The NewsFuror

Monday, October 29, 2007

SAS grounds planes in safety fear

Scandinavian airline SAS is to permanently stop flying Bombardier Dash 8 Q400 planes after several emergencies caused by landing gear problems.

The decision came after a plane carrying 44 people from Bergen, Norway, to Copenhagen made an emergency landing in Denmark on Saturday.

Nobody was seriously injured in the incident, the third involving an SAS Bombardier Q400 in two months.

The SAS board decided to "immediately discontinue" using the planes.

"Confidence in the Q400 has diminished considerably and our customers are becoming increasingly doubtful about flying in this type of aircraft," said chief executive Mats Jansson.

And the airline's deputy chief executive, John Dueholm, said the Dash 8-Q400 had seen "repeated quality-related problems".

"SAS's flight operations have always enjoyed an excellent reputation and there is a risk that use of the Dash 8-400 could eventually damage the SAS brand," he said.

Lease replacements

The airline operates 27 of the 8-400s, which are used on many Nordic regional routes and for connections to destinations including the UK, Germany, Poland and Luxembourg.

SAS said that since it began using the planes in 2000, they had accounted for about 5% of all passengers carried.

The carrier, which had already cancelled more than 40 flights on Sunday after the Copenhagen incident, said it was inevitable that there would now be more flights shelved.

It would look to fill the gap in schedules by reallocating planes in its current fleet and by leasing aircraft, it said.

In September, Bombardier grounded almost half of its Q400 turboprop planes after equipment failures forced emergency landings of SAS planes in Denmark and Lithuania.

At the time of the move, the Montreal-based company said that the groundings were a "precautionary measure", adding it believed its aircraft were "absolutely safe and reliable".

The Q400 turboprop - which carries between 68 and 78 passengers - has been in use since 2000, and more than 160 of the planes have been delivered around the world.

In March, an All Nippon Airways Q400 plane carrying 56 passengers and four crew landed safely after its nose gear failed to descend.

Gap pulls 'child labour' clothing

Fashion chain Gap has withdrawn from sale children's clothing allegedly made using forced child labour in India.

A 10-year-old boy was filmed making clothes for Gap shops in the US and Europe as part of an investigation by the UK's Observer newspaper.

The boy told the Observer he had been sold to a factory owner by his family.

Gap, which has made commitments not to use child labour, said that only one item - a girl's smock blouse - was involved.

The boy said he had been working for four months without pay and would not be allowed to leave the job until the fee his family had received was repaid.

Another boy of 12 said children were beaten if bosses thought they were not working hard enough, the paper reported.

This is very upsetting and we intend to investigate thoroughly
Gap spokesman Dan Henkle

Dan Henkle, a spokesman for Gap, said: "We were made aware earlier this week that a reporter had found an incident of children working in a factory that was producing for one of our brands, and this is completely unacceptable to us.

"We have a strict prohibition on child labour, and we are taking this very seriously. This is very upsetting and we intend to investigate thoroughly."

Emergency meeting

The spokesman said Gap monitors factories which make its clothing and in 2006 revoked approval for 23 factories which it said failed to comply with its standards.

Mr Henkle also said the company was calling an emergency meeting with its suppliers in the region.

The smock blouse will not be offered for sale in the company's 3,000 stores around the world, Gap said, and instead will be destroyed.

Western clothing chains increasingly get their products made in Asia, taking advantage of cheaper labour.

Fed tipped to deliver US rate cut

The Federal Reserve is widely expected to cut US interest rates once again when it meets this week, analysts say.

A slew of recent concerns - including ongoing problems in the housing market and woes at Merrill Lynch - has underlined woes in the US.

The Fed cut interest rates in September from 5.25% to 4.75% as it tried to stimulate the flagging economy.

Analysts say a further reduction to at least 4.5%, or possibly even 4.25%, is likely on Wednesday.

Inflation risk

The last rate decision was seen as sending a strong signal that the US authorities were prepared to intervene to stabilise the markets and to prevent the US economy sliding into recession.

If the Fed doesn't act decisively, the economy is at risk of calamity
Peter Morici, Economist
University of Maryland

But some say that risk to the economy is still very real and that further action from the Fed is needed.

Others argue a rate cut would encourage reckless spending and promote a return to conditions that led to a boom-and-bust cycle in the property market.

There is also a risk of inflation becoming a greater problem if money is made cheaper to borrow, encouraging more consumer spending and takeover activity.

'Low interest needed'

Sales of new and used homes are at record lows as lenders tighten up on who they will give mortgages to.

And up to two million US families - especially those with sub-prime mortgages - could eventually lose their homes as the credit crunch intensifies, a Congressional committee report said last week.

There is also nervousness in the markets, with uncertainty still lingering over how much exposure various big banks have to the credit crisis.

Last week Merrill Lynch reported $7.9bn (£3.85bn) in write-downs for the third financial quarter of the year - leading to its first loss since 2001.

The losses - which were much larger than it had initially forecast - were largely caused by exposure to bad mortgage-related debt.

We're not seeing the weakness in the US economy that would justify a big rate cut
Richard Kelly, Economist
TD Bank Financial Group

And one of the country's biggest mortgage lenders, Countrywide, said it was ready to refinance $16bn in loans after customers were unable to meet repayments.

'Goalposts moved'

University of Maryland economist Peter Morici said that the Fed needed to make another bold rates cut.

"Certainly a half-point cut would be in order in view of the revelations of Countrywide and Merrill," Mr Morici said.

"We cannot get the economy firing on all cylinders until the mortgage market reorganizes and that probably requires a low-interest environment for some time."

"If the Fed doesn't act decisively, the economy is at risk of calamity."

And Capital Economics analyst Julian Jessop said that a 50 basis point cut could not be ruled out.

"Two weeks ago it looked like they'd be able to keep rates on hold in December. Unfortunately, since then, the goalposts have moved".

Richard Kelly, an economist at TD Bank Financial Group, expects the rate to fall to 4.5% but argued that problems in housing should not be allowed to get out of perspective.

"We're not seeing the weakness in the US economy that would justify big rate cuts," Mr Kelly said.

"You won't see positive growth in residential investment until the end of 2008, but that only makes up 5% of the US economy.

"Exports are booming, and that's three times larger than the housing market."

New suitor 'preparing Rock bid'

A third potential suitor for the Northern Rock is looking at the beleaguered bank's books ahead of a possible takeover offer, a report says.

Private equity company Cerberus is putting together a bid for the bank, the Sunday Times has reported.

It is being backed by GMAC, the finance firm half owned by General Motors.

A consortium led by Richard Branson's Virgin Group and the US private equity firm JC Flowers are also keen on buying Northern Rock.

Treasury preference

The report says that GMAC, in which Cerberus owns a 51% stake, would play a pivotal role in a move for the bank.

Formed 88 years ago to offer finance for people buying cars, it evolved into a lender of other loans as well as a bank and insurance company.

Observers say that its involvement would make a Cerberus offer appeal more to the Treasury, which is keen to see the Northern Rock sold in a trade deal to another bank, rather than to a firm interested only in the financial aspects of the deal.

The Virgin-led consortium, also featuring US insurance company AIG and the Tosca hedge fund, has offered to buy a majority stake in the bank and inject "hundreds of millions of pounds" of money in exchange for taking control and rebranding the business as Virgin Money.

And last week JC Flowers stepped up its efforts to take control of the bank - putting together a management team in case a deal happens.

It includes former Marks and Spencer chairman Paul Myners as chairman of the bank and former Alliance and Leicester chief executive Richard Pym.

There have been reports that JC Flowers has secured £15bn to buy Northern Rock, the first major UK bank to be brought to its knees by the seizures in the credit markets which followed the crisis affecting US sub-prime home loans.

But according to The Sunday Telegraph, it wants the government to indemnify the bank against any litigation from shareholders, before it agrees to a deal.

Northern Rock's shares are still more than two-thirds below their price before the bank was forced to go to the Bank of England for emergency funding on 14 September.

Repayment commitment

Any future owner of Northern Rock will need to pay back hefty loans to the Bank of England which it has borrowed in emergency funds.

Over the past week, the bank is likely to have borrowed a further £4.65bn, according to the latest Bank of England data.

The figure appeared in the "other assets" category of the Bank of England's accounts, which includes any funds the Bank issues as "lender of last resort".

Analysts believe it is highly likely that this money has gone to Northern Rock.

This would indicate that Northern Rock's borrowings are now likely to total in excess of £20bn.

3 launches new Skype mobile phone

Mobile phone provider 3 has launched a new handset that will allow users to make free calls over the internet via telephony service Skype.

Users will also be able to use Skype's instant messaging service, 3 said.

But while people using Skype on their computers are able to make cheap global calls to any phone number, this will not be possible via the new 3 handset.

Skype has about 246 million registered users worldwide and is one of the firms reshaping the global phone industry.

Mobile potential

To date, mobile phone companies have been unwilling to let users freely access Skype via their handsets for fear that it would hurt their business.

While it is possible to access Skype from a number of handsets, this has involved downloading third-party software, something that has put off the majority of users.

The Skype-phone will be the first instance of a phone operator launching a mass market device that is designed to allow free calling over the internet from a mobile, 3 said.

"It takes an innovative operator... to challenge traditional thinking and offer the kind of product other operators are still shying away from," said Skype's acting chief executive, Michael van Swaaij.

"It's is now truly mobile. Skype has now taken a giant step forward in the mobile arena.

And chief executive of 3 UK, Kevin Russell, said the firm wanted to make mobile internet more accessible.

"Services need to be simple to access and affordable," he said.

"Mobile has the potential to massively increase access to internet calling."

Global reach

The service, launching on 2 November, will be accessed by a button on the handset.

As well as the UK, the 3 Skype-phone will be launched in countries including Australia, Denmark, Italy and Hong Kong.

Pay as you go customers will have to top up their account with at least £10 each month to qualify for the free Skype-to-Skype calls, 3 said.

Oil prices break through $93 mark

Oil prices have risen to yet another fresh high due to ongoing concerns over the situation between Turkey and Iraq, and general supply jitters.

In early Asian trading on Monday, US light crude broke through $93 a barrel for the first time, hitting $93.20 before easing back slightly to $93.06.

London's Brent also hit a new high of $89.90 a barrel, up $1.21.

Oil prices have risen on fears Turkey may carry out an extensive ground assault against Kurdish rebels in Iraq.

'Geopolitical tensions'

"What we see is a continuation of the trend that was in place on Friday," said David Moore, a commodity strategist with the Commonwealth Bank of Australia in Sydney.

"Geopolitical tensions, issues regarding tensions between Turkey and Kurdish rebels... those sort of factors have added to oil prices."

Analysts said prices had been further lifted by concerns that a tropical storm in the Caribbean could make its way to the US gulf coast, hitting key American oil facilities.

US light crude broke through the $92 a barrel price for the first time on Friday.

Actor Bloom in clear after crash

British actor Orlando Bloom will not face hit-and-run and drunk-driving charges following a car crash in Hollywood earlier this month.

The official report into the accident said Bloom, 30, was not driving under the influence of alcohol or drugs.

And a spokeswoman for the Los Angeles County District Attorney said "there was insufficient evidence he was trying to get away".

Bloom swerved and hit a parked car as he was being chased by four paparazzi.

Bloom's two passengers were injured and had to be treated in hospital.

Police said a 30-year-old woman in the front seat had cuts and bruises on her face, while a 35-year-old woman in the back seat fractured her neck.

Straight after the accident Bloom - who was uninjured - walked about 20m away from the scene to avoid photographers, but he later returned.

He told police he had been dazed by what had happened.

Bloom spent the night at the Cedars Sinai hospital to be with the second woman, a childhood friend.

The Pirates of the Caribbean star told police he was leaving a nightclub at about 0215 local time (0915 GMT) when a photographer began following him.

Bloom's other films include The Lord of the Rings trilogy and Troy.

Shatner sad over Trek movie snub

William Shatner, who played Captain Kirk in the original Star Trek series, has said he "can't believe" he has not been asked to be in the new movie.

Leonard Nimoy is reprising his role as Vulcan Spock in the film, which is due out in the US on 25 December 2008.

The film chronicles the early days of the Enterprise crew.

"I can't believe it, I'm not in the movie at all. Leonard, God bless his heart, is in, but not me," Shatner told the Associated Press news agency.

"I thought, 'what a decision to make', since it obviously is a decision not to make use of the popularity I have to ensure the movie has good box office. It didn't seem to be a wise business decision."

Since his Star Trek days, the 76-year-old actor has continued to work in film and TV and has had particular success in award-winning series the Practice and Boston Legal.

Captain Kirk - Chris Pine
Older Mr Spock - Leonard Nimoy
Young Mr Spock - Zachary Quinto
Scotty - Simon Pegg
Nero - Eric Bana
Uhura - Zoe Saldana
Chekov - Anton Yelchin
Sulu - John Cho
Leonard 'Bones' McCoy - Karl Urban

Director JJ Abrams announced last summer that Nimoy, 76, would come back as Spock, made famous with his crew mates by the 1960s television show and six Star Trek films.

The director also said Shatner would probably have a part in the film.

But Shatner said he had had a couple of meetings with Abrams, creator of Lost, without anything coming of them.

Little-known actor Chris Pine has been chosen to play the young Captain Kirk in the new film.

Heroes star Zachary Quinto will play the young Spock and Lord of the Rings actor Karl Urban will play Leonard "Bones" McCoy, the Starship Enterprise's medical officer.

The movie will show the crew meeting at the Starfleet Academy and embarking on their first mission.

The Paramount Pictures film is expected to begin shooting in November.

The Abrams film will be Star Trek's 11th big screen outing. The most recent Trek film, Star Trek: Nemesis, was released in 2003.

Triple injury blow hits Liverpool

Liverpool players Xabi Alonso, Fernando Torres and Javier Mascherano all face spells out after suffering injuries in Sunday's 1-1 draw against Arsenal.

Alonso (metatarsal) and Torres (abductor muscle) both had recurrences of the injuries which had kept them out for a month before the game.

Alonso limped off after 68 minutes while Torres was replaced by Peter Crouch at half-time.

Mascherano suffered a foot injury and left with his foot in a medical boot.

Manager Rafael Benitez said: "Alonso has suffered the same injury again, the metatarsal, he felt something go in his foot.

"Torres also has a similar injury, a problem with an abductor muscle. Maybe he is not as bad as before. But he could not work as hard as we wanted, we wanted his pace and it was not available.

"He just was not fit. We talked beforehand and he said he was fine. Now we must wait again, he had been out for some time and we have been pushing to get him back, but he has not been right and he still is not right.

"I will need to check with the doctor to see how the players are in the next two days."

Benitez admitted his side paid the price for the injuries they experienced during the game at Anfield.

"We had problems when we lost Torres and then Alonso. We could not control the midfield then, we also had Mascherano with a foot injury and had lost (Mohamed) Sissoko beforehand with sickness," he said.

"In the end there were too many problems against a really good team."

But he praised the contribution of his captain Steven Gerrard who netted Liverpool's goal after a difficult week.

"Stevie has been playing better and this was a very good performance," he added.

"We had a plan to use the strikers wide and for Stevie to attack through the middle with two holding players behind.

"But when we started losing players through injury, it just became too difficult to get forward.

"What pleased me most was the commitment of the players, our supporters should be happy with the efforts they put in against a very good team like Arsenal.

"Arsenal are playing well, a fantastic team. But it is too early, we are six points behind with a game in hand and there is a long way to go yet."

Red Sox claim World Series glory

Boston Red Sox have won the World Series, beating Colorado Rockies 4-3 in the fourth game for a sweep in the best-of-seven series.

It is the second World Series win in four seasons for the Red Sox after they beat St Louis in 2004. Before that they had to wait 86 years for a win.

Veteran third baseman Mike Lowell hit a solo home run and scored twice for the Sox before becoming a free agent.

It was Boston's seventh Series crown overall since it started in 1903.

Lowell blasted his homer in the seventh innings to give Boston a 3-0 lead.

And after Colorado's Brad Hawpe answered with a solo home run, pinch-hitter Bobby Kielty blasted on the first pitch of the eighth innings to seal the Rockies' fate.

The Rockies refused to give in, however, with Garrett Atkins hitting a two-run homer off Red Sox relief pitcher Hideki Okajima in the eighth innings to pull Colorado back to 4-3.

But then Jonathan Papelbon, Boston's closing reliever, forced the final five outs.

Colorado's Jamey Carroll cracked the ball deep to left field in the ninth innings, but it was caught for the penultimate dismissal before Rockies pinch-hitter Seth Smith followed by striking out, touching off a huge Red Sox celebrations.

It completed a remarkable turn-around in form for Boston who had rallied from a 3-1 deficit against Cleveland in the AL Championship series, before winning seven straight games.

"This team has got a lot of heart," Boston team captain Jason Varitek said afterwards.

"We just beat a very, very good team, an excellent team. We had to do the little things, and we were able to."

The Rockies, who won 21 of 22 games to storm into the post-season and their first World Series, never found their stride after waiting eight days for the Series to begin.

And Rockies manager Clint Hurdle admitted: "Boston executed better than us all four games.

"They deserve all the credit. We just got beat by a better team in this series in every way."

Iraq suicide bomber kills dozens

At least 27 people have been killed in a suicide bomb attack on a police headquarters in the Iraqi city of Baquba, north of Baghdad, police say.

At least 20 people were hurt. Most victims were police recruits.

Correspondents say the attack bears the hallmarks of militants al-Qaeda in Iraq, who often target recruits.

Baquba is the capital of Diyala province, where some local tribes have recently joined US and Iraqi forces to fight the group.

On Sunday, nine tribal leaders from Diyala province were kidnapped while returning from Baghdad.

Violence levels falling

Police said the bomber arrived at the scene of the attack on a bicycle dressed in civilian clothes concealing a suicide belt.

He blew himself up as recruits waited to begin the day's training session.

Baquba's chief of police was killed in a suicide attack last month.

The September attack happened in a mosque compound during reconciliation talks between Sunni and Shia groups.

But the Jim Muir in Baghdad says levels of violence have generally been falling since a US troop surge began in February.

The US was set to hand over the mainly Shia central province of Karbala to Iraqi control on Monday.

It will be the eighth of 18 provinces to be transferred to local control since the US-led invasion in 2003.

Saudi king chides UK on terrorism

King Abdullah says Britain is not doing enough to fight terrorism
Saudi Arabia's King Abdullah has accused Britain of not doing enough to fight international terrorism, which he says could take 20 or 30 years to beat.

He was speaking in an interview ahead of a state visit to the UK - the first by a Saudi monarch for 20 years.

He also said Britain failed to act on information passed by the Saudis which might have averted terrorist attacks.

King Abdullah is expected to arrive in the UK on Monday afternoon; his visit begins formally on Tuesday,

In the BBC interview he said the fight against terrorism needed much more effort by countries such as Britain and that al-Qaeda continued to be a big problem for his country.

BBC world affairs correspondent John Simpson says King Abdullah is annoyed that the rest of the world has largely failed to act on his proposal for a UN clearing house for information about terrorism.

Terror 'information'

Speaking through an interpreter, the Saudi monarch said he believed most countries were not taking the issue seriously, "including, unfortunately, Great Britain".

"We have sent information to Great Britain before the terrorist attacks in Britain but unfortunately no action was taken. And it may have been able to maybe avert the tragedy."

The Saudi leadership maintains that it passed the UK information that might have averted the London bombings of 2005 if it had been acted on.

BBC security correspondent Frank Gardner says Whitehall officials have strenuously denied this, and a subsequent investigation by Parliament's Intelligence and Security Committee (ISC) found no evidence of any intelligence passed on by the Saudis that could have prevented the 7 July 2005 bombings.

The king's visit has provoked controversy over Britain's relationship with Saudi Arabia.

A demonstration is planned outside the Saudi embassy in London later in the week in protest at the country's human rights record.

And acting Liberal Democrat leader Vince Cable has announced he is boycotting the visit, citing the corruption scandal over Al Yamamah arms deal, and the Saudis' human rights record.

Kirchner claims Argentine victory

Cristina Fernandez de Kirchner has claimed victory in Argentina's presidential elections.

Partial official results, based on two-thirds of ballots being counted, gave her 43.6% of the vote.

Her nearest rival, former lawmaker Elisa Carrio, has admitted defeat with 22.6% of the vote.

If confirmed by the full count, Mrs Kirchner will succeed her husband Nestor Kirchner and become Argentina's first elected female president.

"We've won by a wide margin," she told supporters in a speech at her campaign headquarters at a hotel in Buenos Aires.

27m eligible voters
14 candidates running for president
Winner needs 45%, or 40% plus 10-point lead
If needed, second round on 25 November
New president to be sworn in on 10 December

As her husband, the outgoing president, stood at her side, she said she would build on his work.

"We have repositioned the country, fought poverty and unemployment, all these tragedies that have hit Argentines," she said, referring to the country's recovery from the 2001 economic crash.

Exit polls showed Ms Carrio, who ran on an anti-corruption platform, took one out of four votes nationwide and did well with middle and upper-class voters in urban areas.

Ex-Economy Minister Roberto Lavagna won 19% of the vote, partial results showed.

Mrs Kirchner needs more than 45% of the full vote, or 40% with a 10 point lead over the next nearest candidate, to win the presidency without facing a second round of voting.

The partial count gives her an apparently unbeatable lead, with double the votes of her rivals.

Mr Kirchner has governed for the past four years, but surprised the nation by deciding not to seek a fresh term.

Polling was extended by one hour in some parts of the country to 1900 local time (2200 GMT) to accommodate a late rush of voters.

Besides a new president, voters were choosing eight provincial governors, a third of the Senate and about half of the Chamber of Deputies.

Some 27 million people were eligible to vote.

Economy and crime

The economy and rising crime have been the two main issues in campaigning.

Mr Kirchner has overseen a return to stability and some prosperity since the economy collapsed six years ago, plunging thousands into poverty.

But there are fears over how strong the economy really is and general scepticism over official statistics suggesting inflation is under control.

Mrs Kirchner's critics have attacked her for failing to outline exactly what her policies are, but voters said the opposition had failed to offer any real alternative.

Surprise candidate

Just a few months ago, Mr Kirchner was riding high in the opinion polls and looked set to continue for a second term.

The husband wife political swap reeks of corruption and nepotism
Brian, New York, USA

However, it was announced in July that his wife Cristina, senator for Buenos Aires province, would stand in his place. No explanation was given.

As candidate for the governing Front for Victory, she has promised to continue her husband's centre-left policies.

As well as facing comparisons with Eva Peron, Argentina's legendary former first lady, Mrs Kirchner has been compared to former US First Lady Hillary Clinton, who is also a lawyer and senator seeking to become the first elected female president of her country.

"I don't want to be compared with Hillary Clinton or with Evita Peron, or with anybody," she said recently.

"There's nothing better than being yourself."