July 25, 2011 nº 1,070 - Vol. 9


"All the things one has forgotten scream for help in dreams."

Elias Canetti

Insider's view: see how local concerns shape up the global world. Read the daily press review in Migalhas International.

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  • Top News

Gridlock for debt talks leads to market fears

A sharply divided Congress pursued rival budget plans on Sunday that appeared unlikely to win broad support, pushing the United States closer to a debt default that would reverberate around the world. With time running out, Democrats and Republicans split into two camps and held talks among themselves. Both sides appeared unwilling to compromise to head off a default that could trigger global economic calamity and strip America of its coveted Triple-A credit rating. The biggest problem here is that the unpredictable shock in case the planned annual expenses are delayed, in case the debt ceiling isn't raised and the negative impact on economic sentiment. There are worries that as the situation becomes increasingly unclear, the yields on bonds would rise, but another factor that has to be taken very seriously into consideration is the impact on the already fragile economy coming from a potential financial shock following steep falls in stock prices. In other words, what I'm worried about is not the rise in the bond yields, but the following drop in them. Obama and GOP leaders are optimistic a deal can be reached to raise the debt ceiling. But Geithner's comments follow after a meeting on Saturday failed to make a breakthrough; he said it was "unthinkable" the US would not meet its obligations on time. The US risks default on its $14.3tn debt without a deal to raise the borrowing limit before 2 August.

Norway attack: legal process facing Anders Behring Breivik

Anders Behring Breivik wants to tell Norway and the world why he killed at least 93 people in a bomb attack and shooting rampage when he appears in court on Monday, his lawyer said. Calling himself a crusader against a tide of Islam in a rambling 1,500-page online manifesto, the 32-year-old mass murderer wants the opportunity to explain actions he deemed 'atrocious, but necessary'. Breivik, charged under terrorism laws, has said he carried out the killings to spark a "revolution" against the multi-culturalism. Following are legal steps facing the 32-year-old Norwegian man who has admitted to a shooting massacre and a bombing that killed at least 93 people in the worst attacks in Norway since the Second World War. A judge is set to remand Breivik in custody. Police can, for instance, request detention of eight weeks in solitary confinement with no access to news, letters or visitors, except a lawyer. That then can be extended. Breivik will be given an opportunity to speak at the hearing, but does not have to enter a plea of "innocent" or "guilty". His lawyer says he wants to address the hearing - he admits to the attacks but does not see a need for punishment. Doctors will later make an assessment of Breivik's mental health, to see if he is fit for trial, while police collect evidence to build a case. Norway has no death penalty and the maximum jail term is 21 years. That can be extended for a renewable five years if courts decide there is a risk of repeat offences. In theory he can be in jail for the rest of his life. Under Norwegian law sentences are served concurrently. Breivik could not, for instance, be sentenced to 93 consecutive sentences that would imply almost 2,000 years in jail. No matter how many killings he has committed the maximum cannot be more than 21 years.

As criminal laws proliferate, more are ensnared

As federal criminal statutes have ballooned, it has become increasingly easy for Americans to end up on the wrong side of the law. Many of the new federal laws also set a lower bar for conviction than in the past: Prosecutors don't necessarily need to show that the defendant had criminal intent. The U.S. Constitution mentions three federal crimes by citizens: treason, piracy and counterfeiting. By the turn of the 20th century, the number of criminal statutes numbered in the dozens. Today, there are an estimated 4,500 crimes in federal statutes, according to a 2008 study by retired Louisiana State University law professor John Baker. There are also thousands of regulations that carry criminal penalties. Some laws are so complex, scholars debate whether they represent one offense, or scores of offenses. Counting them is impossible. The Justice Department spent two years trying in the 1980s, but produced only an estimate: 3,000 federal criminal offenses. The American Bar Association tried in the late 1990s, but concluded only that the number was likely much higher than 3,000. The ABA's report said "the amount of individual citizen behavior now potentially subject to federal criminal control has increased in astonishing proportions in the last few decades." A Justice spokeswoman said there was no quantifiable number. Criminal statutes are sprinkled throughout some 27,000 pages of the federal code. There are many reasons for the rising tide of laws. It's partly due to lawmakers responding to hot-button issues—environmental messes, financial machinations, child kidnappings, consumer protection—with calls for federal criminal penalties. Federal regulations can also carry the force of federal criminal law, adding to the legal complexity. With the growing number of federal crimes, the number of people sentenced to federal prison has risen nearly threefold over the past 30 years to 83,000 annually. The U.S. population grew only about 36% in that period. The total federal prison population, over 200,000, grew more than eightfold—twice the growth rate of the state prison population, now at 2 million, according the federal Bureau of Justice Statistics Tougher federal drug laws account for about 30% of people sentenced, a decline from over 40% two decades ago. The proportion of people sentenced for most other crimes, such as firearms possession, fraud and other non-violent offenses, has doubled in the past 20 years.

The growth in federal law has produced benefits. Federal legislation was indispensable in winning civil rights for African-Americans. Some of the new laws, including those tackling political corruption and violent crimes, are relatively noncontroversial and address significant problems. Plenty of convicts deserve the punishment they get. Yet, the system "isn't broken." Congress took its cue over the decades from a public less tolerant of certain behaviors. Current law provides a range of options to protect society. "It would be horrible if they started repealing laws and taking those options away."

Still, federal criminal laws can be controversial. Some duplicate existing state criminal laws, and others address matters that might better be handled as civil rather than criminal matters. Some federal laws appear picayune. Unauthorized use of the Smokey Bear image could land an offender in prison. So can unauthorized use of the slogan "Give a Hoot, Don't Pollute." The spread of federal statues has opponents on both sides of the aisle, though for different reasons. For Republicans, the issue is partly about federal intrusions into areas historically handled by states. For Democrats, the concerns include the often-lengthy prison sentences that federal convictions now produce.

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  • MiMIC Journal

China fires top officials after railway crash

China has fired three senior railway officials following a high-speed train crash that left 35 people dead. The government has also halted services of 58 other trains and called for a nationwide safety check. The accident is the latest in a series of problems for the high-speed network, which has been dogged by controversies, including accusations of corruption.

Chinese executive is sentenced in bribery case

A former executive at China Mobile was found guilty of taking about $1.15 million in bribes, in a case that has highlighted concerns about corruption in China's government and state sector.

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  • Brief News

ABA faces scrutiny as job prospects, debt levels for law school grads worsen

Since 2008, a retrenchment at the nation's law firms has had newly minted attorneys wringing their hands over the rapidly shrinking job market. Yet enrollment at law schools has continued to climb, with a record 44,004 people earning law degrees last year. The result has been that employment rates for new graduates are at their lowest levels since 1996, a gloomy prospect for students who borrow heavily to attend law school. Recent surveys of graduates show a growing proportion carrying loans of $120,000 or more. Now, regulators and members of Congress are pressing the agency that accredits law schools — the American Bar Association — to step up efforts to keep student debt levels down and reduce the risk of default. The push comes as the government mounts a similar crackdown on for-profit colleges and trade schools. A recent Department of Education review of the ABA's accreditation work found that the agency does not demand schools keep loan default rates below a certain level, as required. The ABA has also failed to set minimum standards for postgraduate employment rates and show that it has a transparent and public accreditation process, a department review panel found in a June hearing. The panel found that the ABA unit fell short on meeting 17 federal standards required of accreditation agencies.

Greece credit rating cut three levels by moody's


Credit rating agency Moody's has cut Greece's rating, warning that a planned debt swap would constitute a default. The rating was cut another three notches from Caa1 to Ca - just two more notches shy of a default rating. "The announced EU program... implies that the probability of a distressed exchange, and hence a default, on Greek government bonds is virtually 100%," the agency said. The debt swap would increase Greece's borrowing terms by up to 30 years. However, a statement last week from the Institute of International Finance - a trade body representing global banks and other major lenders - conceded that the debt deal would cost private sector creditors an estimated 21% of the value of the Greek debts they currently hold. It comes after another rating agency, Fitch, warned that it too expected the deal would mark a "selective" debt default by Athens.

Sony insurer seeks hack opt-out

Sony faces a court battle over how it will pay for legal claims made in the wake of a massive data breach. One of the company's insurers has asked a judge to rule that it is not liable for losses related to the cyber attack. Zurich American Insurance has now gone to court in New York seeking a declaration that it does not have to help Sony with current or future legal action related to the data breach. Legal papers filed by Zurich reveal that 55 separate class action lawsuits are pending in the US because of the breach. Also underway are investigations by state and federal regulators that could also end-up before the courts. Sony has made claims on several of its insurance policies, including one with Zurich, to help pay its legal bills and provide compensation.

DADT: Obama certifies gay military ban repeal

Obama has announced the ban on openly gay people serving in US military is to end on September 20. His certification on Friday of the repeal of the "don't ask, don't tell" (DADT) law comes seven months after it was overturned in the US Congress. The Pentagon had asked for time following the repeal to prepare troops for the arrival of openly gay comrades. Obama's move affirmed the Pentagon had declared it was ready to accept openly gay troops.

BHP says Chile strike 'illegal'

BHP says the strike at the Escondida copper mine in Chile as 'illegal' as the stand-off with the workers continues.

Mass arrests in Mexico human trafficking raids

More than 1,000 people have been arrested in a crackdown on human trafficking and sexual exploitation in Ciudad Juarez.

Facebook wins dismissal of second Winklevoss case

The Winklevosses sought to increase their $65 million settlement with Facebook and its founder, Mark Zuckerberg.

News Corp may escape U.S. bribery action

The argument that a successful U.S.-based bribery case can be built against Murdoch's company involves at least as much wishful thinking as it does legal acumen.

Google bows to web rivals

Google Inc. has made changes to the way its search engine displays information about local businesses, a move that follows the disclosure of a U.S. antitrust investigation of its business practices. The company said it removed snippets of customer reviews that were taken from other Web firms for its Google "Places" service, which has millions of pages for local businesses. Google's practices have drawn fire from some of those Web companies, and is believed to be among the issues the Federal Trade Commission is investigating. Since last year, TripAdvisor, Yelp and Citysearch—sites with local-business reviews generated by their visitors—have complained Google effectively stole their content and posted it on Google's own pages. Google Places competes with those sites and provides information on millions of restaurants, hotels and other businesses, including store hours, location and photos.

Default insurance has quirks

Investors looking for protection against a U.S. debt default could be in for a surprise. In the market for credit default swaps, it is currently more expensive to buy one-year insurance on Treasurys than on "junk"-rated Indonesian bonds.

New pressure on News Corp.

News Corp. Deputy Chief Operating Officer James Murdoch fended off pressure from U.K. politicians, including Prime Minister Cameron, after two former company officials bluntly accused him of misleading a parliamentary committee.

Brazil Petrobras approves $225 billion investment plan

The third time proved to be the charm for Brazilian federal oil company Petroleo Brasileiro, or Petrobras, with the company's board finally approving a five-year investment plan that honored requests to keep a lid on spending. Petrobras said that it will invest $224.7 billion in the 2011-2015 period, up slightly from the $224 billion in outlays set in the 2010-2014 investment plan. Investments for 2011 were set at $55 billion, down slightly from the previous plan's projection of about $60 billion. Petrobras had reportedly asked to be allowed to raise domestic gasoline and diesel prices to generate additional revenue. The board balked at the request, which would not only have raised prices for consumers at the pump but also affected tax revenues. The government typically offsets some price increases by reducing taxes on refined products. The investment plan will also likely please analysts and investors, who had sold off the company's shares so far this year because of uncertainties surrounding the plan. Petrobras shares are down about 15% so far this year. Many analysts had criticized the company's heavy investment in local refining capacities, which they say doesn't generate enough return for the company. There were also concerns about the amount of financing Petrobras may need to seek in global capital markets. Petrobras said that it will likely need between $7.2 billion and $12 billion per year to fund the 2011-2015 plan, depending on economic factors.

Court throws out S.E.C. proxy requirement

A new Securities and Exchange Commission regulation that required companies to distribute information on shareholder-nominated candidates to their board of directors was thrown out by a federal appeals court Friday. The court said the regulator did not fully assess the cost of the new rule.

South Korea enacts chemical castration law

The South Korean Ministry of Justice announced on Sunday that it has enacted a law which allows the use of chemical castration on sex offenders convicted of attacking children under the age of 16 years old. The bill passed in the National Assembly last year 137-13 with 140 legislators declining to cast a vote. According to an anonymous ministry official, "The law takes effect immediately," and dozens of convicted sex offenders could be sentenced to chemical castration under the legislation this year alone. South Korea is the first Asian country to enact the controversial legislation.

Federal judge reduces $1.5 million jury verdict in music file-sharing case

A federal judge on Friday reduced a $1.5 million jury verdict against a Minnesota woman who was found to have willfully shared music files to $54,000. Chief Judge Michael Davis of the US District Court for the District of Minnesota described the court as "intimately familiar" with the case against Jammie Thomas-Rasset, as it has presided over three trials on the matter. In granting Thomas-Rasset's Motion to Amend or Alter the Judgment, Davis emphasized the fact that she is a "first-time willful, consumer infringer of limited means who committed illegal song file-sharing for her own personal use." Accordingly, Davis found the award of $1.5 million to the plaintiffs, members of the Recording Industry Association of America (RIAA), "appalling" and inconsistent with due process. Instead, RIAA will be awarded $2,250 for each of the 24 songs Thomas-Rasset was found to have illegally shared.

Collateral rules criticized

Some lawmakers and financial firms are resisting rules being written to implement last year's Dodd-Frank law that could require banks to set aside more collateral when they make certain trades in the derivatives market. The law requires that much of the collateral be held in cash or high-quality government securities, such as Treasury bonds. But some critics claim such a requirement could steer more money into U.S. securities just when many investors are getting nervous about the nation's debt load.

Mortgage win for Goldman

Goldman Sachs scored a victory in one of the highest-profile lawsuits that accuses it of duping investors on mortgage securities that were sold during the buildup to the financial crisis.

  • Weekly Magazine Review

Time

Chore Wars. Men are now pulling their weight — at work and at home. So why do women still think they're slacking off?

Newsweek

The DSK maid speaks. She was paid to clean up after the rich and powerful. Then she walked into Dominique Strauss-Kahn's room—and a global scandal.

Business Week

Cyber Weapons: The New Arms Race. The Pentagon, the IMF, Google, and others have been hacked. It’s war out there, and a cyber-weapons industry is exploding to arm the combatants.

The Economist

Last of the moguls. Rupert Murdoch is the last member of a dying breed. Time for him to step back.

Der Spiegel

Neustart - Wege aus der Burnout-Falle.

  • Daily Press Review

Norway attacks suspect to appear in court
Al Jazeera, Doha, Qatar

Egypt protesters defiant after clashes
Asharq Al-Awsat, Pan-Arab daily, London, England

Abbas: UN bid forced on Palestinians
Egyptian Gazette, English-language, Cairo, Egypt

Israeli doctors launch last-minute hospital strike
Haaretz, Liberal daily, Tel Aviv, Israel

PA leadership rallying support for UN bid
JPost, Conservative, Jerusalem, Israel

Norway gunman faces court hearing
BBC News, Centrist newscaster, London, England

Norway terror attacks suspect to appear in court
CNN International, London, England

Chavez on song after chemotherapy
Daily Express, Conservative tabloid, London, England

World's thinnest substance graphene 'will power the next generation of computers'
Daily Mail, Conservative daily, London, England

Wayne Rooney prostitute Jennifer Thompson ends up in a catfight on Coleen's patch
Daily Mail, Conservative daily, London, England

Spain's 'Indignants' return to protest in Madrid
EuroNews, International news, Ecully Cedex, France

NORWAY: Suspect in Norwegian killing spree to appear in court
France 24, Issy-les-Moulineaux, France

Focus on Islamists shifts radar
Hurriyet Daily News, (Liberal, English-language), Istanbul, Turkey

Tamils call for change after elections in Sri Lanka
Independent The, London, England

Top Moscow advertising company sold by under-fire Murdoch
Moscow News The, Independent, Moscow, Russia

Norway attack: who was behind the attack?
Telegraph The, Conservative daily, London, England

Amy Winehouse: Another burnt out case at 27
Telegraph The, Celebrity news, London, England

PM: 2nd jet can't be impounded
Bangkok Post, Independent, Bangkok, Thailand

MOFA urges NATO, US to pay boat captain's family
China Post, English-language daily, Taipei, Taiwan

Germany Offers Loans to Libyan Rebels
Chosun Ilbo, Conservative daily, Seoul, South Korea

Israel intercepts boat with weapons on Dead Sea
Hindustan Times, New Delhi, India

Country bomb seized from a house in Chennai
India Times, Conservative daily, New Delhi, India

Fate of Mr. Ozawa's secretaries
Japan Times, Independent centrist, Tokyo, Japan

Norway-style NZ terror attack unlikely - expert
New Zealand Herald, Conservative daily, Auckland, New Zealand

African elephants face extinction
People's Daily Online, English-language, Beijing, China

New US envoy to Afghanistan: No rush for the exits
Straits Times, Pro-government, Singapore

Shawn of the dead
Sydney Morning Herald, Centrist daily, Sydney, Australia

U.S.: Couples wed on 1st day gay marriage is legal in NY
Taiwan News, English-language daily, Taipei, Taiwan

General Motors clashed with Russia over Opel and Vauxhall unit: Paper
The Economic Times, Business, Mumbai, India

Norway twin attacks suspect due in court
Canadian Broadcasting Centre, Toronto, Ontario

With government spending, virtue hath its own rewards
Globe and Mail The, Centrist daily, Toronto, Canada

COLOMBIA: Native Groups Mobilise Against Escalation of War
IPS Latin America, International cooperative of journalists, Rome, Italy

Wall St Week Ahead: Markets edgy on debt talk stalemate
Reuters, Business News, New York, U.S

Venezuela's Chavez will run for re-election in 2012
Reuters, World News, New York, U.S

Manifesto reveals killer's meticulous planning
Toronto Star, Toronto, Ontario

UN talks on Africa drought crisis
BBC News, Centrist newscaster, London, England

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