Google unveils ultrafast wired home project

SAN FRANCISCO: Google on July 26 unveiled an ultrafast Web service along with an Internet television subscription in the Kansas City area as part of a pilot project to boost broadband speeds.

The Google Fiber superfast broadband network will be available starting in September, with one-gigabyte per second speeds - about 100 times faster than most current Internet subscriptions.

The wired home project will allow people to replace cable television and Internet with a single subscription to be controlled by a Google tablet computer, which will be offered for free.

Google Fiber is 100 times faster than todays average broadband, Google vice president Milo Medin said.

No more buffering. No more loading. No more waiting. Gigabit speeds will get rid of these pesky, archaic problems and open up new opportunities for the web. Imagine: instantaneous sharing; truly global education; medical appointments with 3D imaging; even new industries that we haven't even dreamed of, powered by a gig.

The packages offered will include not only Internet but regular TV, the kind you could only get from your cable provider, as well as on-demand programs, Medin told the kickoff event.

Google said it was offering a full ultrafast Internet and television package for $120 a month, with waived installation fees and a free tablet. It also will offer Internet only for $70 a month.

It will also offer free Internet at the current speed of five megabytes per second but will charge an installation fee.

Google asked residents to register to determine the neighbourhoods where the project will be introduced in Kansas City, Kansas, and neighbouring Kansas City, Missouri.

It was not immediately clear when or if Google would expand the project to other US cities.

Google announced its plan to build an experimental high-speed Internet network two years ago, saying the United States had fallen behind other major nations in broadband speed and access.

Fast is better than slow. On the web, nobody wants to wait for a video to buffer or a website to load,Medin said.

Abundance is better than scarcity. There's a plethora of rich content available online - and it's increasingly only available to people who have the speeds and means to access it.

Federal Communications Commission chief Julius Genachowski praised the Google effort.

For the United States to remain globally competitive, we need to keep pushing the boundaries of broadband capabilities and foster testbeds of broadband innovation, he said in a statement.

Abundance in broadband speeds and capacity - moving from megabits to gigabits  will unleash breakthrough innovations in healthcare, education, business services, and more.

US big bank's glory days feared to be gone for good

NEW YORK: The summer of 2012 may be remembered as the time when regulation, scandals and a protracted slow-growth economy finally caught up with big American banks.

Ever since the financial crisis, US banks and their investors have held out hopes of a return to the good times, when lending profits steadily rose and commercial and investment banking flourished together. But analysts and investors are now questioning whether things have changed for good.

�My gut says all these megabanks are worth more separately than combined,� said Bill Black, managing partner of Consector Capital, a hedge fund that focuses on bank trading. Smaller, more focused banks could attract investors, satisfy regulators and increase depressed stock prices, he said.

Seven of the 10 biggest US banks beat analysts� average earnings expectations in the second quarter. But much of that came from cutting costs and dipping into money previously set aside to offset bad loans, rather than from growth in their main businesses, which is what investors want to see.

Revenue from lending, trading and advising corporate clients on mergers is still weak, and low interest rates continue to squeeze profits on loans and other investments. Banks and their already depressed stocks appear headed for a long, grim future.

Nancy Bush, who has been a bank analyst and investor for three decades, said she is ready to throw in the towel on banks of all sizes.

�What�s left at this point, barring a really significant improvement to the economy and a miraculous ramp-up in lending?� Bush asked. �Why invest in these companies? Somebody, give me a reason to believe.�

Toughing out a cyclical economic downturn with more job cuts is not a long-term answer, some banking experts say. Today�s problems derive from structural changes in the financial sector, including increased regulation, and demand a radical restructuring.

�The bottom line is that they have to get smaller so they can manage better,� said Roy Smith, a finance professor at New York University�s Stern School of Business. �They have to give up the idea of being a universal bank holding company that jams together businesses that have nothing to do with each other.�

Morgan Stanley is one financial Goliath that is signaling it gets the message. By the end of 2014 it plans to reduce its risk-weighted fixed-income trading assets by about 30 percent from third-quarter 2011 levels, bank officials said on their second-quarter conference call.

BALANCE SHEET PRESSURE

Government data shows loans on US commercial banks� balance sheets last month grew by 5.3 percent from June 2011, the 10th consecutive month of growth. But low rates and intense competition for the highest-quality borrowers are cutting into the returns earned on mortgage, business and corporate loans, banks� most robust lending sectors.

Even if banks are making more loans to better borrowers, they are doing so less profitably.

�A protracted period of low interest rates puts a lot of pressure on balance sheets,� said Consector�s Black.

Bankers on their second-quarter calls also raised concerns by warning that the mortgage refinancing boom will likely have run its course by year end.

US Bancorp, the seventh-largest US commercial bank, posted about a 17 percent increase in quarterly profit, but cautioned that much of the growth came from mortgage refinancing that is ebbing.

If the economy were turning around, banks might have less to worry about. But Dick Bove, an analyst at Rochdale Securities, said he is feeling squeamish about the economy after reviewing second-quarter earnings calls from 22 bank executives.

�They are seeing very clearly that their clients do not want to hire people or get involved in many capital expenditures,� he said. �If banks from all over the US are saying exactly the same thing, and they did, they are telling you clearly that we are going into a recession.�

One sign of trouble: loan growth is not keeping up with deposit growth.

In March 2010, banks loaned out about 99 percent of money collected from depositors. In March 2012, the figure plunged below 77 percent, the lowest ratio in more than a decade, according to the Federal Deposit Insurance Corp.

Bankers also said on their conference calls that their best clients are increasingly reluctant to invest in their businesses because of uncertainty about the US presidential elections, the end-of-year tax-and-budget �fiscal cliff� battle and ongoing problems with the global economy.

For many banks, however, issues go deeper than just a slowing economy. Capital markets businesses, including trading stocks and bonds, are just not as profitable as they used to be. Trading volumes are in a long-term downtrend globally, and regulators are clamping down on banks� ability to bet their own money.

The big banks also must use more capital to support their riskier trading businesses at a time when the businesses provide sub-par returns. Major commercial banks with investment banking arms, along with standalone investment banks such as Goldman Sachs Group, will suffer, analysts said.

�Nine out of the 10 biggest capital-markets banks in the world can�t earn their cost-of-equity capital,� said NYU�s Smith, a former partner at Goldman Sachs. �If you sit around and bet on these guys because they are undervalued, your patience is running out.�

There are some banks, to be sure, that have stuck to their commercial bank knitting and won perennial plaudits - and strong valuations - from investors and analysts. They include Wells Fargo Corp, the fourth largest US bank by assets, and US Bancorp. These banks have strong credit controls, have generally avoided cut-rate pricing to gain market share, and have been gradually adding fee-based, rather than interest-centered, businesses.

GIVING UP

Analysts, however, say their top institutional clients are increasingly reluctant to invest in any bank stocks. Last week prominent hedge fund manager Bill Ackman said his firm sold its big position in Citigroup, despite his general admiration for the bank�s management, because the banking system has become too risky.

JP Morgan Chase & Co�s almost $6 billion of derivative losses and the Libor interest-rate-fixing scandal in the last few months proved to be the �proverbial straw that broke this camel�s back,� Ackman wrote to his clients at Pershing Square Capital Management.

For months, JP Morgan Chief Executive Jamie Dimon had no idea of the size of the losses brewing inside his bank, signaling to many investors that major banks are too big and too complex to manage, investors said.

�If I don�t think that even insiders have a great handle on what�s going on, I�m certainly not comfortable about investing my capital there,� said Consector Capital�s Black.�Reuters

Wall Street Week Ahead Rolling out red carpet for central banks

NEW YORK: Stocks took off at the end of last week, drawn by the allure of a helping hand from the world�s two most powerful central banks. Traders are unlikely to resist those charms again this week.

The US Federal Reserve and the European Central Bank both meet this week amid investor expectations of action to stimulate economic growth and, in the case of the ECB, tackle the spreading euro zone debt crisis.

The drumbeat of weak economic data and disappointing US corporate profits and outlooks mean central banks can be stocks� best friends.

Equity prices tend to rise sharply in the hours before a Fed statement like the one expected on Wednesday as traders and investors jockey for position and a chance to make a profit.

This week�s calendar has a double-whammy. The Fed�s monetary policy statement will come one day before an ECB meeting packed with intrigue. ECB President Mario Draghi said last week the bank was ready to do whatever was necessary, within its mandate, to save the euro.

�People in this business like to get in front of big events, especially if (they) could be very, very positive for the market,� said Brian Reynolds, chief market strategist at agency brokerage Rosenblatt Securities.

In that sense the strategy �is almost like a lottery ticket,� he said.

But was that ticket already cashed? The S&P 500 rallied to levels not seen since May on Friday, a rally that was sparked a day earlier after Draghi stoked expectations the ECB might resume its Securities Markets Programme (SMP) and possibly adopt more aggressive quantitative easing.

Reports of meetings with the head of Germany�s Bundesbank fueled a Friday rally that outpaced Thursday�s gains.

Equity markets have for weeks been leaning on hoped-for stimulus from the Fed or ECB. Despite weeks of softening economic data, including a dismal payrolls report for June and a poor outlook for corporate profits, the S&P 500 has risen in seven of the past 10 weeks. It closed on Friday near a three-month high.

At the same time that traders position themselves to benefit from the Fed�s latest easy-money policy, those betting against market gains get out of the way and selling pressure recedes.

�It�s very scary to short the market ahead of a Fed meeting,� said Dennis Dick, a proprietary trader at Las Vegas-based Bright Trading and co-founder of Premarketinfo.com. �So you have this short-covering that drives prices up.�

That helps explain the rise in stocks in the 24 hours prior to the US central bank�s policy decisions � a pattern that tends to hold irrespective of what the Fed actually says in its statement.

Economists at the Federal Reserve Bank of New York performed a study of the pattern.

Starting mid-afternoon the day before such decisions, stocks in the United States, Britain, Germany and other major markets begin a sharp rise and don�t stop, on average, until just before the Fed unveils its policy decision at 2:15 p.m. EDT (1815 GMT) the following day.

Since 1994 a whopping 80 percent of the premium in gains of US stocks over yields on short-term government bonds has been earned in these 24-hour periods, the study found.

The pattern has grown starker as the Fed took increasingly aggressive actions to rescue the US economy from recession. The two rounds of major asset purchases, known as quantitative easing, or QE1 and QE2, in recent years, strongly boosted stocks.

�Perhaps this shows markets have given the Fed their seal of approval,� said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.

�At least from a market participant perspective, they are confident the Fed will fulfil its mandate. I try to talk to individual investors to remind them that the stock market is going to react much more quickly than the economy to what the Fed does,� he said.

The focus on central bank meetings will get in the way of a heavy week of earnings for S&P 500 companies at a time when the outlook continues to worsen.

Major companies due to report include AIG, Kellogg, Procter & Gamble, Kraft Foods, Pfizer , MasterCard and General Motors.

Among the 290 companies in the S&P 500 index that have reported earnings for the second quarter, about 67 percent have beaten analysts� estimates, slightly higher than the long-term average of about 62 percent.

But just 40 percent have beaten on revenues, the worst record since the first quarter of 2009.

More worrisome is the market�s outlook. Third-quarter earnings are now expected to decline 0.4 percent from a year ago, compared with an expected rise of 1.4 percent last week, according to Thomson Reuters data.

Also on investors� radar this week is another legal battle in California over patents between Apple and South Korea�s Samsung. The trial�s outcome could reshape the smartphone and tablet wars between the iPhone�s maker and its rivals

US leads sanctions warnings to Sudans over peace talks Advertisement

UNITED NATIONS: The United States is leading international warnings to Sudan and South Sudan to step up efforts to reach a peace accord this week or face possible UN sanctions.

The UN Security Council has given the rival neighbors, who this year came close to all-out war, until Thursday to make their peace.

Tentative talks are being held in Addis Ababa. Diplomats said however that while no accord is expected the 15-nation council will probably hold back from ordering immediate action.

�It appears increasingly unlikely that a comprehensive agreement on outstanding issues will be reached� by the August 2 deadline, said Susan Rice, the US ambassador to the United Nations.

South Sudan broke away from Sudan in July last year but no deal has ever been made to set their frontier, how to share revenues from oil reserves that straddle the border, or how to settle citizenship disputes.

�The United States calls on the parties to fulfill immediately their obligations under Resolution 2046,� Rice said in a statement referring to the resolution passed by the Security Council in May which set the deadline.

�The US wishes to reiterate the UN Security Council�s decision � in the event that any or all of the parties have not complied with the decisions set forth in this resolution to take appropriate additional measures under Article 41 of the (UN) Charter as necessary,� the envoy added.

The United States has taken a tough line with Sudan, which is accused of staging an air raid across the border on July 20. Other Security Council nations say that pressure has to be put on both sides.

�The United States strongly condemns Sudan�s July 20 bombing� in South Sudan�s Bahr El Ghazal state, said Rice.

�This incident constitutes a serious violation of Resolution 2046 and marks a recurrence of violence, which had abated in the period since the resolution�s adoption.�

The UN resolution ordered the two countries to halt hostilities, withdraw their forces from the disputed Abyei frontier region and make a comprehensive accord in three months.

Sudan has however kept a special police force to protect oil facilities in Abyei and has yet to agree a demilitarized border zone map. It also faces international criticism over its war with rebels in South Kordofan and Blue Nile states, on the border with South Sudan.

Tens of thousands of refugees from the conflict have crossed into South Sudan and Ethiopia.

Rice highlighted international concern over what the United Nations has called a humanitarian crisis in South Kordofan and Blue Nile, where the Khartoum government has severely restricted access to aid agencies.

Sudan accuses the South of supplying the Sudan People�s Liberation Movement-North (SPLM-N), which is battling government forces.

The United States praised South Sudan for keeping to most provisions of the UN resolution but Rice said: �At the same time, the United States reiterates the Security Council�s call to cease support to rebel groups.�

Former South African president Thabo Mbeki is leading African Union efforts to mediate between the two rivals at the Addis Ababa talks, which started last week, but diplomats have cited no progress.�AFP

Seven Iraqi police killed in attacks

BAGHDAD: Two bombings and a drive-by shooting Sunday killed seven Iraqi police in a former al-Qaida stronghold in the western part of the country, authorities said, another sign of the militants resurgence.

The attacks before dawn around the city of Fallujah also wounded nine police. They come a week after the leader of al-Qaida in Iraq announced a deadly campaign to reclaim parts of the country the Sunni insurgency was forced to leave before the US military pulled out last December. After the attacks Sunday, security forces sealed off all roads leading into Fallujah and imposed a curfew on the city, 65 kilometers (40 miles) west of Baghdad.

Officials said two explosives-packed cars blew up within a few minutes of each other in Fallujah and the nearby village of Karma as security patrols drove by, killing three policemen. Fifteen minutes later, a gang of gunmen fired on a Karma police station, killing four. The gunmen escaped.

The casualties were confirmed by local hospital officials. All spoke on condition of anonymity because they were not authorized to release the information to reporters.

Fallujah was the site of some of the bloodiest battles of the war in 2004 between US forces and the Sunni insurgency. In 2007, some local tribal leaders in Fallujah and elsewhere in Iraq's Sunni-dominated western Anbar region joined forces with the American troops and forced al-Qaida to retreat in what was a turning point of the war.

Now, however, al-Qaida in Iraq is seeking to make a comeback in Anbar and other Sunni areas, launching dozens of deadly attacks in the days since last weekend's statement by Islamic State of Iraq leader Abu Bakr al-Baghdadi that the militant group would push back into its former strongholds .

Al-Qaida's local wing in Iraq is known as the Islamic State of Iraq, and has for years had a hot-and-cold relationship with the global terror network's leadership.

Both shared the goal of targeting the US military in Iraq and, to an extent, undermining the Shiite government that replaced Saddam Hussein's regime. But al-Qaida leaders Osama bin Laden and Ayman al-Zawahri distanced themselves from the Iraqi militants in 2007 for also killing Iraqi civilians instead of focusing on Western targets.

Generally, al-Qaida in Iraq does not launch attacks or otherwise operate beyond Iraq's borders. But in early 2012, al-Zawahri urged Iraqi insurgents to support the Sunni-based uprising in neighboring Syria against President Bashar Assad, an Alawite. The sect is a branch of Shiite Islam.

There is evidence of al-Qaida involvement in the Syrian civil war, especially the appearance of suicide bomb attacks.

We don't need nuclear power (JAPAN)

TOKYO: Tens of thousands of people protested against nuclear power outside Japan's parliament on Sunday, the same day a proponent of using renewable energy to replace nuclear following the Fukushima disaster was defeated in a local election.

The protesters, including old-age pensioners, pressed up against a wall of steel thrown up around the parliament building shouting, We don't need nuclear power and other slogans.

On the main avenue leading to the assembly, the crowd broke through the barriers and spilled onto the streets, forcing the police to bring in reinforcements and deploy armoured buses to buttress the main parliament gate.

The protest came as results from rural Yamaguchi showed that Tetsunari Iida, an advocate of renewable energy to replace nuclear power, lost his bid to become governor to a rival backed by the opposition Liberal Democratic Party (LDP), which promoted nuclear power during its decades in power, Kyodo news agency reported, citing exit polls.

Iida, who wants Japan to exit nuclear power by 2020, had promised to revitalise Yamaguchi�s economy with renewable energy projects and opposed a project by Chubu Electric Power Co to build a new nuclear plant in the town of Kaminoseki.

Energy policy has become a major headache for Prime Minister Yoshihiko Noda, who less than a year in office is battling to hold his Democratic Party together before a general election due next year but which could come sooner.

Weekly protests outside Noda's office have grown in size in recent months, with ordinary salary workers and mothers with children joining the crowds.

On Sunday, the protesters - holding candles as darkness fell on the hot summer day - took their demonstration to parliament.

Chanting oppose restarts, they pressed against steel barriers erected around the parliament building, where thousands of police were deployed to keep the peace. Many of the crowd had marched past the headquarters of Tokyo Electric Power Co, the company at the heart of the worst nuclear crisis since the Chernobyl disaster in 1986.

We are here to oppose nuclear power, which is simply too dangerous, Hiroko Yamada, an elderly woman from Saitama prefecture near Tokyo, said.

(Noda) isn't listening to us. He only listens to companies and Yonekura, she said, referring to Hiromasa Yonekura, the chairman of Japan's biggest business lobby.

An upset victory by Iida, 53, would have added to Noda's woes as the government tries to decide on an energy portfolio to replace a 2010 programme that would have boosted nuclear power's share of electricity supply to more than half by 2030.

Still, Iida's support from volunteers in the conservative stronghold bodes ill for the Democrats and the LDP, support for which has failed to benefit greatly from Noda's woes, Kyodo said in an analysis of the local vote.

The brave battle by Iida, who sought a change in energy policy, can be said to be proof the popular call to exit nuclear power has spread even to Yamaguchi, the news agency said.

Noda, who approved the restart of two idled reactors this month, has said he would decide on a new medium-term energy plan in August, although media reports over the weekend said that decision could be delayed.

Experts have proposed three options: zero nuclear power as soon as possible, a 15 percent atomic share of electricity by 2030, or 20-25 percent by the same date compared to almost 30 percent before the Fukushima disaster.

Under pressure from businesses worried about stable electricity supply, Noda has been thought to be leaning toward 15 percent, which would require all of Japan's 50 reactors to resume operations before gradually closing older units.

The growing anti-nuclear movement, however, may make that choice difficult, some experts said.

Multiple inquiries into the March 11, 2011 nuclear crisis, in which a huge quake-induced tsunami devastated the Fukushima plant, causing meltdowns and forcing mass evacuations, have underscored the failure by authorities and utilities to adopt strict safety steps or disaster response plans.

Onslaught looms as Assad forces pound Aleppo rebels

US State Dept fears massacre in the city

AMMAN/BEIRUT: President Bashar al-Assad�s artillery pounded rebel-held areas in and around Aleppo on Friday in preparation for an onslaught on Syria�s biggest city where the United States has said it fears a �massacre� may be imminent.

Opposition sources said the shelling, which follows intensive ground and air bombardment, was an attempt to drive fighters inside Aleppo from their strongholds and to stop their comrades outside the city from resupplying them.

�They are shelling at random to instil a state of terror,� said Anwar Abu Ahed, a rebel commander outside the city.

The battle for Aleppo, a major power centre that is home to 2.5 million people, is being seen as a potential turning point in the 16-month uprising against Assad that could give one side an edge in a conflict where both the rebels and the government have struggled to gain the upper hand.

A rebel commander said insurgents had attacked a convoy of Syrian army tanks heading towards the city, as the government continued to redeploy forces from other parts of the country to bolster its forces there.

The fate of Syria itself - an ethnically fragmented nation of 22 million people - is likely to determine the future of the wider region for years to come amid fears that its own sectarian tensions could spill across borders.

The US State Department said credible reports of tank columns moving on Aleppo, along with air strikes by helicopters and fixed-wing aircraft, represented a serious escalation of Assad�s efforts to crush his opponents.

�This is the concern: that we will see a massacre in Aleppo, and that�s what the regime appears to be lining up for,� Victoria Nuland, a spokeswoman for the State Department, said.

Turkey, a former ally of Assad and now one of his fiercest critics, cheered on the rebels in Aleppo. �In Aleppo itself the regime is preparing for an attack with its tanks and helicopters ... my hope is that they�ll get the necessary answer from the real sons of Syria,� Prime Minister Tayyip Erdogan said in remarks broadcast on Turkish TV channels.

As the remaining residents of Aleppo braced themselves for more bloodshed, General Robert Mood, the outgoing head of the UN monitoring mission, told Reuters he thought Assad�s days in power were numbered.

�In my opinion it is only a matter of time before a regime that is using such heavy military power and disproportional violence against the civilian population is going to fall,� the Norwegian general, who left Damascus on July 19, said.

Navay Pillay, the United Nations human rights chief, said a pattern had emerged as Assad�s forces resorted to shelling, tank fire and door-to-door searches.

Government troops stationed on the outskirts of the city unleashed barrages of heavy-calibre mortar rounds on its western districts, while Russian-built MI-25 helicopter gunships struck in the east, opposition activists inside the city said.

The heavy fighting follows an audacious bomb attack on July 18 that killed four of Assad�s closest lieutenants in Damascus, a development that led some analysts to speculate that the government�s grip was slipping.

In the first reported casualty on Friday, a man of about 60 wearing a traditional white prayer, outfit was killed near a park in Aleppo, while fighting spread across several neighbourhoods.

A dawn bombardment killed five people who had been sheltering in a vegetable market. Video footage posted by opposition activists showed people gathering up the victims� body parts in plastic bags.

On Thursday, thirty-four people were killed in and around Aleppo, according to opposition activists, in an uprising that has cost the lives of 18,000 people across the country. Nour said tens of thousands of people had fled Aleppo to nearby northern rural regions close to Turkey.

In the city, rebels have detained at least 100 Syrian officers, soldiers and pro-government militiamen this week, the Syrian Observatory for Human Rights, an opposition group, said.

A video posted on YouTube showed rebels with Kalashnikovs from �The Tawheed (monotheism) Brigade� guarding the detainees, who were lined up on a school playground.

In Damascus on Friday, four helicopters flew over southern areas of the capital, firing heavy machine guns into the districts of Hajar al-Aswad and Tadamon as well as into the Yarmouk Palestinian refugee camp, a resident said.

A Syrian parliamentarian, Ikhlas al-Badawi, from the northern province of Aleppo said on Friday she had fled to Turkey, becoming the first member of the rubber-stamp assembly dominated by Assad�s Baath Party to defect.�Reuters