Google executive chairman arrives in North Korea

PYONGYANG, North Korea (AP) — Google's chairman wants a firsthand look at North Korea's economy and social media landscape during his private visit Monday to the communist nation, his delegation said, despite misgivings in Washington over the timing of the trip.
Eric Schmidt, executive chairman of one of the world's biggest Internet companies, is the highest-profile U.S. executive to visit North Korea — a country with notoriously restrictive online policies — since young leader Kim Jong Un took power a year ago. His visit has drawn criticism from the U.S. State Department because it comes only weeks after a controversial North Korean rocket launch; it has also prompted speculation about what the businessman hopes to accomplish.
Schmidt arrived on a commercial Air China flight with former New Mexico Gov. Bill Richardson, who has traveled more than a half-dozen times to North Korea over the past 20 years.
Richardson, speaking ahead of the flight from Beijing, called the trip a private, humanitarian mission.
"This is not a Google trip, but I'm sure he's interested in some of the economic issues there, the social media aspect. So this is why we are teamed up on this," Richardson said without elaborating on what he meant by the "social media aspect."
"We'll meet with North Korean political leaders. We'll meet with North Korean economic leaders, military. We'll visit some universities. We don't control the visit. They will let us know what the schedule is when we get there," he said.
U.S. officials have criticized the four-day trip. North Korea on Dec. 12 fired a satellite into space using a long-range rocket. Washington condemned the launch, which it considers a test of ballistic missile technology, as a violation of U.N. Security Council resolutions barring Pyongyang from developing its nuclear and missile programs. The Security Council is deliberating whether to take further action.
"We continue to think the trip is ill-advised," State Department spokeswoman Victoria Nuland told reporters Monday, reiterating the U.S. position that the visit is badly timed. However she added that the government would be open to hearing from the delegation after they return from North Korea.
The trip was planned well before North Korea announced its plans to send a satellite into space, two people with knowledge of the delegation's plans told The Associated Press. AP first reported the group's plans last Thursday.
Schmidt, a staunch proponent of Internet connectivity and openness, is expected to make a donation during the visit, while Richardson will try to discuss the detainment of a U.S. citizen jailed in Pyongyang, members of the delegation told AP. They asked not to be named, saying the trip was a private visit.
"We're going to try to inquire the status, see if we can see him, possibly lay the groundwork for him coming home," Richardson said of the U.S. citizen. "I heard from his son who lives in Washington state, who asked me to bring him back. I doubt we can do it on this trip."
The visit comes just days after Kim, who took power following the Dec. 17, 2011, death of his father, Kim Jong Il, laid out a series of policy goals for North Korea in a lengthy New Year's speech. He cited expanding science and technology as a means to improving the country's economy as a key goal for 2013.
North Korea's economy has languished for decades, particularly after the collapse of the Soviet Union, which since the mid-1940s had provided the country with an economic safety net. North Korea, which has very little arable land, has relied on outside help to feed its people since a famine in the 1990s.
In recent years, North Korea has aimed to modernize its farms and digitize its factories. Farmers told the AP that management policies were revamped to encourage production by providing workers with incentives.
Computer and cellphone use is gaining ground in North Korea's larger cities.
However, most North Koreans only have access to a domestic Intranet system, not the World Wide Web. For North Koreans, Internet use is still strictly regulated and allowed only with approval.
Schmidt, who oversaw Google's expansion into a global Internet giant, speaks frequently about the importance of providing people around the world with Internet access and technology.
Google now has offices in more than 40 countries, including all three of North Korea's neighbors: Russia, South Korea and China, another country criticized for systematic Internet censorship.
Accompanying Schmidt is Jared Cohen, a former U.S. State Department policy and planning adviser who heads Google's New York-based think tank. The two collaborated on a book about the Internet's role in shaping society called "The New Digital Age" that comes out in April.
Also leading the delegation is Kun "Tony" Namkung, a Korea expert who has made frequent trips to North Korea over the past 25 years and has worked as a consultant for The Associated Press.

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U.S. banks to pay $8.5 billion to end foreclosure reviews

WASHINGTON (Reuters) - A group of 10 mortgage servicers agreed on Monday to pay a total of $8.5 billion to end a U.S. government-mandated case-by-case review of housing crisis foreclosures in an acknowledgement the program had proven too cumbersome and expensive.
Roughly 3.8 million borrowers whose homes were in foreclosure within the time frame of the review will receive cash compensation ranging from hundreds of dollars up to $125,000, depending on the type of errors they experienced, the U.S. Office of the Comptroller of the Currency (OCC) said.
The reviews followed the "robo-signing" scandal that emerged in 2010 involving allegations banks pursued faulty foreclosures by using defective or fraudulent documents.
Bank of America Corp , Citigroup Inc , JPMorgan Case & Co , Wells Fargo & Co , MetLife Bank , and five others will pay $3.3 billion directly to eligible borrowers, and $5.2 billion in loan modifications and forgiveness, regulators said.
The OCC and the Federal Reserve Board said they accepted the agreement to get relief to consumers more quickly than through the reviews.
In April 2011, the government required the servicers to review foreclosure actions from 2009 and 2010 to determine whether borrowers had been unlawfully foreclosed on or suffered some other financial harm due to errors in the foreclosure process.
Comptroller of the Currency Thomas Curry said in a statement: "It has become clear that carrying the process through to its conclusion would divert money away from the impacted homeowners and also needlessly delay the dispensation of compensation to affected borrowers."
The agreement announced Monday resolves matters left unsettled by a $25 billion deal that the top five servicers reached last February with the Justice Department, housing authorities and state attorneys general to end an investigation into foreclosure practices including robo-signing.
Those authorities had taken a broad approach to dealing with allegations of robo-signed documents and faulty foreclosures, while the bank regulators had initially opted for the more targeted, individual reviews.
Bank of America said it supports the new approach "because it expands the number of borrowers who will receive payment, speeds the delivery of those payments, and will provide support for homeowners still struggling to make payments."
MetLife said it was fully cooperating with the OCC review process and said its portion of the settlement was $37 million.
The other servicers said they were pleased to reach the settlement.
Regulators said the agreement replaces the case-by-case reviews with a broader framework, which allows borrowers to receive compensation regardless of whether they faced actual harm.
Instead the payouts will be based on whether a borrower falls into one of 11 categories, ranging from whether the person was eligible for protections under the Servicemembers Civil Relief Act, whether the borrower was not in default, or whether he or she was denied a loan modification, for example.
The other banks involved in the settlement are: Aurora , PNC , Sovereign , SunTrust , and U.S. Bank .
Regulators are continuing negotiations whether four other servicers, and are also expected to enter into similar settlements with them.
At least one lawmaker expressed disappointment in the settlement. Elijah Cummings, the top Democrat on the House Committee on Oversight said he had serious concerns that the deal "may allow banks to skirt what they owe and sweep past abuses under the rug without determining the full harm borrowers have suffered."
On Friday Cummings and Oversight Committee Chairman Darrell Issa sent a letter to the agencies requesting a briefing on the settlement.

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Bank of America in mortgage claims settlement

NEW YORK (AP) — Bank of America reached an $11.6 billion settlement with government mortgage agency Fannie Mae to settle claims resulting from mortgage-backed investments that soured during the housing crash, bringing it a step closer to clearing up its legacy of bad home loans.
Under the deal announced Monday, Bank of America will pay $3.6 billion in cash to Fannie Mae and buy back $6.75 billion in loans that the bank and its Countrywide Financial unit sold to the agency from Jan. 1, 2000 through Dec. 31, 2008. That includes about 30,000 loans. The bank is also paying $1.3 billion to the agency for failing to deal with foreclosures fast enough.
Also Monday, a separate settlement was announced between federal regulators and ten major banks and mortgage companies, including Bank of America, over wrongful foreclosure practices. That $8.5 billion settlement covers up to 3.8 million people who were in foreclosure in 2009 and 2010. Of those, about 400,000 may be entitled to payments, advocates estimate.
For Bank of America, its own settlement with Fannie Mae over the mortgage investments represents a "a significant step" in resolving the bank's remaining mortgage problems, Bank of America CEO Brian Moynihan said in a statement. Moynihan's predecessor, Ken Lewis, bought Countrywide, a troubled mortgage-lending giant, in July 2008 just as the financial crisis was taking hold.
The settlement represents "another step closer to normal," for Bank of America, Wells Fargo analyst Matt Burnell wrote in a note to clients. Burnell said the deal was good for the bank because it resolved a dispute with a government agency and will likely reduce the provisions it has to set aside to cover claims from investors over faulty mortgages that were sold with incorrect data on home values or income.
Bank of America's acquisition of Countrywide was initially praised by lawmakers because the lender was seen as stepping in to support the mortgage industry. However, instead of boosting Bank of America's mortgage business, the purchase has drawn a drumbeat of regulatory fines, lawsuits and losses.
Fannie Mae and Freddie Mac buy mortgages from banks and package them together as bonds that they sell to investors. During the housing boom, banks sold loans to the two agencies that should never have been issued, because the banks failed to carry out the necessary diligence before making them. For example, banks sometimes failed to adequately check whether customers had stated their income correctly.
The government agencies, which were effectively nationalized in 2008 when they nearly collapsed under the weight of their mortgage losses, have been demanding that banks buy back some of the mortgage-backed investments.
In September, Bank of America also agreed to pay $2.43 billion to settle a class-action lawsuit related to its takeover of Merrill Lynch, another of Lewis's acquisitions during the financial crisis. That lawsuit was filed on behalf of investors who bought or held Bank of America stock when the company announced its plans to buy Merrill Lynch in a $20 billion deal as the banking industry and federal regulators struggled to contain fallout from the financial crisis in the fall of 2008.
The Charlotte, North Carolina-based bank said it would pay for the Fannie Mae settlement in part from existing reserves, though it would record a $2.7 billion hit to its fourth quarter earnings for 2012 from the settlement and the loan servicing fees, as well as taking a charge of $2.5 billion for the settlement over wrongful foreclosure practices.
Despite the charges, Bank of America still expects its earnings for the period to be "modestly positive." Bank of America is scheduled to report earnings Jan. 17.
Bank of America fell 8 cents to $12.01 Monday, after opening slightly higher. The stock more than doubled in 2012, making it the best performer in the 30-member Dow Jones industrial average. It's up 3.6 percent this year.
"Fannie Mae has diligently pursued repurchases on loans that did not meet our standards at the time of origination, and we are pleased to have reached an appropriate agreement to collect on these repurchase requests," Bradley Lerman, Fannie Mae executive vice president and general counsel, said in a statement.

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Could gang-rape protests mark beginning of an age of activism for India?

The large-scale protests triggered by the gang rape of a 23-year-old student in New Delhi has renewed debate over the rise of a new urban middle-class activism in India.
The strength and longevity of those protests, sustained as they were over several weeks and undeterred by police water cannons and teargas, took many by surprise. Student activism has generally been on the decline since the early 1990s, when the economy was liberalized, and the Indian urban middle-class is notorious for its political apathy.
But the recent protests, coming on top of 2011’s massive anticorruption movement led by Gandhian activist Anna Hazare, has some commentators heralding a new social mobilization – one that is fueled by frustration with what is seen as an increasingly corrupt and out-of-touch political system, energized by a new generation of youth, and aided by both old and new media.
“A generation has come of age that has [previously] been linked to a class and an ethos that was supremely indifferent to anything but their own self-interest – consumption and making money,” says Aditya Nigam, a political scientist and senior fellow at the Centre for the Study of Developing Societies in New Delhi. He points out that this generation grew up in the 1990s, a period of economic liberalization that saw rising prosperity but also increased corruption – there have been several high-profile scams in recent years – that was perpetrated with impunity.
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Demographics are certainly a factor in the recent protests. More Indians are entering the middle class – anywhere between 70 million and 150 million, depending on the definition of middle class – and more now live in the cities.
They form the spine of support for the Aam Aadmi Party, launched in October by Hazare’s former deputy Arvind Kejriwal. This segment is believed to have contributed to the recent reelection of controversial right-wing leader Narendra Modi, who courted what he called the “neo-middle-class” in the state of Gujarat.
There is a “new force on the Indian political landscape,” wrote a commentator in a leading business daily. “The middle class has sensed that its period of political irrelevance is over, with its numbers growing at a phenomenal pace.”
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India’s population is also disproportionately young, a feature that is associated with both increased productivity and social unrest. The median age in India is now 25, while the median age of a national politician is closer to 60 – a generational and cultural gap that has been on display in the past few weeks as political and civic leaders have blamed sexual violence on everything from English education to short skirts.
The generational shift is evident to Arjun Bali, a 42-year-old filmmaker who turned up with his toddler for a women’s rights protest in an upscale neighborhood in Mumbai on New Year’s Day. Mr. Bali said he was no stranger to protests – he had attended many as a college student. “The generation born in the 1980s, they don’t know have the baggage or the fears” from, say, the Emergency, he says, referring to the period in the early 1970s when then Prime Minister Indira Gandhi suspended elections and suppressed civil liberties.
Another young protester, Pallavi Srivastava, personifies that difference. Like generations of middle-class Indians before her, the urban planner left the country to study in the United States in 2003, but unlike her predecessors, she chose to return after eight years because of improved economic opportunities and the chance to be a part of a society in the making. “Things are in flux here,” she says, holding a placard that reads, ‘I pledge to use public transport.’ “There’s a lot of energy, but what this nation is going to be, nobody knows yet.”
ROLE OF THE MEDIA
The protest she attended was organized through Facebook. Social media has been instrumental in mobilizing young outrage – Internet penetration is relatively low in India, but the bulk of the 135 million people online are under the age of 35. Still, the old media, especially English television news channels, have also played their part with wall-to-wall coverage: By contrast, a rally Tuesday of more than 1,000 slum-dwellers protesting the demolition of their homes as well as corruption in a government housing plan barely got any coverage.
In earlier years, Indian television largely presented the public as a mob, says Arvind Rajgopal, a media studies professor at New York University. “There was always this fear of law and order being violated but now the public is assumed to be on the side of the good,” he says.
“There is a simmering sense of injustice that the media is building on,” he adds, empowering "the sense that moral authority lies outside the political institutions.”
India has a history of effective social movements – the anti-Narmada dam movement of the 1980s, for example – but these have been mass movements dominated by the left.
The new activism isn’t allied to any political party, and whether it will be sustainable or effective without a unifying agenda or without reaching across caste and class barriers remains unclear.
Some have already criticized the recent protests for being incoherent and even displaying an authoritarian impulse – a charge also levied at the Anna Hazare movement.
“Their demands are very basic and undemocratic, they want immediate justice and have no understanding of democratic processes and constitutional requirements,” says Flavia Agnes, a lawyer and veteran women’s right activist with the group Majlis.
Those demands have included punishing rape with castration or the death penalty and fast track courts to try those cases – measures that women’s groups don’t necessarily support. Death penalties may deter reporting of the crime – most rapes go unreported, it is believed – and may cause the rapist to murder the victim, say many women’s activists. Ms. Agnes also opposes fast track courts, which she says is more likely to lead to “fast track acquittals.”
Only about 25 percent of rape cases resulted in convictions in 2010, and conviction rates were less than 10 percent in some states last year.
“What is needed are nonsensational, small measures,” says Agnes. “Getting women better access to the police station, getting the medical reports done sensitively.”
POTENTIAL TO BE TRANSFORMATIVE
Still, observers like Nigam believe the new movement has the potential to be transformative, even if it is temporary. Unlike the upper-caste youth protests of the late 1980s against affirmative action for lower castes in colleges, the present movement is not about “defending privilege” so much as “more general issues of governance and what is generally perceived to be a collapse of the rule of law and mechanisms of justice,” he notes. “The middle class is no homogenous and unchanging entity.”
Even Agnes believes that the protests are largely positive. Her group’s support program for rape victims has gotten new attention and a senior police officer recently called her for ideas to encourage women to walk into his police stations.
Meanwhile, one state party has pledged not to field candidates with rape charges – a third of national legislators have criminal charges against them, including two with rape charges.
“For some reason, this rape has caught the national imagination,” Agnes says. “If that means the government and police cannot ignore this issue anymore, that’s a good thing.

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Malala Yousafzai, Pakistani teen shot by Taliban, is released from UK hospital

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Malala Yousafzai, the Pakistani teen who was shot in the head by the Taliban in the fall for promoting girls’ education, was released from a British hospital yesterday.
Malala, who will spend the next few weeks with her family in the UK before returning to the hospital for more surgery, quickly became an international symbol of resistance to the Taliban’s efforts to deny women and girls education after the attack last October.
"Malala is a strong young woman and has worked hard with the people caring for her to make excellent progress in her recovery," said Dave Rosser, Queen Elizabeth Hospital's medical director.
15-year-old Malala was targeted in the close-range shooting – which took place on a school bus – because of a blog she wrote for the BBC in Urdu. Her blog, which was nominated for several awards, was written under a pen name, and was highly critical of the Taliban's ban on education for girls in the Swat valley.
According to The Christian Science Monitor, Malala blogged “about her views and about the atrocities of Islamic militias controlling the valley from 2007-2009.” The Taliban’s reign supposedly came to an end there after an Army operation in 2009, reports Agence France-Presse.
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In interviews with Pakistani journalist Owais Tohid, Malala described her blog and motivation:
"I wanted to scream, shout and tell the whole world what we were going through. But it was not possible. The Taliban would have killed me, my father, my whole family. I would have died without leaving any mark. So I chose to write with a different name. And it worked, as my valley has been freed….
"I want to change the political system so there is social justice and equality and change in the status of girls and women. I plan to set up my own academy for girls.…”
The Taliban have bombed more than 1,500 schools since 2008 in the Pakistani province where Malala comes from, according to a separate Monitor story. Under 80 percent of children between the ages of 6 and 16 are enrolled in school across Pakistan, and among those, less than half are girls. Malala’s writing documents the Taliban’s control of the Swat valley, as schools were burned and extreme rules were created and enforced.
"Saturday January 3, 2009: Today our headmistress announced that girls should stop wearing uniform because of Taliban. Come to schools in casual wear. In our class only three out of 27 attended the school. My three friends have quit school because of Taliban threats."
"January 5, 2009: Today our teacher told us not to wear colorful dress that might make Taliban angry."
"Tuesday March 2009: On our way to school, my friend asked me to cover my head properly, otherwise Taliban will punish us."
Malala’s ordeal has inspired people around the world to take action on supporting girls’ education, and her survival has made her a hero to many.
Reuters reports that more than 250,000 people have signed a petition calling for her to receive the Nobel Peace Prize, while the United Nations released a plan named after the young woman to motivate girls around the world to enroll in school by the end of 2015. The UN also created a “Malala day” in November to support education for girls, reports the AFP. The Pakistani government even renamed her former school in her honor, reports the Telegraph. The angry reaction to that move, however, highlighted the ongoing fears surrounding the Taliban, as many students worried that any reference to Malala would create additional targets for Taliban violence.
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A current student told the Telegraph, "The militants didn't spare Malala, then how can they be expected to spare a college named after her…. The government should refrain from politicizing our education. We want to pursue our studies in peaceful environments and the new name of our college can bring it into spotlight and Taliban could hit it.”
According to a separate Telegraph report, Malala has said she would like to return home to Pakistan once she has fully recovered. Officials say, however, that she will remain a target of the Taliban “as long as terrorism threatens the country.”
Malala’s release coincides with the appointment of her father, Ziauddin Yousafzai, as education attaché for the Pakistani consulate in Birmingham, reports Pakistani news outlet The News. “It is widely believed that it was Ziauddin’s own experience of campaigning for education and human rights that originally inspired Malala as her parents encouraged her by every means to be confident and vocal,” The News reports.
Malala was flown to England after an initial surgery removed the bullet – which “grazed” her brain upon entry – in Pakistan last fall. Her next procedure will take place in late January or early February and will focus on the reconstruction of her skull, reports Reuters.

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What does Google want with North Korea?

Google chairman Eric Schmidt plans to visit North Korea as early as next week in what analysts see as part of North Korean leader Kim Jong-un’s drive to give an appearance of closing the vast digital divide between his isolated country and the rest of the world.
Although Mr. Schmidt is not expected to reach any real deal with the North, his presence there seems to show a desire in North Korea to improve the technological capabilities of people almost totally shut off from the Internet. Schmidt, for his part, has often noted the power of the Internet – and Google – to lift people out of poverty and political oppression.
“In the last few years, Google has met with NGOs that do work with North Korea,” observes David Kang, director of the East Asian Studies Center at the University of Southern California. “This is not a sudden or impulsive visit.”
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Schmidt will be traveling with two figures who have been influential in recent years in developing contacts with North Korea. One of them, Bill Richardson, the former New Mexico governor who served as UN ambassador during the presidency of Bill Clinton, has advocated rapprochement with the North during several visits to Pyongyang.
Key in arranging Schmidt’s visit is assumed to be Richardson’s longtime adviser on North Korea, Tony Namkung, who has visited North Korea more than 40 times during the past 25 years.
Mr. Namkung, born to Korean parents in China and educated in the US, was instrumental in Mr. Clinton’s visit to North Korea in August 2009. That resulted in the release of the journalists Laura Ling and Euna Lee, who had been held for 140 days after their arrest while filming along the North’s Tumen River border with China. He also advised the Associated Press on opening a bureau in Pyongyang.
Schmidt's mission raised the possibility that he might be the type of high-level visitor to whom North Korea might be willing to release another American now in prison in Pyongyang. Kenneth Bae, a human rights activist from Oregon, was charged with "hostile acts" after entering North Korea legally from China as leader of a tour group to the Rason economic zone in the northeast. A devout Christian, he was believed to have been carrying religious material -- strictly forbidden in the North.
There was no doubt, though, that the overall rationale for the visit would be political, diplomatic and economic -- with a view to relations with the US.
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“I don't know for sure,” says Nick Eberstadt of the American Enterprise Institute, “but it certainly looks as if Google is the ‘dangle’ for the Richardson/Namkung mission to Pyongyang.” Mr. Eberstadt, who has written extensively on North Korea, adds, “What Schmidt/Google stand to achieve is another question altogether, of course.”
Just what’s in the visit for Schmidt is especially puzzling considering that no North Korean can use Google's search engine unless working for a high-level government agency with a need for vital facts and figures.
In addition, Tom Coyner, a longtime business consultant in Seoul, raises another concern: "What could be the long-term implications for Internet freedom of information as central governments become stronger in denying individual rights – including to free access to information."
Victor Cha, who served as director of Asian affairs on the National Security Council during the presidency of George W. Bush, observes that Google withdrew operations from China to Hong Kong in 2010 as a result of Chinese Internet censorship. The problem, he says, “would likely be exponentially worse in North Korea.”
Mr. Cha, in questions and answers posted by the Washington-based Center for Strategic and International Studies, where he serves as a senior adviser, said that “only about 4,000 North Koreans have access to the Web and under very tightly monitored conditions.”
Kim Jong-un, however, is believed to have played a key role in persuading his father, Kim Jong-il, to accept the inevitability of communication by mobile telephones several years ago. More than 1 million North Koreans now communicate on cellphones through a system set up by Orascom, the Egyptian telecommunications giant, that strictly blocks calls in and out of North Korea.
Thus David Straub, a former senior US diplomat in Seoul, believes that Schmidt may want to "look at what Orascom has done with cell phones in North Korea and thus that Google might be able to do something with the Internet there."
Kim Jong-un “clearly has a penchant for the modern accoutrements of life,” says Mr. Cha. “If Google is the first small step in piercing the information bubble in Pyongyang, it could be a very interesting development.”
Any attempt to formalize a deal between Schmidt and a North Korean state company, however, would run afoul of UN sanctions on doing business with the North. State Department spokeswoman Victoria Nuland says “we don't think the timing of this is particularly helpful,” especially in view of North Korea’s latest launch of a long-range rocket last month, in violation of sanctions.
Still, the State Department can do nothing to block the trip. “They are private citizens,” she says. “They are making their own decision."

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U.S. to Pass Saudi Arabia in Energy Production, IEA Says: Huge Foreign Policy, Economic Implications

A new report by the International Energy Association says the U.S. will become the world's largest oil producer by 2017, overtaking current leaders Saudi Arabia and Russia. U.S. energy policies initiated by the George W. Bush administration and implemented by President Barack Obama have moved the U.S. toward energy independence and away from Middle East energy sources. U.S. oil production has risen rapidly since 2008 and oil imports are at their lowest level in two decades.
"North America is at the forefront of a sweeping transformation in oil and gas production that will affect all regions of the world, yet the potential also exists for a similarly transformative shift in global energy efficiency," says IEA Executive Director Marian von der Hoeven in a statement.
The IEA also says the U.S. could become self-sufficient in energy by 2035 and a net exporter of natural gas by 2020. The Obama administration's push to develop and grow domestic natural gas capabilities has led to a natural gas drilling boom. Production has jumped 15% in four years but the glut in natural gas supplies have also caused the price of natural gas to plummet. According to the White House, the U.S. holds a 100-year supply of natural gas and domestic production is at an all-time high. The Daily Ticker's Aaron Task and Henry Blodget both agree that the explosion in domestic energy production could alter the geopolitical landscape and U.S. labor market.
"The foreign policy implications are maybe even bigger than the economic ones," says Task.
"For 50 years or more we have been just addicted and coupled to a region of the world where so many people hate us," Blodget adds.
Oil and petroleum imports have fallen an average of more than 1.5 million barrels per day and domestic crude oil production has increased by an average of more than 720,000 barrels per day since 2008. As domestic drilling has expanded so has the number of oil and gas production jobs. According to the Federal Reserve Bank of St. Louis, job growth in these industries has risen 25% since January 2010.
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President Obama says natural gas production could support 600,000 jobs by the end of the decade. Most of these positions are highly desirable from a financial standpoint. Drilling and support jobs pay about $34.50 an hour, 50% more than the national average according to The New York Times.
Cheap natural gas and the administration's eagerness to expand U.S. energy production has shifted resources away from green energy technologies like solar and wind.
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The method of extracting natural gas from shale rock formations has come under intense scrutiny. Many local cities and communities have already banned the practice. Hydraulic fracturing, more commonly referred to as hydrofracking or fracking, involves injecting large amounts of sand, water and chemicals into the ground at high pressures. Critics of fracking say this process produces millions of gallons of wastewater that contain highly corrosive salts and carcinogens. These radioactive elements could pollute water sources such as rivers and underground aquifers and pose serious dangers to the environment and individuals.

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Eurozone back in recession in Q3

LONDON (AP) -- The 17-country eurozone has bowed to the inevitable and fallen back into recession for the first time in three years as a sprawling debt crisis took its toll on the region's stronger economies.
And with surveys pointing to increasingly depressed conditions across the eurozone at a time of high unemployment in many countries, there are fears that the recession will deepen, and make the debt crisis even more difficult to handle.
Official figures Thursday showed that the eurozone contracted by 0.1 percent in the July to September period from the quarter before as economies including Germany and the Netherlands suffer from falling demand.
The decline reported by Eurostat, the EU's statistics office, was in line with market expectations and follows on from the 0.2 percent fall recorded in the second quarter. As a result, the eurozone is officially in recession, commonly defined as two straight quarters of falling output.
"We can dispense with the euphemisms and equivocation, and openly proclaim that the euro area economy is indeed in technical recession," said James Ashley, senior European economist at RBC Capital Markets.
Because of the eurozone's grueling three-year debt crisis, the region has the focus of concern for the world economy. The eurozone's economy is worth around €9.5 trillion, or $12.1 trillion, which puts it on a par with the U.S. economy. The region, with its 332 million population, is the U.S.'s largest export customer, and any fall-off in demand will hit order books.
While the U.S has managed to bounce back from its own savage recession in 2008-09, albeit inconsistently, and China continues to post still-strong growth, Europe's economies have been on a downward spiral — and there is little sign of any improvement in the near-term.
The eurozone has managed to avoid returning to recession for the first time since the financial crisis following the collapse of U.S. investment bank Lehman Brothers, mainly thanks to the strength of its largest single economy, Germany.
But even that country is struggling now as confidence wanes and exports drain in light of the debt problems afflicting large chunks of the eurozone.
Germany's economy grew a muted 0.2 percent in the third quarter, down from a 0.3 percent increase in the previous quarter. Over the past year, Germany's annual growth rate has more than halved to 0.9 percent from 1.9 percent.
Perhaps the most dramatic decline among the eurozone's members was seen in the Netherlands, whose economy shrank 1.1 percent on the previous quarter.
Five eurozone countries are in recession — Greece, Spain, Italy, Portugal and Cyprus. Those five are also at the center of Europe's debt crisis and are imposing austerity measures, such as cuts to pensions and increases to taxes, in an attempt to stay afloat.
As well as hitting workers' incomes and living standards, these measures have also led to a decline in economic output and a sharp increase in unemployment.
Spain and Greece have unemployment rates of over 25 percent. Their young people are faring even worse with every other person out of work. As well as being a cost to governments who have to pay out more for benefits, it carries a huge social and human cost.
Protests across Europe on Wednesday highlighted the scale of discontent and with economic surveys pointing to the downturn getting worse, the voices of anger may well get louder still.
"The likelihood is that this anger will continue to grow unless European leaders and policymakers start to act as if they have a clue as to how to resolve the crisis starting to unravel before their eyes," said Michael Hewson, markets analyst at CMC Markets.
The wider 27-nation EU, which includes non-euro countries, avoided the same fate. It saw output rise 0.1 percent during the quarter, largely on the back of an Olympics-related boost in Britain.
The EU's output as a whole is greater than the U.S. It is also a major source of sales for the world's leading companies. Forty percent of McDonald's global revenue comes from Europe - more than it generates in the U.S. General Motors, meanwhile, sold 1.7 million vehicles in Europe last year, a fifth of its worldwide sales.

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Are We Regulating Ourselves Back Into Recession?

"Let us put an end to self-inflicted wounds," President Gerald Ford told Congress in 1975. "And let us remember that our national unity is a most priceless asset." While Ford was talking about the scars from the Vietnam War, his words seem relevant today. Our nation grapples with not one divisive issue, but a basket of them, each pulling and undermining our already battered confidence, while testing our resolve and straining the limits of logic.
What are we doing to ourselves, America?
In just two short weeks, instead of closing the books after a bruising election, we've not only kept the rancor alive but have doubled down on it. In this morning's papers alone, I easily counted a dozen different areas of discourse before growing tired of it all. As my colleague Mike Santoli and I discuss in the attached video, with so much going on — and with so much wrong — is it any wonder stocks are moving in reverse at a fast clip since the second quarter correction.
"It feels like a particularly heavy round of one of these anti-business — or at least calling business to task — moments," Santoli says in the face of my long and growing list of negatives, which include higher taxes, the fiscal cliff, the Benghazi aftermath, turnover at the CIA, federal probes of FedEx and UPS over mail-order medicine, BP's record fine, further investigation into banks for money laundering, as well as another round of mandatory stress testing.
Before you go off and call me some kind of zero-regulation advocate or pessimist, all I am saying is that it strikes me as slightly counterproductive to be building up and and tearing down the banks at the same time. And Santoli seems to agree, saying that it is alarming to see how much banks have to spend on compliance, legal and regulatory issues, calling it a "massive weight."
As much as we had recently been gaining some degree of comfort over the economy, housing and jobs, it suddenly seems as if we're doing everything wrong.
''Is it ever going to be a good time to cinch up tax rates?" Santoli questions. Obviously the answer is no, and yet the markets cling to the belief that our elected officials will break ranks and reach some sort of last-minute grand bargain solution.
Maybe I am just being cynical, but I am of the mind that no major changes will emerge without first going through a period of calamity. Santoli is a smidge more optimistic, however, clinging to a ''residual hope'' that the President has a ''Nixon-to-China moment" and that his second term is not about fighting individual, ideological fight. "That is the distant hope you have to hold," he says.
How about you? Have you given up hope in the face of so much negativity?

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Nintendo's TVii a replacement for the remote

LOS ANGELES (AP) — Nintendo is switching on a television service that transforms the tablet-like controller for its new Wii U game console into a remote that changes the channel on your TV and puts programs from the Internet just a few finger taps away.
The TVii service will debut in the U.S. and Canada on Thursday, the company said. That's a delay from previous plans to have the service available when the game console went on sale in North America on Nov. 18. The TVii service launched in Japan on Dec. 8.
The aim of TVii is to bring order to the hundreds of channels on regular TV and the thousands of shows and movies available through apps from Netflix Inc., Amazon.com Inc., Hulu Plus and Google Inc.'s YouTube.
It's the first time a video game console maker has integrated live TV controls in a device and could be the extra incentive needed for on-the-fence shoppers ahead of the Christmas holiday.
Nintendo Co.'s Wii U console has a unique controller — the GamePad — which is covered with joysticks and buttons and boasts a front-facing camera and 6.2-inch touch screen. The GamePad also houses an infrared emitter that talks directly to your TV or set-top box.
TVii scans what's available and offers you the option of watching a show, sports event or movie on live TV or through apps that connect to the Internet. By the end of March, Nintendo says that it will integrate TVii with TiVo so that it will be possible to program a TiVo digital video recorder through the game console as well.
"This is a way to get every member of the household to pick up the GamePad hopefully every day," said Reggie Fils-Aime, president of Nintendo of America. "Hopefully this leads to a significant change in how consumers view and interact with their TV."
For years, home entertainment enthusiasts have had to grapple with a bunch of different controllers to work their televisions, set-top boxes, DVRs, disc players and game consoles. TVii has the potential to dispense with some of that hassle.
If you search for "The Walking Dead," for example, TVii will show you the next time it's on AMC and give you the option of buying previous episodes from Amazon or watching them on Netflix. If it's on now, you can change the channel from the GamePad. Users will be able to watch only channels they already get via antenna or through their TV provider, but search results will include all the options available, which could entice some people to upgrade their channel packages. Netflix and Hulu Plus require separate subscriptions that cost $8 a month each. TVii itself is free.
TVii also has a traditional channel guide and will recommend shows you might like based on favorite shows, networks and movies that you enter. Different users can have different profiles, and parental controls are included.
Nintendo hopes the service boosts sales of its console. About 425,000 Wii U units were sold in the first seven days on sale. That's faster than the rollout of Microsoft Corp.'s Xbox 360 and Sony Corp.'s PlayStation 3 when they debuted in November 2005 and November 2006 respectively, although initial sales are often constrained by supply, not demand.
Analyst Michael Pachter of Wedbush Securities said the TVii service puts Nintendo a step ahead of its competitors, but he expects Microsoft to close the gap next year with a next-generation Xbox that includes a TV tuner. Microsoft hasn't announced such a device.
"It gives them a head start. I think they should be congratulated on making this a truly multimedia device," Pachter said. "I don't think that advantage is going to last very long."
Nintendo has also added social networking features to its service. A team of curators will watch the top 100 shows on live TV and post details and a screenshot of important events, such as "a great shot in a basketball game or an unexpected twist in 'Mad Men,'" according to Zach Fountain, director of network business for Nintendo of America.
Users can then comment on these moments and have those posts show up on Nintendo's Miiverse network, as well as Facebook and Twitter if they choose. Users that express emotions could wind up with a sad or happy-looking Mii avatar.
Live sporting events such as pro or college football will also be accompanied by scores and play-by-play summaries on the GamePad's screen.
One problem with the service could be the GamePad's battery life. Nintendo says the controller can be used three to five hours depending on activity and screen brightness before it needs to be charged. But TV ratings agency The Nielsen Co. says the average American watches nearly five hours of TV per day. Heavy users may need to keep the controller plugged in to a wall socket, or buy a $25 battery pack that its maker, Nyko, promises will double the battery life.

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