NEW YORK | Thu Sep 27, 2012 7:58am EDT

NEW YORK (Reuters) - A seven-year old child is torn from a secure and happy life when the Khmer Rouge come to power in Cambodia in 1975 and send her privileged family into the misery of hard labor as the new regime destroys the established order.

"In the Shadow of the Banyan" is the first novel of Vaddey Ratner, 41. While the book is powerful as told through the eyes of seven-year-old Raami, Ratner's own story is more so.

Only five when the Khmer Rouge came to power, the author endured four years of forced labor and starvation before she and her mother were able to flee the country. Arriving in the United States by a tortuous path and unable to speak English, she ultimately graduated from Cornell University and only years later returned to Cambodia.

Ratner now resides in Potomac, Maryland, with her husband and daughter and talked to Reuters about the book and her experiences during a brutal period of Cambodian history.

Q: How much of your story is autobiographical?

A: "The overall narrative follows my family experience, the move from the city, the uprooting, the loss of loved ones, the starvation. I make my father a poet but in real life he was a pilot. The story is a closed narrative and the characters have to move the story forward. I had to collapse some characters into one, the same with villages and towns. I created a lot of fictional villages and towns and used the memories of where we stayed."

Q: Do you want vengeance? Do you feel any bitterness?

A: "I don't want vengeance and I don't feel any bitterness. If I feel anything, I mourn for those I lost and the act of remembering requires so much energy, I feel that is all I have to give. I don't have the energy for anger or vengeance, nor do I want to have it."

Q: Your father was a pilot and member of the Cambodian royal family. Did you reveal who your father was to the Khmer Rouge as the child does in the book?

A: "Yes, I revealed who he was. I said his name. I revealed who he was."

Q: Do you feel guilty?

A: "What I feel is haunted and I will never be free of what happened. I will always reflect on what if I had not said his name."

Q: Mae and Pok, the two peasants who took in the book's main protaganists as family, were very sympathetic characters. Were they based on real people? Did you ever try to find them?

A: "Yes, they were real people. They were the easiest to capture as I felt they just translated into English. I did not need to collapse any other people into them to make them in the book. They were as I remember them as a child. But I would not go back to those various villages. Even now, my heart goes aflutter at the thought of going back to those various villages. I would only be confronted with those various losses. What was redemptive about writing this book was I found something beyond those losses. For me to go back, I fear that."

Q: Is your mother still alive? How does she feel about her life?

A: "My mother is still alive. She is very grateful and fiercely guards the few things she feels she has. The peace and solitude she has now. We have so little left of our family, what she was able to build was out of sheer determination."

Q: How much do you tell your daughter? How old is she?

A: "My daughter is 12. My husband and I have an understanding with each other, maybe an extension of how my father spoke to me, when we are asked something we tell her the truth as much as she wants to know."

Q: Was writing the book an act of personal therapy?

A: "It was a strange kind of therapy. At the end of writing it, I realized the depth of redemption I feel. I had felt apprehension that I would have to relive a lot of the ordeal over again. I did not know for sure whether I would come out of it. But I also felt this was the story I had to write.

Q: What was the one personal anecdote in the book that was hardest to write? Why?

"Gosh, every single one of them. Each one dealt into a different dimension of loss. With the loss of my father, it is founded on loss that is unanswerable to this day. I don't know what happened to him. With my sister I felt even the certainty I felt was so absurd, that a disease such as malaria could have been prevented. I chose all of them (the anecdotes) to find some understanding. They did not appear at random. I struggle with them still."

(Reporting By Nick Olivari; editing by Patricia Reaney and Paul Casciato)

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A man is seen behind the entrance door of the offices of the Financial Services Authority (FSA) in Canary Wharf, London, November 19, 2010.

LONDON | Fri Sep 28, 2012 12:08am EDT

LONDON (Reuters) - Britain's top financial watchdog, in a much-awaited reform of benchmark interest rates that have been plagued by scandal, outlined a 10-point plan to fix Libor but stopped short of scrapping the rates.

Martin Wheatley, head of the Financial Services Authority, acknowledged problems with London interbank offered rates, but said that Libor is so deeply entrenched in the financial system that it cannot be easily replaced. There are no better alternatives now, and any transition to a new benchmark would be difficult, he said.

"The system is broken and needs a complete overhaul," Wheatley said in a speech made available in advance.

Longer term, it makes sense for market participants to examine whether there are other possible benchmark rates, Wheatley said.

The plan marks regulators' first effort to fix the tarnished benchmark, but rulemakers have to thread the needle carefully.

On the one hand, they must restore confidence in the financial system, but on the other hand, they cannot take steps that are too radical without creating big trouble with existing transactions that use the benchmark.

More than $300 trillion of contracts and loans — from U.S. mortgages to Japanese interest-rate swaps - refer to Libor.

Dramatic changes to the rates would have resulted in a "huge amount of legacy contracts to resolve, introducing a lot of disputes," said Darrell Duffie, a derivatives expert and finance professor at Stanford University.

CHARGES OF MANIPULATION

Multiple banks have been accused of trying to manipulate Libor, a series of rates set daily in London. Barclays in June agreed to pay $453 million to U.S. and British authorities to settle allegations that it tried to move Libor to help its trading positions.

Wheatley's program for reform includes auditing banks that contribute data used to calculate the rates, to ensure they are not submitting false rates to benefit trading positions.

Libor, which is meant to reflect the rates at which banks borrow from one another, will be based on actual borrowing transactions, Wheatley said. Previously, banks could estimate where they think they would borrow, which left room for manipulation.

Transactions will be recorded with regular external audits of banks that participate. Bank employees making Libor submissions will have to be approved by the FSA. Wheatley is looking for authorization to criminally sanction those who attempt to manipulate the rate.

Reuters parent company Thomson Reuters collects information from banks, and uses it to calculate Libor rates for 10 currencies and 15 maturities according to specifications drawn up by the British Bankers Association.

SHRINKING THE NUMBER OF RATES

Rates that are infrequently referenced in trades, such as Australian and Canadian dollar rates, will be phased out, Wheatley said. Maturities that are infrequently used, such as four, five, seven, eight, 10 and 11 months, will also be ended.

The reductions will shrink the current number of Libor rates set daily to 20 from 150. Rates that are rarely traded are easier to manipulate.

More banks will be required to submit their borrowing rates, Wheatley said.

"Libor requires collective responsibility if it is to work effectively," Wheatley said.

As expected, the British Bankers' Association, which had overseen the rate, will be replaced with a new, as-yet unidentified oversight panel.

"The British Bankers' Association clearly failed to properly oversee the Libor setting process and should take no further role in the administration and governance of Libor," Wheatley said.

The BBA said it worked closely with Wheatley on his review and it has strongly stated the need for greater regulatory oversight of Libor and tougher sanctions against manipulation.

A major problem that remains is that in financial crises, such as the one in 2008, banks cease lending to one another, effectively causing the evaporation of data needed to calculate Libor.

"There isn't enough transaction data during a financial crisis," said Rosa Abrantes-Metz, principal at Global Economics Group and adjunct professor at New York University's Stern School of Business.

The reforms come amid more crackdowns on the banks that submitted rates used to calculate Libor. Royal Bank of Scotland is expected to be next to settle Libor charges, with other banks to follow.

Britain's government commissioned Wheatley to report on reforming Libor and is expected to back the findings in full. Legislative changes will be inserted into a financial services bill now being approved by parliament.

(Additional reporting by Rick Rothacker in Charlotte, North Carolina, and Carrick Mollenkamp and Jennifer Saba in New York; Writing by Dan Wilchins; Editing by Edmund Klamann)

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Thu Sep 27, 2012 6:00am EDT

n">(Reuters) - Affluent Americans feel more in control of their finances and say they are less conservative with their investments than they were a year ago, according to a bi-annual survey released on Thursday by Merrill Lynch Global Wealth Management.

Wealthier investors recognize there is likely to be more volatility ahead thanks to the November U.S. elections, the looming fiscal cliff and continued uncertainty in the European Union, but they feel confident when it comes to their personal finances, said Ted Durkin, head of the Merrill Lynch Affluent Client Segment.

That uptick of confidence came in part from changes affluent investors have made in their financial lives.

Those participating in the August poll of 1,000 people with investable assets of over $250,000 said they are living more within their means, making more joint investment decisions with their spouses and setting tangible goals for their future.

"People have done a great job of controlling what they can control," Durkin said.

Thirty percent of wealthy investors described their investing approach as conservative this year - down from 36 percent in 2011 and 50 percent in 2010.

That shift may be, in part, because investors have become used to volatility, not because they see tangible improvements in the economy. Almost half of the respondents said they see economic uncertainty as a "new normal" that will be here for the foreseeable future.

Younger affluent investors are more confident. Nearly two-thirds of those between 18 and 34 years of age said they think their financial situation will improve next year, citing an ability to take advantage of investment opportunities.

Tony Montanari, a financial adviser who manages $26 million in client assets for Charlotte, North Carolina-based ACM Wealth Management, agreed that the wealthy are getting more aggressive in their investments. But, he said, they might be disappointed.

"People should have been the most aggressive and the least conservative four years ago when the market bottomed," he said.

Heather Walsh, a financial adviser with Merrill based in Burlington, Massachusetts, said she's stressing to her clients that even though the markets have improved, it's critical to stay focused on budgeting and saving. That, in turn, can make them less reliant on unrealistic market returns, said Walsh, whose team manages $500 million in client assets.

That message may resonate with wealthier investors. Despite increased confidence in their financial situation, four out of five of those polled in Merrill's survey said they were concerned about accomplishing certain financial goals, like having enough money to sustain their lifestyle in retirement and buying their dream home.

And only 38 percent of parents paid or plan to pay the full cost of their children's college education, down from nearly 48 percent a year ago.

(Reporting By Jennifer Hoyt Cummings; Editing by Jennifer Merritt; Twitter @jenhoytcummings)

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Worker Derrick Williams loads material into a cutting machine at a Wrap-Tite manufacturing facility in Solon, Ohio July 13, 2012.

WASHINGTON | Thu Sep 27, 2012 2:29pm EDT

WASHINGTON (Reuters) - Orders for long-lasting U.S. manufactured goods fell sharply in August, suggesting the main engine of the economic recovery was stalling even as a report showing a drop in new claims for jobless aid offered a hopeful sign on the labor market.

While weak demand for aircraft and automobiles accounted for much of the drop in orders last month, the Commerce Department report on Thursday underscored the damage being inflicted by the uncertainty over U.S. fiscal policy, Europe's debt troubles and a slowdown in China.

"Given the uncertainty associated with the fiscal cliff, there is certainly a wait-and-see attitude which is impacting a lot of the data," said Omair Sharif, an economist at RBS in Stamford, Connecticut.

The so-called fiscal cliff refers to the $500 billion or so in expiring tax cuts and government spending reductions set to take hold in 2013 if the U.S. Congress fails to agree on an orderly way to reduce a huge budget deficit.

The Commerce Department said durable goods orders dived 13.2 percent, the largest drop since January 2009, when the economy was in the throes of a recession. The decline primarily reflected weak demand for aircraft and automobiles, and transportation orders fell 34.9 percent. Plane maker Boeing reported only one aircraft order last month versus 260 in July.

But orders were down for a wide range of goods, and even excluding transportation, orders fell 1.6 percent, dropping for a third consecutive month. The fall was in sync with other data indicating a marked cooling in the production side of the economy.

Economists polled by Reuters had expected orders for durable goods -- items from toasters to aircraft that are meant to last at least three years -- to fall 5 percent, with non-transportation orders rising marginally.

Unfilled orders dropped by the most since December 2009, pointing to weak factory activity in the months ahead.

"The thesis that manufacturing activity is likely to struggle for the remainder of the year continues to build," said John Ryding, chief economist at RDQ Economics in New York.

Underscoring the economy's weakness, the government revised its measure of second-quarter growth to just a 1.3 percent annual pace from 1.7 percent, largely to reflect the impact a drought in the Midwest had on farm inventories.

Inventories lopped off almost half a percentage point from GDP growth in the last quarter. However, economists expected this to reverse in the third quarter.

Durable goods inventories set a fresh record high in August, prompting economists at Macroeconomic Advisers to raise their third-quarter GDP growth estimate by one-tenth of a percentage point to 1.8 percent.

There was also bad news on the housing market, which has been one of the economy's relative bright spots. Contracts to buy previously owned homes fell in August, providing a counterpoint to other recent data that have shown activity in the housing market picking up, a separate report showed.

However, not all the news on Thursday was downbeat.

The Labor Department showed the number of Americans filing new claims for jobless benefits fell 26,000 last week to a two-month low of 359,000. The four-week moving average for new claims, a better measure of labor market trends fell for the first time after five weeks of increases.

Investors on Wall Street shrugged off the mixed economic data and bought stocks after five straight days of losses. U.S. Treasury debt prices fell on profit-taking after recent gains, while the dollar was little changed versus a currency basket.

ANXIETY OVER FISCAL POLICY

Despite the drop in claims last week, labor market weakness was expected to persist for a while because of anxiety over higher taxes and deep government spending cuts in January and slowing global growth, economists said.

Sluggish job gains and stubbornly high unemployment spurred the Federal Reserve this month into launching a third round of bond purchases to drive down already low interest rates.

The U.S. central bank vowed to buy $40 billion worth of mortgage-backed securities each month until it sees a sustained upturn in the labor market.

"Today's reports suggest that the Fed is going to remain very accommodative for quite some time to try and spur demand and job growth," said Sam Bullard, a senior economist at Wells Fargo Securities in Charlotte, North Carolina.

Mortgage finance company Freddie Mac said the mortgage-backed securities purchases helped push the average rate on a 30-year fixed rate mortgage down to a record low of 3.40 percent this week.

In a preliminary estimate of an upcoming annual revision to its main employment measures, the Labor Department said it likely undercounted job growth in the 12 months through March by 386,000.

The encouraging news on the labor market was eclipsed by the weak durable goods report.

Orders for non-defense capital goods excluding aircraft, a proxy for business spending plans, rose 1.1 percent in August, only partly reversing a 5.2 percent slide the prior month.

What's more, shipments of these goods, which are used to calculate equipment and software spending in the GDP report, fell for a second straight month. That implies little or no growth in equipment and software investment this quarter.

(Additional reporting by Rachelle Younglai; Editing by Andrea Ricci and Tim Ahmann)

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1 of 9. Dissident Chinese artist Ai Weiwei (C) buys fruit from a local vendor on the street outside the Chaoyang District Court before trying to attend his appeal verdict hearing in Beijing September 27, 2012.

BEIJING | Thu Sep 27, 2012 10:21am EDT

BEIJING (Reuters) - A Chinese court upheld a $2.4 million tax evasion fine against China's most famous dissident Ai Weiwei on Thursday, ending his long legal battle with the authorities but paving the way for him to be jailed if he does not pay.

The loss of Ai's second appeal in a higher court means that the world-renowned artist could risk arrest if he does not pay a remaining fine of around 6.6 million yuan ($1.05 million), in a case that has further tarnished China's poor human rights reputation.

He has paid a bond of 8.45 million yuan already lodged with the tax authorities to contest the tax charge.

Ai, whose 81-day detention last year sparked an international outcry, told Reuters he will not pay the remaining fine as that would be tacit acknowledgement of the case's legality, which he has always maintained is trumped up.

Ai said he is uncertain whether he faces arrest if he doesn't do so.

"If I need to go to jail, there's nothing I can do about it," Ai said. "This country has no fairness and justice, even if I've paid the 6 million yuan, I still could possibly go to jail. They don't need an excuse to arrest me - they can always find another excuse at any time."

The case is widely seen by activists as an attempt to muzzle the outspoken artist, who has repeatedly criticized the Chinese government for flouting the rule of law and the rights of citizens.

Ai, 55, had asked the Chaoyang District Court to overturn the city tax office's rejection of his appeal against the 15 million yuan ($2.38 million) tax evasion penalty imposed on the company he works for, Beijing Fake Cultural Development Ltd, which produces his art and designs.

Ai, who has waged a near five-month long legal battle with a Beijing tax agency, said he could not appeal further and has not enough cash to pay the remaining 6.6 million yuan, adding that the tax agency has not given him a deadline to pay.

Government efforts to silence Ai have frequently backfired, as demonstrated by an outpouring of public sympathy - and cash - in response to the tax penalty.

Ai had collected more than 9 million yuan, he says he will start to return, from about 30,000 donors, to pay the bond. Many of Ai's supporters folded money into paper planes that were flown over the walls of his home.

Earlier, an angry Ai, who was allowed to attend court in person for the first time and without an obvious police presence, said he scolded the judge for being a "shame and a disgrace".

"It (the court) didn't respect the facts or give us a chance to defend ourselves; it has no regard for taxpayers' rights," he told reporters.

He said the court had flouted Chinese law by not providing a written notification of the appeal verdict three days in advance, and only notifying his wife, Lu Qing, by telephone earlier this week. One of his lawyers, Pu Zhiqiang, is in France and could not make it back in time.

Ai's loss of his appeal is a predictable outcome in a country where the courts, controlled by the ruling Communist Party, toe the government line. It also underscores Beijing's increasing intolerance of dissent ahead of a tricky transition of power later this year.

"I never imagined the court would disregard the facts this much, be so unreasonable and so insulting," Ai said.

($1 = 6.3066 Chinese yuan)

(Additional reporting by Ben Blanchard and Maxim Duncan; Editing by Jonathan Thatcher)

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Artist Francis Bacon's painting ''Untitled (Pope),'' which Bacon painted circa 1954, is shown in this publicity image released to Reuters September 27, 2012.

NEW YORK | Thu Sep 27, 2012 5:52pm EDT

NEW YORK (Reuters) - A painting from Francis Bacon's iconic screaming Pope series, which has not been seen in public since 1975, is hitting the auction block where it is expected to sell for as much as $25 million, Sotheby's said on Thursday.

"Untitled (Pope)," which Bacon painted circa 1954, will be sold at the November 13 New York sale of impressionist and modern art, the auction house said in a statement.

"This is a great collecting opportunity," Oliver Barker, Sotheby's senior specialist for contemporary art, told Reuters in a telephone interview.

"Paintings of this nature have become tremendously important in terms of asset value," he said, adding that Bacon's early Pope paintings "are truly unattainable objects" with most gracing museum walls and only a few remaining in private hands.

Sotheby's said the work was last sold, and seen in public, in 1975, when a collector it declined to identify bought it for $71,500 at its London auction.

"The timing is absolutely right to capture the upward momentum of the Bacon market," Barker said, noting that prices in recent years "have been driven by an international reassessment of his works by the market".

Barker said Bacon's most desirable works were his Pope series.

Works by the British painter have commanded high prices. A female nude sold for $34 million in London in February, and his "Triptych, 1976" went for $86 million in New York in May 2008.

Art prices have recovered since the financial crisis, and Barker said several of the highest prices for Bacons had been realized in the last three or four years.

Sotheby's has estimated the painting will fetch $18 million to $25 million. It will go on exhibition in Los Angeles on Thursday and be shown in London and New York before the auction.

(Editing By Christine Kearney)

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