-BIG PICTURE…As our Richard DAVIES puts it – “a miserable Monday morning for the global economy as gloom gathers over the prospects for growth…” The latest catalyst – that surprisingly weak U.S. jobs report issued Friday – but the real problem remains the debt crisis in Europe and the absence of true bright spots on the global horizon. As Bianna GOLODRYGA reported for GMA, the trifecta of the U.S. slowdown, European crisis, and a drop in growth and demand from Asian powerhouses India and China are making for a perfect storm of unease.
-THE MARKETS…World markets have been taking a beating – for all the above-mentioned reasons. Wall Street futures are down and the European and Asian markets fell sharply. Japan’s Topix plunged to its lowest level since 1983, entering a bear market while Hong Kong’s Hang Seng dropped 2.3%, eliminating all its 2012 gains. The Dow Jones is now at an 8 month low. For financial markets, 2012 is showing many of the hallmarks of 2010 and 2011—healthy gains through April that collapsed into a long and harrowing summer.
-IN EUROPE…We now have a pair of crises looming: as we mentioned here Friday, concerns that Greece may be forced to exit the eurozone (“Grexit”) have joined worries that Spain may collapse under the pressure of a high deficit and fragile banking system (“Spanic”.) Meanwhile, Portugal’s finance minister says today foreign bailout creditors are providing another batch of the country’s $96 billion rescue package – after concluding the government is abiding by the terms of the loan.
-WHAT TO DO?…The Wall Street Journal reports pressure is growing on policy makers around the world to take steps to bolster their economies as the U.S. and China show fresh signs of slowing and the fallout from Europe’s debt crisis spreads.
-SILVER LININGS…Is there any good news out there? Yes – from Richard DAVIES again: Inflation is tame and interest rates are at record lows. And motorists are likely to see more price breaks at the pumps - the price of oil is down to 8-month lows. The belief among traders is that oil demand will grow less than expected this year. In the past month crude prices have fallen 23%.
U.S. DRONE STRIKE KILLS 15 – INCLUDING LEADING AL QAEDA FIGURE
From Habibullah KHAN and Muhammad LILA: A strike by a US drone aircraft has killed 15 people near the Afghan border, including Al Qaeda leader Yahya al-Libbi. From a recent Washington Post piece: “Believed to be in his late 30s, Libi has emerged as a public face of for al-Qaeda, appearing in more than a dozen lengthy Internet videos since last year. His claim to fame is his successful escape from a high-security U.S. military prison in Bagram, Afghanistan, in July 2005, along with three other al-Qaeda members. A year later, he appeared in a 54-minute videotape dedicated to his account of his capture by Pakistani forces in 2002, his subsequent time in U.S. custody and his prison breakout. Al-Qaeda has named Libi as a field commander in Afghanistan, though he styles himself as a theologian and has offered lengthy commentaries on a variety of political events, including the Prophet Muhammad cartoon controversy in Denmark and the criminal trials of Bulgarian nurses in Libya.” Pakistani officials say today’s missiles hit a militant compound in the town of Mir Ali in the North Waziristan tribal region. It is the third such attack in as many days in Pakistan’s frontier tribal region.
U.S. AND VIETNAMESE: MIA BREAKTHROUGH
Top U.S. and Vietnamese defense officials exchanged letters and diaries of fallen soldiers taken during the Vietnam war today, in the highest level exchange of artifacts since the normalization of relations 17 years ago. Vietnam’s Defense Minister also announced that Hanoi would open three additional sites to American teams hunting for the remains of service members still missing. The letters presented to Defense Secretary Leon Panetta were written by U.S. Army Sgt. Steve Flaherty, who was from Columbia, S.C. and with the 101st Airborne. Flaherty was killed in South Vietnam in March 1969. According to defense officials, Vietnamese forces took Flaherty’s letters and used them in broadcasts during the war. Vietnamese Col. Nguyen Phu Dat kept the letters, but it was not until last August, when he mentioned them in an online publication, that they came to light. Robert Destatte, a retired Defense Department employee who had worked for the POW/MIA office, noticed the online publication, and the Pentagon began to work to get the letters back to Flaherty’s family. Among excerpts seen today: Letter to “Betty” – “I’m sorry for not writing so long but we have been in a fierce fight…We took in lots of casualties and death. It has been trying days for me and my men. We dragged more bodies of dead and wounded than I can ever want to forget.” Letter to “Mother” – “If Dad calls, tell him I got too close to being dead but I’m O.K. I was real lucky. I’ll write again soon.” The small diary belonged to Vu Dinh Doan, a Vietnamese soldier who was killed in a machine gun fight. Officials said a Marine, Robert “Ira” Frazure of Walla Walla, Wash., saw the diary — with a photo and some money inside — on the chest of the dead soldier and took it back to the U.S. The diary came to light earlier this year when the sister of a friend of Frazure’s was doing research for a book and Frazure asked her help in returning the diary. The sister, Marge Scooter, brought the diary to the PBS television program “History Detectives”. The show then asked the Defense and State departments to help return the diary.
With the festivities in full bloom – some London weather notwithstanding – the Queen’s Diamond Jubilee will be marked by a star-studded concert in front of Buckingham Palace today. Ten thousand ticketholders will watch live performances by artists including Sir Paul McCartney, Sir Elton John, Stevie Wonder and Jessie J. Today’s concert will also feature Ska band Madness singing 1980s hit “Our House” from the roof of the 775-room palace. At the show’s end, the Queen will light one of the last of around 4,500 beacons across the globe – in celebration of her 60-year reign. In the afternoon, prior to the Jubilee concert, 10,000 ballot winners and VIPs will enjoy a picnic in the gardens of Buckingham Palace created by celebrity chef Heston Blumenthal and royal chef Mark Flanagan. One of those jubilee beacons has been lit on HMS Daring, a Royal Navy Type 45 destroyer east of Suez.
-CHINA WARNS WEST AGAINST USING FORCE…The Chinese Communist Party’s official newspaper warned Monday against Western military intervention in Syria, in a strongly worded reminder that China, like Russia, is wary of forceful international action even as the civil conflict in Syria grows bloodier. “The Syrian question should be resolved by the Syrian people,” said a commentary in the China Daily. “Outside powers do not have the right to stick their hands in.”
-ASSAD SPEAKS…Assad’s first speech in five months yesterday laid down another hard-line marker. He told parliament that what happened “in Houla and elsewhere in Syria are brutal massacres even monsters would not have carried out.” As always, he blamed foreign-backed terrorists.
Another messy Arab Spring headline – just in: Libyan armed brigade surrounds Tripoli airport; flights canceled, security official says. We’ll keep watching…
EGYPT: POST-MUBARAK UNREST
And – another – this from Alex MARQUARDT: Protesters remain on Tahrir Square, calling for a retrial for Mubarak, his former interior minister, six security officials and the two Mubarak sons. The public prosecutor says he will appeal the verdict. Both presidential candidates are trying to use the verdict to gain an upper hand for the next round. The other defendants aside, this is the best way the judge could have handled the Mubarak case; they were never going to put him to death and anything short of a life sentence and there would have been all-out chaos in the streets. A crying Mubarak reportedly refused for three hours to get off the helicopter once at the prison but state news agency MENA now reports that Mubarak is in Tora Prison, his mugshot has been taken, and the prisons authority has denied his request for his personal doctors to oversee his health. There are calls to postpone the next round of voting.
NIGERIA PLANE CRASH
Bazi KANANI reports three days of mourning have begun in Nigeria for more than 150 people killed when their plane crashed in the city of Lagos. The Boeing MD-83 plunged into a printing works and residential buildings before bursting into flames. Rescue officials said Monday they fear many people may have been killed on the ground as well. We are working to confirm CNN reports that the pilot of the doomed flight was American.
THE KARZAI CLAN
The NYTimes has an interesting piece on the Karzai clan - seven brothers who’ve amassed a private fortune over the last ten years – while Hamid Karzai has been in power. Says the Times: “The extended Karzai family has for years simmered with tensions, jealousies, business rivalries, blood feuds and even accusations of murder.” One brother is suspected of trafficking opium, while another allegedly imprisoned one brother’s aid to extract information about where he kept his savings.
CHINA BLOCKS TIANANMEN TALK ON 23RD ANNIVERSARY
From Gloria RIVIERA in Beijing: China’s censors blocked internet access to the terms “six four”, “23″, “candle” and “never forget” on Monday, broadening extensive efforts to silence talk about the 23rd anniversary of China’s bloody June 4 crackdown on pro-democracy protesters. For China’s ruling Communist Party, the 1989 demonstrations that clogged Tiananmen Square in Beijing and spread to other cities remains taboo, all the more so this year as the government prepares for a tricky leadership handover.
NORTH KOREA THREATENS SOUTH KOREAN MEDIA
Yonhap News Agency reports North Korea says it has aimed rockets at the specific coordinates of South Korean media groups. The General Staff of the Korean People’s Army warned Monday it will launch a “sacred war” against South Korean conservative President Lee Myung-bak and seven news agencies if Seoul doesn’t apologize. It says Seoul orchestrated a “vicious smear campaign” against ongoing children’s festivals in Pyongyang.
23 WEDDING GUESTS KILLED AFTER BUS BLUNGES INTO RAVINE
At least 23 wedding guests, including six children, were killed when a bus plunged into a ravine near Islamabad. Sixty people were injured when the driver lost control of the vehicle. The bus was carrying 97 people after a wedding. The bride and groom were travelling in a separate vehicle.
JAPAN: CULT MEMBER ENDS 16 YEARS ON THE RUN
From Akiko FUJITA in Tokyo: A member of the doomsday cult responsible for the 1995 sarin gas attacks in Tokyo was arrested over the weekend, ending 16 years on the run. Naoko Kikuchi was one of 2 remaining members of the Aum Shinrikyo cult at large – he’s accused of producing the gas that killed 13 people in 5 subway trains. Kyodo news reports the arrest, and new reveations from Kikuchi, could delay the executions of cult founder Shoko Asahara and his dozen followers who are currently on death row. Kikuchi’s arrest comes just 5 months after another cult member turned himself in.
SARKOZY ‘BORED’ – THREE WEEKS AFTER LEAVING OFFICE
The Telegraph reports Nicolas Sarkozy is said to be “bored” after spending a three-week post-election break with his wife and children in Morocco – during which he was constantly on the phone to politicians back in France, according to reports.
LE FOOD TRUCK
American food is becoming très hip in France - and is suddenly being seen as more than just ‘restauration rapide,’ writes the New York Times. Among young Parisians, there is currently no greater praise for cuisine than “très Brooklyn and the latest object of their affection: food trucks, including the “Cantine California” taco truck and “Le Camion Qui Fume,” The Smoking Truck, serving up California style burgers.