Euro near two-week low, shares up on rekindled rate cut hopes

LONDON (Reuters) - The euro hovered near a two-week low and European shares rose on Friday after the European Central Bank rekindled expectations that it could again take the knife to interest rates.


Strong Chinese trade data also helped lift optimism about global growth prospects, boosting oil, copper and Asian shares, although investors booking profits before next week's Chinese new year holidays limited gains.


ECB President Mario Draghi levered the door to a rate cut back open on Thursday, saying the bank would monitor the potential downward pressure of a strengthening euro on already near-target inflation.


European share markets opened higher on the hopes lower borrowing rates would also reverse some of the 8 percent trade-weighted rise in the euro over the last six months that has began to weigh on exporters.


"We're in a 'risk-on' mode and continental Europe should continue to do well in this environment," said Cyrille Urfer, who heads up asset allocation at Swiss bank Gonet.


The pan-European FTSEurofirst 300 <.fteu3> was up 0.5 percent by 0815 GMT, though it remained on course for its second weekly loss in a row.


London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> were up 0.6, 0.4 and 0.3 percent respectively and U.S. stock futures pointed to a steady Wall Street start. <.l><.eu><.n/>


While Draghi said the euro's recent surge was a sign of a return of confidence, he said: "We certainly want to see whether the appreciation is sustained and will alter our risk assessment as far as price stability is concerned."


The comments went further than many analysts had expected and as European trading gathered pace the euro steadied at $1.3398 after earlier dropping to $1.33705, the lowest since January 25.


China said its exports grew 25 percent in January from a year ago, the strongest showing since April 2011 and well ahead of market expectations for a 17 percent rise, while imports also beat forecasts, surging 28.8 percent on the year.


The MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> added 0.3 percent and Australian shares rallied 0.7 percent to 34-month highs.


"China's economic conditions are improving and the trade data confirms the continuation of a recovery trend. Not just the trade data but retail, production and investment flows clearly show that the economy bottomed out in the third quarter last year," said Hirokazu Yuihama, a senior strategist at Daiwa Securities in Tokyo.


In the bond market, benchmark German Bund futures were little changed in early trade as Draghi's cautious tone on the euro zone's economy underpinned demand for low risk assets.


Investors focused on Irish bonds after benchmark 10-year yields slid to their lowest since before the start of the subprime crisis in 2007 on news Dublin had clinched a bank debt deal that will cut its borrowing needs over the next decade.


(Additional reporting by Sudip Kar-Gupta; editing by Philippa Fletcher)



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At War Blog: Interview With Gen. John R. Allen on Leaving Afghanistan

The New York Times interviewed Gen. John. R. Allen on Sunday, a week before his scheduled departure from Afghanistan after 19 months as the commander of the American and allied forces.

Following are some of General Allen’s comments. Brief explanations have been provided in brackets.

On his relationship with President Hamid Karzai:

“I wanted him to understand that he was always going to have my loyalty and I was always going to work with him. In fact, I said a number of times, ‘I’m proud to have served you at the same time I served my own leadership, whether it’s a NATO leadership or U.S. leadership.’ Now, I wanted him to believe it because it happened to be true. I think our personalities meshed in that regard.”

“Now, we’ve had some tough times. This has been a time of really dramatic change for the campaign. When I got here, I measured success in how well we and how often we were fighting. Today, it’s a very different environment. The Afghans are virtually entirely in the lead across Afghanistan.”

“This is what I’ve learned about the president. If you listen to him, he’s got some pretty good ideas, and often the controversy that has arisen in the relationships hasn’t been because necessarily you disagree with the ideas. It’s because you haven’t listened to them early enough.”

“And sometimes it’s been strained. I don’t think he ever believed that actions that I have taken were ever intended to disadvantage him as the president, or not do everything I possibly could for the Afghan people. I told him, I’m prepared to die in this country on behalf of his people. I take that very seriously.”

On civilian casualties:

“I’ve met with the families of the casualties that we’ve inflicted. I’ve flown to the villages to personally apologize for the casualties, and do what I can to do the right thing for those families. I’ve taken measures with respect to the employment of certain kinds of fires.” ["Fires” is common military shorthand for a variety of munitions, from bullets to missiles to mortar shells.]

“We had a couple of pretty rough incidents where Afghans were killed by the delivery of aviation fires. I eventually said to President Karzai that civilian structures, tents, potential areas where civilians might be either taking refuge or hiding or living, I’m not going to deliver any more fires on those structures unless my troops are pinned down, can’t move, and the only option they have is to deliver fires on these structures, or I decide, the senior leader out here, I decide to deliver fires on these structures.”

“The civilian causalities as a result of air fires plummeted immediately. It was probably a decision I could have made long before that and none of our forces were put at risk, or at  greater risk because of this.”

On the aftermath of the burning of Korans at Bagram Air Base:

“I have to tell you, I thought this could be it for the relationship.

“I immediately got on the phone to a number of Afghan media outlets, immediately cut a video apologizing for this as sincerely as I could possibly appear and sound because this was going to be bad, it could be really bad. I called the president, I went to see him, apologized to him for this. It was completely inadvertent but this culture deserved that apology. We were in their home, so to speak. We are guests in their home and even though it was an accident, even though it was not intentional, we had made a bad mistake, a real error and the people deserved my apology, the president deserved my apology.

“He accepted it and I think in many respects, the personal nature of our relationship was what tempered the language coming out of the palace, the releases, his own engagement with the media and so on. Because of both of our actions, both of them supporting each other, we were able to keep this from being the result of a bad mistake from being something that could have really fractured the relationship.”

On the fallout in March after an American soldier killed 16 villagers in the southern Afghan district of Panjwai, which he first heard about when he was in the United States to testify before Congress:

“The first phone call was something of the effect of — we’ve got mixed reporting from Panjwai. We think an American soldier maybe shot some people and my response was, ‘All right. Let’s develop the situation quickly. Tell me what we got in front of us because we’ve got to make the Afghans in the loop on this.’ ”

“Then the phone calls started coming in and the numbers started going up and pretty quick and this is as bad a circumstance as you might have imagined.”

“I called President Karzai from home and we had a long conversation about it. I promised him once again that we would take all steps, measures, take all actions necessary to get to the bottom of this and we would do a full and complete investigation and those people necessary would be held accountable.”

“This was still unfolding. Was it one shooter? Was it multiple shooters? There were wild rumors associated with things that he had done in addition to shooting. So the information environment was wide open at this point. And both for the purposes of internal stability in Afghanistan and for the purposes of preserving our relationship we were working very, very hard to confirm what we knew to be the facts and try very hard to get after the rumors that were just flying.”

“Once again, when he could have been angry, when it could have been a very negative conversation, I mean, he was tutorial. He explained to me why this is bad for the relationship, why this is bad for the campaign, and why this will shake the confidence of the Afghan people, his personal gesture of measured conversation with me. He wasn’t angry.”

On why the United States should stay engaged in Afghanistan:

“I put it in the context of this has been worth it. This is bigger than anyone of us. It’s bigger than the president. It’s bigger than the president of Afghanistan, because this isn’t about today. This is about tomorrow. This is about doing all we can to facilitate President Karzai with his desire to be successful. But it’ll be about doing all we can do to set up his successor for success.”


On overcoming the skepticism of officials in Washington, who often express frustration with Mr. Karzai:

“For this president, at this moment of its history, Afghanistan’s history, to be able to hold together these tribes and these ethnic groups with these kinds of challenges has got to be one of the hardest jobs going. And so I try to paint the context of the challenges that he faces, the history from which he originates and how, conceivably, he will interpret our actions. He may not understand what we are trying to do, or may misinterpret what we’re trying to do or say. And frankly, one of the great things about our democracy is also one of the hardest things about our democracy: That is, we don’t always speak with the same voice.

“So he’ll hear a voice from one part of the government, it will be different for another part of the government and he’ll seek to square the differences. It’s not a criticism, it just is who we are. The farther you are away from Kabul, the farther you are away from the palace, the farther you are away from the history of this country in the complexities of society, the easier it is to generalize, frankly.”

On the need for the Afghan government to better serve its people and stamp out corruption within its ranks:

“We’ve worked very hard, obviously, to build a capacity in those. But when your ability to survive the night, or put food on the table was — well, for many years are a function of what tribe you were part of, or what group you were part of. And those patronage networks undertook economic opportunities which made them some respect, criminal patronage networks.

“They can only survive because institutions of governance are weak. And so now, we find ourselves in a death grip here — at this very moment when the future of the country relies on the strength of institutions. The criminal patronage networks recognize that their future, their survival can only be sustained by keeping these institutions weak. That’s the moment we find ourselves in, and the presidential directive on any anti-corruption and government reform and the Mutual Accountability Framework that came out of Tokyo.

“These created very helpful, very useful, both domestic and international expectations for reform. So we need to see us moving past the written word and the spoken word and start moving towards action. I think the president, if he were sitting here would tell you that they have achieved some good action, good results in his presidential decree. The Mutual Accountability Framework is constantly being audited to see that there’s progress on reform. But again, we’re still pretty fresh in the process and we’ve got to let this play out some more.”

On the future of the war and Afghanistan:

“Let me make sure I’m clear on this. Nothing is sure in a post-conflict society. But I think the indicators, as far as I’m concerned, are that we’re on the right trajectory. What you have to understand, what people have to understand is some of these reforms take a very long time. In an environment where human rights were crashed under multiple different invasions or civil wars or the Taliban, creating once again the kind of bias for human rights that we would all expect in the Western society, just doesn’t come easily to this country.

“Nothing will happen in this country without security. And that security is being purchased every single day by the Afghan National Security Forces. And then, on the platform of that security, this president has announced a program or platform that he intends to follow. Now, he’s moving forward in some areas, he’s having resistance in others, but we just have to expect this is going to take time. That’s where huge patience has to come in. That’s where the decade of transformation comes in.”

On the surge of “insider attacks” against Westerners that took place in 2012:

“The losses became to this particular means of attack became very troubling, very significant, and tragic. And while on the tactical level and on the operational level, we were able to deal with the problem. This was becoming a strategic crisis — a strategic crisis in capitals, a strategic crisis for the alliance — and the Taliban saw this. They knew this. They saw that. They saw that the future of the A.N.S.F. relied on our being close, partnered and advising inside the Afghan formations.

“We were very careful in our reaction to insider attacks. Not to wall ourselves off from the Afghans and create distance. I used to tell them, you may not be able to do anything about the linear distance that you have to deal with but there’s a lot you can do about your proximity and the closer you all feel to each other, the more secure you will be. And that’s in an environment where we’re transitioning to being advisers almost entirely across Afghanistan. That has to be one of the operative principles for philosophically how we’re going to live with the Afghans. You treat them like brothers. You live with them like they’re family. That reduces the unknowns, it reduces the potential for cultural affront, and it makes you more secure.”

“That doesn’t mean we’re not going to keep a close eye on the environment. We still have these people called Guardian Angels because there are enemies in the ranks and they’re waiting to take that shot.”

“We took a lot of measures and the numbers are down. But I don’t in any way want anybody to become complacent about the number being down. I don’t want anyone to lift up on the security measures that they’re taking or reduce the attentiveness that they have to the environment around them. So, I want everybody to be attentive and we’re going to periodically refresh our training both at the very lowest levels and for the units coming in. So, we’re not going to give up on this.”

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American Idol: It's a Guys' Night in Hollywood






American Idol










02/06/2013 at 11:00 PM EST







From left: Randy Jackson, Mariah Carey, Ryan Seacrest, Nicki Minaj and Keith Urban


George Holz/FOX


Caution: Contains spoilers!

"It does feel a bit like The Hunger Games," said Keith Urban, ramping up the drama as American Idol kicked off the first day of Hollywood Week. Although producers didn't unleash any tracker jackers on the contestants, they did throw in a couple unexpected twists: This season the week started off as a guys-only competition (the girls arrive in Hollywood next week), and after surviving a round of sudden death solo sing-offs, contestants would then be put into groups from which they couldn't escape.

During the solo round, the standouts included two memorable contestants from the nationwide auditions. First up, Navy man Micah Johnson, who developed a speech impediment after suffering through a botched surgery to remove his tonsils. After a rousing rendition of Elton John's "Bennie and the Jets," Johnson was the first to get the green light to the next round.

Joining him soon after was Cuban-American Lazaro Arbos, a 21-year-old ice cream scooper from Naples, Fla., who speaks with a severe stutter but sings with ease. Although Arbos admitted to being both "scared" and "petrified," he quickly won the judges over – Nicki Minaj made her fingers into a heart-shape while he sang – with his take on the Robbie Williams hit, "Angels."

When it came time to form groups of four, the Idol producers threw a few more curveballs – such as pairing a couple of country crooners with two flamboyant (think glitter and faux fur) dudes Ryan Seacrest described as the show's "resident divas."

The result: a quartet that dubbed themselves Country Queen, which delivered a train wreck of a performance. Still, somehow three of the four made it through.

Meanwhile, Arbos's group experience also proved to be a bit of a disaster – which some of his cohorts blamed on his inability to quickly learn the lyrics and melody to the Beach Boys hit "Wouldn't It Be Nice." Although his main nemesis got the boot, a tearful Arbos got the chance to sing another day.

The day of auditions came to a close with what was possibly the most heartbreaking Idol exit ever. New York City subway singer Frankie Ford got a case of the jitters before going on stage, then proceeded to screw up the lyrics and sing off key – leaving the judges no choice but to pull the plug on his dreams. Before walking off into the night, a sobbing Ford stared into the camera and said, "I swear to God I'm coming back next year and I'm going to win."

There will be more solos Thursday (8 p.m. ET), as the judges have to whittle the 43 men left in the competition down to 20 lucky fellas.

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New whooping cough strain in US raises questions


NEW YORK (AP) — Researchers have discovered the first U.S. cases of whooping cough caused by a germ that may be resistant to the vaccine.


Health officials are looking into whether cases like the dozen found in Philadelphia might be one reason the nation just had its worst year for whooping cough in six decades. The new bug was previously reported in Japan, France and Finland.


"It's quite intriguing. It's the first time we've seen this here," said Dr. Tom Clark of the Centers for Disease Control and Prevention.


The U.S. cases are detailed in a brief report from the CDC and other researchers in Thursday's New England Journal of Medicine.


Whooping cough is a highly contagious disease that can strike people of any age but is most dangerous to children. It was once common, but cases in the U.S. dropped after a vaccine was introduced in the 1940s.


An increase in illnesses in recent years has been partially blamed on a version of the vaccine used since the 1990s, which doesn't last as long. Last year, the CDC received reports of 41,880 cases, according to a preliminary count. That included 18 deaths.


The new study suggests that the new whooping cough strain may be why more people have been getting sick. Experts don't think it's more deadly, but the shots may not work as well against it.


In a small, soon-to-be published study, French researchers found the vaccine seemed to lower the risk of severe disease from the new strain in infants. But it didn't prevent illness completely, said Nicole Guiso of the Pasteur Institute, one of the researchers.


The new germ was first identified in France, where more extensive testing is routinely done for whooping cough. The strain now accounts for 14 percent of cases there, Guiso said.


In the United States, doctors usually rely on a rapid test to help make a diagnosis. The extra lab work isn't done often enough to give health officials a good idea how common the new type is here, experts said.


"We definitely need some more information about this before we can draw any conclusions," the CDC's Clark said.


The U.S. cases were found in the past two years in patients at St. Christopher's Hospital for Children in Philadelphia. One of the study's researchers works for a subsidiary of Johnson & Johnson, which makes a version of the old whooping cough vaccine that is sold in other countries.


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JournaL: http://www.nejm.org


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Global shares, euro edge up ahead of ECB meeting

London (Reuters) - The euro and shares inched higher on Thursday, as investors awaited the European Central Bank's policy meeting later in the day and President Mario Draghi's views on the region's growth outlook.


Testimony from the new head of the Bank of England, bond auctions by France and Spain, earnings reports from a host of major European companies and the start of a two-day European Union summit provided more reasons for investors to be cautious.


The euro edged up 0.3 percent to $1.3570, holding above this week's low of $1.3458 plumbed on Tuesday but well shy of a 15-month peak of $1.3711 set last Friday.


The common currency has now soared 20 percent against Japan's yen in just three months, risen 8 percent on sterling and 7 percent on the dollar, increasing tensions among policymakers across the recession-hit region.


The gains have put the spotlight firmly on ECB president Draghi's 1330 GMT news conference, which follows the bank's meeting where interest rates are expected to be left unchanged.


"Draghi has to be very careful because it's a very sensitive time in currency markets, and investors will be looking for any hint of the ECB's thinking on this issue," said Ned Rumpeltin, head of G10 FX strategy at Standard Chartered Bank.


"It is probably the wisest path for him to avoid the debate on the currency at this point in time."


At his news conference last month, Draghi read out a G20 statement on exchange rates in which members pledged to avoid competitive devaluations. With another meeting of the group due next week, it's likely Draghi will keep to this line.


BRITAIN VIEW


Ahead of the ECB meeting, the man about to take the helm at the Bank of England, Canadian Mark Carney, faces his first public grilling about how he would revive Britain's stagnant economy.


Carney, the first foreigner to run the bank in its 318-year history, faces a three-hour question-and-answer session that could also signal how he will bring his banking expertise to bear on the UK's crisis-hit banks.


The Bank of England also holds its monetary policy meeting later. No policy changes are expected at the BoE's monthly meeting, with an announcement due at 1200 GMT.


The UK central bank is unlikely to change interest rates though to signal an unchanged monetary policy stance it needs to announce fresh purchases of bonds to maintain its stock at the current level of 375 billion sterling.


Ten-year gilt yields were 1 basis point lower at 2.09 percent ahead of the testimony and the bank's announcement.


German Bund futures reflected the cautious mood across all markets, edging up 5 ticks to 142.61, with attention on reaction to a Spanish sale of 4.5 billion euros of new debt.


Increasing calls for Spain's prime minister Mariano Rajoy to resign over a corruption scandal may have hit investor demand for the bonds, which saw higher yields at the sale.


Ten-year Spanish government bond yields were 3.7 basis points higher at 5.48 percent, while two-year borrowing costs rose 1.9 bps to 2.89 percent.


SHARES STABLE


European shares were mostly little changed, stabilizing after sharp losses in the previous session, as mixed corporate results and rising economic concerns in the euro zone added to the nerves ahead of the ECB meeting.


The FTSEurofirst 300 index <.fteu3> of top European shares was slightly higher in early trade, despite disappointing results from French pharmaceutical group Sanofi , telecoms firm Alcatel Lucent and Credit Suisse . <.eu/>


London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> were all around 0.1 percent higher.


"The medium and long-term positive trend is still intact, although on the short term, we're turning 'neutral'; indexes are very close to key support levels," said Aurel BGC chartist Gerard Sagnier.


Commodities markets were all trading within tight ranges, with investors' attention firmly fixed on the currency implications of anything the ECB's Draghi might say.


The euro often dictates gold's movements in particular, and ahead of the meeting it had inched up to about $1,680 an ounce.


"Gold is very much dependent on the outcome of the ECB. I don't think today they will give us a clear indication whether the euro is indeed overvalued," said Joyce Liu, an investment analyst at Phillip Futures in Singapore.


"If they try to weaken the euro because the economy hasn't bottomed out, then in that case, it's possible gold may go up a bit."


Brent crude was steady in a tight range around $117 per barrel ahead of the meeting.


Brent has gained over the last three weeks as positive data suggested the global economy had turned a corner, which augurs well for fuel demand, while supply worries stemming from tensions in the Middle East have also supported prices.


(Additional reporting by Francesco Canepa; Editing by Will Waterman)



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Chokri Belaid, Tunisian Opposition Figure, Is Killed





A leading Tunisian opposition politician who had been critical of the Islamist-led government was fatally shot outside his home in Tunis Wednesday, the government news agency said.







Hassene Dridi/Associated Press

Chokri Belaid in Tunis in 2010.







Chokri Belaid was shot just as he was leaving his house in the capital city, the state news agency TAP said.


Mr. Belaid, the general secretary of the Democratic Patriotic Party, was one of the leaders of the opposition Popular Front, which had been formed in October to counter the government.


Mr. Belaid has emerged as a chief critic of Ennahda, the moderate Islamist party that leads the government in a coalition with two secular parties. While Ennahda has tried to reassure Tunisians that it would respect liberal democratic values and not impose a strict Muslim moral code, it has faced criticism with an indulgent attitude toward the ultraconservative Islamists known as Salafis.


In recent days, Mr. Belaid accused the Islamists of carrying out an attack on a meeting of its members on Saturday. “At the end of our meeting, a group of Ennahda mercenaries and Salafists attacked our activists,” Mr. Belaid said.


Samir Dilou, a government spokesman, was quoted as calling the killing an “odious crime.”


No group immediately took responsibility for the shooting and its cause remained unclear.


It came as Tunisia faces profound social and religious uncertainties following the ouster of a dictatorial regime two years ago that set off what came to be known as the Arab Spring.


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Kim Kardashian's Pregnancy Is No Reason to Speed Divorce, says Kris Humphries















02/05/2013 at 09:20 PM EST







Kris Humphries and Kim Kardashian


Seth Browarnik/StarTraks


Kim Kardashian's baby is not even born yet and already is being drawn into mama's divorce.

Kardashian, carrying boyfriend Kanye West's child, has bristled at what she sees as stall tactics by estranged husband Kris Humphries to close the legal books on their 72-day marriage.

But Humphries's lawyer Marshall W. Waller writes that "what is really going on here is that an 'urgency' in the form of an apparently unplanned pregnancy" is being used by Kardashian as "an opportunity to gain a litigation advantage (to) prematurely set this matter for trial."

He adds parenthetically that the pregnancy is "something (Humphries) had nothing to do with."

Waller explains his reasoning for calling the pregnancy as unplanned: "Indeed, why would (she) plan to get pregnant in the midst of divorce proceedings?"

Kardashian, herself, recently addressed the timing.

"God brings you things at a time when you least expect it," she said last month. "I'm such a planner and this was just meant to be. What am I going to? Wait years to get a divorce? I'd love one. It's a process."

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Critics seek to delay NYC sugary drinks size limit


NEW YORK (AP) — Opponents are pressing to delay enforcement of the city's novel plan to crack down on supersized, sugary drinks, saying businesses shouldn't have to spend millions of dollars to comply until a court rules on whether the measure is legal.


With the rule set to take effect March 12, beverage industry, restaurant and other business groups have asked a judge to put it on hold at least until there's a ruling on their lawsuit seeking to block it altogether. The measure would bar many eateries from selling high-sugar drinks in cups or containers bigger than 16 ounces.


"It would be a tremendous waste of expense, time, and effort for our members to incur all of the harm and costs associated with the ban if this court decides that the ban is illegal," Chong Sik Le, president of the New York Korean-American Grocers Association, said in court papers filed Friday.


City lawyers are fighting the lawsuit and oppose postponing the restriction, which the city Board of Health approved in September. They said Tuesday they expect to prevail.


"The obesity epidemic kills nearly 6,000 New Yorkers each year. We see no reason to delay the Board of Health's reasonable and legal actions to combat this major, growing problem," Mark Muschenheim, a city attorney, said in a statement.


Another city lawyer, Thomas Merrill, has said officials believe businesses have had enough time to get ready for the new rule. He has noted that the city doesn't plan to seek fines until June.


Mayor Michael Bloomberg and other city officials see the first-of-its-kind limit as a coup for public health. The city's obesity rate is rising, and studies have linked sugary drinks to weight gain, they note.


"This is the biggest step a city has taken to curb obesity," Bloomberg said when the measure passed.


Soda makers and other critics view the rule as an unwarranted intrusion into people's dietary choices and an unfair, uneven burden on business. The restriction won't apply at supermarkets and many convenience stores because the city doesn't regulate them.


While the dispute plays out in court, "the impacted businesses would like some more certainty on when and how they might need to adjust operations," American Beverage Industry spokesman Christopher Gindlesperger said Tuesday.


Those adjustments are expected to cost the association's members about $600,000 in labeling and other expenses for bottles, Vice President Mike Redman said in court papers. Reconfiguring "16-ounce" cups that are actually made slightly bigger, to leave room at the top, is expected to take cup manufacturers three months to a year and cost them anywhere from more than $100,000 to several millions of dollars, Foodservice Packaging Institute President Lynn Dyer said in court documents.


Movie theaters, meanwhile, are concerned because beverages account for more than 20 percent of their overall profits and about 98 percent of soda sales are in containers greater than 16 ounces, according to Robert Sunshine, executive director of the National Association of Theatre Owners of New York State.


___


Follow Jennifer Peltz at http://twitter.com/jennpeltz


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Yen hit near three-year low as new BOJ governor eyed

LONDON (Reuters) - The yen fell close to a three-year low on Wednesday on expectations that a new Bank of Japan governor could ease policy, while the euro was steady and European shares edged up ahead of a central bank meeting.


BOJ Governor Masaaki Shirakawa has said he will step down on March 19, opening the way for a successor supporting the kind of expansionary policies the government favours.


The dollar touched 94.075 yen to its highest since May 2010 before profit taking saw it drop back to 93.76 yen, while the euro also rose as high as 127.71 yen, its strongest since April 2010, before it also eased.


Against the dollar, the euro dipped to $1.3546 but was within this week's range of $1.3450 - $1.3710.


New Japanese Prime Minister Shinzo Abe's support for aggressive easing does not seem to caused an outcry from other countries although there have been sporadic complaints from Germany and South Korea.


This makes yen selling comfortable, said Minori Uchida, chief currency strategist at the Bank of Tokyo-Mitsubishi UFJ.


"The G20 finance ministers meeting next week is unlikely to discuss currencies much. The market is likely to test further downside on the yen in the near future," Uchida said.


European shares edged up and the euro was steady ahead of Thursday's European Central Bank policy meeting after recovering from falls on Monday due to a flare up of political uncertainty in Spain and Italy. The ECB is expected to keep interest rates on hold.


London's FTSE 100 <.ftse> was up 0.5 percent, Paris's CAC-40 <.fchi> was up 0.3 percent and Frankfurt's DAX <.gdaxi> was 0.2 percent higher at 0900 GMT, leaving the pan-European FTSEurofirst 300 <.fteu3> up 0.5 percent at 1160.05.


Asian shares and industrial commodities and oil, now above $116 a barrel, consolidated recent gains that came on signs of global economic recovery.


The slide in the yen bolstered Japanese equities to their highest since October 2008 while expectations of more monetary easing pushed two-year Japanese government bond yields down to a nine-year low of 0.045 percent.


In the European bond market, benchmark German Bund futures edged up before a sale of five-year German debt that is expected to find strong demand due to a recent rise in yields and political uncertainty in Spain and Italy.


Corruption allegations in Spain have put Prime Minister Mariano Rajoy under pressure and a scandal at one of its oldest banks has led to an increasingly uncertain outcome in Italian elections later in February.


"There are fairly ominous signs (in the periphery). I know they (Italian and Spanish bonds) had a good day yesterday, but there's Spanish supply coming up," one trader said.


(Editing by Anna Willard)



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British Ministers Seek Support for Gay Marriage Law





LONDON — As the British Parliament prepared to vote Tuesday on a law permitting same-sex marriage that has divided church and state, senior cabinet ministers launched a last-minute attempt to deflect an embarrassing rebellion by Conservative lawmakers against Prime Minister David Cameron’s support for the new legislation.




A day after the newly-confirmed archbishop of Canterbury, Justin Welby, took office saying he shares the Church of England’s opposition to marriage between people of the same gender, three cabinet officials said in a letter published in The Daily Telegraph that the new legislation was “the right thing to do at the right time.”


“Marriage has evolved over time. We believe that opening it up to same-sex couples will strengthen, not weaken, the institution. Attitudes toward gay people have changed. A substantial majority of the public now favor allowing same sex couples to marry, and support has increased rapidly.”


The three ministers — George Osborne, the chancellor of the Exchequer, Foreign Secretary William Hague and Home Secretary Theresa May — also asked whether it was “any longer acceptable to exclude people from marriage simply because they love someone of the same sex.”


The debate has divided Britain’s Conservatives, who rule in uneasy coalition with the smaller Liberal Democrats. Political analysts forecast that, when the vote is held on Tuesday evening in Parliament, it will be approved despite opposition by scores of Conservative lawmakers because the bulk of Liberal Democrat and opposition Labour legislators are in favor.


However, that outcome could embarrass Mr. Cameron since he will be securing approval for a change that he has championed with the support of his political adversaries and in the teeth of opposition from within his own ranks. The size of the likely revolt among Conservative lawmakers is uncertain, but Mr. Cameron’s allies are trying to reduce it, seeing the vote as a test of his authority.


Opponents of the legislation say it will alienate traditional Conservative voters, jeopardizing Mr. Cameron’s prospects at the 2015 national election. But supporters say it will bring in new backing from outside the party.


Coincidentally, the vote is scheduled a day after Archbishop Welby, 57, was confirmed in his new post to replace the Most Rev. Rowan Williams, who has retired 10 years in office.


The new archbishop, the spiritual head of the world’s 77 million Anglicans, endorsed the traditional view that while the Church of England has no objection to civil partnerships between people of the same gender, it is, as a recent church statement put it, “committed to the traditional understanding of the institution of marriage as being between one man and one woman.”


Ed Miliband, the leader of the opposition Labour Party, said Monday that he would be “voting for equal marriage in the House of Commons, and I’ll be doing so proudly.” He also said he would urge his 255 legislators in the 649-member body to vote with him, although a small group will likely vote against.


“I’ll be voting for equal marriage for a very simple reason: I don’t think that the person you love should determine the rights you have,” Mr. Miliband said on Monday.


The legislation, which applies to England and Wales, would permit civil marriage between same-sex couples, but specifically exempt the Church of England and other faiths from an obligation to perform such ceremonies. Some faith groups, including the Quakers, have said they want the legal right to perform same-sex marriages.


In their letter, Mr. Osborne, Mr. Hague and Ms. May said: “Our party also has a strong belief in religious freedom, a vital element of a free society. The Bill ensures that no faith group will be forced to conduct same-sex marriages. The legal advice is clear that these protections for religious groups cannot be overturned by the courts.”


“Religious freedom works both ways. Why should faith groups, such as the Quakers, that wish to conduct gay marriages be forbidden from doing so? This Bill will enhance religious freedom, not restrict it.”


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