Milan police seize €476m of assets in bond probe

Milan police seize €476m of assets in bond probe

By Vincent Boland in Milan

Published: April 28 2009 14:50 | Last updated: April 28 2009 14:50

Police in Milan said on Tuesday they had seized €476m in assets from four international banks in a dramatic escalation of an investigation into controversial municipal bond issues.

The city’s financial police began the investigation last year into a €1.6bn bond issue the city of Milan launched in 2005, and were probing the role of four banks – Deutsche Bank, JP Morgan, UBS and Depfa, a German bank specialising in public finance – in that and other transactions.

In a statement on Tuesday, the financial police said they had taken control of €476m in assets from four banks, though they did not name them. The assets seized included the banks’ stakes in Italian companies, real estate, and accounts.

The move marks a sharp escalation of the probe into the bond issues. Milan, Italy’s financial capital and one of its wealthiest cities, is already suing the four banks, claiming that derivatives contracts linked to the bond issues allowed the banks to earn around €90m in “hidden commissions”. It also complains that the bond issues were not in the city’s best financial interests.

None of the banks had any immediate comment on Tuesday.

The case is being watched closely by cash-strapped Italian local authorities who issued billions of euros of bonds with similar contracts until the Bank of Italy stopped the practice in 2007. The municipalities now face deteriorating fiscal positions as the global financial crisis begins to bite.

Many of the derivatives contracts exposed the authorities to rising debt service costs between 2005 and 2008, when eurozone interest rates rose from 2 per cent to 4.25 per cent. Estimates of the losses facing Italian authorities vary. The government has denied speculation that the losses could reach €30bn, but analysts say a more conservative estimate of up to €10bn may be more accurate.

At issue in the Milan case are provisions in the bond issue that enabled the city to set aside sums at regular intervals towards repayment of the principal. But as interest rates rose, the authorities found that funds earmarked for the sinking fund were being eaten up by debt servicing. The municipality claims the banks argued that the structure of the bond would reduce debt service costs.

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２６年後に殺害遺体、賠償４２００万円確定　最高裁

2009年4月28日21時7分

　東京都足立区で７８年に小学校教諭の石川千佳子さん（当時２９）が殺害され、２６年後に遺体が見つかった事件で、時効成立後に殺害を自首した男（７３）に対して遺族が損害賠償を求めた訴訟の上告審判決が２８日あった。最高裁第三小法廷（那須弘平裁判長）は、不法行為から２０年を経過すると賠償請求権が消滅する「除斥期間」のルールを例外的に適用せず、男の上告を棄却した。約４２００万円の賠償を命じた二審・東京高裁判決が確定した。

　最高裁が除斥期間の例外を認めたのは、予防接種が原因で重い心身障害になったことをめぐる国家賠償訴訟の判決（９８年）に次いで２例目。犯人が遺体を隠し、遺族が死亡の事実すら知ることができなかった今回のようなケースでは、被害者の権利が重視されることを示した判断といえる。除斥期間も含めた「時効」のありかたを見直そうとする民法改正論議にも影響を与えそうだ。

　遺族の提訴は殺害から２７年後の０５年で、除斥期間を過ぎていたことから、ルール通りならば請求が認められることはない。ただ、第三小法廷は、男が石川さんの遺体を自宅の床下に埋めて隠し続けたため、相続人が確定しないまま２０年が過ぎた、と指摘。相続人が賠償請求権を行使できない一方で、その原因をつくった加害者が責任を免れるのは「著しく正義・公平の理念に反する」と述べ、このような場合には除斥期間の例外を認めるべきだとした。

　判決によると、男は９４年ごろに自宅が区画整理事業の区域にかかって明け渡しを求められたが、遺体の発見をおそれて拒否。最終的に立ち退きを余儀なくされた０４年に警察に自首したが、刑事訴訟法の時効が成立していたため起訴されなかった。

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ＦＸ規制強化策、信託保全義務付け　金融庁が発表

　金融庁は28日、個人投資家に普及している外国為替証拠金取引（ＦＸ）業者に対する規制強化策を発表した。業者が破綻しても顧客が預けたお金を保全できるように、安全性の高い信託銀行への金銭信託（信託保全）を義務づけるのが柱。

　預けたお金の何倍の取引ができるか示す「証拠金倍率」に上限を設ける規制については方針が決定次第、公表するという。証拠金倍率規制をめぐっては東京金融取引所や業者の間で慎重論が出ている。金融庁は規制方針に変更がないとした上で、具体的な上限の水準を慎重に見極める考えを強調した。

　金融庁は金融商品取引法の関係政省令と監督指針を改正する。5月29日まで一般から意見を募り、準備が整い次第、施行する。信託保全を義務づける措置は施行からさらに半年間の準備期間を設ける。(07:00)

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Berkshire’s 31% Decline Spurred by Derivatives Buffett Derided
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By Richard Teitelbaum

April 28 (Bloomberg) -- Berkshire Hathaway Inc. shareholders have a chance this year to do something that’s rare among the Sage of Omaha’s followers: count their losses.

Despite Berkshire’s reputation as a bear market bulwark, its stock has been walloped. The Class A shares are down 31 percent since September, to $90,000 as of yesterday, exceeding the 26 percent drop in the Standard & Poor’s 500 Index.

One reason: Chief Executive Officer Warren Buffett’s increasing use of derivatives -- contracts whose value is based on the performance of stocks or bonds or the outcome of a specific event. That Buffett once called derivatives “time bombs” doesn’t calm investors.

Berkshire held contracts with a combined notional value of $67.3 billion at year-end. While this figure is used mostly for reporting purposes and isn’t indicative of potential losses, it dwarfs the company’s $25.5 billion in cash.

Buffett himself has warned of an increasing possibility he might have a loss from one type of contract on Berkshire’s books. Fitch Ratings and Moody’s Investors Service have lowered their credit ratings on Berkshire, partly because of the derivatives.

“People have become uncomfortable with financial investments that they don’t understand, especially anything related to derivatives,” says Charles Bobrinskoy, a manager at Ariel Investments LLC in Chicago.

Equity Index Puts

Berkshire’s derivatives fall into four categories. Because they carry the greatest notional value, at $37.1 billion, most attention is on put options that Buffett sold on stock indexes in the U.S., U.K., euro zone and Japan that expire from September 2019 to January 2028. Berkshire has to pay at expiration if any of the indexes are lower than they were when the puts were written.

While analysis of these bets shows big losses are unlikely, Buffett, 78, hasn’t provided sufficient information on the derivatives to keep some investors from hitting the sell button. Bobrinskoy says he hasn’t been scared away: Of the $250 million he co-manages at Ariel, 5.6 percent was invested in Berkshire as of March 31.

To lose the full $37.1 billion on the equity puts, the indexes would have to fall to zero -- an unlikely event. Berkshire received $4.9 billion in premiums, which together with what the company earns on it, may offset any eventual payments.

Market Scenarios

Citigroup Inc. analyst Joshua Shanker in a March 16 report examined several scenarios to gauge the likelihood of Buffett’s losing money on the puts. Using the S&P 500 as a proxy for all the indexes and assuming a 5 percent annualized return on the premium, the market would have to suffer a cumulative decline of at least 32 percent across the 15- to 20-year life of the contracts for the seller to lose money. In the U.S. market back to 1800, the only way to do that would be to start the bet just prior to the 1929 crash.

Some economists compare today with the Great Depression, and some of the puts may have been written near the U.S. market’s all-time high in late 2007, according to information Buffett has disclosed. The S&P 500 in March was down 57 percent from its peak.

With that in mind, Shanker looked at scenarios that begin with a 50 percent drop in the S&P 500. From that nadir, if the index rose 6 percent annualized over 14 years, Buffett still would not owe any money when the puts expire -- even without consideration of the $4.9 billion in premiums.

Potential Losses

Shanker also sketched out grimmer scenarios. Starting with the 50 percent decline, if the S&P 500 rises at the stock market’s post-1800 average annual rate of 2.8 percent, Berkshire could be out $5.4 billion at the end of the bet. That assumes an initial one-third loss on the premiums followed by 2.5 percent annualized returns.

David Winters says losses from these derivatives are unlikely. His Wintergreen Fund had 6.6 percent of its assets in Berkshire, as of year end. “We’re living in a world where there’s so much negativity, investors are extrapolating something that’s just remotely possible into something that’s probable,” he says.

Berkshire hasn’t disclosed sufficient information to fully analyze its other derivatives, Shanker says. One category is simply municipal bond insurance structured as derivatives; the risks here are similar to those for his municipal bond insurer. Another type consists of credit-default swaps through which Berkshire guarantees payment of individual corporate bonds. Those bets were relatively small, totaling $3.9 billion in notional value at the end of last year.

Worrisome Bets

The final category is the most worrisome, Shanker says. Berkshire has sold contracts that require it to pay when credit losses occur at companies that are included in certain unnamed high-yield-bond indexes. The notional value is $7.9 billion.

Berkshire took in $3.4 billion in premiums on these contracts and has paid losses of $542 million. The company has also recognized a noncash, $3 billion mark-to-market loss. With these contracts, payments are made when a credit event occurs. They expire from September of this year to December 2013.

Losses on these contracts are accelerating as bankruptcies grow, Buffett said in his shareholder letter in February. “Now with the recession deepening at a rapid rate, the possibility of an eventual loss has increased,” he wrote.

Buffett didn’t respond to an e-mailed request for comment. He is scheduled to address shareholders at Berkshire’s annual meeting on May 2, and quarterly results are expected from the company on May 1.

‘Handpicked’ Risks

Mark Curnin, co-founder of White River Capital LP, an investment partnership that specializes in financial stocks, says Buffett’s derivatives are simply smart ways to do what he’s always done: underwrite insurance and buy attractive securities.

“Buffett has handpicked a select group of risks that he understands and thinks are attractively priced,” he says.

The derivative risks are similar to the other hazards that might worry any investor in Berkshire. There are volatile profits from its insurance subsidiaries, for example, and units that depend on the housing industry, such as Acme Building Brands and Clayton Homes Inc. Then there’s Buffett’s portfolio of equity investments: While easy to understand, 7 of the 14 largest holdings listed at year-end were carried at a loss.

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Gates Makes Lifetime Pledge to Buffett’s Berkshire (Update1)
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By Erik Holm and Betty Liu

April 28 (Bloomberg) -- Microsoft Corp. co-founder Bill Gates, recruited by his friend Warren Buffett to join the board at Berkshire Hathaway Inc., said he’s committed to the firm for the rest of his life.

Gates and fellow Berkshire board member Don Keough, the former president of Coca-Cola Co., said in separate interviews with Bloomberg Television that their role with Omaha, Nebraska- based Berkshire is to protect the company’s culture and values after Buffett, 78, steps down. Buffett has pledged the majority of his Berkshire shares to Gates’s charitable foundation.

“I’ve got a commitment to stay involved with Berkshire as a lifelong thing,” Gates, 53, said in an interview scheduled to be broadcast today. “We always have to think about what might happen and make sure Berkshire is not just great now, but forever.”

Buffett, Berkshire’s chairman and chief executive officer, has said the board’s most important job will be to replace him when he’s unable to perform his duties. He will host about 35,000 people on May 2 at Omaha’s Qwest Center arena for the annual shareholder meeting -- an occasion where he typically fields questions about the succession plan.

“It’s the most important issue there is,” Buffett said in an interview with Bloomberg Television at Berkshire’s headquarters last month. “There’s nothing more important. Nobody knows on any given day where I’ll be the next day.”

‘Intense and Real’

Buffett built Berkshire over four decades from a failing manufacturer of men’s suit linings into a $140 billion company by investing in out-of-favor stocks and buying dozens of businesses ranging from insurance and underwear to ice cream and utilities. Buffett says his ideal time horizon to hold a stock is “forever,” and he purchases operating companies for Berkshire with the promise to their owners never to sell them.

“When you’re sitting on the board, you’re talking about sustainability of Berkshire Hathaway long-term, the issue of management down the road,” said Keough, 82. “The culture he’s built into Berkshire is intense and real and, I think, permanent.” Berkshire is the largest shareholder in Coca-Cola, and Buffett served on the soft-drink maker’s board with Keough.

Buffett said in letters to shareholders and at past annual meetings that the chairman post will go to his son, Howard Buffett, to keep the culture intact, and said the remainder of his work will be split between at least two people: a CEO and person or group that handles investing.

‘Total Confidence’

“All candidates currently work for or are available to Berkshire and are people in whom I have total confidence,” he said in the company’s most recent annual report. Buffett said in an interview March 5 that the CEO candidates hadn’t changed in a year. He declined to name them.

“You could water-board me,” and he still wouldn’t tell, Buffett joked.

Berkshire stockholders and Buffett-watchers have long speculated about who will fill the CEO position. Barron’s has reported that David Sokol, the head of Berkshire’s MidAmerican Energy Holdings Co., was the most likely successor. Sokol said in an interview with Bloomberg Television he hasn’t discussed succession with Buffett.

“Never a word,” Sokol said. “Unfortunately my name comes up because people try to come up with names.”

Tony Nicely, the head of Berkshire’s Geico Corp. car insurance business, and Ajit Jain, who runs a unit that sells reinsurance, are also on media lists of potential successors. Buffett biographer Alice Schroeder, now a Bloomberg News columnist, has suggested Buffett adviser Byron Trott, formerly at Goldman Sachs Group Inc., is an ideal candidate.

Charitable Foundation

Gates’s commitment to Berkshire mirrors Buffett’s pledge to the Bill & Melinda Gates Foundation, a charity established by Gates and his wife to fight disease and global poverty. Buffett in 2006 promised to give the majority of his Berkshire shares to the foundation, in 5 percent annual increments, as long as Gates or his wife is still alive and managing the foundation.

His grant, valued at about $31 billion at the time it was made, also stipulates that the stock payments may be accelerated in the event of Buffett’s death.

Forbes magazine in March ranked Gates as the richest person in the world, and listed Buffett as second. The two men have known each other since 1991, according to Schroeder’s book, when they met at a party outside Seattle celebrating July 4, the U.S. Independence Day.

“As soon as I sat down with him, he was asking me, ‘Why didn’t IBM do this,’ and ‘why wasn’t Microsoft doing that’, and he was asking the questions that I’ve always waited for somebody to ask,” Gates said in the interview. “We just got into this conversation where the whole day went by.”

Gates owns 300 Berkshire shares personally and another 4,050 through his Cascade Investment LLC according to a regulatory filing last month. The stake was valued at more than $390 million based on yesterday’s closing price of $90,000 a share.

(Portions of the interviews with Buffett, Gates, Keough, Trott and Sokol will be broadcast today starting at 5 p.m. New York time, as part of a special about Berkshire Hathaway airing on Bloomberg Television and at BTV on the Bloomberg terminal.)

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Algeria Rap Rips Government Repression as Outlet for Discontent
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By Daniel Williams

April 28 (Bloomberg) -- Bilal Yaici carried a plastic bag of cassettes and a boom box into an Algiers music store and tried to peddle his rap performances to the clerk.

When verses in one song rhymed the word police -- in French slang, flic -- with Algerian President Abdelaziz Bouteflika, the clerk said he already had plenty of that on his shelves and told Yaici to get a job.

“The old man doesn’t want to hear about what we think,” said the 19-year-old, heading down Belouizdad Street looking for another store.

In the Middle East and North Africa, where reporters and bloggers have been persecuted, Web sites blocked, and books and movies censored, rap has become the sound of youthful discontent, saying what few grown-ups say aloud.

Algiers, a chalky white city overlooking the Mediterranean Sea, is teeming with would-be rappers, said Hassina Amroune, culture editor for La Nouvelle Republique, an Algerian French- language newspaper.

“Hardly a week goes by when someone doesn’t come in to me trying to get publicity for his rap,” she said. “It is the voice of the majority, in a way. Rappers pop up everywhere.”

She estimates there are hundreds, including wannabe amateurs, in Algeria, a country where half the population is under the age of 27 and official unemployment is 15 percent.

Algerian rap is heir to an American hip-hop culture that began with social and political protest. In the U.S., rap morphed into glorification of ghetto gangsters, aggressive sex, jumbo cars and jewelry. Algeria’s percussive rhymes remain intensely centered on public ills.

Ironic, Downbeat

Rap here oscillates between the ironic and downbeat, delivered in a fierce stew of Arabic, French, English and Berber, a language of people across the Sahara Desert. Government repression, corruption and hopelessness are the main ingredients.

“Today it’s a crackdown, ain’t no football match,” raps Lotfi, one of the country’s best known artists. “Up there people are fleeing, the land’s become black,” or charred.

Vixit, a group from the city of Oran, sings, “We have the mafia, what is left? Engineers, doctors and diplomats think about selling cigarettes.”

Protest rap has also spread across the Middle East. The Arab-Israeli rap group DAM rails against the hemming-in of Palestinians in the West Bank and Gaza Strip by Israeli troops.

‘Fight for Freedom’

“We fight for freedom, so you’ve made it a crime. And you the terrorist call me terrorist,” says one of DAM’s verses.

In the religiously pious United Arab Emirates, a pair of rappers who call themselves Desert Heat preaches clean living, education and respect for women. In Morocco, where rap dates from the 1980s, the Casablanca group Casa Crew focuses on corruption and unemployment with titles like “I’m Angry” and “Lies in the News.”

“Arab and North African rappers are not into being gangsters and bad boys,” Amroune said. “This area has big problems, and rap is an exit for the young, an outlet for anger.”

Rap’s arrival in Algeria coincided with 1988 youth and worker riots that undermined the political domination of the National Liberation Front, which had ruled Algeria since independence from France in 1962. Reforms led to 1992 multiparty parliamentary elections. While the NLF tried to gerrymander in its favor, a party known as the Islamic Salvation Front was poised to win two-thirds of the seats at stake when the army canceled the vote.

Civil War

More than a decade of civil war followed, sending rap into hiding. Thousands of young people took off for Europe in search of work. The jobless who remained became known as hittistes, a reference to Algerians who hang around street corners leaning against walls.

After about 200,000 deaths, the civil war wound down. Bouteflika, 72, is credited with pacifying the country through an amnesty that persuaded thousands of rebels to lay down their arms, even though recalcitrant terrorists still bedevil security forces. On April 9 he won a third five-year term, receiving 90 percent of the vote.

With the civil war in abeyance, rap revived -- its lyrics reflecting the feeling that corruption, inequality and injustice lived on.

Mohammed Issam Abdellah, 29, a rapper who goes by the name Mister AB, said he raps on bribery and nepotism as the root of Algeria’s problems while trying to discourage teenagers from using drugs and migrating illegally to Europe in rickety boats.

“In my last song, I called the migrants kamikazes; they’re going to die at sea,” he said in an interview.

Government, Rebel Conflict

He plays at dance halls, music festivals and living rooms and says he raps more frankly at live shows than he does on disc. “When I’m with an audience, I can name names,” he said, declining to name whom he might name. And he steers clear of the government-Islamic rebel conflict.

“I don’t understand it and it’s dangerous,” he said.

Yaici and his four-man crew of drummers and DJs -- they call themselves K Ammo -- have all the typical hittiste characteristics: They hang out at a corner of Bab El Oued, a working-class district, wear jeans and T-shirts, smoke cigarettes and talk about going to France. They are short on bling.

“No money; can’t do anything with no money, especially you can’t get married,” Yaici said. “If we can get a disc contract, we can make it big,” he added, to the nods of his pals.

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Senior Saudi calls for political reforms

By Abeer Allam and Andrew England in Riyadh

Published: April 28 2009 17:50 | Last updated: April 28 2009 17:50

A senior member of the Saudi royal family has called for political and economic reforms in the world’s largest oil producer, warning that the kingdom is not prepared to face the challenges of the 21st century.

Prince Talal bin Abdelaziz, who has no role in decision-making and is known for his outspoken views, said there needed to be increased dialogue within the ruling family and called for greater powers for the Shura Council, an unelected consultative body, to pave the way for eventual elections.

“This region is roiling with turmoil and radicalism and the aspirations of a young population, and I am afraid we are not prepared for that. We cannot use the same tools we have been using to rule the country a century ago,” Prince Talal, who is a half-brother of King Abdullah, told the Financial Times.

His remarks appeared to be triggered by King Abdullah’s decision last month to appoint Prince Naif, another brother, as second prime minister, causing many to believe the powerful interior minister has been chosen as third in line. The appointment eased concerns about the succession amid mounting speculation over the health of Crown Prince Sultan, the first deputy prime minister who recently underwent surgery in New York.

However, Prince Naif is considered a conservative and Saudi activists seeking reform fear he may quash any hopes of political change in a nation that is ruled by an absolute monarchy.

Prince Talal, 79, said his concern was that the Allegiance Council, a body established by King Abdullah in 2006 to select the next crown prince and king, would be bypassed. “Bypassing the allegiance system would mean we do not respect our own rules or uphold our system,” said the prince, who is a member of the council. “We are a family and we should have a dialogue and debate about the future of our country, but we do not.”

Although Saudi Arabia has amassed significant petrodollar reserves during the recent oil boom, it faces many pressing social issues, with high unemployment, more than 65 per cent of the population is aged under 25 and a continued threat from Islamic extremists.

Analysts also worry that the middle class is shrinking, while the lower classes are growing, but change in the kingdom is notoriously slow and faces both political and structural barriers.

King Abdullah, 84, is considered a modernising force in Saudi terms and when he ascended to the throne in 2005, many Saudis hoped that their country would embark on a period of reform. He is credited with allowing a greater openness and debate, and a recent cabinet reshuffle, which saw the removal of powerful conservatives who headed the judiciary and religious police, was widely praised.

But reformers question the pace and substance of the changes that have taken place in the past four years, with some arguing that change could destabilise the ultra-conservative country.

However, Prince Talal, who says he fully supports King Abdullah’s efforts, was dismissive of such suggestions. “Hypocrites claim our society is unprepared for change and blame religious institutions,’’ Prince Talal said. “Certain people are pleased to hear that. We have to stop using them as an excuse. King Abdullah is the ruler. If he wills it, then it will be done.’’

Prince Talal, is one of 18 surviving sons of King Abdelaziz, Saudi Arabia’s founding father, and a long-time advocate of reform. In the early 1960s he was exiled to Egypt for advocating constitutional reform but returned after a pardon by King Faisal.

In 2007 he proposed forming a political party, but his request is pending the approval of the king.

Political parties are illegal in Saudi Arabia, but Prince Talal believes the kingdom has to make gradual moves towards elections, starting with granting the Shura Council greater powers.

“Young Saudis see elections in Arab countries, Gulf countries, and even Bangladesh and Bolivia, and they wonder why we lack the same thing. We’re not less able than those others,” Prince Talal said. “The political decision is in the hands of the king. I know he is a reformer. We still believe in him.’’

Prince Talal, who is father of Prince Waleed, the well-known billionaire investor, also believes that the younger generation of royals should be considered for the next line of succession to avoid a “political vacuum” in the future.

Since King Abdulaziz’s death more than half a century ago, succession has passed among his 35 sons based on their seniority and competence, but the surviving members of that generation is ageing.

“There is a difference between being head of state and being head of government. Here the family is the government and head of state; they own and rule,” he said. “We should encourage the young generation of the family (and the people) to become more proactive through dialogue. How can we do that? I believe through involving them in decision making.”

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EU ruling hits UK expats in northern Cyprus

By Delphine Strauss in Ankara

Published: April 28 2009 15:47 | Last updated: April 28 2009 15:47

Thousands of expats who have bought or developed property in northern Cyprus could be affected by a European Court of Justice ruling that courts throughout the European Union should enforce Greek Cypriot legal verdicts.

The ECJ judgement, published on Tuesday, backed the efforts of Meletis Apostolides, a Greek Cypriot architect, to reclaim land his family abandoned when the island was partitioned in 1974, on which a British couple has since built a holiday house.

The fact that European community law is suspended in the northern part of the island, whose Turkish Cypriot authorities are recognised only by Ankara, and that a Greek Cypriot judgement cannot practically be enforced, “does not prevent the courts of another member state from declaring such judgements enforceable,” the ECJ found.

Linda and David Orams, a retired couple who invested around £160,000 in the property in Lapithos, could now face court action to seize their UK assets if they do not demolish the house and pay compensation as the Cypriot court ordered in 2004.

A UK court previously found in their favour when Mr Apostolides applied for it to enforce the Greek Cypriot verdict, but would now be obliged to follow the ECJ’s judgement, which cannot be appealed.

The decision may complicate ongoing talks to reunify the divided island, where one of the most contentious questions is how to recognise, by restitution or compensation, the rights of Greek and Turkish Cypriots forced to leave their properties at partition.

It could also deal a heavy blow to the northern Cypriot economy, already heavily dependent on trade with Turkey, since property development had been one of the main growth areas after the failure of UN-sponsored reunification talks in 2004.

An estimated 5,000 Britons live in northern Cyprus, and the judgement could pave the way for a wave of lawsuits against the sizeable minority occupying disputed property. Emine Erk, a northern Cypriot lawyer who has followed the case closely, said it could also lead to claims against Turkish Cypriots living in London or elsewhere in the EU.

“It certainly does sour the atmosphere,” she added, expressing disappointment at the ECJ’s “dismissive” attitude to the Cyprus problem or the ongoing negotiations to resolve it. The judgement would be perceived by Turkish Cypriots as a further slight from Europeans, she added.

Greek Cypriot President Demetris Christofias and the northern leader, Mehmet Ali Talat, have been engaged since September in a fresh round of negotiations to end the island’s division, but the Turkish Cypriot side in particular is under pressure to make progress before next year’s presidential elections and before the issue becomes a major stumbling block for Turkey’s EU aspirations.

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Argentina risks losing its 'bread basket' status

By Jude Webber in Buenos Aires

Published: April 28 2009 03:00 | Last updated: April 28 2009 03:00

Argentine farmers are preparing to sow what many fear could be their smallest acreage of wheat in more than a century as the world's fourth-biggest wheat exporter suffers the consequence of disastrous policies and terrible weather.

With farmers due to start planting the 2009-10 crop in less than a month, producers and analysts fear they could sow less than 3.5m hectares. This would be a fall of about 30 per cent on the 2008-09 season and the lowest since 1902-03, when Argentina had 3.6m hectares and was on its way to earning a reputation as the "bread basket of the world".

"I'm pretty certain I won't be sowing anything," said Luis Eizaguirre, a farmer in Bahía Blanca in the wheat belt of the south of the province of Buenos Aires. "I've never seen so many farmers decide not to sow or to reduce planting so sharply."

The decline stems from three years of government intervention in wheat trading, in which farmers are periodically banned from selling overseas; a 23 per cent tariff on exports; and a serious drought that has eroded production incentives and slashed output.

The upshot was that Argentina was fast "disappearing from the market as a reliable exporter", while other world producers such as Russia had grown, said Pablo Andreani of the AgriPac consultancy. Global stocks are projected by the International Grains Council to rise 39 per cent this year to 160m tonnes after Russia and the Ukraine planted large crops in response to rising global prices.

Société Générale said the global wheat crop could shrink to about 642m tonnes in 2009-10, still a bumper harvest by historical standards but significantly lower than last year. With consumption expected to increase to 657m tonnes, the market could see a supply deficit by the end of 2009-10.

Sean Cameron, head of Aaprotrigo, producers' association, even projected that Argentina "may have to end up importing wheat", a view seen as alarmist but which reflects the gloomy mood.

The woes in Argentina's cereal sector come amid warnings from private economists that the economy is sliding deeper into recession. A long-running conflict between the government and soyabean farmers will slash export income this year.

El Tejar, an agricultural groups, has frozen investments at home and is looking elsewhere in the region, such as neighbouring Uruguay and Brazil, where the regulatory hurdles that plague Argentina are absent.

"It's very difficult to take investment decisions in Argentina today," Oscar Alvarado, president of El Tejar, said, adding that the group's focus was on production from Brazil this year.

Mr Alvarado, who is also president of Argentine Association of Regional Consortiums for Agricultural Experimentation, said indications from farmers were that the area planted with wheat could be as low as 3m hectares for the coming season.

Last season's production in Argentina slumped to 8.3m tonnes from more than 16m the year before because of the worst drought in half a century. But farmers had about 2.5m tonnes in stocks, enabling Argentina to mill 7m tonnes into flour and export 4m tonnes of wheat.

The drought has eased, but many farmers still need more than 200mm of rain to penetrate soils before they can start sowing. If conditions improve, Argentina could yet pull off an increase in production. But exports will be squeezed. Neighbouring Brazil had traditionally bought 7m to 8m tonnes a year "but at these levels, we can only sell half their needs", noted Gustavo López of Agritrend consultancy.

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06:44 GMT, Wednesday, 29 April 2009 07:44 UK
Over-40s may benefit from aspirin

Aspirin

Taking aspirin in your 40s could cut the risk of cancer later in life, a review of research suggests.

Experts said taking the drug at an age before cancer usually develops, and for ten years would maximise its potential to prevent the disease.

Aspirin has been linked to a reduced risk of some cancers, and heart disease, but also to a raised risk of ulcers and internal bleeding.

The Cancer Research UK study features in the journal Lancet Oncology.

"Many questions need to be answered before we would advise regular use of aspirin for cancer prevention. "
Professor Jack Cuzick
Cancer Research UK Centre for Epidemiology

Aspirin blocks the effects of proteins which can trigger inflammation, and which are found at unusually high levels in several types of cancer.

Previous research suggests people who take the drug are less likely to develop bowel, breast and possibly some other types of cancer.

However, regular use of aspirin specifically for cancer prevention is not currently recommended because of the risk of side effects.

Common cancers, such as prostate, breast, lung and bowel, tend to develop after the age of 60 - when the risk of aspirin causing internal bleeding is at its highest.

Lead researcher Professor Jack Cuzick, from the Cancer Research UK Centre for Epidemiology at Queen Mary, University of London, said pre-cancerous lesions tended to start developing in the mid-40s.

Thus, taking aspirin around that time may be the best strategy for preventing that damage progressing to the full-blown disease.

It would also carry a much lower risk of side effects than beginning to take aspirin 15-20 years later.

Work needed

However, Professor Cuzick said: "Many questions need to be answered before we would advise regular use of aspirin for cancer prevention.

"Future research and more clinical trials are needed to better identify those people who are at high risk of developing cancers and at low risk of side effects, who will benefit most from aspirin treatment."

Professor Cuzick said it was not clear a lower dose "baby aspirin" could achieve the same anti-cancer effect as the standard dose of 300mg/day.

The researchers also found that taking aspirin in combination with other drugs known as proton pump inhibitors could help to lower the risk of stomach bleeding.

Dr Lesley Walker, Cancer Research UK's director of cancer information, said: "It's too soon to recommend that people take aspirin to try and stop cancer developing because of the side effects.

"It's important that any decision to take aspirin regularly is only made in consultation with a GP."

Ellen Mason, of the British Heart Foundation (BHF), also stressed it was too early for researchers to recommend taking aspirin to reduce the risk of cancer.

"Currently the risk of bleeding outweighs the benefit," she said.

"Many thousands of people in the UK are prescribed aspirin because they have heart disease.

"This research does not prove that they will also get protection from cancer at a low dose, but as they already need to take aspirin it would be reassuring if further research eventually shows an anti-cancer benefit."

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23:08 GMT, Monday, 27 April 2009 00:08 UK
Child behaviour 'linked to sleep'

Girl asleep

A good night's sleep could reduce hyperactivity and bad behaviour among children, a Finnish study reports.

It has been suggested that some children who lack sleep do not appear tired, but instead behave badly.

Of the 280 examined in the Pediatrics study, those who slept for fewer than eight hours were the most hyperactive.

Experts said adequate sleep could improve behaviour in healthy children and reduce symptoms of attention deficit hyperactivity disorder (ADHD).

It is recognised that chronic sleep deprivation is a problem for many adults in Western countries and that it can have consequences for their health and daily life.

The team behind this research said not enough was understood about the role of sleep in children's lives but it has been estimated that a third of US children do not get enough sleep.

Monitoring

In this research, the team from the University of Helsinki and Finland's National Institute of Health and Welfare studied 280 healthy children aged seven or eight.

They wanted to see if those healthy children who slept the least were the most likely to display the kind of symptoms associated with ADHD.

None of the children studied had the attention disorder.

"There is a lot of commonality between the symptoms of a tired child and the symptoms of a child with ADHD"
Neil Stanley, Sleep expert

Parents filled in questionnaires about their children's usual sleeping habits and then noted how long their children slept for over seven nights.

The children also wore devices called actigraphs, which measure movement, to monitor how long they actually rested for.

Parents' estimates of sleep duration were longer than the actigraph measurements, which the researchers say could be because they measured from bedtime or because they assumed their children were asleep when they were simply lying awake in bed or reading.

The parents were also asked about their children's behaviour, using measures normally used to diagnose ADHD.

The children whose average sleep duration as measured by actigraphs was shorter than 7.7 hours had a higher hyperactivity and impulsive behaviour score.

They also had a higher ADHD symptom score overall.

'Sleep needs differ'

Dr Juulia Paavonen, who led the study, said: "We were able to show that short sleep duration and sleeping difficulties are related to behavioural symptoms of ADHD.

"The findings suggest that maintaining adequate sleep schedules among children is likely to be important in preventing behavioural symptoms.

"Even 30 minutes per night has been shown to give a major improvement"
Dr Juulia Paavonen, Finnish National Institute of Health and Welfare

"It may well be that inadequate sleep is increasing some of the behavioural problems that have been seen in children with attention deficit disorders."

Dr Paavonen said further studies were needed to confirm the link.

And she advised parents that, even though the study suggested fewer than eight hours sleep could be problematic, it was not a figure everyone should aim for.

"Sleep needs differ between individuals. The only way to take care that a particular child has enough sleep is to see if they seem to have a problem with short sleep.

"But even [an extra] 30 minutes per night has been shown to give a major improvement in objective cognitive tests, improving reaction times, impulsivity and attention spans."

Sleep expert Neil Stanley, of the University of East Anglia, said: "It has been acknowledged for a while now that there is a lot of commonality between the symptoms of a tired child and the symptoms of a child with ADHD."

He said parents needed to recognise that sleep was important for children.

"These things have been lost at a time when ADHD is increasing.

"How much of what is diagnosed as ADHD is something that can be modified or improved, or even totally cured by a more rigid sleep pattern?

"Maybe parents should try and get sleep sorted out. If the child is still showing symptoms, then that's probably the time to look at pharmacological interventions."