G20 steps back from currency brink, heat off Japan

MOSCOW (Reuters) - The Group of 20 nations declared on Saturday there would be no currency war and deferred plans to set new debt-cutting targets, underlining broad concern about the fragile state of the world economy.

Japan's expansive policies, which have driven down the yen, escaped direct criticism in a statement thrashed out in Moscow by policymakers from the G20, which spans developed and emerging markets and accounts for 90 percent of the world economy.

Analysts said the yen, which has dropped 20 percent as a result of aggressive monetary and fiscal policies to reflate the Japanese economy, may now continue to fall.

"The market will take the G20 statement as an approval for what it has been doing -- selling of the yen," said Neil Mellor, currency strategist at Bank of New York Mellon in London. "No censure of Japan means they will be off to the money printing presses."

After late-night talks, finance ministers and central bankers agreed on wording closer than expected to a joint statement issued last Tuesday by the Group of Seven rich nations backing market-determined exchange rates.

A draft communiqué on Friday had steered clear of the G7's call for economic policy not to be targeted at exchange rates. But the final version included a G20 commitment to refrain from competitive devaluations and stated monetary policy would be directed only at price stability and growth.

"The mood quite clearly early on was that we needed desperately to avoid protectionist measures ... that mood permeated quite quickly," Canadian Finance Minister Jim Flaherty told reporters, adding that the wording of the G20 statement had been hardened up by the ministers.

As a result, it reflected a substantial, but not complete, endorsement of Tuesday's proclamation by the G7 nations - the United States, Japan, Britain, Canada, France, Germany and Italy.

As with the G7 intervention, Tokyo said it gave it a green light to pursue its policies unchecked.

"I have explained that (Prime Minister Shinzo) Abe's administration is doing its utmost to escape from deflation and we have gained a certain understanding," Finance Minister Taro Aso told reporters.

"We're confident that if Japan revives its own economy that would certainly affect the world economy as well. We gained understanding on this point."

Flaherty admitted it would be difficult to gauge if domestic policies were aimed at weakening currencies or not.


The G20 also made a commitment to a credible medium-term fiscal strategy, but stopped short of setting specific goals as most delegations felt any economic recovery was too fragile.

The communiqué said risks to the world economy had receded but growth remained too weak and unemployment too high.

"A sustained effort is required to continue building a stronger economic and monetary union in the euro area and to resolve uncertainties related to the fiscal situation in the United States and Japan, as well as to boost domestic sources of growth in surplus economies," it said.

A debt-cutting pact struck in Toronto in 2010 will expire this year if leaders fail to agree to extend it at a G20 summit of leaders in St Petersburg in September.

The United States says it is on track to meet its Toronto pledge but argues that the pace of future fiscal consolidation must not snuff out demand. Germany and others are pressing for another round of binding debt targets.

"We had a broad consensus in the G20 that we will stick to the commitment to fulfill the Toronto goals," German Finance Minister Wolfgang Schaeuble said. "We do not have any interest in U.S.-bashing ... In St. Petersburg follow-up-goals will be decided."

The G20 put together a huge financial backstop to halt a market meltdown in 2009 but has failed to reach those heights since. At successive meetings, Germany has pressed the United States and others to do more to tackle their debts. Washington in turn has urged Berlin to do more to increase demand.

Backing in the communiqué for the use of domestic monetary policy to support economic recovery reflected the U.S. Federal Reserve's commitment to monetary stimulus through quantitative easing, or QE, to promote recovery and jobs.

QE entails large-scale bond buying -- $85 billion a month in the Fed's case -- that helps economic growth but has also unleashed destabilising capital flows into emerging markets.

A commitment to minimize such "negative spillovers" was an offsetting point in the text that China, fearful of asset bubbles and lost export competitiveness, highlighted.

"Major developed nations (should) pay attention to their monetary policy spillover," Vice Finance Minister Zhu Guangyao was quoted by state news agency Xinhua as saying in Moscow.

Russia, this year's chair of the G20, admitted the group had failed to reach agreement on medium-term budget deficit levels and expressed concern about ultra-loose policies that it and other emerging economies say could store up trouble for later.

On currencies, the G20 text reiterated its commitment last November, "to move more rapidly toward mores market-determined exchange rate systems and exchange rate flexibility to reflect underlying fundamentals, and avoid persistent exchange rate misalignments".

It said disorderly exchange rate movements and excess volatility in financial flows could harm economic and financial stability.

(Additional reporting by Gernot Heller, Lesley Wroughton, Maya Dyakina, Tetsushi Kajimoto, Jan Strupczewski, Lidia Kelly, Katya Golubkova, Jason Bush, Anirban Nag and Michael Martina. Writing by Douglas Busvine. Editing by Timothy Heritage/Mike Peacock)

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Pistorius' family strongly denies murder charge

PRETORIA, South Africa (AP) — Oscar Pistorius is "numb with shock as well as grief" after the shooting death of his model girlfriend at his home in South Africa, the runner's uncle said Saturday, as his family strongly denied prosecutors' claims that he murdered her.

Arnold Pistorius spoke with The Associated Press and two other South African journalists about his nephew's arrest in the killing of Reeva Steenkamp, who was shot four times on the morning of Valentine's Day. Arnold Pistorius spoke to reporters from the garden of his three-story home in the eastern suburbs of South Africa's capital, Pretoria.

The statement, the first on camera and directly made in person by Pistorius' family, also came out strongly against prosecutors seeking to upgrade the charge against Pistorius to one of premeditated murder, which carries a sentence of life in prison.

"After consulting with legal representatives, we deeply regret the allegation of premeditated murder," Arnold Pistorius said. "We have no doubt there is no substance to the allegation and that the state's own case, including its own forensic evidence, strongly refutes any possibility of a premeditated murder or murder as such."

He said the family was "battling to come to terms with Oscar being charged with murder."

The track star's arrest in the killing of 29-year-old Steenkamp shocked South Africa, where Pistorius was a national hero and icon dubbed the Blade Runner for his high-tech carbon fiber running blades and revered for overcoming his disability to compete at the London Olympics. She was discovered in a pool of blood before dawn Thursday by police called to Pistorius' upscale home in a gated community. Authorities said she had been shot four times, and a 9 mm pistol was recovered at the home.

Pistorius remains held at a police station pending a bail hearing Tuesday. Police have already said they'll oppose Pistorius being released before trial. A premeditated murder charge also makes it more difficult for his defense team to get bail.

On Saturday afternoon, Pistorius' lawyers visited the Brooklyn police station in Pretoria, where the athlete is being held. His younger sister Aimee, who stood alongside Arnold Pistorius when he made his statement, also was at the police station later.

There will be a variety of hearings before Pistorius, 26, could go on trial. In South Africa, there are no juries, so a judge ultimately would decide Pistorius' guilt or innocence, sometimes with the help of two advisers. At an initial hearing Friday, Pistorius sobbed and held his head in his hands at times. He has yet to enter a plea in the case.

The family denial that Pistorius committed murder doesn't necessarily mean that they say he didn't shoot her, as murder is a legal term. Initial speculation immediately after the shooting Thursday suggested that it could have been accidental, though police say they are not currently considering that.

Arnold Pistorius did not discuss the circumstances of the shooting, but said that his nephew and Steenkamp had become very close since they started dating in November.

"They had plans together and Oscar was happier in his private life than he had been for a long time," the uncle said.

As Arnold Pistorius read his statement, Pistorius' sister Aimee stood nearby and broke down in tears at one point. Her uncle stopped reading for a moment to put his right arm around her. Pistorius remains very close with his uncle, a man he once lived with as a teenager.

"Words cannot adequately describe our feelings," his uncle said. "The lives of our entire family have been turned upside down forever by this unimaginable human tragedy and Reeva's family have suffered a terrible loss. As a family we are trying to be strong and supportive to Oscar as any close family would be in these dreadful circumstances."

The entire family was "devastated," Pistorius' uncle said, and was "grieving for Reeva, her family and her friends."

Since news of the killing, shock waves have rippled across South Africa, a nation of 50 million where nearly 50 people are killed each day, one of the world's highest murder rates. U.N. statistics say the nation has the second highest rate of shooting deaths in the world, behind only Colombia. Others have focused their attention on Pistorius and his fascination with fast cars, cage fighting and firearms.

Steenkamp, who graduated from law school, is known in South Africa for appearing in commercials and as a bikini-clad model in men's magazines. On Saturday, South Africa's state broadcaster SABC planned to air a reality TV show featuring the model. Another portion of the show released earlier Saturday included a clip of her swimming with two dolphins, which tap her on the cheek with their snouts.

"I think the way that you go out, not just your journey in life, but the way that you go out and the way you make your exit is so important," the blonde-haired Steenkamp says in the video. "You either made an impact in a positive or a negative way, but just maintain integrity and maintain class and just remain true to yourself.

"I'm going to miss you all so much and I love you very, very much."


Jon Gambrell reported from Johannesburg.


Gerald Imray can be reached at www.twitter.com/geraldimrayAP . Jon Gambrell can be reached at www.twitter.com/jongambrellAP .

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Pope's resignation 'shows leadership'

By Roland Martin, CNN Contributor

February 16, 2013 -- Updated 1649 GMT (0049 HKT)

Longest-reigning popes

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  • Pope Benedict stuns world by announcing he will resign

  • Roland Martin says it's a wise decision for a leader to step down when his powers fail

  • He says a mark of a good leader is the care he takes about the institution he is leaving

  • Martin: Too many in power try to hang on after they are no longer capable

Editor's note: Roland Martin is a syndicated columnist and author of "The First: President Barack Obama's Road to the White House." He is a commentator for the TV One cable network and host/managing editor of its Sunday morning news show, "Washington Watch with Roland Martin."

(CNN) -- When Thurgood Marshall retired from the U.S. Supreme Court in June 1991, a reporter asked him what were the medical reasons that contributed to his leaving the bench -- and its lifetime appointment -- after serving for nearly 25 years. He was his usual blunt self.

"What's wrong with me?" Marshall said at the packed news conference. "I'm old. I'm getting old and falling apart."

When the news broke this week that Pope Benedict XVI was stepping down as the spiritual leader of 1.2 billion Roman Catholics because of his concerns about being able to do the job, many began to speculate that there were other reasons for the decision.

Roland Martin

Roland Martin

We have become accustomed to a pope dying in office. That's not a surprise. It has been nearly 600 years since the last pope, Gregory XII, quit in 1415.

Even though the job of pope is a lifetime appointment, frankly, it is selfish of any individual to hold on to the job for dear life, knowing full well they don't have the capacity to do the job.

"Strength of mind and body are necessary, strength which in the last few months has deteriorated in me to the extent that I have had to recognize my incapacity to adequately fulfill the ministry entrusted to me," according to a statement from Pope Benedict released by the Vatican.

Whether we want to be honest or not, it was sad to watch the decline of Pope John Paul II. He was a vibrant figure when he became pope in 1978, traveling the world and spreading the gospel to anyone who would listen. But toward the end of his life in 2005, he was barely able to move or talk, clearly worn down by significant health challenges.

Any leader who respects the organization they serve should have the common sense to know when it's time to say goodbye. We've seen countless examples of CEOs, pastors, politicians and others hang on and on to a position of power, hurting the very people they were elected or chosen to serve.

It takes considerable courage for anyone to step away from the power bestowed upon them by a position, as well as the trappings that come with it.

I'll leave it to others to try to figure out other reasons behind the resignation. But we should at least acknowledge the value of an ego-less decision that reflects humility and concern about the very institution the pope pledged his life to.

All leaders should be concerned about their institution continuing to grow and thrive once their days are no more. That's why a proper succession plan is vitally important.

Too often we have assessed great leaders by what they did in their positions. But their final legacy really is defined by how they left a place.

Pope Benedict XVI knows full well the Catholic Church cannot grow and prosper if its leader is limited in traveling and attending to his flock. There comes a time when one chapter must end and another begins. He has more days behind him than in front of him. He should enjoy his last years in peace and tranquility, without having to worry about trying to do the work designed for a younger man.

Follow us on Twitter @CNNOpinion.

Join us on Facebook/CNNOpinion.

The opinions expressed in this commentary are solely those of Roland S. Martin.

Part of complete coverage on

February 16, 2013 -- Updated 1726 GMT (0126 HKT)

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This latest meteor over Russia shows how crucial it is that we keep our eye on the sky, says Colin Stuart.

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John Sutter says commenters made good points about the plight of the longterm unemployed.

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Frida Ghitis says the murder of Reeva Steenkamp allegedly by Oscar Pistorius is a reminder that we have to do more to protect women.

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He was the best player I ever saw, the most determined, the toughest mentally, the most confident, the least insecure, says David Aldridge.

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Jim Walker says there is an underside to those cheap cruises.

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Van Jones says we should not be giving an exalted place in our national discourse to the political rantings of a murderer.

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Andy Behar says not enough studies have adequately demonstrated the safety of nanoparticles used in some foods.

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CNN invited contributors to weigh in on President Obama's State of the Union address Tuesday night.

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Bob Brenly: 'It was unbelievably tough to leave'

Former Chicago Cubs TV analyst Bob Brenly talks about how he was set to return to the Cubs until a last-minute snag in negotiations.

MESA, Ariz. – Former Chicago Cubs TV analyst Bob Brenly said he was planning to return to the team’s broadcast booth last year until a snag in negotiations led to his new job with the Arizona Diamondbacks.

The D’backs quickly signed Brenly to a five-year deal after the Cubs’ deal fell through.  

“It was unbelievably tough to leave,” Brenly said Saturday during a visit to Cubs camp, where his son, Michael is a non-roster invitee. “Long story short, we thought we had a deal done, and actually went out and celebrated with my family and ran up a pretty good tab at Joe’s (Stone Crabs).

“Woke up the next morning and there were some issues with the contract. One thing led to another and that kind of opened up negotiations with the Diamondbacks and it rolled downhill quickly. The Diamondbacks were willing to give me the years and the money that WGN and Comcast (Sports Net) could just not guarantee. Not a bad Plan B.”

The Cubs could not guarantee Brenly more than two years because they plan to open up bidding rights to games next year. The contract with their longtime home, WGN-TV expires after 2014, and the Cubs figure to cash in after the Los Angeles Dodgers reportedly reached an agreement with Time Warner Cable on a deal expected to be worth $7 billion to $8 billion over 25 years.

“There were some last-minute technical issues, a lot of financial maneuvering going on with the Tribune Co. and WGN," he said. “And their contract expires after next season with the Cubs. And with the money that’s there for the TV rights now, there was no guarantee who was going to get the contract.

“I certainly understand their position. They certainly did not want to guarantee me a contract when they might not even be carrying the games. It was just one of those things that happen in the game of baseball. It happens in broadcasting. It happens in just about every livelihood. But, like I said, a real good plan B.”

Brenly, who managed the D’backs to then 2001 championship, said he’s no longer thinking about the possibility of getting back in the manager’s seat down the road. He took himself out of consideration for the job that eventually went to Mike Quade in 2011.  

“I think that boat has sailed,” Brenly said. “There’s always a chance that some of the older people in the game may recall what we did back here in ’01 in Arizona, but I’m content. I like my job. Working with Len (Kasper) for eight years was as good as it gets. Going to Wrigley and traveling with the club… I’m breaking in a new partner this year in Steve Berthiaume, who just has a tremendous amount of energy and enthusiasm for the game.

“I think it’s going to be a lot of fun to get back in the booth. I think the Diamondbacks are going to have a really good team this year, so I’m looking forward to it.”

The Cubs later signed Astros analyst Jim Deshaies to a four-year deal to replace Brenly in the booth.


Twitter @PWSullivan

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Bomb kills 64 in Pakistan's Quetta

QUETTA, Pakistan (Reuters) - Sixty-four people including school children died on Saturday in a bomb attack carried out by extremists from Pakistan's Sunni Muslim majority, police said.

A spokesman for Lashkar-e-Jhangvi, a Sunni group, claimed responsibility for the bomb in Quetta, which caused casualties in the town's main bazaar, a school and a computer center. Police said most of the victims were Shi'ites.

Burned school bags and books were strewn around.

"The explosion was caused by an improvised explosive device fitted to a motorcycle," said Wazir Khan Nasir, deputy inspector general of police in Quetta.

"This is a continuation of terrorism against Shi'ites."

"I saw many bodies of women and children," said an eyewitness at a hospital. "At least a dozen people were burned to death by the blast."

Most Western intelligence agencies have regarded the Pakistani Taliban and al Qaeda as the gravest threat to nuclear-armed Pakistan, a strategic U.S. ally.

But Pakistani law enforcement officials say Lashkar-e-Jhangvi has become a formidable force.


Last month the group said it carried out a bombing in Quetta that killed nearly 100 people, one of Pakistan's worst sectarian attacks. Thousands of Shi'ites protested in several cities after that attack.

Pakistani intelligence officials say extremist groups, led by Lashkar-e-Jhangvi, have escalated their bombings and shootings of Shi'ites to trigger violence that would pave the way for a Sunni theocracy in U.S.-allied Pakistan.

More than 400 Shi'ites were killed in Pakistan last year, many by hitmen or bombs, and the perpetrators are almost never caught. Some hardline Shi'ite groups have hit back by killing Sunni clerics.

The growing sectarian violence has hurt the credibility of the government, which has already faced criticism ahead of elections due in May for its inability to tackle corruption and economic stagnation.

The schism between Sunnis and Shi'ites developed after the Prophet Muhammad died in 632 when his followers could not agree on a successor.

Emotions over the issue are highly potent even today, pushing some countries, including Iraq five years ago, to the brink of civil war.

Pakistan is nowhere near that stage but officials worry that Sunni extremist groups have succeeded in dramatically ratcheting up tensions and provoking revenge attacks in their bid to destabilize the country.

(Reporting by Jibran Ahmed; Writing by Michael Georgy; Editing by Stephen Powell)

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Wall Street ends slightly down, S&P positive for seventh week

NEW YORK (Reuters) - The S&P 500 dipped in a late decline on Friday as Wal-Mart dropped following a report of a weak start to February sales, though the index just barely extended its streak of weekly gains to seven.

Equities were little changed for much of the session, with investors finding few reasons to make big bets following an extended rally on Wall Street, but stocks turned lower in afternoon action.

Wal-Mart Stores Inc dropped 2.1 percent to $69.30 after Bloomberg News reported a weak start to February sales, citing internal company e-mails. The stock was the biggest decliner on the Dow, while the S&P retail index <.spxrt> fell 0.5 percent.

"When a retailer of this size comes out with this kind of lousy news, the whole market can fall off, especially on a Friday afternoon," said Mike Shea, trader at Direct Access Partners in New York. "However, I'm not worried that this is indicative of any larger macro issue with retail."

Equities have struggled for direction recently, with major indexes moving only slightly in the past several sessions. The S&P didn't end a session with a move greater than 0.2 percent at all this week.

The benchmark index, up 6.6 percent so far this year, is facing strong technical resistance near the 1,525 level. But investors, expecting the index to advance further in the quarter, have held back from locking in profits.

"There's no news that suggests the strong underpinning for stocks isn't appropriate. We may have gotten ahead of ourselves, but there's also an absence of bad news," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

Many investors are starting to look ahead to a debate in Washington over sequestration, automatic across-the-board spending cuts put in place as part of a larger congressional budget fight. The cuts are due to kick in March 1 unless lawmakers agree to an alternative.

"This had been far enough out to not yet become an impediment for stocks, but it will start to move into the forefront and cause people to take a bit of a jaundiced eye towards the market," said Luschini, who helps oversee about $54 billion in assets.

The Dow Jones industrial average <.dji> was up 11.27 points, or 0.08 percent, at 13,984.66. The Standard & Poor's 500 Index <.spx> was up 0.32 points, or 0.02 percent, at 1,521.70. The Nasdaq Composite Index <.ixic> was up 1.51 points, or 0.05 percent, at 3,200.17.

For the week, both the Dow and Nasdaq fell 0.1 percent while the S&P rose 0.1 percent in its seventh straight week of gains, a period during which the index rose 8.4 percent. The last such seven-week run was between December 2010 and January 2011.

The New York Federal Reserve said manufacturing in New York state expanded for the first time in seven months, while Thomson Reuters/University of Michigan's preliminary reading of consumer sentiment rose from the prior month and beat expectations.

But U.S. manufacturing fell in January after a rise in the prior month.

Wall Street's gain thus far in 2013 has largely been driven by strong corporate earnings, while data indicated some weakening in economic conditions.

A surge in merger and acquisition activity, with more than $158 billion in deals announced so far in 2013, has given further support to the equity market as it points to healthy valuations and bets on the economic outlook.

Herbalife shares cut earlier gains to rise 1.2 percent to $38.74. Late Thursday, billionaire investor Carl Icahn said in a regulatory filing that he now owns 13 percent of Herbalife and was ready to put it in play.

MeadWestvaco Corp climbed 12.5 percent to $35.65 as the biggest percentage gainer on the S&P index after activist investor Nelson Peltz's Trian Fund Management LP said it had bought about 1.6 million shares of the packaging company.

Burger King Worldwide shares gained 4.7 percent to $17.36 after it beat estimates with a 94 percent rise in fourth-quarter profit, thanks to new menu additions.

Oil service stocks declined, weighed by a 5.1 percent drop in shares of Transocean to $56.26, after the rig contractor reported its fleet update and Deutsche Bank cut its rating on the stock to "sell." The PHLX oil service sector <.osx> lost 1.5 percent.

Slightly more stocks fell than rose on the New York Stock Exchange while about 50 percent of Nasdaq shares ended lower. About 6.69 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, above the daily average so far this year of about 6.48 billion shares.

(Editing by Nick Zieminski)

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Bosh gives Heat 3 starters in NBA All-Star game

HOUSTON (AP) — Chris Bosh will start in the All-Star game, giving the NBA champion Miami Heat three starters for the Eastern Conference.

Bosh says he was told Friday by Miami coach Erik Spoelstra, who will lead the East, he had been chosen to replace injured Boston guard Rajon Rondo in the lineup.

Bosh will join teammates LeBron James and Dwyane Wade as starters Sunday. The three played together here in 2006 as East All-Stars, long before they teamed up in 2010 and won their first title together last summer.

Rondo was voted to start by fans, but had to withdraw because of a knee injury.

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How Carnival can clean up PR mess


  • David Bartlett: For Carnival, impact of 'cruise from hell' potentially devastating.

  • Passenger video, media puts Carnival increasingly on the defensive, he says

  • He says it must show real concern, lay out plan, go a long way to make amends

  • Don't try to justify or explain, he says, but get proactive now about fixing problem

Editor's note: David Bartlett is a senior vice president of Levick, a crisis and issues management and strategic communications firm based in Washington. He is the author of "Making Your Point" (St. Martin's Press), a guide to communication strategy and tactics.

(CNN) -- As three tugboats towed the disabled Carnival cruise ship Triumph back to port in Mobile, Alabama, things went from bad to worse.

The fire that caused the ship to lose power and drift aimlessly on rough Gulf of Mexico swells was just the beginning. Raw sewage seeped into corridors and cabin ways. Food had to be rationed. There were fears of looting. Not surprisingly, passengers were furious and emotional. Some were reported to be "acting like savages."

For Carnival and the rest of the cruise line industry, the implications are potentially devastating. The deadly capsizing in January 2012 of the Costa Concordia ship off the coast of Italy still lingers in the public's mind. About a month later, the Costa Allegra liner suffered a similar engine fire, lost power, and was set adrift in pirate-infested waters in the Indian Ocean. Carnival owns Costa Cruises, and now a third high-profile crisis for Carnival in just over a year threatens to cement the perception among vacationers that cruising might not be worth the risk.

Five things we've learned about cruises

David Bartlett

David Bartlett

In the age of social and digital media, the problems faced by cruise lines are compounded. Using mobile phones, passengers aboard the Triumph have been providing concerned family members with constant updates. Those enraged family members have immediately passed the horror stories along to the eager media. The public is getting the full play-by-play in virtual real time, leaving Carnival playing catchup from an increasingly defensive posture.

But as bad as the potential damage to Carnival's image may be, the company, as well as the rest of the cruise line industry, has an opportunity to blunt the impact, if it acts quickly and wisely.

It seems counterintuitive, but while the gruesome stories of the "cruise from hell" are still fresh, the crisis offers an opportunity for the cruise line to make a compelling statement about the industry's commitment to its passengers. (Statements from Carnival.)

Crisis management experts know that customers and the general public are more likely to judge an organization by how it handles a problem than how it got into the problem in the first place. That means Carnival has to go much further than mere reimbursements and vouchers for onward travel.

The challenge to Carnival's reputation is three-fold.

First the company must articulate real concern for passengers and clearly communicate what it is doing to make things right for customers. This will require financial sacrifices, of course. But Carnival has little choice but to pay now and win some badly needed goodwill -- or pay later in the courtroom, in the court of public opinion, and, of course, at the cash register when bookings decline.

Second, the company must clearly communicate what it is doing to fix the problem and prevent anything like it from ever happening again. How did an engine fire, serious as that might be, so quickly develop into a disaster of this magnitude?

My celebration trip on the Carnival Triumph: From joy to misery

How could it have been allowed to happen? Why was the widely reported chaos and disorder allowed to develop? Why did Carnival not have emergency response plans in place? What is the industry doing to prepare for what would seem to be a manageable situation? The public will demand answers to these basic questions before it will begin to trust again. Uncertainty breathes life into a crisis. Accurate and timely information smothers it.

Third, Carnival must aggressively and clearly deliver these messages now, and for as long as it takes to restore the public's trust.

So far, the story has been about the unthinkable conditions the passengers have been forced to endure. Carnival must move aggressively to reshape that narrative to reflect all that it is doing to rectify the situation.

After a bad cruise, can you cruise into court?

Carnival has to resist the temptation to explain, minimize, or justify what happened and position itself instead as part of the solution to the problems that caused the disaster. That is what the public will focus on and remember, but only if Carnival is able to communicate it fast and effectively.

Follow us on Twitter @CNNOpinion.

Join us on Facebook/CNNOpinion.

The opinions in this commentary are solely those of David Bartlett.

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Lawyers: Jackson Jr., wife intend to plead guilty to charges

Jesse Jackson Jr. and his wife Sandi intend to plead guilty to federal charges alleging the former congressman misused $750,000 in campaign funds while she understated their income on  tax returns for six years, their lawyers say.

Jackson Jr., 47, a Democrat from Chicago, was charged in a criminal information today with one count of conspiracy to commit wire fraud, mail fraud and false statements. He faces up to five years in prison, a fine of up to $250,000 and other penalties.

Sandi Jackson was charged with one count of filing false tax returns. She faces up to three years in prison, a fine of up to $100,000 and other penalties.

Jackson Jr. is accused of diverting $750,000 in campaign funds for personal use.

Federal authorities allege that Jackson Jr. used campaign funds to purchase a $43,350 men’s gold-plated Rolex watch, $5,150 worth of fur capes and parkas, and $9,588 in children’s furniture. The purchases were made between 2007 and 2009, according to the criminal information, which authorities noted is not evidence of guilt.

Other expenditures listed by prosecutors include $10,105 on Bruce Lee memorabilia, $11,130 on Martin Luther King memorabilia and $22,700 on Michael Jackson items, including $4,600 for a "Michael Jackson fedora."

The government also alleged that Jackson Jr. made false statements to the House of Representatives because he did not report approximately $28,500 in loans and gifts he received.

"He has accepted responsibility for his actions and I can confirm that he intends to plead guilty to the charge in the information," Jackson Jr.'s attorney Brian Heberlig said.

Sandi Jackson is accused of filing incorrect joint tax returns with her husband for calendar years 2006 through 2011, reporting income “substantially less than the amount of income she and her husband received in each of the calendar years,” with a substantial additional tax due.

Her attorneys released a statement saying she has "reached an agreement with the U.S. attorney’s office to plead guilty to one count of tax fraud."

Jackson Jr. stepped down from the House of Representatives on Nov. 21, citing both his poor health and an ongoing federal probe of his activities. In a statement then, he said he was doing his best to cooperate with federal investigators and to accept responsibility for his “mistakes.”

In a statement today, Jackson Jr. said:

“Over the course of my life I have come to realize that none of us are immune from our share of shortcomings and human frailties. Still I offer no excuses for my conduct and I fully accept my responsibility for the improper decisions and mistakes I have made. To that end I want to offer my sincerest apologies to my family, my friends and all of my supporters for my errors in judgment and while my journey is not yet complete, it is my hope that I am remembered for the things that I did right.”

Sandi Jackson's attorneys released a statement saying she "has accepted responsibility for her conduct, is deeply sorry for her actions, and looks forward to putting this matter behind her and her family. She is thankful for the support of her family and friends during this very difficult time."

Jackson's father, the Rev.  Jesse Jackson Sr., said he wanted to attend President Barack Obama's speech Friday at Hyde Park Academy in Chicago but traveled to Washington, D.C., instead, to be with family members while they waited for the federal charges to come down.
"This has been a difficult and painful ordeal for our family," the civil rights leader said.
The Rev. Jesse Jackson said he would "leave it up to the courts system" to determine his son's fate.

"We express our love for him as a family," he said.

Jackson Jr.’s political fortunes sank beginning late in 2008, when he sought unsuccessfully to have Gov. Rod Blagojevich appoint him to the Senate seat that came open with the election of then-Sen. Barack Obama to the White House.

Jackson Jr. or an emissary reportedly offered to raise up to $6 million in campaign cash for Blagojevich, who now is in federal prison for crimes including trying to sell the Senate seat. Jackson Jr. was never charged in the case, which became the subject of an ethics probe in the House.

Last June, Jackson Jr. began a mysterious leave of absence for what originally was called “exhaustion” but later emerged as bipolar disorder. He spent months in treatment and won re-election Nov. 6 despite never returning to service in the House or staging a single campaign appearance.

A campaign to replace him is being conducted now in the 2nd Congressional District, which includes parts of the South Side and south suburbs.

Jackson Jr. was first elected to Congress in 1995. Sandi Jackson was a Chicago alderman until she resigned her post last month. They have two children.

Sandi Jackson’s firm, J. Donatella & Associates, has been paid at least $452,500 from her husband’s campaign committee since 2002, Federal Election Commission reports show.

The former congressman’s campaign committee reported $105,703 in cash on hand on last Nov. 26, FEC reports show. Leading up to the last election, it reported $1 million in contributions and $1.06 million in operating expenditures, reports show.

Once considered a potential candidate for mayor of Chicago, Jesse Jackson Jr.’s reputation has taken a hit in recent years because of the Blagojevich scandal and also because of news reports in 2010 that a suburban Chicago businessman told federal investigators he twice paid to fly a woman — a hostess from a Washington, D.C. bar — to Chicago at Jackson’s request.

In the wake of the reports, Jackson Jr. issued a statement calling the woman a “social acquaintance” and describing the matter as a  “private and personal matter between me and my wife that was handled some time ago.”

Jackson Jr. subsequently told the Tribune editorial board he had apologized to "my absolute best friend, my wife."

Still, he also acknowledged he asked longtime supporter Raghuveer Nayak to pay to fly the woman from Washington to Chicago. House ethics rules prohibit members from soliciting gifts of personal benefit. Jackson said Nayak’s purchase was "a friendly gesture" by "a close and dear friend of mine, one who knows members of my family, has worked with members of my family, has been a friend of our family's for a number of years."

The woman's travel was "not a personal benefit to me, I don’t believe, under the House rules. A benefit to the person for whom he bought the ticket. He didn't buy tickets for me. Did I direct him? I did."

Tribune reporters Kim Geiger, Rick Pearson and Patrick Svitek contributed.


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Exclusive: North Korea tells China of preparations for fresh nuclear test - source

BEIJING (Reuters) - North Korea has told its key ally, China, that it is prepared to stage one or even two more nuclear tests this year in an effort to force the United States into diplomatic talks, said a source with direct knowledge of the message.

Further tests could also be accompanied this year by another rocket launch, said the source, who has direct access to the top levels of government in both Beijing and Pyongyang.

North Korea conducted its third nuclear test on Tuesday, drawing global condemnation and a stern warning from the United States that it was a threat and a provocation.

"It's all ready. A fourth and fifth nuclear test and a rocket launch could be conducted soon, possibly this year," the source said, adding that the fourth nuclear test would be much larger than the third, at an equivalent of 10 kilotons of TNT.

The tests will be undertaken, the source said, unless Washington holds talks with North Korea and abandons its policy of what Pyongyang sees as attempts at regime change.

North Korea also reiterated its long-standing desire for the United States to sign a final peace agreement with it and establish diplomatic relations, he said. North Korea remains technically at war with both the United States and South Korea after the Korean war ended in 1953 with a truce.

In Washington, U.S. State Department spokeswoman Victoria Nuland urged North Korea to "refrain from additional provocative actions that would violate its international obligations" under three different sets of U.N. Security Council resolutions that prohibit nuclear and missile tests.

North Korea "is not going to achieve anything in terms of the health, welfare, safety, future of its own people by these kinds of continued provocative actions. It's just going to lead to more isolation," Nuland told reporters.

The Pentagon also weighed in, calling North Korea's missile and nuclear programs "a threat to U.S. national security and to international peace and security."

"The United States remains vigilant in the face of North Korean provocations and steadfast in our defense commitments to allies in the region," said Pentagon spokeswoman Major Catherine Wilkinson.

Initial estimates of this week's test from South Korea's military put its yield at the equivalent of 6-7 kilotons, although a final assessment of yield and what material was used in the explosion may be weeks away.

North Korea's latest test, its third since 2006, prompted warnings from Washington and others that more sanctions would be imposed on the isolated state. The U.N. Security Council has only just tightened sanctions on Pyongyang after it launched a long-range rocket in December.

Pyongyang is banned under U.N. sanctions from developing missile or nuclear technology after its 2006 and 2009 nuclear tests.

North Korea worked to ready its nuclear test site, about 100 km (60 miles) from its border with China, throughout last year, according to commercially available satellite imagery. The images show that it may have already prepared for at least one more test, beyond Tuesday's subterranean explosion.

"Based on satellite imagery that showed there were the same activities in two tunnels, they have one tunnel left after the latest test," said Kune Y. Suh, a nuclear engineering professor at Seoul National University in South Korea.

Analysis of satellite imagery released on Friday by specialist North Korea website 38North showed activity at a rocket site that appeared to indicate it was being prepared for a launch (http://38north.org/2013/02/tonghae021413/).


President Barack Obama pledged after this week's nuclear test "to lead the world in taking firm action in response to these threats" and diplomats at the U.N. Security Council have already started discussing potential new sanctions.

North Korea has said the test was a reaction to "U.S. hostility" following its December rocket launch. Critics say the rocket launch was aimed at developing technology for an intercontinental ballistic missile.

"(North) Korea is not afraid of (further) sanctions," the source said. "It is confident agricultural and economic reforms will boost grain harvests this year, reducing its food reliance on China."

North Korea's isolated and small economy has few links with the outside world apart from China, its major trading partner and sole influential diplomatic ally.

China signed up for international sanctions against North Korea after the 2006 and 2009 nuclear tests and for a U.N. Security Council resolution passed in January to condemn the latest rocket launch. However, Beijing has stopped short of abandoning all support for Pyongyang.

Sanctions have so far not discouraged North Korea from pursuing its nuclear ambitions.

"It is like watching the same movie over and over again," said Lee Woo-young, a professor at Seoul's University of North Korean Studies. "The idea that stronger sanctions make North Korea stop developing nuclear programs isn't effective in my view."

The source with ties to Beijing and Pyongyang said China would again support U.N. sanctions. He declined to comment on what level of sanctions Beijing would be willing to endorse.

"When China supported U.N. sanctions ... (North) Korea angrily called China a puppet of the United States," he said. "There will be new sanctions which will be harsh. China is likely to agree to it," he said, without elaborating.

He said however that Beijing would not cut food and fuel supplies to North Korea, a measure it reportedly took after a previous nuclear test.

He said North Korea's actions were a distraction for China's leadership, which was concerned that the escalations could inflame public opinion in China and hasten military build-ups in the region.

The source said he saw little room for compromise under North Korea's youthful new leader, Kim Jong-un. The third Kim to rule North Korea is just 30 years old and took over from his father in December 2011.

He appears to have followed his father, Kim Jong-il, in the "military first" strategy that has pushed North Korea ever closer to a workable nuclear missile at the expense of economic development.

"He is much tougher than his father," the source said.

(Additional reporting by Arshad Mohammed and Phillip Stewart in WASHINGTON; Writing by David Chance; Editing by Raju Gopalakrishnan, David Brunnstrom and Jackie Frank)

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Wall Street ends slightly higher, helped by acquisitions

NEW YORK (Reuters) - The S&P 500 eked out a small gain for a third straight session on Thursday, helped by a flurry of merger activity, though investors see no catalysts to lift the market further with major averages near multi-year highs.

The market's slowed advance took the S&P 500 to its highest intraday level since November 2007 on Wednesday. While the index notched its third straight day of gains, none was more than 0.2 percent.

Shares of H.J. Heinz Co jumped 20 percent to $72.50 after it said Warren Buffett's Berkshire Hathaway and 3G Capital will buy the food company for $72.50 a share, or $28 billion including debt. Berkshire's class B shares rose 1.3 percent to $99.21.

Also supporting the market was data showing the number of Americans filing new claims for unemployment benefits fell more than expected in the latest week. The CBOE Volatility index <.vix> fell 2.4 percent, dropping to 12.67.

"While I'm not bearish, I don't see many upside motivations at these levels," said Donald Selkin, chief market strategist at National Securities in New York, who cited the low level of the VIX as a sign the market was overbought.

Equities have struggled to break above current levels where they have been hovering for almost two weeks. The S&P 500 is up more than 6 percent so far this year.

"We need to digest some of our gains to go higher, but people are so eager to buy on the dips that we're not even seeing dips anymore. People are just chasing the market higher," said Selkin, who helps oversee about $3 billion in assets.

Stocks fell earlier after a report the euro zone's gross domestic product contracted by the steepest amount since the first quarter of 2009. In addition, Japan's GDP shrank 0.1 percent in the fourth quarter, crushing expectations of a modest return to growth.

The Dow Jones industrial average <.dji> was down 9.52 points, or 0.07 percent, at 13,973.39. The Standard & Poor's 500 Index <.spx> was up 1.05 points, or 0.07 percent, at 1,521.38. The Nasdaq Composite Index <.ixic> was up 1.78 points, or 0.06 percent, at 3,198.66.

Constellation Brands soared 37 percent to $43.75 after AB InBev's deal to take over Mexican brewer Grupo Modelo was revised to grant Constellation perpetual rights to distribute Corona and other Modelo brands in the United States. U.S. shares of AB InBev gained 5.1 percent to $92.77.

American Airlines and US Airways Group said they plan to merge in a deal that will form the world's biggest air carrier, with an equity valuation of about $11 billion. US Airways shares fell 4.6 percent to $13.99.

Weakness in Europe contributed to a 5 percent drop in revenue from the region for Cisco Systems , which nonetheless beat estimates as it reported its results late Wednesday. The company's shares dipped 0.7 percent to $20.99.

General Motors Co reported a weaker-than-expected fourth-quarter profit, also citing bigger losses in Europe alongside lower prices in its core North American market. The stock was off 3.3 percent to $27.73.

Only five more stocks rose than fell on the New York Stock Exchange, while 51 percent of Nasdaq-listed shares closed higher.

Volume was light, with about 6.36 billion shares changing hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the daily average so far this year of about 6.48 billion shares.

(Editing by Nick Zieminski and Kenneth Barry)

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Olympian Oscar Pistorius charged with murder

PRETORIA, South Africa (AP) — Paralympic superstar Oscar Pistorius was charged Thursday with the murder of his girlfriend who was shot inside his home in South Africa, a stunning development in the life of a national hero known as the Blade Runner for his high-tech artificial legs.

Reeva Steenkamp, a model who spoke out on Twitter against rape and abuse of women, was shot four times in the predawn hours in the house, in a gated community in the capital, Pretoria, police said.

Hours later after undergoing police questioning, Pistorius left a police station accompanied by officers. He looked down as photographers snapped pictures, the hood on his gray workout jacket pulled up, covering most of his face. His court hearing was originally scheduled for Thursday afternoon but has been postponed until Friday to give forensic investigators time to carry out their work, said Medupe Simasiku, a spokesman for the prosecution.

South Africans were shocked at the killing. But while Pistorius captured the nation's attention with his Olympic quest, police said there was a recent history of problems involving him. Police spokeswoman Brigadier Denise Beukes said the incidents included "allegations of a domestic nature."

"I'm not going to elaborate on it but there have been incidents (at Pistorius' home)," Beukes said. Police in South Africa do not name suspects in crimes until they have appeared in court but Beukes said that the 26-year-old Pistorius was at his home at the time of the death of Steenkamp and "there is no other suspect involved."

Pistorius' father, Henke, declined to comment when contacted by The Associated Press, only saying "we all pray for guidance and strength for Oscar and the lady's parents."

Neither Pistorius' agent Peet van Zyl nor coach Ampie Louw could be reached while Pistorius' own cellphone went straight to voicemail.

Pistorius' former coach, Andrea Giannini, said he hopes it was "just a tragic accident." Giannini said he believed that Pistorius had been dating Steenkamp for "a few months."

"No matter how bad the situation was, Oscar always stayed calm and positive," Giannini told the AP in Italy. "Whenever he was tired or nervous he was still extremely nice to people. I never saw him violent."

Yet Pistorius had troubles in his personal life. In February 2009, he crashed a speed boat he was piloting on South Africa's Vaal River. Witnesses said he had been drinking before the crash and officers found alcoholic beverages in the wreckage, though they acknowledged at the time they hadn't conducted a blood test on the athlete. Pistorius broke his nose, jaw and several ribs in the crash, as well as damaged his eye socket and required some 180 stitches to his face.

In November, Pistorius also found himself in an altercation with a local coal mining millionaire over a woman, South African media reported. Eventually, the two men involved the South African Police Service's elite Hawks investigative unit before settling the matter.

Pistorius owned firearms and posted a photograph of himself at a shooting range in November 2011 to the social media website Twitter, bragging about his score.

"Had a 96% headshot over 300m from 50shots! Bam!" he tweeted.

Police said that earlier reports that Steenkamp may have been mistaken for a burglar by Pistorius did not come from the police. Several local media outlets initially reported that the shooting may have been accidental.

Capacity Relations, a talent management firm, earlier named model Steenkamp as the victim of the shooting. Police spokeswoman Lt. Col. Katlego Mogale told the AP that officers received a call around 3 a.m. after the shooting.

A 9 mm pistol was recovered and a murder case opened against Pistorius.

Pistorius enjoyed target shooting with his pistol and an online advertisement featuring him for Nike read: "I am a bullet in the chamber." An article in January 2012 in The New York Times Magazine described him talking about how he pulled a pistol to search his home when his alarm went off the night before an interview. At Pistorius' suggestion, he and the journalist went to a nearby target range where they fired at targets with a 9 mm pistol. At one point, Pistorius told the writer: "If you practiced, I think you could be pretty deadly."

Asked how often he went target shooting, Pistorius replied: "Just sometimes when I can't sleep."

Police have still not released the name of the woman, but the publicist for Steenkamp confirmed in a statement that the model was dead.

"We can confirm that Reeva Steenkamp has passed away," Steenkamp's publicist Sarit Tomlinson said. "Our thoughts and prayers go to the Steenkamp family, who have asked to have their privacy respected during this difficult time, everyone is simply devastated. She was the kindest, sweetest human being; an angel on earth and will be sorely missed."

Tomlinson said Steenkamp, known simply as Reeva, was one of FHM's (formerly For Him Magazine) 100 Sexiest Women in the World for two years running, appeared in countless international and national advertisements and was one of the celebrity contestants on the reality show "Tropika Island of Treasure," filmed in Jamaica.

She and Pistorius were first seen publicly together in November at an awards ceremony in Johannesburg. Later, she began mentioning the athlete in public messages on Twitter.

She also tweeted messages urging women to stand up against rape as well as her excitement about Valentine's Day. "What do you have up your sleeve for your love tomorrow?" she tweeted. "It should be a day of love for everyone."

Pistorius made history in London last year when he became the first double-amputee track athlete to compete in the Olympic Games, propelling him to the status of an athletics superstar.

Having had both his legs amputated below the knee before his first birthday because of a congenital condition, he campaigned for years to be allowed to compete against able-bodied athletes. Having initially been banned because of his carbon fiber blades — which critics said gave him an unfair advantage — he was cleared by sport's highest court in 2008 and allowed to run at the top events.

He competed in the 400 meters and on South Africa's 4x400 relay team at the London Games, making history when his selection for South Africa's team was confirmed at the very last minute. He also retained his Paralympic title in the 400 meters in London.

South Africa's Sports Confederation and Olympic committee released a statement on Thursday saying they had been "inundated" with requests for comment but were not in a position to give out any details of the shooting. The International Paralympic Committee also said it wouldn't comment in detail apart from offering its condolences to the victim's family.

South Africa has some of the world's highest murder rates, with nearly 50 people killed each day in the nation of 50 million. It also has high rates of rape, other assaults, robbery and carjackings.

U.N. statistics show South Africa has the second highest rate of shooting deaths in the world, second only to Colombia.

"The question is: Why does this story make the news? Yes, because they are both celebrities, but this is happening on every single day in South Africa," said Adele Kirsten, a member of Gun Free South Africa. "We have thousands of people killed annually by gun violence in our country. So the anger is about that it is preventable."


Imray reported from Cape Town, South Africa. Associated Press writer Michelle Faul contributed to this report from Johannesburg.

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How safe are nanoparticles in food?


  • Andy Behar: Some foods contain tiny, engineered particles called nanomaterials

  • Behar: Nanoparticles might pose health risks, since they have adversely affected mice

  • He says not enough studies have adequately demonstrated the safety of nanoparticles

  • Behar: With an emerging technology such as this, companies have to be careful

Editor's note: Andy Behar is the chief executive of As You Sow, a nonprofit organization that promotes corporate accountability.

(CNN) -- Some foods sold in supermarkets across America contain tiny, engineered particles called nanomaterials. Our organization decided to test doughnuts after learning that the titanium dioxide used as a coloring in the powdered sugar coating likely contained nano-sized particles.

The tests, conducted by an independent laboratory, found that both Dunkin' Donuts Powdered Cake Donuts and Hostess Donettes did indeed contain titanium dioxide nanoparticles. In response, a spokeswoman for Dunkin Donuts said the company was looking into the matter.

You must be wondering: What are nanomaterials? They are microscopic in size. "If a nanoparticle were the size of a football, a red blood cell would be the size of the field." Nanoparticles have been heralded as having the potential to revolutionize the food industry -- from enabling the production of creamy liquids that contain no fat, to enhancing flavors, improving supplement delivery, providing brighter colors, keeping food fresh longer, or indicating when it spoils.

Andy Behar

Andy Behar

But there are a few problems.

One is that no one knows how many and which food products have them. Companies are not being forthcoming about whether they are using nanoparticles. To further complicate the issue, some companies may not even be aware that they are selling products containing them.

Many companies are reluctant or uninterested in discussing the issue, and concrete information has been difficult to obtain. The majority of food companies are not responsive in providing information about their specific uses, plans and policies toward nanoparticles. There is also no law in the United States that requires disclosure. In contrast, companies in the European Union are required to label foods containing nanoparticles.

The bigger issue with nanoparticles is that they might pose health risks, as they have been found to in tests on mice.

There are not nearly enough studies that can adequately demonstrate the safety of nanoparticles in food additives or packaging. Scientists are still investigating how the broad range of nanoparticles, with their myriad potential uses, would react in the body.

When ingested, nano-sized particles can pass into the blood and lymph, where they circulate through the body and reach in potentially sensitive sites such as bone marrow, lymph nodes, the spleen, the brain, the liver and the heart.

Our knowledge about how nanomaterial food additives react in the body and their health impact is still in its infancy. While efforts are under way to understand them better, much deeper scientific inquiry should occur before nanoparticles are sold in food and food-related products.

More companies and consumers need to be aware of the use of engineered nanomaterials in foods and the potential unknown risks of this technology. More food products like M&M's and Pop-Tarts should be tested as recent studies have identified them as likely to contain nanomaterials as well.

Fortunately, a few companies have become willing to take a public position on nanoparticles.

McDonald stated that it "does not currently support the use by suppliers of nano-engineered materials in the production of any of our food, packaging, and toys." Similarly, Kraft Foods said that it was not using nanotechnology.

Some of the largest food companies in the world, including YUM! Brands, PepsiCo, and Whole Foods, need to know more about nanomaterials and check with their supplies to see if they are using them.

Americans are becoming increasingly interested in what is in the food they're eating. No longer content with label information on daily allowances of vitamins and minerals, U.S. consumers are following the lead of their counterparts in many other countries by demanding more disclosure about where and how their food is grown and whether it is safe.

Even though communicating risks to consumers can be challenging, the public's perception of safety will be paramount in determining the acceptance of nanomaterials. This is especially true for an emerging food-products technology the safety of which even the FDA has acknowledged a lack of understanding.

Follow us on Twitter @CNNOpinion.

Join us on Facebook/CNNOpinion.

The opinions expressed in this commentary are solely those of Andy Behar.

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Stricken cruise ship reported awash in raw sewage nears port

MOBILE, Alabama—

Reeking of rotting food and sewage from overflowing toilets, a crippled cruise ship carrying more than 4,200 people was limping into Mobile, Alabama, on Thursday as passengers awaited the end of a vacation voyage some described as hellish.

The Carnival Triumph was being towed into port by tugboats as the drama played out live on U.S. cable news stations, creating another public relations nightmare for cruise giant Carnival Corp. Last year, its Costa Concordia luxury ship grounded off the coast of Italy, with 32 people killed.

Passengers described an overpowering stench on board the ship four days after an engine room fire knocked out power and plumbing across most of the 893-foot (272-metre) vessel and left it adrift in the Gulf of Mexico.

After the mishap, toilets overflowed, soaking many cabins and interior passages in raw sewage.

"Let's just say that I had a pair of shoes that I will not be bringing home with me," Julie Morgan told CNN.

"It is revolting," Morgan added, referring to the smell aboard the ship. "It's a mixture of sewage and rotting food."

But Terry Thornton, a senior Carnival Cruise Lines vice president, told reporters in Mobile that additional provisions were laid in on Wednesday and the ship was now "in excellent shape."

Passenger Donna Gutzman said those aboard the ship were treated to steak and lobster for lunch on Thursday afternoon.

"Our basic needs are being met. For the most part, they are making us happy," Gutzman told CNN.

The ship was expected to arrive in port around midnight CST (1.00 a.m. ET on Friday), Carnival said. A senior Carnival official said it could take up to five hours to remove all the passengers from the ship, which has only one functioning elevator.

Carnival Corp spokesman Vance Gulliksen said a tow line on one of four tugboats helping the Triumph get into port snapped on Thursday. But the tug was later reattached to the vessel.

Operated by Carnival Cruise Lines, the flagship brand of Carnival Corp, the ship left Galveston, Texas, a week ago carrying 3,143 passengers and 1,086 crew. It was supposed to return there on Monday.

A Coast Guard cutter has been escorting the Triumph on its long voyage into port since Monday, and a Coast Guard helicopter ferried about 3,000 pounds (1,360 kg) of equipment including a generator to the stricken ship late on Wednesday.

Earlier in the week, some passengers reported on the poor conditions on the Triumph when they contacted relatives and media before their cell phone batteries died. They said people were getting sick and passengers had been told to use plastic "biohazard" bags as makeshift toilets.


Carnival Cruise Lines Chief Executive Gerry Cahill said in a statement late on Wednesday that the company had decided to add further payment of $500 a person to help compensate passengers for "very challenging circumstances" aboard the ship.

"We are very sorry for what our guests have had to endure," Cahill said.

Mary Poret, who spoke to her 12-year-old daughter aboard the Triumph on Monday, rejected Cahill's apology in comments to CNN on Thursday, as she waited anxiously in Mobile with a friend for the Triumph's arrival.

"Seeing urine and feces sloshing in the halls, sleeping on the floor, nothing to eat, people fighting over food, $500? What's the emotional cost? You can't put money on that," Poret said.

Carnival Corp Chairman and CEO Micky Arison faced criticism in January 2012 for failing to travel to Italy and take personal charge of the Costa Concordia crisis after the luxury cruise shop operated by Carnival's Costa Cruises brand grounded on rocks off the Tuscan island of Giglio. The tragedy unleashed numerous lawsuits against his company.

The cruise ship mogul has taken a low-key approach to the Triumph situation as well, even as it grabbed a growing share of the U.S. media spotlight. His only known public appearance since Sunday was courtside on Tuesday at a game played by his Miami Heat championship professional basketball team.

"I think they really are trying to do the right thing, but I don't think they have been able to communicate it effectively," said Marcia Horowitz, an executive who handles crisis management at Rubenstein Associates, a New York-based public relations firm.

"Most of all, you really need a face for Carnival," she added. "You can do all the right things. But unless you communicate it effectively, it will not see the light of day."

Carnival Corp shares closed down $0.11 at $37.35 in trading on Thursday on the New York Stock Exchange. The shares closed down 4 percent at $37.46 on Wednesday after the company said voyage disruptions and repair costs related to Carnival Triumph could shave up to 10 cents a share off its second-half earnings.

The Triumph is a Bahamian-flagged vessel and the Bahamas Maritime Authority will be the primary agency investigating the cause of its engine room fire.

For all the passengers' grievances, they will likely find it difficult to sue the cruise operator for any damages, legal sources said. Over the years, the cruise industry has put in place a legal structure that ring-fences operators from big-money lawsuits.

Rules for seeking redress are spelled out in complex, multi-page ticket contracts that have been the subject of decades of court battles. Victims are often required to proceed with any litigation in remote jurisdictions.

(Writing and additional reporting by Tom Brown; Editing by Peter Cooney)

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Key U.S. general backs keeping Afghan forces at peak strength

WASHINGTON (Reuters) - The U.S. general nominated to oversee a vast region that includes Afghanistan on Thursday backed keeping Afghan forces at a peak strength of 352,000, contrary to current plans to shrink them after NATO declares the war over next year.

General Lloyd Austin, nominated to lead the U.S. military's Central Command, said at his Senate confirmation hearing that a more robust Afghan force, while more costly, would "hedge against any Taliban mischief" following America's longest war.

"Keeping the larger-size force would certainly reassure the Afghans, it would also reassure our NATO allies that we remain committed," Austin said.

The comments came two days after President Barack Obama announced in his State of the Union address that 34,000 U.S. troops - roughly half of the current U.S. force in Afghanistan - would be withdrawn by early 2014.

Obama reassured Americans that the costly, unpopular war was coming to an end, but he left unanswered bigger questions about America's exit strategy, including how many U.S. troops would stay in the country beyond 2014 to help train and advise the Afghans and to battle remnants of al Qaeda.

Obama also did not discuss the future size of the Afghan forces, although a White House fact sheet sent out after his address noted they would remain at 352,000 until "at least" early 2015.

Austin warned the Taliban would be waiting to test them.

"You could reasonably expect that an enemy that's been that determined, that agile, will very soon after we transition begin to try to test the Afghan security forces," Austin said.

Under current plans, the United States and its NATO allies will help build up the Afghan armed forces to 352,000 personnel, a number they are approaching, but the size of the force - which the allies will continue to fund - will be trimmed to 230,000 after 2015.


The hearing frequently moved away from questions about the Afghan war and other current events to questions about Austin's past role as commander in Iraq, when a failure to strike an immunity deal for U.S. troops led to their total withdrawal in 2011.

Obama administration officials have warned that failure to strike an immunity deal with Afghanistan would also result in a pullout, but Afghan President Hamid Karzai and U.S. officials have expressed confidence a deal can be reached.

Republicans, who have criticized Obama's drawdown strategy in Afghanistan, noted that the president would have left a much smaller force in Iraq than Austin recommended, even if a deal had been struck.

Senator John McCain of Arizona lamented the lack of a U.S. presence in Iraq.

Pressed by Republicans, Austin acknowledged that the situation in Iraq was trending in a "problematic" direction, and agreed that a continued U.S. role would have helped bolster Iraqi forces.

When it came to Afghanistan, Senator Lindsay Graham of South Carolina warned Austin that if Obama sought an insufficient force for the post-2014 mission, he would refuse to vote for funding the war effort.

"It can be as low as 9 or 10,000, that I will stand with them," Graham said.

"If they overrule the commanders and create a force that cannot in my view be successful, I cannot in good conscience vote to continue this operation."

Graham said he would vote for Austin's confirmation once Austin spoke with the former commander of the Afghan mission, General John Allen, about his recommendations to Obama and reported back to the committee about his opinion.

(Reporting by Phil Stewart; Editing by David Brunnstrom)

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Obama speech 'relied on amnesia'


  • Matt Welch: State of the Union featured content-free calls to action for action's sake

  • He says governed might want to know what they've gotten in return for ballooning debt

  • Didn't we try repairing infrastructure with the stimulus package? he asks

  • Welch: Rand Paul spoke to those who think government should get out of way

Editor's note: Matt Welch is editor in chief of Reason and co-author of "The Declaration of Independents: How Libertarian Politics Can Fix What's Wrong With America" (Public Affairs).

(CNN) -- The two most memorable lines of President Barack Obama's fourth State of the Union address were the ad-libbed: "Get it done" (which doesn't appear in the remarks as prepared), and the emotional "They deserve a vote," concerning victims of gun violence.

As exasperated appeals for an obstructionist Congress to get off its duff, the exhortations provided emotional catnip for Democrats. For the rest of us, however, they were sobering reminders of what governing liberalism has deteriorated into: content-free calls to take action for action's sake.

Consumers of national governance are within their rights to ask just what we've gotten in return for ballooning the cost of the stuff since 2000. The answer may lie in not just what the president said, but what he has assumed we've already forgotten.

Matt Welch

Matt Welch

"Let's cut in half the energy wasted by our homes and businesses over the next 20 years," said the president, who promised a "Recovery Through Retrofit" three years ago. "The American people deserve a tax code that ... lowers tax rates for businesses and manufacturers that create jobs right here in America," said the man who before he took office vowed to, uh, give "tax breaks to companies that are investing here in the United States."

That "aging infrastructure badly in need of repair"? Well, what happened to the $50 billion from the stimulus package dedicated to precisely that task, or the $50 billion plan 18 months later? Making college "more affordable"? That has been the motivation for continuous ratcheting of government involvement in higher education, which has -- surprise! -- coincided with a several-decade increase in tuition costs and student loan debt.

Greene: In 2013, democracy talks back

Do-something politics works when Americans have amnesia, or are reacting to headline-making tragedies, or when they just want free stuff. But this irresistible force is butting up against the immovable object of a have-nothing U.S. Treasury. Debt service costs will soon overtake defense spending, and baby boomer entitlements are about to transform the federal government into a check-writing program for senior citizens.

Americans know by now that Obama can't possibly believe his own promises that his policies won't "increase our deficit by a single dime," not only because of his poor track record with that particular vow, but because he spends the rest of his time talking about all the various things the government needs to "invest" to create "broad-based growth." It's a conflict at the basic level of vision with those of us who think prosperity is mostly a private-sector affair that is on balance imperiled, not improved, by the exertions of a deficit-spending government.

Opinion: Obama dares Congress to get the job done

Thankfully, and quite unlike during the 2012 presidential campaign, the competing vision was voiced Tuesday night. Not necessarily by a dehydrated but game Sen. Marco Rubio, R-Florida, who delivered the Republican response to the State of the Union address, but by Sen. Rand Paul, R-Kentucky, who did the honors online for the tea party.

"The path we are on is not sustainable," Paul said, directly. "All that we are, all that we wish to be, is now threatened by the notion that you can have something for nothing, that you can have your cake and eat it, too, that you can spend a trillion dollars every year that you don't have."

Paul dinged Republicans as well as Democrats, targeted military spending as well as entitlements, and spent a good 30 seconds giving a more full-throated defense of wartime civil liberties than the allegedly anti-war candidate Obama ever did.

Most importantly, he laid out a truly alternative vision that speaks directly to the growing number of Americans who feel like the federal government has failed as the engine of economic growth, and needs urgently to take a back seat before it does more harm.

Rothkopf: This time, a president in full

"What America needs," Paul said, "is not Robin Hood, but Adam Smith." As Obamanomics continues underperforming through a second term, it will be fascinating to see whether Ron Paul's kid can get more people to agree.

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The opinions expressed in this commentary are solely those of Matt Welch.

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Wall Street ends slightly higher, Dow near a record

NEW YORK (Reuters) - Stocks closed modestly higher on Tuesday, putting the Dow within striking distance of an all-time high, as investors looked ahead to President Barack Obama's State of the Union address.

Investors will be listening to Obama's speech for any clues on a deal with Republicans to avert automatic spending cuts due to take effect March 1. The tone of the speech will also be scrutinized, with any sign of compromise likely to be warmly received.

The S&P 500 has risen for the past six weeks, putting it up 6.5 percent so far this year, while the Dow is about 1 percent away from its all-time closing record of 14,164.53, reached in October 2007.

But gains have been harder to come by since the S&P hit a five-year high on February 1. Daily moves have been small and trading volume light as investors search for new reasons to drive stocks higher.

About 5.73 billion shares changed hands on the New York Stock Exchange, the Nasdaq and NYSE MKT on Tuesday, below the daily average so far this year of about 6.48 billion shares.

"We're likely to settle in for a period and digest the gains we've had, though there's still a bias towards positive momentum," said Eric Teal, chief investment officer at First Citizens Bancshares in Raleigh, North Carolina.

"Questions over government spending are the big overhang, and we're looking for Obama to inspire some confidence over that tonight."

The White House has signaled Obama will urge investment in infrastructure and clean energy, suggesting companies in those sectors may be volatile in Wednesday's session.

"Gun makers could also see a reaction if Obama talks about anything with respect to gun control," said Teal, who helps oversee $5 billion. Shares of Smith & Wesson fell 2 cents to $9.11 while Sturm Ruger was up 0.4 percent at $53.91.

The Dow Jones industrial average <.dji> was up 47.46 points, or 0.34 percent, at 14,018.70. The Standard & Poor's 500 Index <.spx> was up 2.42 points, or 0.16 percent, at 1,519.43. The Nasdaq Composite Index <.ixic> was down 5.51 points, or 0.17 percent, at 3,186.49.

Housing shares were among the strongest of the day, led by a 12.5 percent jump in Masco Corp to $20.02 after the home improvement product maker said it expects new home construction to show strong growth in 2013. The PHLX housing sector index <.hgx> rose 3.7 percent.

Avon Products Inc surged 20 percent to $20.79 as the S&P 500's top percentage gainer after the cosmetics company reversed sales declines and cut costs.

On the downside, Coca-Cola Co fell 2.7 percent to $37.56 and was the biggest drag on the Dow after reporting revenue below estimates, hurt by a weaker-than-expected performance in Europe.

Michael Kors Holdings shares jumped 8.8 percent to $62.04 after the fashion company handily beat Wall Street's estimates and raised its full-year outlook.

With earnings season starting to wind down, Thomson Reuters data through Tuesday morning shows of the 353 companies in the S&P 500 that have reported results, 70.3 percent have exceeded analysts' expectations, above a 62 percent average since 1994 and 65 percent over the past four quarters.

Fourth-quarter earnings for S&P 500 companies are estimated to have risen 5.3 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.

About 62 percent of stocks traded on the New York Stock Exchange closed higher while 59 percent of Nasdaq-listed shares closed in positive territory.

(Editing by Nick Zieminski)

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