BBC News - Sandy: Damage estimated at up to $20bn

Businesses on the US East Coast have continued to be disrupted by storm Sandy, with total damage estimated at between $10bn and $20bn (£6bn-£12bn).

Businesses in gambling mecca Atlantic City were boarded up

Sandy has flooded subway and road tunnels in much of Lower Manhattan.

Beyond New York City, public transport has been halted in several eastern US cities, and thousands of flights have been grounded.

And US stock markets have had to close again on Tuesday, the longest period since 9/11.

It is also the first time the weather has shut them for two consecutive days since 1888. The estimate of damage comes from disaster risk modelling firm Eqecat.

Both the New York Stock Exchange (NYSE) and the Nasdaq exchanges plan to reopen on Wednesday. NYSE said that its famed trading floor - based close to the major flooding in Lower Manhattan - remained undamaged.

Wednesday is a key trading day because it is the last day of the month, when traders price their portfolios.

Transport disruption

Sandy threatens an 800-mile (1,290-km) swathe of the US, from the Atlantic Ocean to the Great Lakes in the Mid-West and killed 66 people in the Caribbean last week before pounding the East Coast of the US.

The storm has closed thousands businesses and severely affected the infrastructure of the nation.

The closure of public transport along the US East Coast means millions of people are unable to get to work.

Air traffic to and from the region has also been severely disrupted and nearly 14,000 flights were cancelled, potentially hurting airlines that were already struggling in the weak economy.

Amtrak has suspended passenger train services across the north-east.

The UN headquarters in New York is also to stay closed, while public transport was suspended in Washington DC, New York, Baltimore, Philadelphia and Boston.

Rebuilding benefits

Paul Ashworth, an economist at Capital Economics, said that depending on how long flooding lasts, the hurricane could maybe shave one tenth of US output during the quarter.

"But you have to remember that the hurricane generates extra activity too, in terms of the clean-up and rebuilding," he told the BBC.

"In theory, it could even be a positive for the economy."

Peter Morici, an economist and professor at the University of Maryland, estimated that some $15bn to $20bn will likely be spent on rebuilding after the storm, which could create as much as $36bn in an "economy with high unemployment and underused construction resources".

"When government authorities facilitate quick and effective rebuilding, the process of economic renewal can leave communities better off than before in many tangible ways."

Power outage

Roan Kirby, a farmer in Hope, New Jersey, told the BBC he has had to shut his farm down during the storm.

"I see no mention of the impact on farmers," he said.

"It is easy to forget livestock, stored crops and buildings that are at great risk. If trucks cannot get through to pick up milk at the farms and if the processing plants are affected, milk supply will surely be affected. Milk will have to be disposed of on the farm if it cannot be collected, which will mean a huge loss of income."

In New York, the US financial capital, an explosion at a sub-station caused power outages and darkened most of downtown Manhattan as well as Westchester County and affected more than 650,000 customers, power company Consolidated Edison said.

"This is the largest storm-related outage in our history," said John Miksad, Con Ed's senior vice president for electric operations.

Six million homes are currently without power.

"It will be days before we can know the full extent of the damage left behind by Hurricane Sandy in New York City and the rest of the state," Rob Lillpopp, a spokesperson for the Business Council of New York State, told the BBC.

"We are just a year removed from Hurricane Irene, and what we learned from that devastating storm is that small and large businesses can and will pull together to recover."

In Europe, shares in Swiss Re rose 1.3% and Munich Re shares were also higher. The two companies are reinsurers - they insure insurers, who will have to pay out a large amount to businesses and individuals affected by Sandy.

Reuters News - Greek government gets key backing to pass reforms

1 of 3. Banking sector employees march in front of the parliament during a rally against planned reforms at their pension fund in central Athens October 30, 2012. A Greek coalition partner confirmed on Tuesday it would vote against labour reforms proposed by foreign lenders, ignoring the prime minister's appeal for a united front to push through more unpopular austerity.

Credit: Reuters/John Kolesidis

By Renee Maltezou and Harry Papachristou

ATHENS | Tue Oct 30, 2012 5:42pm EDT

(Reuters) - An overwhelming majority of Greek Socialist lawmakers have agreed to vote in favor of contested austerity reforms, party officials told Reuters on Tuesday, sharply increasing the odds of securing parliamentary approval for the measures.

Near-bankrupt Greece needs to push through spending cuts and tax measures worth 13.5 billion euros as well as a raft of reforms to appease EU and IMF lenders and secure bailout money needed to avoid running out of cash next month.

After months of negotiations on the austerity plan, Prime Minister Antonis Samaras announced on Tuesday that talks had been completed and implored his allies to back the package.

The prime minister's New Democracy party and the Socialist PASOK have between them 160 deputies, nine more than they need for an absolute majority in parliament.

But the third party in the coalition, Democratic Left, refuses to back the proposed new labor laws which could tempt other deputies to defect and leave the government facing an unpredictable vote in parliament next week.

However, the odds of parliamentary approval jumped after Socialist PASOK deputies agreed to back the reforms.

"The overwhelming majority of PASOK lawmakers are in favor of the package," one of the party officials said, adding that just two of the 33 PASOK lawmakers would vote against the package, while another two had yet to decide.

Still, a flurry of contradictory statements from the three coalition parties highlighted the chaos ahead of the crucial vote on austerity measures, which has become the government's biggest test since taking power in June.

"What would happen if the deal isn't passed and the country is led to chaos?" Samaras said in a statement.

"Such dangers must be avoided. That is the responsibility of each party and every lawmaker individually."

The Democratic Left party immediately responded by reiterating it would vote against labor reforms.

"The Democratic Left has fought on the issue of labor relations, to protect workers' rights which have been already weakened," the party said in statement.

"It does not agree with the result of the negotiations. The Democratic Left sticks to its position."

PASOK, which has seen its support evaporate in the face of continued austerity, then interrupted a party meeting to put out a statement chiding Samaras for saying talks had concluded.

"A rushed press release that says 'the government did what it could, it is moving ahead and whoever wants to should follow it' ... is at best unfortunate," the party's chief said in the statement.

NUMBERS GAME

The government is expected to include a large chunk of the austerity measures in the 2013 budget bill to be presented on Wednesday, with the remaining measures and labor reforms in a separate bill to be put to parliament on Monday.

The bickering among the allies threatens to bring next week's vote down to a numbers game, undermining Samaras's pledge that Greece's government is committed to doing everything it can to restore credibility in the eyes of European partners.

The Democratic Left party has the support of 16 deputies in the 300-seat parliament, meaning the government - which has a 176-seat majority - could pass the reforms without its support as long as PASOK deputies vote in favor.

But the smaller party's stance has emboldened some in PASOK and speculation has grown that some rebel lawmakers could vote against the measures. The austerity bill could be defeated if more than 10 of the 33 PASOK lawmakers oppose them.

The government also faces a contentious vote on a privatizations bill on Wednesday which could set the tone for the bigger vote next week.

The proposed law intends to scrap the government's obligation to own a minimum stake in a string of former state companies, but PASOK and Democratic Left deputies have demanded all privatizations be subject to parliamentary approval.

A Democratic Left official said the party would abstain on the entire privatization bill and vote against certain articles.

Euro zone finance ministers are due to hold a conference call on Greece on Wednesday, ahead of a November 12 meeting that is expected to focus on the debt-laden nation's latest crisis.

Highlighting Greece's troubles to meet its bailout targets, the country's privatization agency said on Tuesday it has slashed its revenue target to about 11 billion euros by the end of 2016, down from a previous target of about 19 billion euros by the end of 2015.

Greece has already missed several privatization revenue targets and has raised only about 1.6 billion euros in cash since its first bailout in May 2010.

The lack of progress stems from the reluctance of Greek governments to sell off assets, political instability and the lack of investor interest in a country facing a grim economic future and the threat of an exit from the euro.

(Writing by Deepa Babington; Editing by Jon Hemming)

Reuters News - Politics puts Italy, Spain back in market focus

A European Union (E.U.) flag flutters in front of the monument of Parthenon on Acropolis hill in Athens June 17, 2012.

Credit: Reuters/John Kolesidis

By Julien Toyer and James Mackenzie

MADRID/ROME | Mon Oct 29, 2012 2:59pm EDT

(Reuters) - Spanish Prime Minister Mariano Rajoy kept financial markets guessing on Monday over whether he will seek a credit line from the euro zone's rescue fund but said he would do so "when I think it is in the interests of Spain".

At a joint news conference after talks in Madrid, Italian Prime Minister Mario Monti said it was vital that the European Central Bank's bond-buying program to support troubled states be activated, a strong hint that Spain should take the plunge, since he also said Italy did not need a bailout.

"It is of paramount importance that the instrument is put to work, that it does not remain theoretical," Monti said.

Monti said earlier this month that if Spain were to request a credit line from the euro zone's rescue fund, triggering ECB intervention, it would calm financial markets.

While Rajoy maintained his ambiguity, he omitted previous demands to know more details of the ECB's bond-buying plan before making up his mind.

"The instrument is there and any country can ask for it if it finds it necessary. And I will do just that," he said. "When I believe that it is in the interests of Spain to ask for it, I will ask for it. Until I reach this conclusion, I won't do it."

Former Italian Prime Minister Silvio Berlusconi's weekend threat to withdraw support from Monti's government, and regional elections in Sicily in which a protest party led by a stand-up comic polled strongly, highlighted political risk in Italy.

Monti dismissed fears that his unelected reformist administration of technocrats could fall, saying: "I think that the best thing for us to do is continue to work with a time horizon of spring 2013 as has always been our intention."

Rome's borrowing costs have fallen since July, partly due to the European Central Bank's pledge to buy unlimited quantities of bonds if necessary to help states that request aid and accept strict conditions, but also on hopes that Monti may stay on after next year's general election.

Italian and Spanish bond yields rose on Monday, partly due to uncertainty in the euro zone's recession-stricken third and fourth largest economies. But Italy paid less than a month ago to sell 8 billion euros of six-month bills. <GVD/EUR>

The euro also slipped on doubts over whether Greece, the country that triggered Europe's debt crisis, can agree to a deal on new austerity measures and its international lenders can figure out how to make its huge debts sustainable. <FRX/>

A German government spokesman rejected talk of any new write-down of Greek debt involving official creditors, saying German law would not permit such a haircut.

The European Central Bank has also refused to take any losses on its sizeable holdings of Greek government bonds, saying that would be illegal.

Some market players are concerned by signs that Rajoy, having almost completed this year's borrowing, will try to avoid the stigma of requesting a precautionary credit line from the euro zone's ESM rescue fund.

A Spanish government source said Rajoy was taking into account improving market conditions, some more encouraging macroeconomic data and progress in euro zone integration, such as steps towards a single bank supervisor, but he would have no inhibition about seeking aid if the situation deteriorated.

The risk premium on Spanish bonds has tumbled since ECB President Mario Draghi's move, some Spanish banks have regained money market access and the Treasury has almost cleared its 2012 issuance needs and can soon being to pre-fund 2013 borrowing.

But Spanish yields have stopped falling and some analysts expect them to rise the longer Rajoy holds off.

In a sign of the depth of the recession battering Spain, retail sales fell at their fastest pace on record in September, hit by a hike in value-added tax, after unemployment topped a record 25 percent in August.

NUDGE

Monti sought to nudge Rajoy towards applying for a rescue when the two men met in August in the belief that Italy would benefit indirectly from a backstop for Spain, European diplomats told Reuters. The International Monetary Fund is also pressing for Madrid to seek for a credit line soon, diplomats said.

But with market pressure far less acute since the ECB announced its bond-buying policy, the incentive for Rajoy to apply has waned. Germany, the biggest contributor to the ESM, continues to insist that Spain does not need a bailout.

Rajoy rebuffed a German proposal for a European super-commissioner with powers to reject national budgets, saying it could not be taken in isolation but only as part of a grand bargain on closer euro zone union. He said he was not personally in favor.

"We are giving a message that we really want greater European integration. We can't say something is this first, then something else, without saying where we're going," he said. "As part of a variety of measures for fiscal union, it could be considered."

In Italy, Berlusconi appeared to have cleared the way last week for a new political era by announcing he would not run in a general election due in April, raising the prospect of Monti retaining a guiding role in economic policy.

However, in a furious reaction to being sentenced to prison for tax fraud, the billionaire former premier threatened on Saturday to unseat the Monti government and make a comeback, raising new uncertainty over the electoral outlook.

Against this backdrop, Sicilians voted on Sunday for a new regional government, dealing a setback to Berlusconi's party in one of its strongholds and boosting the anti-establishment 5 Star Movement on a low turnout, first results showed.

A strong performance for the 5 Star Movement, after its success in local polls in May, would reinforce its status as the main vehicle for protest against Monti's austerity policies and disillusion with mainstream parties.

GREEK DRAMA

Greece's foreign lenders have refused to make any further concessions on changes to labor laws contested by a junior coalition partner, the country's finance minister said on Sunday, prolonging an impasse on a crucial austerity package.

Athens has been locked in talks with its EU and IMF lenders on the austerity package for months, but a final agreement has been held up by the small Democratic Left party's refusal to back the new wage laws.

The publication of a list of more than 2,000 wealthy Greeks with Swiss bank accounts, including well-known business and political figures, fuelled public anger at a rich elite suspected of tax evasion on a massive scale.

Newspaper Ta Nea reprinted the names and the magazine editor who first published the list appeared in court on Monday charged with violating data privacy laws. The case against Costas Vaxevanis was adjourned until Thursday.

"I was doing my job in the name of the public interest," Vaxevanis told a crowd of supporters outside court. "Journalism is revealing the truth when everyone else is trying to hide it."

The list, given to Greece by French authorities in 2010, contains the names of 2,059 Greek account holders at HSBC in Switzerland to be probed for possible tax offences.

Greek authorities have said there is no evidence that people included in the list have violated the law, but Greek media have criticized former ministers for not investigating.

(Additional reporting by Karolina Tagaris in Athens, Stephen Brown in Berlin. Writing by Paul Taylor, editing by Mike Peacock)

BBC News - Storm Sandy causes severe flooding in eastern US

"Super-storm" Sandy has swept into the eastern US coast with hurricane-force winds, bringing severe flooding, cutting power and claiming 13 lives.

Chris Christie, governor of New Jersey, said there were reports of 5ft of water in places, as some roads turned to rivers

Sandy caused a record surge of seawater in New York City, flooding subway and road tunnels and plunging much of Lower Manhattan into darkness.

An estimated 50 million people could be affected, with up to one million ordered to evacuate homes.

At least five million people across several states are without electricity.

The full extent of the damage may not be known until daybreak.

Over the past week Sandy has killed dozens of people as it carved a path of destruction through the Caribbean.

Public transport has been halted in several eastern US cities, and thousands of flights have been grounded.

Both President Barack Obama and Republican challenger Mitt Romney cancelled campaign appearances little more than a week before the presidential election.

The storm made landfall close to Atlantic City in New Jersey at about 20:00 local time (midnight GMT), packing winds of more than 80mph (129km/h).

Much of Atlantic City was under water, and 30,000 residents were evacuated.

America's oldest nuclear power plant, Oyster Creek in New Jersey, was put on alert due to rising water, the Nuclear Regulatory Commission said.

'Lower Manhattan covered'

Sandy threatens an 800-mile (1,290-km) swathe of the US, from the Atlantic Ocean to the Great Lakes in the Mid-West.

It lost its hurricane status late on Monday as it neared the coast and collided with winter weather systems, but was still generating hurricane-strength winds.

Just before 02:00 EDT (06:00 GMT) theNational Hurricane Center placed the centre of Sandy just south of Lancaster, Pennsylvania.

In New York, some 375,000 residents were ordered out of Lower Manhattan and other areas, as the Hudson and East rivers began overflowing.

A record storm surge of 13.7ft (4.15m) swept into Lower Manhattan, flooding seven major subway tunnels.

"The New York City subway system is 108 years old, but it has never faced a disaster as devastating as what we experienced last night," city transport director Joseph Lhota said early Tuesday.

"Lower Manhattan is being covered by seawater," Howard Glaser, director of operations for the New York state government, was quoted as saying. "I am not exaggerating. Seawater is rushing into the Battery Tunnel."

Battery Tunnel links Manhattan with Long Island.

The city's Consolidated Edison utility provider said some 500,000 homes in Manhattan were without power.

There were reports of an explosion at a Con Edison power station on the east side of Manhattan.

Vice president John Miksad said it was caused by flooding or flying debris, and he added it could take a week to restore power completely.

New York Mayor Michael Bloomberg said the storm surge was higher than the highest forecast, but he expected the waters to start receding from midnight local time.

Back-up power at New York University hospital had failed and authorities were trying to get people out, he said.

Elsewhere in the city, the storm left a construction crane bent double next to a skyscraper and caused the facade off a four-storey building to collapse.

Trading on the New York Stock Exchange and Nasdaq will stay suspended for a second day on Tuesday. The United Nations headquarters in New York has also been closed.

Officials reported at least 12 deaths in New Jersey, New York, Maryland, West Virginia, Pennsylvania and Connecticut - several due to fallen trees.

In addition to the US deaths, a Canadian woman was reported killed by flying debris in Toronto.

Forecasters have said Sandy could linger over as many as 12 states for 24-36 hours.

President Obama declared emergencies in Massachusetts, Connecticut, Rhode Island, New York, New Jersey and Pennsylvania.

In Washington DC, federal government offices were to be closed until Wednesday.

Continue reading the main story

• Hurricane Sandy map and satellite images
• In pictures: Sandy lashes East Coast

Public transport was suspended in the US capital, New York, Baltimore, Philadelphia and Boston.

Amtrak has suspended passenger train services across the north-east, while nearly 14,000 flights were cancelled, according to Flightaware.com.

Up to 3ft (91cm) of snow is expected to fall on the Appalachian mountains in West Virginia, Virginia and Kentucky.

The disaster estimating firm Eqecat has forecast that Sandy could cause economic losses to the US of between $10bn and $20bn (£6.2bn-£12.4bn).

The greatest storms on Earth

• A tropical storm is classified as a hurricanewhen wind speeds reach 74mph
• A hurricane can expend as much energy as 10,000 nuclear bombs over its lifecycle
• The hurricane's spiral is due to the Coriolis Effect, which is generated by the Earth's rotation

Reuters News - Global shares fall as growth fears mount, Wall Street closes

1 of 3.

Credit: Reuters

By Richard Hubbard

LONDON | Mon Oct 29, 2012 6:39am EDT

(Reuters) - World share and commodity prices fell on Monday as the recent run of downbeat corporateearnings cast a shadow over the growth outlook and investors braced for the impact of a giant U.S. hurricane.

Activity across all markets was expected to be thin as the Category 1 Hurricane Sandy neared landfall along the mid-Atlantic states of the United States, forcing shops, offices and share markets in New York to close.

The MSCI world equity index .MIWD00000PUS was down 0.25 percent at 327.80 points and is on track for its worst monthly performance since May as doubts grow over the effect of recent central bank efforts to boost activity.

Positive economic surprises, including third-quarter U.S. and British growth data and signs of stability in China, have yet to reassure investors that growth is on a sustainable path in the face of weak revenue outlooks from major companies.

"Corporate earnings are still weighing on sentiment," said Adrian Slack, head of equities at Bastion Capital.

The FTSE Eurofirst 300 index .FTEU3 of top European shares followed Asian markets lower, dropping 0.45 percent to 1092.31 points. London's FTSE 100 .FTSE, Paris's CAC-40 .FCHI and Frankfurt's DAX .GDAXI were all down between 0.5 and 0.8 percent. .L .EU

In Europe, the problems facing the heavily indebted nations of Spain,Greece and Italy have added to investor concerns, undermining the euro and peripheral bond markets.

Spain's economic woes appear to be deepening, with retail sales in September falling at the fastest pace in at least six years as already battered consumer confidence took another hit from a hike in sales tax.

In Greece uncertainty is growing over whether it can agree measures to unlock further funds from its international bailout package before cash runs out in mid-November.

In Italy political risks were on the rise again after former premier Silvio Berlusconi threatened to bring down the current government of Prime Minister Mario Monti over its current economic policies.

"Berlusconi's rant perhaps highlights the less than stable nature of Italian politics and reinjects some degree of political risk into (Italian government bonds)," said Richard McGuire, rate strategist at Rabobank.

The single currency was down 0.4 percent at $1.2895, not far from a two-week low of $1.2882.

Spanish 10-year government bond yields were 6 basis points higher at 5.67 percent, with the Italian equivalent up 7 basis points at 4.98 percent.

German government bonds also hit two-week highs as the weakness on equity markets added to the demand for less risky assets.

DOLLAR FIRM

Meanwhile, the dollar steadied at 79.63 yen, off a four-month high of 80.38 yen touched on Friday, ahead of the Bank of Japan's policy decision on Tuesday. Markets expect the BOJ to take further easing measures.

If the BOJ does ease, it will be the first time the central bank has acted for two consecutive months since 2003.

In oil markets all eyes were on Hurricane Sandy, which has forced the closure of several big refineries along the east coast of the United States.

"With refineries cutting runs, we're likely to see a build-up in crude stocks which could be driving bearish prices at the moment," said Michael Creed, an economist at National Australia Bank in Melbourne.

Brent crude oil fell $1.04 to $108.51 a barrel, while U.S. crude <CLc1< was down 78 cents at $85.50.

The hurricane could also hit economic activity along the eastern seaboard of the United States, including New York, adding to worries about the fragile nature of the U.S. recovery.

Commodities were also pressured by fears that rising evidence of weak corporate earnings around the world meant demand would slow, with London copper CMCU3 falling to its lowest level since September 7 at $7,755 a metric ton.

(Additional reporting by Anirban Nag and Kirsten Donovan; Editing by Will Waterman)

BBC News - Carbon nanotubes fit by the thousands onto a chip

By Jason PalmerScience and technology reporter, BBC News

Scientists have demonstrated methods that could see higher-performance computer chips made from tiny straws of carbon called nanotubes.

Carbon nanotubes' electronic properties have long been lauded but still have not made it into chips

Carbon nanotubes have long been known to have electronic properties superior to current silicon-based devices.

But difficulties in manipulating them have hampered nanotube-based chips.

The experiments, reported in Nature Nanotechnology, show a kind of two-part expoxy approach to individually place the nanotubes at high density.

The race is on in the semiconductor chip industry to replace current silicon technology - methods to make smaller and therefore faster devices will soon come up against physical limits on just how small a silicon device can be.

Study co-author James Hannon, a materials scientist at IBM, said that there are few realistic successors to silicon's throne.

"The problem is you have to put it in to production on a 10- or 15-year time scale, so the kinks have to be worked out in the next few years," he said.

"If you look at all the possibilities out there, there are very few that have actually produced an electronic device that would outperform silicon - there are exotic things out there but they're all still at the 'PowerPoint stage'."

Though single nanotubes have shown vastly superior speed and energy characteristics in lab demonstrations, the challenge has been in so-called integration - getting billions of them placed onto a chip with the precision the industry now demands.

The two molecules on the chip and nanotube work like a two-part epoxy

Superior speed

Current chips are made using lithography, in which large wafers of silicon are layered with other materials of different electronic properties and then devices are simply "etched" out using a focused beam of electrons or charged atoms.

To address the integration challenge, Dr Hannon and his colleagues came up with a solution - two of them in fact.

The first was a chemical that coats nanotubes and makes them soluble in water.

The second was a solution that binds to the first chemical and to the element hafnium, but not to silicon.

The team used standard techniques to etch a pattern of channels in hafnium deposited on silicon.

Then they simply "double-dipped" the chip into the two solutions - one chemical stuck to the hafnium, and the other chemical acted as the second part of a two-part epoxy, tightly binding nanotubes to the hafnium regions on the chip but not to silicon.

The result was a series of neatly aligned nanotube devices, already wired up within the pattern, at a density of a billion per square centimetre.

Challenges remain

"That's one nanotube every 150 or 200 (billionths of a metre) or so," explained Dr Hannon. "That's not good enough to make a microprocessor yet - it's a factor of 10 away.

"But it's a factor of 100 better than has been done previously."

The demonstration is a "huge improvement", but Dr Hannon said several issues are still to be solved.

They incude finding more efficient ways to sort through nanotubes - which are made in a wide variety of sizes and types - to select in large quantity and high accuracy the kind suitable for devices.

The etching process that sets the ultimate size of a transistor on the chip must also be improved.

For now, the team has modelled what it can do with the technique in its current form - a vast array of transistors, each comprising six nanotubes spaced 10 nanometres apart.

Their models suggest a 10-fold jump in performance - a chip run at more than three times the frequency and consuming just a third the energy.

However, in the longer term, nanotube chips would run up against the same limits that silicon faces; as Dr Hannon puts it, "we're limited by the size of an atom eventually".

"But this at least gives us a way to gain performance while shrinking the device."

BBC News - Nigeria: 'Oil-gas sector mismanagement costs billions'

A leaked report into Nigeria's oil and gas industry has revealed the extent of mismanagement and corruption that is costing billions of dollars each year.

Despite Nigeria's oil wealth, 90% of its citizens live on less than $2 per day

The report, seen by the BBC, was commissioned by the oil minister in the wake of this year's fuel protests to probe the financial side of the sector.

It says $29bn (£18bn) was lost in the last decade in an apparent price-fixing scam involving the sale of natural gas.

It also calculated the treasury loses $6bn a year because of oil theft.

Nigeria is one of the world's biggest oil producers but most of its people remain mired in poverty.

The Petroleum Revenue Special Task Force report is one of several commissioned by the government - and follows an outcry after a parliamentary investigation uncovered a massive multi-billion fuel subsidy scam.

That had been set up after angry nationwide protests in January when the government tried to remove a fuel subsidy.

Earlier this week, a campaign was launched to clean up Nigeria's oil sector.

It was led by Patrick Dele Cole, a politician from the oil-rich Niger Delta region, who said that 90% of the stolen oil was refined in eastern Europe and Singapore.

The BBC's Will Ross in Lagos says this leaked report exposes the extent of the rot in Nigeria's oil and gas industry - all the way from the awarding of contracts to the sale of refined products.

It is staggering just how much money the people of Nigeria appear to be missing out on, he says.

Nigeria's Oil Minister Diezani Alison-Madueke declined to comment on the specifics of the probe but said a report compiled from several committees set up earlier in the year to investigate the oil and gas sector was in its final stages and would be presented to the president soon.

'Total overhaul'

The Petroleum Revenue Special Task Force, headed by former anti-corruption chief Nuhu Ribadu, revealed in its report that losses of revenue to the treasury over apparent gas price-fixing involved dealings between Total, Eni and Shell and government officials.

The report does not suggest the companies broke the law but called for measures to be put in place to ensure all transactions are more transparent.

It said that oil and gas companies owe the treasury more than $3bn in royalties.

For the period 2005 to 2011, it said $566m was owed in signature bonuses - the fees a company is supposed to pay up front for the right to exploit an oil block.

The report looked at the issue of discretionary licences which companies do not have to bid for.

Between 2008 and 2011 it found the Nigerian government had handed out seven discretionary licences, from which $183m in signature bonuses had not been paid.

A Shell spokesman said the company would not comment as it had not yet seen the report.

Our correspondent says it is well known that oil theft is a major problem in Nigeria, but the report says it may be reaching emergency levels as 250,000 barrels of crude oil could be being stolen every day - 10% of annual production.

The leaked report said that small-scale "pilfering" had been "endemic since at least the late 1990s", but it also said it had heard allegations about thefts from crude export terminals, tank farms, refinery storage tanks, jetties and ports.

"Submissions to the Task Force alleged that officials and private actors disguise theft through manipulation of meters and shipping documents," the report said.

"Yet there is also evidence that members of the security forces condone and, in some cases, profit from theft. The void in effective security likewise appears to increasingly hand over control of coastal and inland waterways to undesirable elements."

The investigation showed that 40% of refined products - either refined in Nigeria or imported - currently being channelled through state-owned pipelines are lost to theft and sabotage.

Mr Ribadu's investigation calls for a total overhaul of the industry with an oil sector transparency law requiring all companies to report all payments and publish all contracts and licences.

The Task Force also wants a special financial crimes unit to be established specifically for the oil and gas sector.

Missing billions revealed this year

• $400bn - estimated amount of Nigeria's oil revenue stolen or misspent since independence in 1960 - World Bank's ex-vice-president for Africa, Oby Ezekwesili said in August
• $6.8bn - the amount a fuel subsidy scam has cost Nigeria over the last two years - a parliamentary report said in April
• $29bn - the amount lost by the treasury in the last decade in an apparent gas price-fixing scam - leaked Petroleum Revenue Special Task Force report in Octoberr
• $6bn - the amount the treasury loses a year because of oil theft - leaked Petroleum Revenue Special Task Force report in October

Reuters News - U.S. CEOs call for action to reduce federal deficit

A sign is seen on Wall Street near the New York Stock Exchange June 15, 2012.

Credit: Reuters/Eric Thayer

Thu Oct 25, 2012 2:27am EDT

(Reuters) - Chief Executives of more than 80 big U.S. corporations, including Goldman Sachs, JPMorgan and Boeing, are getting together to pressure Congress to reduce the federal deficit with tax reform and spending cuts.

In a letter posted on the Wall Street Journal website late on Wednesday, the U.S. corporate chiefs said it is urgent and essential to put in place a plan to fix America's debt. The letter is due to be released on Thursday.

If Congress fails to reach a deficit reduction deal by the end of the year, it will automatically trigger big spending cuts and tax increases in 2013. This so-called "fiscal cliff" would hit the still-recovering U.S. economy hard.

The U.S. deficit in 2012 will top $1 trillion for a fourth straight year, pushing the national debt past $16 trillion. While the United States currently borrows at record low interest rates, investors worry this will change.

The CEOs' statement was organized by campaign called "Fix the Debt," which is urging Washington to set aside partisan differences to put the United States on a sustainable fiscal path.

"In order to develop a fiscal plan that can succeed both financially and politically, it must be bipartisan and reforms to all areas of the budget should be included," the CEOs said.

The corporate chiefs said the fiscal plan must include "comprehensive and pro-growth tax reform, which broadens the base, lowers rates, raises revenues and reduces the deficit."

Also, as part of the plan, the group urged the government to reform and improve the efficiency of healthcare programs like Medicare and Medicaid.

The CEO group said the recommendations of the bipartisan Simpson-Bowles Commission provides an effective framework for a fiscal plan. The commission's proposal has several options including trimming tax rates for all income groups.

Simpson-Bowles also calls for slashing many popular tax deductions and adding them back only selectively.

(Reporting by Sakthi Prasad; Editing by Hans-Juergen Peters)

BBC News - Olympics expected to have boosted UK GDP

Figures for the UK economy due on Thursday morning are expected to show growth after nine months of recession.

Gross domestic product (GDP) figures, measuring the value of everything produced in the economy in the three months from July to September, will have been boosted by the Olympic Games.

Ticket sales for the Olympics and Paralympics will be included.

The Office for National Statistics' (ONS) first estimate is expected to show growth of about 0.7%.

It will also be flattered by comparison with the previous three months, because the second quarter had an extra public holiday as part of the Diamond Jubilee celebrations in in June.

The ONS said that the extra day off had knocked 0.5% off economic growth in the second quarter.

It also said ticket sales would add about 0.2% to GDP.

So excluding the Olympic and Jubilee effects, growth seems to have been broadly flat, as it has for some time, showing either small amounts of growth or small contractions.

"Putting aside the quarterly swings over the past two years, the economy has been and remains 'flat on its back' with stagnant growth," said Rob Donaldson from the accountants Baker Tilly.

In a speech on Tuesday, Bank of England governor Mervyn King warned he expected that to carry on.

"The zig-zag pattern of quarterly growth rates of GDP that we have seen this year is likely to continue," he said.

He also pointed out that despite the expected end of the double-dip recession, GDP was still "barely higher than two years ago", which means it is still well below pre-recession levels.

Volatile figures

Of the three months covered by the third-quarter GDP figures, we already have almost all of the figures the ONS uses for July and some of the figures for August.

The service sector, which accounts for more than 70% of the UK economy, grew by 1.1% in July compared with June.

The index of production, which covers most of the rest of the economy, including manufacturing, mining and energy, grew 2.9% in July compared with June.

Much of that increase was put down to the effect of the extra public holiday, and the official figures showed a contraction of 0.5% in August.

The volatile figures for the construction industry showed 2.1% growth in July compared with June and a 0.9% contraction in August.

Official figures on the service sector in August are not yet available, but the influential purchasing managers' index of the sector from Markit/CIPS rose to 53.7 in the month, up from 51 in July. Any number above 50 indicates growth.

So the figures so far support the case for modest growth in the third quarter, but the fourth quarter may struggle to overcome the comparison with the Olympic-boosted third quarter.

That means that while the UK is likely to be out of recession, commonly defined as two consecutive quarters of negative growth, there is a real danger of further contraction in the fourth quarter of the year.