US to make profit from bailouts, Treasury says

US to make profit from bailouts, Treasury says

Treasury secretary Timothy Geithner (right) believes that the US taxpayer will make a profit


The US will make a profit from bailing out the nation's banks and carmakers at the height of the financial crisis, the Treasury Department has said.

The bank bailouts may result in a return of $2bn (£1.3bn), the Treasury said in its latest projections for the government's response to the crisis.And the recovering auto industry has added 230,000 jobs as a result.The recession was the worst since the Great Depression and $19.2tn of wealth was wiped out, it said."Although the economy is getting stronger, we have a long way to go to fully repair the damage the crisis has left behind," the Treasury said.

"We are still living with the broader economic cost of the crisis, which can be seen in high unemployment." The vast majority of the projected returns - more than $179bn - come from the Federal Reserve's huge investments and loans to banks.The Fed and the Treasury together invested $182bn just to save insurance giant AIG.

Tarp
In terms of the bank bailouts, the much-maligned Troubled Asset Relief Program (Tarp) that provided money to more than 700 banks has already realised a $19bn profit.The bailout of carmakers General Motors and and Chrysler - which was also part of Tarp, cost $22bn, the Treasury said.

"But the cost of a disorderly liquidation to families and businesses across the country that rely on the auto industry would have been far higher," it added.The US Treasury still owns more than 30% of GM's ordinary shares.In the end, the Treasury expects to make $22bn from Tarp's bank bailouts and $2bn on Tarp's loans to restart the credit markets, offsetting the auto bailouts.

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Taliban launch raids on Kabul and other Afghan targets

 Taliban launch raids on Kabul and other Afghan targets

The BBC's Bilal Sawary says he can hear gunfire from his location in Kabul

Militants are carrying out what they say are co-ordinated attacks on Kabul and other targets in Afghanistan.
A Taliban spokesman said fighters were attacking embassies in the diplomatic enclave, Nato's HQ and the parliament building in the west of the capital.Multiple blasts and gunfire have been heard across Kabul.The Taliban spokesman said there were also attacks in Logar and Paktia provinces. There are also reports of suicide attacks in Jalalabad.Nato said it had reports of attacks in seven locations in Kabul.The British embassy was one of the targets, with two rockets hitting a guard tower.

 A rocket-propelled grenade was also fired into a house used by British diplomats, witnesses told Reuters.A medical source in Kabul told the Associated Press news agency five people had been wounded in the attacks, and at least two militants are reported dead in the city.According to another unverified report, from Afghan broadcaster channel Shamshad TV, eight people were also wounded, and two militants killed, in an attack in the eastern city of Gardez, in Paktia Smoke billowing At least seven large explosions were heard in central Kabul and gunfire erupted from various directions in the heavily barricaded diplomatic zone.Residents were reportedly running for cover and sirens wailing in the Wazir Akbar Khan district.

Some explosions were also heard near the parliament building in western Kabul and police said it was under attack.A number of MPs joined the fight against the insurgents, shooting at them as they tried to storm parliament, Kandahar lawmaker Naeem Hameedzai Lalai told reporters."I'm the representative of my people and I have to defend them," he said.Rockets were reportedly fired at the Russian embassy and smoke was said to be billowing from the direction of the German embassy.

The US embassy confirmed there were attacks nearby. It said: "The embassy is currently in lockdown... all compound personnel are accounted for and safe."Britain's Foreign Office said it was "in close contact with embassy staff".AFP news agency reported that the newly built Kabul Star hotel was on fire.Kabul resident Idris Ghairat, who lives near the hotel, told the BBC: "I can see the smoke rising. The fighting is around us and I have heard the blasts and gunfire.

 The security forces have taken position on top of all government buildings close to the hotel."Another attack appeared to target a Nato base known as Camp Warehouse on the outskirts of the city, where Turkish and Greek Nato forces were trying to repel militants.

Provinces targeted
The BBC's Bilal Sarwary in Kabul says there are also reports of a suicide attack that has closed the centre of the eastern city of Jalalabad.Police said suicide bombers had attacked the airport there. Abdulhadi, who works for the World Food Programme in Jalalabad, told the BBC: "The US air base was under attack. We heard loud explosions and had to take cover in a bunker."

Militants also took over a government building in Pul-e-Alam, capital of Logar province, police said, and a gun battle was under way.In Gardez, capital of Paktia province, militants took over a building where university students were staying.In the city of Kundoz, 15 suspected militants were arrested over an alleged plot to launch attacks, an official told BBC News.

Mirwais Yasini, an MP from the eastern province of Ningarhar, told BBC News: ''This shows the Taliban don't want peace."They don't want to negotiate. They are not serious. They want to continue the killing of innocent people. But these attacks also show a clear intelligence failure. Where was the intelligence to prevent co-ordinated attacks?''

There is normally a surge in the number of Taliban attacks at this time of year following a relative lull in winter, when militants find it more difficult to move around.

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China loosens currency controls on the yuan

China loosens currency controls on the yuan

China has loosened its currency controls in a move that may spur gains in the value of the yuan.


From Monday, the yuan can fluctuate up to 1% in trading against the US dollar, up from the previous limit of 0.5%, the People's Bank of China said. The increase of the trading band was announced in English, a rare statement that suggests it was targeted at foreign audiences.China has been under pressure to let the yuan appreciate.

Nations like the US believe that China keeps the yuan artificially low to boost its exports, giving it an unfair trading edge.The PBOC said on Saturday that the band was increased to "meet market demands, promote price discovery, enhance the flexibility of RMB (yuan) exchange rate in both directions".

China's yuan was fixed against the dollar until 2005, when it was lifted and allowed to float 0.5% against a basket of currencies each day.Since then, the yuan has risen 31% against the dollar - to about 6.30 yuan at the moment.

Last month, China and and Australia signed a currency swap agreement in a bid to promote bilateral trade and investment.It will allow for the exchange of local currencies between their central banks, worth up to 30bn Australian dollars ($31bn; £20bn) over three years.

The deal is expected to reduce cost for businesses, as they will be able to settle trade terms in local currency.It is the latest in a series of similar deals signed by Beijing as it seeks a more global role for the yuan

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An Iranian mystery: Just who are the MEK?

An Iranian mystery: Just who are the MEK?
By Owen Bennett Jones
BBC News 

How do you get a group described by the US government as a cult and an officially designated foreign terrorist organisation to be viewed by many congressmen and parliamentarians as champions of human rights and secular democracy?It would challenge even the most talented PR executive. The starkly differing perceptions of the MEK or People's Mujahideen of Iran could be a case study in the power of image management - of what can be achieved not with guns but by the way information is disseminated.

The organisation has a history of ideological and tactical flexibility. Since the 1970s, its rhetoric has changed from Islamist to secular; from socialist to capitalist; from pro-Iranian-revolution to anti-Iranian-revolution; from pro-Saddam to pro-American; from violent to peaceful. And there is another dichotomy - it has admiring supporters and ardent critics.Continue reading the main stor“Start Quote Former members consistently describe participating in regular public confessions of their sexual fantasies”

Take, for example, the US military officers who had to deal with the MEK after they invaded Iraq in 2003.
Not only was the MEK heavily armed and designated as terrorist by the US government, it also had some very striking internal social policies.For example, it required its members in Iraq to divorce. Why? Because love was distracting them from their struggle against the mullahs in Iran.And the trouble is that people love their children too.So the MEK leadership asked its members to send their children away to foster families in Europe. Europe would be safer, the group explained.

Some parents have not seen their children for 20 years and more.And just to add to the mix, former members consistently describe participating in regular public confessions of their sexual fantasies.You might think that would set alarm bells ringing - and for some US officers it did.One colonel I spoke to, who had daily contact with the MEK leadership for six months in 2004, said that the organisation was a cult, and that some of the members who wanted to get out had to run away.

And yet another officer, who was there at precisely the same time and is now a retired general, has become an active lobbyist on the MEK's behalf.With his open smile and earnest friendly manner, he is a good advocate. "Cult? How about admirably focused group?" he says. "And I never heard of anyone being held against their will."We later emailed him about a former member who claimed to have told the general to his face that people were held against their will. "He's lying," the general replied.You just have to decide which side to believe.

Ex-MEK member Eduard Termado is now living in Germany.His face is scarred to the point of being misshapen. His complexion is grey, his skin blotched and waxy, and his forehead constantly covered in dribbling beads of sweat - but then he spent nine years as a prisoner of war in Iraq.He joined the MEK hoping to help Iranian democracy and did not like what he saw.He says that after three years he asked to leave, but was told he couldn't. He stayed for 12 years.

He now says joining the MEK was the biggest mistake of his life and he has expressed that feeling in an unusual way.He has married and produced three children. "My family is my protest against the MEK," he says.There are many other stories.Children who never forgave their parents for abandoning them. Children who did forgive and are now joyously reunited. Divorcees who have got out of the organisation saying they still love their former spouses who are still in.In over 25 years of reporting, I have been lied to often enough but, as successive former MEK members told what they had been through, their tears seemed real enough to me.

And yet a significant number of politicians in the US and UK would say I was tricked because the former MEK members who spread these kind of stories are, in fact, Iranian agents.Again, who to believe?In the US in particular, an impressive array of public figures have spoken in defence of the MEK.There are more than 30 big names - people like Rudy Giuliani former mayor of New York, Howard Dean at one time the democratic presidential hopeful, a retired governor, a former head of the FBI.

Many get paid. Of those who have declared their earnings, the going rate for a pro-MEK speech seems to be $20,000 (£12,500) for 10 minutes. But then many other prominent MEK supporters act without payment.Why do people take such strong positions on the MEK?

After a month talking to people on both sides of the argument, I am left thinking this. Some supporters are paid, others see the MEK through the prism of Iran - they will just support anything that offers hope of change there. Many are well motivated but some are naive.And the former members?Some are embittered, others just seem broken.Which is when it occurred to me - the perception people have of the MEK may say more about them than about the organisation itself.It is so difficult to pin down you can see your own reflection in it.

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Iran nuclear talks 'positive' after 15-month break

Iran nuclear talks 'positive' after 15-month break

Key talks on Iran's controversial nuclear programme, which have resumed after a 15-month impasse, have been described as "positive".

 Six world powers - the US, UK, France, China, Russia and Germany - and Iran are meeting in Istanbul in Turkey. Iran says its nuclear programme is peaceful, but critics suspect it of seeking to develop nuclear weapons. Israel has hinted in recent months that it could carry out a pre-emptive strike on Iran to prevent that happening.

Michael Mann, a spokesman for EU foreign policy chief Catherine Ashton, said the talks were "totally different" from the last session 15 months ago. "There is a positive atmosphere... contrasting with the last time," he said. The BBC's James Reynolds, in Istanbul, says the envoys had earlier set the bar pretty low - saying they did not expect detailed, substantive proposals from either side.

What they want to see, he says, is whether Iran is ready to seriously engage and, if that happens, there may be another round of talks in four to six weeks time 'Renewing confidence'

The six world powers, known collectively as the P5+1, hope the talks will at least cool tensions.

After a two-and-a-half-hour morning session, Mr Mann said: "The principles for future talks seem to be there."

There will be another session in the afternoon. Russia earlier warned both sides not to "overblow the differences" between them. "We really need to find a middle course," said Deputy Foreign Minister Sergei Ryabkov. "The negotiations are about renewing confidence."

US President Barack Obama has described this as a "last chance" for diplomacy to work, while Secretary of State Hillary Clinton said Iran had to "demonstrate clearly in the actions they propose that they have truly abandoned any nuclear weapons ambition"But one source close to the Iranian delegation earlier told Agence France-Presse: "So far the Iranian delegation finds the Western position ... disappointing and discouraging."

On Thursday, Iranian President Mahmoud Ahmadinejad said his country was "standing firm on its fundamental rights and under the harshest pressure will not retreat an iota from its undeniable right".

The P5+1 hope eventually to persuade Iran to reduce its enrichment of uranium and fully open up its nuclear facilities to inspectors from the International Atomic Energy Agency (IAEA).There are suggestions that the stringent sanctions on Iran could be reduced if it complies with the requests.

The last series of international talks broke down in January 2011 after the parties failed to agree on any issues. Since then, the IAEA expressed concern that Iran had failed to co-operate with its inspectors and had carried out activities "relevant to the development of a nuclear explosive device". Israel, which believes a nuclear-capable Iran would be a direct threat to its security, has warned that time is running out to prevent that outcome.

Prime Minister Benjamin Netanyahu has said he would never allow Israelis to "live in the shadow of annihilation", and hinted his country is ready to strike Iran's nuclear facilities if diplomacy does not work soon. President Obama has warned against "loose talk of war", while stressing that all options remain open

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