'Pak was preparing to use nuke missiles during Kargil war'

28 Oct 2007, 1008 hrs IST,PTI

LONDON: Pakistan was preparing to use nuclear missiles against India during the Kargil war, a new book has claimed, citing a conversation between US President Bill Clinton and Pakistan Prime Minister Nawaz Sharif eight years back.

"When President Clinton met Sharif at Blair House (in July 1999), Clinton asked Sharif if he knew how advanced the threat of nuclear war really was? Did he know, for example that his military was preparing to use nuclear missiles?" the book "Deception: Pakistan, the United States and the Global Nuclear Weapons Conspiracy" says.

Answering Clinton's query, Sharif shook his head implying he was unaware of his military's moves, investigative journalists Adrian Levy and Catherine Scott-Clark have claimed in their 586-page book.

Warning Sharif, the President said he had a statement ready for release that would pin all the blame for Kargil on Pakistan if the Prime Minister refused to pull his forces back.

Clinton further questioned Sharif on whether the Pakistani leader could be trusted on anything.

The US President reminded Sharif that despite his promise to help bring Osama bin Laden to justice, the ISI had continued to work with bin Laden and the Taliban to foment terrorism and the Americans knew that.

The Americans were unsure as to who was really in control in Islamabad, the authors said, as confusion prevailed over whether Sharif was in reality pushed into a war by General Pervez Musharraf, or he attempted to diminish his role in the crisis.

(http://www.timesofindia.com)

Fed tipped to deliver US rate cut

Last Updated: Sunday, 28 October 2007, 17:18 GMT

Up to two million US families could lose their home in the next year

The Federal Reserve is widely expected to cut US interest rates once again when it meets this week, analysts say.

A slew of recent concerns - including ongoing problems in the housing market and woes at Merrill Lynch - has underlined woes in the US.

The Fed cut interest rates in September from 5.25% to 4.75% as it tried to stimulate the flagging economy.

Analysts say a further reduction to at least 4.5%, or possibly even 4.25%, is likely on Wednesday.

The last rate decision was seen as sending a strong signal that the US authorities were prepared to intervene to stabilise the markets and to prevent the US economy sliding into recession.

If the Fed doesn't act decisively, the economy is at risk of calamity
Peter Morici, EconomisUniversity of Maryland

But some say that risk to the economy is still very real and that further action from the Fed is needed.

Others argue a rate cut would encourage reckless spending and promote a return to conditions that led to a boom-and-bust cycle in the property market.

There is also a risk of inflation becoming a greater problem if money is made cheaper to borrow, encouraging more consumer spending and takeover activity.

Sales of new and used homes are at record lows as lenders tighten up on who they will give mortgages to.

And up to two million US families - especially those with sub-prime mortgages - could eventually lose their homes as the credit crunch intensifies, a Congressional committee report said last week.

There is also nervousness in the markets, with uncertainty still lingering over how much exposure various big banks have to the credit crisis.

Last week Merrill Lynch reported $7.9bn (£3.85bn) in write-downs for the third financial quarter of the year - leading to its first loss since 2001.

The losses - which were much larger than it had initially forecast - were largely caused by exposure to bad mortgage-related debt.

We're not seeing the weakness in the US economy that would justify a big rate cut
Richard Kelly, Economist, TD Bank Financial Group

And one of the country's biggest mortgage lenders, Countrywide, said it was ready to refinance $16bn in loans after customers were unable to meet repayments.

University of Maryland economist Peter Morici said that the Fed needed to make another bold rates cut.

"Certainly a half-point cut would be in order in view of the revelations of Countrywide and Merrill," Mr Morici said.

"We cannot get the economy firing on all cylinders until the mortgage market reorganizes and that probably requires a low-interest environment for some time."

"If the Fed doesn't act decisively, the economy is at risk of calamity."

And Capital Economics analyst Julian Jessop said that a 50 basis point cut could not be ruled out.

"Two weeks ago it looked like they'd be able to keep rates on hold in December. Unfortunately, since then, the goalposts have moved".

Richard Kelly, an economist at TD Bank Financial Group, expects the rate to fall to 4.5% but argued that problems in housing should not be allowed to get out of perspective.

"We're not seeing the weakness in the US economy that would justify big rate cuts," Mr Kelly said.

"You won't see positive growth in residential investment until the end of 2008, but that only makes up 5% of the US economy.

"Exports are booming, and that's three times larger than the housing market."

(http://news.bbc.co.uk)

Clothes label (GAP) pulls items made in India

Clothes label pulls items made in India 29 Oct 2007, 0144 hrs IST LONDON/NEW DELHI: International apparel major GAP said on Sunday that it was withdrawing garments sourced from India from its 3,000 stores following allegations of use of child labour by one of the company's vendors in the capital's Shahpur Jat area, possibly setting the stage for retaliation by the Indian government. GAP's action followed an undercover investigation by a British newspaper purportedly showing the use of child labour to manufacture smocked blouses that were headed for shelves in the company's US and European stores ahead of Christmas. The report said that children as young as 10 years old were working for a GAP sub-contractor and complained of working long hours, going unpaid and being subjected to threats and beatings. A 10-year-old boy, filmed making clothes, told the British paper that he had been sold by his family to the factory owner. The boy was said to have been working for four months without pay and would not be allowed to leave the job until the fee his family received had been recovered. The government reacted to the news cautiously with commerce minister Kamal Nath saying his officials would investigate the matter. Though he refrained from commenting on the case till "it has been thoroughly probed", the minister cautioned against the use of non-tariff barriers, like raking up the issue of child labour, as a protectionist device by the developed countries. He warned of retaliation if investigations established that fresh trade barriers were being erected, as was found in Bangalore recently. "I have already written to EU trade commissioner Peter Mandelson (on October 23) about non-tariff barriers being used as a protectionist device," Nath told TOI. The hand-stitched tops, which were to be sold for around £20 in the Christmas season, are now being withdrawn. In response to the findings, GAP released a statement saying it was "unacceptable" for children to produce its clothing. "It is clear that one of our vendors violated this agreement, and a full investigation is under way.... After learning of this situation, we immediately took steps to stop this work order and to prevent the product from ever being sold in our stores. We are also convening a meeting of our suppliers where we will reinforce our prohibition on child labour," it said in a statement.

(http://www.timesofindia.com)