WASHINGTON (Reuters) – House Speaker John Boehner told fellow Republicans that he wants the House of Representatives to vote on Monday on a last-minute deal to raise the debt ceiling, a Republican lawmaker said on Sunday.
"The speaker wants us out of town by tomorrow, he wants this done," Representative Jack Kingston told Reuters after participating in a conference call with Boehner and other House Republicans.
(Reporting by Andy Sullivan; editing by Christopher Wilson)
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SINGAPORE (Reuters) – Averting a U.S. debt default solves only the immediate fiscal problem for the West and its big creditors in Asia.
The U.S. sovereign debt path remains unsustainable. Investors are growing reluctant to lend cheap money to a handful of European countries. Either of those could erupt into another bout of market-bruising uncertainty.
A Reuters examination of Asia's finances shows the region as a whole boasts healthy government balance sheets, with vast amounts of reserves on hand to counter any sudden reversal of investment flows.
Some countries such as Singapore and China are already taking steps to cut their exposure to the U.S. dollar, and Washington's brush with default may hasten the shift.
But there are a few vulnerable spots. In Taiwan, for example, foreigners hold $480 billion worth of stocks and bonds, eclipsing the country's $400 billion in reserves. In South Korea, foreigners hold almost $450 billion in stocks and bonds, well above its $304 billion in reserves.
New Zealand and Malaysia also have foreign stock and bond ownership that outstrip reserves.
A sovereign debt crisis in the West could spark a sudden withdrawal of that foreign money, much like it did after the Lehman Brothers bankruptcy in 2008.
The debt deal that President Barack Obama announced in Washington on Sunday appeared to neutralize the immediate U.S. default threat. Next on the worry list -- at least chronologically -- is the growing number of European economies struggling to borrow at affordable interest rates.
Spain and Italy have paid much higher rates to sell their debt in recent weeks, feeding worries that the euro zone's debt troubles won't stop with Greece, Ireland and Portugal.
Although Asia is more exposed to U.S. government debt than European, it is more reliant on European banks than American ones for private financing.
European banks' total claims on Asia, excluding Japan, were $1.3 trillion as of the end of 2010, more than three times that of U.S. banks, brokerage Nomura estimated.
Should the situation in Europe worsen, banks might pull funding with little warning.
Robert Prior-Wandesforde, a Credit Suisse economist based in Singapore, said another banking crisis in the Western world was "highly likely" and it was easy to envisage this leading to a credit crunch in Asia.
He listed Hong Kong, Singapore, Taiwan and South Korea as the region's four most at risk to a sudden flight from a banking crisis, but all of Asia would suffer from the accompanying drop in global confidence and demand.
"In short, the region would do very well to avoid a credit crunch," he said.
LINKING TO A SINKING DOLLAR
As long as the West avoids a fresh crisis, Asia could see more foreign investment money pour in, drawn by its strong growth rates and healthy public finances.
"There is evidence that investors all over the world are looking at emerging markets as safe havens rather than the U.S. dollar or U.S. Treasuries," said Mark Mobius, Singapore-based executive chairman of Templeton Asset Management's emerging markets group.
Some government officials in the region concur, and are directing more of their holdings toward emerging markets.
Singapore's $300 billion state-run investment fund, GIC, said last week it had cut its investment in developed markets to 34 percent of its portfolio in the fiscal year that ended in March, down from 41 percent. It increased its investment in emerging market equities to 15 percent from 10 percent.
Not surprisingly, China stands out in Asia as the most exposed to the U.S. dollar but also the most prepared to withstand a financial blow. With $3.2 trillion in reserves, it is hard to imagine any scenario where an overseas crisis wipes out that cushion.
China's problem is that an estimated two-thirds of that pot is invested in dollar-denominated assets, and economists widely expect the greenback to weaken in the next few years.
China's foreign exchange regulator made it crystal clear last week that it intends to shrink the dollar exposure. In an announcement on Thursday which was overshadowed by the U.S. debt drama, the State Administration of Foreign Exchange said it would press ahead with diversifying reserves.
One sentence in SAFE's comments stands out: "We will take comprehensive measures to promote economic restructuring and transform economic development, to fundamentally slow down the foreign exchange inflow, and to promote a better balance of international payments."
In other words, China's reserves growth will slow, and so will its need to buy U.S. Treasury debt. That is a worrisome development for Washington, which will need to entice other investors to pick up the slack.
The debt deal that Obama outlined was short on details of how the United States would cap rising healthcare costs, the largest single threat to fiscal stability as its population ages.
Beijing's latest five-year economic plan calls for enhancing the social safety net and raising the minimum wage by 84 percent, which should spur higher consumption. Consumer spending accounts for roughly a third of China's economy, less than half the share in the United States.
Morgan Stanley Asia's non-executive chairman, Stephen Roach, said China was "moving now to embrace a new model which will stimulate internal private consumption."
"They are moving away from the dollar whether we like it or not," Roach said in an interview with Reuters Insider.
(Additional reporting by Saeed Azhar in Singapore; Editing by Mathew Veedon)
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WASHINGTON (Reuters) – White House economic adviser Gene Sperling said on "Fox News Sunday" he was "not worried the U.S. will have a double-dip recession" and urged Congress to approve an increase in the debt limit as a way to give certainty to financial markets.
Sperling said the debt uncertainty was "a self-inflicted wound" that contributed to lower U.S. economic growth as did external events including higher gasoline prices and the downturn in the U.S. auto industry in the first half of 2011.
(Reporting by Jackie Frank)
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OSLO (Reuters) – Norwegians believe penalties for serious crimes in their country should be tightened in the wake of a shooting and bomb attack that killed 77 people in July, an opinion poll showed Monday.
In a survey of 1,283 people conducted six days after the July 22 attack, 65.5 percent said the penalties were "too low" and only 23.8 percent believed they were suitable, newspaper Verdens Gang reported.
Anders Behring Breivik, the 32-year old anti-Islamic immigration zealot who has confessed to the bombing in Oslo and shooting spree on a nearby island, has been charged by police with terrorism, which carries a sentence of up to 21 years.
He also faces the risk of successive five-year protective custody sentences, and some have also called for the use of provisions on crimes against humanity that could give an initial sentence of up to 30 years.
The broader aim of Breivik's attacks was to save Europe from "cultural Marxism" and a "Muslim invasion," according to a manifesto published just hours before the killings. The majority of the victims were teenagers at a Labor Party youth summer camp.
Justice Minister Knut Storberget told VG he was "not surprised" by the calls for stricter laws. "We must listen and have a debate, while not draw hasty conclusions... it's important that policy isn't shaped in a state of panic."
Hanne Marthe Narud, a political scientist at the University of Oslo, said Norway's parliament is likely to stand against immediate public calls for harsher sentencing and more surveillance.
"A lot of these attitudes we see now are reflections of the terror event," she told Reuters, referring to the VG poll.
"I don't think the politicians will change legislation on this point as a spontaneous reaction. It may be considered, but there will be a broad debate first."
"In 2001 it was as though someone had declared war against the U.S., which Al Qaeda and those groups had actually done." she added.
"This by contrast appears to be the act of one person who is sick or has his mind in a bubble. You can't really do legislation based on events like we have had in Norway."
She said public opinion has long favored stricter punishment for violent crimes while the parliament has resisted cracking down.
Norway's parliament was holding a rare summer session attended by the king and the prime minister at 1000 GMT on Monday.
Per Sandberg, chairman of the parliament's Justice Committee, said stiffer sentencing will be on the agenda when party leaders resume debate on August 15.
"I am sure when we come to August 15 the political discussion will be about sentences, searches by the police and everything else around this case," Sandberg told Reuters.
"My party has always wanted that. I believe there will be new measures."
Sandberg's right-wing Progress Party is an anti-immigration, anti-tax party that favors stricter prison terms for violent crimes.
(Reporting by Walter Gibbs, Terje Solsvik, Victoria Klesty and Elinor Schang, Editing by Sonya Hepinstall)
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BENGHAZI, Libya (AFP) – A deadly clash broke out in Libya's rebel capital of Benghazi in the wake of the murder of their military chief, as the Kadhafi regime said Sunday it was in contact with rebel leadership members.
Four rebels were killed in the clash with a pro-Kadhafi group in Benghazi overnight, a rebel spokesman said.
"It was a long battle and it took many hours because they were heavily armed," Mahmud Shamman told AFP. "In the end we arrested 31 of them. We lost four people."
He said the group, which suffered "about 20 casualties," was rounded up for its role in organising a prison break in Benghazi earlier in the week.
Rebel forces had surrounded the camp of the group linked to Libyan leader Moamer Kadhafi after they refused to obey an order from the rebels' National Transitional Council (NTC) for all militias to disband and lay down their arms.
The clash follows last week's assassination of rebel military chief General Abdel Fatah Yunis, whose death remains cloaked in mystery. The general was a right-hand man to Kadhafi before his defection to the rebel ranks.
While the rebels tried to quash rumours about the mysterious death of their army chief, the Kadhafi regime said it was in contact with members of the NTC.
"There are contacts with Mahmud Jibril (number two in the NTC), and (Ali) Essawy (in charge of external relations), (religious leader Ali) Sallabi and others," deputy foreign minister Khaled Kaaim told a Tripoli news conference.
Kadhafi on Saturday night renewed his pledge "never to abandon" the battle, in an audio tape broadcast on state television despite NATO air strikes earlier the same day on the broadcaster's headquarters in Tripoli.
Libya's enemies would be "defeated in the face of the resistance and courage of the Libyan people," he said in a speech following the strikes which Tripoli said killed three journalists.
The rebels, who have frequently denied having had any direct negotiations with Tripoli, sought to stamp out rumours by giving details on Yunis's killing and bringing all militias under the control of the NTC interior ministry.
Meanwhile, the Benghazi villa of the murdered general was surrounded by checkpoints early on Sunday and no traffic allowed on the coastal city's main highway.
South of Benghazi, rebels reported an attack by pro-Kadhafi forces on the southern oasis town of Jalo, but said it had been repulsed.
On the western front in the five-month-old armed revolt, Libyan rebels on Sunday took the village of Josh at the foot of the Nafusa mountain range, AFP journalists said.
"We took Josh this morning and are now heading west. Now we're fighting to take Tiji," further down the valley, Juma Brahim, head of the rebel fighters' operational command in the Nafusa region, told AFP.
He gave a casualty toll of three dead and four wounded.
The Nafusa region has seen heavy fighting between rebels and forces loyal to Kadhafi since the insurgents launched a major offensive this month in a drive on Tripoli.
NATO said its warplanes carried out 50 strike sorties on Saturday, with hits in the areas of Brega, Zliten, Waddan and Tripoli.
France said on Sunday it was committed to striking Kadhafi's military assets for as long as needed for him to quit power, and called on Libyans in Tripoli to rise up against him.
"We say to Kadhafi that we will not ease our pressure and to his opponents that we will not abandon them," French Defence Minister Gerard Longuet was quoted as saying by the newspaper Le Journal du Dimanche.
"Things have to move more in Tripoli... the population must rise up," he added.
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LOS ANGELES – Harry Potter has joined the billion-dollar club.
Distributor Warner Bros. said Sunday that "Harry Potter and the Deathly Hallows: Part 2" crossed the $1 billion mark at the worldwide box office. It's soon expected to pass "Pirates of the Caribbean: On Stranger Tides," which is this year's top grossing movie at $1.03 billion.
The last of the eight films about the young wizard is the first in the franchise to reach the billion dollar mark. The previous best global haul was $974.8 million for the original film, 2001's "Harry Potter and the Sorcerer's Stone."
With $21.9 million domestically this weekend, "Deathly Hallows: Part 2" climbed to a domestic total of $318.5 million. That tops the franchise's previous best of $317.6 million for "Sorcerer's Stone."
But factoring in today's higher admission prices, "Deathly Hallows: Part 2" has not caught up to "Sorcerer's Stone" in terms of actual tickets sold.
The 2009 film "Avatar" holds the record for the biggest worldwide box office haul, grossing $2.8 billion. It's followed by another James Cameron film, "Titanic," which brought in $1.8 billion.
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AP/The Casper Star-Tribune
July 29: Rescuers continue to search for Converse County Deputy Bryan Gross, who has been missing since he swam into a swollen eastern Wyoming river to help a struggling girl Thursday evening near Douglas, Wyo.
The body of a Wyoming deputy who jumped in the North Platte River to assist a distressed girl was discovered Sunday.
It was the fourth day of searching for 29-year-old Bryan P. Gross, of the Converse County sheriff's office, who was hailed as a hero for attempting to save a teenage girl who appeared to be struggling in the river Thursday evening. The girl survived, but Gross was swept away in the high-flowing North Platte River swollen by heavy snowmelt.
County Sheriff Clinton Becker said Gross' body was found late Sunday morning in the river about a mile and a half from where Gross entered.
Searchers from several law enforcement agencies and civilian volunteers checked the banks of the river. Divers, dogs and a helicopter helped in the search. The sheriff did not describe how Gross was located.
"Anytime you go into the water like that, it's heroic," said Douglas Mayor Bruce Jones on Friday. "Of course to him, he's probably just doing his job."
Jones said the situation is hitting his town hard.
The girl entered the waterway near the Douglas Yellowstone Bridge, which joins both sides of Douglas, 50 miles east of Casper.
Gross went into the river from one side while several others swam in from the other, Undersheriff Don Schoenleber said.
Other emergency workers recovered the girl about a mile downstream Thursday evening and took her to a hospital. Schoenleber declined to identify the girl.
Steve Henning, Douglas city administrator, said the girl was 14 years old and was in town for a 4-H fair.
"She was distraught with her boyfriend, and she jumped in the river," Henning said.
Gross worked as a Douglas police officer for a few years before recently joining the sheriff's department.
Henning said Gross had worked at the police department as a drug officer, handling a trained dog. He added Gross had gotten married within the past month or so to a woman who worked as a receptionist for the city.
Searchers, including some using boats and aircraft including a military helicopter, worked the river by daylight, Schoenleber said. And deputies used lights to scan the water overnight to keep watch for Gross, while searchers walked the riverbank sometimes assisted by tracking dogs.
The North Platte River near Douglas is higher than normal following heavy snows last winter.
Deputy State Engineer Harry C. LaBonde said the river was running at 6,620 cubic feet per second Friday at a nearby gauging station, downstream from Douglas. He said the flow averaged only 2,110 cfs on the same date over the past 60 years.
"It's higher than you would expect this time of year based on the water we're having with all of the snow and the releases from all the federal reservoirs," LaBonde said.
There have been several deaths in Wyoming this year associated with flooding and high water, including four members of a Colorado family killed earlier this month when a highway washed out in a heavy rainstorm.
President Barack Obama last week declared a major disaster in Wyoming because of spring and summer flooding. The declaration opened the way for the federal government to help the state pay for costs incurred from damaged roads, highways and other infrastructure.
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