The World's Tallest and Biggest

The World's Largest Man-Made Islands

Perhaps no structure on this list more embodies the original impulse behind the tall building — pure human hubris — than Dubai’s Palm Islands. Composed of three separate islands, Palm Jumeirah, Palm Jebel Ali and Palm Deira, the entire construction will add nearly 330 miles of beach front to the city of Dubai. Parts of Palm Jumeirah are currently open for development, with the remaining islands to be completed in the next 10-15 years. When finished, the three islands will contain over 100 luxury hotels while Palm Deira itself will be almost as large as Paris.

The World's Tallest Dam

Construction began on the Nurek Dam (984 feet) in 1961 while the central Asian nation of Tajikistan was still a republic within the Soviet Union, and was completed an efficient 19 years later. The dam provides 98 percent of Tajikistan’s electrical needs and was one of the first to be constructed with an asphalt central core of cement forming an impermeable barrier along the Vakhsh River.

The World's Tallest Hotel Not in Dubai

Though eclipsed both by Dubai’s Rose Tower and Jumeirah Emirates Tower, the Baiyoke Tower II in Bangkok, Thailand, nevertheless boasts 88 floors and 673 guest rooms. The 997-foot Tower is located in Bangkok’s Ratchathewi district known for its shopping and its 1.5 mile long artificial lake.

The World's Tallest Monument

Commonly known as the “Gateway to the West” the St. Louis Arch, designed by renowned architect Eero Saarinen, marks the starting point of the Lewis and Clark Expedition. The arch is surrounded by a 91-acre national park along the Mississippi River and stands 630-feet-tall. Visitors can take a four-minute tram ride up one of the “legs” of the arch to the observation deck at its center for spectacular views of St. Louis.

The World's Tallest Hotel Never Actually Completed

Destined for greatness, the Ryugyong Hotel in Pyongyang, North Korea, stands at 1,083 feet, was supposed to boast 105 floors and 3.9 million-square-feet of floor space, and was meant to have seven revolving restaurants. Not surprisingly this towering pyramid’s construction was put on hold in 1992 when North Korea confronted more pressing matters. What remains is the pyramid itself, but it lacks windows and fixtures and has been deemed unsafe for human occupancy.

The World's Tallest Casino (sort of)

Unsurprisingly located in Las Vegas, the Stratosphere Hotel & Casino boasts a 1,149-foot-tall observation tower and restaurant, making it the tallest free-standing tower in the United States. While you can be shot straight up 160 feet in the air, or ride a mechanical arm over the Tower’s edge, there are no actual games in the tower itself.

The World's Tallest Bar

On the 87th floor of Shanghai’s Jin Mao Tower–literally “Golden Prosperity Building”–is the appropriately titled Cloud Nine. In February 2001, cocktail-sipping patrons observed Han Qizhi, a 31-year-old shoe salesman, climb the 1,214 foot tower barehanded.

The World's Largest House

Indisputably, the Sultan of Brunei’s Istana Nurul Iman is the world’s largest residence. Really more of a palace, this structure boasts an impressive 2,152,782-square-feet of space, comprised of 1,788 rooms (including 257 bathrooms), and is home to the Sultan's car collection, including 165 Rolls Royces. (It easily dwarfs Buckingham Palace's 828,818 square feet). Unfortunately for non-royals, the Sultan’s palace is only open three days a year for the Islamic festival of Hari Raya Aidilfitri, marking the end of Ramadan. However, in 2009, Indian multi-billionaire Mukesh Ambani is scheduled to complete construction on the world's largest house.

The World's Largest Ancient City

Built in the mid-15th century, Machu Picchu is located 7,875 feet above sea level in the Urubamba Valley in Peru. A gorgeous collection of 150 structures, including temples and residences, the city was abandoned approximately 100 years after its founding and not re-discovered until the early 1900s. Machu Picchu was named one of the New Seven Wonders of the World in 2007.

The World's Tallest Memorial

Erected in 1940 by the Spanish dictator Francisco Franco, the Benedictine Abbey of the Valley of the Fallen boasts the largest Memorial Cross in the world. Located 28 miles northwest of Madrid, the 492-foot structure towers above a basilica and crypt carved out of a granite ridge, and boasts spectacular views of both the surrounding valley and the outskirts of Madrid.

Buffett says US in 'economic Pearl Harbor'

OMAHA, Neb. – Billionaire investor Warren Buffett says the U.S. is engaged in an "economic Pearl Harbor."

In an interview that aired Sunday on "Dateline NBC," the chairman and CEO of Berkshire Hathaway Inc. said the nation's economic situation is not as bad at World War II or the Great Depression, but it's still pretty severe.

Buffett said Americans are in a cycle of fear, "which leads to people not wanting to spend and not wanting to make investments, and that leads to more fear. We'll break out of it. It takes time."

Buffett's interview centered on President-elect Barack Obama and the tough task he faces in fixing the U.S. economy.

"You couldn't have anybody better in charge," the Omaha resident said of Obama, who'll be sworn into office on Tuesday.

As one of Obama's economic advisers, Buffett said the president-elect listens to what his advisers say, but ultimately comes up with better ideas.

He predicted that Obama will be able to convey the severity of the economic situation to the American people and explain their part in alleviating it.

As to how long the crisis would continue, Buffett said he didn't know.

"It's never paid to bet against America," he said. "We come through things, but its not always a smooth ride."

Omaha-based Berkshire owns a diverse mix of more than 60 companies, including insurance, furniture, carpet, jewelry, restaurants and utility businesses. And it has major investments in such companies as Wells Fargo & Co. and Coca-Cola Co.

UN to Obama: Don't change Afghan strategy

KABUL, Afghanistan – The top U.N. official in Afghanistan said U.S. President-elect Barack Obama should resist calls to change strategy in Afghanistan, urging him instead to focus on implementing the one already being pursued.

Kai Eide said that the incoming U.S. administration "has a unique opportunity to gather strength, gather energy ... and build on the trends we have seen" toward building the Afghan security forces and propping up the country's economy.

"My appeal is not grand strategy discussion, my appeal is concrete implementation effort," Eide told The Associated Press in an interview Thursday inside the U.N. compound in Kabul.

Obama has pledged to withdraw American troops from Iraq and deploy more to Afghanistan, where Taliban and al-Qaida linked militants have made a comeback in recent years.

U.S. Vice President-elect Joe Biden, who toured the region earlier this month, said that "things are going to get tougher in Afghanistan before they're going to get better."

Insurgent attacks in Afghanistan increased in 2008 over the previous year and some 6,400 people — mostly militants — died last year as a result of the insurgency.

The deteriorating situation in Afghanistan has forced the U.S. to plan to rush as many as 30,000 more troops to the central Asian country this year.

They will be joining some 32,000 U.S. troops already there who serve alongside 32,000 other NATO-led and coalition troops — the highest number since the U.S.-led invasion that ousted the Taliban from power in 2001.

Obama has said Afghanistan is one of his top priorities, but his incoming team have not yet disclosed a concrete plan.

Eide, the Norwegian diplomat who has been heading the U.N. mission in Afghanistan for the last nine months, warned against any major change in direction.

"Our problem is not that we need a new strategy. ... What happens very often is that we agree on something, we do not implement it and we say something must therefore be wrong with the strategy," Eide said. "That is not the case. The problem is in the implementation."

Eide said that there have been major improvements in two important sectors — building of local security forces and the economy.

"Every month we are getting better at handling the security situation," he said. "There is a greater momentum in building the key parts of the economy."

Staying the course and implementing the priorities set up at an international conference over six months ago must remain the goal, Eide said.

Meanwhile, the U.S. military said one of its Black Hawk helicopters crashed near Kabul Friday, but there were no deaths reported and no enemy activity was involved. All seven people on the helicopter survived and are "safe and secure," the military said in a statement.

The helicopter was on its way to perform a medical evacuation. The statement does not say what caused the accident.

Zimbabwe unveils 100 trillion dollar note ahead of unity talks

HARARE (AFP) – Zimbabwe unveiled a 100 trillion dollar note Friday in the latest grim measure of its staggering economic collapse, heightening the urgency of a new round of unity talks set for next week.

A shopper purchases tomatoes in Harare. Zimbabwe will introduce a 100 trillion dollar note, in its latest attempt to keep pace with hyperinflation that has left the once-vibrant economy in tatters

Veteran leader Robert Mugabe and opposition chief Morgan Tsvangirai are set to hold talks Monday with key regional leaders in a bid to salvage a four-month-old unity accord, which has yet to be implemented.

The stalemate over disputed elections last year has only fuelled the economic and humanitarian crisis that has impoverished the country, leaving nearly half the population dependent on food aid as a cholera epidemic sweeps the country.

The Reserve Bank announced in the government mouthpiece Herald newspaper a series of trillion-dollar denominations to keep pace with hyperinflation that has left the once-dynamic economy in tatters.

The new 100,000,000,000,000 Zim-dollar bill would have been worth about 300 US dollars (225 euros) at Thursday's exchange rate on the informal market, where most currency trading now takes place, but the value of the local currency erodes dramatically every day.

The move came just one week after the bank released a series of billion-dollar notes, which already are not worth enough for workers to withdraw their monthly salaries.

Inflation was last reported at 231 million percent in July, but the Washington think-tank Cato Institute has estimated it now at 89.7 sextillion percent -- a figure expressed with 21 zeroes.

When Mugabe took power at independence from Britain in 1980, the Zimbabwe dollar was equivalent to the British pound.

For years, the nation's farms, schools and health care were considered a model for Africa. Now 80 percent of the population is in poverty, 1.3 million are living with HIV, five million depend on food aid, and more than one million others have fled overseas.

A breakdown in basic sanitation and water has spawned a cholera epidemic that has killed 2,100 people since August and shows no sign of slowing.

Despite the ever-worsening crisis, Zimbabwe is locked in a political limbo following elections last March, when Tsvangirai won a first-round presidential vote and his Movement for Democratic Change (MDC) seized a parliamentary majority for the first time.

The MDC victory was greeted with a wave of political attacks that Amnesty International says left more than 180 people dead -- mostly opposition supporters.

Citing the violence, Tsvangirai pulled out of a run-off election in June, allowing 84-year-old Mugabe to claim a one-sided victory condemend by western powers.

Former South African president Thabo Mbeki brokered a power-sharing deal signed September 15, but the rivals have yet to agree on how to form a unity government, while attacks and arrests of MDC members have continued.

Hoping to salvage the deal, South Africa's new President Kgalema Motlanthe plans to fly to Harare on Monday with Mbeki and Mozambican President Armando Emilio Guebuza to mediate new talks.

"They will focus their discussions on the outstanding matters in the implementation of the global agreement," Motlanthe's spokesman Thabo Masebe told AFP in Johannesburg.

Tsvangirai told reporters Thursday that he remained committed to the unity accord. "All I lack is a willing partner," Tsvangirai said.

But he said he was not willing for talks to drag on indefinitely.

"At some point we will have to decide whether it is worth going into this government or not," he said.

Sri Lanka: Thousands of civilians flee rebel area

From Yahoo

COLOMBO, Sri Lanka – Thousands of civilians have fled Sri Lanka's northern war zone in recent days, crossing the front lines amid fierce fighting as the army closed in on the rebels' last stronghold, the military said Friday.

Sri Lankan workers bury the bodies of suspected Tamil Tiger rebels recovered by government forces following heavy fighting in the island's north, in Vavuniya on January 14. Tens of thousands of people are on the run because of fighting between troops and Tamil rebels in northern Sri Lanka where civilians have no safe passage, the Red Cross said Friday.

(AFP/Str)

The government says it hopes the exodus represents the start of a mass flight that will remove hundreds of thousands of bystanders from harm's way as the military tries to crush the Tamil Tigers' decades-old insurgency

Aid workers and diplomats have expressed growing concern over the fate of the civilians trapped in what remains of rebel-controlled territory in the northeast after months of fighting.

While the military has so far avoided large-scale civilian deaths, there have been increasing reports of civilian casualties.

Civilians have largely ignored past government appeals for them to cross into military-held areas. However, with the rebel-held area shrinking and nowhere left to run, families now have begun fleeing in large numbers, the military said.

On Thursday alone, 1,069 civilians fled into government territory, the military said. The day before, 874 crossed over. A total of 2,735 fled in the first 15 days of 2009, dwarfing the 1,600 who left in all of 2008.

"It has started, and day by day it is increasing," military spokesman Brig. Udaya Nanayakkara said.

The military has vowed to destroy the rebel group and in recent weeks has captured the Tamil Tigers' de facto capital of Kilinochchi and boxed the insurgents into a small pocket of territory in the northeast.

On Friday, the military said it had captured a sixth airstrip used by the rebels' tiny airborne unit.

An estimated 250,000 civilians remain in the area, many of them having fled from other areas ahead of advancing troops, aid groups said.

New York-based Human Rights Watch accused the rebels last month of preventing civilians from leaving, and the government said the insurgents were using them as human shields to block the military offensive.

The rebels could not be reached for comment.

The International Committee of the Red Cross confirmed the growing civilian flight, saying Friday that as the rebel area shrank and the fighting escalated, there was no safe place left for them to hide.

"Families heading westward in search of safety are encountering other families moving eastward with the same aim," said Paul Castella, the head of the Red Cross office in Sri Lanka.

The families that have chosen to flee are trudging through the jungles with their belongings, Nanayakkara said. When they run into government troops, they are questioned to determine whether they are rebels and then sent to displacement camps in the south, he said.

Human Rights Watch has accused the government of arbitrarily detaining those civilians who managed to flee the rebel areas and described the camps as "badly disguised prisons."

Meanwhile, concerns mounted over the safety of the civilians still in the war zone.

Dr. T. Varatharajah, the government health director in the region, sent a letter to the Red Cross and the United Nations on Thursday describing deteriorating conditions in the rebel-held areas.

In the letter, obtained by The Associated Press, Varatharajah said there was a severe shortage of food, shelter, medicine and medical staff. One local hospital was hit by several artillery shells Tuesday that wounded two patients, he said.

"This totally inhumane attack ... has left the staff and the people in total panic," he wrote. He did not say who fired the artillery.

The rebels have been fighting since 1983 to establish an independent state for minority Tamils, who have suffered marginalization at the hands of successive governments controlled by the Sinhalese majority. More than 70,000 people have been killed in the violence.

In new tactic, L.A. goes after gangs' money

Los Angeles – The gang capital of the world is taking a new tack against them: cash damages.

The city of Los Angeles, plagued by 23,000 violent gang crimes since 2004, including 784 murders and 12,000 felony assaults, announced Tuesday that it had won its first civil judgment, for $5 million, against a criminal gang that had dominated the heroin trade downtown for decades.

The verdict could bode well for another first-of-its-kind lawsuit the city filed last month that goes after all assets of gang leaders, not just those associated with their criminal activity. Both suits seek to plow the money back into improving the neighborhoods affected by the gangs through a fund.

"By giving prosecutors more tools to fight gang activity at the local level, we are protecting our communities at the same time [that] we're able to strengthen our statewide anti-gang efforts," said Gov. Arnold Schwarzenegger in a statement released with the announcement of the $5 million verdict against the 5th and Hill gang in L.A.

The civil suits were filed under different amendments to state laws, one passed in 2007 and one in 2008, designed to strengthen authorities' ability to control gangs. The 2007 amendment allows law enforcement to seize assets associated with criminal conduct. But the 2008 law goes even further – it allows prosecutors to collect damages from gang members' personal assets, too.

The December suit against the 18th Street gang is the first to make use of the 2008 amendment.

"We're sending a message to gang leaders across this city," said City Attorney Rocky Delgadillo at a press conference last month. "If you break the law, we will not only find you, arrest you, and put you behind bars, we will also take away your money, your property, your homes, and your cars. Every penny we strip away will be returned to the neighborhoods."

The tactic of trying to cripple organizations by taking away their assets has been commonly used against the mafia. More recently, it has been used against white supremacist organizations. In 2000, the Southern Poverty Law Center won a $6.3 million verdict against the Aryan Nations that forced the organization to give up its 20-acre compound in Idaho.

The center won its most recent case last November, getting $2.5 million from the Imperial Klans of America on behalf of a teenager assaulted by Klan members in rural Kentucky.

Money to repair neighborhoods
The City Attorney's office says it is moving against the 18th Street gang on behalf of residents who can't file suit themselves because they can't afford the expenses and they fear retaliation. Gangs control certain neighborhoods by exacting so-called "street taxes" on home and business owners as well as street vendors.

The suit seeks compensation for property damage, emotional distress, personal injury, and intangibles such as residents not being able to use public parks because of gang activity.

It names nine leaders of the 18th Street gang, which has operated for years in the Pico-Union and Westlake areas. One of the leaders, Ruben "Night Owl" Castro, is serving multiple life terms in a federal maximum security prison but still allegedly controls two gang subgroups, the Shatto Park Locos and the Hoover Locos.

The damages collected in the suit will be placed in a fund to aid the neighborhoods affected by the gang activity, says Bruce Riordan, director of the city attorney office's antigang operations and a former federal prosecutor of the 18th Street gang and Mexican Mafia.

The fund will be administered by the City Council, he says, and will most likely go toward security cameras, graffiti removal, or beautification of parks.

"Gang members are not necessarily the best at saving their money, but they do buy stuff and invest in property and make cash down payments," says Mr. Riordan.

One gang member, Frank "Puppet" Martinez made as much as $40,000 a month while still behind bars, he says. At the home of one of his relatives, investigators found $444,605 in cash, stashed in storage boxes and a vacuum cleaner bag. Included on the bills were 18th Street gang markings as well as street and collectors' names.

Concerns over civil liberties
Los Angeles has been at the forefront of using public nuisance injunctions against gang members since the 1980s, and other cities such as San Francisco have followed its lead, says Austen Parrish, vice dean for academic affairs and professor of law at Southwestern University School of Law, Los Angeles.

The city currently has 463 known gangs with 26,000 members, according to the Los Angeles Police Department.

But the use of injunctions has been controversial, Mr. Parrish says, because of "perceived selective enforcement and various civil rights issues."

The new law, too, "may raise significant civil rights issues depending on how it's used," Mr Parrish adds.

Unlike with organized groups, street gang members may be hard to identify.

"Gangs are not like a corporation with a company house and car. There are potentially lots of arguments over who is in the gang and what that means," says Peter Bibring, staff attorney for the Southern California chapter of the American Civil Liberties Union.

Some local observers have already questioned the motivations of the city attorney and the efficacy of the law. "Gang injunctions are showy, quick-fix, politically-motivated PR gimmicks that do nothing to reduce gang violence," says Earl Ofari Hutchinson, president of the Los Angeles Urban Policy Roundtable.

Guilt by association, he says, ensures criminalization of "countless numbers of young blacks and Latinos who are not gang members."

It would be better, he adds, to fund skills training, drug counseling and rehabilitation, mentoring, and family support programs."

Where gang members keep their money and other assets is another question that troubles civil libertarians. They want to know whether the rights of those not engaged in criminal activity will be protected.

"Suppose an alleged gang member's grandmother received some jewelry … do prosecutors suddenly get to go after her house as well?" asks Mr. Bibring.

"It's one thing if the bags of money are marked, 'income from cocaine' – but how due process gets sorted out becomes a much more difficult problem," he says. "This is potentially a hugely complicated question."

Citigroup posts $8.29B loss, splits up the company

Citigroup posts $8.29B loss, separates traditional banking business from riskier ventures NEW YORK (AP) -- Citigroup said Friday it is splitting up into two businesses as it reported a fourth-quarter net loss of $8.29 billion -- its fifth straight quarterly loss.

In Citigroup's reorganization, one business, Citicorp, will focus on traditional banking, while the other, Citi Holdings, will hold the company's riskier assets.

The move will allow Citigroup to sell or spin off the Citi Holdings assets to raise cash. It also reveals the company's growing focus on back-to-basics lending and deposit-gathering, and dismantles the "financial supermarket" created a decade ago.

Some investors have been calling for a breakup of Citigroup for years, as the bank struggled to keep up with its Wall Street peers. Those calls grew louder as the mortgage crisis caused the company's troubles to mount.

There has been harsh blame for Citigroup's woes directed at the board, too -- and the company said Friday it plans to get rid of more board members after the recent departure of long-time director and former Treasury Secretary Robert Rubin.

"There has been one announced departure from the board. Together with other anticipated departures, this gives us the opportunity to reconstitute the board and we will do so as quickly as possible," said Richard Parsons, Citi's lead director, in a statement.

The New York-based bank's fourth-quarter loss amounted to $1.72 per share. Analysts expected a loss of $1.31 per share. While the per-share loss was higher than the consensus estimate, the total loss was smaller than the $10 billion many investors feared. For the year-ago fourth quarter, Citigroup had a net loss of $9.83 billion, or $1.99 per share.

For the latest quarter, Citigroup marked down $7.8 billion in securities and banking revenue, and $5.3 billion on the value of credit derivatives. It also lost $2.5 billion in private equity and equity investments, $2 billion in restructuring costs, and $6 billion to add to reserves.

The company's new structure is a reversal back to 1998, when John Reed's Citicorp merged in 1998 with Sandy Weill's financial services conglomerate Travelers Group.

The new Citicorp will include the retail bank; the corporate and investment bank; the private bank, which serves wealthy individuals; and global transaction services.

Citi Holdings will include Citi's asset management and consumer finance segments, including CitiMortgage and CitiFinancial. It will also be in charge of Citi's 49 percent stake in the joint brokerage with Morgan Stanley, and the pool of about $300 billion in mortgages and other risky assets that the U.S. government agreed to backstop late last year.

Citigroup said it entered a definitive agreement on that deal with the government on Thursday. The government has already lent the bank $45 billion.

Asian stocks tumble on US retail sales, bank fears

HONG KONG – Asian stock markets tumbled Thursday, with Japan's benchmark sliding almost 5 percent, on gloomy U.S. holiday sales and renewed concerns about the banking industry.

Every market across Asian suffered steep declines, with broad-based selling hitting industries from energy to financials to exporters. The dollar sank further against the yen, and oil prices continued to fall on worries that the global economic slump will further weaken demand for crude.

Sentiment was pummeled after a U.S. government report showed retail sales dropped 2.7 percent last month, more than double the decline economists had expected and providing alarming new evidence that American consumers are slashing their spending.

Meanwhile, a flood of negative news in the financial industry reignited worries that international banks would suffer ever-bigger losses and be forced to raise billions more in capital as the world economy deteriorates.

Deutsche Bank AG, Germany's biggest bank, on Wednesday reported a 4.8 billion euro ($6.4 billion) loss for the fourth quarter, blaming "exceptional market conditions." Analysts said HSBC PLC, Europe's largest bank, may have to raise $20 billion to $30 billion and slash its dividend.

In the U.S., reports surfaced Wednesday that the government was closed to supplying Bank of America Corp., the nation's biggest bank by assets, with billions of dollars more in aid after it agreed to acquire debt-ridden Merrill Lynch & Co.

"Everybody is worried the global recession will hurt bank earnings because of bad debt," said Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong. "And retail sales are very bad. Things are bad for everybody."

In Tokyo, the Nikkei 225 stock average fell 415.14 points, or 4.9 percent, to 8,023.31, with sentiment further hurt by new figures showing that Japanese machinery orders, a closely watched indicator of corporate spending, plunged in November.

Elsewhere, Hong Kong's Hang Seng Index fell 3.4 percent to 13,284.50 after earlier sinking about 5 percent. South Korea's Kospi dived 6 percent to 1,111.34 while markets in Australia and Taiwan fell more than 4 percent. Singapore's benchmark was down over 3 percent but Shanghai stocks were only slightly lower.

In financials, HSBC skidded 5. 6 percent in Hong Kong trade to a multiyear low, and South Korea's KB Financial Group Inc. plunged 9.2 percent.

Falling prices for oil and metals pulled down commodity producers, with Rio Tinto, the world's No. 3 mining company, tanking 8.2 percent in Australia following a significant drop in iron ore output during the fourth quarter. Major Chinese oil firms, including PetroChina and CNOOC, sank more than 7 percent in Hong Kong.

In Japan, Sony Corp. shed 5.2 percent, while electronics maker Nikon Corp. lost 6.8 percent and Canon Inc. fell 5.6 percent.

The sell-off followed markets in Europe and the U.S., where the Dow Jones index fell 248.42, or 2.9 percent, to 8,200.14, its lowest close since Dec. 1. All 30 stocks that make up the Dow fell. The S&P 500 fell 29.17, or 3.4 percent, to 842.62.

With U.S. futures down, Wall Street was poised to add to its losses. Dow futures were off 17 points, or 0.2 percent, at 8,142 and S&P500 futures fell 4.2 points, or 0.5 percent, to 835.60.

Oil prices lost ground again, with light, sweet crude for February delivery off 92 cents at $36.36 a barrel in Asian trade. The contract lost 50 cents to settle at $37.28 overnight on demand concerns after a government report showed that crude inventories continued to grow.

In currencies, the dollar weakened to 89.08 yen, down from 89.13, and the euro fell to $1.3178 from $1.3199.

AP Obama stimulus bill price tag now $850 billion

WASHINGTON – Barack Obama's economic recovery bill has grown to perhaps $850 billion after negotiations with his Democratic allies in Congress, who have rewritten some of the president-elect's tax proposals and may drive the price tag even higher.

But House Democrats are likely to back away from an effort to use the economic recovery bill to extend a tax cut for middle- to upper-income taxpayers. Obama's transition team had concerns that extending current rules regarding the alternative minimum tax wouldn't boost the economy.

Rep. Charles Rangel, D-N.Y., chairman of the tax-writing House Ways and Means Committee, said Wednesday that lawmakers in both the House and Senate wanted to use Obama's stimulus package to make the annual fix to the AMT to prevent more than 20 million additional tax filers from having to pay it.

But making that fix for one year alone would have cost about $70 billion, taking a healthy chunk out of the approximately $300 billion that Obama has set aside for tax cuts. Now, Democratic aides briefed on the details but demanding anonymity to speak frankly, say the soon-to-emerge $850 billion stimulus plan is unlikely to address the minimum tax, at least in the House version likely to be revealed Thursday.

In the Senate, Max Baucus, D-Mont., the top tax writer, said the alternative minimum tax fix was likely to remain in the recovery bill, which could drive the cost of the bill above $850 billion.

A $3,000 job-creation tax credit proposed by Obama, which drew strong objections as unworkable, still appears likely to be jettisoned from the Obama plan, Rangel said.

But a pro-business provision that would allow companies posting losses last year to get refunds for taxes paid as far back as five years earlier now sounds more likely to win inclusion in the relief package after talks Wednesday.

The AMT was designed in 1969 to make sure wealthy taxpayers pay at least some tax. But it never was indexed for inflation and therefore threatens to trap millions of people for whom it was never designed.

Obama's economic team has been resisting adding the AMT fix to the economic recovery bill, arguing privately that it won't do much to help the economy. It's virtually certain to be addressed later if left alone now — and in any event, the effects wouldn't be felt until next year's tax-filing season.

The House and Senate often have wrangled over how to pay for fixing the AMT — whether to use other tax revenues to cover the cost or to add the cost to the budget deficit.

Meanwhile, work continued throughout the Capitol on other pieces of the recovery package in hopes of unveiling the bill to lawmakers and the public on Thursday. Despite promises of an open process, the Obama transition team and its allies in Congress have refused to release any details in writing or thoroughly describe most of the bill's elements.

The Obama plan originally was plotted to cost $725 billion to $775 billion, most of which would reach the economy over the next three years. Now, aides involved in ongoing talks said, the measure would cost about $850 billion, with tax cuts in the range of $300 billion to $325 billion.

The largest components include $85 billion to $90 billion for cash-strapped states to help pay for the Medicaid health care program for the poor and disabled. Another $80 billion or so would go into a block grant to states for education, which Sen. Charles Schumer, D-N.Y., said would prevent cutbacks in school programs, layoffs and property tax increases.

There's also about $25 billion to pay for subsidies to help laid-off workers hold onto their health insurance, $35 billion to extend unemployment benefits and a 15 percent increase in food stamp benefits costing $20 billion.

Infrastructure spending, especially popular with rank-and-file lawmakers, is set for a big increase. Rep. John Olver, D-Mass., who chairs the panel funding transportation projects and public housing, said he had at least $55 billion on such projects. But other ideas, such as improving the nation's electrical grid, also are getting funded.

The recovery bill has set off a feeding frenzy in Washington as lawmakers across the spectrum press for add-ons. Sen. Arlen Specter, R-Pa., wants new health research funds, while Rep. Anthony Weiner, D-N.Y., claimed credit for $1 billion worth of police hiring grants, which he hopes would create 13,000 jobs.

Job losses stack up as recession deepens

Job losses stack up as employers scramble to cut costs to survive deepening recession WASHINGTON (AP) -- Trying to survive a deepening recession, employers are cutting their work forces to the bone, leaving more Americans unemployed and with dim prospects of finding a new job any time soon.

The Labor Department releases a report Friday expected to show the employment market turned worse in December, capping a year when job losses were logged every month.

With employers throttling back hiring, the unemployment rate is expected to jump from 6.7 percent in November to 7 percent in December, according to economists' forecasts. If they are right, that would mark the highest jobless rate in 15- 1/2 years.

Nervous employers probably axed another 550,000 jobs last month, economists forecast. That would bring the net number of jobs lost for all of 2008 to 2.46 million. Some however, think the number of jobs cut last month will be higher -- 600,000 or 700,000.

If the conservative 2.4 million estimate of net payroll reductions for 2008 proves correct, it would mark the first annual job loss since the previous recession in 2001. It also would be the worst year of job losses since 1945, when employers slashed nearly 2.8 million jobs, though the number of jobs in the U.S. has more than tripled since then.

Employers are chopping costs as they try to cope with dwindling appetite from customers in the United States as well as in other countries, which are struggling with their own economic problems.

The U.S. recession, which just entered its second year, is already the longest in a quarter century, and is likely to stretch on well into this year. The fact that the country is battling a housing collapse, a lockup in lending and the worst financial crisis since the 1930s make the current downturn especially dangerous.

All the problems have forced consumers and companies alike to retrench, feeding into a vicious cycle that Washington policymakers are finding difficult to break.

President-elect Barack Obama says a bold approach is needed to bust through this cycle and revive economy.

"I don't believe it's too late to change course, but it will be if we don't take dramatic action as soon as possible," he said Thursday.

"If nothing is done, this recession could linger," Obama warned. "The unemployment rate could reach double digits."

Obama, who takes over Jan. 20, is promoting a massive package of tax cuts and government spending that could total $775 billion over two years. With add-ons by lawmakers, the package could swell to $850 billion, his advisers say.

Even with a new government stimulus, the unemployment rate is expected to keep rising this year. Some think it could hit 9 percent or 10 percent at the end of this year.

This week alone, drugstore operator Walgreen Co., managed care provider Cigna Corp., aluminum producer Alcoa Inc., data-storage company EMC Corp. and computer products maker Logitech International all announced major layoffs to cope with the recession.

Questions loom over use of Treasury bailout money

Congressional auditors questioning how bailout money has been used; urge more accountability WASHINGTON (AP) -- The head of a congressional panel overseeing the $700 billion bailout program said Friday that lawmakers need to "take a very hard look" at how banks have used the money.

"I'm shocked that we have to ask these questions," said Harvard law professor Elizabeth Warren, "but what I will say is that I'm not giving up on this. The best news is that these questions have gotten a lot of attention and a lot of people are demanding answers and when a lot of people demand answers, things start to change."

Warren appeared on a nationally broadcast television show Friday as the Congressional Oversight Panel she heads released a report featuring questions about how banks are spending taxpayer money, how the money will combat the rising tide of home foreclosures and Treasury's overall strategy for the rescue.

But Treasury's Dec. 30 response "did not provide complete answers to several of the questions and failed to address a number of the questions at all," said the panel's second report.

The new document cited an Associated Press investigation that found none of the banks was willing to disclose what they were doing with hundreds of billions of dollars distributed through direct injections of federal money.

"For Treasury to advance funds to these institutions without requiring more transparency further erodes the very confidence Treasury seeks to restore," it said.

Appearing Friday on ABC's "Good Morning America," Warren said that Treasury "didn't put any tracking mechanisms on it."

"They didn't tell the banks what they had to do in order to get the money. It might be used for lending, it might be used to buy other banks ... Or it might just be stuffed in vaults and left there," she said.

"I think that Congress may want to take a very hard look at that question," Warren added. "Ultimately, we don't have a badge, don't have a gun. It's up to Congress."

"In my view, the heart of this problem started with the housing bubble and the mortgage foreclosure mess and in my view, that's where the solution should start as well," Warren said.

Most of the panel's report argues that better responses to unanswered questions are "essential" and explains why it believes Treasury's earlier responses were insufficient.

"Treasury has still not explained precisely what it sees as the problem," reads one assessment of a response deemed inadequate.

At several points, the report tartly explains the meanings of simple terms such as "strategy" and "oversight."

Referring to a question of why Treasury has required Citigroup, but not other firms that got money, to modify mortgages, the report says: "Treasury's refusal to answer this question is one of the most troubling aspects of their letter. The panel intends to do more fact finding on this matter."

Line after line of the column marked "Treasury Response" says simply, "No response."

The panel repeatedly states its reluctance to take Treasury's reassurances at face value.

"Treasury may be 'confident' that it is 'pursuing the right strategy to stabilize the financial system and support the flow of credit to our economy,' but once again, the function of oversight is to evaluate that claim," the report reads. "The question remains unanswered."

The panel's next official action will be a public hearing next Wednesday.

City Employee Pay Is Outpacing Private Sector, Report Says

Bolstered in part by Mayor Michael R. Bloomberg’s spending, the average New York City employee cost the city $107,000 a year in wages, health insurance, pension and other benefits in the 2008 fiscal year, an increase of 63 percent since 2000, according to a new report.

City worker compensation grew twice as fast as that of employees in the private sector and elsewhere in the public sector during the same period, the Citizens Budget Commission said in the report, which was released on Thursday. The increase was driven by contractual raises that outpaced the inflation rate, and by the rising cost of health insurance and pension benefits, said the commission, a business-backed research group.

The group said those benefits have remained “exceptionally generous” under Mr. Bloomberg.

And with the city staring at a projected $7 billion deficit by 2011, fiscal watchdogs are intensifying their calls for the Bloomberg administration to act more aggressively to control employee costs.

“These skyrocketing costs are stunning,” said Carol Kellermann, president of the Citizens Budget Commission, “and they impose an enormous, and growing, burden on increasingly strained taxpayers. Corrective action is essential and can no longer be delayed.”

Mr. Bloomberg has long defended giving healthy raises to the city’s workforce of 281,000 to attract the best people and make city jobs competitive with those in the suburbs. Some critics contend that recent contracts he has negotiated with teachers and police officers, among others, are too generous, and have been driven by Mr. Bloomberg’s political aims as he seeks warm relations with powerful unions.

Critics also say that Mr. Bloomberg has not been forceful enough addressing soaring health and pension benefit costs. Those costs have jumped by 182 percent since 2000, according to the Citizens Budget Commission, in contrast to a 52 percent increase for other state and local governments, and a 40 percent increase for private industry.

Part of the reason that health benefits have jumped so much, the report said, is the city’s longstanding practice, unchanged by Mr. Bloomberg, to pay 100 percent of health insurance premiums for employees and their families, as well as for retirees and their spouses. The report noted that “Most other employers require their workers to pay some share of the premium.”

Other factors are beyond the mayor’s control, according to the report, such as actuarial recalculations and lower investment returns, as evidenced recently by the impact of the recession.

Still, Charles M. Brecher, the commission’s research director, said: “His record is mixed. On the pay side, he started out doing a terrific job, based on productivity, but his performance has slipped. On fringe benefits I don’t think he’s been aggressive enough to tackle the problems.”

Mr. Bloomberg has had some success, however, battling the Legislature’s seemingly endless desire to sweeten pension benefits. Last month, Mr. Bloomberg developed the local component of an ambitious plan unveiled by Gov. David A. Paterson seeking to reduce benefits for newly hired state and local workers by creating a new pension category, which would require employees to work longer and retire later to receive pension benefits, a move long opposed by the unions.

Indeed, the Citizens Budget Commission praises that proposal, and urges the State Legislature to pass it. “I think the report is very clear,” said Marc LaVorgna, a Bloomberg spokesman. “It lays the blame at the foot of pension costs. Costs for employees are always going to go up. That’s not irregular. But we have been extraordinarily burdened by a pension system that we have no control over.”

The report recommends that the city do more to restructure health insurance costs by negotiating with the Municipal Labor Committee. The administration hopes to save $200 million; the commission says “larger savings should be pursued on a more urgent basis.”

Asked about spiraling health care costs, Mr. LaVorgna said: “Rapidly rising costs are not unique to New York City government. That’s a national problem and there’s really not a local solution to what’s a national health care problem.”

Over all, the report found that city employee pay rose to an average of $69,000 annually as of last June 30, up from $52,000 in 2000, an annual increase of 3.6 percent, while inflation rose an average of 3.2 percent during the same period. Average benefits now cost almost $38,000 a year, up from $13,000 a year.

Thanks to overtime and other supplemental payments, firefighters have an average annual compensation package totaling $186,000, the highest among city employees. Department of Education employees cost the city almost $99,000 annually.

Obama Needs Quick Action

WASHINGTON – Lawmakers are under orders to finish action on President-elect Barack Obama's nearly $800 billion economic recovery plan by mid-February. But already it is plain that a set of serious fissures need to be bridged if the bill is to be completed within five weeks.

Obama urged Congress on Thursday to "act boldly and act now" to fix an economy growing perilously weaker, even as top Democrats said they dislike key provisions, especially the design of his tax cuts.

Democrats such as Budget Committee Chairman Kent Conrad complained openly that many of the incoming administration's proposed tax cuts wouldn't work. Republicans warned against excessive new spending, with both parties signaling the incoming president they intend to place their own stamp on the economic recovery effort.

Conrad, D-N.D., and Sen. Judd Gregg, R-N.H., also staked a firm position against using the economic recovery plan for permanent spending increases, opening a split with House Democrats hoping to use the plan to broaden eligibility for unemployment insurance and boost education spending.

"Doing things that would have a permanent effect when we face trillion-dollar deficits as far as the eye can see is just unwise," Conrad said.

A call for a $3,000 tax break for job creation drew particular criticism in a closed-door meeting, and numerous lawmakers said Obama had not ticketed enough of his tax proposal for energy.

But there was little or no dispute about the need for action, and Obama's remarks coincided with a pair of government reports showing fresh weakness in an economy already in recession. An updated reading on unemployment was expected to bring even more bad news on Friday.

"If nothing is done, this recession could linger for years," with unemployment reaching double digits, Obama said in a speech at George Mason University in Fairfax, Va. "A bad situation could become dramatically worse."

Obama's aides and congressional Democrats have been at work for weeks on legislation to create new jobs, help the unemployed, cut taxes and aid cash-strapped states. There also are subsidies to help the newly unemployed afford their health care, a big new effort to improve the energy efficiency of federal buildings, and tax credits for business investment in plants and equipment.

The details are closely held and subject to change — and the cost of various components seems to be bouncing around daily in the push and pull between the Obama transition team and congressional leaders.

Obama's chief political strategist, David Axelrod, and incoming chief of staff, Rahm Emanuel, heard plenty of ideas and criticisms during Capitol Hill meetings Thursday.

"There was what one would expect, which is constructive comments," Axelrod told reporters. "I'm not going to characterize it as push-back. I'm going to characterize it as people doing their jobs."

House Speaker Nancy Pelosi, D-Calif., promised lawmakers would cancel next month's planned Presidents' Day recess if necessary.

"We are not going home without an economic recovery package," she told reporters, and Senate Republican leader Mitch McConnell of Kentucky, at a different appearance, agreed that that allowed enough time to get the job done.

About $300 billion of Obama's package would be for tax cuts or refunds for individuals and businesses.

One tax provision would provide a $500 tax cut for most workers and $1,000 for couples, at a cost of about $140 billion to $150 billion over two years. The individual tax cuts may be awarded through withholding less from worker paychecks, effectively making checks about $10 to $20 larger each week.

Democrats emerging from a closed-door meeting of the Senate Finance Committee had little positive to say about the tax cut proposals. Conrad was critical of the proposed break for workers and their families.

"Twenty bucks a week. How much of a lift is that going to give?" he said.

Nor did he sound positive about a proposed tax break for businesses to create jobs — a $3,000 tax credit for companies that hire or retrain workers.

"If I'm a business person, it's unlikely if you give me a several thousand dollar credit that I'm going to hire people if I can't sell the products they're producing," Conrad said.

Republicans noted forecasts of a record $1.2 trillion deficit for the current year and said too much additional spending could be harmful. "We can't buy prosperity with more and more government spending," declared Rep. John Boehner of Ohio, the House Republican leader.

Changing Mail delivery

NDIANAPOLIS – Think you know what time your mail arrives each day? Think again.

The U.S. Postal Service is reviewing all its city routes nationwide and changing some of them to cut costs because mail volume is dropping during the recession.

Nationwide, the changes are expected to affect as many as 50 million addresses on 85,000 urban routes. Rural routes already get reviewed each year,

"It should be pretty seamless to customers, except they could possibly see a difference in delivery times," said Al Eakle, a USPS spokesman for the Indiana District.

The route reviews began last month and should be completed by the end of February, Eakle said Thursday. Some customers already may be seeing changes as parts of some routes are consolidated into others.

Some letter carriers are saddened by the changes. In Bloomington, Darlene Meyer said she has watched children grow up, kept an eye on homebound customers and returned escaped pets during the nine years she's delivered her route.

"It's like losing part of my family," Meyer told The Herald Times of Bloomington.

Eakle said the economic downtown affects the Postal Service just as it would any enterprise because businesses have reduced mailings to cut expenses. Nationally, mail volume fell by 9.5 billion pieces, or 4.5 percent, during the fiscal year that ended Sept. 30.

An agreement between postal officials and the National Association of Letter Carriers allows the Postal Service to expedite the changes, Eakle said. Rather than laying off carriers, the Postal Service has been offering early retirement to thin the ranks.

Postmaster General John Potter has said that after losing $2.8 billion in the last fiscal year, the Postal Service would continue to cut overtime and working hours. The cost of a first-class stamp rose to 42 cents last May and a new increase based on the rate of inflation will occur in May.

LTTE's most fortified Northern garrison at EPS falls

"Elephant Pass, the gateway to the Jaffna peninsula is now under the total control of security forces", news reports from the battlefront read. "Troops have also gained total control over the 325km long A-9, Jaffna- Kandy trunk road, after 23 years", military sources further said.

The end-game of LTTE's protracted separatist cause is reaching its final stages, as the advancing SL security forces overran the most fortified LTTE Northern garrison at EPS today (Jan 9), which was officially declared by the C-in-C President Mahinda Rajapaksa, a short while ago.

In the face of concentrated armour, artillery, infantry and mechanized infantry assaults led by close support SLAF raids, LTTE terrorists' pulled off from the garrison township with soaring casualties and loses, towards Mulliyan, further East military sources at the battlefront said. According to battlefield reports, the 53 and 55 offensive Divisions from North have linked up with the 58 Division, flushing the last LTTE resistance at EPS during a heavy multi-frontal onslaught launched since yesterday.

The fall of EPS has deprived LTTE, the most crucial strategic ground, at the 'Jaffna gateway', following an eight year odd occupation, which linked the Wanni mainland with the Jaffna peninsula. With the fall of EPS, troops are now poised at launching a decisive blow at the remaining LTTE strongpoints at Mulliyan, Chempiyanpattuwa, Chundikulama and Kaddaikadu, defence observers state.

Fierce fighting was fought as LTTE terrorists made desperate attempts to stall the military surge following its humiliating defeat at Kilinochchi (02 Jan, 2009). The conquest of Elephant Pass (EPS) LTTE complex, signified a major victory of the security forces, who are pushing LTTE towards its extinction.

EPS was earlier occupied by the Dutch during the colonial rule in the island, who had built a fort in 1760, identifying its strategic value in maintaining vital logistic supply with the Jaffna mainland. This fort was later occupied by the British during its colonial aggression in the island who built a bungalow which was turned a rest house after independence.

In 1958, late Prime Minister SWRD Bandaranayake, identifying the fort's strategic value maintained a small military detachment which was later turned to a permanent Army transition base following the 1983 July, unrest in the island. The surge of calamity in Jaffna forced the military to shift its presence from Jaffna to the more remote, EPS.

In 1990, EPS was developed into a major military base complex and on 10th July, 1991, LTTE made its fist ever major scale attack at EPS. The LTTE's fighting formations were beaten off after security forces launched its most successful amphibious operation, 'Balavegaya -1' on 14th July. The troops led by Lt. General Denzil Kobbekaduwa and Major General Vijaya Wimalarathne landed at the Vettilaikerni beach head engaging LTTE in the most fierce battle fought in the decade. According to defence observers, the success of the campaign was triggered due to the diversion attack 'Asaka Sena', which was under taken by the Commandos and Special Forces (SF). In 1998, LTTE terrorists made another attempt to overrun the base which left LTTE losing and withdrawing its artillery batteries further southeast.

EPS was considered the 'jargon of the current conflict' and was most talked about since SLA's tactical withdrawal from the base complex on 22nd April, 2000.

Elephant Pass and Kurinchattiv are the largest salterns in the island with a combined area of 100 acres, which produced more than 85,000 metric tons of salt per year, before the area was engulfed in the bitter fighting for decades, defence observers said, speaking to defence.lk. The shallow waters through which elephants were once used to carry goods into the Jaffna peninsula from South has given it the name EPS, the sources said citing historical data.

Stunned LTTE proxies and mouth pieces are maintaining deafening silence over the twin debacle at North: loss of EPS and A-9 trunk road. Meanwhile, political observers state that the time is right for the LTTE to give-up arms and surrender without further dragging the Tamil youth towards disaster.

Describing, the LTTE's debacle at EPS "worst ever defeat after Kilinochchi", defence observers said, "It is apparent that we as a nation is finally seeing a definite end to this three decade protracted terrorist cause, and the prevail of a unitary nation under a competent leadership, which is to make history of being the first ever, to defeat terrorism amidst all odds".

source : MOD

Madoff 'victims' do math, realize they profited

NEW YORK – The many Bernard Madoff investors who withdrew money from their accounts over the years are now wrestling with an ethical and legal quandary. What they thought were profits was likely money stolen from other clients in what prosecutors are calling the largest Ponzi scheme in history. Now, they are confronting the possibility they may have to pay some of it back.

The issue came to the forefront this week as about 8,000 former Madoff clients began to receive letters inviting them to apply for up to $500,000 in aid from the Securities Investor Protection Corp.

Lawyers for investors have been warning clients to do some tough math before they apply for any funds set aside for the victims, and figure out whether they were a winner or loser in the scheme.

Hundreds and maybe thousands of investors in Madoff's funds have been withdrawing money from their accounts for many years. In many cases, those investors have withdrawn far more than their principal investment.

"I had a call yesterday from a guy who said, 'I've taken out more money then I originally put in, but I still had $1 million left with Madoff. Should I file a $1 million claim?'" said Steven Caruso, a New York attorney specializing in securities and investment fraud.

"I'm hard-pressed to give advice in that situation," Caruso said.

Among the options: Get in line with other victims looking for restitution. Keep quiet and hope nobody notices. Return the money. Or hire a lawyer and fight to keep profits that were probably fraudulent.

No one knows yet how many people will emerge as net winners in the scandal, but the numbers appear to be substantial. Many of Madoff's long-term investors have, over time, cashed out millions of dollars of their supposed profits, which routinely amounted to 11 percent to 15 percent per year.

Jonathan Levitt, a New Jersey attorney who represents several former Madoff clients, said more than half of the victims who called his office looking for help have turned out to be people whose long-term profits exceeded their principal investment.

"There are a lot of net winners," he said.

Asked for an example, Levitt said one caller, whom he declined to name, invested $1.8 million with Madoff more than a decade ago, then cashed out nearly $3 million worth of "profits" as the years went by.

On paper, he still had $4 million invested with Madoff when the scheme collapsed, but it now looks as if that figure was almost entirely comprised of fictitious profits on investments that were never actually made, leaving his claim to be owed anything unclear.

Other attorneys report getting similar calls.

Under federal law, the court-appointed trustee trying to unravel Madoff's business can demand that people who profited from the scheme return some or all of the money.

These so-called "clawbacks" are generally limited to payouts over the last six years, but could still amount to big bucks for some investors.

When a hedge fund run by the Bayou Group collapsed and was revealed to be a Ponzi scheme in 2005, the trustee handling the case sought court orders forcing investors to return false profits. Many experts anticipate a similar process in the Madoff case.

Applying for the aid could give the trustee evidence he needs to initiate a clawback claim. On the other hand, investors who ignore the letter would most likely forfeit any chance of recovering lost funds.

No matter how they respond, it may only be a matter of time before investors wiped out in the scandal turn on those who unknowingly enjoyed the fruits of the fraud.

"The sharks are all circling," Caruso said.

Some hedge funds that had billions of dollars invested with Madoff are already going through years worth of records, trying to figure out which of their investors withdrew more than they put in.

That data could be used by the fund managers to defend themselves against lawsuits, or go after clients deemed to have profited from the scheme and get them to return the cash.

The future is equally cloudy for investors who cashed out entirely before Madoff's arrest.

Their lucky ranks include the Fort Worth Employees Retirement Fund, which invested $7.5 million in a Madoff-related hedge fund years ago, then cashed out last summer after a consultant raised concerns about the investment.

The consultant, due diligence firm Albourne Partners, of London, had long been skeptical of Madoff's reported investment returns.

Fort Worth walked away with $10 million — a sum that included $2.5 million in what now appears to be fraudulent profit.

A lawyer for the public pension fund, Robert Klausner, said he couldn't discuss whether that money might have to be returned, but said the decision to divest was not made because of "special or inside knowledge of what was later reported to be misconduct."

"There just aren't any winners in this deal," Klausner said.

Stephen Harbeck, chief executive of the Securities Investor Protection Corp., told The Associated Press neither he nor the trustee handling Madoff's business, Irving Picard, have decided what to do about Madoff investors who made money. He predicted the process would be "a legal and accounting nightmare."

"Between money in and money out, versus statements received, it is a real difficult pile of issues," Harbeck said. "There are some customers who would want us to use clawback procedures against other customers, and there are other customers who would resist that."

Asked if SIPC would rule out paying claims to investors who appear to have net profits, Harbeck said it was "too early" to say. He encouraged people to file claims, even if they think it might ultimately be denied, but said investors had no legal duty to do so.

Picard will oversee the liquidation of assets from Madoff's investment firm as the SIPC attempts to help investors recoup their money. The SIPC was created by Congress in 1970 to protect investors when a brokerage firm fails and cash and securities are missing from accounts.

Asia stocks slip ahead of U.S. jobs

HONG KONG (Reuters) – Asian stocks slipped and the U.S. dollar drifted higher on Friday, as investors braced for the December U.S. payrolls data, expected to show sharp job losses and deal another blow to hopes for a speedy recovery this year.

An investor checks his stock situation on a monitor in front of an electronic board in a brokerage house in Shanghai January 5, 2009. t's infrastructure building plans.

The world's largest economy probably shed more than half a million jobs last month, bringing job losses in 2008 to a post-war record, boding ill for Asia's struggling exporters who have been starved of demand from developed nations.

Global equities, emerging market currencies and high-grade credit had all benefited in the last month from a steady improvement in investors' risk tolerance. However, dour corporate outlooks, including from the world's top retailer Wal-Mart, and prospects for higher unemployment have curbed appetite for riskier assets.

"What gave the latest rally legs has been the support of institutional investors. Now, as they are once more on the sidelines there must be a danger that the gains will be reversed," said analysts with State Street Global Markets in a note.

"The message from investors is that even though the world may not face an existential crisis, the wrecking ball of deleveraging and unprecedented financial and economic dislocation will cause further damage yet," said the analysts, who track 15 percent of the world's tradeable assets.

The MSCI index of stocks in the Asia-Pacific region outside Japan (.MIAPJ0000PUS) edged 0.5 percent lower, creeping further away from a one-month high reached on Wednesday.

Japan's Nikkei share average (.N225) fell 0.8 percent, with big exporter stocks such as Honda Motor Co (7267.T) and Canon Inc (7751.T) among the biggest drags on the index.

AGGRESSIVE ACTION

South Korean stocks were the region's biggest decliners, with the benchmark KOSPI (.KS11) down 1.8 percent after the country's central bank cut interest rates by 50 basis points to a record low and warned Asia's fourth-largest economy would slow further.

"The Bank of Korea has no choice but to cut interest rates, given a slowing economy. The economy probably contracted in the fourth quarter and the first quarter is seen worse," said Park Sang-hyun, chief economist with HI Investment & Securities in Seoul.

Policymakers in China, India and Korea were the most aggressive in Asia in trying to protect their economies as the worsening global downturn really bit into the region in the second half of 2008.

But other Asian countries have lately had to step up their actions with export sectors gutted, domestic growth crippled and bank lending still sluggish. Taiwan unexpectedly slashed rates and Indonesia eased by more than forecast this week.

Bond market investors meanwhile have been more focused on new global bond issuance, hungry for higher yields, particularly with credit markets showing signs of stabilization.

U.S. corporate debt proceeds of $19.9 billion in the first full week of 2009 were the highest since May 2008, according to Thomson Reuters data, as companies took advantage of the window of calm in capital markets to push through deals.

The budding enthusiasm has slowly peeled money away from U.S. Treasuries. The benchmark 10-year Treasury note yield was steady at 2.45 percent, but has climbed around 40 basis points since hitting a five-decade low late in 2008.

The 30-year bond yield edged up to 3.04 percent, up 1 basis point from late New York trade.

Japanese government bond futures ticked up 0.28 point after hitting a 1-month low on Thursday.

The dollar was little changed at 91.15 yen. The dollar had hit a one-month high around 94.65 yen on Tuesday.

The euro fell 0.2 percent to $1.3677. The euro has bounced between $1.3964 and a three-week low of $1.3312 this week.

U.S. light crude oil for February delivery climbed above $42 a barrel, up 2 percent, as dealers tried to find a floor, thinking most of the bad news has been priced in.

UN Security Council calls for Gaza cease-fire

UNITED NATIONS – The U.N. Security Council approved a resolution Thursday night calling for an immediate and durable cease-fire between Hamas militants and Israeli forces in Gaza. The U.S. abstained from the 14-0 vote.

Israel and Hamas were not parties to the vote and it will now be up to them to stop the fighting. But the text of the resolution was hammered out by the United States, Israel's chief ally, and by Arab nations that have ties to Hamas and the Palestinians in the Israeli-occupied territories.

"We are all very conscious that peace is made on the ground while resolutions are written in the United Nations," British Foreign Secretary David Miliband said.

U.S. Secretary of State Condoleezza Rice said the United States "fully supports" the resolution but abstained because it "thought it important to see the outcomes of the Egyptian mediation" with Israel and Hamas, aimed at achieving a cease-fire.

The Egyptian and French initiative must be "not just applauded, but supported," she said.

In deciding that the U.S. should not block the resolution, Rice said, "the Security Council has provided a road map for a sustainable, durable peace in Gaza."

The decision came on the 13th day of an Israeli air and ground offensive against the Islamic group Hamas which rules Gaza and has been launching rockets and mortars into southern Israel for years. It followed three days of intense negotiations between ministers from key Arab nations and the council's veto-wielding Western powers — the U.S., Britain and France.

With Palestinian civilian casualties mounting, the Arabs were under intense pressure to get a resolution — and several diplomats said they wanted it before Friday prayers at mosques in the region.

As of Thursday, about 750 Palestinians, at least a quarter civilians, had been killed along with 13 Israelis.

The resolution expressed "grave concern" at the escalating violence and the deepening humanitarian crisis in Gaza and emphasized the need to open all border crossings and achieve a lasting solution to the Arab-Israeli conflict.

Arab nations called for the emergency Security Council meeting to get the council to call for an immediate cease-fire.

They had been pressing their own resolution, which not only would have demanded an end to all military activity in Gaza but was revised to include mention of Hamas by name and call for an international force to prevent arms smuggling — two key U.S. demands.

But the changes in the Arab text didn't meet all the demands of the United States and its key Western allies, Britain and France, all veto-wielding members of the council.

Those nations countered by shelving a weaker "presidential statement" they had proposed Wednesday and introducing a rival resolution written by the British.

The resolution "stresses the urgency of and calls for an immediate, durable and fully respected cease-fire, leading to the full withdrawal of Israeli forces from Gaza." While the "call" is tantamount to a demand on the parties, Israel's troops won't be required to pull out until there is a "durable" cease-fire.

The resolution calls on U.N. member states "to intensify efforts to provide arrangements and guarantees in Gaza in order to sustain a durable cease-fire and calm, including to prevent illicit trafficking in arms and ammunition and to ensure the sustained re-opening" of border crossings.

This is a weaker statement than Israel sought, and the U.S. would have liked. There is also no mention in the resolution of an "international observer force" proposed by the Arabs — and the word "Hamas" was dropped during the negotiations.

The resolution "condemns all violence and hostilities directed against civilians," calls for "unimpeded" humanitarian access to Gaza, and welcomes the initiative to open "humanitarian corridors." It urges international efforts to provide humanitarian aid and rebuild Gaza's economy.

While the resolution was not drafted under Chapter 7 of the U.N. Charter, which is militarily enforceable, the Arab League's Moussa said it is "legally binding."

As for implementation, he said, "we'll get it" because following the Security Council's unanimous approval, the council "will have to supervise the implementation."

Shortly before the final day of U.N. negotiations began, Israeli envoys went to Cairo and held talks with Egyptian officials on an initiative by the presidents of Egypt and France that calls for a temporary truce. Hamas militants have yet to commit to coming to Cairo for talks and said they have major reservations about the plan.

In a possible sign Hamas was unwilling to compromise yet, a senior Hamas official in Syria, Mohammed Nazzal, told Syrian TV on Thursday that the group would never surrender and vowed to fight house to house against Israeli troops in Gaza.

A joint statement issued by Palestinian groups based in Syria's capital Thursday rejected the Egyptian-French initiative, saying it would undermine Gazans' resistance and give Israel "a free hand" to continue aggression.

Hamas is normally a member of the coalition, but it wasn't clear if it signed the statement. Hamas officials in Syria were not available for comment.

Israel's government said Wednesday that it viewed the Egyptian-French proposal positively but stopped short of acceptance.

The leaders of France and Germany met Thursday to discuss the crisis and urged quick action to halt the fighting. French President Nicolas Sarkozy said any time lost would play into the hands of those who want war.

German Chancellor Angela Merkel backed the Egyptian-French plan. "We must do everything we can so that this cease-fire occurs as soon as possible," she said.

Speaking in Madrid, Spain, Palestinian President Mahmoud Abbas called the Egyptian-French initiative "a positive element" in the peace process and said that "we support it." Abbas' Fatah faction, which controls the West Bank, has little sway in Gaza.

The Egyptian-French initiative aims to achieve a "lasting halt" to the fighting and a pullout of Israeli troops along with a cessation of militant rocket fire into Israel and arms smuggling to Hamas, French Foreign Ministry spokesman Eric Chevallier said.

In Washington, the Senate unanimously adopted a resolution stating an "unwavering commitment" to Israel and its right to defend itself, while also calling for "a viable and independent Palestinian state living in peace alongside a secure state of Israel." The House was expected to pass a similar measure Friday.