Italy left on financial high-wire




Prime Minister Silvio Berlusconi delivers a speech during a campaign rally in Rome on January 25, 2013.




STORY HIGHLIGHTS


  • Brilliant minds are still trying to figure out the financial impact of Italy's election

  • The lack of certainty is seen as a negative for Italy -- and the eurozone

  • Instability could reignite the eurozone crisis

  • But it depends on what deal will be done, and how the markets will respond




Editor's note: Louise Cooper is a financial blogger and commentator who regularly appears on television, radio and in print. She started her career at Goldman Sachs as a European equity institutional sales person and then become a financial and business journalist. She now writes CooperCity.


London (CNN) -- Brilliant minds across the financial world are still trying to work out the implications of the Italian election result.


For the time being, the best answer is that it is probably too soon to tell. After Tuesday's falls, a little stability has returned to markets, possibly because everyone is still trying to work out what to think.


Credit ratings agency Moody's has warned the election result is negative for Italy -- and also negative for other indebted eurozone states. It fears political uncertainty will continue and warns of a "deterioration in the country's economic prospects or difficulties in implementing reform," the agency said.


For the rest of the eurozone, the result risks "reigniting the euro debt crisis." Madrid must be looking to Italy with trepidation. If investors decide that Italy is looking risky again and back off from buying its debt, then Spain will be drawn into the firing line too.


Can the anti-Berlusconi save Italy?



Louise Cooper, of Cooper City

Louise Cooper, of Cooper City



Standard & Poor's stated that Italy's rating was not immediately affected by the election but I think the key part of that sentence is "not immediately."


At the same time Herman Van Rompuy's tweets give an indication of the view from Brussels: "We must respect the outcome of democratic elections in Italy," his feed noted.


Really? That's a first. The democratically elected Silvio Berlusconi was forced out when he failed to follow through with austerity after the European Central Bank helped Italy by buying its debt in autumn 2011.




"It is now up to Italian political leaders to assume responsibility, compromise and form a stable government," Van Rompuy tweeted.




Did he see the results? The newcomer and anti-establishment comedian Beppe Grillo refuses to do a deal and yet he is the natural kingmaker, polling at 25%.




"Nor for Italy is there a real alternative to continuing fiscal consolidations and reforms," he continued.


Economically yes, but the Italian electorate disagree. And for the time being, Italy has a democracy (of sorts).


Finally: "I am confident that Italy will remain a stable member of the eurozone."


He hopes...


The key to whether the crisis reignites is whether investors begin to back away from lending to Italy. If so, this will be the big test of the ECB's resolve to save the euro.


Read more: Euro crisis coverage


The key thing to look at is Italian bonds, because if borrowing costs rise from 4.8% for 10-year money currently to nearer 6%, then Italy will start to find it too expensive to borrow.


The trillion euro question is if the ECB will step in to help even if it cannot get the reforms and austerity it demands (because of the political situation). That is the crux of the matter. And there will be many in the city today pondering that question.


Clearly in financial markets, taking on a central bank is a dangerous thing to do. Soros may have broken the Bank of England on Black Wednesday 1992, making billions by forcing sterling out of the EMU, but that was a long time ago.


Italy avoids panic at bond auction


What we have learnt from this crisis is not to "fight the Fed" (or the ECB). Last summer, the ECB's chief Mario Draghi put a line in the sand with his "whatever it takes" (to save the euro) speech.


But as part of that commitment he stressed time and time again that any new help from the ECB comes with conditions attached. And those conditions are what have proven so unpalatable to the Italians -- austerity and reform.


So we have two implacable objects hurtling towards each other. The political mess of Italy and the electorate's dislike of austerity and reform (incumbent technocrat Mario Monti only polled 10%).


So what happens next? The status quo can continue if Italian borrowing costs do not rise from here and therefore Italy does not need ECB help.


If markets continue to believe in Draghi and Brussels that the euro is "irreversible," then investors will continue to lend to Italy. Yes, markets will be jittery and fearful, but Italy will eventually sort itself out politically.


The big advantage for Italy is although it has a lot of debt, it is not creating debt quickly (like Greece, Spain or even the UK). And as I said yesterday on my CooperCity blog, the positive outcome from all this could be that Brussels backs off from austerity, which would be a good thing.


However, the basic rule of finance is that high risk comes with high return. Soros took a huge gamble against the British central bank but it reportedly made him a billionaire overnight.


There must be a few hedge funders looking at the Italian situation with similar greed in their eyes. If he wants to save the euro, it is time for Mario Draghi to put the fear of God back into such hearts.







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Chicago archdiocese to close or consolidate five schools









The Roman Catholic Archdiocese of Chicago is laying off about 10 percent of its work force and is planning to close five schools to reverse "unsustainable" deficits.

The downsizing, which apparently has been in the works for months, coincides with the arrival of Cardinal Francis George in Rome this week to participate in the conclave to choose a new pope.


In a lengthy letter to parishioners posted on the archdiocese website, George outlines cost-cutting measures for the archdiocese, which has been running operating deficits of more than $30 million every year for the past four years.


"Since this trend is unsustainable, I want to set out the measures we are taking to ensure prudent stewardship of our resources for years to come," George says in the letter.








At the Pastoral Center, 75 positions have been cut, including 55 full-time roles. That reduction is estimated to save $11 million to $13 million annually by fiscal year 2015, according to George.

“Our employees are faith-filled men and women who have worked tirelessly for the good of the Church.  Please keep them in your prayers,” he wrote.


George wrote in his Cardinal’s Column that other cost-cutting measures would also include closing or consolidating “a few schools that are no longer sustainable.”

Five schools will be closed, some of which have seen demographic changes or other challenges, according to the letter. The archdiocese plans to give out scholarships to children affected by the change so they can attend nearby Catholic schools.

The archdiocese will also reduce its annual aid to schools by $10 million next year. “We hope to return to a sustainable level of aid for those schools that will always be facing financial difficulties,” George wrote.

The archdiocese will also scale back on handing out capital loans and grants to parishes, while also creating  “stricter criteria” for them to qualify for the financial assistance. The Pastoral Center will work with those church communities to help them handle financial needs in the future, according to the letter.

“Going forward, we will need to approach this source of aid differently, to be sure it is always available when necessary,” the cardinal wrote in the letter. “We need to be more careful about the types of projects we can fund; we need to rely on parishes to pursue their own funding when possible; we need to adhere to stricter underwriting guidelines and to adhere more closely to budget.

“There will likely be needs that are simply not fundable, and we will have to work with those parishes on alternative plans,” he wrote.

A Parish Transformation initiative in the works for at least two years will also save funds by laying out measures to provide more financial stability, though the letter did not give details.

All together, those reductions are expected to save $13 million to $15 million annual by fiscal year 2015, the letter states.


The cardinal said the deficits incurred over the years are not related to misconduct payments. The archdiocese uses the proceeds from “sales of undeveloped property to pay misconduct expenses,” he wrote.


Saying the cuts are “necessary but difficult,” George goes on to thank Chicago Catholics for their generosity. He also acknowledges that the reduction in services and funding will be hard for the parishes and people directly affected.


“These actions are being taken now because the financial situation imposes them,” George wrote. “We are also taking them, however, so that the archdiocese will have the resources she needs for her mission, picking up the challenge of the New Evangelization and re-proposing the Gospel of Jesus Christ to future generations.”


mbrachear@tribune.com



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Benedict: Pope aware of his flaws?




Pope Benedict XVI delivers his last Angelus Blessing to thousands of pilgrims gathered in Saint Peter's Square on February 24.




STORY HIGHLIGHTS


  • Sister Mary Ann Walsh: Pope Benedict acknowledged that he made mistakes

  • Walsh: In firestorm over scholarly quotes about Islam, he went to great lengths to atone

  • Walsh: Similarly, he quickly reversed a decision that had angered Jews and repaired ties

  • Even his stepping down is a nod to his humanity and his love of the church, she says




Editor's note: Sister Mary Ann Walsh is director of media relations for the U.S. Conference of Catholic Bishops and a member of the Sisters of Mercy of the Americas Northeast Regional Community. She is a former foreign correspondent at Catholic News Service (CNS) in Rome and the editor of "John Paul II: A Light for the World," "Benedict XVI: Essays and Reflections on his Papacy," and "From Pope John Paul II to Benedict XVI."


(CNN) -- One of the Bible's paradoxical statements comes from St. Paul's Epistle to the Galatians: "Power is made perfect in infirmity."


The poetic statement proclaims that when we are weak, we are strong. Pope Benedict XVI's stepping down from what many consider one of the most powerful positions in the world proves it. In a position associated with infallibility -- though that refers to formal proclamations on faith and morals -- the pope declares his weakness.



Sister Mary Ann Walsh

Sister Mary Ann Walsh



His acceptance of frailty speaks realistically about humanity: We grow old, weaken, and eventually die. A job, even one guided by the Holy Spirit, as we Roman Catholics believe, can become too much for us.


Acceptance of human frailty has marked this papacy. We all make mistakes, but the pope makes them on a huge stage.


He was barely into his papacy, for example, when he visited Regensburg, Germany, where he once taught theology. Like many a professor, he offered a provocative statement to get the conversation going. To introduce the theme of his lecture, the pope quoted from an account of a dialogue between the Byzantine Emperor Manuel II Paleologus and an unnamed Muslim scholar, sometime near the end of the 14th century -- a quote that was misinterpreted by some as a condemnation of Mohammed and Islam.


Opinion: 'Gay lobby' behind pope's resignation? Not likely


Twice, the pope emphasized that he was quoting someone else's words. Unfortunately, the statement about Islam was taken as insult, not a discussion opener, and sparked rage throughout the Muslim world.


The startled pope had to explain himself. He apologized and traveled two months later to Istanbul's Blue Mosque, where he stood shoeless in prayer beside the Grand Mufti of Istanbul. Later he hosted Muslim leaders at the Vatican at the start of a Catholic-Muslim forum for dialogue. It was a human moment -- a mistake, an apology and atonement -- all round.










A similar controversy erupted when he tried to bring the schismatic Society of St. Pius X back into the Roman Catholic fold.


In a grand gesture toward reconciliation, he lifted the excommunication of four of its bishops, unaware that one, Richard Williamson, was a Holocaust denier. This outraged many Jews. Subsequently the Vatican said the bishop had not been vetted, and in a bow to modernity said officials at least should have looked him up on the Internet.


In humble response, Benedict reiterated his condemnation of anti-Semitism and told Williamson that he must recant his Holocaust views to be fully reinstated. Again, his admission of a mistake and an effort to mend fences.


News: Scandal threatens to overshadow pope's final days


Pope Benedict XVI came from a Catholic Bavarian town. Childhood family jaunts included trips to the shrine of the Black Madonna, Our Lady of Altotting. He entered the seminary at the age of 13. He became a priest, scholar and theologian. He lived his life in service to the church. Even in resigning from the papacy, he embraces the monastic life to pray for a church he has ever loved.


With hindsight, his visit to the tomb of 13th century Pope Celestine V, a Benedictine monk who resigned from the papacy eight centuries before, becomes poignant.


In 2009, on a visit to Aquila, Italy, Benedict left at Celestine's tomb the pallium, a stole-like vestment that signifies episcopal authority, that Benedict had worn for his installation as pope. The gesture takes on more meaning as the monkish Benedict steps down.


We expect the pope to be perfect. Catholics hold him to be the vicar of Christ on earth. He stands as a spiritual leader for much of the world. Statesmen visit him from around the globe. He lives among splendid architecture, in the shadow of the domed St. Peter's Basilica. All testify to an almost surreal omnipotence.


Complete coverage of the pope's resignation


In this world, however, walked a vulnerable, human person. And in a paradox of life, his most human moment -- giving up the power of office -- may prove to be his most potent, delivering a message that, as St. Paul noted many centuries ago, "Power is made perfect in infirmity."


Follow @CNNOpinion on Twitter.


Join us at Facebook/CNNOpinion.


The opinions expressed in this commentary are solely those of Mary Ann Walsh.






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Top foes concede defeat to Kelly in bid for Jackson seat









The two top opponents have conceded defeat tonight to Robin Kelly in the special Democratic primary election to replace disgraced former U.S. Rep. Jesse Jackson Jr. in Congress.


With two-thirds percent of precincts reporting, Kelly had 55 percent to 23 percent for former U.S. Rep. Debbie Halvorson and 10 percent for 9th Ward Ald. Anthony Beale.


Halvorson called Kelly to concede and gave a concession speech.








"This is a big night for Robin, she did a great job," Halvorson said, before acknowledging the large role money played in the race. "We all know how rough it was for me to have to run an election against someone who spent $2.3 million against me," Halvorson said. "Every seven and a half minutes there was a commercial..."


Beale did the same shortly afterward, saying he couldn't get through to Kelly so he texted her congratulations.


“The biggest disservice in this race was the dumping of millions of dollars to support one candidate," Beale told supporters on the South Side. “If this is the future of the Democratic Party, then we are all in big trouble.”


At the Kelly campaign party in Matteson, supporters waited for the candidate to declare victory.


New York Mayor Michael Bloomberg, whose super PAC poured more than $2.2 million into the contest, offered congratulations to Kelly.

"This is an important victory for common sense leadership on gun violence, a problem that plagues the whole nation. And it's the latest sign that voters across the country are demanding change from their representatives in Washington -- not business as usual. As Congress considers the President's gun package, voters in Illinois have sent a clear message: we need common sense gun legislation now. Now it's up to Washington to act," Bloomberg said in a statement.


The total number of votes isn’t expected to be large, however, as a storm that brought a wintry mix of snow and slush depressed turnout in the 2nd Congressional District contest.


Chicago election officials reported that as of 1:45 p.m., turnout was about 11 percent among sampled city precincts. The figures included ballots cast today and early and absentee voting.


"This puts us on course for turnout in the mid-teens," said Jim Allen, spokesman for the Chicago Board of Election Commissioners, in an e-mail. "This is to be expected with a special primary and special election. It is shaping up to be among the lowest turnouts in recent decades."


There are primaries for both political parties in the South Side and south suburban district, but the territory is so heavily Democratic that whoever emerges from the crowded Democratic field is expected to easily win the April 9 special general election.

Today's voting follows weeks of candidate forums, an accelerated campaign schedule and a flurry of TV ads from the mayor of New York. While the top-tier candidates among the 14 Democrats vying for the primary nomination are known, there also are some big unknowns. Voter turnout, already anticipated to be very low, could be exacerbated by nasty weather.

The results of early voting held between Feb. 11 and Saturday demonstrated a lack of interest in the contest, despite its ramifications in deciding who will represent voters and their disparate interests in the vast district.

A majority of the district's Democratic voters live in suburban Cook County, with an additional one-third from the South Side. The district also includes parts of eastern Will County and all of Kankakee County, and together the two regions make up slightly less than 10 percent of the Democratic vote.

In suburban Cook, 4,459 early votes were cast, with 98 percent of those voters taking Democratic ballots. Of the 11 suburban early voting locations, Matteson Village Hall, in Kelly's hometown, had the most with 1,601 voters.


In Chicago, 98 percent of the 2,768 early voters cast Democratic ballots. Only 63 early votes were cast for Republicans.

In Will, 246 voters cast early ballots, all but 40 of them Democratic votes. Kankakee County officials reported 699 early ballots, with 533 voting Democrat and 166 Republican.

"I just think if it was a regular race, then they'd look a little bit different," Kelly said of the low early voting totals. "I also think because (the special primary) came so close to the November election that there's some (voter) fatigue."

But in a large field of candidates and questionable turnout, a nomination for Congress could be decided by mere hundreds of votes. Even as forecasters sounded warnings of a Tuesday smorgasbord of wintry weather, candidates sought to energize core supporters to help get out the vote.

In an email to supporters, Kelly's campaign pleaded for volunteers to help get voters to the polls and asked for money for its get-out-the-vote field operation.


Halvorson acknowledged the early voting numbers were "paltry" and that voter turnout would be a "huge" factor Tuesday. Halvorson said she believed turnout could be driven by the district's history of scandals — including last week's guilty plea by Jackson on federal charges of illegally converting about $750,000 in campaign cash to personal use.

"I think this race has gotten so much attention and people are so angry about what the 2nd Congressional District has had to deal with over the years that they're going to take a special interest to make sure they are going to vote for someone who is completely different than what they've seen," said Halvorson, of Crete.

Halvorson also has been the target of the most extensive advertising in the contest, more than $2.2 million worth of TV and mail attacks by New York Mayor Michael Bloomberg's super political action committee, centered on her past National Rifle Association support. Bloomberg's Independence USA PAC is backing Kelly.

Beale said the low number of early ballots puts all the more importance on Election Day field efforts. He said that well-established organizations in the six city wards in the district could serve as an advantage for his campaign.

"It's just slow across the board, and that just goes to show it is going to be a very low turnout," Beale said of the early votes. "We're just making sure we're targeting our core, solid voters, and we're going to get them out to the polls and be victorious Tuesday night."

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Wall Street trips and falls on cloudy Italian election

NEW YORK (Reuters) - Stocks on Monday suffered their biggest drop since November after a strong showing in Italian elections by groups opposed to the country's economic reforms triggered worry that Europe's debt problems could once again destabilize the global economy.


The decline marks the biggest percentage drop for the benchmark Standard & Poor's 500 Index since November7, and drove the S&P down to its lowest close since January 18. The CBOE Volatility Index <.vix> or VIX, Wall Street's favorite barometer of fear, surged 34 percent, its biggest jump since August 18, 2011.


Selling accelerated late in the trading session after the S&P 500 fell below the 1,500 level, which has acted as a significant support point. Monday marked the S&P's first close under 1,500 since February 4.


Italy's center-left coalition holds a slim lead over former Prime Minister Silvio Berlusconi's center-right bloc in the election for the lower house of parliament, three TV projections indicated. But any government must also command a majority in the Senate, a race that is decided by region.


The resulting gridlock in parliament could lead to new elections and cast into doubt Italy's ability to pay down its debt.


"Europe hasn't gone away as an issue, it is going to hang around, and it is rearing its ugly head today," said Stephen Massocca, managing director of Wedbush Morgan in San Francisco.


"If someone gets elected who is simply not going to play by the rules, what are they going to do? It puts them in a real quandary here because their financial support, their monetary support is all stipulated by the fact that these austerity programs are going to be in place."


Earlier polls pointing to a center-left victory boosted stocks in Milan and other European markets, and also helped lift the S&P 500 to a session high of 1,525.84 on optimism that Italy would continue down its austerity path.


After a strong start to the year, equities have retreated more recently. The S&P 500's slight fall last week was its first weekly drop after a seven-week string of gains.


In Monday's volatile session, banks and other financial stocks were among the worst performers on worries about the sector's exposure to Italy's massive debt. The KBW Bank Index <.bkx> fell 2.7 percent.


The CBOE Volatility Index <.vix> ended at 18.99, up 34.02 percent.


The Dow Jones industrial average <.dji> dropped 216.40 points, or 1.55 percent, to 13,784.17 at the close. The Standard & Poor's 500 Index <.spx> lost 27.75 points, or 1.83 percent, to 1,487.85. The Nasdaq Composite Index <.ixic> fell 45.57 points, or 1.44 percent, to 3,116.25.


Although the overall market lost ground on Monday, there were a few bright spots.


Barnes & Noble Inc shares shot up 11.5 percent to $15.06 after the bookseller's chairman offered to buy its declining retail business.


Amgen Inc shares climbed 3.1 percent to $89.55, after rival Affymax issued a voluntary recall of its only drug, an anemia treatment that competes with Amgen's top-selling red blood cell booster, Epogen. Affymax shares lost 85.4 percent to $2.42.


The FTSEurofirst-300 index of top European shares <.fteu3> edged up 0.04 percent and Italy's main FTSE MIB <.ftmib> ended up 0.7 percent after earlier gaining nearly 4 percent.


Political uncertainty on the home front, though, is also on Wall Street's mind.


U.S. equities will face a test with the looming debate over so-called sequestration - U.S. government budget cuts that will take effect starting on Friday if lawmakers fail to reach an agreement over spending and taxes. The White House issued warnings about the harm the cuts are likely to inflict on the economy if enacted.


"Sitting out there is the one-thousand-pound gorilla - the sequester issue - and certainly nothing is happening there," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.


Lowe's Companies Inc lost 4.8 percent to $35.86 after the home improvement retailer posted fourth-quarter earnings.


With 83 percent of the S&P 500 companies having reported results so far, 69 percent beat profit expectations, compared with a 62 percent average since 1994 and 65 percent over the past four quarters, according to Thomson Reuters data.


Fourth-quarter earnings for S&P 500 companies are estimated to have risen 6 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.


Volume was active with about 7.27 billion shares traded on the New York Stock Exchange, NYSE MKT and Nasdaq, above the daily average of 6.46 billion.


Declining stocks outnumbered advancing ones on both the NYSE and the Nasdaq by a ratio of about 4 to 1.


(Editing by Kenneth Barry, Nick Zieminski and Jan Paschal)



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AP source: Tom Brady gets 3-year extension


Tom Brady will be a Patriot until he is 40 years old.


Brady agreed to a three-year contract extension with New England on Monday, a person familiar with the contract told The Associated Press. The extension is worth about $27 million and will free up nearly $15 million in salary cap room for the team, which has several younger players it needs to re-sign or negotiate new deals with.


The person spoke on condition of anonymity because the extension has not been announced.


Sports Illustrated first reported the extension.


The 35-year-old two-time league MVP was signed through 2014, and has said he wants to play at least five more years.


A three-time Super Bowl champion, Brady will make far less in those three seasons than the going rate for star quarterbacks. Brady currently has a four-year, $72 million deal with $48 million guaranteed.


Drew Brees and Peyton Manning are the NFL's highest-paid quarterbacks, at an average of $20 million and $18 million a year, respectively.


Brady has made it clear he wants to finish his career with the Patriots, whom he led to Super Bowl wins for the 2001, 2003 and 2004 seasons, and losses in the big game after the 2007 and 2011 seasons. By taking less money in the extension and redoing his current contract, he's hopeful New England can surround him with the parts to win more titles.


Among the Patriots' free agents are top receiver Wes Welker and his backup, Julian Edelman; right tackle Sebastian Vollmer; cornerback Aqib Talib; and running back Danny Woodhead.


Brady has been the most successful quarterback of his era, of course, as well as one of the NFL's best leaders. His skill at running the no-huddle offense is unsurpassed, and he's easily adapted to the different offensive schemes New England has concentrated on through his 13 pro seasons.


The Patriots have gone from run-oriented in Brady's early days to a deep passing team with Randy Moss to an offense dominated by throws to tight ends, running backs and slot receivers.


Brady holds the NFL record for touchdown passes in a season with 50 in 2007, when the Patriots went 18-0 before losing the Super Bowl to the Giants. He has thrown for at least 28 touchdowns seven times and led the league three times.


Last season, Brady had 34 TD passes and eight interceptions as the Patriots went 12-4, leading the league with 557 points, 76 more than runner-up Denver.


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Vatican 'Gay lobby'? Probably not






STORY HIGHLIGHTS


  • Benedict XVI not stepping down under pressure from 'gay lobby,' Allen says

  • Allen: Benedict is a man who prefers the life of the mind to the nuts and bolts of government

  • However, he says, much of the pope's time has been spent putting out fires




Editor's note: John L. Allen Jr. is CNN's senior Vatican analyst and senior correspondent for the National Catholic Reporter.


(CNN) -- Suffice it to say that of all possible storylines to emerge, heading into the election of a new pope, sensational charges of a shadowy "gay lobby" (possibly linked to blackmail), whose occult influence may have been behind the resignation of Benedict XVI, would be right at the bottom of the Vatican's wish list.


Proof of the Vatican's irritation came with a blistering statement Saturday complaining of "unverified, unverifiable or completely false news stories," even suggesting the media is trying to influence the papal election.


Two basic questions have to be asked about all this. First, is there really a secret dossier about a network of people inside the Vatican who are linked by their sexual orientation, as Italian newspaper reports have alleged? Second, is this really why Benedict XVI quit?



John L. Allen Jr.

John L. Allen Jr.



The best answers, respectively, are "maybe" and "probably not."


It's a matter of record that at the peak of last year's massive Vatican leaks crisis, Benedict XVI created a commission of three cardinals to investigate the leaks. They submitted an eyes-only report to the pope in mid-December, which has not been made public.


It's impossible to confirm whether that report looked into the possibility that people protecting secrets about their sex lives were involved with the leaks, but frankly, it would be surprising if it didn't.


There are certainly compelling reasons to consider the hypothesis. In 2007, a Vatican official was caught by an Italian TV network on hidden camera arranging a date through a gay-oriented chat room, and then taking the young man back to his Vatican apartment. In 2010, a papal ceremonial officer was caught on a wiretap arranging liaisons through a Nigerian member of a Vatican choir. Both episodes played out in full public view, and gave the Vatican a black eye.









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In that context, it would be a little odd if the cardinals didn't at least consider the possibility that insiders leading a double life might be vulnerable to pressure to betray the pope's confidence. That would apply not just to sex, but also potential conflicts of other sorts too, such as financial interests.


Vatican officials have said Benedict may authorize giving the report to the 116 cardinals who will elect his successor, so they can factor it into their deliberations. The most immediate fallout is that the affair is likely to strengthen the conviction among many cardinals that the next pope has to lead a serious house-cleaning inside the Vatican's bureaucracy.


It seems a stretch, however, to suggest this is the real reason Benedict is leaving. For the most part, one should probably take the pope at his word, that old age and fatigue are the motives for his decision.


That said, it's hard not to suspect that the meltdowns and controversies that have dogged Benedict XVI for the last eight years are in the background of why he's so tired. In 2009, at the height of another frenzy surrounding the lifting of the excommunication of a Holocaust-denying traditionalist bishop, Benedict dispatched a plaintive letter to the bishops of the world, voicing hurt for the way he'd been attacked and apologizing for the Vatican's mishandling of the situation.


Even if Benedict didn't resign because of any specific crisis, including this latest one, such anguish must have taken its toll. Benedict is a teaching pope, a man who prefers the life of the mind to the nuts and bolts of government, yet an enormous share of his time and energy has been consumed trying to put out internal fires.


It's hard to know why Benedict XVI is stepping off the stage, but I doubt it is because of a "gay lobby."


Follow us on Twitter @CNNOpinion.


Join us on Facebook/CNNOpinion.


The opinions expressed in this commentary are solely those of John L. Allen Jr.






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Chicago could see 6 inches of snow in Tuesday storm









Abundant sunshine and temperatures close to 50 degrees in the past few days teased sober Midwestern sensibilities.


Encouraged perhaps by spring training photos, some people deliberately ventured outside. Some even hopped on bicycles for spins. Maybe they dared to think that spring could break a little early this year.


But on Tuesday morning, for the second time in less than a week, a blustery mix of freezing rain, sleet and snow is forecast to hit the Chicago area. Accumulations could reach 6 inches.








Sure, weather predictions being what they are around here, many will shrug off the warnings and be brazenly optimistic. But it might be best to recall the adage that those who ignore history are sure to be victimized by it.


Chicago has plenty of late-season snow history and, regardless of what materializes, the prudent will keep their salt dry, snow shovels handy and snowblowers primed for the next couple of months.


National Weather Service records from 2011 show that 54 of the previous 139 years — nearly 40 percent — experienced at least one day with an inch or more of snowfall on or after March 25. A total of 17 of those years brought multiple days with more than an inch of snow to Chicago.


One year, 1926, included six days when more than an inch of snow fell after March 25.


And, like some cruel trick, the later in the season the snow falls, the heavier and deadlier it tends to be. On the other hand, it also generally melts faster.


Among the grimmest of those late snowfalls was the deadly storm of April 15-17,1961, when a rainy low-pressure system stalled and kept looping over the Chicago region. It transformed cold rain into nearly 7 inches of snow. Six people died from the storm's effects; four were victims of snow-shoveling heart attacks.


That storm remains the latest major snowfall of 6 inches or more in the Chicago area.


More recently, the area was hit with nearly 2 inches of snow on March 27, 2008. On March 29, 2009, 1.2 inches accumulated. A week later, more than 2 inches of snow fell.


Tuesday's forecast, which calls for heavier snow north of Interstate 80 and winds whipping up to 35 mph, weighed on Jason Marker's mind while he stood at the Downers Grove Metra station Monday.


"I have a job interview tomorrow," said Marker, 30, of Downers Grove. "It's going to be tough getting there because I have to ride my bike."


Still, he said the winter has been a moderate one so far, "but maybe it will catch up with us tomorrow."


Ashley Feuillan and Bernard Thomas, also of Downers Grove, will be commuting in opposite directions Tuesday morning. Thomas commutes to a job in Aurora, which he starts at 7 a.m. Feuillan hops the train to Columbia College Chicago three times a week.


Both said they plan to leave earlier Tuesday.


"I actually like the snow," said Feuillan, 24, "but it can be a hassle when you're trying to get someplace."


Rather than focusing on what could be a nasty storm, Thomas, 40, kept an upbeat perspective.


"It hasn't been a bad winter," he said. "We haven't really had any big snowstorms."


If the forecast is accurate, Jake Weimer could receive a little relief.





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Huge protest vote leaves Italy facing deadlock


ROME (Reuters) - A huge protest vote by Italians enraged by economic hardship and political corruption left the euro zone's third-largest economy facing a dangerous vacuum on Monday after an election in which no group won enough votes to form a government.


The result, in which anti-euro parties took more than 50 percent of the vote and a novice populist movement scored a stunning success, rocked global markets with fears of a new euro zone crisis.


Europe's common currency slumped against the dollar and yen and U.S. stocks suffered their biggest one-day drop since November.


With more than 99 percent of returns in from polling stations, results showed the center-left had taken a slim victory of around 130,000 votes in the lower house of parliament, enough to give it comfortable control thanks to a big winner's bonus.


But no party or likely coalition won enough seats to form a majority in the upper house, creating a deadlocked parliament - the opposite of the stable result that Italy desperately needs to tackle a deep recession, rising unemployment and a massive public debt.


The outcome fanned fears of a new European financial crisis, with prospects of a long period of paralysis and uncertainty in Italy.


"This is the worst possible outcome from the market's point of view ... It seems inevitable that there will be a new election," said Alessandro Tentori, Citigroup head of global rates.


The result was an extraordinary success for Genoese comic Beppe Grillo, leader of the populist 5-Star Movement, who toured the country in his first national election campaign hurling obscenity-laced insults against a discredited political class.


He was set to become the biggest single party in the lower house, riding a potent wave of anger against rampant waste and corruption by ageing political leaders.


His success fulfilled the predictions of some analysts that the most uncertain and closely watched election in years would herald a political revolution. "This is the end of a system, not a government," respected commentator Massimo Franco told Reuters before the vote.


Grillo polled more around a quarter of the vote in a meteoric rise from the 1.8 percent he garnered in his movement's first local political test in 2010.


The result was a humiliating slap in the face for colorless center-left leader Pier Luigi Bersani, who threw away a 10-point opinion-poll lead less than two months ago against Silvio Berlusconi's center right.


He failed to turn up for a press conference after the result became clear. His deputy, Enrico Letta, as well as outgoing technocrat premier Mario Monti, said responsible forces must form a government and avoid another election. But the result raised a big question over whether that would be possible.


Billionaire media magnate Berlusconi, 76, who staged an extraordinary comeback from sex and corruption scandals since diving into the campaign in December, came in a close second in the Senate race, with an estimated 117 seats.


With almost all results in, the center-left was set to take 121 seats in the upper house, Grillo 54, and Monti languishing on only 22 after a campaign which never took off. The Senate majority is 158.


Berlusconi, a master politician and communicator, wooed voters with a blitz of television appearances and promises to refund Monti's hated housing tax despite accusations from opponents that this was an impossible vote buying trick.


Grillo has attacked all sides in the campaign and ruled out a formal alliance with any group although it was not immediately known how he would react to his stunning success or how his supporters would behave in parliament.


The next move to solve the crisis will be when head of state Giorgio Napolitano calls in political leaders to discuss how to form a government. But this is not expected until March 10 after the election result is formally confirmed and parliament convened.


Letta said the center-left, as biggest party in the lower house, had the right to be the first to try to form a government.


DANGER OF NEW ELECTION


Investors fear a return of the kind of debt crisis that took the euro zone close to disaster and brought the technocrat Monti to office, replacing Berlusconi, in 2011.


The results showed more than half of Italians had voted for the anti-euro platforms of Berlusconi and Grillo.


A center-left government either alone or ruling with Monti had been seen by investors as the best guarantee of measures to combat a deep recession and stagnant growth in Italy, which is pivotal to stability in the currency union.


But the failure of Monti to gain traction at the head of a centrist force, despite support from business leaders and foreign governments, and the weak showing by the center-left meant they do not have nearly enough Senators to do this.


The upper and lower houses have equal law-making power.


The benchmark spread between Italian 10-year bonds and their German equivalent widened from below 260 basis points to above 300 and the Italian share index lost all its previous gains after projections of the Senate result.


Monti helped save Italy from a debt crisis when Rome's borrowing costs were spiraling out of control in November 2011, but few Italians now see him as the savior of the country, which is reeling under its longest recession for 20 years.


Grillo's movement rode a wave of voter anger about both the pain of Monti's austerity program and a string of political and corporate scandals. It had particular appeal for a frustrated younger generation shut out of full-time jobs.


"I'm sick of the scandals and the stealing," said Paolo Gentile, a 49-year-old Rome lawyer who voted for 5-Star. "We need some young, new people in parliament, not the old parties that are totally discredited."


Berlusconi, a billionaire media tycoon, exploited anger against Monti's austerity program, accusing him of being a puppet of German Chancellor Angela Merkel, but in many areas Grillo was a bigger beneficiary of public discontent.


Italians wrung their hands at prospects of an inconclusive result that will mean more delays to essential reforms.


"It's a classic result. Typically Italian. It means the country is not united. It is an expression of a country that does not work. I knew this would happen," said 36-year-old Rome office worker Roberta Federica.


Another office worker, Elisabetta Carlotta, 46, shook her head in disbelief. "We can't go on like this," she said.


(Additional reporting by Stefano Bernabei, Steve Scherer, Gavin Jones, Naomi O'Leary and Giuseppe Fonte in Rome and Lisa Jucca, Silvia Aloisi in Milan; Writing by Barry Moody; Editing by Peter Graff and Tim Dobbyn)



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Asian shares edge higher, yen falls on Bank of Japan report

TOKYO (Reuters) - Asian shares edged higher on Monday, with investors still picking up shares battered by last week's steep plunge, while the yen fell to fresh lows on news a reflationary advocate could head the Bank of Japan next month.


The news Japan's government is likely to nominate Asian Development Bank President Haruhiko Kuroda, an advocate of aggressive monetary easing, as its next central bank governor, is set to be a major factor in financial markets this week.


Markets are pondering whether Italy's weekend elections will produce a stable government, and the implications of that for euro zone cohesion, while Moody's credit downgrade on Britain will play on confidence in the pound and government bonds.


Investors also await testimony on Tuesday from Fed Chairman Ben Bernanke for further clues of when the Fed may slow or stop buying bonds. Financial markets were rattled last week after minutes of the Fed's January meeting suggested some Fed officials were mulling scaling back its strong monetary stimulus earlier than expected.


The MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> was up 0.1 percent, pulled higher by Australian shares <.axjo> which gained 0.6 percent on reassuring comments from U.S. Federal Reserve officials on the bank's current stimulus program, which has helped underpin risk sentiment globally.


South Korean shares <.ks11> opened up 0.2 percent, with the nation's new leader, who has shown willingness to talk down the won, being sworn in on Monday.


Tokyo's Nikkei stock average <.n225> opened 1.6 percent higher. <.t/>


Early on Monday, the yen touched its lowest since May 2010 of 94.61 yen against the dollar, while the euro rose to a high of 124.83 yen, still off its 34-month peak of 127.71 set early this month.


The Nikkei newspaper reported the Japanese government is likely to nominate Haruhiko Kuroda and Kikuo Iwata, both vocal advocates of aggressive monetary expansion, as BOJ governor and deputy governor.


The dollar fell sharply to below 93 yen last week on media reports that Toshiro Muto, a former financial bureaucrat perceived as less willing to take unconventional steps, was the frontrunner candidate for the top BOJ job.


"The dollar's move this morning is merely a rebound from disappointment on Muto last week. I don't think this topic will be enough to hoist the dollar above 95 yen," said Hiroshi Maeba, head of FX trading Japan at UBS in Tokyo. "No matter who is elected at the BOJ, it will not affect the longer-term trend of a weak yen," he said.


Speculation over the BOJ has been a key factor driving the yen lower recently due to anticipation for strong reflationary measures, but other fundamental factors such as Japan's deteriorating trade balances and signs of firmer U.S. growth also supported a weakening yen trend.


Abe told Americans on Friday "I am back and so is Japan" and vowed to get the world's third biggest economy growing again.


Investors remained cautious before the full official results of Italy's elections come out on Tuesday, worried a potential political stalemate could impede Rome's progress on fiscal reforms.


The euro was up 0.1 percent to $1.3192, off Friday's six-week low of $1.31445.


Sterling fell to a 31-month low of $1.5073 early on Monday and a record low against the New Zealand dollar at NZ$1.8025 following Friday's one-notch downgrade of Britain's prized triple-A sovereign rating by Moody's.


Investors will also seek signs of recovery from the flash estimate of China's manufacturing PMI from HSBC/Markit due later in the session.


Wall Street ended higher on Friday, boosted strong earnings from Dow component Hewlett-Packard , but the benchmark Standard & Poor's Index <.spx> posted its first weekly decline of the year. European shares rose on Friday after data showed German business morale surged at its fastest pace in over two years in February.


Hedge funds and other big speculators cut their bullish bets on U.S. commodities by nearly $13 billion, the most in about 10 months, in the week to February 19 to $69 billion, just before oil and metals prices tumbled last week on rumors a commodities fund was dumping positions, trade data showed on Friday.


U.S. crude was up 0.1 percent to $93.26 a barrel.


(Editing by Eric Meijer)



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