UN peacekeeping chief arrives in Chad to discuss cooperation with government

The top United Nations peacekeeping official has arrived in Chad accompanied by a five-member team to discuss cooperation between the Government and the UN peacekeeping mission in Chad and the Central African Republic (CAR).

A Biography of Opera Singer Lillian (Evans) Evanti (1891-1967)

Evans, Annie/Evanti, Lillian (1891-1967)

Lillian (Evans) Evanti, one of the first African American women to become an internationally prominent opera performer, was born in Washington D.C. in 1891. Evanti was born into a prominent Washington, D.C. family. Her father, Wilson Evans, was a medical doctor and teacher in the city. He was the founder of Armstrong Technical High School and served many years as its principal. Anne Brooks, Evanti’s mother, taught music in the public school system of Washington D.C.

Evanti received her education from Armstrong Technical High School and graduated from Howard University in 1917 with her bachelor’s degree in music. A gifted student and performer, she was able to speak and sing in five different languages. The following year she and Roy W. Tibbs, her Howard University music professor, married and had a son, Thurlow Tibbs.

Combining her maiden and married names into the stage name, Evanti, a lyric soprano, began singing professionally in 1918. Her career progressed slowly until she moved to France in 1925 where she became the first African American to sing with a European opera company. From France she traveled around Europe and on occasion returned to the United States to perform.

During her travels she gave radio performances, sang in a variety of operas and in 1932 was given a chance to audition for the New York Metropolitan Opera. Evanti was not asked to join the Company and for some time blamed the decision on racial discrimination.

Despite the setback Evanti remained popular, performing in Latin America as well as Europe. She gave a special command performance for President Franklin D. Roosevelt and his wife, Eleanor in 1934. She also performed concerts for the armed forces during World War II.

In 1941 Evanti and Mary Cardwell Dawson created The National Negro Opera Company in Pittsburgh to provide a venue for African American performers. A series of Company performances of La Traviata, where Evanti sang the part of Violetta, was hugely successful and attracted over 12,000 people. Over her career Evanti performed in twenty four operas.

Near the end of her life Evanti returned to Washington, D.C. where she coached and gave soprano voice lessons. Lillian Evans Evanti died on December 6, 1967 in Washington D.C.

Sources:
Rayford W. Logan and Michael R. Winston, eds., Dictionary of American Negro Biography (New York: W. W. Norton, 1982); Carl Van Vechten, “Lillian Evanti.” Extravagant Crowd, http://beinecke.library.yale.edu/cvvpw/gallery/evanti.html

Global Economic Crisis Update: Unemployment Claims Rise in US; GreeceCrisis Threatens Euro Zone; Stocks Risk Another Triple-Digit Fall

Stocks Risk Third Triple-Digit Fall This Month

By KRISTINA PETERSON And PETER A. MCKAY
Wall Street Journal

NEW YORK—U.S. stocks dropped broadly as a surprise jump in jobless claims cast doubt over the economic recovery and concerns deepened over the stability of euro zone debt.

The Dow Jones Industrial Average was recently down 161, or 1.6%, at 10209, with all of its 30 components in the red. The Dow’s worst performing component was Coca-Cola, which sank 4.2%, after agreeing to buy most of its largest bottler, Coca-Cola Enterprises, in a deal estimated to be worth between $12 billion and $13 billion.

Industrial machinery stocks slipped as investors fled the cyclical stocks tied closest to the economy’s performance. Caterpillar dropped 2.2%, while industrial crane maker Terex, which isn’t a Dow component, fell 2.4%.

The Dow’s financial components also sank after Federal Reserve Chairman Ben Bernanke told a U.S. Congressional Senate panel the central bank was looking into derivative transactions that U.S. banks, including Goldman Sachs Group, made with Greece, amid concerns that they might have been used to help the government hide its debt. Goldman Sachs, which isn’t a Dow component, fell 2.1%. Bank of America dropped 1.2%.

J.P. Morgan’s slide steepened after its investment banking chief said the bank expects a return on equity of 17% this year and doesn’t expect to make changes due to regulations. Its shares fell 2.6%.

Both the Nasdaq Composite and the Standard & Poor’s 500-share index slid 1.4%. Economically sensitive industrials and technology stocks led the tumble.

The Dow industrials’ early losses put it on pace for its third triple-digit point decline this month and its worst one-day drop since a 268-point slide on Feb. 4 as investors registered deep fears about Greece’s heavy debt load and how it might affect Europe more broadly.

“The focus has definitely turned back towards the problems in Greece,” said Mark Turner, head of sales trading at Instinet. “That, along with the economic data this morning, has certainly caused the selloff in the market.”

The Labor Department said weekly jobless claims unexpectedly surged last week by 22,000 to 496,000, their highest level in over three months. Economists had expected initial claims to decrease by 13,000.

Even the four-week average of claims, which are viewed as a more dependable barometer of the job market than volatile week-to-week readings, shook investors.

“The fact that the moving average has turned higher is a cause for near-term concerns,” said Brian Belski, chief investment strategist at Oppenheimer Asset Management. “Investors are quite jittery, quite reactive. Many are worried that the majority of the recovery is already priced into the market,” thanks to big gains in stocks in 2009.

The four-week average of claims rose by 6,000 in Thursday’s report, to a total of 473,750, up from the previous week’s revised average 467,750.

A separate report from the Commerce Department showing that durable-goods demand rose 3.0%, or twice what was expected, did little to boost the market.

Concerns over the euro zone intensified after Standard & Poor’s said Wednesday that Greece was on the verge of junk status within a month, while Moody’s said it would keep the rating unchanged if promised spending cuts by the government are enacted. Greece now plans to issue a 10-year bond next week, after the government announces a new austerity package worth between €2 billion and €2.5 billion ($2.70 billion and $3.37 billion), people familiar with the situation said.

Among stocks in focus, Palm tumbled 14% after the company acknowledged its new smart phones aren’t selling as well as hoped, which will leave its revenue for the year “well below” what the struggling company had forecast.

Dr Pepper Snapple Group jumped 8.1% after reporting slightly better-than-expected fourth-quarter earnings and predicted 2010 sales would rise 3 to 5%. Grocery chain Safeway slid 2.3% after swinging to a fiscal fourth-quarter loss on $1.97 billion of goodwill write-downs as the grocery-store company’s sales remained weak.

Dynegy’s fourth-quarter loss widened on asset sales and mark-to-market losses, as the electricity generator reported a steeper-than-expected decline in revenue. Shares of Dynegy tumbled 4.2%.

In other markets, the dollar weakened against the yen, but strengthened against the euro. Treasurys climbed, with the 10-year note up 3/8 to yield 3.648%. Crude-oil prices slid to just above $78 per barrel and gold futures also fell.

—David Benoit contributed to this article.
Write to Kristina Peterson at kristina.peterson@dowjones.com

Fed probes Goldman role in Greek crisis

By Alan Rappeport in Washington
February 25 2010 15:35

Ben Bernanke, chairman of the Federal Reserve, said on Thursday that the US central bank was looking into Goldman Sachs’ role in creating credit default swaps for Greece.

The remarks came in response to a question from Chris Dodd, the Democrat senator from Connecticut, in his second day of testimony before congress.

“We are looking into a number of questions relating to Goldman Sachs and other companies and their arrangements with Greece,” Mr Bernanke said, noting that the Securities and Exchange Commission was also interested in the issue.

Mr Bernanke called any financial instruments that destabilise a company or country “counterproductive”.

Goldman Sachs has come under fire this month from European regulators for structuring transactions that helped Greece to trim its debt figures after it joined the European monetary union in 2001. Goldman has said that the the swaps played a minimal role in Greece’s current financial crisis. However, a senior Goldman banker said it ”could have and should have” been more transparent in the transactions.

Copyright The Financial Times Limited 2010.

Euro tumbles amid flight to havens

By Jamie Chisholm, Global Markets Commentator
February 25 2010 15:40

Worries about the Greek debt crisis and concerns the US labour market is deteriorating saw investors flee riskier assets on Thursday.

The FTSE World equity index tumbled 1.6 per cent, and oil led the commodity complex lower as traders pared back bets on global economic growth. The yen soared and the dollar challenged recent highs as investors sought perceived havens such as US Treasuries.

The nervousness had its genesis in the Asian session when news that Moody’s was joining Standard and Poor’s in considering to downgrade Greek sovereign debt caused the yen to soar against the euro, pushing the single currency down against a swathe of major crosses.

Investors have been extremely sensitive of late to moves in major currencies – particularly the euro/dollar cross, which they have used as a proxy for global risk appetite.

“The risk-on, risk-off trade is being driven largely by euro-area specific factors, ie the volatility surrounding sovereign credit ratings. We expect these concerns to remain a weight on the euro/US dollar in the near term,” said David Forrester, currency economist at Barclays Capital.

The Market Eye

Amid all the worry about the euro, it is interesting to note that sterling is down 0.7 per cent today to 88.41p against the ailing single currency. It is also off 0.9 per cent at $1.5275, having broken through but then regained a technical support level seen at $1.5272. News that business investment in the UK fell in the fourth quarter of 2009 at a record annual rate of 24.1 per cent has added to the pressure on the pound, which is also at a four-month low on a trade-weighted basis.

It had been thought that comments from Bank of England governor Mervyn King, which implied quantitative easing could be resuscitated if economic conditions don’t improve, were also weighing on sterling. However, a Reuters poll shows that only 10 per cent of economists surveyed expected the Bank to revive QE.

This is intriguing, because the return of QE was also being used to partly explain the more than 20 basis point fall in 10-year gilt yields this week and the contraction of the spread with Bunds. Perhaps the traders are paying no attention to the economists. Surely not!

Sentiment took a further knock after US weekly jobless claims came in much higher than expected, increasing fears that the US economy was facing a tepid, jobless recovery, at best.

Wall Street slumped nearly 1.5 per cent as the opening bell rang, with traders also keeping a wary eye on a second day of testimony from Federal Reserve chairman Ben Bernanke and a Whitehouse healthcare summit.

The Vix index, a gauge of expected equity market volatility, jumped 11 per cent to 22.41.

● The yen’s gains were broad-based as selling of the euro by Japanese exporters, and the worries over Greece, pushed the yen through stop-loss orders, exacerbating the move. Haven flows following the US data pushed the yen higher still and it breached the Y120 level, below which lurked a further batch of “stops”, said traders.

It was later trading up 1.3 per cent at Y120.30 against the single currency and up 1.2 per cent to Y89.02 versus the dollar.

The buck rose 0.2 per cent to $1.3508 versus the euro and climbed 0.2 per cent on a trade-weighted basis, just shy of a recent eight-month peak.

“The euro has tried to strengthen this week, but keeps getting knocked back by deteriorating news surrounding Greece,” said strategists at Royal Bank of Scotland.

“It is trading like the market is well short, which of course creates the risk that if something breaks positively for Greece, there will be a short-covering rally. However, it is far from clear that either Greece or the euro will catch a break any time soon”.

● Greek sovereign debt came under pressure, with the yield on the 10-year note rising 18 basis points to 6.67 per cent. Ten-year German Bund yields fell 1 basis point to 3.12 per cent, pushing the Greek/German yield spread to 355 basis point. Greek credit default swaps, which track the cost of protecting against a debt default, rose 4 basis points to 386 basis points.

Supposed haven government bonds were in demand. The yield on US 10-year notes fell 5 basis points to 3.64 per cent. The Treasury will auction $32bn of seven-year notes later.

“After a rather sluggish US 5-year Treasury sale yesterday, the question will be what concession will be needed to achieve a better result today,” asked Marc Ostwald at Monument Securities.

● Asian stock markets turned tail as traders saw the “haven” proxies – the yen, and on the day to a lesser extent, the dollar – start to gain ground and the US futures tumble. The FTSE Asia-Pacific index lost 0.7 per cent, with the Nikkei 225 in Tokyo off 1 per cent. The Hang Seng in Hong Kong fell 0.3 per cent but the Shanghai Composite was typically maverick and gained 1.3 per cent, a one-month closing high.

European bourses faltered in the wake of the heightened risk aversion. The FTSE Eurofirst 300 fell 1.5 per cent and London’s FTSE 100 slipped 1.2 per cent after a bank-inspired rally dissolved and miners fell back on weakness in commodities. Turkey’s ISE National 100 fell 2.6 per cent as investors fretted about tensions between the government and the military.

● The stronger dollar and concerns about technical weakness saw more selling in gold. The bullion dropped 0.3 per cent to $1,094. Oil succumbed to the risk aversion sweeping bourses, slumping 2.4 per cent to $78.14.

The Reuters-Jefferies CRB index, a commodities basket, fell 1.5 per cent.

Copyright The Financial Times Limited 2010. Print a single copy of this article for personal use. Contact us if you wish to print more to distribute to others.

US jobless claims show surprise rise

By Alan Rappeport in Washington
February 25 2010 14:10

The number of US workers making new claims for jobless benefits recorded a surprising increase last week, offering more evidence that the labour market’s recovery will be rocky.

Initial jobless claims rose by 22,000 to 496,000, the labour department said on Thursday. Economists were expecting jobless claims to fall during the week.

The less volatile, four-week average of claims rose, climbing by 6,000 to 473,750 while those continuing to claim unemployment benefits also rose by 6,000 to 4.61m.

The disappointing jobless figures follow a sharp drop in consumer confidence earlier this week, which was pulled back by growing anxiety about the labour market.

Some relief could be in sight, however, as the US senate on Wednesday passed a $15bn jobs bill that will provide tax incentives to businesses that hire new workers. The legislation is expected to create about 250,000 jobs.

Meanwhile, the commerce department said on Thursday that new orders for durable goods jumped last month thanks to greater demand for aircraft. The rise is another sign that the manufacturing sector will show continued strength.

Durable goods orders rose by 3 per cent to $175.7bn. That was the biggest increase since last July and was fuelled by a 126 per cent surge in new orders for civilian aircraft.

Excluding transportation orders, which tend to be volatile, demand for long-lasting goods was down by 0.6 per cent.

Copyright The Financial Times Limited 2010.

Weak investment data damp recovery hopes

By Daniel Pimlott
February 25 2010 11:08

Business investment declined at an accelerated pace in the final quarter of last year and was much lower than expected, raising fresh fears over the fragility of the recovery in the UK economy.

Investment – which ranges from spending on new machinery to IT to construction of new offices – fell by 5.8 per cent in the final three months of the year to £27bn in the quarter, compared with an expected rise of 0.1 per cent. That compares with a 1.8 per cent decline in the third quarter.

Business investment fell in almost every sector and was down by 24.1 per cent compared with a year earlier, by far the biggest year-on-year fall in more than 40 years of data ignoring a one-off blip in 2006.

The sharp further drop-off in investment, even as the economy appeared to leave the recession in the fourth quarter, is likely to raise concerns about the extent to which the availability of credit is hitting companies, as well as whether the recovery in the UK will prove sustainable. However, the business investment data is often subject to substantial revisions over time.

“The substantial fall in business investment in the fourth quarter of 2009 is a horrible surprise and extremely disappointing,” said Howard Archer, economist at IHS Global Insight.

Although the figures have no direct impact on revised fourth quarter GDP figures to be reported on Friday morning – because national income estimates rely on output figures rather than spending numbers – they do suggest an upwards revision is less likely.

“It dilutes hopes of an upward revision on Friday to UK GDP growth of 0.1 per cent quarter-on-quarter in the fourth quarter of 2009 and even raises the spectre that this minimal growth could be revised away,” Mr Archer added.

The figures come after other data on retail sales and mortgage lending at the start of this year have been extremely weak, albeit probably hit by the heavy snow in January.

Manufacturing saw an 8.2 per cent fall in investment in the quarter and services investment fell by 8.4 per cent. Construction investment collapsed by a further 24.5 per cent in the quarter and has fallen by 54 per cent since the recession began in the sector at the beginning of 2008.

Recent surveys of businesses report that plans for new investment were limited, but that companies did not expect to cut back much further.

The Bank of England’s regional agents reported in February that “investment plans continued to be widely described as muted, with very few contacts anticipating significant growth in capital expenditure. But while the level of investment remained lower than before the recession, there were few reports of plans for a further round of sharp cuts following the previous year’s reductions.”

The fall in investment deals a blow to the Bank’s recent argument that low interest rates could potentially help foster lower inflation by encouraging businesses to expand capacity. More importantly it threatens to undermine the supply side of the economy, reducing the ability of the economy to produce strong growth in the future and potentially boosting inflationary pressures.

“There is still no sign of an export and investment-led recovery, which the BoE has hoped for, materialising any time soon,” said Colin Ellis, economist at Daiwa Europe.

Copyright The Financial Times Limited 2010.

Fiscal fears put euro under pressure

By Peter Garnham
February 22 2010 23:06

The euro lost ground on Monday, trading close to a nine-month low against the dollar, as concerns over Greece’s fiscal problems, and those of other countries on the periphery of the eurozone, continued to put pressure on the single currency.

Analysts said any relief for the euro from weekend press reports that Germany was preparing to lead a bail-out of Greece, with the European Union providing up to €25bn ($34bn) in financial assistance, was likely to prove short-lived.

Hans Redeker at BNP Paribas said that since German banks were reported to hold about €522bn in periphery eurozone debt, a German-led bail-out for Greece should not come as a surprise if matters took a turn for the worse.

“While such an outcome may provide some initial support for the euro, the longer term implications are likely to prove even more negative for the single currency,” he said.

Mr Redeker said that the adjustment process in Europe would have strong deflationary pressures, suggesting that the European Central Bank would keep monetary policy much looser than the market was expecting.

The euro was also undermined as positioning data from the Chicago Mercantile Exchange, often used as a proxy for hedge fund activity, showed bets against the euro were extended to fresh record levels.

Late in New York, the euro, which dropped to a nine-month low of $1.3442 against the dollar on Friday, was flat at $1.3601. It had eased 0.1 per cent to £0.8785 against the pound and was down 0.4 per cent at Y124.10 against the yen.

Meanwhile, the dollar eased back but remained close to an eight-month high on a trade-weighted basis as expectations of an early interest rate rise from the Federal Reserve receded.

The dollar rallied sharply on Thursday after the Fed caught the market off guard with a surprise decision to raise its discount rate, the emergency rate at which it lends to banks.

That triggered speculation that the central bank was gearing up to raise the Fed funds rate, its main lending rate, sooner than expected.

Officials were keen to play down such a move, while a surprise fall in January core US consumer price inflation announced on Friday also damped speculation of an early US rate rise.

The dollar index, which tracks its progress against a basket of six leading currencies, eased 0.2 per cent to 80.499, but still remained within sight of the eight-month high of 81.342 that it hit on Friday.

The dollar also eased 0.4 per cent to Y91.18 against the yen and lost 0.1 per cent to $1.5494 against the pound.

Copyright The Financial Times Limited 2010.

Today on New Scientist: 25 February 2010

All today’s stories on newscientist.com at a glance, including: how wireless speed freaks could leave Wi-Fi standing, a disease gene blocker that sneaks past cells’ defences, and the heyday of arsenic

Greece News Update: Euro Tumbles on Concerns About Worsening EconomicCrisis

Euro Tumbles on Greece Concerns, Jobless Data

By FABIO ALVES
Wall Street

NEW YORK — Revived concerns over Greece’s sovereign debt and disappointing U.S. economic data sent the euro tumbling Thursday morning, sinking to a year low against the yen, as investors fled riskier assets to seek safety in the dollar and the Japanese currency.

The euro also slumped against the dollar, falling below the key $1.35 level, in a selloff exacerbated after Moody’s Investors Service said Thursday that Greece’s A2 debt rating may be cut if the Greek government doesn’t act forcefully to cut its ballooning deficit. That threat follows a similar warning by Standard & Poor’s, which ranks Greece’s sovereign debt at BBB+, that the country’s credit quality may be lowered to junk status.

Demand for the dollar and yen surged in the wake of worse-than-expected U.S. weekly jobless-claims data, fueling concerns about the pace of economic recovery. The euro hit an intraday low against the yen after the data, falling more than 1.5% and falling to 119.84 yen, the lowest level since Feb. 23, 2009.

“The jobless claims data undermines recent optimism regarding an accelerating U.S. recovery,” said Omer Esiner, senior market analyst at Travelex Global Business Payments in Washington. “Risk aversion is the primary theme of the market and [the jobless claims data] add to the already negative sentiment in the financial markets … by news of another possible downgrade of Greece’s debt ratings.”

In recent trade, the euro was at $1.3483 from $1.3534 late Wednesday. The dollar was at 89.12 yen from 90.19 yen, while the euro was at 120.20 yen from 121.95 yen. The U.K. pound was at $1.5257 from $1.5396. The dollar was at 1.0851 Swiss francs from 1.0810 francs.

The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 81.034 from 80.847.

Investor sentiment further deteriorated overnight when Moody’s warned Greek authorities that if the country doesn’t stick to its austerity plan, its credit ratings will be cut, with the magnitude of the downgrade depending on how much the government deviates from the plan, Moody’s told Reuters.

Write to Fabio Alves at fabio.alves@dowjones.com

Strike-hit Greece faces EU budget test

February 26, 2010 - 12:24AM

European Union and IMF experts on Thursday were finalising a report on Greece’s crisis-hit finances as the embattled Socialist government digested the impact of a general strike against its austerity cuts.

Tens of thousands of people took to the streets of major Greek cities on Wednesday to protest tax hikes and benefit cuts in the first general strike to hit the government, which is grappling with spiralling debt levels.

But the main question according to analysts is whether the majority of Greeks, who currently appear to accept the painful adjustment, will continue to support extra measures that are widely perceived to be imposed from Brussels.

“The real question is whether the pro-European spirit of Greeks will falter before the flurry of orders from Brussels,” said Thomas Gerakis, head of the Marc polling company.

For the moment, “Greeks remain convinced that the situation is very difficult. They got up from their armchairs and realised that they are on the deck of a sinking ship,” he told AFP.

As the country with the highest public deficit in the eurozone, Greece is at the centre of a storm over spiralling debt levels in Europe that has threatened cohesion in the European single currency area. IMF stresses deficit reduction in exit strategies

After a collapse in investor confidence, Greece faces major strains in raising new money on international markets and is under intense pressure from EU authorities to get its public finances back in order.

The report of the three-man mission from the EU, European Central Bank and International Monetary Fund mission, which completed on Wednesday a round of talks with Greek officials, comes as a new hurdle for Athens.

If the experts say the programme is not enough, a meeting of EU finance ministers could demand even harsher corrective action at a meeting on March 16.

Before that meeting, the EU Financial Affairs Commissioner Olli Rehn is also due to visit Athens. EU budget enforcer to go to Greece

The experts met Finance Minister George Papaconstantinou and Economy Minister Louka Katselli just as the country was hit by a nationwide strike, including a strike by journalists, against austerity measures.

Also late on Wednesday, Standard & Poor’s credit rating agency warned that it could downgrade Greek sovereign debt again within a month.

The yield on Greek ten-year bonds on Thursday rose to 6.598 percent compared to 6.496 percent a day previously.

Under pressure from financial markets and EU institutions and partners, Greece has promised a programme to cut public spending and crimp public sector pay, to raise taxes and fight tax evasion, and to restructure its economy.

The baseline target is to cut back an annual public deficit by four percentage points of gross domestic product to 8.7 percent this year.

This is widely considered to be an enormous undertaking particularly since credit rating agency Moody’s has calculated that Greece will have to use 15.1 percent of its tax revenues this year to meet debt interest payments due.

That is about twice the ratio in other debt-stricken eurozone countries Spain and Portugal.

The last EU summit on February 11 decided to send three-way EU, ECB and IMF missions to Athens regularly under a special arrangement of exceptionally close supervision of Greek public finances.

February 25, 2010

Banks Bet Greece Defaults on Debt They Helped Hide

By NELSON D. SCHWARTZ and ERIC DASH
New York Times

Bets by some of the same banks that helped Greece shroud its mounting debts may actually now be pushing the nation closer to the brink of financial ruin.

Echoing the kind of trades that nearly toppled the American International Group, the increasingly popular insurance against the risk of a Greek default is making it harder for Athens to raise the money it needs to pay its bills, according to traders and money managers.

These contracts, known as credit-default swaps, effectively let banks and hedge funds wager on the financial equivalent of a four-alarm fire: a default by a company or, in the case of Greece, an entire country. If Greece reneges on its debts, traders who own these swaps stand to profit.

“It’s like buying fire insurance on your neighbor’s house — you create an incentive to burn down the house,” said Philip Gisdakis, head of credit strategy at UniCredit in Munich.

As Greece’s financial condition has worsened, undermining the euro, the role of Goldman Sachs and other major banks in masking the true extent of the country’s problems has drawn criticism from European leaders. But even before that issue became apparent, a little-known company backed by Goldman, JP Morgan Chase and about a dozen other banks had created an index that enabled market players to bet on whether Greece and other European nations would go bust.

Last September, the company, the Markit Group of London, introduced the iTraxx SovX Western Europe index, which is based on such swaps and let traders gamble on Greece shortly before the crisis. Such derivatives have assumed an outsize role in Europe’s debt crisis, as traders focus on their daily gyrations.

A result, some traders say, is a vicious circle. As banks and others rush into these swaps, the cost of insuring Greece’s debt rises. Alarmed by that bearish signal, bond investors then shun Greek bonds, making it harder for the country to borrow. That, in turn, adds to the anxiety — and the whole thing starts over again.

On trading desks, there is fierce debate over what exactly is behind Greece’s recent troubles. Some traders say swaps have made the problem worse, while others say Greece’s deteriorating finances are to blame.

“This is a country that is issuing paper into a weakening market,” said Ashish Shah, co-head of credit strategy at Barclays Capital, referring to Greece’s need for continual borrowing.

But while some European leaders have blamed financial speculators in general for worsening the crisis, the French finance minister, Christine Lagarde, last week singled out credit-default swaps. Ms. Lagarde said a few players dominated this arena, which she said needed tighter regulation.

Trading in Markit’s sovereign credit derivative index soared this year, helping to drive up the cost of insuring Greek debt, and, in turn, what Athens must pay to borrow money. The cost of insuring $10 million of Greek bonds, for instance, rose to more than $400,000 in February, up from $282,000 in early January.

On several days in late January and early February, as demand for swaps protection soared, investors in Greek bonds fled the market, raising doubts about whether Greece could find buyers for coming bond offerings.

“It’s the blind leading the blind,” said Sylvain R. Raynes, an expert in structured finance at R&R Consulting in New York. “The iTraxx SovX did not create the situation, but it has exacerbated it.”

The Markit index is made up of the 15 most heavily traded credit-default swaps in Europe and covers other troubled economies like Portugal and Spain. And as worries about those countries’ debts moved markets around the world in February, trading in the index exploded.

In February, demand for such index contracts hit $109.3 billion, up from $52.9 billion in January. Markit collects a flat fee by licensing brokers to trade the index.

European banks including the Swiss giants Credit Suisse and UBS, France’s Société Générale and BNP Paribas and Deutsche Bank of Germany have been among the heaviest buyers of swaps insurance, according to traders and bankers who asked for anonymity because they were not authorized to comment publicly.

That is because those countries are the most exposed. French banks hold $75.4 billion worth of Greek debt, followed by Swiss institutions, at $64 billion, according to the Bank for International Settlements. German banks’ exposure stands at $43.2 billion.

Trading in credit-default swaps linked only to Greek debt has also surged, but is still smaller than the country’s actual debt load of $300 billion. The overall amount of insurance on Greek debt hit $85 billion in February, up from $38 billion a year ago, according to the Depository Trust and Clearing Corporation, which tracks swaps trading.

Markit says its index is a tool for traders, rather than a market driver.

In a statement, Markit said its index was started to satisfy market demand, and had improved the ability of traders to hedge their risks. The index and similar products, it added, actually make it easier for buyers and sellers to gauge prices for instruments that are traded among players over the counter, rather than on exchanges.

“These indices have helped bring transparency to the sovereign C.D.S. market,” Markit said. “Prior to their creation, there was no established benchmark index enabling investors to track the performance of segments of the sovereign C.D.S. market.”

Some money managers say trading in Greek swaps alone, not the broader index, is the problem.

“It’s like the tail wagging the dog,” said Markus Krygier, senior portfolio manager at Amundi Asset Management in London, which has $40 billion in global fixed-income assets. “There is a knock-on effect, as underlying positions begin to seem riskier, triggering risk models and forcing portfolio managers to sell Greek bonds.”

If that sounds familiar, it should. Critics of these instruments contend swaps contributed to the fall of Lehman Brothers. But until recently, there was little demand for insurance on government debt. The possibility that a developed country could default on its obligations seemed remote.

As a result, many foreign banks that held Greek bonds or entered into other financial transactions with the government did not hedge against the risk of a default. Now, they are scrambling for insurance.

“Greece is not a small country,” said Mr. Raynes, at R&R in New York. “Credit-default swaps give the illusion of safety but actually increase systemic risk.”

Former Rwandan colonel gets 25-year sentence from UN war crimes tribunal

The United Nations war crimes tribunal set up in the wake of the 1994 Rwandan genocide today sentenced a former top officer in the country’s armed forces to 25 years of imprisonment after being found guilty of genocide and crimes against humanity.

Challenges faced by Botswana’s indigenous require Government action - UN expert

Botswana’s Government must step up efforts to tackle the challenges faced by many indigenous communities, such as land rights, according to a new report by a United Nations independent expert.

UBM, social media and Japan

Interesting to see this use of YouTube by UBM Asia Senior Vice President Chris Eve. It captures nicely the buzz of a new e-commerce event which opened today in Tokyo.

It seems increasingly clear that companies who can successfully combine their web offerings, social networks and face-to-face events can have a significant advantage over competitors who remain unconvinced about these things - a sizeable number based on straw polls at recent industry events we have attended.

Confusion Trails Nigerian President’s Return

Confusion Trails Yar’Adua’s Return

•President Fails To Attend EXCOF Meeting
•Continue Performing State Duties, He Tells Jonathan
•We’re Not Aware Of His Return, Say Senators
•Yar’Adua’s Return May Fuel Uncertainty – U.S.

By Adetutu Folasade-Koyi, Chesa Chesa, Joe Nwankwo, Otei Oham, Rotimi Akinwumi (Abuja), Paul Arhewe, Rafiu Ajakaye and Wale Igbintade (Lagos)
Nigerian Daily Independent

TRUE to prediction, the return of President Umaru Yar’Adua from a three-month medical treatment in Saudi Arabia is creating ripples and confusion in Aso Rock, coupled with his refusal to recognise his Deputy, Goodluck Jonathan, as Acting President.

Yar’Adua is still indisposed and has admitted that he cannot perform the functions of his office.

Senators said they have not been officially informed of his return, and a chorus of opinion leaders – among them the Peoples Democratic Party (PDP), the Nigerian Bar Association (NBA), the Conference of Nigerian Political Parties (CNPP), and the Save Nigeria Group (SNG) – insisted on Wednesday that Jonathan remains Acting President.

America warned that Yar’Adua’s return while unable to carry out his duties as President could fuel uncertainty.

Jonathan declined to preside over Wednesday’s meeting of the Executive Council of the Federation (EXCOF) and instead met in camera with Ministers in his office.

A statement issued by Yar’Adua’s Spokesman, Olusegun Adeniyi, confirmed that Yar’Adua returned to the Villa from his hospital bed in Jeddah after being discharged by doctors.

The statement referred to Jonathan as Vice President, not Acting President.

However, it thanked him for “competently overseeing the affairs of state in (Yar’Adua’s) absence,” and asked him to continue to do so until Yar’Adua fully recovers.

“(Yar’Adua) wishes to express his profound gratitude to all Nigerians for their prayers for his recovery, their exceptional generosity of spirit and their appreciation of the fact that all mortals are subject to the vagaries of ill-health,” the statement added.

“(He) is grateful to the Vice President, Goodluck Jonathan, for competently overseeing the affairs of state in his absence.

“(He) also wishes to thank the President of the Senate, (David Mark), the Speaker of the House of Representatives, the entire membership of the National Assembly (NASS), the Governors’ Forum, the judiciary, the Armed Forces, and other security agencies, former Heads of State and other eminent Nigerians for their roles in maintaining order and stability during his absence.

“(Yar’Adua) wishes to reassure all Nigerians that on account of their unceasing prayers, and by the special grace of God, his health has greatly improved.

“However, while the President completes his recuperation, Vice President Jonathan will continue to oversee the affairs of state.”

Nevertheless, after waiting anxiously for two hours, EXCOF members who gathered at about 10 a.m. for a meeting – staying glued to their seats instead of engaging in their usual back slapping greetings – were asked to return to their offices and show up later for a special meeting with Jonathan.

No reason was given for the cancellation, but it may be connected with the confusion in Aso Rock as Jonathan and most Ministers were not privy to the plan by Yar’Adua’s men to bring him back to the country without allowing the EXCOF delegation sent to Saudi Arabia to do so.

Besides, it is not clear if Jonathan will be allowed to continue to sit on the Presidential seat emblazoned with the Coat of Arms in front of the national and Armed Forces flags, to preside over the EXCOF meeting, as he did in the past two weeks.

Yar’Adua remains incommunicado as Jonathan made unsuccessful efforts to see him before the aborted EXCOF meeting.

The meeting usually starts at 10 a.m., but at 12:10 p.m., the Secretary to the Government of the Federation (SGF), Yayale Ahmed, walked in and announced that attendance was mandatory at the special meeting scheduled for 2 p.m. with Ministers at the Vice President’s Conference Room.

Emerging from the meeting, which lasted about 10 minutes, Information and Communications Minister, Dora Akunyili, told reporters that Jonathan briefed the cabinet on the return of Yar’Adua and that he would later in the day go over to see his wife, Turai.

She said Jonathan acknowledged that he would continue to attend to state matters until Yar’Adua fully recovers, and that he has been briefed by the President’s aides on latest developments.

Her words: “He (Jonathan) told us that (Yar’Adua) has returned, he has been briefed by the President’s aides and that he hopes to see (Turai) this evening, and that we meet next week, we will be briefed on the outcome of the Saudi trip by the members of Council.

“And that when he is eventually briefed by (Yar’Adua) he will call us again.”

However, Senators declared that they are unaware of Yar’Adua’s return, and pressed that he must follow procedure and officially inform the National Assembly (NASS) that he is back to duty.

“I am not aware that the President is back because as a Senator I know that there are procedures and if he is back it should be announced on the floor of the Senate that he is back,” riposted Smart Adeyemi, the Chairman of the Federal Character and Inter-governmental Affairs Committee.

Works Committee Chairman, Festus Olabode Ola, said the Senate cannot be guided by newspaper reports, and insisted that Yar’Adua must comply with the Constitution by officially writing a letter to the NASS on his return.

Capital Market Committee Chairman, Mohammed Bello, maintained that the Senate stands by the NASS resolution of February 9 which mandated Yar’Adua to comply with Section 145 of the Constitution on his return.

Asked if he knew of Yar’Adua’s return, States and Local Government Committee Chairman, Sahabi Ya’u, replied: “We are not aware.”

George Sekibo, Solid Minerals Committee Chairman, insisted that, “We will not act on rumours because there have been so many rumours. Our resolution is clear.”

But the PDP noted in a statement that Yar’Adua’s return shows that the prayers by Nigerians for his recovery have been answered by God.

“We therefore rejoice with our fellow citizens for this unique favour done to us by the Almighty God. We wish to specially congratulate Acting President Goodluck Jonathan for successfully holding forth the ship of state while Yar’Adua was away,” the statement said.

In his reaction, however, NBA President, Oluwarotimi Akeredolu, asked Yar’Adua to resign if he is not well enough to resume his duties as President.

“The Acting President remains Jonathan until the President transmits a letter to the (NASS) informing it that he is back and well enough to resume his duties as President,” Akeredolu argued in a telephone interview.

“If the President feels that he is not strong enough to continue as President, the right thing for him to do is to resign. If he is not strong enough, Nigerians should appeal to him to resign, and not to disrupt the present equilibrium.”

Akeredolu also maintained at a press conference in Abuja that Jonathan is still in charge of the government until Yar’adua physically presents himself to the nation and formally informs the NASS of his return.

“We have seen from reports in the press that (Yar’Adua) came back under the cover of darkness with all the lights at the airport turned off, and soldiers taking over the entire environment.

“We have not seen him, and I heard that not even journalists who were there were allowed to see him.”

CNPP National Publicity Secretary, Osita Okechukwu, also decried the way Yar’Adua was flown back to the country, saying the secrecy demonstrates that he is incapable of ruling.

Okechukwu reiterated that, “We are yet to see any photograph of Yar’Adua in any news media, whether local or foreign, since his return. How come that the media were cordoned off from the precincts of his arrival? We demand to see our President.

“The CNPP calls on (his) handlers to allow us to see our dear President, and join us in appealing to him to honourably resign and save the country from divided government and its attendant instability.”

The SNG asked the cabinet to declare Yar’Adua incapacitated, as stipulated in Section 144 of the Constitution, and dismissed as primitive the manner he was smuggled back into the country on Wednesday morning.

It said in a statement that it welcomes Yar’Adua back, but he should address a joint session of the NASS, broadcast live on television, to enable Nigerians determine whether he is fit enough to govern.

“As citizens of Nigeria, we deplore in the strongest terms the way Yar’Adua was smuggled into the country like a piece of contraband in the dead of the night and through mafia tactics by his kidnappers,” the statement added.

“The reported parking of the aircraft that brought him in a bush path further showed that the cabal has no respect for Yar’Adua and would not give him the amount of care a sick dog deserves from the owner for as long as they use his sick body to feather their nests.

A statement issued by the United States Assistant Secretary of State,Johnnie Carson, expressed hope that Yar’Adua’s health “is sufficient to enable him to fully resume his official duties” because “Nigeria needs a strong, healthy, and effective leader to ensure the stability of the country and to manage Nigeria’s many political, economic, and security challenges.”

Carson said reports continue to suggest that Yar’Adua’s health remains fragile and that he may still be unable to fulfill the demands of his office.

“We hope that (his) return to Nigeria is not an effort by his senior advisers to upset Nigeria’s stability and create renewed uncertainty in the democratic process.

“Nigeria is an extraordinarily important country to its friends and partners, and all of those in positions of responsibility should put (Yar’Adua’s) health and the best interests of the country and people of Nigeria above personal ambition or gain.

“As a nation of 150 million people, Nigeria’s democracy and its continued adherence to constitutional rule should be the highest priority.”

In any case, the Senate on Wednesday concluded the amendment of Sections 145 and 190 of the Constitution, a legislative record and a first since 1999.

More than the required two thirds passed the changes, which make it mandatory for the President to inform the NASS in writing whenever he is going on vacation.

Should he fail to do so within two weeks of his vacation, the NASS would empower the Vice President to become Acting President by a simple majority.

Likewise, a Governor has to inform the state House of Assembly of his vacation, and failure to do so within 14 days, the Assembly would empower the Deputy Governor to act as Governor by a simple majority.

The amendments would be transmitted to the state Assemblies for approval after the concurrence from the House of Representatives.

Two-thirds or 24 of the 36 state Assemblies are required to pass the amendments.

Nigerian Vice-President to Stay in Charge

Wednesday, February 24, 2010
17:58 Mecca time, 14:58 GMT

Nigerian VP to stay in charge

An ambulance, thought to be carrying Yar’Adua, left the airport under police escort

Nigeria’s vice-president will continue to lead the nation while the ailing president recuperates, a presidential adviser has said.

In a statement issued on Wednesday, Olusegun Adeniyi, a presidential spokesman, said Goodluck Jonathan would continue to serve as acting president.

“After being discharged by the team of medical experts overseeing his treatment in… Saudi Arabia, President Umaru Musa Yar’Adua returned to the presidential villa, Abuja early this morning,” Adeniyi said.

“While the president completes his recuperation, Vice-President Jonathan will continue to oversee the affairs of state,” he said.

The announcement comes after Yar’Adua returned to Nigeria early on Wednesday morning after more than three months abroad at a Saudi Arabian hospital.

Two aeroplanes arrived at the presidential wing of Abuja’s Nnamdi Azikiwe international airport where one of them was met by an ambulance, the Reuters news agency, citing a witness, reported.

The ambulance later left under a heavy police escort. There was no immediate word on Yar’Adua’s condition.

Constitutional concerns

Following a power vacuum because of Yar’Adua’s long absence from the country, Nigeria’s parliament installed Jonathan as the acting head of state early this month.

Yvonne Ndege, Al Jazeera’s West Africa correspondent, said that while Jonathan had established himself as a leader, constitutionally power still lay with Yar’Adua.

“There is potential, let’s say, for Goodluck Jonathan to try to consolidate his position and become the substantive president of Nigeria,” she said.

“But my sense is that that will have to come with the blessing of President Yar’Adua because if the constitution is followed to the letter of the law President Yar’Adua will be back in the seat of power.”

Nigeria’s constitution says the president must make a written declaration that he is on vacation or unable to carry out his duties before a transfer of power can take place.

Yar’Adua had not officially given his consent to the transfer of power, but parliament said it based its decision on an interview that he gave the BBC last month, saying that he would return to work once his doctors gave him the go-ahead.

Health problems

Despite general government support, some critics have described the move to have Jonathan assume presidential powers as illegal.

Yar’Adua left Nigeria on November 23 to receive medical treatment at a clinic in Jeddah for pericarditis, an inflammation of the membrane surrounding the heart that can restrict normal beating.

He is also known to suffer from a chronic kidney condition and has long been criticised for not being able to work more than five or six hours a day.

Aside from the near constitutional crisis, Yar’Adua’s long absence had prompted street protests by thousands across the country, demanding his resignation.

It also threatened to paralyse the government until parliament installed Jonathan as acting head of state on February 9.

Balancing act

A delegation of Nigerian ministers had travelled to Saudi Arabia on Monday to ascertain Yar’Adua’s health, expecting to report back to a weekly cabinet meeting, but it appeared they had not managed to see him.

Instead they were told that he was on his way back to Abuja.

Nii Akuetteh, the former executive director of Africa Action, said that could have been a deliberate move to avoid further conflict.

“My impression is now that the delegation that went to Jeddah [was] a small portion of the cabinet,” he told Al Jazeera.

“Now the entire cabinet, if they want to assess the president’s health, will have him there to do that instead of depending on a few people who went to Jeddah and can come back with conflicting reports.”

The Nigerian presidency reflects a regional balancing act between the Muslim north and the Christian south, with the role traditionally switching between the two sides with every election.

Yar’Adua is from the Muslim north and Jonathan from the Christian south.

While many activists in the south would be pleased to see a southerner in the presidency, others from the north would like their candidate to serve a full term.

“A lot of this was precipitated by people from the south - activists - who actually went to court to say that he [Yar’Adua] has been away for too long,” Akuetteh said.

Source: Al Jazeera and agencies