World News joined 5

[OMEN]

MARKET DIVE: Stocks have tumbled across world markets following yesterday's rock-bottom sale of troubled bank and Wall St icon Bear Stearns.
Global stocks have fallen sharply overnight following the sale of stricken Wall St bank Bear Stearns at a rock-bottom price.
Global markets were driven by fear that the US Federal Reserve's move to back JPMorgan in taking over Bear Stearns reflected a widening of worldwide credit crisis that could engulf other banks and market participants.

In New York, however, equities were lifted by several rally attempts in morning trading and overall loses were half the level of other global markets.

"Much to everyone's shock," the Dow was not completely mired in negative territory, said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey.

The need for a Fed bailout, however, kept trading cautious and jittery.

"We're in a position now where really the Fed is the only entity out there that can really help, to get the market back on track," said Kenny.

The dollar tumbled and investors piled into the safety of government debt following steep sell-offs of equity markets in Europe and Asia. US stocks opened sharply lower but pared many losses and the Dow went in and out of positive territory.

Efforts by the US Federal Reserve to restore battered investor confidence may have taken the edge off a grim mood in global markets. In an emergency move on Sunday the Fed cut a key lending rate and announced new measures to stabilize credit markets rocked by rising defaults on US mortgage debt.

Reacting to signs of continuing instability. government debt prices surged in a flight to safety. US And European short-term inter-bank lending rates jumped, while spreads of US banks' credit default swaps widened, signalling growing fears of counter-party risk in the banking system.

Bids for cash instruments were so sharp that the yield on 3-month US Treasury bills fell below 1 per cent to levels not seen in 50 years.

Traders reported that money markets were near stand-still with banks increasingly wary of lending to each other after news that JPMorgan would buy Bear Stearns for just $US2 a share.

Banking shares in the United States and Europe tumbled -- Lehman Brothers was down 25 per cent, UBS fell 10 per cent and Citigroup shed 6.5 per cent -- leading benchmark stock indexes lower.

The market had a positive view on the move by JPMoran, which rose 9.85 per cent. Investors saw it as a rock-bottom price of $US236 million -- a tiny fraction of the fifth-largest US investment bank's market value a year ago.

US stock indexes fell almost 2 per cent shortly after opening and European shares fell more than 4 per cent, following a sell-off in Asia, where Japan's leading indexes shed 3.7 per cent.

A bounce in the Dow proved short-lived and the broader market remained in the red amid investor concerns that the global credit crisis may be spiraling out of control.

The Dow Jones industrial average .DJI dropped 114.39 points, or 0.96 per cent, to 11,836.70. The Standard & Poor's 500 Index .SPX shed 23.44 points, or 1.82 per cent, to 1,264.70. The Nasdaq Composite Index tumbled 44.78 points, or 2.02 per cent, to 2,167.71.

The financial sector tumbled, as Lehman Brothers sank 23.9 to $US29.86 and Citigroup dropped 7.3 per cent to $US18.35. The Standard & Poor's financial index was down 3.6 per cent.

The US dollar hit new lows against the euro and a basket of six major currencies. Oil hit a new high of nearly $US112 a barrel on the weaker dollar.

And investors dived into safe haven assets, lifting gold to more than $US1,030 an ounce at one point and sending yields on short-dated euro zone debt below 3 per cent for the first time in more than two years.

"The markets are in a complete state of panic and in such situations there is no such thing as valuation or value in any asset," said Michael Klawitter, FX strategist at Dresdner Kleinwort in Frankfurt.

In a shock move late on Sunday (Monday morning NZT), the Fed lowered the discount rate it charges on direct loans to banks to 3.25 per cent from 3.50 and implemented steps to provide cash to a wider range of financial firms, using tools last used in the Great Depression.

LIQUIDITY SQUEEZE

Investors are now nearly fully pricing in a 1 percentage point cut in the main federal funds rate at or before the Fed's policy meeting on Tuesday.

That would take US rates down to just 2.0 per cent.

There were also signs of continuing liquidity worries.

The Bank of England said it would offer 5 billion pounds of three-day funds later on Monday in an exceptional fine-tuning operation designed to bring overnight interest rates down.

Market strategists said there was a deep distrust between banks when it came to lending.

"It's quite illiquid this morning. If you want unsecured cash you're really going to have to pay up for it. It's really quite an intense situation," said David Keeble, head of rate strategy at Calyon.

Concern swirled that problems were not contained to Bear Stearns. Merrill Lynch fell 7.9 per cent and Goldman Sachs declined 6.2 per cent.

STOCKS, DOLLAR DOWN SHARPLY

European shares tumbled. The FTSEurofirst 300 index of top European shares was down 3.4 per cent, having pared losses from an earlier decline of 4.4 per cent.

Earlier, Japanese stocks fell to about a 2&frac; year closing low, dragged down by exporters worried about a rising yen.

The Nikkei average fell 3.7 per cent or 454.09 points to end at 11,787.51, its lowest finish since August 8, 2005.

The broader TOPIX index shed 3.7 per cent or 43.58 points to 1,149.65, the lowest close since June 2005.

The US dollar plunged across the board.

It slid as much as 3 per cent in early Monday trading as low as 95.77 yen according to Reuters data, the lowest since 1995, and set fresh all-time lows at 0.9637 Swiss francs.

It later recovered to 96.91 yen and 0.9834 Swiss franc.

The euro soared as high as a new record $US1.5904 before dropping back to $US1.57533.

A record low dollar and an emergency rate cut by the Federal Reserve also fueled buying in gold, and traders expected choppy business ahead of a rate-setting decision by the US central bank on Tuesday.

He active gold contract for April delivery GCJ8 in New York rose $US12.70 to $US1,012.20 an ounce after hitting a new record of $US1,033.90.

Oil dropped from a record high as a part of wider commodity sell-off sparked by growing concern over the health of the world's largest economy.

US crude CLc1 was trading at $US106.87 by 1359 GMT, down $US3.34 from the previous close. Earlier, it hit a new record of $US111.80 and then fell to a session low of $US105.11.

The gold contract for April delivery GCJ8 in New York was up $US12.70 to $US1,012.20 an ounce, after hitting a record $US1,033.90.

Reuters

[OMEN]

US Vice President Dick Cheney has declared the 2003 US-led invasion of Iraq a "successful endeavour" in a visit to Iraq that was overshadowed by a suicide bombing that killed at least 27 people.
"If you look back on those five years it has been a difficult, challenging but nonetheless successful endeavour ... and it has been well worth the effort," Cheney told a news conference in Baghdad after meeting Iraqi leaders.

The Iraq war is a major issue in the US presidential campaign. As it enters it sixth year, the war has cost the US economy $US500 billion and seen nearly 4,000 US soldiers and tens of thousands of Iraqis killed.

Shortly after Cheney spoke, a woman wearing a suicide vest blew herself up in a cafe in the southern holy Shi'ite city of Kerbala, killing 27 people and wounding 50, police and health officials said. Bombs in Baghdad killed four and wounded 13.

Cheney, an architect of the invasion, arrived as Republican presidential candidate John McCain was meeting Iraqi leaders as part of a Senate Armed Services Committee fact-finding mission.

"I was last in Baghdad 10 months ago and I sense that, as a result of the progress that has been made since then, phenomenal changes in terms of the overall situation," Cheney said after meeting Iraqi Prime Minister Nuri al-Maliki.

Cheney said there had been a "remarkable turnaround" in security after 30,000 extra troops were sent to Iraq last year to help reduce sectarian violence that threatened civil war.

Despite the improved security, however, some 4 million Iraqis are still displaced, and the International Committee of the Red Cross said in a report on Monday that millions were still deprived of clean water and medical care.

Like McCain, Cheney is in Iraq as part of a wider tour to the Middle East. Cheney will also visit Saudi Arabia, Jerusalem, the Palestinian territories, Turkey and Oman on a nine-day tour.

Both men have been staunch supporters of the US troop build-up that Washington says helped drag Iraq back from the brink of all-out sectarian civil war between majority Shi'ites and minority Sunni Muslims who were dominant under Saddam.

"The surge is working," McCain, referring to the troop build-up, told CNN in an interview in Baghdad.

REUTERS

[OMEN]

ROLL ON: French NATO peacekeeping troops protect the UN court compound during clashes in the ethnically divided city of Kosovska Mitrovica. Serbs have attacked a UN convoy carrying Serb detainees from a raid in Kosovo, enabling several detainees to escape, witnesses said.
Serbs have fired guns and thrown grenades at UN police and Nato troops in Kosovo in the worst violence since Albanian leaders declared Kosovo's independence from Serbia a month ago.

Nato said its troops came under automatic gunfire in the ethnically divided town of Mitrovica in northern Kosovo in clashes with Serbs, who oppose independence. The clashes began after UN special police backed by Nato peacekeepers stormed a UN court that had been seized by Serbs on Friday.

Serb media reports said about 70 civilians were wounded. UN police said 63 officers were injured, in addition to a dozen members of the Nato-led KFOR peacekeeping force.

The clashes highlighted the risk of Kosovo's partition along ethnic lines following the independence declaration on February 17. Serbia's ally Russia demanded restraint by Nato and Serbia said it was consulting Moscow on joint steps to protect Kosovo Serbs.

A Serbian party leader said Nato was behaving like the Nazi occupiers of World War 2. But a Nato spokesman said KFOR would not give in to violence.

It was the third major challenge to Nato and UN authority in the Serb-dominated north of Kosovo since protesters burned down two border posts last month. A European Union office was also forced to move out because of security threats.

A Serb hospital director said three Serbs were badly hurt, one shot through the head "by a sniper". A Nato spokesman said warning shots were fired into the air, not into the crowd.

UN spokesman Alexander Ivanko said several hundred UN police and nine civilian staff had been moved from north Mitrovica to the south, but would return "as soon as the security situation permits".

Mitrovica calmed down, but with KFOR soldiers securing key points rather than the UN and Kosovo police who normally patrolled the town before the independence declaration.

"Nato condemns in the strongest form the violence we have seen in northern Kosovo today," Nato spokesman James Appathurai said. "KFOR will respond firmly to any acts of violence, as is its mandate from the United Nations," he said.

Serbia blamed the UN and Nato for heavy-handed action.

Serbia's caretaker prime minister, Vojislav Kostunica, accused Nato of "implementing a policy of force against Serbia" and said Serbia and Russia were discussing moves to stop "all forms of violence against Kosovo Serbs".

This raised the prospect of Serbia inviting Russian troops into Serb-dominated northern Kosovo as peacekeepers, undermining the authority of the Nato-led KFOR mission, creating potential for conflict, or heralding a partition of the territory.

Serbian President Boris Tadic, recalling the March 17, 2004, Albanian riots in which 19 people were killed and hundreds of Serb homes burned down, warned of the risk of provoking a fresh Albanian "pogrom" against Kosovo's 120,000 minority Serbs.

Tomislav Nikolic of Serbia's largest party, the hardline opposition Radicals, called it "a brutal and savage action" against Serbs, the state news agency Tanjug reported.

He said it reminded him of actions "Hitler's occupying regime carried out against Serbs" in World War 2.

DAWN RAID

The clash began at dawn when several hundred UN special police backed by Nato peacekeepers stormed the UN court and arrested dozens of people.

Hundreds of Serbs fought back with stones, grenades and powerful firecrackers, forcing the UN police to pull back and leave KFOR to face the rioters. Rioters attacked UN vehicles, breaking doors to free 10 of those detained in the raid.

Nato said shots were fired at troops.

"We used automatic weapons to respond but fired only warning shots," French spokesman Etienne du Fayet de la Tour said. "We shot in the air, not into the crowd."

A KFOR spokesman said eight French KFOR soldiers were injured by "grenades, stones and Molotov cocktails". UN police ordered a pullout "after attacks with explosive devices suspected to be hand grenades, and firearms" a statement said.

Fourteen Ukrainian police in UN uniforms were injured when "fighters" attacked their police station", Ukrainian Interior Minister Yuri Lutsenko said. Poland said 13 officers were hurt.

Serbia's minister for Kosovo in the caretaker government, Slobodan Samardzic, said the United Nations had broken its word by moving in to evict the court-building occupiers.

"This what they have done to us. We'll pay them back," he told a crowd in Mitrovica. Serbs should trust Belgrade, he said.

Asked if the violence would force the European Union to halt or delay deployment of its planned rule-of-law mission numbering some 2,000 police and magistrates, EU foreign affairs chief Javier Solana said: "Let me be very clear. The answer is No"

But Russia, which says the EU mission is illegal, blamed Kosovo's "illegitimate" secession for the rioting.

"A turn of events which leads to violence and clashes cannot be allowed," Russia's Foreign Ministry said in a statement. "The international presence should show restraint and act strictly in accordance with its (United Nations) mandate."

Reuters

[OMEN]

Premier Wen Jiabao has defended China's crackdown in Tibet, accusing the Himalayan region's exiled spiritual leader, the Dalai Lama, of organising the rioting that may have left dozens dead.

"There is ample fact and plenty of evidence proving this incident was organised, premeditated, masterminded and incited by the Dalai clique," Wen told a news conference.

"This has all the more revealed the consistent claims by the Dalai clique that they pursue not independence but peaceful dialogue are nothing but lies."

The Dalai Lama, who fled into exile in India in 1959, has denied Chinese accusations he incited the rioting. The god-king of Tibetan Buddhists says he wants autonomy for Tibet within China but not outright independence.

Monk-led pro-independence protests, the biggest in almost two decades, erupted in Tibet's regional capital Lhasa last Monday and by the weekend spilled into nearby Chinese provinces with significant Tibetan populations.

Some turned ugly, weighing uncomfortably on China, anxious to polish its image in the build-up to the Beijing Olympic Games in August.

Western nations have called on Beijing to exercise restraint, but International Olympic Committee President Jacques Rogge told Reuters in Trinidad on Monday there had been "absolutely no calls" from governments for a Beijing Games boycott.

Exiled representatives of Tibet in India put the death toll from last Friday's protests against Chinese rule at 80.

But Chinese authorities said security forces exercised restraint in response to the Lhasa burning and looting, using only non-lethal weapons, and only 13 "innocent civilians" died.

There was no word from Lhasa of any action taken after the passing of a Monday midnight deadline for people involved in the rioting to surrender to police or face harsher treatment.

Foreign journalists are not allowed to travel to the Himalayan region of Tibet without permission.

In neighbouring Sichuan province, an ethnic Tibetan man said he knew of no fresh outbreaks of unrest since Monday.

"Now they are bringing back stability," he told Reuters by telephone, requesting anonymity out of fear for his safety.

"There are so many police and People's Armed Police it will be difficult for anything to spread," he said.

"I'm sure the People's Liberation Army is waiting too. In the background waiting, if the situation really gets out of hand."

Reuters

[OMEN]

A man accused of murdering an elderly Australian woman in Vanuatu is back behind bars after breaking out of jail.

Jacky Saul threatened guards with an axe during his escape from a Port Vila jail on March 4. He showed up at his parents' house on Sunday, but they contacted police and turned him in.

Saul is the chief suspect in the murder of Australian woman Lyndall Jaques, 69, who was found with her throat cut in her Port Vila home in January.

Vanuatu's Acting Deputy Commissioner of Police, Arthur Caulton, said Saul, 21, was a high-risk offender who escaped while on kitchen duties.

"He was involved in some cooking. He was with an axe chopping up wood to light a fire and he threatened correctional services officers with the axe and then took off from the prison," Caulton said.

Saul's March 4 escape came three days before a mass break-out of 20 inmates from the same jail; 14 were recaptured at the weekend with a manhunt continuing for the other six.

Caulton said all of the escapees were suspected of serious crimes such as murder or rape.

He said the mass break-out occurred after a guard accidentally left a door open.

"A guard left the door open. She was talking to her parents who were visiting at the time. The prisoners took the chance to leave," Caulton said.

"During the main escape three guards were assaulted when they tried to stop the men from leaving."

Saul is expected to appear in court on murder charges later this month.

AAP

[OMEN]

A Singaporean man swallowed more than $A500,000 ($NZ581,000) worth of heroin and then tried to smuggle it into Australia, a court has been told.

The Supreme Court in Brisbane was told Ng Teck Boon, 40, had 91 packets of heroin in his stomach when he was arrested at Brisbane International Airport on June 27 last year.

He pleaded guilty today to one count of importing a marketable quantity of a border controlled drug.

Commonwealth prosecutor Paul Huygens told the court Ng had arrived on a flight from Hong Kong and was questioned by Customs officers after looking "nervous".

Ng quickly admitted to having swallowed a large amount of heroin before boarding the flight.

He was arrested by Australian Federal Police and spent two days in hospital while he passed all the packages.

The court was told Ng had swallowed almost 500g of powder, and that the pure weight of the heroin was 286.1g.

The drugs had an estimated street value of $A572,000.

Defence barrister Simon Lewis said Ng had agreed to courier the drugs to Australia out of desperation for money.

Mr Lewis told the court his client had travelled to Hong Kong in search of work but had been lured into becoming a mule with the promise of a $US5000 payment.

He was given just $US400 and a mobile phone before leaving for Australia, and told immigration officials the purpose of his trip was for a holiday.

Justice John Byrne today sentenced Ng to nine years jail with a non-parole period of five years.

AAP

[OMEN]

Vietnam, one of the countries hardest-hit by bird flu, will start a human vaccine trial this month, a military medical official has said.

The official did not give a specific date but said the Health Ministry had approved testing that would last eight months at the Military Medical Academy in Ha Tay province near Hanoi.

"We are going to conduct the tests at the academy, with people joining on a voluntary basis, including students and employees," said the official, who asked not to be identified in the media.

The academy had been licensed by the Ministry of Health to conduct the trial but it still required permission from the Ministry of Defence, the official said.

A company run by the National Institute of Hygiene and Epidemiology said in a statement on its website that it would produce six million doses per year for application on both humans and poultry should the tests be successful.

Five people have died of bird flu in Vietnam so far this year out of six reported H5N1 infections. The World Health Organisation has recorded 51 deaths in Vietnam since late 2003 out of 235 people killed among 372 known cases globally.

WHO in Vietnam said it was not directly involved in the Communist-run Southeast Asian country's development of a human vaccine for the H5N1 virus.

"Our understanding is that this would be for local issue only and that the Ministry of Health has rigorous guidelines for quality control," said Dida Connor, WHO spokeswoman in Hanoi.

The Company for Vaccine and Biological Production No.1, known as Vabiotech, said in its statement that the vaccine used for poultry would be 1.5 microgram per dose, or one tenth the dose for humans.

On March 2, GlaxoSmithKline company said a vaccine it designed to protect people against H5N1 may be effective in warding off a few different sub-types of the virus.

In an Asian clinical trial involving 1206 adults in Hong Kong, Singapore, Taiwan and Thailand, the vaccine produced antibodies that not only neutralised the H5N1 virus found in Vietnam, but also the variant now dogging Indonesia.

A vaccine designed using a current H5N1 strain might not offer protection against other strains and might even be useless against any eventual pandemic strain because viruses mutate all the time.

Still, experts say the process of making vaccines will lay down the necessary infrastructure so that the time used to make an eventual pandemic vaccine - anywhere between 4 to 6 months after a pandemic begins - can be shortened

.

Reuters

[OMEN]

Chinese Premier Wen Jiabao has offered to resume talks with self-ruled Taiwan which China claims as its own but warned the island that passage of a contentious referendum on UN membership would disrupt ties.

Taiwan, ruled separately from China since the end of a civil war in 1949, will hold a referendum on UN membership alongside presidential elections on Saturday, ignoring warnings from the United States, France, Japan and China.

"We hope to resume peace talks across the Straits as soon as possible under the one China principle. Any questions can be addressed, including such major issues as ending the hostile state between the two sides," Wen told a news conference.

"Anyone who wants to separate Taiwan from the motherland will not succeed and is doomed to fail," Wen said.

China opposed the referendum because it would change Beijing's cherished policy that both the island and the mainland belong to a single country, Wen said.

China insists the democratic island should eventually be returned to the fold, by force if necessary.

Su Chi, deputy manager for Taiwan's main opposition Nationalist Party candidate Ma Ying-jeou, who favours closer ties with China, said there was nothing new in Wen's comments.

"It looks like there's no change," Su told Reuters. "It's just reiteration. So we will reiterate that the future of cross-Strait relations is for the 23 million citizens of Taiwan to decide."

Taiwan's Mainland Affairs Council, the island's main policy making body for China relations, had no immediate comment.

Reuters

[JohnCenaFan28]

Thanks for the news.

[JohnCenaFan28]

Thanks for the story.