Forex folly: Why you shouldn’t be trading currencies

Late-night infomercials and Internet ads are like sirens, calling would-be trading wizards with this alluring pitch: "You, too, could make a fortune trading currencies!"

There's little doubt that there's money being made in this market. Just ask legendary investor George Soros, who "broke the bank of England."

Yet currencies are hard to track by even the most seasoned traders and it's not for the average investor. And you're no George Soros, although you'll surely end up breaking something — your own bank account. Even institutionscan get scammed.

Called "Forex," short for "foreign exchange," this form of trading requires guessing on whether a currency or basket of them rises or falls. There are more scams out there than regulators can keep up with and some schemes even ensnare experienced institutional investors.

A $4 trillion market, Forex is dominated by big banks and institutions, who trade around the clock based on constantly changing streams of information. There's a reason why the big boys play this game. It's volatile, turns on a dime and is not predictable.

Currency swings often have nothing to do with the day's headlines and could be manipulated by big traders. No matter what the FOREX ads say, you will have no advantage over the biggest players. None whatsoever.

Still, if you feel that you need to bet on currency movements, use only a small amount of your net worth (under 5 percent) and look at some of the funds available. The Merk Hard Currency fund mixes in gold with a basket of non-U.S. currencies. It's basically a bet on the dollar falling.

If you're bullish on the dollar, you might consider the Rydex Strengthening Dollar 2X fund, which will produce gains if the buck gets stronger against other currencies.

Hedging against a specific currency is another matter. I would employ this strategy if you are making a large business or personal transaction in another country. You would want to protect your investment from currency fluctuations. For this, you would need to buy a specific forward contract. I would employ the services of a broker or registered investment adviser who has experience doing this. Don't do it on your own.

For those of you still compelled to take the plunge into currencies, here are some warnings. Always do your homework before you invest:

• Check out the FOREX company first. You can obtain information about any firm or individual registered with the Commodity Futures Trading Commission, including any actions taken against a registrant.
• Also check the National Futures Association (NFA) Background Affiliation Status Information Center (BASIC), available on the NFA website. You can also find out if someone is registered by calling the NFA at 1-800-676-4632.
• Ignore promises that sound too good to be true. Most of them are frauds. Hang up on unsolicited phone calls offering investments, especially those from strangers.
• Don't sign a check or transfer any funds until you fully understand what you're investing in and how you can lose money. 

Source: Reuters

Rumsfeld admits 'possible' Iraq troop mistakes

AFP, WASHINGTON: Former defense secretary Donald Rumsfeld releases his new memoir Tuesday, as he concedes his Iraq troop decisions may have been wrong while sparing no criticism of former colleagues.

In "Known and Unknown," Rumsfeld defends his handling of the war and recounts his government career serving Republican presidents from Richard Nixon to George W. Bush.

The former defense secretary was reluctant to endorse Bush's assessment that the decision to draw down US troops shortly after the 2003 invasion of Iraq was "the most important failure in the execution of the war."

"I don't have enough confidence to say that that's right. I think that it's possible," Rumsfeld told ABC News anchor Diane Sawyer.

"We had (an) enormous number of troops ready to go in. They had -- we had off-ramps, if they weren't needed.

"It's hard to know. You know, the path you didn't take is always smoother," he added.

The former Pentagon chief's comments came in his first television interview since leaving public life in December 2006 after a long and divisive tenure at the Pentagon.

They largely echoed his memoir, in which he laid blame for much of the failings and heavy bloodshed of the Iraq war on "too many hands on the steering wheel."

Rumsfeld, who served as Bush's defense chief for six years after holding the the same job under president Gerald Ford in the 1970s, acknowledged that "in a war, many things cost lives."

But he had no regrets about his leadership of the wars in Iraq and Afghanistan -- the latter now nearing its 10th anniversary.

He refused to echo the regrets of another domineering defense secretary -- the late Robert McNamara -- who came to describe the Vietnam War as "terribly wrong."

"That's not the case with Iraq," Rumsfeld countered.

"I think the world's a better place with Saddam Hussein gone and with the Taliban gone and the Al-Qaeda out of Afghanistan," he added, insisting the Bush administration's decision to invade Iraq in the wake of the September 11, 2001 attacks on the United States was "incremental," not rushed.

Rumsfeld said it was Paul Wolfowitz, then a deputy secretary of defense and later a major architect of the Iraq war, who raised Iraq at the Camp David presidential retreat shortly after 9/11.

Just as in his book, the former defense chief also ripped into some of George W. Bush's closest advisers, saying Condoleezza Rice lacked experience and Colin Powell showed poor management skills.

Asked whether he admired his ex-boss's father president George H.W. Bush -- under whom he did not serve -- Rumsfeld replied curtly: "No, I was kind of disappointed in him."

Rice, Bush's national security adviser who later became secretary of state, had "never served in a senior administration position," a lack of experience that hampered her ability to organize critical meetings, Rumsfeld said.

He said Powell -- Bush's first top diplomat -- "did not, in my view, do a good job of managing the people under him," calling leaks out of the State Department "unhelpful."

Rumsfeld said Powell, along with other top Bush advisers and officials, truly believed Saddam Hussein had weapons of mass destruction when he made a presentation to the UN Security Council in February 2003 -- and never spoke up during meetings with the president to raise objections about the war.

"There's a lot of stuff (in) the press that says Colin Powell was against it. But I never saw even the slightest hint of that," he said.

On the weapons of mass destruction that never surfaced despite being cited by the Bush administration as the primary justification for the war, Rumsfeld acknowledged: "My goodness, the intelligence was certainly wrong."

But he categorically refused to to say whether he would have acted differently had he known then what he knows now about Saddam's alleged weapons.

"I have no idea. I have no idea," he said. "What you know today can help you on things you're thinking about tomorrow. It can't help you with things you were thinking about back then. Back then, there was reasonable confidence that he had these weapons."

In conjunction with bookstores selling his memoir this week, Rumsfeld is also releasing online a wide range of nearly 2,000 documents from his tenure in public service, dating back to his years as a congressman in the 1960s. They will be available on www.rumsfeld.com.

Haiti issues new passport to ex-leader Aristide

AFP, PORT-AU-PRINCE: The Haitian government said it has issued a new passport to former president Jean-Bertrand Aristide, enabling him to end his exile in South Africa and return to Haiti, a government official said.

"The passport was issued on Monday. All the formalities have been completed," the official said, asking to remain anonymous.

One of Aristide's lawyers, Ira Kurzban, said he had not received the passport.

"If they have (issued a passport for Aristide), they haven't told me," Kurzban told AFP from Miami. Asked if Aristide would be back in Haiti soon, the attorney said: "I think we're getting closer, but we're not there yet."

The news, certain to add to the uncertainty in this quake-hit nation, came as about 200 people demonstrated in the capital Port-au-Prince calling for President Rene Preval to step down.

"Preval, give back the keys to the palace, your mission is at an end," they shouted in front of the presidential palace, still in ruins after the January 2010 earth quake.

Preval had been due to step down from office on Monday, but the presidential elections have been bogged down by accusations of corruption and vote-rigging in favor of his favored successor.

The Haiti election commission ruled on Thursday that popular singer Michel Martelly -- and not the ruling party's Jude Celestin -- would now face off against former first lady Mirlande Manigat in the second round on March 20.

Preval, who passed emergency legislation last year extending his mandate in the event of an electoral delay, has now said he plans to stay in office until the next president and government is installed.

It is not yet clear how Aristide's return -- coming so soon after former dictator Jean-Claude "Baby Doc" Duvalier ended two decades in exile -- will impact on the political scene.

Aristide has been living in South Africa since 2004, and in recent months has repeatedly requested to be allowed to return home to the Caribbean nation, but said he had no travel documents as his passport had expired.

Haiti's first democratically elected leader who was forced to flee amid a popular revolt after two stints as president, Aristide has said he wants to return to help his countrymen.

A former priest, Aristide has long maintained he was forced to step down under pressure from the United States and France.

"Since my forced arrival in the Mother Continent six and a half years ago, the people of Haiti have never stopped calling for my return to Haiti," he said in a statement sent to AFP last month.

"As far as I am concerned, I am ready. Once again I express my readiness to leave today, tomorrow, at any time."

Haiti has been in turmoil since the January 2010 earthquake devastated the impoverished country, killing 250,000 people and leaving 1.3 million homeless.

Last month, Duvalier's return some two decades after he was overthrown in a popular uprising against his brutal rule also fuelled tensions in a nation which has known years of political upheaval and bloodshed.

Monday marked exactly 25 years to the day since Duvalier departed aboard a US air force plane, bringing to an abrupt end a lavish and notoriously corrupt dictatorship.

Duvalier said in a radio interview aired Monday that he dreams of "national reconciliation" led by all of Haiti's former presidents.

"I envision the possibility that all the former chiefs of state would form a grand council with the goal of promoting national reconciliation and rebuilding Haiti," he said in the interview with Signal FM radio.

In the days after his return, Duvalier was charged with corruption, misappropriation of public funds and criminal association, and several complaints have been filed accusing the former "president for life" of crimes against humanity.

Nevertheless, Duvalier's return was welcomed by Michel Martelly, the singer who is in a runoff election for the presidency against Miralande Manigat, a former first lady

Chechen rebel leader claims Moscow airport bombing

AFP, MOSCOW: Chechen rebel chief Doku Umarov has claimed responsibility for last month's bombing at Moscow's main airport that killed 36 people, after an earlier warning to make 2011 a year of "blood and tears".

"This operation was carried out on my order," he said in a video posted late Monday on the Kavkaz Centre website, referring to the January 24 suicide attack at Domodedovo airport.

Umarov said he was acting in the name of Allah and the aim of the audacious attack was to set up an independent Islamic state in the North Caucasus.

He said it was also to avenge Russian "crimes" in the region and underlined that the blast was purposely staged at the international arrivals hall as the aim was to kill foreigners.

Rights activists have long criticised tactics in raids against militants in the North Caucasus -- known by the authorities as special operations -- for being overly brutal and targeting civilians as well as suspects.

Last week, the self-proclaimed leader of the so-called "Caucasus Emirate" -- which has sought to unite various groups in Russia's Caucasus and establish Islamic rule -- had vowed in a chilling video to cause mayhem in Russia this year.

In the earlier video, released late Friday on the website of the group's mouthpiece, Umarov warned Moscow: "God willing we will make this year a year of blood and tears for you."

"You better come to your senses and think," Umarov said, urging Russians to pressure their leaders into letting the region go. He said the attacks would stop after Russia withdrew from the region.

The Kremlin has repeatedly said giving up the Caucasus and negotiating with "terrorists" was not an option.

Russian security officials have said the Domodedovo airport bombing attack was carried out by a 20-year-old from one of the North Caucasus republics who was high on drugs.

A Russian security source had told Interfax news agency that the young man, Magomed Yevloyev, was the son of a school teacher and a bus driver and came from the restive Ingushetia region, bordering Chechnya.

Attacks on officials and police are a daily occurrence in the North Caucasus and after a lull of several years, suicide attacks returned to Moscow in March last year when two female suicide bombers from the region killed 40 and wounded dozens on the underground during morning rush hour.

After the March attacks Umarov said they were revenge for the deaths of innocent civilians in a Russian special operation. In a similar video at the time, Umarov said the bombings would go on as long as the "crimes committed by the gangs under (Russian Prime Minister Vladimir) Putin continued".

The Kremlin fought two wars against separatist rebels in Chechnya in the 1990s but the insurgency has now become more Islamist in tone and has spread to neighbouring regions such as Ingushetia and Dagestan.

South Sudan votes 98.83 percent to secede

AFP, KHARTOUM: Southern Sudan was well on track to become the world's newest state on Monday after final results of its historic independence referendum showed that 98.83 percent had voted for secession.

The results -- displayed at a ceremony in Khartoum -- revealed that out of 3,837,406 valid ballots cast, only 44,888 votes, or 1.17 percent, favoured the status quo of unity with the north.

"The referendum was correct, accurate and transparent and we have no objection to the results," said Mohamed Ibrahim Khalil, chairman of the Southern Sudan Referendum Commission's chairman.

The definitive outcome of the January 9-15 referendum emerged soon after Sudan's President Omar al-Bashir said that Khartoum accepted the south's widely anticipated landslide vote for sovereignty.

"We respect the people of south Sudan's choice and we accept the result of the referendum according to what the commission announces," the Sudanese leadership said in a statement broadcast on state television.

"South Sudan has chosen secession. But we are committed to the links between the north and the south, and we are committed to good relations based on cooperation," Bashir himself said earlier in Khartoum.

Monday's final results ceremony was something of a formality after preliminary results a week earlier showed the same overwhelming majority of south Sudanese choosing to split with the north.

But that did nothing to dampen excitement in the southern capital Juba, where wild celebrations erupted as the announcement was projected live onto a screen by satellite link at former rebel leader John Garang's mausoleum.

The crowd of more than 1,000, who had gathered at the site despite the stifling heat, cheered loudly, with women ululating and people embracing.

"We are on the way to the promised land. This result is our ticket, and now the final journey to our independence begins," said Robert Majur, one of those celebrating.

Western reaction was both swift and positive.

US President Barack Obama hailed a "successful and inspiring referendum" and said Washington would recognise south Sudan as a sovereign, independent state in July.

US Secretary of State Hillary Clinton urged north and south to work quickly on post-referendum arrangements, and EU foreign policy chief Catherine Ashton promised to seek a long-term partnership with the new state.

UN Secretary General Ban Ki-moon asked the international community "to assist all Sudanese towards greater stability and development," and offered help to both sides.

The referendum defied expectations by taking place on time and largely without incident, despite the major logistical challenges facing the organisers and fears that Khartoum might try to block a process certain to split Africa's largest nation in two.

The vote was the centrepiece of a 2005 peace deal that ended a devastating 22-year conflict between the largely African Christian south and the mainly Arab Muslim north that killed around two million people.

Southern leader Salva Kiir praised Bashir on Monday and promised cooperation with the north after the south becomes independent in July.

"The (freedom) of the south is not the end of the road, because we cannot be enemies. We must build strong relations... (as) there are many things that connect the north and the south," Kiir said.

He pledged to create a soft border that allows the free movement of people and goods, to cooperate on security, and to help in lifting sanctions, having Sudan's foreign debt forgiven and reaching a peace deal on Darfur.

In Khartoum, members of the Forum for Just Peace, a northern political party that advocates secession, were preparing to celebrate the result by sacrificing two cows, which lay bound at the side of the road.

"From today we are saying goodbye to the unity of blood and tears... Southerners who want to stay in the north will have to stay as refugees," said Abdelwahab Said, 50.

Bashir on Monday renewed his commitment to protect southerners remaining in north Sudan and pledged to work to resolve all outstanding north-south issues by July.

But he warned that any resolution to the future of the flashpoint border region of Abyei must accommodate the rights of the Misseriya, Arab nomad cattle-herders who migrate there each year.

"We will not be a part of any solution that does not reserve the rights of the Misseriya. Voting in the Abyei referendum is the right of all citizens, and there are no second-class citizens because they are nomads," he said.

The future status of Abyei, where more than 37 people died in clashes last month, is the most sensitive issue to be resolved ahead of southern independence, with oil-revenue sharing, border demarcation and citizenship also on the agenda.

Two Koreas hold first talks since island attack

AFP, SEOUL: The two Koreas Tuesday began their first talks since the North's deadly shelling of a South Korean border island in November sent tensions soaring, Seoul's defence ministry said.

The military talks began at 10 am (0100 GMT) at Panmunjom on the heavily fortified frontier, a ministry spokesman told AFP.

Tuesday's closed-door discussions were to focus mainly on preparations for high-level military talks, possibly between defence ministers, at a date yet to be fixed.

But the South sees it as a chance to test the sincerity of its neighbour's peace overtures in recent weeks after months of confrontation.

Relations have been icy since the South in May accused the North of torpedoing a warship near the disputed Yellow Sea border and killing 46 sailors, a charge it denies.

The November 23 bombardment of South Korea's Yeonpyeong island also near the border, which killed two marines and two civilians, briefly sparked fears of war.

But in an abrupt change of tack this year, Pyongyang has launched a series of appeals for dialogue.

The turnaround came as its key ally China presses for the revival of six-party nuclear disarmament talks to ease overall tensions.

The talks, grouping host China, the United States, the two Koreas, Russia and Japan, are aimed at disarming the North in return for economic and diplomatic gains. They have been stalled since December 2008.

The United States says the North must mend ties with the South before the nuclear dialogue can resume. But the two Koreas remain far apart on who is to blame for the months of tension.

Seoul demands Pyongyang take "responsible measures" over last year's attacks and promise not to repeat them as a precondition for any wider dialogue.

The North denies any involvement in the sinking of the Cheonan warship.

It says its artillery attack on Yeonpyeong was in response to a South Korean live-fire drill there, which dropped shells into waters claimed by the North.

"There is a possibility of the talks ending up confirming each other's stance," a military official was quoted as saying by Yonhap news agency before the colonel-level discussions began.

"The two sides may hold multiple rounds of the preliminary talks."

The South staged a series of military drills after the shelling and began fortifying Yeonpyeong and four other "frontline" islands and reinforcing marines posted there.

A military source quoted by Yonhap said the military plans to increase the size of the marine corps by up to 2,000, to strengthen the islands' defences.

The bombardment was the first attack on a civilian-populated area in the South since the 1950-53 war.

The military has deployed more K9 self-propelled howitzers, weapons-locating radar systems and guided missiles capable of hitting North Korean artillery hidden in caves on the mainland.

It is also considering deploying ship-to-surface cruise missiles on a 4,500-ton destroyer patrolling the Yellow Sea border area, a source told Yonhap.

The Hyunmu-3A missile has a range of 500 kilometres (300 miles) and is capable of striking the North's surface-to-ship missile units along the maritime border.

Mubarak fights Egyptian protest with pay rise

AFP, CAIRO: Egyptian President Hosni Mubarak tried to buy time in the face of defiant street protests, pledging to raise public sector wages by 15 percent and ordering a probe into recent deadly violence.

The 82-year-old leader met his new-look cabinet for the first time on Monday as the regime battled to get the economy moving despite ongoing demonstrations by pro-democracy activists occupying a Cairo square since January 25.

According to the official MENA news agency, the cabinet approved a plan to increase state sector salaries by 15 percent from April and to spend another 6.5 billion Egyptian pounds ($940 million) boosting pensions.

Mubarak also pledged to launch an "independent" investigation into deadly violence between his supporters and demonstrators Wednesday at Tahrir Square that left 11 dead and nearly 1,000 injured, according to official estimates.

The president "has given instructions for the creation of a... transparent, independent and impartial investigatory commission," MENA reported.

The commission will investigate "the terrible and unacceptable violations that made some protesters innocent victims", it said.

The pay hike might reassure Mubarak's partisans in Egypt's large bureaucracy and security forces, but there was no sign that the demonstrators were ready to cede ground.

Campaigners sat under the tracks of army tanks deployed around the square. Activists also kept up the pressure by barring access to the Mugamma, the heart of Egypt's bureaucracy, which dominates the square.

The United States, meanwhile, urged Egypt to uphold existing treaties, in apparent reference to the country's peace agreement with Israel.

Washington "will be a partner" to an Egyptian government that "will uphold the treaties and obligations" by which Cairo is presently bound, US President Barack Obama's spokesman Robert Gibbs said.

Egypt has played a key role in the Middle East peace process, becoming the first Arab country to officially recognise Israel with a peace treaty signed in 1979.

In other government moves to revive economic life, the nightly curfew in three cities including Cairo was pushed back to 8:00 pm (1800 GMT) until 6:00 am, and the stock exchange said it would reopen on Sunday.

The Cairo bourse closed down 10 points on January 27, after 70 billion Egyptian pounds (12 billion dollars) was wiped off shares over two days.

On Sunday, Vice President Omar Suleiman -- Mubarak's key lieutenant and possible successor -- tried to appease demonstrators by inviting several opposition groups to join him on a panel to pilot democratic reform.

The government said the parties agreed to set up a committee to examine constitutional amendments by March, while an office would look at complaints over the treatment of political prisoners and loosen media curbs.

A strict emergency law would be lifted "depending on the security situation", the government said.

But Suleiman refused another key demand of the opposition, saying he would not assume Mubarak's powers and rule in his place during the transition.

The demonstrators were unimpressed and vowed to maintain their vigil.

Opposition parties, including the powerful Muslim Brotherhood, repeated their demand that Mubarak himself must stand down or immediately delegate his powers to Suleiman.

And there was scant relief for the strongman in the Western capitals where he was once hailed as a close ally and bulwark of Middle East stability.

German magazine Der Spiegel reported Monday that preparations were under way for Mubarak to possibly visit Germany for an "extended medical check-up".

"Preliminary talks with appropriate hospitals are ongoing," it said. AFP was unable to confirm the report.

While Mubarak has said he is "fed up" with leadership, he has said he must stay on until September's presidential election in order to ensure stability -- but the demonstrators' frustration is now finding an echo abroad.

Spain's foreign minister said the election should be brought forward, but US Secretary of State Hillary Clinton warned that an early election could lead to complications if opposition groups are not organised for the vote.

One protester killed in Cairo shooting: Al Arabiya TV

Reuters, CAIRO: One protester was killed in Cairo on Thursday when
supporters loyal to President Hosni Mubarak opened fire at
anti-government demonstrators demanding Mubarak to step down, Al
Arabiya TV quoted a doctor at the scene.

Yemeni president signals he won't stay beyond 2013

Reuters, SANAA: Yemeni President Ali Abdullah Saleh, eyeing protests
that threaten to topple Egypt's long-serving president, indicated on
Wednesday he would leave office when his term ends in 2013, after
three decades in power.

Saleh, an important U.S. ally against al Qaeda, pledged not to hand
the reins of government on to his son and appealed to the opposition
to call off protests as a big rally loomed.

"I present these concessions in the interest of the country. The
interests of the country come before our personal interests," Saleh
told parliament and members of the military.

"No extension, no inheritance, no resetting the clock," he said,
referring to ruling party proposals on term limits seen as designed to
enable him to run again.

The move was Saleh's boldest gambit yet to stave off anti-government
turmoil spreading in the Arab world as he tried to avert a showdown
with the opposition which might risk drawing people on to the streets
in the poverty-stricken state.

He spoke a day before a planned rally by the opposition, dubbed a "Day
of Rage" and seen as a barometer of the size and strength of the
Yemeni people's will to follow Egyptians and Tunisians in demanding a
change of government.

"I call on the opposition to freeze all planned protests, rallies and
sit-ins," Saleh said. "I call on the opposition after this initiative
to come and form a national unity government in spite of the ruling
party majority. We will not allow chaos. We will not allow
destruction."

About 5,000 government supporters held a rally in a sports stadium in
a suburb of the capital Sanaa on Wednesday, some carrying signs that
read "No to sabotage, yes to security and stability" and "Yes to
unity, no to separatism."

Yemen, at risk of becoming a failed state, is trying to fight a
resurgent al Qaeda wing, quell southern separatism, cement peace with
Shi'ite rebels in the north, all in the face of crushing poverty. One
third of Yemenis face chronic hunger.

"I think it is very significant," Dubai-based security analyst
Theodore Karasik said of the move. "What they are doing in Yemen is
trying to not have what happened in Egypt."

"I don't know if it will be enough to satisfy people. It may try to
heal some of the cleavages between for example the southern
secessionist movement and Sanaa, but is it going to be enough for
everyone?"

RALLY TO GO ON

The United States relies heavily on Saleh to help combat al Qaeda's
regional Yemen-based arm which also targets neighboring Saudi Arabia,
the world's biggest oil exporter.

President Barack Obama telephoned Saleh to express support for his
initiative, the state news agency Saba said. "You have handled the
situation well, and I look forward to working with you in a good
partnership between the two countries," it quoted Obama as saying.

Yemen's biggest opposition party welcomed the initiative but said
Thursday's rally in Sanaa would still go ahead. The rally's size and
mood will offer the first glimpse of popular reaction to Saleh's
concessions.

"We consider this initiative positive and we await the next concrete
steps. As for our plan for a rally tomorrow, the plan stands and it
will be organized and orderly," said Mohammed al-Saadi, undersecretary
of the Islamist party Islah (reform).

"This is a peaceful struggle through which the people can make their
voices heard and express their aspirations."

Saleh had already offered lesser concessions on presidential term
limits and pledged to raise civil servants' and military salaries by
around $47 a month, no small move in a country where about 40 percent
of the population lives on less than $2 a day.

However, the pledges on Wednesday went much further.

Saleh promised to delay parliamentary elections due in April to
conduct reforms to persuade the opposition the vote will be fair. The
delay was not expected to more than several months.

He pledged to re-open voter registration after opposition complaints
that around 1.5 million had been unable to sign up, and renewed an
offer for a unity cabinet with the opposition.

Saleh also promised direct election of provincial and local governors,
which would give Yemenis more say over local affairs, and put on hold
all proposed constitutional changes, including on presidential term
limits, pending talks with the opposition.

Relief as Australia mops up from giant cyclone

Reuters, INNISFAIL, Australia: Australians voiced relief and surprise
after one of the world's most powerful cyclones spared the nation's
northeast coast from expected devastation on Thursday, with no
reported deaths despite winds tearing off roofs and toppling trees.

Cyclone Yasi, roughly the size of Italy and packing winds of up to
around 300 km per hour (186 miles per hour), threatened Australia with
its second major natural disaster in as many months this week but
ended up missing heavily populated areas.

"It's amazing no-one was killed. The wind was howling like a banshee,"
said farmer Nathan Fisher, speaking out the window of his
four-wheel-drive vehicle as he returned to his property from a shelter
in the small town of Innisfail.

Australia, a vast continent with less than three people for every
square km, is one of the few countries where a storm as large and
terrifying as Yasi -- with a diameter of up to around 500 km (310
miles) -- could simply miss major cities.

Even as Yasi began its 1,000 km (620 mile) inland march into the
outback on Thursday, weakening all the time, tracking forecasts showed
it was likely to hit only a handful of small towns in a region home to
around 400,000 people.

The lack of any major damage or substantial casualties was also
attributed to several days of cyclone preparation, early evacuations,
laws that ensure newer homes and buildings are strong enough to
survive a cyclone, and less than expected sea flooding as the cyclone
missed the peak tides.

The cyclone came ashore around midnight along hundreds of km of coast
in Queensland state and then drove inland, bringing heavy rains to
mining areas struggling to recover from recent devastating floods.

"Early reports have given us all a great sense of relief," Queensland
Premier Anna Bligh told reporters, adding the cyclone emergency was
still unfolding.

Click image to see photos of the cyclone aftermath

AP Photo/Rick Rycroft

"Some people in this region will be going back to their communities,
going back to their neighborhoods, and facing scenes of considerable
devastation."

Yasi was rated a maximum-strength category five storm, on a par with
Hurricane Katrina, which wrecked New Orleans in 2005, killing 1,500
people and causing $81 billion in damage.

It was downgraded to a category-two storm as it moved inland but its
core remained very destructive, the Bureau of Meteorology said.

The biggest impact could be on the economy. Sugarcane crops had been
damaged, with initial estimates suggesting around 15 percent of the
national sugar crop could be lost. The industry estimated that one
area, accounting for about a third of the crop, had suffered up to 50
percent losses

Australia is the world's third largest raw sugar exporter.

Some coal mines remained shut after the cyclone passed, although
others were starting to resume operations. Queensland accounts for 90
percent of Australia's steelmaking coal exports.

TOURIST AREAS HIT, TREES SNAPPED

The eye of the cyclone crossed the coast near the tourist town of
Mission Beach, where devastating Cyclone Larry struck in 2006, and
damaged areas around Tully and Cardwell, where many older homes, built
before tougher building codes were applied, suffered severe damage.

Authorities said initial reports suggested only about 100 houses had
suffered major damage. There were no initial reports of serious
injuries.

Hills around Tully were covered in snapped trees and scoured almost
clean of vegetation by the force of the wind. The main road into Tully
was flooded and several houses had roofs torn off, with crumpled tin
lying in flooded fields.

At Innisfail, Bill Biscow stood in flood waters and cleaned up roofing
shredded by the storm. "It was scary, but the damage is not as bad as
last time when the place got flattened. Cyclone Larry probably blew
away the oldest buildings."

In the coastal hamlet of Cowley Beach, steel roofs were torn from
houses and twisted around power poles.

"I've been in the area for a long time and I've seen many of these,
but this one is the biggest I've ever seen," said 84-year-old Robert
Hurst, cleaning up his still-intact house.

Another resident, Maria Cook, returned from an emergency shelter to
check on her home on the outskirts of Innisfail.

"I'm going to have to use a chainsaw to cut past trees and to get back
inside my house," she said.

A weather bureau spokesman said a storm surge of two meters (six feet)
above normal tides had inundated one stretch of coast but the surges
were not as severe as authorities had feared.

The cyclone had cut electricity to around 200,000 homes, but main
links to the power grid remained intact.

Queensland has had a cruel summer, with floods sweeping across it and
other eastern states in recent months, killing 35 people and causing
damage estimated at $10 billion or more.

$1=0.9888 Australian dollar)

(Additional reporting by Amy Pyett and Bruce Hextall in SYDNEY)

(Writing by Ed Davies and James Grubel; Editing by Dean Yates)