At a House of Representatives Financial Services Committee hearing where he was grilled over his handling of the program, Paulson said the bailout plan wasn’t "a panacea for all our economic difficulties" and would be more effectively used by investing in financial companies to shore up the system.

"The rescue package was not intended to be an economic stimulus or an economic recovery package. It was intended to shore up the foundation of our economy by stabilizing the financial system," the Treasury chief insisted.

Under stiff questioning from lawmakers who charged Treasury was making up strategy as it went along, Paulson conceded he hadn’t totally ruled out using bailout funds to help homeowners, but said he had "reservations" about a proposal put forward by the Federal Deposit Insurance Corp.

Rep. Barney Frank, the Massachusetts Democrat who chairs the panel, lectured Paulson, telling him mortgage relief was spelled out as an option under the bailout passed by Congress.

"The fundamental policy issue is our disappointment that funds are not being used out of the $700 billion to supplement mortgage foreclosure reduction," Frank said. "There, I believe, is an overwhelmingly … powerful set of reasons why some of the … money must be used for mortgage foreclosure."

FDIC Chairman Sheila Bair, at the same hearing, told lawmakers it was "essential" Treasury offer loan guarantees and credit help to slow foreclosures, and warned that 4 million to 5 million mortgages will enter foreclosure over the next two years if nothing is done.

The FDIC says its plan could avert about 1.5 million foreclosures by encouraging lenders to restructure loans by having the government share in the cost of defaults. It is estimated the plan could cost the federal government about $24 billion.

"We are clearly falling behind the curve," Bair said. "Much more aggressive intervention is needed if we are to curb the damage to our neighborhoods and broader economic health."

FED ADDS ENDORSEMENT

Rising U.S. mortgage defaults have touched off a credit crisis that is weighing on economies around the globe and threatening to push the United States into a deep and long recession.

Federal Reserve Chairman Ben Bernanke endorsed the FDIC’s approach to ease foreclosures, but with some reservations, noting it could expose the government to substantial costs.

"I want to say this is a very promising approach," he said. "A very strong point of the FDIC program is it’s simple and it’s run by the (loan) servicers rather than the government."

The financial bailout program approved last month was originally intended to buy bad loans from banks to free them up to make fresh loans, but Treasury has scrapped that plan and has focused on using it to buy equity in financial institutions.

Some lawmakers were clearly upset at the change of course.

Democratic Rep. Gary Ackerman of New York said Congress was caught by surprise by what "seems to be the second-largest bait-and-switch scheme that history has ever seen, second only to the reasons given us to vote for the invasion of Iraq."

Even the banking industry seemed puzzled. "It’s been very confusing and very difficult," Edward Yingling, president of the American Bankers Association, told the committee. "It’s confusing for bankers … customers don’t know how to react."

Some $290 billion of the first $350 billion authorized under the program already has been used or committed for use, and Paulson said he wanted to reserve the balance for the incoming administration of President-elect Barack Obama, who takes office on January 20.

"This financial crisis is unpredictable and difficult to counteract," Paulson said. "So early last week, we concluded it was only prudent to reserve our … capacity, maintaining not only our flexibility, but that of the next administration."

LITTLE HELP FOR AUTOMAKERS

Paulson was also pressed about possibly tapping bailout funds to help distressed U.S. automakers but again ruled that out. He said any solution for automakers, who are pressing their case in Congress on Tuesday, should be one that helped them to re-tool to make more energy-efficient vehicles, and that wasn’t what the bailout fund was set up to do.

He said Treasury was working with the U.S. central bank on a potential program, to be run by the Fed, that could be used to buy highly rated debt backed by auto loans, which could help automakers and make it easier for consumers to obtain loans.

Paulson said the bailout had "turned a corner in terms of stabilizing the system" but added that falling housing prices were the root cause of the current downturn and a correction in the housing sector may be prolonged by a weakening economy.

A real estate trade group on Tuesday reported that U.S. single-family home prices in metropolitan areas plunged 9.0 percent in the third quarter from a year earlier, pressured by the high number of foreclosed and other distressed properties on the market.

Bernanke said continuing to inject capital into banks "will be critical for restoring confidence and promoting the return of credit markets to more normal functioning."

He said there were some signs of a return to more normal conditions but said markets were still unsettled and many banks continued to restrict their lending through October.

Source:Reuters

Nicole Kidman and Hugh Jackman have attended the world premiere of period epic Australia in a rainy Sydney.

Directed by Baz Luhrmann of Moulin Rouge! fame, the film - reported to have cost $120m (£80m) - is the most expensive ever made on the continent.

Speaking at a press conference earlier, Kidman expressed her delight at being "part of the Australian cinema".

"Rarely do you get to make a film that you’ve dreamed of doing since you were little," said the 41-year-old.

Kidman plays an English aristocrat who falls in love with Jackman’s rugged cattleman against the backdrop of World War II.

It is hoped the film - mostly shot in the north-west of Australia - will boost local tourism.

"We have amazing landscapes and historical events," Luhrmann said of his homeland. "Epics are made of these things."

"This is a celebration for me, and hopefully for this country," added Hawaii-born Kidman, who was raised in Australia from the age of three.

‘Stolen generation’

Part of the film, which clocks in at two hours and 40 minutes, focuses on the Japanese bombing of the city of Darwin in 1942.

The story also deals with the so-called "stolen generation" of Aboriginal children who were taken away from their families to be raised by white foster parents.

Hugh Jackman (left) plays Kidman’s romantic interest in the film

Brandon Walters, a 13-year-old Aboriginal from Broome in Western Australia, was hand-picked by Luhrmann to play a leading role.

The boy, who had not left his home state prior to making the film, said he did not know of Kidman before he was cast.

Kidman said she felt "very protective" towards her co-star, who also appears in a £17m tourism campaign linked to the film.

"If the film does really well he is going to need a lot of protection," she told reporters ahead of the Australia premiere in downtown Sydney.

Australian critics have given a mixed reception to the film, with one saying it was "good but way, way too long".

"There is a lot of narrative flab and longueurs," wrote Jim Schembri in the Canberra Times, adding the film "often has the pace of a steamroller with engine trouble".

Source:BBC

The King of Bahrain’s son planned to revive Michael Jackson’s career with songs he had written himself, London’s High Court has heard.

Sheikh Abdulla Bin Hamad Bin Isa Al-Khalifa also gave the pop star financial support, his lawyer said.

The royal is suing Mr Jackson for £4.7m for reneging on a music contract which would have paid back the loans.

Mr Jackson contests the claim, saying there was no valid agreement and that the payments were "gifts".

An application has been made for the star to give evidence from the US via a video link during the 12-day hearing.

Sheikh’s invitation

The sheikh and Mr Jackson had a "close personal relationship" during his six-month stay in Bahrain three years ago, the royal’s lawyer Bankim Thanki told the court.

The singer travelled to the country, with his children and personal staff, at the sheikh’s invitation "to relax" shortly after being cleared of child abuse charges in the US.

Prior to his stay, Sheikh Abdulla set up Mr Jackson with a recording studio on his Neverland ranch and sent him his own musical compositions.

A recording of a finished song will be played in court, Mr Thanki said.

Sheikh Abdulla helped Jackson settle his bills, the court heard

The court heard that under the agreement, an album, autobiography and stage play were to be produced.

In 2006, plans were announced for the star to release a new album on a label based in the Gulf state and owned by Sheikh Abdulla.

The sheikh claims that despite having paid the $2.2m (£1.5m) cost for Mr Jackson to record a song intended to benefit the victims of Hurricane Katrina, the singer failed to attend the studio for the final recording and the song was never released.

He also says he paid for and built a recording studio in Bahrain for Mr Jackson and himself to make recordings together.

‘Gifts’

In addition, he paid all the singer’s living, travel and other expenses until his departure from Bahrain in May 2006, and advanced funds to retain legal and financial advisers.

Mr Jackson has contested the claim, saying there was no valid agreement, adding the sheikh’s case is based on "mistake, misrepresentation and undue influence".

He has also said no project was ever finalised and payments were "gifts".

The singer has admitted that he signed a document which he understood gave him a substantial shareholding in the 2 Seas recording company.

But he challenges the sheikh’s description of him as "an experienced businessman" and says he never read the terms of the document and was never advised to take independent legal advice.

He also claims that the sheikh, a powerful and influential public figure, exercised "undue influence" over him when he was emotionally exhausted after his highly-publicised criminal trial.

The dispute comes just days after the singer had to give up his Neverland ranch due to financial problems.

The hearing will continue on Tuesday.

Source:BBC

The US president-elect is likely to give it up, aides told the New York Times, because transparency laws would open his correspondence to public view.

Neither Bill Clinton nor George W Bush used e-mail during their presidencies, but unlike Mr Obama neither of them was a devoted BlackBerry user.

He took mobile e-mail everywhere on the campaign trail.

In the summer, cameras filmed him checking his BlackBerry while watching one of his daughters playing football.

His wife Michelle slapped at his hands, to get him to put it away.

"I think Obama is the first president who is addicted to the BlackBerry like the rest of us, and there’s a lot of presidential records and archive rules on what gets stored and what doesn’t," former Clinton press secretary Joe Lockhart told the Associated Press.

‘Crisp’ e-mails

A final decision on whether Mr Obama will become the first e-mailing president has yet to be made.

He is expected to be the first to have a laptop on his desk in the Oval Office.

One possibility reported to be under consideration is that he could continue to receive e-mails, but not send them.
During the campaign, the New York Times reports, his advisers rarely printed out memos, e-mailing them to his BlackBerry instead.

The paper quotes aides saying that his emails, sometimes sent as late as 0100 or 0300, were "generally crisp, properly spelled and free of symbols or emoticons".

As well as the problem of the Presidential Records Act, which could open all presidential emails to public scrutiny, there are also security concerns.

Experts say there is always a risk of digital communication being hacked into.

There is also the possibility that the location of a presidential mobile telephone could be tracked.

Benjamin Nugent, author of the book American Nerd, says the president-elect is a techie, who will have difficulty parting with his BlackBerry.

"It’ll be interesting if we could see the torment on his face," he told AP. "For me it would be hell."

But Mr Obama could yet decide to emulate Al Gore, who reportedly used a government e-mail address in his later years as vice-president.

"He’s the president," said another Clinton press secretary, Mike McCurry. "If he wants to carry the BlackBerry, he’s entitled."

Story from BBC NEWS

US light, sweet crude rose to $58.16 a barrel, having fallen to $55.29 earlier on Monday.

Brent crude rose to $54.13, having fallen to $52.84 earlier in the day.

The early falls were due to yet more bad economic news and Opec hinting that it would not be announcing any cuts in oil production soon.

US industrial output rebounded in October after a sharp fall in September, the Federal Reserve said.

Output rose by 1.3% during the month, compared with a fall of 3.7% in September - the sharpest fall in production for over 60 years.

That helped ease some fears that demand for oil would be hurt as more countries slide into recession.

Oil prices are down around 60% since their record highs of nearly $150 a barrel in July.

Prices were also hit earlier after Opec’s president downplayed the chance of a November output cut.

"[Opec president] Chakib Khelil basically said that they will not cut on 29 November," said Dave Ernsberger, Asia director of global energy information provider Platts in Singapore.

Earlier it was reported Iran would call for a cut of between 1m and 1.5m barrels a day when the oil cartel meets in Cairo later this month.

But Mr Khelil said Iran’s call was a "wish".

The oil cartel decided in October to cut production by 1.5m barrels a day, but this has not stopped world oil prices from falling further.

Story from BBC NEWS

A busboy who worked at the restaurant for a year from June 2007 filed the suit on behalf of 50 other employees. It accuses Timberlake, two of his business partners and managers of Southern Hospitality BBQ restaurant in Manhattan of stealing tips and not paying the minimum wage or overtime.

It was the latest suit to be filed by workers over wages against New York restaurants and clubs, with businesses owned by actor Robert De Niro and hip hop star Jay Z also hit by legal action.

The suit, filed in Manhattan federal court, seeks unspecified damages. It also names Timberlake’s business partners Eytan Sugarman and Trace Ayala as fellow owners and as running the operations of the BBQ eatery.

Among those named in other suits are celebrity haunt Pastis; three New York restaurants co-owned by actor Robert De Niro in the global Nobu chain; Jean Georges — which has three Michelin stars — and other restaurants owned by French chef Jean-Georges Vongerichten; and Jay Z’s 40/40 Club.

Earlier this year, Vongerichten agreed to pay $1.75 million to eight waiters who filed suit on behalf of all staff at Jean Georges and four of his other New York restaurants.

Southern Hospitality did not return a call seeking comment.

Source:Reuters

Oscar-winning South African-born actress Charlize Theron was named a United Nations messenger of peace on Friday, with a special focus on ending violence against women.

 Messengers of peace, of which there will now be 10, are celebrities mainly from the fields of film, music, literature and sport who are charged with promoting U.N. activities and ideals through public appearances and media contacts.

 Theron, 33, won an Academy Award for her role in the 2003 movie "Monster," in which she played serial killer Aileen Wuornos, who came from a background of violence and abuse and was executed in Florida in 2002.

 In the 2005 film, "North Country" she played a woman who fights back against sexual harassment. She has been in dramas like "The Cider House Rules," thrillers such as "The Italian Job" and the special-effects filled "AEon Flux."

 Theron, named by Esquire magazine last year as its "Sexiest Woman Alive," has also been involved in charitable causes such as putting mobile health clinics in rural areas of her native South Africa where access to care is limited.

 She had her own experience of domestic violence at the age of 15 when her mother fatally shot her alcoholic father as he threatened the family in a drunken rage.

 Designating her a messenger of peace, U.N. Secretary-General Ban Ki-moon said, "You have used your voice, compassion and special relationship with the public to create a better world."

 The other messengers of peace are actors George Clooney and Michael Douglas, musicians Daniel Barenboim, Midori Goto and Yo-Yo Ma, authors Paulo Coelho and Elie Wiesel, equestrian Princess Haya Bint al-Hussein and naturalist Jane Goodall.

Source:Reuters

Researchers from Manchester University and Lubeck University, in Germany, used a molecule to stimulate the pigment responsible for hair colour.

But they said the technique still had to be tested on humans and would not reverse the natural greying process.

However, experts said the development was an encouraging breakthrough.

Artists are lighting up London’s South Bank with 1200 wind-powered lights as part of a digital arts festival.

The Aeolian tower - which means moved by the wind - is a 15m steel structure located next to Waterloo Bridge.

The tower is covered with hundreds of tiny wind-powered LEDs. Each one made of a plastic turbine, controlling circuits and three red LEDs.

The designers aim to show how renewable energy can be used to power sustainable art and design.

As wind blows over the tower, swirling patterns of light reveal the strength and direction of the breeze.

"We want to visualize the invisible, making people realize that there’s a lot of energy out there that we’re not using," said Zena Bruges from Jason Bruges Studio, which designed the tower.

The designers chose the location next to Waterloo Bridge because of the complex wind patterns that come off the River Thames and the bridge, said Gabby Shawcross, one of the tower’s creators.

The lights need a gentle wind of about 3mph (4.8kph) to reach full brightness.

A 2.5m square panel of lights is also on show inside the BFI delegate centre. Since the panel is indoors, the lights are powered with two industrial fans.

These lights are connected to a laptop, which controls the lights so that they can display patterns and messages.

"The result of this could be a low-resolution, wind-powered billboard," said Ms Bruges.

The team is working with architecture students from the University of Westminster to develop a wireless version of the technology that will allow the lights to be controlled remotely.

These lights wouldn’t need power or data cables, so designers could apply them to any surface in any location, said Mr Shawcross.

The Aeolian Tower will be in place from 14 -16 November as part of the One Dot Zero - Adventure In Motion festival at the BFI Southbank in London.

Source:BBC

President-elect Barack Obama on Saturday urged lawmakers to quickly pass at least "a down payment" on a new economic rescue plan to help resuscitate the ailing American economy.

In a radio address that was also published as a YouTube video on his Web site (www.change.gov), Obama noted that the leaders of G-20 nations were in Washington this weekend to seek solutions to the economic turmoil that has spread around the world.

"I’m glad President Bush has initiated this process because our global economic crisis requires a coordinated global response," Obama said.

"And yet, as we act in concert with other nations, we must also act immediately here at home to address America’s own economic crisis."

At the same time, Obama moved to fill out more of his staff as he prepares to take power on January 20. A senior campaign adviser and former housing developer, Valerie Jarrett, will serve as senior White House adviser.

Another senior campaign adviser, Phil Schiliro, will serve as his legislative affairs adviser. Vice President-elect Joe Biden announced earlier this week that former Clinton administration official Ron Klain will serve as his chief of staff, a job he held for Al Gore.

"These individuals will be essential members of our team as we work to bring Republicans and Democrats together to strengthen our struggling economy and make Washington work for all Americans," Obama said in a statement.

In his radio address, Obama noted that financial markets are volatile, unemployment insurance claims have jumped to their highest levels since September 11, 2001, and more jobs are disappearing.

‘MORE HOPEFUL THAN EVER’

"We’ve lost jobs for 10 straight months — nearly 1.2 million jobs this year, many of them in our struggling auto industry," he said. "And millions of our fellow citizens lie awake each night wondering how they’re going to pay their bills, stay in their homes and save for retirement."

Obama said he was "more hopeful than ever" that the United States will find a way out of the economic slump.

"But we must act right now," he said, noting that Congress was meeting next week to address the spreading impact of the financial crisis.

"I urge them to pass at least a down payment on a rescue plan that will create jobs, relieve the squeeze on families, and help get the economy growing again."

Obama specifically called for help for the more than 1 million Americans who will have run out of unemployment insurance by the end of the year.

"If Congress does not pass an immediate plan that gives the economy the boost it needs, I will make it my first order of business as president," said Obama, who will be sworn in on January 20.

Obama has announced he will resign his Senate seat effective on Sunday, so he will not take part as a senator in the post-election or "lame-duck" session of Congress.

The 47-year-old president-elect said real recovery would require long-term investments in areas like infrastructure, building a green energy economy, overhauling the health care system and improving education.

Doing all this will require not just new policies but a new spirit of service and sacrifice, where each of us resolves to pitch in and work harder and look after not only ourselves, but each other," he said.

"If this financial crisis has taught us anything, it’s that we cannot have a thriving Wall Street while Main Street suffers. In this country, we rise or fall as one nation; as one people. And that’s how we will meet the challenges of this time — together."

Source:Reuters