Pay ban on donor organs doesn't include bone marrow, court says

A federal law banning compensation for organ transplants doesn't extend to bone marrow harvested from a donor's blood, a federal appeals court said Thursday in a ruling that could attract thousands of new donors in a national campaign to save the lives of those afflicted with cancer and genetic disorders.

The 1984 National Organ Transplant Act included bone marrow in its list of "organs and parts thereof" for which donors could face criminal charges and five years in prison for providing them in exchange for money or other "valuable consideration."

Though bone marrow is naturally replenishable, unlike livers, kidneys and other whole organs, its sale was barred because the extraction method used at the time the law was passed was painful and risky for the donor and authorities feared the poor would be induced to submit to the procedure to earn money.

In the last 20 years, though, medical advances have brought about a less intrusive method by which the life-saving marrow stem cells are harvested from a donor's bloodstream in much the same way as blood is drawn at a blood bank. The new process, known as apheresis, filters out excess marrow stem cells that circulate in the bloodstream, as opposed to the surgical extraction method, known as aspiration, which inserts a large needle into the hip bone and siphons out the cells.

A unanimous three-judge panel of the 9th U.S. Circuit Court of Appeals ruled that the marrow cells taken from a donor's blood were blood parts, not organ parts, and that a donor is therefore free to accept compensation for a donation.

"This is a fundamental change to how deadly blood diseases will be treated in the country," said Jeff Rowes, the Institute for Justice attorney who argued the case before the 9th Circuit panel in February. "Compensation will expand the donor pool by at least hundreds and potentially thousands each year."

More than 3,000 Americans die each year waiting for a suitable marrow donor, Rowes told the court, representing a group of cancer patients and their families, a Minnesota doctor specializing in bone marrow treatments and the California nonprofit MoreMarrowDonors.org.

The lead plaintiff in the case is Doreen Flynn of Lewiston, Maine, a single mother of five trying to ensure that a broader field of potential donors is available when her three daughters suffering from Fanconi anemia need marrow transplants after treatment for the potentially fatal genetic disorder.

"That is, like, the best Christmas news ever!" said a jubilant Flynn upon hearing that the 9th Circuit had ruled to exclude marrow from the compensation ban. Her 13-year-old daughter is already on medication to stave off the need for a marrow transplant while waiting for a well matched donor, and Flynn must decide soon whether to put one of her 7-year-old twins on the same medication, she said.

MoreMarrowDonors.org wanted the organ transplant law struck down or amended to allow the nonprofit to offer $3,000 scholarships or housing payments to attract new registrants to the National Marrow Donor Program. The registry has more than 7 million members, but many joined years ago during donor drives for friends or family members and are often reluctant to donate to a stranger.

Although the extraction procedure has been greatly simplified, it remains difficult to find the right genetic match between donor and recipient, the plaintiffs argued. Unlike blood, of which there are only four types, marrow comes in millions of types.

The plaintiffs sued U.S. Atty. Gen. Eric H. Holder Jr., alleging that the federal law treating bone marrow in the same way as organs that can't be regenerated violates the Equal Protection Clause of the Constitution. The appeals court panel ruled that the older extraction method directly drawing cells from the marrow was reasonably included in the ban on compensation but that the marrow cells filtered out of a donor's blood were blood parts, not marrow parts.

"We construe 'bone marrow' to mean the soft, fatty substance in bone cavities, as opposed to blood, which means the red liquid that flows through the blood vessels," said the opinion written by Judge Andrew J. Kleinfeld, an appointee of President George H.W. Bush. "The statute does not prohibit compensation for donations of blood and the substances in it, which include peripheral blood stem cells."

Justice Department spokesman Charles S. Miller said the government hasn't decided yet whether to appeal.

"We're going to have to review it to make a determination about what the government's next step will be," Miller said, declining to comment on the ruling.

The 9th Circuit interpretation applies to its nine-state jurisdiction, but because it is the only federal appeals court to have ruled on the question, its judgment could guide future decisions nationwide.

carol.williams@latimes.com

Source: http://feeds.latimes.com/~r/latimes/news/science/~3/PaOH72MmCtQ/la-me-bone-marrow-20111202,0,3782680.story

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Genome Researchers Have Too Much Data

An anonymous reader writes "The NY Times reports, 'The field of genomics is caught in a data deluge. DNA sequencing is becoming faster and cheaper at a pace far outstripping Moore's law. The result is that the ability to determine DNA sequences is starting to outrun the ability of researchers to store, transmit and especially to analyze the data. Now, it costs more to analyze a genome than to sequence a genome. There is now so much data, researchers cannot keep it all.' One researcher says, 'We are going to have to come up with really clever ways to throw away data so we can see new stuff.'"

Source: http://rss.slashdot.org/~r/Slashdot/slashdotScience/~3/NaE5rG5BHxQ/genome-researchers-have-too-much-data

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Sonos Updates Its Software—Promises Android Tablet Control, Spotify and Slacker Radio [Audio]

Sonos Inc, makers of wireless HiFi stereo systems, announced a system software update today that promises a host of new features as well as deeper integration with two of the Internet's largest streaming music providers. Here's what's new. More »


Source: http://feeds.gawker.com/~r/gizmodo/full/~3/RpIY68-1sqE/sonos-updates-its-softwarepromises-android-tablet-control-spotify-and-slacker-radio

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Exclusive: Euro zone may drop bondholder losses from ESM bailout (Reuters)

BRUSSELS (Reuters) ? Euro zone states may ditch plans to impose losses on private bondholders should countries need to restructure their debt under a new bailout fund due to launch in mid-2013, four EU officials told Reuters on Friday.

Discussions are taking place against a backdrop of flagging market confidence in the region's debt and as part of wider negotiations over introducing stricter fiscal rules to the EU treaty.

Euro zone powerhouse Germany is insisting on tighter budgets

and private sector involvement (PSI) in bailouts as a precondition for deeper economic integration among euro zone countries.

Commercial banks and insurance companies are still expected to take a hit on their holdings of Greek sovereign bonds as part of the second bailout package being finalized for Athens.

But clauses relating to PSI in the statutes of the European Stability Mechanism (ESM) - the permanent facility scheduled to start operating from July 2013 - could be withdrawn, with the majority of euro zone states now opposed to them.

The concern is that forcing the private sector bondholders to take losses if a country restructures its debt is undermining confidence in euro zone sovereign bonds. If those stipulations are removed, most countries in the euro zone argue, market sentiment might improve.

"France, Italy, Spain and all the peripherals" are in favor of removing the clauses, one EU official told Reuters. "Against it are Germany, Finland and the Netherlands." Austria is also opposed, another source said.

A third official said that while German insistence on retaining private sector involvement in the ESM was fading, collective action clauses would only be removed as part of broader negotiations under way over changes to the EU treaty.

Berlin wants all 27 EU countries, or at least the 17 in the euro zone, to provide full backing for alterations to the treaty before it will consider giving ground on other issues member states want it to shift on, officials say.

Germany is under pressure to soften its opposition to the European Central Bank playing a more direct role in combating the crisis, and member states also want Berlin to give its backing to the idea of jointly issued euro zone bonds.

German officials dismiss any suggestion of a 'grand bargain' being put together, but officials in other euro zone capitals, including Brussels, say such a deal is taking shape and suggest Berlin will move when it has the commitments it is seeking, although it's unclear when that will be.

German Chancellor Angela Merkel said after meeting French President Nicolas Sarkozy in Strasbourg on Thursday that there was no quid pro quo being set up.

"This is not about give and take," she said.

Euro zone finance ministers will discuss the ESM at a meeting in Brussels on November 29-30, including the implications of dropping collective action clauses from its statutes.

COMPLICATIONS

While most euro zone countries just want to forget about enforced private sector involvement, some are adamant that there must be a way to ensure banks and not just taxpayers shoulder some of the costs of bailing countries out.

Austria's opposition Green Party, whose support the government needs to secure backing for the ESM in the Vienna parliament, insists collective action clauses must remain a part of the ESM. It's also far from unclear whether the finance committee of the German lower house Bundestag would agree to such changes being made to the ESM.

Any changes to the mechanism would have to be approved by all member states and ratified by national parliaments before they can take effect, meaning fixed Austrian and German opposition could derail the push for changes.

Germany and some other member states were hoping to bring the ESM, which will have a lending capacity of 500 billion euros, into force as early as July next year, but disagreement over its structure could delay that.

(Reporting by Julien Toyer, John O'Donnell and Luke Baker in Brussels, Andreas Rinke in Berlin and Mike Shields in Vienna; writing by Luke Baker; editing by Rex Merrifield, John Stonestreet)

Source: http://us.rd.yahoo.com/dailynews/rss/eurobiz/*http%3A//news.yahoo.com/s/nm/20111125/bs_nm/us_eurozone_treaty_esm

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Colombia: Rebels execute 4 captives; 1 found alive

Relatives of slain hostage Elkin Hernandez, at his family home in Bogota, Colombia, Saturday Nov. 26, 2011. Colombia's President Juan Manuel Santos said that rebels of the Revolutionary Armed Forces of Colombia, FARC, killed four members of the security forces, including Hernandez, a police major kidnapped in 1998. All were found killed execution-style Saturday morning in the southern state of Caqueta after been held between 12 and 13 years. (AP Photo/William Fernando Martinez)

Relatives of slain hostage Elkin Hernandez, at his family home in Bogota, Colombia, Saturday Nov. 26, 2011. Colombia's President Juan Manuel Santos said that rebels of the Revolutionary Armed Forces of Colombia, FARC, killed four members of the security forces, including Hernandez, a police major kidnapped in 1998. All were found killed execution-style Saturday morning in the southern state of Caqueta after been held between 12 and 13 years. (AP Photo/William Fernando Martinez)

Margarita Hernandez, sister of slain hostage Elkin Hernandez, speaks on the phone in front of her home in Bogota, Colombia, Saturday, Nov. 26, 2011. Colombia's President Juan Manuel Santos said that rebels of the Revolutionary Armed Forces of Colombia, FARC, killed four security force members who had been held as hostages during years, including Hernandez, a police major kidnapped in 1998. All were found killed execution-style Saturday morning in the southern state of Caqueta. (AP Photo/William Fernando Martinez)

Wearing a t-shirt with portraits of rebel hostages, Margarita Hernandez, sister of slain hostage Elkin Hernandez, holds her hands as she speaks to reporters in front of her home in Bogota, Colombia, Saturday, Nov. 26, 2011. Colombia's President Juan Manuel Santos said that rebels of the Revolutionary Armed Forces of Colombia, FARC, killed four security force members who had been held as hostages during years, including Hernandez, a police major kidnapped in 1998. All were found killed execution-style Saturday morning in the southern state of Caqueta. (AP Photo/William Fernando Martinez)

Colombia's Defense Minister Juan Carlos Pinzon looks on after announcing the killing of four security force members held by rebels of the Revolutionary Armed Forces of Colombia, FARC, in Bogota, Saturday Nov. 26, 2011. Pinzon said the bodies were found early morning during a military operation in the southern state of Caqueta, all killed execution-style, three with shots to the head and one with a shot to the back. (AP Photo/William Fernando Martinez)

Colombia's defense minister Juan Carlos Pinzon looks down after announcing the killing of four security force members held by rebels of the Revolutionary Armed Forces of Colombia, FARC, in Bogota, Saturday Nov. 26, 2011. Pinzon said the bodies were found early morning during a military operation in the southern state of Caqueta, all killed execution-style, three with shots to the head and one with a shot to the back. Behing him is Air Force Gen. Tito Saul Pinilla. (AP Photo/William Fernando Martinez)

(AP) ? Colombia's main rebel group executed four of its longest-held captives during combat Saturday between guerrillas and soldiers searching for the men, the government said.

A fifth captive fled into the jungle and survived.

President Juan Manuel Santos called the killing of a soldier and three police officers "a crime against humanity" and dismissed any suggestions that Colombia's armed forces might be responsible.

"They were held hostage for between 12 and 13 years and wound up cruelly murdered," Santos said.

A senior Defense Ministry official told The Associated Press that government troops were not attempting to rescue the captives but rather trying to locate them based on intelligence indicating the rebels were holding them in the area. The official agreed to discuss the operation only if granted anonymity.

Defense Minister Juan Carlos Pinzon initially announced the deaths, then said hours later that a fifth rebel prisoner, police Sgt. Luis Alberto Erazo, had survived. Erazo, 48, had been held by the Revolutionary Armed Forces of Colombia, or FARC for nearly 12 years.

Pinzon said troops had been in the area for 45 days chasing rebels and had intelligence the guerrillas might be holding police and soldiers as captives. No official explained how far the captives were being held from the area of combat. Pinzon did not take questions from reporters.

All four men were killed execution-style, three with shots to the head and one with two shots to the back, Santos told a community meeting in central Colombia.

Pinzon said the bodies were found together, with chains near them.

He said Erazo fled into the jungle chased by three rebels who threw grenades, wounding him slightly in the face. Erazo emerged from hiding after dusk when he heard chain saws cutting a clearing so helicopters could land, Pinzon added.

It is standing policy of the FARC to kill its prisoners to prevent their rescue. And the rebels frequently chain their captives.

The sister of one of the victims, 34-year-old police Maj. Elkin Hernandez, was angry with the government.

"The FARC are murderers for the manner in which they killed them, and the government is equally a murderer. They had the possibility to get them out of there, and they didn't," Margarita Hernandez told the AP.

Former Sen. Luis Eladio Perez, who was freed by the FARC in February 2008 after six years of captivity, told the AP he believed the four died in a failed rescue.

The bodies were found about 10 a.m. in the municipality of Solano in the southern state of Caqueta. Among them was the longest-held rebel captive, army Sgt. Maj. Jose Libio Martinez. He was seized by rebels Dec. 21, 1997, in an attack on a lonely southern mountain outpost called Patascoy.

The killings left the FARC in possession of about 16 security force members, which they consider to give them political leverage.

Martinez's son, who was in his mother's womb when his father was captured, pleaded with the FARC via Caracol radio to free them.

"We don't want any more dead. We don't want anymore children like me crying for their fathers," Johan Steven Martinez said.

The FARC took up arms in 1964 and are Latin America's last remaining rebel army. They have suffered a series of military setbacks and record desertions in recent years, crowned by the Nov. 4 combat death of their leader, Alfonso Cano.

His successor, Timoleon Jimenez, was named the following day and few analysts believe defeat is imminent for the rebels, who draw their strength from landless peasants in a country where land ownership is concentrated in a few hands. The FARC are believed to comprise about 9,000 fighters.

The drug trafficking-funded rebels have periodically freed security force members and politicians as goodwill gestures, stepping up releases in early 2007 with the intercession of Venezuelan President Hugo Chavez.

But Santos, who was defense minister for four years before winning the presidency, has publicly refused to entertain peace overtures, saying the rebels must first show themselves willing by freeing all captives.

Analyst Ariel Avila of the Nuevo Arco Iris think tank said Saturday that the killings will give the government justification not to negotiate. "But the government won't get out of this without blame," he added.

On several occasions, the FARC has slain hostages when under military pressure, real or perceived.

In June 2007, FARC fighters killed 11 regional lawmakers they had kidnapped five years earlier, apparently under the mistaken belief they were under attack by government forces.

In 2003, rebels killed 10 captives, including a former defense minister and governor, during an attempted rescue when they heard approaching military helicopters.

The FARC suffered a major embarrassment in July 2008 when elite Colombian troops posing as international humanitarian workers rescued former presidential candidate Ingrid Betancourt, three U.S. military contractors and 11 others in a daring ruse.

Reached by the AP via email about the deaths of four men with whom she had for a time shared captivity, Betancourt said: "The truth is that the news has hit me hard. I'm in pain and don't wish to make any (further) comment."

Betancourt last year published "Even Silence Has An End," an eloquent recounting of her more than six years in captivity.

___

Associated Press writers Vivian Sequera, Camilo Hernandez and Cesar Garcia contributed to this report.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/3d281c11a96b4ad082fe88aa0db04305/Article_2011-11-26-LT-Colombia-Rebels/id-815b6c3292c8464993271f05f1c8cb81

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Egypt's ElBaradei ready to head government (AP)

CAIRO ? Leading Egyptian democracy advocate Mohamed ElBaradei says he is prepared to head a "national salvation" government to steer the country out of its political crisis.

ElBaradei's office released the statement late Saturday, in advance of plans by Egypt's protest movement to stage a massive protest in Cairo's Tahrir Square to press demands for the country's military rulers to step down.

The Sunday rally, dubbed "Legitimacy of the Revolution," comes following nine days of continued protest in Tahrir.

The planned rally comes one day before the start of voting in the first parliamentary elections since the ouster of President Hosni Mubarak. The elections will be held over a three-month period.

Source: http://us.rd.yahoo.com/dailynews/rss/topstories/*http%3A//news.yahoo.com/s/ap/20111127/ap_on_re_mi_ea/ml_egypt

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Most Britons oppose children having mobile phones, poll finds (Reuters)

(Reuters) ? Nearly three-quarters of Britons think it is inappropriate for children under 12 to own a mobile phone, despite the fact that most kids already have them, according to a poll on Thursday.

The survey of 2,000 people found that expensive bills, unmonitored internet use and lack of parental control were some of the reasons adults felt uncomfortable about kids owning mobiles.

However, more than one in 10 would buy a child a mobile phone as a treat to encourage good behavior, or for doing well at school.

The vast majority of parents (90 percent) also liked the idea of a child having a phone in case of an emergency.

Mobile phone information and price comparison website Recombu.com, which carried out the survey, noted that 79 percent of 7 to 11-year-olds already own a mobile.

Hannah Bouckley, editor of Recombu, said: "It is reassuring for parents to be in constant contact with their children, but there are clearly concerns about just how careful a young child will be with their own mobile phone.

"It is important for parents to sit down with their kids to discuss the responsibilities that come with the phone and set clear limits for its usage from the outset."

(Reporting by Li-mei Hoang, editing by Paul Casciato)

Source: http://us.rd.yahoo.com/dailynews/rss/tech/*http%3A//news.yahoo.com/s/nm/20111124/tc_nm/us_phone_children_mobile

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Slaying horrifies town known for Shakespeare plays

Jeff Barnard / AP

Zhawen Wahpepah and August Haddick burn sage during a cleansing ceremony on Friday at a memorial for David Grubbs in Ashland, Ore. Grubbs was killed last weekend in an apparent random attack by a stranger wielding a sword or a machete.

By Jeff Barnard, Associated Press

ASHLAND, Oregon -- In this storybook town, murder is commonplace on the stages of the Oregon Shakespeare Festival, where sword fights are carefully choreographed entertainment, and the blood that spurts is fake.

The real-life slaying of a young grocery clerk nearly decapitated by an apparent stranger wielding a sword or machete has sent a shiver of horror through residents and visitors alike, and stumped investigators desperately searching for clues.

A small shrine is growing on the side of the bike path where 23-year-old David Grubbs was killed last weekend while walking home from work, the way he had countless times, just as darkness was falling. It's an open place next to a parking lot where the path goes through a park with ball fields and tennis courts ? and past an elementary school ? where parents bring their small children to play.

"I'm freaking out," said Zhawen Wahpepah, who came to the shrine Friday morning with her boyfriend, August Haddick, to burn sage and leave a booklet of music that she and Grubbs had played together as members of a school chamber orchestra. She added it to the candles, flowers, carrot cake, NY Times Sunday crossword puzzle, music CDs, photos, and lyrics from the song, "Stairway to Heaven." They were all carefully placed on the ground next to a green metal cross painted with the name David and driven into the ground.

"I think it was a thrill kill," said Wahpepah. Grubbs "was not into anything bad. He was just really shy and really nice," she added.

"I used to walk this way home, and now I don't anymore because of this," said Haddick, who worked stocking shelves at the Shop'n Kart grocery with Grubbs. Living in the same student neighborhood, they often walked home together, but the night of the slaying, Haddick's schedule had him working three hours later, so Grubbs walked home alone.

When Haddick drove by last Saturday night with a friend, the spot was cordoned off by police, blue lights flashing in the darkness. Haddick didn't know until the next day, when the "Rest in Peace" tributes appeared on Facebook, that Grubbs had been killed.

"It's hard to imagine it could just as easily have been me," he said.

Ashland is a liberal outpost in conservative rural Oregon. The town of 20,000 just a few miles north of the California border is known for good schools, good restaurants, high housing prices, and deer that walk freely through town. Many residents are happy to work at low-paying jobs serving tourists for the chance to live here.

"It's like this little paradise," said Brenna Heater, who knew Grubbs growing up and now works behind the counter of a downtown pizza joint. "The fairytale land is like the definition to us. I always use the word magical ? our little magical Ashland. New people are coming here every day. The Shakespeare festival keeps this town upbeat and hip."

Police have little to go on. No one has come forward to say they witnessed the slaying. No weapon has been found. The 911 call came from a woman riding her bike down the path, who was stopped by a man who found Grubbs lying in the bike path. They initially thought Grubbs was passed out, but on looking closer saw the deep wounds around his head and neck, said Police Chief Terry Holderness. Investigators don't think either of them had anything to do with the slaying. The woman saw a man leaving the area, but didn't get a good look at him. Police have not found him.

"This community has very little crime of any type, especially violent crime," said Holderness. "To have this type of thing happen anywhere is very rare. We are contacting most major police departments up and down the West Coast looking for similar situations and haven't found any yet."

There was a machete attack about 100 miles north in the small town of Sutherlin, but police have ruled out any connection.

"Most homicide involves a person who commits the crime with some relationship to the victim," Holderness said. "This might truly be random, which is very unusual for this type of crime. It makes it more likely to put other community members at risk."

A random attack ending with near-decapitation is so rare that investigators have been unable to find an expert, Holderness added. There is not even enough information to develop a profile of the killer.

Friday morning, Jackson County sheriff's Det. Colin Fagan stopped by to look over the killing ground again, hoping that something new might catch his eye. He found a branch lying on the ground, which might have been cut by a big blade before being broken off. But the cut looked old.

Fagan stood in a bed of Oregon grape bushes where a killer might have hidden, looked behind a nearby shed, and examined trees for cut marks. Finding none, he drove away.

Source: http://usnews.msnbc.msn.com/_news/2011/11/25/9023948-slaying-horrifies-tourist-town-known-for-shakespeare-plays

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Mayor stages hunger strike as residents shiver (Reuters)

BUCHAREST (Reuters) ? A Romanian mayor has begun a hunger strike to protest against cuts in heating subsidies imposed under a government austerity drive, reawakening memories of the harsh final years of communism.

Mayor Florin Cazacu said 10,000 residents in the central Romanian town of Brad were braving low temperatures at home because his town hall lacked 3 million lei ($925,200)from the state budget to buy fuel oil for the winter season.

"People are suffering from cold, this is why I began this protest," Cazacu told Reuters. "I took an oath ... to do everything in my power and competence for the sake of the inhabitants."

During the last years of communist leader Nicolae Ceausescu heating was often shut down under an austerity drive aimed at repaying Romania's foreign debt.

This inflicted widespread suffering before Ceausescu's overthrow in 1989. Living standards have since risen sharply but winters remain tough for many Romanians.

The European Union's second poorest member state introduced tough austerity measures last year including salary cuts and a rise in value-added tax to one of the highest levels in the EU.

Romania has promised the International Monetary Fund, which is leading a 5 billion euro aid deal, to liberalize its gas and power markets, raise administered prices and scrap government subsidies for centralized heating.

Temperatures in winter fall as low as minus 30 Celsius degrees (-22 Fahrenheit) in the region around Brad, which has a total population of 17,000.

As apartments in Brad are not connected to mains gas, some people are using electric heaters but this has caused frequent power cuts due to town's poor electricity grid.

"I will stay on hunger strike for as long as it takes ... and give up the protest only if the government grants us the necessary funds," said 46-year-old Cazacu. ($1 = 3.2426 Romanian leus)

(editing by David Stamp)

Source: http://us.rd.yahoo.com/dailynews/rss/europe/*http%3A//news.yahoo.com/s/nm/20111123/od_nm/us_romania_mayor

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Strains in German economy trouble Europe (AP)

BERLIN ? The German economy, which has been a bastion while its neighbors have buckled one by one under debt, showed signs of strain Wednesday and raised fears across world financial markets that Europe is far from containing its crisis.

An auction of bonds by the German government flopped, generating some of the weakest demand in a decade. And investors who buy German bonds on the open market demanded higher yields, a sign of concern about Germany's finances.

Compounding the problems for Europe, France received another warning that it might be stripped of its top-notch credit rating, and borrowing costs for Italy neared dangerous levels.

German Chancellor Angela Merkel and the head of the European Union clashed openly over one proposed solution to the European crisis ? common bonds issued by all 17 nations that use the euro currency.

A European bond could promote stability in the markets. But Merkel said it would not solve "structural flaws" with the euro, and, in a testy exchange, an EU official said Merkel was trying to cut off the debate before it could even start.

While European leaders bickered and the bond market fretted, investors sold stocks all over the world. In New York, the Dow Jones industrial average was down more than 200 points before recovering some losses, and stock markets across Europe finished more than 1 percent lower.

"If Germany can't sell bonds, what is the rest of Europe going to do?" asked Benjamin Reitzes, an analyst at BMO Capital Markets.

The debt crisis in Europe has already forced Greece, Portugal and Ireland to accept international bailouts, and it has threatened Italy and Spain, which have much bigger economies.

But Germany had weathered the storm. It has the largest economy in Europe, with $3.3 trillion of output last year, or about 20 percent of the EU economy. It is vital to any continent-wide solution, both as a source of strength and as a source of cash.

Germany had hoped to raise $8.1 billion by selling bonds, but it sold only $5.9 billion, one of the worst showings since the adoption of the euro in 1999.

German officials cited a record-low offered yield and the "extraordinarily nervous market environment" for the auction's failure, but investors took it as a warning that the crisis might threaten the rock-solid German economy.

Germany kept the rest of the bonds to auction another day. The agency was careful to say that the result did not represent a "refinancing squeeze" for Germany.

The poor auction piled pressure on German bonds in secondary markets. The yield on benchmark 10-year German bonds climbed by a hefty 0.2 percentage points to 2.08 percent, its highest since Oct. 28.

And for the first time since Oct. 10, investors demanded a higher interest rate to lend to Germany than to the United States, which is wrestling with its own long-term debt problems.

The yield on the 10-year U.S. Treasury was 1.89 percent, down from 1.94 percent a day earlier ? a substantial move in the bond market and a sign investors were seeking the safety of U.S. securities.

Germany's national debt is equal to 81 percent of what its economy produces in a year, high by historical standards. The United States' national debt has pulled roughly even with annual economic output, about $15 trillion.

Like any country with debt, Germany has to tap bond market investors for money. It is also the top contributor to bailouts for other European nations.

One advantage Germany has over almost all other European economies is that its sterling AAA credit rating is not at risk. France, on the other hand, was warned anew by Fitch, a respected rating agency, that it could lose AAA status soon.

Fitch said that a "further intensification" of the debt crisis would result in a much sharper economic downturn in France and the 27-nation European Union. Moody's, another rating agency, delivered a similar warning two days earlier.

In Italy and Spain, the yields on benchmark national bonds pushed close to 7 percent. That is a level considered unsustainable by world investors, and the line that forced other European countries to take bailouts.

The Italian bond yield was at 6.95 percent, up more than a quarter of a percentage point from a day earlier. Spain's yield was 6.61 percent, up 0.03 points.

In another sign of distress in the bond market, investors demanded a higher return to lend to Italy for only two years than for 10 years. The yield on two-year government debt soared half a percentage point to 7.13 percent.

The day brought discord among European leaders over how to get out of the mess.

Jose Manuel Barroso, the head of the European Commission, promoted the introduction of jointly issued European bonds, coupled with stricter budgetary discipline, as the best way out. The bonds "could bring tremendous benefits," he said.

But Merkel, the German chancellor, told lawmakers in Berlin that it was wrong to suggest that a "collectivization of the debt would allow us to overcome the currency union's structural flaws."

Barroso shot back that it was bad form to kill a debate before it started. "We are trying to have a rational, reasonable, serious ? intellectually and politically serious ? debate," Barroso told reporters.

Germany has long opposed European bonds and wants the individual countries of Europe to clean up their own finances so they can eventually borrow at lower rates again.

Proponents argue that the bonds would immediately ease refinancing costs for weaker nations that use the euro. But for Germany, it would most likely lead to higher borrowing costs.

Merkel repeated her call for changes to the EU treaty to guarantee strict enforcement of fiscal discipline. On that point, at least, Merkel and Barroso seemed to agree.

"It is quite clear, as things stand at present, if we want to keep a common currency, we need more integrated governance," Barroso said.

The easiest way for Europe to counter its debt problems would be for its economies to grow, making debt smaller as a share of the overall economy, plus generating more tax revenue for governments.

But that hope was dashed yet again Wednesday. A closely watched survey from the financial information company Markit showed that economic activity in the 17-nation euro group shrank in November for the third month in a row.

The survey found that the deteriorating economic picture is not confined to debt-stressed countries such as Greece, but increasingly spreading to stronger economies such as Germany and France.

The survey suggests the economy of the euro nations as a whole will be 0.6 percent smaller in October, November and December than the three months before. Official figures last week showed that the nations narrowly avoided contraction in the three months before, growing only 0.2 percent over the second quarter.

By contrast, the U.S. economy is growing more than twice as fast. It grew at a 2 percent annual rate, or a 0.5 percent quarterly rate, in July, August and September, according to revised government projections.

Greece, meanwhile, took a step forward in avoiding bankruptcy after the conservative party leader pledged to back the conditions attached to a new financial aid package.

Greece's creditors had insisted that party leaders supporting Greece's interim coalition government commit in writing to backing the country's new euro130 billion, or $174 billion, bailout plan.

Uncertainly about whether the party leader would back those conditions had raised the possibility that Greece would go bankrupt by Christmas.

___

Casert reported from Brussels. Geir Moulson in Berlin, Greg Keller in Paris and Nicholas Paphitis in Athens contributed to this report.

Source: http://us.rd.yahoo.com/dailynews/rss/business/*http%3A//news.yahoo.com/s/ap/20111123/ap_on_re_eu/eu_germany_financial_crisis

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