Allies of the man who the international community says won Ivory Coast’s disputed presidential election called Sunday for a general strike that would last until the incumbent hanging on to power concedes defeat and leaves office.
It was the latest form of pressure to force Laurent Gbagbo from the presidency nearly a month after the United Nations said his political rival, Alassane Ouattara, won the runoff vote. Gbagbo has refused to leave despite international calls for his ouster, and West African leaders say they now will remove him by force if he fails to go.
Djedje Mady, the head of Ouattara’s electoral coalition, said it called on “all Ivorians and those who live in Ivory Coast and believe in peace and justice to cease all their activities on Monday, December 27, 2010, until Laurent Gbagbo leaves power.”
The U.N. has said at least 173 people have been killed in violence over the vote, heightening fears that the country once divided in two could return to civil war. The toll is believed to be much higher, though, as the U.N. mission has been blocked from investigating other reports including an allegation of a mass grave.
On Sunday, the interior minister appointed by Gbagbo accused the U.N. of only telling half the story.
“The government of Ivory Coast denounces the lack of objectivity and balance in the procedures carried out by the U.N. Human Rights Council,” said Emile Guirieoulou, the interior minister. He said that at least 36 of the victims were police or other security forces who “were targeted by gunfire coming from the protesters.”
Guirieoulou also alleged that the thousands of refugees arriving in Liberia had fled violence perpetrated by rebels who support Ouattara. The U.N. refugee agency says at least 14,000 people have fled the violence and political chaos in Ivory Coast, some walking for up to four days with little food to reach neighboring Liberia. At least one child drowned while trying to cross a river.
Gbagbo has been in power since 2000 and had already overstayed his mandate by five years when the long-delayed presidential election was finally held in October. The vote was intended to help reunify the country, which was divided by the 2002-2003 civil war into a rebel-controlled north and a loyalist south.
Instead, the election has renewed divisions that threaten to plunge the country back into civil war. While Ivory Coast was officially reunited in a 2007 peace deal, Ouattara still draws his support from the northern half of the country, where residents feel they are often treated as foreigners within their own country by southerners.
The U.N. certified Ouattara as the winner of the Nov. 28 runoff vote, but a Gbagbo ally overturned those results by throwing out half a million ballots from Ouattara strongholds in the north. The move angered people who had waited for years as officials settled who would be allowed to vote in the long-delayed election, differentiating between Ivorians with roots in neighboring countries and foreigners.
For nearly a month, Gbagbo has now defied calls from the U.N., United States, former colonizer France, African Union and European Union to step aside and hand over power to Ouattara.
West African leaders from the regional bloc ECOWAS late Friday threatened a military intervention if Gbagbo does not step down. On Sunday, Sierra Leone’s information ministry said that three leaders from the region would pay him a visit.
“In the spirit of brotherliness in Africa, three presidents have been nominated by their colleagues to confront Mr. Gbagbo in Abidjan to encourage him to leave office without delay,” the ministry said. “The three presidents can fly back with Mr. Gbagbo, as all ECOWAS countries are prepared to grant him asylum.”
Gbagbo has shown few signs that he plans to go, though, and his security forces have been accused of being behind hundreds of arrests, and dozens of cases of disappearance and torture in recent weeks.
In recent days, the United Nations has expressed alarm about the actions of men who are believed to be Gbagbo loyalists. The world body reported Thursday that heavily armed forces allied with Gbagbo, who were joined by masked men with rocket launchers, were preventing people from getting to the village of N’Dotre, where the global body said “allegations point to the existence of a mass grave.”
While the threat of a military intervention creates pressure on Gbagbo, Africa security analyst Peter Pham said there are “serious doubts that ECOWAS has the wherewithal to carry it out.”
“None of the ECOWAS countries has the type of special operations forces capable of a ‘decapitation strike’ to remove the regime leadership,” said Pham, who is the senior vice president of the National Committee on American Foreign Policy in New York. “That leaves the rather unpalatable option of mounting a full-scale invasion of the sort that would inevitably involve urban fighting and civilian casualties.”
Pham also said there is “little chance” that the U.N. would allow its peacekeepers to get involved in such an effort. “The precedent would make it very difficult to get future agreement for deployment of such missions by host countries,” he said.
Diplomatic pressure and sanctions have left Gbagbo increasingly isolated, though he has been able to maintain his rule for nearly a month since the disputed vote because he still has the loyalty of security forces and the country’s military.
Even that, though, may disappear if he runs out of money to pay them. Gbagbo’s access to the state funds used to pay soldiers and civil servants has been cut off and only Ouattara’s representatives now have access to the state coffers.
Senior diplomatic sources, speaking on condition of anonymity because of the sensitivity of the issue, say that Gbagbo only has enough reserves to run the country for three months.
Bank of England policy maker Adam Posen said policy makers shouldn’t “overreact” to inflation, which may slow below 1 percent in two years.
The bank’s Monetary Policy Committee “would only make things worse by making policy looking in the rear-view mirror, trying to make up for past mistakes,” Posen said in a speech today in Billericay, England. “If we allow for even just some exchange-rate pressure upwards on prices over this period as well, underlying U.K. inflation has stayed well below target.”
U.K. inflation has exceeded the government’s 3 percent limit for nine months, and an increase in value-added tax on sales in January may add to prices in 2011. Posen said Britain’s economy still has a “large” amount of slack in the aftermath of the recession and the largest government budget squeeze since World War II will slow inflation.
“Neither our forecast nor our policy going forward should overreact reflexively to that above-target inflation, even though it will persist for the next few months after the coming VAT rise,” Posen said.
Posen’s analysis leads him “to a forecast for U.K. inflation well below that of the November Inflation Report, and more importantly a forecast that at the target horizon of two- plus years, annual CPI inflation will be significantly below target (perhaps by 1 percent or more),” he said.
Price Expectations
Consumer prices rose 3.3 percent from a year earlier in November, the highest since May. Consumers’ inflation expectations reached a two-year high in November in a GfK NOP Ltd. survey for the Bank of England released today.
The large amount of slack in the economy will still curb consumer-price gains, Posen said.
“Financial crises in advanced economies do not destroy enough productive capacity to offset the disinflationary fall in demand,” he said. “For the U.K. today, this would suggest that a sizable output gap still exists, exerting downward pressure on inflation, all else equal.”
The bank’s nine-member committee kept its bond-purchase plan unchanged at 200 billion pounds ($312 billion) this month and held its benchmark interest rate at a record low of 0.5 percent. Minutes of the central bank’s Nov. 4 decision showed policy makers split three ways, with Andrew Sentance calling for higher rates to combat inflation and Posen pushing for more stimulus to sustain the recovery. The rest voted for no change.
Minutes of this month’s decision are due Dec. 22.
Oil, gold and silver prices started out the session soaring for a second day in a row Tuesday. But commodities took a breather as the euro’s upward push lost steam.
The European currency had been getting a boost from signs that European debt problems may be easing: The Irish parliament is close to approving an emergency budget that will get that country back on track. And European finance ministers say they have sufficient reserves to help Spain and Portugal if those countries need it.
Earlier in the session, the U.S. dollar dropped 0.6% against the euro. But the euro pulled back in afternoon trading, falling 0.3% versus the greenback. Commodities, including oil, gold and silver, are priced in dollars, so a weaker greenback boosts prices.
Crude prices reversed direction as well, slipping 69 cents to settle at $88.69.
Prices had jumped 1.5% in the morning and crossed $90 per barrel for the first time since October 2008. The big gains came as stocks rallied, following President Obama’s compromise with Republican lawmakers to extend the Bush-era tax cuts for two years. Crude has been on the rise since Nov. 23, gaining more than 10% during the two-week period.
"It looks like we’re just taking a breather from a pretty good run," said James Williams, president and energy economist at WTRG Economics. "There’s some profit-taking, as well as people saying maybe this agreement on the tax cuts isn’t as rosy as we thought and folks considering whether $90 crude is really sustainable in a weak economy — and of course we still have lots of concerns about Europe."
Gold also eased, slipping $7.10 to settle at $1,409 after surging to record levels above $1,432 an ounce earlier in the session.
Meanwhile, silver closed off session highs. The precious metal finished 4 cents higher after surging to fresh 30-year highs of $30.75 per ounce in earlier trading.
Facebook Inc. has reportedly acquired online content publishing software start-up Chai Labs Inc.
The All Things Digital blog of the Wall Street Journal reported the deal on Sunday, saying it is likely to be in the $10 million range and is most likely a talent buy rather than a new product play by the Palo Alto social networking company.
Mountain View-based Chai Labs was founded by Gokul Rajaram, who is a former Google Inc. (NASDAQ:GOOG) AdSense executive.
Regulatory filings show that it raised $1.1 million in funding last year and $1.3 million in 2008. Among the advisers list on its website are Netscape Communications Corp. founder Marc Andreessen, LinkedIn Inc. founder Reid Hoffman and Excite co-founder Joe Kraus.
Chai Labs' technology helps publishers and journalists launch content websites.
Maintenance and procedural problems at a Gilead Sciences Inc. manufacturing and distribution facility could land the HIV drug maker a warning letter from the Food and Drug Administration.
In a Securities and Exchange Commission filing Monday, Foster City-based Gilead (NASDAQ: GILD) said a routine FDA inspection of its San Dimas facility in February raised concerns from the agency about maintenance of aseptic processing conditions in the manufacturing area for its AmBisome anti-fungal product. The agency also cited environmental maintenance issues in the warehouse, batch sampling and the timeliness of completion of annual product quality reports.
Gilead, which said it has addressed all of the FDA’s concerns, learned in May that the agency “may be considering” issuing a warning letter as a result of the inspection, according to the SEC filing guaranteed payday loan.
A warning letter could hurt Gilead’s ability to receive export certificates or approvals of regulatory applications associated with “the products at issue,” the company said, and “decrease our revenues and harm our business.”
Gilead makes AmBisome and Cayston, a recently approved inhaled drug to treat cystic fibrosis symptoms, at San Dimas. It also fills and finishes Macugen, an injectable drug marketed by Eyetech Inc. to treat age-related macular degeneration, at the facility.
AmBisome had sales of $155.2 million in the first half, Gilead’s largest-selling drug outside of its antiviral products.
Sales may have risen only slightly on Black Friday as U.S. shoppers sought deals on electronics, toys and clothes, but retailers appeared to have been better-prepared to protect margins against tepid results.
At the start of the U.S. holiday shopping season on Friday and through the weekend, both discount chains like Wal-Mart Stores Inc and higher-end stores like Saks Inc seemed to have lured more spending and avoided steep discounts, retail consultants and executives said on Sunday.
Specialty apparel chains, however, may face another tough year as they relied on heavy promotions to draw shoppers.
“Going through the mall on Friday, the stores that had not been doing as well — AnnTaylor, Limited, Gap — were very aggressively promoting,” said Jeff Edelman, director of retail and consumer advisory services at RSM McGladrey.
“Saks, which had low inventories, Bloomingdale’s, which had low inventories, were maybe 25 percent off or 30 percent off, and it was on selected items,” he said. “It’s not as if the entire store was on sale as it was last year.”
Edelman expects holiday sales to be flat this year, but he said he expected profits for most retailers to be higher.
For a graphic on U.S. holiday sales trends, click here
For a Reuters Insider segment on holiday sales, click on link.reuters.com/wuj63g
Data released on Saturday showed that sales rose a scant 0.5 percent on Black Friday, the day after Thanksgiving. Shoppers interviewed across the country said they were lured by bargains, but many said they would stick to their budgets and avoid purchases if they could not find a good deal.
Bill Taubman of Taubman Centers Inc said that anecdotally in his 24 malls, it appeared that traffic and spending rose in the high single-digit to low double-digit percentage range on Friday. On Saturday, business slowed, and it appeared to rise in the mid to low single-digit range.
“You’re seeing a little bit of a barbell — the low end of stores are clearly recovering and the high-end stores are also recovering against a low base,” he said.
That does not mean consumer spending is rebounding to levels in 2007, before a global financial crisis and recession.
“You’re clearly down on a two-year run rate,” Taubman said. But he added, “margins are going to be extremely good because (retailers) have been careful about what they bought.”
ShopperTrak said retail sales rose to $10.66 billion on Black Friday, which often is the single-busiest shopping day of the holiday season and can set the tone for the weeks leading up to Christmas on December 25.
In 2008, Black Friday sales measured by ShopperTrak rose 3 percent compared with the prior year’s Black Friday. Last year’s entire holiday season marked the worst performance in nearly 40 years. The firm stuck by its forecast for total holiday sales to rise 1.6 percent this year compared with 2008.
Gordon Brown and David Cameron will offer business leaders rival views of how to return the U.K. to economic growth after a poll showed the gap between their parties at its narrowest this year.
The prime minister and his Conservative Party rival will both address the Confederation of British Industry’s annual conference, starting at about 11 a.m. today in London. While Cameron said yesterday that the government needs to cut spending to avoid losing the confidence of bond investors, Brown will argue that such a course would put any recovery in danger.
“Choking off recovery by turning off the life support for our economies prematurely would be fatal to British jobs, British growth and British prosperity for years,” Brown will say, according to extracts released in advance by his office. “That’s why we will continue with our current plans to support our economy until the private sector recovery is established.”
With an election six months away at most and the country facing the biggest budget deficit since World War II, the question of when to cut spending is dominating political debate. Last month, the Conservatives pledged to freeze most public sector pay and make voters wait a year longer before they retire. Yesterday, an Ipsos-Mori poll showed their lead at six percent, putting them on course for a minority government.
Cameron told the BBC yesterday he was “working night and day” for a majority government pay day loans. “We’ve got to take some tough and difficult decisions and I’d rather have a government that could do that,” he said on the Andrew Marr show.
‘Emergency Budget’
Cameron pledged to deliver an “emergency budget” which “goes for growth” within 50 days of winning the election. The Organization for Economic Cooperation and Development last week urged Britain to do more to mend public finances as data showed the deficit in October was the worst for the month since records began in 1993.
While Brown will repeat the suggestion of a Tobin tax on banking that he aired at the Group of 20 finance ministers’ meeting earlier this month, he will say the idea could only work if adopted globally. The U.S. has rejected the proposal.
Brown will still tell bankers they must expect to pay for the costs of rescuing them.
“Make no mistake, we must agree international action to redress the balance of risk and reward between the public and the financial sector so that it reflects fully the potential damage of financial failure and the cost of preventing it,” the prime minister will say.
Home prices rose for the fourth month in a row during August and suffered a smaller-than-expected annual drop, according to a report issued Tuesday.
Prices in the S&P Case-Shiller Home Price index of 20 cities rose a non-seasonally adjusted 1.2% in August. It was the fourth consecutive monthly increase and followed a 1.6% gain in July.
Prices were down 11.3% versus August 2008, but that drop was less severe than expected. Analysts surveyed by Briefing.com had forecast an 11.9% year-over-year drop.
"Broadly speaking, the rate of annual decline in home price values continues to improve" said David Blitzer, chairman of Standard & Poor’s index committee.
While many U.S. markets remain down versus this time last year, the relative rate of decline "has shown some real improvement," Blitzer added.
Home prices improved on an annual basis in 19 of the 20 major metropolitan markets in the survey.
State by state. In California, home prices have recovered notably from depressed levels in recent months, according to the report.
Home prices rose 2.8% in San Francisco during August, while San Diego prices were up 2.5% and Los Angeles gained 1.8% in the month.
Minneapolis had the biggest increase, with home prices rising 3.2% from July to August.
But prices continued to slide in areas that have been hit hard by foreclosures payday advance low fees. Prices dropped 0.5% in Cleveland and 0.3% in Las Vegas during August.
A shaky recovery. Overall, the housing market has been stabilizing as low home prices and attractive mortgage rates, as well as government tax credits, have revived anemic home sales.
However, the market remains hampered by unemployment, which rose to a 26-year high last month. And real estate analysts warn that the expiration of a popular new homebuyer tax credit next month could stifle the rebound in home sales.
The improvement in home prices could also be hindered by a "wall of supply" coming to market this spring from private sellers and foreclosures, warned Ian Shepherdson, chief U.S. economist at High Frequency Economics.
Given the long-term challenges facing the housing market, the outlook for home prices remains grim.
Home values are predicted to drop in 342 out of 381 markets during the next year, according to a recent study by financial information and analysis firm Fiserv.
Fiserv expects the national median home price to drop 11.3% by June 30, 2010.
There will be no cost-of-living increase for 57 million Social Security beneficiaries next year because consumer prices have fallen, the Social Security Administration announced on Thursday.
It marks the first time that Social Security benefits have not been increased year over year since the cost-of-living adjustment was put into effect in 1975.
To help counterbalance the hit, President Obama is calling on Congress to send another $250 relief payment to seniors and other Americans to stem the economic strain.
"Even as we seek to bring about recovery, we must act on behalf of those hardest hit by this recession," Obama said in a statement Wednesday. "That is why I am announcing my support for an additional $250 in emergency recovery assistance to seniors, veterans, and people with disabilities to help them make it through these difficult times."
Last year, Social Security beneficiaries got a 5.8% cost-of-living adjustment, the largest since 1982, largely because of the spike in energy prices.
"This year, in light of the human need, we need to support President Obama’s call for us to make another $250 recovery payment for 57 million Americans," said Commissioner of Social Security Michael J. Astrue in a written statement.
Since there will be no COLA for benefits, the law also prohibits the Social Security Administration from increasing the maximum amount of earnings subject to the Social Security tax. This year and next, the first $106,800 of a worker’s earnings is subject to the 12.4% Social Security tax. Workers typically pay half of that and their employers pay the other half.
It’s still not clear yet what if any changes will be made to seniors’ Medicare Part B premiums for hospital care next year. The Social Security Administration said in its announcement that if there is an increase that a "hold harmless" provision in the law would protect 93% of Social Security beneficiaries from the increase.
New emergency payment similar to COLA
Obama’s proposed $250 payment is roughly equal to a 2% increase in benefits for the average Social Security beneficiary.
Congress approved a similar payment as part of the $787 billion economic recovery act enacted in February.
As with the first $250 recovery payment, the second one would be exempt from income tax, a senior administration official said in a call with reporters on Wednesday.
If approved by Congress, the payments would be sent out in 2010, most likely in the first half. "It wouldn’t be late in 2010," the administration official said.
The measure would cost $13 billion over 10 years, according to White House estimates.
The call for increased benefits for seniors is one of several proposals to expand stimulus benefits. Lawmakers are also considering extending unemployment benefits and the homebuyer tax credit, both of which were included in the economic stimulus bill passed in February.
In addition to the $250 emergency payments, the White House has also publicly supported the extension of jobless benefits as well as the extension of subsidies to help the unemployed purchase health insurance under Cobra. The president has not said yet whether he supports the expansion of the homebuyer tax credit.
Where the money will come from
The original $250 relief payment was paid out of general revenue. That would likely be the case for the second payment as well.
Obama specified that he "is committed to ensuring that the $13 billion cost of the proposal does not reduce the solvency of Social Security or other social insurance programs."
That means the $13 billion wouldn’t be deducted — on the balance sheet anyway — from the payroll taxes collected to pay for Social Security.
But it also won’t be paid for by reducing spending or raising revenue in other parts of the budget. Typically economic stimulus is exempt from rules requiring that new measures be paid for.
So if the proposal passes, it will add to the country’s annual deficit, which in 2009 was estimated by the Congressional Budget Office to have hit a record high of $1.4 trillion.
Chicago lost its bid to host the 2016 Summer Olympics Friday to Rio de Janeiro, Brazil.
The news was announced by Jacques Rogge, president of the International Olympic Committee, at a meeting in Copenhagen, Denmark.
"Like in every competition, there can be only one winner," said Rogge, just prior to announcing Rio as the host city.
With help from hometown heroes like the Obamas, the Windy City was aggressively lobbying to host the games. The upside to the rejection is that Chicago possibly saved money, as making the Olympics profitable would not have been an easy win.
Chicago was competing with Tokyo, Madrid, Spain and Rio de Janeiro in wooing the International Olympic Committee in Copenhagen.
The IOC also rejected Tokyo and Madrid Friday.
Chicago 2016, the organization leading the effort to host the games, had projected a cost of $3.8 billion, including a "rainy day" fund of $450 million in case of unforeseen increases if the city won the bid.
But there was good reason to be skeptical of that projection, said Robert Livingstone, producer of GamesBids.com and a leading expert in the Olympic selection process. Host cities routinely overrun their Olympic budgets, he said.
"It’s going to be more expensive than we think it’s going to be, because it typically is," Livingstone said, before the decision was made Friday. "I think every [host] city is going to lose money. It’s not an efficient event."
The bidding process alone cost Chicago about $100 million, Livingstone estimated.
An argument often made by host city advocates is that presenting the international spectacle is good for a local economy. But such "trickle-down effects," like benefits to local businesses, are "almost impossible to measure," Livingstone said.
"I think a lot of people look at the Olympics, and they try to justify it by how much money it adds to the economy," said Livingstone. "[But] if you’re in this to make money and improve your economy, you’re in it for the wrong reasons."
A Chicago 2016 spokesman, who asked not be named, had stood by the $3.8 billion projection. "Our numbers are completely feasible thanks to the infrastructure already in place, the number of venues already built and the temporary nature of the majority of those we’re planning to build," he wrote, in an e-mail prior to the IOC rejection.
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