Life in OUR America, The Livyjr Files Volume 7 Options

[Livyjr]

"China's Shanghai index jumps 9.3 percent after government cuts tax on stock transactions"

By ELAINE KURTENBACH, Associated Press

Last updated: 4:42 a.m., Thursday, April 24, 2008

SHANGHAI, China -- China's most-watched stock index surged 9.3 percent Thursday -- its biggest percentage gain ever -- after the government cut a tax on stock transactions in a move widely seen as an effort to boost slumping markets.

The rebound came as many global markets are recovering modestly after being battered since the start of the year by worries over the U.S. credit crisis and slower global growth.

The benchmark Shanghai Composite Index surged as much as 9.6 percent in early trading, then fell back some before closing up 304.69 points, or 9.3 percent, at 3,583.02.

The Shenzhen Composite Index of China's smaller bourse shot up 8.7 percent.

The jump came after the government announced late Wednesday that it was cutting a stamp tax on share transactions to 0.1 percent from 0.3 percent.

That reversed a tax increase imposed May 30, when regulators were trying to cool surging stock prices.

The communist Beijing government keeps its markets isolated from global money flows and most shares are off-limits to foreign buyers.

But investors are watching them closely for signs of a possible recovery, and markets abroad often react to swings in Chinese prices.

The latest tax measure took effect Thursday.

Chinese stock prices have fallen sharply since October, ending a boom that began in mid-2006.

The main index has dropped by nearly half, hitting levels last seen in March 2007.

As of Thursday's close it was still down 31 percent for the year.

"In recent weeks, expectations have been mounting on the government to take decisive steps to prop up the domestic markets," Jing Ulrich, chairwoman of China equities for JPMorgan Chase & Co., said in a report to clients.

"The lowering of stamp duty ... is among the most aggressive steps the government could have taken to improve sentiment," Ulrich wrote.

China's economy has grown by more than 10 percent annually for five straight years and the first-quarter expansion was 10.6 percent over the same period of 2007.

But analysts say that in China's state-dominated economy, stock prices are especially sensitive to policy changes and often are disconnected from the overall economy.

Alarmed by an 11 percent slide in the Shanghai index last week, the market regulator announced new restrictions late Sunday on sales of large blocks of shares newly freed from lockup periods.

That move, showcased in front-page headlines of state newspapers, was aimed at reassuring investors who worry that the market will be diluted when US$430 billion in previously nontraded shares become available for trading this year.

But it seemed to do little to spur buying.

For the first time in more than a year, the Shanghai benchmark dropped below 3,000 briefly on Tuesday before rebounding later in the day.

Rumors that another market-boost measure was in the works helped push the index up 4.2 percent on Wednesday.

The stamp tax reduction seemed to have done the trick, for now.

The Shanghai index was helped Thursday by a 7.1 percent advance in PetroChina's stock, to 17.70 yuan.

Its shares account for about one-fifth of the benchmark's total value.

At least 200 companies' shares had hit the 10 percent daily upside limit by late morning, according to figures compiled by market monitor Wind Consulting Co.

[Livyjr]

"Pakistan wants peace deal with tribe of Taliban commander suspected in Bhutto assassination"

By MUNIR AHMAD, Associated Press

Last updated: 8:22 a.m., Thursday, April 24, 2008

ISLAMABAD, Pakistan -- Pakistan's government is seeking a peace deal with the tribe of a Taliban commander suspected in the assassination of former Prime Minister Benazir Bhutto, an official said Thursday.

Zahid Khan, a senior official in one of the parties of the ruling coalition, said government envoys were in talks with elders of the Mahsud tribe in South Waziristan.

The tribe includes Baitullah Mehsud, Pakistan's top Taliban leader who is accused of ties to al-Qaida.

Mehsud is wanted for a string of suicide attacks in Pakistan.

The previous government has accused him of Bhutto's assassination in December.

Mehsud has reportedly denied involvement and Bhutto's party has not repeated the assertion.

Bhutto's Pakistan Peoples Party is now leading a coalition government packed with Musharraf foes after routing loyalists of the U.S.-backed president in Feb. 18 elections.

The new government wants to counter surging Islamic militancy with dialogue and development, distancing itself from Musharraf's more forceful tactics.

The border region is believed to shelter many al-Qaida and Taliban militants, including groups who orchestrate attacks on the U.S.-backed government in Afghanistan and plot terrorist strikes in Europe and North America.

"We will ensure that all people from this tribe respect and abide by an agreement which we might reach with them," Khan told The Associated Press in a telephone interview.

Khan said there were no direct talks with Mehsud but he is part of the Mahsud tribe and elders from the tribe will be responsible for any violence in their controlled areas.

Maulvi Umar, a spokesman for Mehsud, said militants across the region were ready for peace if the government met their demands to withdraw the army and release militant prisoners.

But army spokesman Maj. Gen. Athar Abbas said it had received no order to pull back.

The army and the militants have been observing an unofficial cease-fire for more than a month and Mehsud's supporters this week distributed fliers urging Taliban members to "strictly observe the ban on any hostility."

A copy obtained by The Associated Press warned offenders that they would be strung upside down and punished.

Khan, a leader of the Awami National Party, was involved in talks that resulted in the freeing earlier this week of an aging pro-Taliban cleric, Sufi Muhammad.

The government of the North West Frontier Province said Muhammad's group signed a pact renouncing violence in return for being allowed to peacefully campaign for Islamic law in the Swat Valley and neighboring areas.

The dialogue effort has received a cautious response from Washington, which has given Pakistan billions of dollars in return for aid in the war on terror.

U.S. officials complained that past deals Musharraf struck with militants simply gave breathing space to al-Qaida before eventually breaking down.

White House spokeswoman Dana Perino said the Bush administration has been concerned about these types of approaches.

"We don't think they work," she said.

U.S. Assistant Secretary of State Richard Boucher indicated support for the effort to negotiate peace with the tribes -- not with the Taliban or al-Qaida -- but cautioned that it had to produce results.

"Getting people who have been involved in violence in the past to abandon violence and take on a peaceful path is important," Boucher said.

------

Associated Press writers Ishtiaq Mahsud, Riaz Khan, Sadaqat Jan and Nahal Toosi contributed to this report.

[Livyjr]

"British foreign secretary visits Iraq amid continuing clashes with Shiite militias"

By QASSIM ABDUL-ZAHRA, Associated Press

Last updated: 6:32 a.m., Thursday, April 24, 2008

BAGHDAD -- Britain's foreign secretary held talks Thursday with Iraqi Prime Minister Nouri al-Maliki as at least 13 people were reported killed in the ongoing fighting between Shiite militiamen and Iraqi and U.S.-led forces.

The British Embassy confirmed that Foreign Secretary David Miliband had arrived on a previously unannounced visit but refused to release any other information due to security concerns.

Britain has about 4,500 troops in Iraq, most of them based at an airport camp near the southern city of Basra.

Britain suspended plans to withdraw about 1,500 troops this spring after fighting broke out last month between Iraqi forces and Shiite militiamen.

In the latest clashes, five people died and 28 were wounded early Thursday in Baghdad's embattled Sadr City district, a stronghold of the Mahdi Army militia of anti-American cleric Muqtada al-Sadr.

The figures came from a police officer who asked not to be identified because he was not authorized to speak to the media.

Another eight people were killed and two wounded during fighting in the capital's Husseiniyah area, another base of Shiite militants.

The figures came from a hospital official who spoke on condition of anonymity out of safety concerns.

The fighting broke out after Iraqi troops moved last month to regain control of Basra -- capital of the country's vast oil industry -- from militias.

U.S. and British troops have helped the Iraqis gain control of the city, although scattered attacks still occur.

The fighting, however, spread to Baghdad, with its substantial Shiite population and strong militia presence.

Thursday's clashes came a day after a top American general urged al-Sadr to rein in his fighters.

"We certainly hope that Sadr will choose the road of peace and responsibility," said Lt. Gen. Lloyd J. Austin III, who commands day-to-day operations in Iraq.

Meanwhile, the U.S. military said Thursday that two of its soldiers were killed in an accident in Salahuddin province when their vehicle rolled onto its side.

Their deaths raised the American death toll in April to 36, the highest rate of death for troops in Iraq since September, when 65 Americans were killed, according to an Associated Press tally.

Another American soldier died in a single-vehicle accident on a highway in neighboring Kuwait, the military said.

A soldier was injured in the crash.

The cause of both crashes were under investigation, the military said.

[Livyjr]

"Reconstruction of Samarra shrine helps bridge sectarian divides in Iraq"

By BRADLEY BROOKS, Associated Press

Last updated: 3:12 a.m., Thursday, April 24, 2008

SAMARRA, Iraq -- It was the bombing of a revered Shiite shrine here that pushed Iraq to the brink of civil war, bloodshed that has left tens of thousands dead and this ancient city in ruins.

But reconstruction of the famed mosque amid the rubble filling this city is under way, once bitter Shiite and Sunni enemies jointly man checkpoints and locals hope tourists will return again to see the shrine and help save the economy.

"It's a beautiful thing that they are rebuilding the mosque," said Abdul Jabar Salah, an unemployed father of three standing in line on Tuesday outside the mayor's office, waiting to apply for a job helping with reconstruction of the shrine.

"We're hopeful that as the mosque rises, so, too, will our economic situation."

"All things, though, depend upon security," he said.

This city has long used the Tigris river to support a strong agricultural base -- its sweet watermelons are a prized crop.

But for decades, it was the Shiite tourists who trekked here to see the golden dome of the Askariya mosque who pumped life into the local economy.

All that ended in February 2006, when a huge explosion destroyed the dome of the mosque and immediately ignited fierce sectarian fighting between Sunnis and Shiites across Iraq.

In June 2007, another bombing brought down twin minarets on the mosque's compound, adding even more fury to the fighting.

Despite the recent history, Samarra is now one of the few -- if not the only -- Iraqi cities where several major security players work together with a semblance of harmony, largely because of the destruction of the sacred shrine.

National police controlled by the Shiite-dominated Interior Ministry man the same checkpoints as Awakening Council fighters, Sunnis who once sided with al-Qaida but now work with Coalition forces.

An Iraqi army battalion comprised of Kurdish soldiers guards a security berm that encircles the city, while a separate mixed army battalion supports them.

That mixed army battalion also works at checkpoints along with the national police, the Sunni fighters and local police as well.

How, in a town that once symbolized fiery sectarian warfare, did this occur?

"It was really a sequence of events," said Cpt. Juan Garcia, a 28-year-old from Miami, Fla.

"But it has worked well -- there is no shooting between the different forces."

"Everyone worked hard to get Samarra where it is."

The bombing of the mosque set in motion the sequence that Garcia referred to.

After the first attack, Iraqi police in Samarra were bolstered.

After the second bombing that destroyed the minarets, national police were sent up from Baghdad.

Last May, a Sunni suicide car bomber targeted the local police headquarters, killing 12 officers, including the chief.

That, Garcia said, spurred a bigger national police force to take over security of the mosque compound and more involvement from the Iraqi army in the city.

While a peaceful balance between such forces is always tenuous at best in Iraq, for the past three months an equilibrium has held in Samarra, U.S. soldiers said.

Which does not mean the city is by any means a bastion of safety.

Awakening Council members are routinely targeted by insurgents.

A month ago, a suicide bomber drove a truck filled with explosives into the mayor's home, killing three security guards.

Yet there are signs of normalcy returning.

A modest business district has sprung up.

Pedestrians and hordes of children on bicycles were on the city's streets and a four-hour American patrol rolling through the city was not fired upon once -- a calm unheard of just a few months ago.

"Rebuilding the mosque will help bring civilization back to the city," said Ahmed Asaad, as he sold ice cream to a crowd of Iraqis and American soldiers.

"But if we want to make the economy of Samarra good, the people have to stand on their own two legs and do the job."

Work on the mosque is now in the demolition phase.

Shards of glass -- entire walls of the mosque were made up of small, hand-cut mirrors -- are littered everywhere.

Bits of the gorgeous hand-painted tiles that once lined the inside of the dome are buried in the debris.

Hundreds of pieces of gold sheeting that covered the dome sit in a corner of the compound.

The Askariya mosque contains the tombs of the 10th and 11th imams -- Ali al-Hadi, who died in 868, and his son Hassan al-Askari, who died in 874.

Both are descendants of the Prophet Muhammad, and Shiites consider them to be among his successors.

Restoring the shrine will cost an estimated $16 million, with $8 million coming from the European Union and $5 million more from the United Nations.

The remaining $3 million will come from the Iraqi government.

Not all locals, however, are thrilled with the money going toward the shrine.

"I think you have to rebuild the city before you rebuild the mosque," said the owner of a flower shop who asked that his name not be used for security reasons.

"We all love the mosque, but our basic needs are not being met."

[Livyjr]

"Pakistan protests Afghan border skirmish - Pakistan protests to NATO, Afghan forces over skirmish that killed at least 9"

Associated Press

Last updated: 7:32 a.m., Thursday, April 24, 2008

ISLAMABAD, Pakistan -- The foreign ministry says Pakistan has protested to NATO and Afghan authorities over a skirmish that killed at least nine people.

In a pre-dawn battle Wednesday, militants attacked an Afghan border post across from Pakistan's Bajur tribal area.

During the melee, Pakistani and Afghan troops also traded fire.

A Pakistani soldier and at least eight suspected militants died.

On Thursday, 1st Lt. Richard Ulsh, a spokesman for the U.S.-led coalition in Afghanistan, said NATO forces provided small arms fire and air support to Afghan forces.

Pakistan Foreign Ministry spokesman Mohammed Sadiq says NATO and Afghan forces were told not to repeat such incidents.

He said the clash involved "intrusion of our border post."

[Livyjr]

"Talk of firing Chicago's US attorney cited at Rezko trial - Conversations about firing US Attorney Patrick Fitzgerald cited by prosecutor at Rezko trial"

By MIKE ROBINSON, Associated Press

Last updated: 4:12 a.m., Thursday, April 24, 2008

CHICAGO -- As one of the nation's toughest prosecutors on corruption, Patrick J. Fitzgerald is viewed with icy suspicion at best among Chicago's cigar-chomping, patronage-loving, backroom politicians.

But prosecutors dropped a bombshell Wednesday at political fundraiser Antoin "Tony" Rezko's corruption trial, suggesting some of Fitzgerald's foes may have gone beyond mere grumbling about his hard-nosed approach.

They say a government witness claims Rezko discussed efforts among top Republicans, including former White House political director Karl Rove and GOP national committeeman Robert Kjellander, to have Fitzgerald fired to derail a corruption probe.

That witness is Ali Ata, whom prosecutors want to be allowed to testify about his alleged 2004 conversations with Rezko.

Ata, a former executive director of the Illinois Finance Authority, pleaded guilty Tuesday to tax fraud and lying to an FBI agent about Rezko's role in getting Ata his state job.

"He had conversations with Mr. Rezko about the fact that Mr. Kjellander was working with Karl Rove to have Mr. Fitzgerald removed," Assistant U.S. Attorney Carrie Hamilton told U.S. District Judge Amy J. St. Eve on Wednesday.

Hamilton didn't say much more, but she did make it clear that the idea was allegedly to derail, or at least slow, the federal government's probe of influence peddling involving Democratic Gov. Rod Blagojevich's administration.

At the time of the purported talks, Fitzgerald already had been appointed a special prosecutor for Washington's CIA leak investigation, in which I. Lewis "Scooter" Libby was later convicted of perjury and obstruction of justice.

Rezko is charged with scheming to use his clout with Blagojevich's administration to launch a $7 million kickback scheme.

Rezko, who also raised funds for Sen. Barack Obama, says he had nothing to do with the schemes.

Neither Obama nor Blagojevich are charged with any wrongdoing.

Kjellander, reached by telephone, brushed aside Hamilton's claim.

"I never have discussed with Karl Rove or any other person on the White House staff the proposition that U.S. Attorney Patrick Fitzgerald should or could be removed from his office," he said.

Rove's Washington attorney, Robert Luskin, said Rove and Kjellander have been friends since college, but Rove does not remember Kjellander ever talking to him about Fitzgerald.

"He does not recall Kjellander speaking to him about Pat Fitzgerald and is certain he never spoke to anyone at the White House about removing Fitzgerald," Luskin said Wednesday.

Rove has never been contacted by the U.S. attorney's office about the alleged conversations, he said.

Luskin said Rove, being the subject of the CIA leak investigation, "would have been especially sensitive to doing or saying anything that would appear to be interfering with Fitzgerald's independence."

Since coming to Chicago, Fitzgerald has sent former Gov. George Ryan and other politicians to prison on corruption charges, and the Rezko case has provided political black eyes for Blagojevich.

Last year, the firings of U.S. attorneys around the country provoked a backlash on Capitol Hill, where lawmakers questioned whether the moves were politically motivated.

Alberto Gonzales later resigned as attorney general.

[Livyjr]

AND AS VIOLENT WEATHER RELATED TO GLOBAL WARMING CONTINUES TO WRECK HAVOC HERE IN AMERICA, WE HAVE ...

"Travelers profit falls as investment income declines; company raises 2008 earnings outlook"

Associated Press

Last updated: 6:42 a.m., Thursday, April 24, 2008

SAINT PAUL, Minn. -- Insurer Travelers Companies says its profit declined in the first quarter, in part because investment income fell amid a weak market.

Catastrophe payments more than doubled as well.

"Severe weather pounds parts of Texas with hail, 70 mph winds"

Wed Apr 23, 11:43 PM ET

LUBBOCK, Texas - Severe weather pounded parts of Texas with baseball-sized hail, 70-mph winds and possible tornadoes on Wednesday, knocking down power lines and trees, and damaging some buildings.

No injuries were reported.

In northern Jones County, Judge Dale Spurgin said a storm damaged roofs in Anson and one highway was closed by downed utility poles.

Spurgin said there was minor flooding on some roads.

As the storm moved east, at least one tornado was reported in Erath County, about 60 miles southwest of Fort Worth.

The same one appears to have touched down nearby in Palo Pinto County, said Nick Hampshire, a meteorologist with the National Weather Service.

Trees were knocked down and outbuildings were destroyed along the county line.

Hood County emergency management official Roger Deeds said some homes and a fire station were damaged as the storm moved through the region.

In Stephenville, several cars were stuck in high water, but there were no injuries, said police patrolman Marty Golightly.

He said there were reports of water as high as 3 feet.

[Livyjr]

"Petraeus promotion keeps nation on its war course"

By ROBERT BURNS, AP Military Writer

24 APRIL 2008

WASHINGTON - President Bush is promoting his top Iraq commander, Army Gen. David Petraeus, and replacing him with the general's recent deputy, keeping the U.S. on its war course and handing the next president a pair of combat-tested commanders who have relentlessly defended Bush's strategies.

Bush will nominate Petraeus to replace Navy Adm. William J. Fallon as chief of U.S. Central Command, Defense Secretary Robert Gates announced Wednesday.

The command's area of responsibility features some of the most vexing military and foreign policy problems facing this administration and its successor — including Iran, Pakistan, Lebanon, parts of Africa and Afghanistan in addition to Iraq.

Fallon resigned last month, saying news reports that he was at odds with the White House over Iran policy had become a distraction.

He was the first Navy officer to lead Central Command; the Petraeus choice represents a return to the more common practice of making it an Army slot.

Petraeus would be succeeded at a pivotal time in Baghdad by Army Lt. Gen. Ray Odierno, who was the No. 2 commander in Iraq for 15 months.

He has been credited by many with deftly managing security gains that Petraeus told Congress this month have opened a pathway for potential political progress in the country.

Gates said he hoped the Senate would act on both nominations by next month and expected Petraeus to switch to the Central Command job, which is based in Tampa, Fla., by late summer or early fall.

That is the point at which Petraeus is likely to make an initial recommendation to Gates and to Bush on whether conditions in Iraq are stable enough to permit a further reduction in U.S. troop levels.

The United States has about 160,000 troops in Iraq and about 28,000 in Afghanistan.

The strain of those wars has taken a heavy toll on U.S. ground forces.

Among the politically sensitive questions Petraeus would face as head of Central Command is whether the military focus on Iraq is limiting what U.S. and allied forces can accomplish in Afghanistan.

And he would be pressed on the matter of using military force against Iran.

The next president taking office in January would not be compelled to keep either Petraeus or Odierno, but normally the lineup of senior commanders — as well as the chairman of the Joint Chiefs of Staff — is not changed with administrations.

"There is no precedent in U.S. tradition for a new president changing these kinds of officers," said Stephen Biddle, a senior fellow at the Council on Foreign Relations and an occasional adviser to Petraeus.

"For an incoming president to change them (in 2009) would be a real statement."

Many Republicans, including all-but-certain presidential nominee John McCain, are enthusiastic Petraeus supporters.

Democrats on Capitol Hill are not expected to oppose either Petraeus or Odierno, but they are likely to raise tough questions during confirmation hearings.

Senate Majority Leader Harry Reid noted after Gates' announcement that any war commander must be committed to "implementing major changes in strategy" if directed to do so by a new president.

"The Senate will carefully examine these nominations, and I will be looking for credible assurances of a strong commitment to implementing a more effective national security strategy," said Reid, D-Nev.

John Batiste, a retired Army two-star general who was a division commander in Iraq in 2004-05, said in an e-mail exchange that he has confidence in the abilities of Petraeus and Odierno, but he questions whether their experience and expertise can make the crucial difference in the U.S. war on terror.

"The best military in the world ... cannot redeem a national strategy which fails in the more important diplomatic, political and economic components of strategy and when the nation is not mobilized behind our incredible service men and women," wrote Batiste, who was among the retired officers who spoke out against the war two years ago in what became known as the revolt of the generals.

At a Pentagon news conference, Gates said he did not foresee that the new lineup at Central Command and in Iraq would mean any changes in the way the U.S. is approaching the issue of Iranian influence in Iraq.

Petraeus and Odierno have both accused Iran of aiding rebels opposing U.S. troops.

"It's my belief that General Odierno and General Petraeus and Admiral Fallon were all in exactly the same position when it came to their views of Iranian interference inside Iraq," Gates said.

"And it is a hard position."

"Because what the Iranians are doing is killing American service men and women inside Iraq."

Petraeus will face broader aspects of the Iran issue if he is confirmed as Fallon's replacement.

A number of U.S. officials, including Adm. Michael Mullen, chairman of the Joint Chiefs of Staff, have asserted that Iran also is supplying arms or otherwise supporting the Taliban rebels in Afghanistan.

Earlier this week, Gates said that while war with Iran would be "disastrous on a number of levels," the military option cannot be abandoned so long as the Iranians remain a potential nuclear threat.

Many had seen a strong possibility that Gates' senior military assistant, Army Lt. Gen. Peter Chiarelli, would replace Petraeus in Baghdad if Petraeus were nominated for the Central Command job.

Asked why he had recommended Odierno, Gates said, "General Odierno is known recently to the Iraqi leadership, he's known to the Iraqi generals, he is known to our own people, he has current experience," and so the odds of a smooth transition in Baghdad "are better with him than with anybody else I could identify."

Odierno, currently commander of the Army's 3rd Corps at Fort Hood, Texas, served as the No. 2 commander in Iraq from December 2006 to February 2008.

Chiarelli, who preceded Odierno in that post and then joined Gates' staff, will be nominated as the next vice chief of staff of the Army.

Bush had nominated Odierno for that job some months ago; Gates said that nomination will be withdrawn.

The current Army vice chief of staff, Gen. Richard Cody, is expected to retire this summer.

[Livyjr]

"China's Shanghai index jumps 9.3 percent after government cuts tax on stock transactions"

By ELAINE KURTENBACH, Associated Press

Last updated: 4:42 a.m., Thursday, April 24, 2008

SHANGHAI, China -- China's most-watched stock index surged 9.3 percent Thursday -- its biggest percentage gain ever -- after the government cut a tax on stock transactions in a move widely seen as an effort to boost slumping markets.

But analysts say that in China's state-dominated economy, stock prices are especially sensitive to policy changes and often are disconnected from the overall economy.

"Wall Street advances on jobless claims drop, Ford's 1Q; dollar gains as commodity prices slide"

By TIM PARADIS, Associated Press

Last updated: 5:52 p.m., Thursday, April 24, 2008

NEW YORK -- Wall Street rallied Thursday after the government's jobless claims data and Ford Motor Co.'s first-quarter results helped reinject some optimism about the economy into the market.

The Dow Jones industrial rose more than 80 points as investors focused on the Labor Department data showing weekly unemployment claims dropped and word that Ford had a $100 million profit in the first quarter.

The news allowed investors to look past the Commerce Department's report that new home sales fell in March to the lowest level in more than 16 years, a sign that the housing slump isn't close to an end.

Investors were also able to set aside any concerns about another drop in factory orders for big-ticket manufactured goods and weak forecasts from Amazon.com Inc. and Starbucks Corp.

Meanwhile, oil and other commodities prices fell as the dollar rose to its highest level against major currencies since January, which also helped boost stocks.

Sellers held sway early in the session, sending the Dow down nearly 57 points, after the home sales report.

The data appeared to stir concerns that the hangover from the housing bubble would remain an intractable obstacle for the economy.

But as the session wore on, the market righted itself, perhaps because there were no real surprises in the day's negative news.

John Merrill, chief investment officer at Tanglewood Capital Management in Houston, said investors are seeing confirmation of many of the economic themes that have played out in recent months, with weakness in the financial, homebuilding and automotive sectors and relative strength elsewhere.

"The earnings picture is not so bleak as people though it was going to be," he said.

"There's been so much talk of the spillover from the credit crunch and homebuilding into the real economy and that just doesn't seem to have happened."

The Dow rose 85.73, or 0.67 percent, to 12,848.95.

Broader stock indicators also gained.

The Standard & Poor's 500 index rose 8.89, or 0.64 percent, to 1,388.82, and the Nasdaq composite index advanced 23.71, or 0.99 percent, to 2,428.92.

Bond prices declined.

The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.83 percent from 3.74 percent on Wednesday.

Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, where consolidated volume came to 4.34 billion shares, up from 3.81 billion on Wednesday.

The dollar rose for the second straight day, regaining ground from its record low against the euro on Tuesday amid rising expectations that the Federal Reserve will pause in its string of interest rate hikes following its meeting next Wednesday.

The euro brought $1.5686 in late New York trading, down from $1.5896 Wednesday and $1.6018 on Tuesday.

The greenback's advance sent commodities prices falling; hard assets like oil and gold tend to rise when the dollar is falling, so they reversed course Thursday as the U.S. currency regained some strength.

A drop in oil prices was particularly reassuring for Wall Street.

Crude's surge toward $120 a barrel earlier this week compounded already rising concerns about inflation and its impact on consumer spending.

Light, sweet crude fell $2.24 to settle at $116.06 on the New York Mercantile Exchange.

The Labor Department's report that claims for unemployment benefits declined by 33,000 last week to 342,000 came as a surprise after economists predicted claims would rise by 3,000.

The notion that unemployment might be contained appeared to cap some concern about the economy.

With consumer spending accounting for about 70 percent of U.S. economic activity, a rise in unemployment could dent people's willingness to reach into their wallets.

But unwelcome news came from the Commerce Department, which said new home sales fell by 8.5 percent in March to a seasonally adjusted annual rate of 526,000 units -- the slowest pace since October 1991.

Also, the median price of a new home showed the sharpest year-over-year decline in nearly four decades.

Moreover, orders to factories for durable goods -- big-ticket items like refrigerators, cars and computers -- fell for a third straight month in March.

This marks the longest sustained pullback since the 2001 recession.

Amazon had worried investors over the strength of its profit margins, while Starbucks warned that its second-quarter profit will likely fall short of Wall Street's expectations because of weak consumer spending.

Their forecasts, delivered after the closing bell Wednesday, touched off unease over the prospects for the consumer.

Amazon fell $3.31, or 4.1 percent, to $77.69, while Starbucks dropped $1.86, or 11 percent, to $15.99.

But Ford said strong results from Europe and South America helped make up for a slower U.S. economy.

The No. 2 U.S.-based automaker's performance was its first profitable quarter since the second quarter of 2007.

Ford rose 88 cents, or 12 percent, to $8.40.

3M Co. -- the maker of Scotch tape and Post-It notes -- fell $1.50 to $79.13 after reporting its first-quarter profit fell 28 percent from a year earlier, when it benefited from a gain on the sale of one of its branded pharmaceutical business in Europe.

Motorola Inc. slid 30 cents, or 3.1 percent, to $9.25 after reporting that its first-quarter loss widened following a 39 percent decline in its mobile business.

The Russell 2000 index of smaller companies rose 8.96, or 1.27 percent, to 717.07.

Overseas, Japan's Nikkei stock average fell 0.28 percent.

Britain's FTSE 100 closed down 0.54 percent, Germany's DAX index rose 0.39 percent, and France's CAC-40 fell 0.31 percent.

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On the Net:

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

[Livyjr]

"Wall Street advances on jobless claims drop, Ford's 1Q; dollar gains as commodity prices slide"

By TIM PARADIS, Associated Press

Last updated: 5:52 p.m., Thursday, April 24, 2008

NEW YORK -- Wall Street rallied Thursday after the government's jobless claims data and Ford Motor Co.'s first-quarter results helped reinject some optimism about the economy into the market.

John Merrill, chief investment officer at Tanglewood Capital Management in Houston, said investors are seeing confirmation of many of the economic themes that have played out in recent months, with weakness in the financial, homebuilding and automotive sectors and relative strength elsewhere.

"The earnings picture is not so bleak as people though it was going to be," he said.

"There's been so much talk of the spillover from the credit crunch and homebuilding into the real economy and that just doesn't seem to have happened."

THE "REAL" ECONOMY ....

WE KEEP HEARING THAT TERM FROM ALL OF THESE FINANCIAL WIZARDS AND ANALYSTS DOWN THERE ON WALL STREET IN NEW YORK CITY AND ELSEWHERE HERE IN AMERICA .....

"THE CREDIT CRUNCH HAS NOT SPILLED OVER INTO THE 'REAL'ECONOMY" THESE FINANCIAL WIZRDS KEEP TELLING US ...

WELL, WELL, WELL, IS ALL I CAN SAY IN RETURN ...

HOW ABOUT THAT, NOW WILL YOU ...

And so ...

HERE IS SOME "REAL ECONOMY", AS FAR AS I CAN SEE ...

AND IT LOOKS LIKE SOMETHING HAS SPILLED OUT SOMEWHERE, SINCE THINGS SEEM TO BE GOING FLAT HERE IN A HELL OF A HURRY ...

BUT, HEY ...

IT'S PROBABLY JUST ME ..

I'M FROM THE COUNTRY, SO WHAT CAN I KNOW ABOUT IT ...

And so ...

"New home sales plunge to lowest level in 16 1/2 years, prices drop by largest amount in 38 years"

By MARTIN CRUTSINGER, Associated Press

Last updated: 11:22 a.m., Thursday, April 24, 2008

WASHINGTON -- Sales of new homes plunged in March to the lowest level in 16 1/2 years as housing slumped further at the start of the spring sales season.

The median price of a new home in March, compared with a year ago, fell by the largest amount in nearly four decades.

The Commerce Department reported Thursday that sales of new homes dropped by 8.5 percent last month to a seasonally adjusted annual rate of 526,000 units, the slowest sales pace since October 1991.

The median price of a home sold in March dropped by 13.3 percent compared with March 2007, the biggest year-over-year price decline since a 14.6 percent plunge in July 1970.

The dismal news on new home sales followed earlier reports showing sales of existing homes fell by 2 percent in March.

Housing, which boomed for five years, has been in a prolonged slump for the past two years with sales and home prices falling at especially sharp rates in formerly boom areas of the country.

For March, sales were down in all regions of the country, dropping the most in the Northeast, a decline of 19.4 percent.

Sales fell by 12.9 percent in the West, 12.5 percent in the Midwest and 4.6 percent in the South.

In other economic news, orders to factories for big-ticket manufactured goods fell for a third straight month in March, the longest string of declines since the 2001 recession, while applications for unemployment benefits fell by 33,000 to 342,000.

The Commerce Department said demand for durable goods dropped by 0.3 percent last month, a worse-than-expected performance that underscored the problems manufacturers are facing from a severe economic slowdown.

The last time orders fell for three consecutive months was from February to April of 2001, when the country was sliding into the last recession.

The weakness in manufacturing orders was led by a 4.6 percent drop in orders for autos, a sector hard hit by soaring gasoline prices, and the weakening economy, which have cut sharply into car sales.

Orders in the category that includes home appliances fell by 6.6 percent.

This industry has been hurt by the two-year slump in home sales.

President Bush said Tuesday that the economy was not in a recession but a period of slower growth.

However, economists who believe the country has fallen into a recession pointed to the string of declines in manufacturing orders to support their view.

"The broad swath of data in the March (orders) report is indicative of a mixed set of conditions in a factory sector that is, overall, in a mild recession," said Cliff Waldman, economist for the Manufacturers Alliance/MAPI.

The Labor Department reported that claims for unemployment benefits fell by 33,000 last week to 342,000.

Economists had been expecting claims to rise by 3,000.

The four-week moving average for claims fell by 7,250 to 369,500.

Even with the improvements, analysts said the weak economy is still putting greater pressures on the labor market.

The unemployment rate climbed to 5.1 percent in March as businesses laid off the largest number of workers in five years.

Economic growth slowed to a near-standstill at the end of last year as the economy was battered by the prolonged slump in housing and a severe credit crunch that has resulted in billions of dollars of losses at many of the nation's largest financial institutions and has made it harder for consumers and businesses to get loans.

Consumer sentiment, meanwhile, has plunged to recessionary lows as Americans have also watched gasoline soar to an average price above $3.50 per gallon nationally.

The 0.3 percent drop in orders for durable goods, items expected to last at least three years, followed even bigger declines of 0.9 percent in February and 4.4 percent in January.

Orders for all transportation products fell by 4.6 percent, reflecting the big drop in demand for autos.

Orders for commercial aircraft actually rose by 5.5 percent while demand for defense aircraft surged by 29.4 percent.

Many defense industries have seen big increases reflecting the wars in Iraq and Afghanistan.

A key category viewed as a proxy for business investment plans showed no increase in March after a big 2 percent drop in February.

Businesses have cut back on plans to expand and modernize as the economy has softened.

[Livyjr]

"New home sales plunge to lowest level in 16 1/2 years, prices drop by largest amount in 38 years"

By MARTIN CRUTSINGER, Associated Press

Last updated: 11:22 a.m., Thursday, April 24, 2008

WASHINGTON -- Sales of new homes plunged in March to the lowest level in 16 1/2 years as housing slumped further at the start of the spring sales season.

Housing, which boomed for five years, has been in a prolonged slump for the past two years with sales and home prices falling at especially sharp rates in formerly boom areas of the country.

For March, sales were down in all regions of the country, dropping the most in the Northeast, a decline of 19.4 percent.

In other economic news, orders to factories for big-ticket manufactured goods fell for a third straight month in March, the longest string of declines since the 2001 recession, while applications for unemployment benefits fell by 33,000 to 342,000.

The Commerce Department said demand for durable goods dropped by 0.3 percent last month, a worse-than-expected performance that underscored the problems manufacturers are facing from a severe economic slowdown.

The last time orders fell for three consecutive months was from February to April of 2001, when the country was sliding into the last recession.

Orders in the category that includes home appliances fell by 6.6 percent.

This industry has been hurt by the two-year slump in home sales.

"The broad swath of data in the March (orders) report is indicative of a mixed set of conditions in a factory sector that is, overall, in a mild recession," said Cliff Waldman, economist for the Manufacturers Alliance/MAPI.

Even with the improvements, analysts said the weak economy is still putting greater pressures on the labor market.

The unemployment rate climbed to 5.1 percent in March as businesses laid off the largest number of workers in five years.

Economic growth slowed to a near-standstill at the end of last year as the economy was battered by the prolonged slump in housing and a severe credit crunch that has resulted in billions of dollars of losses at many of the nation's largest financial institutions and has made it harder for consumers and businesses to get loans.

Consumer sentiment, meanwhile, has plunged to recessionary lows as Americans have also watched gasoline soar to an average price above $3.50 per gallon nationally.

The 0.3 percent drop in orders for durable goods, items expected to last at least three years, followed even bigger declines of 0.9 percent in February and 4.4 percent in January.

Businesses have cut back on plans to expand and modernize as the economy has softened.

"Treasurys fall as jobless claims retreat and investors bet Fed is nearing end of rate cutting"

By MADLEN READ, Associated Press

Last updated: 5:52 p.m., Thursday, April 24, 2008

NEW YORK -- Treasury prices fell Thursday as investors, already anticipating an end to the Federal Reserve's rate-cutting campaign, found another reason to sell government bonds when a report showed a surprising drop in unemployment claims.

Investors have been concerned about the weak economy's effect on the labor market, and grew a little less worried after the Labor Department said initial claims for unemployment benefits fell by 33,000 last week to 342,000.

Economists had forecast that claims last week rose by 3,000.

The four-week moving average -- which helps investors look past week-to-week volatility -- also fell, dropping by 7,250 to 369,500.

The government data followed a Wall Street Journal report predicting the Fed will probably lower its benchmark fed funds rate by another quarter point when it meets next week, but then take a pause.

A halt in rate cuts would indicate either that an economic recovery is in sight, or that inflation is becoming a bigger threat than slowing growth.

Neither scenario makes Treasurys appear particularly attractive.

"It seems for right now the financial crisis to some extent has been taken out of the equation," said T.J. Marta, fixed-income analyst at RBC Capital Markets.

"Now we're looking at growth versus inflation, and it's a highly contradictory picture ..."

"It's probably going to be September before we know which way it's going to go."

The benchmark 10-year Treasury note fell 23/32 to 97 12/32 and yielded 3.82 percent, up from 3.74 percent late Wednesday, according to BGCantor Market Data.

Prices and yields move in opposite directions.

The 30-year long bond fell 22/32 to 97 10/32 and yielded 4.54 percent, up from 4.51 percent late Wednesday.

The 2-year note fell 11/32 to 99 15/32 with a yield of 2.39 percent -- well above the target federal funds rate of 2.25 percent, and up sharply from 2.20 percent late Wednesday.

The 5-year note fell 10/32 to 97 19/32 after the U.S. Treasury awarded $19 billion in 5-year notes at a high rate of 3.16 percent.

The debt traded with a yield of 3.10 percent during the session.

Demand was weak, with a very low bid-to-cover ratio of 1.65.

In late trading, some prices showed modest moves.

The 2-year yield rose to 2.40 percent and the 10-year yield rose to 3.83.

Yields on both the 30-year and 5-year were unchanged.

The 3-month Treasury bill's yield was at 1.25 percent, down from 1.22 percent late Wednesday, while its discount rate was at 1.23 percent.

While prices of outstanding government debt appeared little affected by the auction results, the weak demand contributed to the overall downbeat tone of trading.

Government securities were also pressured amid reports that big Wall Street investment banks were curtailing their borrowing from the Federal Reserve's emergency lending program -- the pullback is a sign that credit conditions might be improving.

Investors tend to move into government securities as a safe haven when economic conditions sour, and the credit crisis has helped power the months-long rally in Treasurys.

The central bank said Thursday firms averaged $22.6 billion of daily borrowing this past week, compared to $24.8 billion in the previous week.

It marked the third straight week in which investment firms borrowed less from the central bank.

[Livyjr]

GOD BLESS THE OIL COMPANIES ...

AFTER ALL, WHERE WOULD THE AMERICAN ECONOMY BE WITHOUT THEM GOUGING US ...

And so ...

"Soaring oil prices help lift ConocoPhillips first-quarter profit by almost 17 percent"

By JOHN PORRETTO, Associated Press

Last updated: 5:12 p.m., Thursday, April 24, 2008

HOUSTON -- ConocoPhillips, the third-largest U.S. oil company, said Thursday its first quarter profit rose almost 17 percent as record high oil prices offset disruptions that hurt earnings from its refining operations.

The Houston-based company said net income rose to $4.14 billion, or $2.62 a share, for the January-March period, from $3.55 billion, or $2.12 a share, in the year-ago quarter.

On average, Wall Street analysts surveyed by Thomson Financial expected earnings per share of $2.42.

ConocoPhillips said revenue rose to $54.9 billion from $41.3 billion a year ago.

As expected, soaring crude prices in the first three months of the year gave ConocoPhillips a big lift.

Crude prices have neared a record $120 a barrel in recent trading sessions.

"Although we delivered solid financial results during the first quarter, unplanned downtime negatively impacted our performance," Jim Mulva, ConocoPhillips' chairman and chief executive, said in a statement.

The company said net income from its exploration and production arm rose nearly 24 percent to $2.89 billion in the first quarter from a year ago, as higher commodity prices offset lower volumes and higher taxes.

Daily production in the most-recent quarter averaged 1.79 million barrels of oil equivalent a day, down from 2.02 million barrels a year ago.

The company attributed the decline to the expropriation of its Venezuelan oil projects last year and its exit from Dubai, as well as normal field decline and unplanned downtime in the continental U.S.

Production results include ConocoPhillips' Canadian Syncrude operations but not its Russian Lukoil business.

Earnings fell sharply on the refining and marketing side, to $502 million from $1.14 billion a year ago -- a decline ConocoPhillips said earlier this month was not unexpected.

The root of the problem was refining margins, which were squeezed by higher crude prices.

Those margins reflect the difference between the cost of crude and what the company makes on refined products such as gasoline.

Lower volumes also hurt, as ConocoPhillips said it encountered unplanned downtime at its U.S. Gulf Coast refineries.

Despite the higher earnings, ConocoPhillips shares fell $1.59 to $82.89 Thursday.

[Livyjr]

DO TWO AND TWO MAKE A FOUR HERE?

BY PAPERING WALL STREET WITH SECURE TREASURY SECURITIES IN EXCHANGE FOR WORTHLESS TOXIC WASTE, HAS THE BEARDED BUSHIAN FINANCIAL SAVANT BEN BERNANKE MADE THE TREASURY SECURITIES AS WORTHLESS AS HE HAS MADE THE GREENBACK DOLLAR?

"Treasury prices slip despite mostly negative economic data - Treasurys slip after economic data; uncertainty over British rate weighs on short-term prices"

By MADLEN READ, Associated Press

Last updated: 5:43 p.m., Thursday, April 17, 2008

NEW YORK -- Treasury prices fell slightly Thursday, with investors hopeful the credit crisis is largely over but uncertain about the prospects for the U.S. economy.

Despite the downbeat outlook for the economy, however, there have been a number of factors weighing lately on Treasurys, which are normally popular assets in times of economic turmoil.

One is the feeling that the worst of the tightness in the credit markets has past.

"As the market starts to focus on the notion that we're past the worst .... there's increasing talk of Treasurys being a very overvalued asset," said Joel Marver, a Treasury technical analyst at Thomson Financial.

Additionally, because Treasury yields have fallen so hard over the past several months, investors are looking to different types of safe-haven assets, said Kevin Giddis, managing director of fixed income at Morgan Keegan.

"What we're seeing in Treasurys in particular is that flight-to-quality is moving into other securities," said Giddis said.

With yields so low in Treasurys, investors are moving money into higher-yielding safe assets, he said -- including gold and highly rated mortgage-backed securities.

"It's not a big step-up in credit risk, but it's a big pickup in yield," Giddis said.

"There's a reliance on safety -- it's just in alternative sources."

"Treasurys fall as jobless claims retreat and investors bet Fed is nearing end of rate cutting"

By MADLEN READ, Associated Press

Last updated: 5:52 p.m., Thursday, April 24, 2008

NEW YORK -- Treasury prices fell Thursday as investors, already anticipating an end to the Federal Reserve's rate-cutting campaign, found another reason to sell government bonds when a report showed a surprising drop in unemployment claims.

While prices of outstanding government debt appeared little affected by the auction results, the weak demand contributed to the overall downbeat tone of trading.

Government securities were also pressured amid reports that big Wall Street investment banks were curtailing their borrowing from the Federal Reserve's emergency lending program -- the pullback is a sign that credit conditions might be improving.

Investors tend to move into government securities as a safe haven when economic conditions sour, and the credit crisis has helped power the months-long rally in Treasurys.

The central bank said Thursday firms averaged $22.6 billion of daily borrowing this past week, compared to $24.8 billion in the previous week.

It marked the third straight week in which investment firms borrowed less from the central bank.

"Big investment firms pull back on Fed borrowing from emergency lending program"

By JEANNINE AVERSA, Associated Press

Last updated: 4:42 p.m., Thursday, April 24, 2008

WASHINGTON -- Big Wall Street investment companies are pulling back on their borrowing from the Federal Reserve's emergency lending program, a sign that credit conditions may be improving a bit.

A Federal Reserve report Thursday said those firms averaged $22.6 billion in daily borrowing over the past week.

That compares with $24.8 billion in the previous week.

It marked the third straight week where investment firms borrowed less from the central bank.

The program, which began on March 17, is one of several extraordinary actions the Fed has taken recently to limit the damage from a trio of crises - housing, credit and financial.

After the sudden crash of Bear Stearns, the nation's fifth-largest investment bank, fears grew that others might be in jeopardy, given major stresses in credit and financial markets.

Scrambling to avert a market meltdown, Fed Chairman Ben Bernanke and his colleagues -- in the broadest use of the central bank's lending authority since the 1930s -- agreed last month to temporarily let investment firms obtain emergency financing from the Fed, a privilege previously granted only to commercial banks.

The program, similar to the one the Fed has long had for commercial banks, will continue for at least six months.

It gives investment firms a place to go for overnight loans.

Commercial banks and investment companies pay 2.5 percent in interest for the loans.

Banks, meanwhile, averaged $10.7 billion in daily borrowing for the week ending April 23.

That compares with $7.8 billion for the previous week.

The identities of commercial banks and investment houses are not released.

As part of the effort to relieve credit strains, the Fed auctioned $59.46 billion in super-safe Treasury securities to investment firms on Thursday.

The auction -- the fifth of its kind -- fetched bids totaling less than the $75 billion worth of securities the Fed was making available.

That could suggest that demand for Treasuries may be moderating a bit.

And that might be viewed as a sign of some improvement in credit conditions, analysts said.

"Although the $59.5 billion sold is still a sizable amount, it does suggest that liquidity strains could be easing," said Lynn Reaser, chief economist at Bank of America's Investment Strategies Group.

In exchange for the 28-day loan of Treasury securities, bidding firms can put up more risky investments as collateral, including certain shunned mortgage-backed securities.

In the five auctions held so far, the Fed has provided nearly $218.41 billion worth of the Treasury securities to investment firms.

The program began March 27.

In Thursday's auction, investment firms paid an interest rate of 0.2500 percent for a slice of securities.

The auction program is intended to help financial institutions and the troubled mortgage market.

The goal is to make investment houses more inclined to lend to each other.

It also is aimed at providing relief to the distressed market for mortgage-linked securities.

Questions about their value and dumping of these securities had driven up mortgage rates, aggravating the housing slump.

------

On the Net:

Federal Reserve Bank: http://www.federalreserve.gov

[Livyjr]

"Gas prices shot above $3.55 a gallon, but rate of increase could soon level off; oil falls"

By JOHN WILEN, Associated Press

Last updated: 3:52 p.m., Thursday, April 24, 2008

NEW YORK -- Gasoline prices shot up to yet another record at the pump Thursday, while some analysts said the sharp price increases of recent days could soon level off although gas will continue to rise.

Crude oil prices, meanwhile, fell more than $2 a barrel as the dollar gained strength against the euro.

At the pump, the average national price of a gallon of regular gas jumped 2.3 cents overnight to $3.556 a gallon, according to a survey of stations by AAA and the Oil Price Information Service.

Prices have risen nearly 14 cents in one week.

Gas prices have advanced sharply in recent days partly because refiners have been switching over from selling winter grade gasoline to the more expensive but less polluting form of the fuel the government requires them to sell in the summer.

That process, which made winter grade fuel more scarce, is nearly complete now, suggesting that price increases could slow.

"That was probably why ... you saw (prices) accelerate so quickly," said Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service in Wall, N.J.

"No, don't get used to these crazy increases."

Retail gas prices have also been following oil futures' record rally, although prices hasn't risen as steeply as oil futures.

"(Gas prices) had a lot of catching up to do," said James Cordier, president of Tampa, Fla., trading firms Liberty Trading Group and OptionSellers.com.

Crude prices have jumped about 80 percent in one year, while retail gas prices are only up 24 percent in that time.

But Thursday, light, sweet crude for June delivery stalled in its march toward $120 a barrel, falling $2.24 to settle at $116.06 a barrel on the New York Mercantile Exchange.

Analysts said the dollar's rise against the euro gave investors a chance to lock in profits from oil's recent record run.

Investors see commodities such as oil as a less effective hedge against inflation when the dollar strengthens, and a stronger greenback makes oil more expensive to investors overseas.

Analysts believe the dollar is gaining ground on speculation the Federal Reserve is growing concerned about inflation, and may not cut interest rates as much as once thought.

Higher interest rates tend to stabilize or strengthen the dollar.

"There's a lot of cry out there right now to stop cutting rates," Cordier said.

Phil Flynn, an analyst at Alaron Trading Corp. in Chicago, said the resolution of a one-day strike by oil workers in Nigeria, a major U.S. supplier, also pushed oil prices lower.

But few analysts are willing to predict that oil's record run is over.

Investors remain concerned about tight supplies of oil amid growing global demand, they say.

Oil production is falling in Russia and Mexico, while "global growth in China, India, Russia and Brazil is tapping additional oil," Cordier said.

That could spell additional records for oil, and more pain for consumers.

June crude futures are trading a few dollars below the record high near $120 hit by May crude futures earlier this week; the expiring contract attracted buying from investors scrambling to square bets.

But concerns about supplies, or a downturn in the dollar, could easily push crude to $125 or $130 a barrel in short order, Cordier said.

Moreover, "it looks like gasoline's going to hit $3.90 or $4 for driving season," Cordier said.

In other Nymex trading Thursday, May gasoline futures fell 3.21 cents to settle at $3.0186 a gallon, and May heating oil futures fell 6.67 cents to settle at $3.2583 a gallon.

May natural gas futures rose 0.9 cent to settle at $10.79 per 1,000 cubic feet.

The Energy Department said inventories grew last week by 24 billion cubic feet, less than analysts expected.

In London, June Brent crude futures slid $2.12 to settle at $114.34 a barrel on the ICE Futures exchange.

[Livyjr]

"Rates on 30-year mortgages top 6 percent for first time in 6 weeks"

By MARTIN CRUTSINGER, Associated Press

Last updated: 3:02 p.m., Thursday, April 24, 2008

WASHINGTON -- Rates on 30-year mortgages topped 6 percent for the first time in six weeks as financial markets grew more worried about rising inflation pressures.

Freddie Mac, the mortgage company, reported Thursday that 30-year fixed-rate mortgages averaged 6.03 percent this week after three straight weeks at 5.88 percent.

Rates on 30-year mortgages were last above 6 percent the week of March 16 when they averaged 6.13 percent.

"Average rates on mortgages increased across the board this last week as the most recent economic data raised inflationary concerns in the capital markets," said Frank Nothaft, Freddie Mac's chief economist.

Fueling those concerns was a bigger-than-expected 1.1 percent jump in wholesale prices and a renewed surge in energy costs, which have pushed gasoline and crude oil prices to record levels.

The Federal Reserve has been aggressively cutting interest rates to combat an economic slowdown that many economists believe has turned into a recession.

However, analysts said that the Fed is likely to scale back its rate cuts to a quarter-point move at next week's meeting as a way of signaling that it is also concerned about the threat of inflation.

Bill Hampel, chief economist for the Credit Union National Association, said while interest rates rose this week they still remain at historically favorable levels.

He said that the bigger problem for the housing industry at the moment is the fact that many lenders have tightened up on credit standards in reaction to rising mortgage defaults, making it harder for prospective buyers to qualify for loans.

Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, rose this week to 5.62 percent, up from 5.40 percent last week.

Five-year adjustable-rate mortgages rose to 5.68 percent, up from 5.48 percent last week.

One-year adjustable-rate mortgages rose to 5.28 percent compared with 5.10 percent last week.

The mortgage rates do not include add-on fees known as points.

For 30-year and 15-year mortgages, the nationwide average fee was 0.3 point while the average fee was 0.5 point for 5-year and one-year mortgages.

A year ago, rates on 30-year mortgages stood at 6.16 percent, 15-year mortgage rates averaged 5.87 percent, five-year adjustable-rate mortgages were 5.88 percent and one-year adjustable-rate mortgages were at 5.43 percent.

------

On the Net:

Freddie Mac: http://www.freddiemac.com

[Livyjr]

"Gold futures plunge to 4-month low as dollar gains against euro; Crude oil falls $3"

By STEVENSON JACOBS, Associated Press

Last updated: 2:52 p.m., Thursday, April 24, 2008

NEW YORK -- Gold prices plunged to a four-month low Thursday, extending their losses as a stronger dollar gave investors reasons to sell the metal traditionally viewed as a hedge against inflation.

Other commodities traded broadly lower for a second straight session, with rice futures retreating from a record and crude oil, copper and silver also falling.

The dollar gained against the euro for a second day after a report showed a surprise drop in the number of Americans seeking jobless claims.

Claims for unemployment benefits fell by 33,000 last week to 342,000, the Labor Department said.

That contrasted with expectations from economists, who had predicted claims would rise by 3,000.

The euro bought $1.5664, down from the $1.5896 it bought late Wednesday.

On Tuesday, the dollar fell to a record low $1.6018 against the 15-nation currency.

Gold futures reacted sharply, with the June contract dropping $19.60 to settle at $889.40 an ounce on the New York Mercantile Exchange, after earlier falling as low as $884.50, its lowest level since Jan. 10.

Gold has fallen 8 percent since March and is nearly $150 off its all-time high of $1,038.60.

Gold investors "have decided that there are changes in the atmosphere, with the No. 1 being the improvement in the dollar," said George Gero, vice president at RBC Capital Markets Global Futures in New York.

"I don't think it's the beginning of the end (for gold) but it's certainly making people think twice about holding long positions."

A rising dollar generally encourages investors to shift funds out of safe-haven assets like gold, and a stronger greenback makes dollar-denominated commodities more expensive to overseas buyers.

Also boosting the dollar -- and pressuring gold -- is the belief among analysts that the Federal Reserve may soon wind down its interest rate cutting campaign and turn its attention to fighting inflation.

That would diminish the appeal of gold and other hard assets as inflation hedges.

Other precious metals also fell sharply Thursday.

Silver for May delivery sank 50.5 cents to settle at $16.66 an ounce on the Nymex, while May copper lost 2.9 cents to settle at $3.875 a pound.

In agriculture markets, rice futures pulled back from an all-time high but remained near record territory a day after two major U.S. warehouse retail chains, Wal Mart Stores Inc.'s Sam's Club and Costco Wholesale Corp., imposed limits on rice purchases.

Rice for July delivery fell 5 cents to $24.32 per 100 pounds on the Chicago Board of Trade, down from Wednesday's record of $24.85.

Meanwhile, wheat prices slumped to a six-month low as rainfall in the U.S. plains states boosted expectations of a good crop.

Wheat for May delivery fell 9.25 cents to $8.085 a bushel on the Chicago Board of Trade, after earlier falling as low as $8.05, its lowest level since November.

Other agriculture futures also traded lower.

May corn futures fell 12.25 cents to $5.755 a bushel on the CBOT, while May soybeans dropped 25 cents to $13.48 a bushel.

In energy futures, oil futures dropped more than $3 on the rebounding dollar, allowing investors to cash in profits from crude's recent run-up to near $120.

Light, sweet crude for June delivery fell $3.11 to $115.21 a barrel on the Nymex.

Analysts said the dollar's rise against the euro gave investors a chance to lock in profits from oil's recent record run.

Other energy futures also fell.

May gasoline futures dropped 5.35 cents to $2.9972 a gallon on the Nymex, while May heating oil futures lost 6.82 cents to $3.2568 a gallon.

[Livyjr]

"Wall Street advances on jobless claims drop, Ford's 1Q; dollar gains as commodity prices slide"

By TIM PARADIS, Associated Press

Last updated: 5:52 p.m., Thursday, April 24, 2008

NEW YORK -- Wall Street rallied Thursday after the government's jobless claims data and Ford Motor Co.'s first-quarter results helped reinject some optimism about the economy into the market.

John Merrill, chief investment officer at Tanglewood Capital Management in Houston, said investors are seeing confirmation of many of the economic themes that have played out in recent months, with weakness in the financial, homebuilding and automotive sectors and relative strength elsewhere.

"There's been so much talk of the spillover from the credit crunch and homebuilding into the real economy and that just doesn't seem to have happened."

THE "REAL" ECONOMY ....

WE KEEP HEARING THAT TERM FROM ALL OF THESE FINANCIAL WIZARDS AND ANALYSTS DOWN THERE ON WALL STREET IN NEW YORK CITY AND ELSEWHERE HERE IN AMERICA .....

"THE CREDIT CRUNCH HAS NOT SPILLED OVER INTO THE 'REAL'ECONOMY" THESE FINANCIAL WIZRDS KEEP TELLING US ...

WELL, WELL, WELL, IS ALL I CAN SAY IN RETURN ...

HOW ABOUT THAT, NOW WILL YOU ...

And so ...

HERE IS SOME "REAL ECONOMY", AS FAR AS I CAN SEE ...

AND IT LOOKS LIKE SOMETHING HAS SPILLED OUT SOMEWHERE, SINCE THINGS SEEM TO BE GOING FLAT HERE IN A HELL OF A HURRY ...

BUT, HEY ...

IT'S PROBABLY JUST ME ..

I'M FROM THE COUNTRY, SO WHAT CAN I KNOW ABOUT IT ...

And so ...

"New home sales plunge to lowest level in 16 1/2 years, prices drop by largest amount in 38 years"

By MARTIN CRUTSINGER, Associated Press

Last updated: 11:22 a.m., Thursday, April 24, 2008

WASHINGTON -- Sales of new homes plunged in March to the lowest level in 16 1/2 years as housing slumped further at the start of the spring sales season.

The median price of a new home in March, compared with a year ago, fell by the largest amount in nearly four decades.

The Commerce Department reported Thursday that sales of new homes dropped by 8.5 percent last month to a seasonally adjusted annual rate of 526,000 units, the slowest sales pace since October 1991.

The median price of a home sold in March dropped by 13.3 percent compared with March 2007, the biggest year-over-year price decline since a 14.6 percent plunge in July 1970.

Housing, which boomed for five years, has been in a prolonged slump for the past two years with sales and home prices falling at especially sharp rates in formerly boom areas of the country.

For March, sales were down in all regions of the country, dropping the most in the Northeast, a decline of 19.4 percent.

"AutoNation 1Q profit tumbles as housing woes drag on sales - AutoNation 1Q profit falls 37 percent with homeowners pulling back on spending"

By ADRIAN SAINZ, Associated Press

Last updated: 1:52 p.m., Thursday, April 24, 2008

MIAMI -- AutoNation Inc. reported Thursday that decelerating vehicle sales in California, Florida and other key states beset by sagging home prices dragged its first-quarter earnings down 37 percent, missing Wall Street expectations.

The nation's largest auto retailer expressed hope that the auto sales market would begin to stabilize near the end of 2008.

AutoNation said it earned $50.7 million, or 28 cents per share, compared with $77.6 million, or 37 cents per share, in the year-ago quarter.

Revenue fell 7 percent to $4 billion, compared to $4.3 billion in the year-ago period.

Analysts polled by Thomson Financial expected a profit of 34 cents per share on revenue of $4.13 billion.

The Fort Lauderdale-based company said retail vehicle sales fell, especially in California, Florida, Nevada and Arizona "where the housing crisis has significantly impacted the automotive retail business."

Consumers have been less willing to buy big-ticket items since falling home prices have cut into their equity and lenders have cut access to credit.

AutoNation saw more meager profits from the vehicles it did sell as buyers look for smaller, more efficient cars.

Retail profits per new vehicle sold fell 10 percent, while profits per used vehicle sold fell 12 percent, the company reported.

"The most difficult period we feel was going to be the first two quarters of '08, and certainly the numbers confirm that," Chief Executive Mike Jackson told The Associated Press.

In March, billionaire investor and Sears Holdings Corp. Chairman Edward Lampert raised his stake in AutoNation to 37.2 percent.

Lampert has accumulated AutoNation shares as the company's stock has plunged on slow sales and economic concerns.

Despite lower sales, AutoNation said it fared better than its peers.

Industry new vehicle sales fell about 11 percent nationally and 15 percent in the California, Florida, Nevada and Arizona markets, based on data compiled by CNW Research that was cited by AutoNation.

AutoNation's new vehicle sales fell 8 percent nationally and fell 11 percent in California, Florida, Nevada and Arizona -- states which represent about 60 percent of the company's new vehicle business and about 25 percent of U.S. new vehicle sales.

Some areas, including Texas, Chicago and Knoxville and Memphis in Tennessee, have been steady compared with the rest of the country.

Shares rose 64 cents, or 4.2 percent, to $15.75 in afternoon trading.

Looking forward, the company said interest rate cuts could spur market stabilization late this year and recovery in 2009.

"Those rate cuts take time to work their way through, but it's powerful medicine that will prove to be effective," Jackson said.

"These downward cycles usually last 30 to 40 months, so we're deep into it."

AutoNation owns and operates 321 new vehicle franchises in 15 states.

------

AP Business Writer Samantha Bomkamp in New York contributed to this report.

[Livyjr]

AND HERE IS "CON-JOB CONNIE" RICE FOOLISHLY RUNNING HER MOUTH TO STIR UP MORE TROUBLE IN IRAQINAM FOR OUR AMERICAN MILITARY LIKE THE PECKERWOOD DID WHEN HE FOOLISHLY SHOUTED OUT:

"BRING THEM ON!"

WHILE THE PECKERWOOD WAS SAFELY ENSCONCED THOUSANDS OF MILES AWAY IN WASHINGTON, D.C. ...

AND WHILE WE FOUGHT AND DIED IN VIET NAM, THE PECKERWOOD BUSH WAS SITTING OVER HERE IN AMERICA, SAFE AND SOUND IN THE LAP OF LUXURY ...

And so ...

"Rice mocks al-Sadr in Iraq - Secretary dismisses cleric's threat to wage war on U.S., Iraqis"

Associated Press

First published: Monday, April 21, 2008

BAGHDAD -- Secretary of State Condoleezza Rice mocked anti-American cleric Muqtada al-Sadr as a coward on Sunday, hours after the radical leader threatened to declare war unless U.S. and Iraqi forces end a military crackdown on his followers.

Rice, in the Iraqi capital to tout security gains and what she calls an emerging political consensus, said al-Sadr is content to issue threats and edicts from the safety of Iran, where he is studying.

"I know he's sitting in Iran," Rice said dismissively, when asked about al-Sadr's latest threat to lift a self-imposed cease-fire with government and U.S. forces.

"I guess it's all-out war for anybody but him," Rice said.

"I guess that's the message; his followers can go to their deaths and he's in Iran."

AND MEANWHILE, WHILE OUR ECONOMY IS MELTING DOWN OVER HERE ...

OVER IN IRAQINAM, WE HAVE ...

"Al-Sadr may restart full-scale fight against US in Iraq - Radical cleric Muqtada al-Sadr moving toward all-out fight in showdown with Iraqi leaders"

By HAMZA HENDAWI and QASSIM ABDUL-ZAHRA, Associated Press

Last updated: 6:52 p.m., Thursday, April 24, 2008

BAGHDAD -- Muqtada al-Sadr is considering setting aside his political ambitions and restarting a full-scale fight against U.S.-led forces -- a worrisome shift that may reflect Iranian influence on the young cleric and could open the way for a shadow state protected by his powerful Mahdi Army.

A possible breakaway path -- described to The Associated Press by Shiite lawmakers and politicians -- would represent the ultimate backlash to the Iraqi government's pressure on al-Sadr to renounce and disband his Shiite militia.

By snubbing the give-and-take of politics, al-Sadr would have a freer hand to carve out a kind of parallel state with its own militia and social services along the lines of Hezbollah in Lebanon, a Shiite group founded with Iran's help in the 1980s.

It also would carry potentially disastrous security implications as the Pentagon trims its troops strength and Prime Minister Nouri al-Maliki finally shows progress on national reconciliation.

Last week, the main Sunni political bloc announced provisional plans to rejoin the Shiite-led coalition nine months after quitting the government.

The Sunnis are pleased with the squeeze on al-Sadr's movement as well as an amnesty law that could free many detainees.

"Muqtada has shown a great deal of patience not calling for an all-out war yet with so much pressure on him," said Mohan Abedin, director of research at London's Center for the Study of Terrorism and an expert on Shiite affairs.

"The Mahdi Army is by far the most powerful Iraqi faction."

"It can cause damage on a massive scale if it goes to war."

Al-Sadr's next move is still uncertain, but he clearly holds important cards.

The Mahdi Army is estimated to have about 60,000 fighters -- with at least 5,000 thought to be highly trained commandos -- and is emboldened by its strong resistance to an Iraqi-led crackdown launched last month in the southern city of Basra and elsewhere.

Al-Sadr's movement also holds sway over the densely populated Shiite parts of Baghdad and across the Shiite south by controlling vital needs such as fuel and running social services such as clinics.

A cease-fire declared last summer by al-Sadr has been credited with helping bring a steep drop violence.

But al-Sadr -- who has been in the Iranian seminary city of Qom for the past year -- is seriously considering tearing up the truce and disassociating himself from his political bloc in parliament, according to loyalists and Shiite politicians interviewed by the AP over the past two weeks.

Then al-Sadr would be free to unleash Mahdi attacks on U.S. and Iraqi forces, the political insiders said.

They include members of the 30-seat Sadrist faction in parliament and members of rival Shiite parties, including two who saw al-Sadr recently in Iran.

All requested anonymity because of the sensitivity of the subject.

"The emphasis is now on weapons and fighting, not politics," said one of the lawmakers in the Sadrist bloc.

"(Al-Sadr) now only communicates with the Mahdi Army commanders."

Any Mahdi Army offensive could have serious repercussions.

Mahdi fighters engaged in fierce battles with U.S. forces in 2004 and then were blamed for waves of roadside bombings that were once the chief killer of American troops.

Mahdi militiamen also fought Iraqi security forces to a virtual standstill last month in Basra before an Iranian-supervised truce.

It's unknown how much al-Sadr's Iranian hosts are shaping his views.

Al-Sadr, who is in his mid-30s, is studying in Qom under the supervision of Ayatollah Kazim al-Haeri, a reclusive Iraqi cleric close to Iranian hard-liners.

Washington accuses Iran of aiding Shiite militias in Iraq, including so-called "special groups" with murky ties to the Mahdi mainstream.

Iran denies the allegations.

But Iran has obvious and well known connections to the main Shiite political groups in al-Maliki's government.

During the recent battles in Basra, Iran supported al-Maliki's crackdown on so-called "criminals" but did not make a clear statement on the spillover confrontation with the Mahdi Army.

Backing a Mahdi Army uprising would allow Tehran to effectively play both sides in a Shiite showdown.

A flurry of recent statements by al-Sadr has emphasized his first public role: as a firebrand militia leader after the U.S.-led invasion in 2003.

In a statement posted Saturday on his Web site, al-Sadr gave a "final warning" to the government to halt its crackdown or face an "open war until liberation."

Senior Mahdi Army commanders, speaking on condition of anonymity because they are not authorized to discuss strategy with media, said they have taken delivery of new Iranian weapons, including sophisticated roadside bombs, Grad rockets and shoulder-fired anti-aircraft missiles.

The militia's top field commanders, they said, were senior members of the special groups.

One commander, who identified himself by his nickname Abu Dhara al-Sadri, said scores of militia fighters were prepared to carry out suicide bombings against U.S. forces.

Suicide bombings are the signature attacks of Sunni militants in Iraq's conflict, but the tactic was introduced against Americans in Lebanon by Shiite militants in the 1980s.

Sadrist lawmakers and aides have sent compromise-seeking proposals to al-Sadr in Qom.

The ideas seek to appease al-Maliki enough to forestall his threat: barring al-Sadr's followers from running in this fall's key provincial elections unless al-Sadr disbands the Mahdi Army.

But the proposals have gone unanswered, said al-Sadr's aides.

One offer, they said, would allow for creation of a new political party with no formal links to the Mahdi Army.

Another would permit candidates sympathetic to the Sadrists -- but with no direct links -- to run as independents in the fall election.

One of the authors of the proposals, moderate cleric Riyadh al-Nouri, was gunned down April 11 in Najaf, the spiritual center for Shiites in Iraq.

The reason for the slaying was not clear.

Lawmakers and politicians told the AP that al-Sadr's more belligerent tone is motivated, in part, by his wish to secure a place for himself in history as a nationalist leader and anger over the recent arrests of hundreds of supporters despite his unilateral cease-fire.

At talks this month in Qom between al-Sadr and former Prime Minister Ibrahim al-Jaafari, the young cleric vowed never to disband the Mahdi Army while U.S. and other foreign forces remain in Iraq, according to Shiite political figures familiar with the meetings.

Al-Jaafari has said he was mediating an accommodation between al-Sadr and al-Maliki's government.

Salah al-Obeidi, al-Sadr's chief spokesman in Iraq, acknowledged that al-Sadr and the Iranians were at present bound by close ties and common goals.

However, he was quick to add that while al-Sadr and the Iranians shared common interests -- namely fighting the Americans in Iraq -- the cleric was nobody's puppet.

Vali Nasr, an expert on Shiite politics at the Fletcher School of Law and Diplomacy at Tufts University, said the Iranians may want al-Sadr to stay in Qom to keep him in check for the moment.

"Muqtada is forcing everyone's hand right now when they (the Iranians) may not be wanting their hand forced," said Nasr.

[Livyjr]

Ah, yes ....

HISTORY .....

NGO DINH DIEM

When the Geneva conference took place in 1954, the United States delegation proposed Diem's name as the new ruler of South Vietnam.

The French argued against this claiming that Diem was "not only incapable but mad".

However, eventually it was decided that Diem presented the best opportunity to keep South Vietnam from falling under the control of communism.

Once in power, the Americans discovered that Diem was unwilling to be a 'puppet' ruler.

The North Vietnamese government reminded Diem that a General Election for the whole of the country was due in July, 1956.

Diem refused to accept this and instead began arresting his opponents.

In a short period of time, approximately 100,000 people were put in prison camps.

Communists and socialists were his main targets but journalists, trade-unionists and leaders of religious groups were also arrested.

Even children found writing anti-Diem messages on walls were put in prison.

When it became clear that Diem had no intention of holding elections for a united Vietnam, his political opponents began to consider alternative ways of obtaining their objectives.

Some came to the conclusion that violence was the only way to persuade Diem to agree to the terms of the 1954 Geneva Conference.

The year following the cancelled elections saw a large increase in the number of people leaving their homes to form armed groups in the forests of Vietnam.

At first they were not in a position to take on the South Vietnamese Army and instead concentrated on what became known as 'soft targets'.

In 1959, an estimated 1,200 of Diem's government officials were murdered.

http://www.spartacus.schoolnet.co.uk/VNngo.htm

"Al-Sadr may restart full-scale fight against US in Iraq - Radical cleric Muqtada al-Sadr moving toward all-out fight in showdown with Iraqi leaders"

By HAMZA HENDAWI and QASSIM ABDUL-ZAHRA, Associated Press

Last updated: 6:52 p.m., Thursday, April 24, 2008

BAGHDAD -- Muqtada al-Sadr is considering setting aside his political ambitions and restarting a full-scale fight against U.S.-led forces -- a worrisome shift that may reflect Iranian influence on the young cleric and could open the way for a shadow state protected by his powerful Mahdi Army.

A possible breakaway path -- described to The Associated Press by Shiite lawmakers and politicians -- would represent the ultimate backlash to the Iraqi government's pressure on al-Sadr to renounce and disband his Shiite militia.

By snubbing the give-and-take of politics, al-Sadr would have a freer hand to carve out a kind of parallel state with its own militia and social services along the lines of Hezbollah in Lebanon, a Shiite group founded with Iran's help in the 1980s.

It also would carry potentially disastrous security implications as the Pentagon trims its troops strength and Prime Minister Nouri al-Maliki finally shows progress on national reconciliation.

Last week, the main Sunni political bloc announced provisional plans to rejoin the Shiite-led coalition nine months after quitting the government.

The Sunnis are pleased with the squeeze on al-Sadr's movement as well as an amnesty law that could free many detainees.

"Iraqi PM says political blocs agree to return to government; Sunni deal still not sealed"

By MAZIN YAHYA, Associated Press

Last updated: 5:52 p.m., Thursday, April 24, 2008

BAGHDAD -- Iraq's prime minister said Thursday that all political blocs have agreed to return to the Shiite-led government -- a potentially important sign of success in efforts toward national reconciliation.

Prime Minister Nouri al-Maliki's optimistic remarks came a week after lawmakers with Iraq's main Sunni political bloc said the group has agreed in principle to return to the government nearly nine months after quitting the Cabinet.

A return of the Sunnis would be a boost to al-Maliki and seen by Washington as a significant step forward.

But the main bloc, the National Accordance Front, has not made a formal announcement about a return to the government, and agreements in principle in Iraq sometimes fall apart over the details.

Nevertheless, al-Maliki said that "national reconciliation has proved a success and all political blocs will return to the government," according to a statement issued by his office.

He also reiterated a warning against militias.

His government is involved in a crackdown on armed groups led by radical Shiite cleric Muqtada al-Sadr's Mahdi Army.

Al-Sadr's followers also left the government last year after al-Maliki refused their demands for a timetable for the withdrawal of U.S. troops from Iraq.

"It is not permitted to conduct peaceful political activities while carrying arms."

"Everybody should work as politicians, and it is not permitted for anybody besides the state to hold a single weapon," al-Maliki said during a meeting with visiting British Foreign Secretary David Miliband, according to the statement.

Salim Abdullah, a lawmaker and chief spokesman for the Sunni Accordance Front, said last week that the group had "positive negotiations" with al-Maliki's government and a deal in principle was reached.

Under the provision pact, the Front would hold five Cabinet posts, in addition to a deputy prime minister position.

But differences remain over which individuals will be appointed to the Cabinet and which posts will go to the Sunnis.

The Accordance Front quit the 39-member Cabinet saying Sunni Arabs were not getting enough say in decision-making, a reflection of the feeling among Iraq's Sunni Arab minority that it is being sidelined by the majority Shiites and the Kurds, who dominate parliament and al-Maliki's government.

This post has been edited by Livyjr: Apr 26 2008, 03:10 PM

[Livyjr]

"Iraqi PM says political blocs agree to return to government; Sunni deal still not sealed"

By MAZIN YAHYA, Associated Press

Last updated: 5:52 p.m., Thursday, April 24, 2008

BAGHDAD -- Iraq's prime minister said Thursday that all political blocs have agreed to return to the Shiite-led government -- a potentially important sign of success in efforts toward national reconciliation.

He also reiterated a warning against militias.

His government is involved in a crackdown on armed groups led by radical Shiite cleric Muqtada al-Sadr's Mahdi Army.

Al-Sadr's followers also left the government last year after al-Maliki refused their demands for a timetable for the withdrawal of U.S. troops from Iraq.

"It is not permitted to conduct peaceful political activities while carrying arms."

"Everybody should work as politicians, and it is not permitted for anybody besides the state to hold a single weapon," al-Maliki said during a meeting with visiting British Foreign Secretary David Miliband, according to the statement.

"Britain's leader says troop withdrawals will stay on hold until security improves in Iraq"

By ROBERT H. REID, Associated Press

Last updated: 4:12 p.m., Thursday, April 24, 2008

BAGHDAD -- Britain said Thursday it will keep its troop withdrawals from Iraq on hold until security improves, following the flare-up in fighting between government forces and Shiite militiamen.

At least 13 people were killed Thursday as U.S. and Iraqi troops battled Shiite gunmen in Baghdad, where the fighting spread last month after erupting in the southern city of Basra, where Britain's 4,000 soldiers are based.

Several rockets or mortar shells slammed into the U.S.-controlled Green Zone, sending diplomats and government officials scurrying for concrete bunkers.

One projectile hit the roof of the building housing the Polish Embassy's security staff, slightly wounding one person.

British Defense Secretary Des Browne said in London that Britain still hopes to remove hundreds of soldiers this year, but the pullout will stay frozen because of the surge in fighting.

Britain had planned to withdraw about 1,500 soldiers this spring, leaving some 2,500 in the south, down from 46,000 during the U.S.-led invasion, 18,000 in May 2004 and 8,500 at the end of 2005.

The U.S. has 155,000 military personnel in Iraq.

"While the situation on the ground continues to evolve rapidly, and while military commanders continue to assess the changing environment in Basra, it remains prudent that we take time to fully consider further reductions," Browne said in a written statement to Parliament.

The announcement came as British Foreign Secretary David Miliband made an unannounced visit to Baghdad for talks with Prime Minister Nouri al-Maliki and other top Iraqi officials.

Al-Maliki told the British official that the Iraqi government's fight against Shiite militias had won broad political support from Sunni, Shiite and Kurdish political parties, according to a statement from the prime minister's office.

Al-Maliki said the situation in the south was now stable and the government was continuing "to pursue all outlaws," the statement said.

But the British clearly want to see how the situation develops before resuming large-scale troop reductions.

Fighting with Shiite militias broke out last month when al-Maliki, a Shiite, launched a major offensive seeking to wrest control of Basra, Iraq's second-largest city and headquarters of the oil industry, from Shiite forces that included the Mahdi Army of anti-American cleric Muqtada al-Sadr.

The offensive stalled due to strong resistance, poor planning and widespread desertions until an Iranian-mediated truce March 30 gave al-Maliki's government time to reorganize and resume operations.

U.S. and British troops have been providing air cover and logistical support to Iraqi forces, who have gained control of Basra.

But fighting continues in the Baghdad area, especially in the Mahdi Army stronghold of Sadr City, a sprawling neighborhood that is home to some 2.5 million people.

Five people were killed and 28 wounded early Thursday in Sadr City, said a police officer, who spoke on condition of anonymity because he was not authorized to speak to the media.

Eight more people were killed and two wounded during fighting in the capital's Husseiniyah area, another base of Shiite militants.

The figures came from a hospital official who spoke on condition of anonymity out of safety concerns.

Also Thursday, a roadside bomb targeting an Iraqi army patrol exploded in Baghdad's western Mansour area, killing three civilians and wounding 14 others, police said.

Meanwhile, the U.S. military said two of its soldiers died in an accident north of Baghdad in Salahuddin province when their vehicle rolled onto its side.

Their deaths raised the American death toll in April to 36, the highest rate of death for U.S. troops in Iraq since September, when 65 were killed, according to an Associated Press tally.

In all, at least 4,048 U.S. military personnel have died since the Iraq war started in March 2003, according to the AP count.

In western Anbar province, U.S. troops killed six Sunni insurgents in a clash north of Lake Tharthar, the U.S. military said.

The region, a former resort area northwest of Baghdad, is now a stronghold of insurgents affiliated with al-Qaida.

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Associated Press writer David Stringer in London contributed to this report.