, "with the added complexity of what foreclosures do to market pricing, some form of principal reduction may be the answer."

(Reporting by Aruna Viswanatha in Washington D.C. and Rick Rothacker in Charlotte, North Carolina; Editing by Tim Dobbyn)

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Is Rick Perry on the comeback trail? (The Christian Science Monitor)

Washington – After weeks (months?) of bad debate reviews, plunging poll numbers, and Herman Cain sucking up all the oxygen in the GOP race, we’ve noticed Rick Perry has managed to seize the spotlight - and to some extent drive the news cycle - over the past several days.

So far this week, Perry has:

Drawn attention for seeming to revive the Obama a€?birthera€

Released a “20-20” tax plan, calling for an optional 20 percent flat tax on income and a 20 percent corporate tax. While the plan was criticized by some economists as making the system even more complicated (since many Americans would essentially have to do their taxes twice to figure out which rate was better), it drew positive comments from GOP tax mavens like Grover Norquist of Americans for Tax Reform and Club for Growth’s Chris Chocola. (Here’s Decoder’s take on how Perry is selectively borrowing from Cain on this issue.)

Hired a slew of new advisors with deep experience in presidential campaigns.

Launched his first TV ads in Iowa - with a positive ad touting his jobs record in Texas.

Landed some actual hits on Mitt Romney - over Romney’s hedging on the collective bargaining issue in Ohio and Romney’s refusal to release his tax returns.

Of course, a few good (or mostly good) news cycles does not a comeback make. The latest CBS News/New York Times poll makes clear just how far Perry has to go: He’s currently in fifth place, with just 6 percent, behind Cain (25 percent), Romney (21 percent), Newt Gingrich (10 percent), and Ron Paul (8 percent). That marks a 17-point drop for the Texas governor since September.

But Perry is making his way back into the conversation - and not just on defense - and thata€?s a start.

And Perry will get more even exposure this Sunday, when he will appear for the full hour on Fox News Sunday - making his Sunday show debut, and his longest TV interview to date.

Like your politics unscrambled - with a dash of humor? Check out DCDecoder.com.

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NYC cops pleading not guilty in corruption probe (AP)

By TOM HAYS and COLLEEN LONG, Associated Press Tom Hays And Colleen Long, Associated Press – 1?hr?1?min?ago

NEW YORK – New York City police officers pleaded not guilty Friday to a range of corruption charges in a sweeping probe touched off by an investigation into whether a Bronx officer had ties to a drug dealer.

In total, 16 officers were arraigned in a packed courtroom. The halls were swarmed with people, and hundreds of officers carrying signs stood outside the courthouse and applauded as the accused officers walked through.

The Bronx officer, Jose Ramos, pleaded not guilty to drug and other charges. An internal affairs lieutenant pleaded not guilty to charges she leaked information to union officials about the probe. The rest of the officers pleaded not guilty to charges including official misconduct and obstructing governmental authority after prosecutors said they abused their authority by helping family and friends avoid paying traffic tickets.

The case evolved from a 2009 internal affairs probe of Ramos, who owned a barber shop and was suspected of allowing a friend to deal drugs out of it. Prosecutors said he also transported drugs in uniform.

"He sold his shield, he violated his oath," Assistant District Attorney Omer Wiceyk said.

Wiceyk said Ramos was recorded as saying he "stopped caring about the law a long time ago."

Ramos' attorney, John Sandleitner, said the charges were ridiculous. "If he had done any of these things that they say, they would've arrested him two months ago. Or two years ago," he said. "Why did they let him go to work, then?"

While listening to Ramos' phone, investigators caught calls from people seeing if Ramos could fix tickets for them. The conversations led to more wiretaps that produced evidence of additional officers having similar conversations.

Internal affairs lieutenant Jennara Cobb, who pleaded not guilty to charges of divulging a wiretap, was accused of meeting with union officials about the probe. As a result, word spread through the department's most powerful union and delegates started to alter the way they fixed tickets, prosecutor Jonathan Ortiz said.

"The investigation was significantly compromised because of her actions," he said.

Her attorney, Philip Karasyk, said she denied the charges and had been unfairly singled out. She was released on bail.

"That wiretap was leaking like a sieve," he said.

Many of those arrested include high level members of the union, the Patrolmen's Benevolent Association, the department's most powerful with 22,000 members.

"This has been laid on the shoulders of police officers, but when the dust settles and we have our day in court, it will be clear that this is part of the NYPD at all levels," union President Patrick Lynch said through a spokesman.

Among those charged were Bronx union delegates Officers Joseph Anthony, 46; Michael Hernandez, 35; and Brian McGuckin, 44. Officer Virgilio Bencosme, 33, and Officer Luis R. Rodriguez, 43, both of the 40th Precinct; Officer Christopher Scott, 41, of the 48th Precinct; Officer Jaime Payan, 37, of the 46th Precinct; Officer Eugene P. O'Reilly, 39, of the 45th Precinct; Officer Christopher Manzi, 41, of the 41st Precinct; and Jason Cenizal, 39, a former delegate from the 42nd Precinct.

Ramos' supervisor, Jacob G. Solorzano, 41, was charged with misconduct. Sgt. Marc Manara, 39, Officer Ruben Peralta, 45, Jeffrey Regan, 37 and Officer Christopher Scott, 41, of the 48th Precinct were all charged with covering up an assault for a an acquaintance. Some of the charges also overlap to include ticket fixing.

The case doesn't appear to rise to the level of the more notorious corruption scandals in the nation's largest police department. But in terms of the number of officers facing criminal or internal administrative charges, the probe represents the largest crackdown on police accused of misconduct in recent memory. Dozens of other officers may face internal charges.

Earlier this week, federal prosecutors in Manhattan brought conspiracy and other charges against five current and three former officers alleging they were part of a gun-running ring. In two other recent unrelated federal cases, one officer was charged with arresting a black man without cause and using a racial slur to describe the suspect, and another with using a law enforcement database to try to trump up charges against an innocent man.

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Reforming the Taliban: US aims to teach Afghan fighters new livelihoods (The Christian Science Monitor)

Bagram, Afghanistan – Down a back road, past old, still-active minefields and blown-out Soviet tanks, US military officials are trying to bring former insurgents back into the fold of the Afghan government.

The US official who runs the program calls it "tactical detoxifying" – offering captured former foot soldiers a skill that could help them make a legal living once they are released. Since March, the Parwan Detention Center at Bagram Air Base near Kabul has offered beekeeping workshops, language labs, and tailoring classes.

Yet the process of reintegration has been fraught with suspicion and roadblocks.

Afghan efforts at reconciling with elements of the Taliban have virtually come off the rails since the September assassination of lead negotiator Burhanuddin Rabbani. Moreover, Afghan critics say the US effort at Bagram is undermining the government's outreach.

RECOMMENDED: Taliban tunnel: Five militant escapes under US watch

Dividing the United States and Afghan governments are fundamentally different views about the Taliban. Is it a cohesive ideological movement that must be dealt with through its leaders, as the Afghans believe, or are the Taliban rank and file merely underemployed Afghans who will abandon the cause and thus contribute to the collapse of the insurgent group if taught proper job skills, as the US believes?

Either way, this program is an effort that US commanders would like to see gather steam. Doubts linger about what reintegration can accomplish until coalition forces gain the upper hand on the Afghan insurgency. But the reintegration of former Taliban fighters, commanders say, is crucial to a secure Afghanistan.

"Frankly, one of the key areas where we have to gain momentum in the coming weeks is reintegration," says Maj. Gen. Daniel Allyn, commander of the 1st Cavalry Division and of US forces in eastern Afghanistan.

Pentagon officials say they expect US military pressure on the ground to aid them in the process by the end of this winter. But they acknowledge that, for now, the number of Taliban fighters willing to lay down their weapons remains modest.

Some 2,350 former fighters have pubicly joined the Afghan reintegration program, according to the International Security Assistance Force (ISAF).

The process is designed to be deliberate, says Maj. Gen. Phil Jones, director of ISAF's reintegration cell. "There's a vetting that has to be taken seriously. Some are genuine insurgents. Some are criminals. Some are freeloaders."

At times, interest in reintegration has outpaced the ability of the AfA-ghan government to carry out these steps, holding up the process. Others complain that they laid down their arms but have received none of the benefits they were promised.

"I do know that we have a number who have expressed interest and as yet have not followed through for a number of reasons. Part of it is they have a single minister that is controlling the process," Allyn says. "So it is a process that is in need of more decentralization."

The officials who run the Parwan Detention Center see it as part of the solution. In part, the program is intended to counteract the notorious reputation that Bagram's first prison a€“ now being demolished a€“ has for the abuses that took place there early in the war. Rehabilitation is the primary focus, though.

The program's size is modest a€“ there are currently 276 prisoners in the program, out of the thousands being held by US forces. But US military officials hope to expand it in the months to come, as they work through the files of individual fighters.

Prison officials are primarily on the lookout for "simple farmers" and others who have taken up arms for cash, "the low-hanging fruit," says Col. David Draeger, chief of rehabilitation and reintegration at Combined Joint Interagency Task Force 435 at Parwan.

The key, he says, is to take what US military officials refer to as the "$10-a-day Taliban" – the one doing it just for the money – and "give him a skill, which cuts down on the possibility of him lashing out again."

Of those detainees in the program, more than 70 percent are illiterate. Most opt for reading and writing courses in their native Dari or Pashto, though some do take English courses as well, Draeger says.

The emphasis is on vocational skills that can lead to licit livelihoods. Detainees taking tailoring courses, for example, are permitted to send clothes they make back to their families. There are job-placement counselors at the facility to help prisoners find work.

Parwan officials are debating adding advanced vocational training – carpentry, electrical wiring – to the class offerings but say they worry about the threat of jailbreaks or violence that might accompany such additional training.

"What you're really talking about is small tools, and what you're worried about is the possibility of these getting back into the [prison] facility," Draeger says.

But the track record so far appears to be good. Of the 1,000 detainees who have been through the program and released, there has been only one known recidivist, according to Draeger.

The hope is that the program grows to become "a catalyst for a wider social movement for peace," says Jones. The progression from insurgent to productive citizen is perhaps the most difficult transformation to achieve, though. "The country has fracture lines all over the place," Jones says, "and huge deficits of trust."

The Parwan program itself is a point of some distrust between the US and Afghanistan. Members of the Afghan central government and the country's High Peace Council often warn that reaching out to fighters is angering insurgent leaders and undercutting chances of national reconciliation.

"I don't see any significant progress in the process of reconciliation," says Abdul Hakim Mujahid, a former Taliban official and first deputy of the High Peace Council.

Efforts to bring lower-level fighters into the fold will be more effective after some agreement is reached with Taliban leaders, he says. In the meantime, he says, such programs are counterproductive. That's because these Afghan officials "see the Taliban as a much more unified body than perhaps we see them – who need to be dealt with as a recognized armed opposition," says Jones.

There are also "a lot of people who believe that reintegration can't happen on any greater scale at the moment – which is low-level, small groups – until you get some political traction," Jones adds. "And to a degree I would agree with that. The two are inextricably linked."

IN PICTURES: Winning hearts and minds in Afghanistan

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Boy pulled uninjured from Turkey's quake wreckage (AP)

ERCIS, Turkey – A 13-year-old boy was pulled from a collapsed building without injury on Friday, five days after Turkey's powerful earthquake struck, and state-run TV said he survived by drinking rain water that seeped through cracks in the wreckage around him.

The boy, Ferhat Tokay, also used shoes under his head as a pillow and peered through a tiny gap in the wreckage to see when it was day or night outside, his uncle said.

Tokay was discovered early Friday morning, soon after rescue workers from Azerbaijan had sent the uncle and other relatives away from the site to get some rest, saying there was no chance of finding the missing boy alive.

"He didn't even have a scratch on him!" the uncle, Sahin Tokay, told NTV television. "He was hungry on the first day, but the hunger pangs later disappeared."

The 7.2 magnitude quake leveled about 2,000 buildings in eastern Turkey on Sunday, killing at least 575 people and leaving about 2,500 injured and thousands of homeless.

Authorities say another 5,700 buildings are now unfit for habitation.

The government's crisis management center said 187 people have been freed from the rubble alive.

Interior Minister Idris Naim Sahin said search and rescue efforts were continuing "in small sections" of Ercis, the hardest-hit area. "Hopefully we will be successful in pulling out survivors there too," he told reporters.

But news from one of those sites was gloomy. Rescuers recovered the body of a missing father whose 2-week-old baby girl had been pulled alive from the rubble with her mother and grandmother on Tuesday.

Ferhat Tokay was working in a shoe shop on the ground floor of a multistory building in the town when the quake hit. State-run Anatolia news agency said he kept alive by drinking water that reached him in the wreckage during heavy rains.

Turkey is mostly Muslim, and in Ercis on Friday many people held traditional Muslim prayers outdoors, in parks or in streets strewn with rubble from the earthquake.

Others prayed in tents or in the few mosques still standing, Anatolia said.

One of them was the Seyid Muhammed mosque. Its only damage is a gaping crack at the foot of its minaret.

As men entered it to pray Friday, its imam, Selahattin Tasdemir, said: "It wouldn't have been considered a sin to not pray today because these people are victims and in a difficult situation."

"But their conscience wouldn't allow it. They're used to praying, so we prayed," he said in an interview with Associated Press Television News.

The 213-person Azerbaijani rescue team that saved Tokay on Friday is equipped with sniffer dogs and it has saved nine other people from the wreckage since Sunday night.

On Thursday, the team pulled 18-year-old Imdat Padak from another destroyed building in Ercis. During that effort, rubble hit one of its sniffer dogs, Cip, while it was searching a narrow gap, seriously injuring its paws.

Meanwhile, aid workers delivered tents, prefabricated homes, blankets and heaters from a dozen other countries to the desolate and cold areas hit by the quake.

Survivors complained about a shortage of tents following the quake and the government acknowledged initial difficulties in sending aid. Officials also have said some aid trucks have been looted before reaching Ercis.

Sahin, the interior minister, said the shortage of tents had largely been overcome by Friday.

___

Fraser reported from Ankara, Turkey.

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