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Space trio lands in Kazakhstan after bad weather delay

ALMATY | Sat Mar 16, 2013 12:48am EDT

ALMATY (Reuters) - A Russian Soyuz capsule made a "bull's eye" landing in the steppes of Kazakhstan on Saturday, delivering a Russian-American trio from the International Space Station, a day after its originally scheduled touchdown was delayed by foul weather.

NASA's Kevin Ford and Russian cosmonauts Oleg Novitskiy and Evgeny Tarelkin, who had manned the $100 billion orbital outpost since October as Expedition 34, landed in cloudy weather at 7:06 a.m. Moscow time (0306 GMT) northeast of the town of Arkalyk.

They had spent 144 days aboard the multinational ISS on their space journey of almost 61 million miles (98 million km).

"The landing was energetic and exciting," Russian TV showed Novitskiy as saying.

NASA television said the deorbit burn and other events during the descent had gone flawlessly. It said the capsule had landed upright, almost hitting its bull's eye target in thick fog.

"Oleg Novitskiy reported to search and recovery teams that the crew is feeling good," NASA television said. "Everything seems to be in order."

Due to hampered visibility, it took a few minutes before helicopters with Russian search and recovery teams could locate the Soyuz capsule after its landing.

The first images shown by Russia's Vesti-24 television featured rescue workers standing in a snow-covered steppe opening the hatch of the capsule.

The three smiling astronauts were seated on semi-reclined chairs and covered with blue thermal blankets. They were then carried to a nearby inflatable medical tent.

On Friday, fog and freezing rain at the landing site in Kazakhstan prevented helicopters from setting up for the crew's return to Earth.

In preparation for their departure, Canadian astronaut Chris Hadfield took the helm of the space station on Wednesday, becoming the first Canadian to take command of the outpost.

It is only the second time in the 12-year history of the station, a project of 15 nations that has been permanently staffed since November 2000, that command has been turned over to someone who is not American or Russian.

Hadfield will be part of a three-man skeleton crew until NASA astronaut Chris Cassidy and cosmonauts Pavel Vinogradov and Alexander Misurkin arrive later this month.

(Reporting by Dmitry Solovyov; Editing by Lisa Shumaker)


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At Bolshoi, show goes on, month after acid horror

Sergei Filin, artistic director of Russia's Bolshoi Ballet, speaks to journalists as he leaves a hospital in Moscow February 4, 2013. REUTERS/Vselovod Kutznestov

Sergei Filin, artistic director of Russia's Bolshoi Ballet, speaks to journalists as he leaves a hospital in Moscow February 4, 2013.

Credit: Reuters/Vselovod Kutznestov



MOSCOW | Thu Feb 14, 2013 2:25pm EST


MOSCOW (Reuters) - Principal dancer Artem Ovcharenko seems to defy gravity as he glides through the air, then lands silently with a flourish of his arm during a rehearsal at Russia's revered Bolshoi Theater.


Other dancers spin through the air behind him, a few warm up at the side and two ballerinas walk on their toes while Viktor Barykin, the repetiteur or dance coach, barks instructions.


"One, two, three. One, two, three - up! That's not bad," Barykin shouts into a microphone from a seat perched on the front of the stage, taking a male dancer through his steps.


On the surface, it is business as usual at one of the world's great theaters as the dancers prepare for a performance of Yuri Possokhov's contemporary ballet "Classical Symphony".


But dance has also, for some, become a way to escape a drama behind the scenes that has had more twists than many an on-stage plot in the month since a masked attacker threw acid in the face of Sergei Filin, the Bolshoi Ballet's artistic director.


Intrigue and misfortune are nothing new to an institution whose name translates at The Grand Theatre: it has burnt down three times since being built in 1776 under Catherine the Great and was also bombed in World War Two.


But the dancers are now struggling to come to terms with the brutality of the January 17 attack, which has left Filin fighting for his sight and the Bolshoi battling to mend a reputation tarnished by rumors of rivalries, resentments and intrigues.


"It affects some people more, the ones who are more emotional, but on stage you forget everything, you cut yourself off. That's what I do because I can't let it affect me," Ovcharenko, 26, said during a break in the rehearsal.


Ovcharenko, a rising star at the Bolshoi since joining in 2007, embodies the motto that the show must go on.


He says the rigors of a work day that often lasts from 10 a.m. until 10 p.m. leave dancers little time to dwell on the attack. With more roles available than in the past because the Bolshoi now performs more often, there is less reason for envy.


But although he says morale has not been affected, the troupe has clearly been shaken by the attack and by a public row it provoked between the Bolshoi's general director, Anatoly Iksanov, and Nikolai Tsiskaridze, a veteran lead dancer.


"Some people came up with hypotheses, some started suspecting people ... I say 'Forget it, and get back to work'," Ovcharenko said. "I just want peace at the theatre."


POLICE INVESTIGATION


But these are not peaceful times at the Bolshoi. It is hard for dancers to put the attack out of their minds when police are milling around at rehearsals, asking questions, and now treat some of the troupe as suspects.


"Having all these people backstage and in our classes is a bit different," said Joy Womack, the first American to graduate from the Bolshoi Ballet's main training program. Her words are not without a touch of understatement.


She does not conceal that competition for roles and for influence over productions is intense at the Bolshoi and says people with different artistic visions "will butt heads"; but, in that, she sees it as not unusual in the ballet world.


"The Bolshoi is certainly filled with histories and little skeletons packed away in the cupboard," the Californian added. "But every organization is like that."


Like Ovcharenko, she is trying to forget the attack through her dancing, including as a swan in Tchaikovsky's "Swan Lake". But if her personal drive and ambition are anything to go by, it is no surprise that the Bolshoi is as competitive as it is.


"I have crazy goals. That's how I got here in the first place," she said, promising to show she can achieve what others had said was impossible. "It's just a matter of how much you want it and how much time you are prepared to put into it."


Scandal has long been endemic behind the cream-colored, eight-columned facade close to Red Square which reopened to great fanfare in 2011 after a $700-million, six-year renovation that restored the theatre's opulent tsarist beginnings, doused its interior in gold-leaf and introduced cutting-edge acoustics.


The theatre's history is laced with tales of tricks to put off rivals: needles left in costumes; crushed glass in ballet shoes; an alarm clock timed to go off during a particularly intense dance sequence; even a dead cat thrown on stage.


Management of the theatre has also seen controversy: in 1995, the departure of the artistic director sparked a wildcat strike by dancers, in turn prompting jeering and foot-stamping from an angry audience that had paid to see "Romeo and Juliet".


In 2003, world media had a field day when Bolshoi bosses tried to fire ballerina Anastasia Volochkova for being too heavy. And in 2011, deputy ballet director Gennady Yanin - then seen as a candidate for the artistic director post - quit after pornographic images of him appeared on the Internet.


Dirty tricks are far from unheard of throughout public life in post-Soviet Russia. But never before has a member of the Bolshoi Theatre had sulfuric acid thrown in his face.


IDENTIFYING ATTACKER


Filin, 42, says he thinks he knows who was behind the attack and that it may be linked to his work as artistic director, but he has named no names in public and police have made no arrest.


One of his predecessors, Alexei Ratmansky, said it was no coincidence that Filin had been attacked and described an atmosphere of intrigue and passion, ticket speculators and half-crazed fans ready to cut the throats of an idol's rivals.


Events since the attack have unfolded like a page-turning whodunit, with the motives still a subject of speculation and no shortage of theories and possible clues.


Complicating matters is the fact that Filin says he had his car tires slashed and emails hacked in the two weeks before the attack, and had received repeated nuisance calls from someone who stayed silent when he answered.


Was it artistic rivalry? Filin is at odds with some of his colleagues over the direction the ballet is heading in, and his role gives him the power to make or break dancers' careers.


Could it be connected to power struggles behind the scenes? Filin's job is much coveted and he has seen off rivals for his position, which he secured in 2011. Such is its importance that a group of cultural figures wrote to President Vladimir Putin last November demanding Filin be replaced by Tsiskaridze.


Was it a nasty twist to a love affair? Some sources close to the Bolshoi have sought to suggest in the media that the attack was a personal matter and nothing to do with his work.


Could there be commercial reasons? The Bolshoi has been criticized over the profusion of touts who sell tickets at vastly inflated prices. The company's policy has long been to sell some tickets cheaply so that not only the wealthy attend - but some fall into the wrong hands for resale.


While some scalpers are small-time, the prices and prestige of the renovated Bolshoi, favored by Muscovites keen to flaunt their new-found wealth, may well be attracting organized crime.


MANY TWISTS


Since the attack, a production of Stravinsky's "Rite of Spring" has been cancelled due to Filin's absence; a ballerina has said she is afraid to return to Russia from Canada because of a blackmailer; and the long-running row between dancer Tsiskaridze, 39, and veteran manager Iksanov, 60, has worsened.


The two gave interviews to a Russian magazine, Snob, in which they traded blame for the bad atmosphere at the Bolshoi and drew attention to the bitterness behind the scenes. Tsiskaridze then called on the management to resign.


"There is one person in the Bolshoi company who is constantly dissatisfied with whatever the Bolshoi management is doing for the past 12 years," said Bolshoi spokeswoman Katya Novikova. Tsiskaridze criticized the renovation of the Bolshoi under Iksanov, who has denied it was tainted by corruption.


Novikova said Iksanov and Tsiskaridze were not on speaking terms and that lawyers were looking carefully at the allegations Tsiskaridze had made. She doubted they would ever make up because they had been rivals for the general manager role.


Tsiskaridze declined an interview with Reuters but says he is the victim of a witch-hunt and describes the atmosphere as like "back in the days of Josef Stalin", the Soviet dictator who sent millions of opponents to their death or to labor camps.


Tsiskaridze has condemned the acid attack on Filin, a fellow dancer with whom he worked for many years and sometimes shared a dressing room. For all his battles with management, many in the troupe speak highly of the Georgian-born Tsiskaridze and Womack smiled as she described his "jokes and wonderful sarcasm".


Doctors say Filin is likely to recover his sight and work again. The Bolshoi, a symbol of Russian culture that has come through difficult times before in both Soviet and tsarist eras, is also sure to recover - but damage has been done.


"There have long been power struggles but never before was there such criminality and harm done," said Tatiana Kuznetsova, a ballet critic for Kommersant newspaper. "The image is fading."


For the dancers, the overwhelming response is to focus on their dancing to show their appreciation of Filin, whose daily instructions are passed on by Galina Stepanenko, a former principal dancer who has become the acting artistic director.


"When you fall you can only go up. There is nowhere lower to go," Ovcharenko said before going back to finish his rehearsal. "For us, the artists, this is the best way to support our boss, to be on stage and perform well, so that we don't upset him."


(Editing by Alastair Macdonald)


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RIM shares rise after upgrade by influential analyst

A logo of the Blackberry maker's Research in Motion is seen on a building at the RIM Technology Park in Waterloo April 18, 2012. Picture taken April 18, 2012. REUTERS/Mark Blinch

A logo of the Blackberry maker's Research in Motion is seen on a building at the RIM Technology Park in Waterloo April 18, 2012. Picture taken April 18, 2012.

Credit: Reuters/Mark Blinch



TORONTO | Fri Jan 18, 2013 12:06pm EST


TORONTO (Reuters) - Shares of Research In Motion Ltd (RIMM.O)(RIM.TO) rose more than 6 percent after an influential analyst raised his rating on the stock on Friday, saying that RIM's new BlackBerry 10 operating system performed as well or better than rivals in recent tests.


Jefferies & Co analyst Peter Misek, who lifted his stock rating on RIM to "buy" from "hold," believes Wall Street is now underestimating the strength of RIM's financial performance for the coming quarters after the new devices debut on January 30. He also lifted his price target on RIM to $19.50 from $13.


The move pushed RIM shares up 6 percent to $15.80 in morning trading on the Nasdaq, while its Toronto-listed shares rose 7 percent to C$15.72.


RIM hopes that its re-engineered line of touch-screen and keyboard devices will win back market share lost to rivals such as Apple Inc's (AAPL.O) iPhone and devices powered by Google Inc's (GOOG.O) market-leading Android operating system.


Misek, who has been skeptical for some time about RIM's odds of engineering a turnaround, said recent trials of BB10 test devices showed vast improvements over its existing smartphones.


"Recent tests and demos have shown a solid browser, smooth touch interface, and intuitive navigation. We now believe the operating system performance could be better than or equal to Android Jelly Bean and likely on par with iOS 6," said Misek, referring to the latest versions of software powering Android and Apple devices.


Shares of RIM, which fell as low as $6.22 in September, have more than doubled in value over the last four months as the BB10 launch approaches.


CARRIER ORDERS


In November, Misek had upgraded RIM's stock to "hold" from "underperform," arguing that his checks revealed greater carrier support for BB10 than expected.


Misek's last upgrade had propelled RIM's shares into double-digit territory for the first time in five months and his latest upgrade pushed the stock to a new 11-month high.


In his latest note, Misek said: "More recent checks indicate that carriers have also agreed to volume commitments for the first two quarters post-launch."


Earlier this month, some top U.S. mobile carriers including Verizon Communications (VZ.N), AT&T Inc (T.N) and T-Mobile USA (DTEGn.DE) signaled that they would support RIM's BlackBerry 10 products.


And earlier this week media reports indicated that Aircel and Vodafone Group Plc (VOD.L) are gearing up to market the new BB10 devices in India, which has long been a strong growth market for RIM even as it has ceded ground in North America and Europe.


Misek said BB10 global orders have risen to between 1 million and 2 million a month from about 500,000 a month in early December. He now views initial sales of 4 million BB10 devices a quarter as "not a high hurdle."


Additionally, developer support is proving to be stronger than expected, Misek said.


"Our checks indicate that large app developers are going to put resources into developing BB10 apps," he said. "Previously, we had thought they would take more of a wait-and-see approach before committing resources."


RIM has faced criticism in the past for lacking a strong suite of high-quality apps.


RIM has said its new platform will boast business focused apps from Cisco WebEx and SAP among others, along with music, movie and gaming apps.


Social networks LinkedIn, Foursquare, Twitter and Facebook will all have apps for BB10 at launch, according to RIM. It will announce some of its other app partners on the launch date.


(Reporting by Euan Rocha; Editing by Gerald E. McCormick, Jeffrey Benkoe and Leslie Gevirtz)


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Mexico rescue workers search for survivors after Pemex blast kills 25

Paramedics wheel an injured person to a helicopter at the parking lot of the state-run oil company Pemex after an explosion in Mexico City January 31, 2013. REUTERS/Tomas Bravo

1 of 20. Paramedics wheel an injured person to a helicopter at the parking lot of the state-run oil company Pemex after an explosion in Mexico City January 31, 2013.

Credit: Reuters/Tomas Bravo



MEXICO CITY | Fri Feb 1, 2013 5:50am EST


MEXICO CITY (Reuters) - Emergency services worked into the early hours of Friday to find people trapped in rubble under state oil company Pemex's headquarters in Mexico City after an explosion that killed at least 25 people and injured more than 100.


Scenes of confusion and chaos at the downtown tower dealt yet another blow to Pemex's image as Mexico's new president courts outside investment for the 75-year-old monopoly.


Search and rescue workers picked through debris, and investigators sifted through shattered glass and concrete at the bottom of the building to try to find what caused the blast. It was not clear how many might still be trapped inside.


Pemex, a symbol of Mexican self-sufficiency as well as a byword in Mexico for security glitches, oil theft and frequent accidents, has been hamstrung by inefficiency, union corruption and a series of safety failures costing hundreds of lives.


Thursday's blast at the more than 50-storey skyscraper that houses administrative offices followed a September fire at a Pemex gas facility near the northern city of Reynosa which killed 30 people. More than 300 were killed when a Pemex natural gas plant on the outskirts of Mexico City blew up in 1984.


Eight years later, about 200 people were killed and 1,500 injured after a series of underground gas explosions in Guadalajara, Mexico's second biggest city. An official investigation found Pemex was partly to blame.


Pemex initially flagged Thursday's incident as a problem with its electricity supply and then said there had been an explosion. But it did not give a cause for the blast.


A government official, speaking on condition of anonymity, said a preliminary line of inquiry suggested a gas boiler had blown up in a Pemex building just to the side of the main tower. However, he stressed nothing had been determined for sure.


Others at the scene said gas may have caused the blast.


Not long after the blast, President Enrique Pena Nieto was at the scene, vowing to discover how it happened.


"We will work exhaustively to investigate exactly what took place, and if there are people responsible, to apply the force of the law on them," he told reporters before going to visit survivors in hospital.


Shortly after midnight, at least 46 victims were still being treated in hospital, the company said.


Pemex said the blast would not affect operations, but concern in the government was evident as top military officials, the attorney general and the energy minister joined Interior Minister Miguel Angel Osorio Chong for a late news conference.


"I have issued instructions to the relevant authorities to convene national and international experts to help in the investigations," Osorio Chong said. He later noted that the number of casualties could still climb.


Whatever caused it, the deaths and destruction will put the spotlight back on safety at Pemex, which only a couple of hours before the explosion had issued a statement on Twitter saying the company had managed to improve its record on accidents.


Nieto has said he is giving top priority to reforming the company this year, though he has yet to reveal details of the plan, which already faces opposition from the left.


Both Pena Nieto and his finance minister were this week at pains to stress the company will not be privatized.


(Editing by Louise Ireland)


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Art sleuth finds Matisse 25 years after Swedish heist

Christopher Marinello, executive director at the Art Loss Register in London, holds Henri Matisse's painting ''Le Jardin'' in this handout photo. REUTERS/Ray Wells/Handout

Christopher Marinello, executive director at the Art Loss Register in London, holds Henri Matisse's painting ''Le Jardin'' in this handout photo.

Credit: Reuters/Ray Wells/Handout

STOCKHOLM | Mon Jan 7, 2013 12:47pm EST

STOCKHOLM (Reuters) - A British art sleuth has recovered a painting by French artist Matisse that was stolen from a Stockholm museum 25 years ago.

Matisse's "Le Jardin", valued at about 6 million crowns ($916,200), was recovered by Christopher Marinello, an art recovery specialist at the Art Loss Register in London.

"It is fantastic that the painting has turned up again," said Kristin Ek, spokeswoman for the Moderna Museet in Stockholm. "It was stolen so long ago that really we had almost given up hope."

The painting was stolen in May, 1987 when a thief smashed his way into the museum with a sledgehammer during the night.

The theft was reported to both Interpol and the Art Loss Register (ALR), the world's largest international private database of stolen, missing and looted artwork.

The painting was recovered after an art dealer in Britain checked with the ALR's register before selling the Matisse.

"We are happy the painting seems to be okay and in good condition," Moderna Museet's Ek said. "It was a good start to the New Year."

Marinello would not give details of how he got hold of the Matisse.

"No arms were broken and no payments were made," he said, adding the painting would be returned to the museum through Sweden's ministry of culture.

The Moderna Museet is still missing a painting by Georges Braque, after a theft in 1993.

Stolen art is a lucrative industry with $6-7 billion worth of thefts every year, and the current global economic downturn has led to a surge in crimes, according to Marinello.

Last year, for example, thieves made off with paintings by Picasso, Matisse, Monet and other prominent modern artists from Rotterdam's Kunsthal museum worth tens of millions of dollars.

If thieves cannot collect a ransom from insurers or owners, the art is sold on the black market, often for a fraction of its real worth, or even exchanged for drugs or guns.

Of the 360,000 objects on the ALR's database, Marinello said there were several he particularly wanted to find.

The first is a hoard including paintings by Vermeer, Degas and Rembrandt worth $300 million stolen from the Isabella Stewart Gardner Museum in Boston in 1990.

There is a $5 million reward for the paintings.

"Then there is a Rafael stolen by the Nazis in WWII that is pretty nice," he said.

Marinello, however, will have his work cut out. By his admission, only 5-10 percent of stolen art is ever recovered.

($1 = 6.5490 Swedish crowns)

(Reporting by Simon Johnson and Mike Collett-White)


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Bigger fights loom after "fiscal cliff" deal

Speaker of the House John Boehner (R-OH) walks with House Majority Leader Rep. Eric Cantor (R-VA) to a meeting with House Republicans on the ''fiscal cliff'' budget deal on Capitol Hill in Washington on January 1, 2013. Washington's last-minute scramble to step back from a ''fiscal cliff'' ran into trouble on Tuesday as Republicans in the House of Representatives balked at a deal to avert a budget crisis. REUTERS/Joshua Roberts

1 of 12. Speaker of the House John Boehner (R-OH) walks with House Majority Leader Rep. Eric Cantor (R-VA) to a meeting with House Republicans on the ''fiscal cliff'' budget deal on Capitol Hill in Washington on January 1, 2013. Washington's last-minute scramble to step back from a ''fiscal cliff'' ran into trouble on Tuesday as Republicans in the House of Representatives balked at a deal to avert a budget crisis.

Credit: Reuters/Joshua Roberts



WASHINGTON | Thu Jan 3, 2013 12:44am EST


WASHINGTON (Reuters) - President Barack Obama and congressional Republicans face even bigger budget battles in the next two months after a hard-fought "fiscal cliff" deal narrowly averted devastating tax increases and spending cuts.


The agreement, approved late on Tuesday by the Republican-led House of Representatives and signed by Obama on Wednesday, was a victory for the president, who had won re-election in November on a promise to address budget woes, partly by raising taxes on the wealthiest Americans.


But it set up potentially bruising showdowns over the next two months on spending cuts and an increase in the nation's limit on borrowing. Republicans, angry the fiscal cliff deal did little to curb the federal deficit, promised to use the debt-ceiling debate to win deep spending cuts next time.


Republicans believe they will have greater leverage over Democrat Obama when they must consider raising the borrowing limit in February because failure to close a deal could mean a default on U.S. debt or another downgrade in the U.S. credit rating. A similar showdown in 2011 led to a credit downgrade.


"Our opportunity here is on the debt ceiling," Republican Senator Pat Toomey of Pennsylvania said on MSNBC. "We Republicans need to be willing to tolerate a temporary, partial government shutdown, which is what that could mean."


But Obama and congressional Democrats may be emboldened by winning the first round of fiscal fights when dozens of House Republicans buckled and voted for major tax hikes for the first time in two decades.


"We believe that passing this legislation greatly strengthens the president's hand in negotiations that come next," House Minority Leader Nancy Pelosi told NBC in an interview to air on Thursday.


Obama, who is vacationing in Hawaii, signed the legislation late on Wednesday, the White House said.


"We received the bill late this afternoon, and it was immediately processed. A copy was delivered to the president for review. He then directed the bill be signed by autopen," a senior administration official said. An autopen is an automatic pen with the president's signature.


Deteriorating relations between leaders in the two parties do not bode well for the more difficult fights ahead. Vice President Joe Biden and Republican Senate leader Mitch McConnell had to step in to work out the final deal as the relationship between House Speaker John Boehner and Obama unraveled.


Senate Majority Leader Harry Reid also drew the ire of Boehner, who told Reid in the White House to "Go fuck yourself" after a tense meeting last week, aides said. His remark came after the Democrat accused Boehner of running a "dictatorship" in the House.


Bemoaning the intensity of the fiscal cliff fight, Obama urged "a little less drama" when the Congress and White House next address budget issues like the government's rapidly mounting $16 trillion debt load. He vowed to avoid another divisive debt-ceiling fight before the late-February deadline for raising the limit.


"While I will negotiate over many things, I will not have another debate with this Congress about whether or not they should pay the bills they have already racked up," Obama said before he headed to Hawaii to resume an interrupted vacation.


NOT TIME TO CELEBRATE


Analysts warned that might not be so easy. "While the markets and most taxpayers may breathe a sigh of relief for a few days, excuse us for not celebrating," said Greg Valliere, chief political strategist at Potomac Research Group.


"We have consistently warned that the next brawl represents a far greater threat to the markets - talk of default will grow by February, accompanied by concerns over a credit rating downgrade," he said.


Rating agencies Moody's Investors Service and Standard & Poor's said the "fiscal cliff" measure did not put the budget on a more sustainable path. The International Monetary Fund said raising the debt ceiling would be a critical move.


"More remains to be done to put U.S. public finances back on a sustainable path without harming the still fragile recovery," said Gerry Rice, a spokesman for the IMF.


Financial markets that had been worried about the fiscal cliff showdown welcomed the deal, with U.S. stocks recording their best day in more than a year. The S&P 500 achieved its biggest one-day gain since December 20, 2011, pushing the benchmark index to its highest close since September 14.


The debate over "entitlement" programs is also bound to be difficult. Republicans will be pushing for significant cuts in government healthcare programs like Medicare and Medicaid for retirees and the poor, which are the biggest drivers of federal debt. Democrats have opposed cuts in those popular programs.


"This is going to be much uglier to me than the tax issue ... this is going to be about entitlement reform," Republican Senator Bob Corker of Tennessee said on CNBC.


"Now that we have this other piece behind us - hopefully - we'll deal in a real way with the kinds of things our nation needs to face," he said.


The fiscal cliff crisis ended when dozens of Republicans in the House relented and backed a bill passed by the Democratic-controlled Senate that hiked taxes on household income above $450,000 a year. Spending cuts of $109 billion in military and domestic programs were delayed for two months.


Economists had warned that the fiscal cliff of across-the-board tax hikes and spending cuts would have punched a $600 billion hole in the economy this year and threatened to send the country back into recession.


Dozens of House Republicans reluctantly approved the Senate bill, which passed by a bipartisan vote of 257-167 and sent it to Obama to sign into law.


Peter Huntsman, chief executive of chemical producer Huntsman Corp, said the vote did little to reduce the U.S. budget deficit and would hinder growth.


"We haven't even begun to address the basic issues behind this," Huntsman told Reuters. "We haven't fixed anything. All we've done is addressed the short-term pain.


The vote underlined the precarious position of Boehner, who will ask his Republicans to re-elect him as speaker on Thursday when a new Congress is sworn in. Boehner backed the bill, but most House Republicans, including his top lieutenants, voted against it.


The Ohio congressman also drew criticism on Wednesday from his fellow Republicans for failing to schedule a House vote on a bill passed by the Senate that would provide federal aid to Northeastern states hit by the storm Sandy.


(Additional reporting by Susan Heavey, Richard Cowan in Washington and Gabriel Debenedetti and Ernest Scheyder in New York, Editing by Alistair Bell, Peter Cooney and Mohammad Zargham)


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After fiscal win, Obama warns Congress on debt fight

U.S. Vice President Joe Biden (L) and President Barack Obama (R) depart following Obama's remarks after the House of Representatives acted on legislation intended to avoid the ''fiscal cliff,'' at the White House in Washington January 1, 2013. The Republican-controlled House backed a tax hike on the top U.S. earners shortly before midnight on Tuesday, ending weeks of high-stakes budget brinkmanship that threatened to spook consumers and throw financial markets into turmoil.

Credit: Reuters/Jonathan Ernst


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Bigger fights loom after "fiscal cliff" deal

Speaker of the House John Boehner (R-OH) walks with House Majority Leader Rep. Eric Cantor (R-VA) to a meeting with House Republicans on the ''fiscal cliff'' budget deal on Capitol Hill in Washington on January 1, 2013. Washington's last-minute scramble to step back from a ''fiscal cliff'' ran into trouble on Tuesday as Republicans in the House of Representatives balked at a deal to avert a budget crisis. REUTERS/Joshua Roberts

1 of 12. Speaker of the House John Boehner (R-OH) walks with House Majority Leader Rep. Eric Cantor (R-VA) to a meeting with House Republicans on the ''fiscal cliff'' budget deal on Capitol Hill in Washington on January 1, 2013. Washington's last-minute scramble to step back from a ''fiscal cliff'' ran into trouble on Tuesday as Republicans in the House of Representatives balked at a deal to avert a budget crisis.

Credit: Reuters/Joshua Roberts



WASHINGTON | Thu Jan 3, 2013 12:44am EST


WASHINGTON (Reuters) - President Barack Obama and congressional Republicans face even bigger budget battles in the next two months after a hard-fought "fiscal cliff" deal narrowly averted devastating tax increases and spending cuts.


The agreement, approved late on Tuesday by the Republican-led House of Representatives and signed by Obama on Wednesday, was a victory for the president, who had won re-election in November on a promise to address budget woes, partly by raising taxes on the wealthiest Americans.


But it set up potentially bruising showdowns over the next two months on spending cuts and an increase in the nation's limit on borrowing. Republicans, angry the fiscal cliff deal did little to curb the federal deficit, promised to use the debt-ceiling debate to win deep spending cuts next time.


Republicans believe they will have greater leverage over Democrat Obama when they must consider raising the borrowing limit in February because failure to close a deal could mean a default on U.S. debt or another downgrade in the U.S. credit rating. A similar showdown in 2011 led to a credit downgrade.


"Our opportunity here is on the debt ceiling," Republican Senator Pat Toomey of Pennsylvania said on MSNBC. "We Republicans need to be willing to tolerate a temporary, partial government shutdown, which is what that could mean."


But Obama and congressional Democrats may be emboldened by winning the first round of fiscal fights when dozens of House Republicans buckled and voted for major tax hikes for the first time in two decades.


"We believe that passing this legislation greatly strengthens the president's hand in negotiations that come next," House Minority Leader Nancy Pelosi told NBC in an interview to air on Thursday.


Obama, who is vacationing in Hawaii, signed the legislation late on Wednesday, the White House said.


"We received the bill late this afternoon, and it was immediately processed. A copy was delivered to the president for review. He then directed the bill be signed by autopen," a senior administration official said. An autopen is an automatic pen with the president's signature.


Deteriorating relations between leaders in the two parties do not bode well for the more difficult fights ahead. Vice President Joe Biden and Republican Senate leader Mitch McConnell had to step in to work out the final deal as the relationship between House Speaker John Boehner and Obama unraveled.


Senate Majority Leader Harry Reid also drew the ire of Boehner, who told Reid in the White House to "Go fuck yourself" after a tense meeting last week, aides said. His remark came after the Democrat accused Boehner of running a "dictatorship" in the House.


Bemoaning the intensity of the fiscal cliff fight, Obama urged "a little less drama" when the Congress and White House next address budget issues like the government's rapidly mounting $16 trillion debt load. He vowed to avoid another divisive debt-ceiling fight before the late-February deadline for raising the limit.


"While I will negotiate over many things, I will not have another debate with this Congress about whether or not they should pay the bills they have already racked up," Obama said before he headed to Hawaii to resume an interrupted vacation.


NOT TIME TO CELEBRATE


Analysts warned that might not be so easy. "While the markets and most taxpayers may breathe a sigh of relief for a few days, excuse us for not celebrating," said Greg Valliere, chief political strategist at Potomac Research Group.


"We have consistently warned that the next brawl represents a far greater threat to the markets - talk of default will grow by February, accompanied by concerns over a credit rating downgrade," he said.


Rating agencies Moody's Investors Service and Standard & Poor's said the "fiscal cliff" measure did not put the budget on a more sustainable path. The International Monetary Fund said raising the debt ceiling would be a critical move.


"More remains to be done to put U.S. public finances back on a sustainable path without harming the still fragile recovery," said Gerry Rice, a spokesman for the IMF.


Financial markets that had been worried about the fiscal cliff showdown welcomed the deal, with U.S. stocks recording their best day in more than a year. The S&P 500 achieved its biggest one-day gain since December 20, 2011, pushing the benchmark index to its highest close since September 14.


The debate over "entitlement" programs is also bound to be difficult. Republicans will be pushing for significant cuts in government healthcare programs like Medicare and Medicaid for retirees and the poor, which are the biggest drivers of federal debt. Democrats have opposed cuts in those popular programs.


"This is going to be much uglier to me than the tax issue ... this is going to be about entitlement reform," Republican Senator Bob Corker of Tennessee said on CNBC.


"Now that we have this other piece behind us - hopefully - we'll deal in a real way with the kinds of things our nation needs to face," he said.


The fiscal cliff crisis ended when dozens of Republicans in the House relented and backed a bill passed by the Democratic-controlled Senate that hiked taxes on household income above $450,000 a year. Spending cuts of $109 billion in military and domestic programs were delayed for two months.


Economists had warned that the fiscal cliff of across-the-board tax hikes and spending cuts would have punched a $600 billion hole in the economy this year and threatened to send the country back into recession.


Dozens of House Republicans reluctantly approved the Senate bill, which passed by a bipartisan vote of 257-167 and sent it to Obama to sign into law.


Peter Huntsman, chief executive of chemical producer Huntsman Corp, said the vote did little to reduce the U.S. budget deficit and would hinder growth.


"We haven't even begun to address the basic issues behind this," Huntsman told Reuters. "We haven't fixed anything. All we've done is addressed the short-term pain.


The vote underlined the precarious position of Boehner, who will ask his Republicans to re-elect him as speaker on Thursday when a new Congress is sworn in. Boehner backed the bill, but most House Republicans, including his top lieutenants, voted against it.


The Ohio congressman also drew criticism on Wednesday from his fellow Republicans for failing to schedule a House vote on a bill passed by the Senate that would provide federal aid to Northeastern states hit by the storm Sandy.


(Additional reporting by Susan Heavey, Richard Cowan in Washington and Gabriel Debenedetti and Ernest Scheyder in New York, Editing by Alistair Bell, Peter Cooney and Mohammad Zargham)


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After "fiscal cliff," U.S. conservatives eye Republican primaries

U.S. Senate Minority Leader Mitch McConnell (C) departs the senate floor with an aide after a senate vote in the early morning hours at the U.S. Capitol in Washington January 1, 2013. REUTERS/Jonathan Ernst

U.S. Senate Minority Leader Mitch McConnell (C) departs the senate floor with an aide after a senate vote in the early morning hours at the U.S. Capitol in Washington January 1, 2013.

Credit: Reuters/Jonathan Ernst

By Nick Carey

CHICAGO | Wed Jan 2, 2013 8:22pm EST

CHICAGO (Reuters) - The U.S. Congress prevented hefty tax hikes and spending cuts with a "fiscal cliff" deal this week, but grassroots conservatives are already seeking 2014 primary challengers for high-profile Republican lawmakers who backed the deal.

Few challengers have yet come forward. But fiscally conservative activists irate at Republicans who voted to raise some taxes without cutting spending are casting about for opponents to Republicans including Senate Minority Leader Mitch McConnell and senators Saxby Chambliss of Georgia, Lindsey Graham of South Carolina and Lamar Alexander of Tennessee.

"Many people here have watched Mitch McConnell's voting record and are dissatisfied with what they've seen," said Eric Wilson, executive director of the Kentucky 9/12 project, a Tea Party group in McConnell's home state. "There are some potential candidates working in the background and doing the right thing" including visiting Kentucky's conservatives to gauge support.

Wilson declined to divulge names, citing McConnell's fundraising prowess that allowed him to amass almost $19 million for his 2008 re-election bid. McConnell could not be reach for comment.

"Anyone who sticks their neck out now will get their head cut off," he added. "But there are definitely people here with real potential."

In the 2010 midterm elections the Tea Party movement took the Republican "establishment" by surprise with high-profile primary victories over more conventional candidates and brought a wave of freshmen to the House of Representatives.

But despite successes in the primaries in 2012, most notably the defeat of Indiana's six-term Republican Senator Dick Lugar by state treasurer Richard Mourdock, conservative candidates fared poorly in the general election.

Tea Party supporters claim 2014 should be different as lower turnout in midterm years allows fiscal conservatives to punch above their weight.

"Presidential politics in 2012 sucked oxygen out of the conversation in local races," said Matt Kibbe, president of FreedomWorks, which coordinates with Tea Party groups around the country. "So to us, 2014 looks more like 2010."

After some disastrous showings by Tea Party candidates, most notably Christine O'Donnell in Delaware in 2010 who ended up running a television ad denying she was a witch, conservatives are on the lookout for credible candidates who can run effective campaigns and raise sufficient funds for a general election.

It is reasonable to expect challenges to some Republicans from the right in 2014, said James Henson, a politics professor at the University of Texas in Austin.

"Whether they use the name Tea Party or not is irrelevant," he said. "The DNA of their movement has now been spliced into the DNA of the Republican Party."

'IN MAJOR TROUBLE'

Previous battles in Congress have been marked by Tea Party activists around the country bombarding their elected representatives, mostly Republicans, calling on them to hold the conservative line.

Many did not bother ahead of the fiscal cliff deal, a bipartisan agreement to raise tax rates on incomes of more than $450,000 per household.

"We knew the Republican leadership would cave in," said Debbie Dooley, a coordinator at national umbrella group Tea Party Patriots and a founder of the Atlanta Tea Party. "So we didn't expend a lot of energy on this issue."

Instead, Dooley said activists in her home state of Georgia are focused on educating voters about America's spiraling debt and seeking a replacement for Saxby Chambliss, who was forced into a runoff election in 2008 and only narrowly managed to return to the Senate.

No one has announced a challenge to Chambliss, but Georgia representatives Tom Price and Paul Broun are seen as potential candidates. Chambliss could not be reached for comment.

"If a credible candidate comes forward, then Saxby Chambliss is in major trouble," Dooley said.

In South Carolina, Joe Dugan of the Myrtle Beach Tea Party said there are credible alternatives to Senator Lindsey Graham, including three representatives elected in 2010 who have been reliably conservative on most issues.

"I am over 90 percent certain that if there is a reliably conservative candidate in 2014 he will have my total support," against Senator Graham, Dugan said.

Tim Phillips, president of Americans for Prosperity which has backing from the billionaire oil and gas brothers Charles and David Koch, said it is too early to say whether the group will get involved in primary challenges in 2014.

But the group, which raised $140 million in 2012 compared to $51 million in 2011, will focus on educating voters in 2013 on how their representatives voted on the fiscal cliff and the upcoming U.S. debt limit debate.

"We aim to hold elected officials accountable," he said. "Lawmakers will not be judged solely on how they voted on the fiscal cliff, but it is a big vote to get wrong."

Some conservative activists admit they face a steep climb at best if they want to unseat their local Republican representative. The West Chester Tea Party in House Speaker John Boehner's district in southwestern Ohio, for instance, has begun looking for a challenger to him even though he amassed nearly $22 million for his 2012 re-election bid.

"We've been getting emails from around the district and around the country asking if this is the best we can do for a representative," West Chester Tea Party member Ann Becker said. "That's not an easy question to answer."

"It will be a David-versus-Goliath battle if we do find somebody, but nothing is impossible," she added.

Unlike Indiana's Dick Lugar, who refused to recant on key votes that angered Tea Party activists, Utah Senator Orrin Hatch tacked rightward to defeat a primary challenge in 2012.

The University of Texas' Henson said that in the months to come the behavior of Republican lawmakers who voted for the fiscal cliff may show how seriously they take the threat of primary challenges next year.

"We will have to see what kind of compensatory behavior we see from Republicans," Henson said. "I suspect we will see more conservative Republicans try to make up for the fiscal cliff by trying to revert to form on other issues."

(Editing by Alistair Bell and Lisa Shumaker)


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Boehner sets House votes on Sandy aid after Republican attacks

U.S. House Speaker John Boehner (R-OH) arrives to speak to the media on the ''fiscal cliff'' on Capitol Hill in Washington, December 21, 2012. REUTERS/Yuri Gripas

U.S. House Speaker John Boehner (R-OH) arrives to speak to the media on the ''fiscal cliff'' on Capitol Hill in Washington, December 21, 2012.

Credit: Reuters/Yuri Gripas



WASHINGTON | Wed Jan 2, 2013 8:08pm EST


WASHINGTON (Reuters) - House Speaker John Boehner abruptly reversed course on Wednesday and set a timetable to approve $60 billion in Superstorm Sandy relief, after fellow Republicans including New Jersey Governor Chris Christie heaped scorn on his cancellation of an earlier vote.


The Republican-controlled House of Representatives will now vote on Friday on a $9 billion down payment for storm-related support to the National Flood Insurance Program.


Boehner also assured New York and New Jersey lawmakers that the House will take a second vote on January 15 on the $51 billion remainder of the Sandy disaster aid package approved last week in the U.S. Senate.


"This procedure that was laid out is fully acceptable and fully satisfactory. It provides the full $60 billion that we require," said Representative Peter King, a high-ranking House Republican from Long Island, New York.


Earlier, King had condemned Boehner's adjournment of the House before the Sandy vote, saying on the House floor the inaction was "a knife in the back."


Sandy, the second-costliest storm in U.S. history, devastated the northeastern United States on October 29, smashing New York and New Jersey coastal communities.


New Jersey Governor Chris Christie, seen as a potential Republican presidential candidate in 2016, said the vote's cancellation reflected the "toxic internal politics" of House Republicans.


"There is only one group to blame for the continued suffering of these innocent (storm) victims - the House majority and the speaker, John Boehner," Christie told a news conference in Trenton, New Jersey.


"It is why the American people hate Congress," he added.


Christie tried to telephone Boehner four times after 11:20 p.m, when House Majority Leader Eric Cantor told him the vote was canceled. The speaker declined to take his calls, the governor said.


President Barack Obama also made a last-minute overture to Republicans to pass the plan and spoke to both Christie and New York Governor Andrew Cuomo by telephone.


Angry New York and New Jersey lawmakers said the House delay marked a stark contrast to congressional reaction to Hurricane Katrina in 2005. Then, a Republican-controlled Congress swiftly approved $62.3 billion in aid just 10 days after the storm devastated the Gulf Coast.


Local officials in battered coastal Long Island communities complained on Wednesday that they could not launch rebuilding projects without knowing aid funds were on the way.


Recreation and senior centers are closed and boardwalks splintered in Long Beach, New York, where $250 million in estimated repair costs far exceed the city's $88 million annual budget.


"We need Congress to pass the bill. That's how we're going to rebuild," said Long Beach spokesman Gordon Tepper.


After reversing course on Wednesday afternoon, Boehner and House Majority Leader Eric Cantor said in a joint statement: "Getting critical aid to the victims of Hurricane Sandy should be the first priority in the new Congress, and that was reaffirmed today with members of the New York and New Jersey delegations."


NOT A GOOD TIME


Boehner had called off the vote on aid after the House passed a budget deal.


But critics complained Boehner should have allowed the House to give final approval to the Senate-passed Sandy rescue package before the current Congress officially ended on Thursday, causing all pending legislation to expire.


Explaining the adjournment without a vote, a Boehner aide said it "was not a good time" to vote on $60 billion in relief spending as Congress dealt with the broad tax measure, which had few spending cuts.


With Boehner facing an internal House Republican leadership re-election on Thursday after a majority of his party members voted against the "fiscal cliff" deal, some Republican lawmakers said a massive, $60-billion spending bill would have been too much to handle.


"It was a horrendous day with some horrific votes that a lot of our conference was very unhappy with," said Michael Grimm, a Republican from hard-hit Staten Island, New York.


Grimm and other New York and New Jersey Republican congressmen said they were satisfied with Boehner's new plan and would support his bid for another term as House speaker.


Even King said late in the day that his earlier vitriol "seems like a lifetime ago."


SHRINKAGE RISKS


But the new plan could still see some Republicans trying to shrink the aid package, as the $51 billion portion may be split into two parts - one for initial needs and another for longer-term projects. Fewer Republicans are likely to support the longer-term funds, but Democrats gained eight seats in the new Congress in November's elections.


Many House Republicans had complained that the Sandy aid bill was loaded with spending on projects unrelated to storm damage or long-term projects that needed more scrutiny.


Among expenditures criticized in the Senate plan were $150 million to rebuild fisheries, including those in the Gulf Coast and Alaska, and $2 million to repair roof damage at the Smithsonian Institution buildings in Washington that pre-dates the storm.


(Reporting By David Lawder, Ian Simpson, Jeff Mason, Hilary Russ and Tom Ferraro; writing by Ian Simpson; editing by Todd Eastham and Philip Barbara)


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Facebook Instagram use dived after photo fiasco: AppData

A photo illustration shows the applications Facebook and Instagram on the screen of an iPhone in Zagreb April 9, 2012. REUTERS/Antonio Bronic

A photo illustration shows the applications Facebook and Instagram on the screen of an iPhone in Zagreb April 9, 2012.

Credit: Reuters/Antonio Bronic

SAN FRANCISCO | Fri Dec 28, 2012 5:02pm EST

SAN FRANCISCO (Reuters) - Facebook Inc's Instagram lost almost a quarter of its daily users a week after it rolled out and then withdrew policy changes that incensed users who feared the photo-sharing service would use their pictures without compensation.

Instagram, which Facebook bought for $715 million this year, saw the number of daily active users who accessed the service via Facebook bottom out at 12.4 million as of Friday, versus a peak of 16.4 million last week, according to data compiled by online tracker AppData.

The popular app, which allows people to add filters and effects to photos and share them over the Internet or smartphones, experienced the drop over the brief, often-volatile holiday period.

Other popular apps also saw slippage in usage, and some were more pronounced. Yelp, for instance, saw daily active users -- again via Facebook -- slide to a weekly low of half a million on Thursday, from a high of 820,000 one week ago.

Instagram disputed the AppData survey, which was compiled from users that have linked the photo service to their own Facebook accounts, historically between 20 and 30 percent of Instagram members.

"This data is inaccurate. We continue to see strong and steady growth in both registered and active users of Instagram," a spokeswoman said in an emailed statement on Friday.

Looking out over a broader timeframe, Instagram's monthly active users edged up to 43.6 million as of Friday, an increase of 1.7 million over the past seven days, according to AppData.

"We'll have to monitor the data over the coming weeks to gain perspective on trends in Instagram's performance," AppData marketing manager Ashley Taylor Anderson said in an email.

ATTENTION-SEEKING

The sharp slide in activity highlighted by AppData was bound to draw attention on the heels of the controversial revision to Instagram's terms of service that, among other things, allowed an advertiser to pay Instagram "to display your username, likeness, photos (along with any associated metadata)" without compensation.

The subsequent public outrage prompted an apology from Instagram founder Kevin Systrom. Last week, a California Instagram user sued the company for breach of contract and other claims, in what may have been the first civil lawsuit to stem from the controversial change.

Instagram subsequently reverted to some of its original language.

The move renewed debate about how much control over personal data users must give up to live and participate in a world steeped in social media.

Analysts say Facebook, the world's largest social network, was laying the groundwork to begin generating advertising revenue, by giving marketers the right to display profile pictures and other personal information, such as who users follow in advertisements.

Its shares closed down 13 cents or 0.5 percent at $25.91 on the Nasdaq, in line with the broader market.

(Reporting By Edwin Chan; Editing by Leslie Adler and Andrew Hay)


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After setbacks, Russia boosts space spending

MOSCOW | Thu Dec 27, 2012 2:43pm EST

MOSCOW (Reuters) - The country that oversaw the launch of the world's first artificial satellite hopes to regain some of its former glory with a big boost in space spending announced by Russia on Thursday after a series of failures.

Prime Minister Dmitry Medvedev approved a plan to spend 2.1 trillion roubles ($68.71 billion) on developing Russia's space industry from 2013 to 2020, state-run RIA news agency reported.

"The programme will enable our country to effectively participate in forward-looking projects, such as the International Space Station (ISS), the study of the Moon, Mars and other celestial bodies in the solar system," Medvedev was quoted as saying.

Despite the launch by the former Soviet Union of Sputnik 1 in 1957, triggering the Cold War space race, Russia's space programme has suffered a series of humiliating setbacks in the past year.

These have mostly involved unmanned missions such as satellite launches, that industry veterans blame on a decade of crimped budgets and a brain drain.

Russia budgeted about 100 billion roubles ($3.3 billion) for space programmes annually in 2010 and 2011, far less than the yearly average of the amount Medvedev announced, but he said some of the money would come from outside the state budget.

The failure of a workhorse Proton rocket after launch in August caused the multimillion-dollar loss of an Indonesian and a Russian satellite. A similar problem caused the loss of a $265 million communications satellite last year.

Medvedev criticized the state of the industry in August, saying problems were costing Russia prestige and money.

Since the retirement of its space shuttle fleet last year, U.S. space agency NASA has been relying on Russia to take astronauts to the ISS at a cost of $60 million each, and plans to continue until its own new craft is developed in 2017.

($1 = 30.5645 Russian roubles)

(Reporting By Nastassia Astrasheuskaya; Editing by Michael Roddy)


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After Jackson, EPA faces decisions on U.S. fracking boom

U.S. Environmental Protection Agency Administrator Lisa Jackson, speaks during a news conference in Rio de Janeiro June 20, 2012. REUTERS/Ueslei Marcelino

U.S. Environmental Protection Agency Administrator Lisa Jackson, speaks during a news conference in Rio de Janeiro June 20, 2012.

Credit: Reuters/Ueslei Marcelino

By Jonathan Leff and Joshua Schneyer

NEW YORK | Fri Dec 28, 2012 4:28pm EST

NEW YORK (Reuters) - The past four years of U.S. environmental regulation was marked by a crackdown on emissions that angered coal miners and power companies. Over the next four, the new head of the Environmental Protection Agency will have to decide whether to take on an even larger industry: Big Oil.

Following Lisa Jackson's resignation on Wednesday, her successor will inherit the tricky task of regulating a drilling boom that has revolutionized the energy industry but raised fears over the possible contamination of water supplies.

The controversial technique at the center of the boom, hydraulic fracturing, involves injecting millions of gallons of water laced with chemicals deep into shale rocks to extract oil and gas. It has become a flashpoint issue, putting the EPA -- charged with safeguarding the nation's water -- in the middle of a fight between environmentalists and the energy industry.

Both sides now eagerly await a major EPA research project into fracking's effects on water supplies due in 2014, as well as final rules on issues including the disposal of wastewater and the use of 'diesel' chemicals in the process.

It is unclear who will take the role, but the incoming chief may have a "huge impact" on the oil and gas industry, says Robert McNally, a White House energy adviser during the George W. Bush administration who now heads the Rapidan Group, a consulting firm.

On the one hand, energy industry and big manufacturers are warning the EPA not to impede a drilling boom that offers the promise of decades' worth of cheap energy. Meanwhile, environmentalists are pressing President Barack Obama to ensure the drilling bonanza is not endangering water resources.

"This administration clearly needs contributors to economic growth for its economic legacy as much as it needs to add to its environmental legacy," said Bruce Bullock of the Maguire Energy Institute at Southern Methodist University in Dallas.

"This appointment could be key in seeing which of those two legacies is more important."

There are many contenders for the role, but no clear front-runner as yet. Obama may seek an insider to avoid a difficult confirmation process, with possible candidates including Bob Perciasepe, the EPA deputy administrator and interim chief, and Gina McCarthy, who runs the air quality division.

Obama is unlikely to win Congressional approval for a heavy-handed regulator, and there is no suggestion of a stringent crackdown.

Even Jackson, who suffered withering criticism from big industry and Republicans for her efforts to curb pollution and limit greenhouse gas emissions, has cautiously condoned the practice as safe, while acknowledging the need for greater study and, in some cases, oversight.

"(Fracking technology) is perfectly capable of being clean," Jackson said in February. "It requires smart regulation, smart rules of the road."

Jackson's successor may now be charged with refining those rules, and both energy companies and fracking critics are anxious about the outcome.

Industry body Independent Petroleum Association of America said the EPA has "hindered development" of oil and gas for four years, and looks forward to a new chief who will promote energy drilling "hand in hand" with environmental regulation.

Executive director of the Sierra Club environmental group Michael Brune says the EPA has "unfinished business" in addressing things such as the release of methane emissions during fracking.

APPETITE TO REGULATE

Some analysts say Obama will not risk the economic stimulus of cheaper, domestic energy by pushing for tougher regulations. The oil sector is one of the few bright spots in the U.S. economy; natural gas prices are near their lowest in a decade, a boon for manufacturers, and U.S. oil output is the highest in 18 years.

"Even before (Jackson's resignation) there didn't seem to be much of an appetite in the White House to regulate shale drilling on a federal level in the next couple of years," says Nitzan Goldberger, U.S. energy policy analyst with Eurasia Group.

But big drillers such as ExxonMobil and Chesapeake who have plowed billions of dollars into shale fields are watching carefully for any sign of new rules or oversight.

Mark P. Fitzsimmons, a former lawyer in the Department of Justice's environmental division, and now a partner at Steptoe & Johnson LLP in Wash DC, says there is "a risk of overregulation." Some drilling activity has already slowed sharply this year due to the slump in natural gas prices.

"Regulatory overlays that add to the cost of production will further slow down development" but won't stop it, he said.

While fracking technology has been around for decades, it has only gained widespread use across dozens of states in recent years. The EPA, like many groups, has struggled to keep up with the expansion, according to Government Accountability Office reports released earlier this year.

After years in which states were mostly responsible for regulating onshore drilling, the new EPA administrator will be pressed to take a more central role.

A year ago, in the first U.S. government report of its kind, the EPA drew a potential link between water contamination in rural Pavillion, Wyoming and fracking, based on samples of ground water from the area. That study has been contested, and subsequent research has been inconclusive.

A firmer word on the impact may not emerge until 2014, when the EPA is expected to release the first exhaustive in-depth government study on the long-term effects of fracking on drinking water, commissioned by Congress over two years.

While climate change issues and air pollution may remain larger agency priorities, fracking is moving up the agenda.

"I don't think they would be capable of ignoring something that Matt Damon makes a movie about," said Fitzsimmons.

Damon and John Krasinski star in "Promised Land," a new film that opened on Friday exploring the social impact of fracking. It received mixed reviews from critics, but is being closely watched by an energy industry that fears it could further antagonize public opinion over domestic drilling.

A Gallup poll this year showed drinking water contamination is the leading environmental concern among Americans.

DIESEL, WASTEWATER AND FLARING

The debate rages over a diverse range of issues.

While fracking was exempted from the Federal Clean Water Act in 2005, operations that used diesel fuel, which contains a number of toxic chemical compounds, were not exempted.

However, what exactly constitutes "diesel" has been a bone of contention among oil firms and environmental groups.

"The question is how to define "diesel" - broadly or narrowly," says consultant McNally.

"It's a big issue especially for Bakken producers," he said, referring to the region of North Dakota where crude oil output has more than tripled in two years.

The EPA published a draft definition in May, which met with criticism from the industry and some legislators, but it will fall to the new administrator to set a final definition.

Under Jackson, the EPA also said it would begin to regulate the millions of gallons a day of wastewater that is withdrawn from wells after the fracking process, probably in 2014. This is usually trucked offsite and sometimes re-injected elsewhere, although increasingly it is being reprocessed for further use.

And eventually, the EPA could face pressure to backtrack on previous initiatives. In April, the agency relented to pressure from the industry, giving drillers until January 2015 to end the practice of "flaring" excess natural gas from wells that were not connected to pipelines. It had initially proposed that firms cease almost immediately.

For Jackson's successor, a central question is whether the EPA takes a broader role in the industry, or, as Jackson hinted a year ago, allows state officials to call most the shots when it comes to drilling:

"It's not to say that there isn't a federal role, but you can't start to talk about a federal role without acknowledging the very strong state role."

(Additional reporting by Selam Gebrekidan and Valerie Volcovici; Editing by Joseph Radford and Andrew Hay)


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U.S. retailers scramble after lackluster holiday sales


Wed Dec 26, 2012 5:08pm EST


n">(Reuters) - The 2012 holiday season may have been the worst for retailers since the 2008 financial crisis, with sales growth far below expectations, forcing many to offer massive post-Christmas discounts in hopes of shedding excess inventory.


While chains like Wal-Mart Stores Inc and Gap Inc are thought to have done well, analysts expect much less from the likes of book seller Barnes & Noble Inc and department store chain J. C. Penney Co Inc.


Shares of retailers dropped sharply on Wednesday, helping drag broader indexes lower, as investors realized they were likely to be disappointed when companies start to report results in a few weeks' time.


"The broad brush was Christmas wasn't all that merry for retailers, and you have to ask what those margins look like if the top line didn't meet their expectations," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group.


Growth was always expected to slow this season, though an improving employment picture and rising home values had helped mitigate the worst fears. But then Superstorm Sandy hit the East Coast in late October, mild weather blunted sales of winter clothing and rising concern about the "fiscal cliff" became more of a reality, dragging down already-pessimistic forecasts.


The latest sign of trouble came from MasterCard Advisors Spending Pulse, which reported holiday-related sales rose 0.7 percent from October 28 through December 24, compared with a 2 percent increase last year.


The preliminary estimate from SpendingPulse was in line with other estimates showing weak growth during the holiday season, when retailers can book about 30 percent of annual sales - and in many cases, half of their profit.


"It has been a very uneven industry performance, probably at least for the last year, and that certainly continued into the holiday season," said Michael Niemira, chief economist at the International Council of Shopping Centers, in an interview with Reuters Insider.


The latest holiday season could end up the weakest since 2008, during the last recession, when sales actually declined. The National Retail Federation had previously predicted 4.1 percent sales growth this year, versus a 5.6 percent increase a year earlier.


Markets reacted sharply to the gloomy outlook.


The S&P retail index closed down 1.7 percent, and 14 of the top 20 decliners in the broader S&P 500 were retailers or consumer brands.


INVENTORY CRUSH


To be sure, the actual percentage change in holiday sales can differ substantially, depending on which group is calculating the figure. SpendingPulse and the National Retail Federation, for example, look at different categories, which can cause some variation in their forecasts.


Regardless of how bad the figure is, one concern for retailers is that soft sales will mean an excess of inventory that will force some to slash prices.


The day after Christmas, retailers were using deep discounts to lure shoppers. Among other brands, Barnes & Noble offered 50 percent discounts in stores via email promotions on Wednesday, while Ann Inc had half-off at its Loft stores, and Macy's Inc's Bloomingdale's promoted discounts of up to 75 percent in some cases.


At a Target store in New York City's Harlem neighborhood, most shoppers seemed to be spending more on groceries, toys and small gifts than on gadgets or clothes.


Despite discounts of 50 percent, there were few takers for Jason Wu glass ornaments, Oscar de la Renta canvas totes and other designer goods launched under the mass merchant's tie-up with upscale chain Neiman Marcus.


Even in a good year, retailers would have offered discounts to lure customers, but some suggest a weak year has now forced their hands.


"Retailers are no longer chasing sales, they are chasing inventory management. That means the discounts that they would have liked to be at 50-60 (percent) off have climbed to 75 to even 80 (percent) off," said Marshal Cohen, chief industry analyst at The NPD Group.


This week's cold, snowy weather on the heels of a warm start to December could spur people to use the gift cards they received or their remaining discretionary income to buy everything from jackets to snow blowers, said Evan Gold, senior vice president of client services at Planalytics, which tracks weather for businesses including retailers.


In December, he said, "people are out spending anyway, weather can trigger what you purchase, not if you purchase, but what you purchase."


SANDY AND CLIFF


A variety of factors were thought to be at fault for the weak season, starting with Superstorm Sandy, which depressed sales in the U.S. Northeast in late October and early November.


Sales recovered in the second part of November, with early hours and promotions helping drive traffic during the "Black Friday" weekend after Thanksgiving, analysts said.


But there was a deep lull in early December as a winter storm in parts of the United States may have limited sales, said Michael McNamara, vice president of research and analysis at MasterCard SpendingPulse.


On top of that, there were fears that taxes will rise in the new year if Washington cannot negotiate a solution to the end-of-year "fiscal cliff" dilemma.


A recent Ipsos poll for Reuters found that only 17 percent of shoppers were spending less due to cliff fears, though analysts said the damage was still done.


"The government usually does not have a role in holidays but this year they did. They got right in the midst of it, the timing couldn't have been any worse," NPD's Cohen said.


BRIGHT SPOTS


One bright spot has been online sales, which continue to grow at a faster pace.


On Christmas Day, online sales jumped 22.4 percent, outpacing the 16.4 percent increase in 2011, according to IBM Digital Analytics Benchmark, which tracks more than 1 million e-commerce transactions a day from 500 U.S. retailers.


Whether online or off, some of the winning retailers were expected to be Wal-Mart, which attracted shoppers with early deals on the night of Thanksgiving and kept its focus on value, and apparel chains like the Gap, whose bright sweaters were successful, according to analysts.


Toys sold well, and hot items that were harder to find later in the season included certain Mattel Inc Barbie dolls and LeapFrog Enterprises Inc's LeapPad2 tablet computer, according to B. Riley Caris analyst Linda Bolton Weiser.


For retailers that have struggled, analysts said all hope was not lost. Many have fiscal quarters that end in January, so they still have time to benefit from a post-Christmas rebound. Because Christmas fell on a Tuesday, some said they could even see a boost this week from people who have extra time off.


"There's still a little bit more time to go until the holiday season is officially over," Morningstar analyst Peter Wahlstrom said.


Wal-Mart shares ended down 0.8 percent at $67.99 on Wednesday, while Macy's shares were down 1.1 percent at $37.11, Barnes & Noble shares were down 3.5 percent at $14.49, Amazon.com Inc shares ended 3.9 percent lower at $248.63, and Ann Inc shares lost 5.1 percent to close at $32.06.


(Reporting by Brad Dorfman, Nivedita Bhattacharjee and Jessica Wohl in Chicago; additional reporting by Chuck Mikolajczak and Dhanya Skariachan in New York; writing by Ben Berkowitz; editing by Jeffrey Benkoe and Matthew Lewis)


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Winnebago to raise output after strong demand boosts first-quarter

n">(Reuters) - Winnebago Industries Inc (WGO.N), the largest U.S. motor home maker, said it plans to increase its production in the current quarter to meet the high demand that also helped it report stronger-than-expected first-quarter results.

Shares of the company were up 13 percent at $15.95 at noon on the New York Stock Exchange on Thursday. The stock rose to a year-high of $16.22 earlier.

The company said its motorhome order backlog had more than tripled from a year earlier to 2,118 units as of December 1.

"We have continued to increase our production schedule and have hired additional employees to meet this improved demand during the last two fiscal quarters," Chief Executive Randy Potts said in a statement on Thursday.

Order backlog, which the company defines as orders to be shipped within the next six months, grew for both low- and high-end products, Potts said on a conference call.

Growth in motorhome revenue was on strong demand for the company's new entry-level Class A gasoline offerings, Chief Financial Officer Sarah Nielsen said during the call.

The company's Class A models are conventional motor homes constructed directly on medium- and heavy-duty truck chassis.

Winnebago introduced low-priced models after the recession reduced demand for higher-end motorhomes costing up to $350,000.

Net income rose to $7.4 million, or 26 cents per share, from $1 million, or 4 cents per share, a year earlier. Revenue rose 47 percent to $193.6 million. (link.reuters.com/xav74t0)

Analysts on average had expected earnings of 10 cents per share on revenue of $155.3 million, according to Thomson Reuters I/B/E/S.

(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Ted Kerr)


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SMA Solar shares rise after Zeversolar takeover: CEO

FRANKFURT | Fri Dec 21, 2012 8:01am EST

FRANKFURT (Reuters) - Shares in SMA Solar (S92G.DE), Germany's top solar company, rose on Friday after an acquisition gave it access to China, seen as overtaking Germany next year as the world's No.1 solar market.

SMA Solar late on Thursday announced the acquisition of a 72.5 percent stake in Jiangsu Zeversolar, a move that drove its shares up as much as 7.6 percent on Friday. At 7:39 a.m. ET, they were still up 3 percent.

"SMA Solar so far had no access to the Chinese market. Thus, the acquisition makes clear strategic sense," said a trader.

Plunging subsidies for solar power in Europe have driven the local solar industry to the brink of collapse, forcing many players to file for insolvency or look for growth in foreign markets to remain profitable.

China, however, has been a tough nut to crack, usually favoring local suppliers. In addition, Western solar firms have alleged price dumping by Chinese peers, triggering a trade war that reached the WTO last month.

China is spending 13 billion yuan ($2.1 billion) on its solar industry this year and, said SMA Solar Chief Executive Pierre-Pascal Urbon, is expected to install 2-3 gigawatts (GW) of solar power this year, a figure which could soar to 8 GW next year.

"We hope for very strong growth in sales next year," Urbon told Reuters on Friday.

He added Zeversolar's sales for 2012 would remain largely stable compared with the 30 million euros ($40 million) generated in 2011. SMA aims for sales of 1.3-1.5 billion euros this year.

Urbon said SMA had an option to secure the remaining stake in Zeversolar, which is expected to generate positive earnings per share (EPS) from 2014, but added the group currently had no plans to do so.

(Reporting by Christoph Steitz; Editing by Mike Nesbit)


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RIM shares fall at the open after earnings

A logo of the Blackberry maker's Research in Motion is seen on a building at the RIM Technology Park in Waterloo April 18, 2012.

Credit: Reuters/Mark Blinch


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State Department seeks more money, vows reforms after Benghazi

The U.S. Consulate in Benghazi is seen in flames during a protest by an armed group said to have been protesting a film being produced in the United States in this September 11, 2012 file photo. U.S. Secretary of State Hillary Clinton said December 19, 2012, she accepted the findings of an independent panel that faulted the State Department over the deadly September attack and had ordered widespread changes to bolster US. Diplomatic security overseas. REUTERS/Esam Al-Fetori/Files

1 of 2. The U.S. Consulate in Benghazi is seen in flames during a protest by an armed group said to have been protesting a film being produced in the United States in this September 11, 2012 file photo. U.S. Secretary of State Hillary Clinton said December 19, 2012, she accepted the findings of an independent panel that faulted the State Department over the deadly September attack and had ordered widespread changes to bolster US. Diplomatic security overseas.

Credit: Reuters/Esam Al-Fetori/Files



WASHINGTON | Thu Dec 20, 2012 5:06pm EST


WASHINGTON (Reuters) - The U.S. State Department will seek billions of dollars in new funds and revamp security procedures around the globe in response to criticism by an independent investigation of the September 11 attack on the U.S. mission in Benghazi, Libya, senior officials said on Thursday.


U.S. Secretary of State Hillary Clinton's two top deputies appeared at a Senate hearing and conceded that U.S. officials had failed to "connect the dots" ahead of the attack, which killed U.S. Ambassador to Libya Christopher Stevens and three other Americans.


"We learned some very hard and painful lessons in Benghazi," said Deputy Secretary of State William Burns. "We are already acting on them. We have to do better."


The State Department said on Wednesday its security chief had resigned and three other officials were relieved of their posts following the report, which cited leadership and management deficiencies, poor coordination and confusion over who had the authority to make decisions.


Senate Foreign Relations Committee Chairman John Kerry, tipped to be President Barack Obama's pick to replace Clinton when she steps down next month, chaired the session and led the call for increased funding.


"We need to make certain that we are not penny wise and pound foolish when it comes to supporting America's vital interest overseas," Kerry, a Massachusetts Democrat, said.


SECURITY SPENDING EYED


Clinton, unable to appear at the hearing due to illness, has already asked for $1.4 billion in funds for the 2013 fiscal year to be re-allocated to improve security at U.S. diplomatic missions, a State Department fact sheet said.


The State Department is also expected to request $2.3 billion per year for the next 10 years to further this work.


Some Republican lawmakers challenged the call for more money.


"If the State Department intends to blame its long string of failures on inadequate funding, then perhaps it should take a closer look at the money that is being lavished on global climate change, culinary diplomacy programs and other favored projects," House Foreign Affairs Committee chairwoman Ileana Ros-Lehtinen, said at an afternoon hearing.


But the panel's top Democrat, Representative Howard Berman, said the diplomatic security budget was cut so often it "created a culture at the State Department that is more preoccupied with saving money than with achieving its security goals."


Deputy Secretary of State Thomas Nides said the department had formed a task force to implement 29 specific recommendations in the panel's report and sent security assessment teams to 19 U.S. missions in 13 countries.


The department, in cooperation with the Pentagon, intends to send 35 additional Marine detachments, or about 225 uniformed personnel, to beef up security at medium- and high-threat posts and to boost staffing of its own Bureau of Diplomatic Security by about 5 percent, or 150 additional agents, Nides said.


"Implementation of each and every recommendation will be under way by the time the next secretary of state takes office," Nides said.


The State Department said Bill Miller, a diplomatic security special agent since 1987 who has served in Egypt and Iraq, was appointed deputy assistant secretary of state for high-threat posts - a new position in the Bureau of Diplomatic Security.


The job will focus on U.S. posts in Afghanistan, Azerbaijan, Egypt, Indonesia, Iraq, Jordan, Kenya, Libya, Mauritania, Nigeria, Pakistan, Somalia, South Sudan, Sudan, Syria, Tunisia and Yemen, the State Department said.


The Benghazi incident could tarnish Clinton's four-year tenure as secretary of state but the report does not fault her specifically.


Burns said to his knowledge the security requests from diplomats in Libya "did not get as far as Secretary Clinton."


White House spokesman Jay Carney said Obama endorsed the recommendations of the Benghazi report and expects them to be fully implemented.


"Immediately, accountability has been brought to bear with regard to four individuals who are very senior," he said.


'SCLEROTIC' DEPARTMENT


Republican Senator Bob Corker, an outspoken critic of the Obama administration's response to Benghazi, said the panel report revealed a "sclerotic" State Department that has failed to make good use of the resources already at its disposal.


"We have no idea whether the State Department is using its money wisely or not," he said.


Nides said the department still was coming to terms with widespread changes across the Middle East and defended the department's overall track record.


"We get this right about 99 percent of the time. We would like to be at 100 percent without question," he said.


Republicans have focused much of their firepower on U.S. Ambassador to the United Nations Susan Rice, who appeared on TV talk shows after the attack and suggested it was the result of a spontaneous protest rather than a planned attack.


The report concluded there was no such protest and Rice, who had been widely seen as Obama's top pick to succeed Clinton, withdrew her name from consideration last week.


U.S. officials say the assault, which occurred on the anniversary of the September 11, 2001, attacks on New York and Washington, was the work of Islamist extremists and have pledged to bring those responsible to justice.


Burns said the attack highlighted the need to take a broader look at security rather than focus on "specific and credible" threats, which officials insist were absent in Benghazi.


"What happened in Benghazi was clearly a terrorist attack," Burns said. "We did not do a good enough job, as the report highlights, in trying to connect the dots."


(Additional reporting by Tabassum Zakaria and Mark Felsenthal; Editing by Bill Trott and Todd Eastham)


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Instagram retreats on some service terms after backlash

n">(Reuters) - Instagram, the popular photo-sharing service, has retreated from some but not all of the controversial changes in its terms of service that prompted a fierce backlash from users earlier this week.

In a blog post on Thursday, Instagram founder and CEO Kevin Systrom apologized for a failure to "communicate our intentions clearly." The terms of service changes pertaining to advertising have been reversed, Systrom said, and restored to what they had been before the changes announced on Monday.

Instagram, which allows people to add filters and effects to photos and share them easily on the Internet, was acquired by Facebook earlier this year for $715 million.

Some top users of Instagram, including National Geographic magazine, said they would stop using the service after the new rules were announced on Monday.

Language that had appeared to allow Instagram advertisers to display user photos without compensation have been removed from updated terms of service posted on Thursday.

The updated terms also do not appear to contain a controversial provision which had stated that if a child under the age of 18 used the service, it implied his or her parent had tacitly agreed to Instagram's terms.

However, the new terms still contain a mandatory arbitration clause, which is not included in terms of service for other leading social media companies like Twitter, Google, YouTube or even Facebook itself. That immunizes Instagram from many forms of liability, according to legal experts.

Internet experts said Instagram had been very aggressive in asserting its rights to user information and inviting anyone who did not agree to delete their accounts within a few weeks.

The updated terms still say that anyone who accesses Instagram agrees to be bound by the new terms which are slated to go into effect on January 19.

Also, Instagram kept language which gave it the ability to place ads in conjunction with user content, and "that we may not always identify paid services, sponsored content, or commercial communications as such."

Instagram representatives could not immediately be reached for comment.

Systrom stressed in the blog post that the company had no intention of selling the photos that users post on the service. Many users had read the new terms of service as an indication that the company was reserving the right to do that.

"Going forward, rather than obtain permission from you to introduce possible advertising products we have not yet developed, we are going to take the time to complete our plans, and then come back to our users and explain how we would like for our advertising business to work," Systrom said.

(Reporting by Jonathan Weber and Dan Levine; Editing by Paul Tait and Michael Perry)


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Met Opera's James Levine to return in May after spinal injury


NEW YORK | Fri Oct 12, 2012 7:33pm EDT


NEW YORK (Reuters) - Metropolitan Opera music director James Levine will return to the conducting podium in May 2013 - initially in a wheelchair - after a fall more than a year ago that left him partially paralyzed, the New York opera house said on Friday.


Levine, 69, who has been the Met's music director since 1976, will conduct the Metropolitan Opera Orchestra at Carnegie Hall in May 2013, before leading three operas during the Met's 2013-14 season, the Met said in a statement.


Met General Manager Peter Gelb called Levine's return to conducting "great news for opera lovers throughout the world," while Levine said: "I'm looking forward more than I can say to getting back to work."


Levine has been in long-term rehabilitation since injuring his spine in a fall while on vacation in August 2011 that required surgery and left him partially paralyzed.


While his upper body strength has returned, his injuries have left him temporarily unable to walk.


The Met said that for the time being, he will conduct from a motorized wheelchair. In anticipation of Levine's return, the Met's technical department is designing customized, elevating podiums that will be utilized on the Carnegie Hall stage and in the Met's orchestra pit.


Levine referred to the "long healing process" from his spine injury, but said he feels better with each passing day.


For the 2013-14 season, Levine is scheduled to conduct a new production of Verdi's "Falstaff" and revivals of Mozart's "Cosi fan tutte" and Berg's "Wozzeck."


The Met said that in recent weeks, Levine has gradually been taking on more of his duties as music director, including coaching members of the organization's young artist development program and holding artistic planning sessions.


His physician, Dr. Len Horovitz, who coordinates his medical team, said Levine was "an inspirational case, whose return to conducting will be a result of remarkable perseverance and hard work."


Levine made his debut with the company in 1971 and has conducted 2,441 performances there, more than anyone in the company's 129-year history. His last performance as a conductor was of Wagner's "Die Walküre" on May 14, 2011.


(Reporting By Ellen Freilich; Editing by Jill Serjeant and Eric Walsh)


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