Eurozone unemployment stays at record high
Unemployment in the eurozone stayed at a record high in November as the impact of the sovereign debt crisis rumbled on, according to official figures.
The jobless rate in the 17 nations that use the euro was 10.3% in November for the second month in a row, according to the Eurostat statistics agency.
There were 16.3 million people in the bloc out of work.
At the same time, an index of consumer confidence fell to a two-year low in December, the European Commission said.
The economic sentiment indicator fell 0.5 to 93.3 in December, which was well below the long-term average of 100, the Commission said.
Howard Archer, an economist at IHS Global Insight, said that the data suggested that Europe's economy had contracted in the last three months of 2011.
"Tighter fiscal policy, squeezed consumers, the seemingly never-ending eurozone sovereign debt crisis, weakened global growth and financial market turmoil are taking a serious toll on economic activity across the eurozone," he said.
Spain's unemployment rate was highest at 22.9%, accounting for more than a quarter of the total eurozone unemployment figure.
Spain's rate was more than four times as high as in Austria, for example, where only 4% of people were jobless.
For the whole of the European Union, which includes countries such as the UK and Sweden that do not use the euro, the unemployment rate was 9.8%.
Separately, Eurostat said that eurozone retail sales fell 2.5% in November, compared with the same month the previous year.
The steepest declines were in Portugal, which was bailed out last April, where sales fell 9.2% from a year earlier.
But there were also declines in the richer, northern European countries that are lifting eurozone growth, with Germany and the Netherlands both seeing declining retail sales.
IMF chief qualifies negative global outlook
The International Monetary Fund chief has said that it will downgrade predictions for global economic growth to lower than 4.0% later this month, due to the effects of a widening Eurozone crisis.
At a news conference in Pretoria, South Africa, Christine Lagarde warned 2012 "will not be a walk in the park, and that it will not be an easy journey." She said some European countries (may) already be technically in a recession but that does not necessarily apply to the 17-nation eurozone or the European Union as a whole.
She also said that any changes in the Eurozone crisis would effect other countries like South Africa and other African nations.
Lagarde was accompanied by South Africa’s Finance Minister Pravin Gordhan, who said the European situation was creating more and more uncertainty.
Yahoo CEO scores $26 million pay package
Yahoo's new CEO is poised to score a rich payday for taking on the troubled company. He's eligible for up to $26 million this year in salary, stock and bonuses.
Scott Thompson, formerly the president of PayPal, was appointed Yahoo CEO on Wednesday and will officially take the helm on January 9. He will try to pull off the kind of turnaround promised by the last Yahoo (YHOO, Fortune 500) CEO, Carol Bartz, who was fired by phone in September.
Thompson will receive a base salary of $1 million for 2012. He's guaranteed a bonus of at least $1 million, and it could be as much as $2 million if he hits various performance goals.
The contract, which doesn't lock Thompson into the role for any set number of years, also awards him lucrative stock grants. Thompson will get a grant this year valued at $11 million, plus an additional $5 million grant as a one-time hiring perk.
But that's not all. Yahoo will compensate Thompson for the loss of bonus and stock awards he would have received from PayPal (a subsidiary of eBay (EBAY, Fortune 500)). He'll get a cash bonus of $1.5 million, plus a grant of restricted stock units worth $6.5 million.
Of those restricted stock units, $5.5 million worth will vest on March 15. The remaining $1 million will vest in 2013 if Thompson remains in his position.
Thompson's hefty pay package, which Yahoo disclosed in a late-Friday regulatory filing, pales in comparison to Bartz's first-year windfall. Yahoo calculated her 2009 pay at $47 million -- though most of that is a paper gain based on stock options that may not ever pay out. The company has not yet disclosed how much it paid Bartz in severance, though Yahoo's earlier estimates put the figure at around $10 million.
Obama strengthens military in Asia-Pacific
US President Barack Obama has unveiled a defence strategy to expand the country’s military presence in the Asia-Pacific region amid defence cuts.
It’s a time of transition for the world’s largest military power.
To cope with budget cuts and transitional national security interests, the US government is reducing spending in Europe and moving its’ military resources further East.
Barack Obama,US President, said, "We will be strengthening our presence in the Asia Pacific and budget reductions will not come at the expense of that critical region."
The President’s Strategic Review will reset defence priorities and guide defence budget cuts over the next decade.
Despite the good relationship China and the US hold, the review indicates the US is still worried about the strategic intention of China’s military build-up, and thinks its’ rise could affect US economy and security.
The new strategy also seeks to improve US capabilities in areas such as cyber-warfare and missile defence.
The detailed plan won’t be available for several weeks.
Russian warships heading for Syria
The Russian Navy's warships patrolling the eastern Mediterranean Sea were heading for a Syrian port, the state-owned Itar-Tass news agency reported on Friday.
The warships were scheduled to arrive in Tartus, a point of logistics supplies of the Russian navy on Saturday, according to preliminary information.
"It is planned that the port of Tartus will be visited by a big anti-submarine ship of the Northern Fleet 'Admiral Chabanenko' and an escort ship 'Yaroslav Mudry'," Itar-Tass quoted a source with the Russian Navy as saying.
"Our ships are supposed to stay in Syria for several days," the source said, without giving more details about the warships' mission in the country.
Russian Navy dispatched their warships to the Mediterranean sea in November, and claimed the move was part of scheduled exercises and had no connection with the situation in Syria.
The warships, led by "Admiral Kuznetsov", the country's only aircraft carrier, have started their patrol missions in the Northeast Atlantic and the Mediterranean Sea since Dec. 6 to "ensure the security of the sea navigation and other Russian maritime economic activities," according to Russian Navy.
Pro-Democracy Demonstrators Rally in Bahrain
Hundreds of pro-democracy demonstrators in Bahrain gathered Saturday in the capital, Manama, for a protest led by the Shi'ite-led opposition, defying a government ban.
The demonstration was organized by opposition groups led by Al Wefaq, a leader of the Shi'ite majority's protest movement.
Riot police blocked roads leading to the city center, forcing demonstrators to gather elsewhere. The protest ended peacefully.
Also Saturday, the United States expressed concern over continued violence in the Persian Gulf nation, as well as the fate of a Bahraini human rights activist, Nabeel Rajab, who was injured during a demonstration Friday.
The U.S. State Department spokeswoman, Victoria Nuland, said in a statement that U.S. embassy officials in Manama met with Rajab and urged the Bahraini government to refrain from using excessive force against protesters, as well as launch a full investigation into Rajab's case.
More than 40 people have died since the unrest in Bahrain began nearly a year ago. The protest movement is aimed at breaking the Sunni minority's hold on power in the Shi'ite majority country.
Bahraini security forces faced off against protesters through much of 2011 in a series of confrontations. Analysts say the protesters have drawn inspiration from the uprisings in Tunisia and Egypt.
In November, the head of a special commission probing the violence said the government used excessive force, including the torture of detainees, at the height of its crackdown on demonstrators in March 2011.
But the report concluded there was no evidence that Gulf-area troops committed human rights abuses, after Bahrain called in Saudi troops to help crush the protests.
Bahrain is an important U.S. ally and home to the U.S. Navy's 5th Fleet. Washington has taken a cautious line with authorities, urging the country's leaders to open more dialogue with the opposition.
IRS comes up $385 billion short
Close to 15% of federal taxes -- or $385 billion -- went unpaid in 2006, according to new estimates by the IRS.
That's the net tax gap number -- meaning what didn't get paid even after the $65 billion the IRS managed to collect through audits.
And it's the closest proxy policymakers have to the country's annual revenue shortfall, said Mark Luscomb, the principal federal tax analyst at CCH, a tax information publisher.
What's driving the shortfall? A whopping 84% of the total tax gap is due to underreporting of income by corporations, small businesses and individuals.
But underreporting by small businesses and others who report business income on the individual tax return is the biggest single culprit, accounting for more than a quarter of the gap.
The distant second and third reasons for the gap are taxpayers who do not file a tax return at all or underpay what they owe.
Whether mistakenly or intentionally, some taxpayers underreport their income by not including all their receipts, overstating their expenses or claiming incorrect amounts of credits, deductions and exemptions.
IRS audited 1 in 8 millionaires
The IRS has noted that compliance among taxpayers is highest when there is third-party reporting of income. So, the basic W2 working Joe who has money withheld automatically from his paycheck typically has a very high compliance rate.
"A net of only 1 percent of wage and salary income was misreported. But amounts subject to little or no information reporting had a 56 percent net misreporting rate," the IRS said in a statement Friday.
Given the more than 140 million returns filed a year, the 22,184 employees working in IRS enforcement can't hope to close the tax gap on their own, especially given the frequently changing tax laws.
Last year, for instance, the agency audited more than 62,000 corporate returns and roughly 1.6 million individual returns, including one in 8 millionaires, the highest enforcement rate for that income group since 2004.
The tax gap, especially in a time of $1 trillion annual deficits, is one reason many on Capitol Hill are calling for tax reform.
"An improved tax code that's simple and fair to all Americans will help close the tax gap, boost our economy and create jobs," Senate Finance Committee Chairman Max Baucus said in a statement. "In an era when we're squeezing the federal budget for every dollar of savings, we have to make every effort to recover these lost funds."
While it's easy to be disconcerted over the size of the tax gap, two things are of note: The voluntary compliance rate among U.S. taxpayers has been fairly steady over the years, and Americans are among the best in the world at paying what they owe the tax man.
Activists: At Least 21 Dead in Syria Violence
Syrian activists say at least 21 people have been killed in clashes throughout Syria Saturday.
The British-based Syrian Observatory for Human Rights said the majority of the deaths occurred in the flashpoint central city of Homs and in the restive Idlib province in the northwest.
The clashes came as thousands of supporters of President Bashar al Assad joined a funeral ceremony in Damascus for 26 people killed in a bomb attack a day earlier.
The government called the devastating explosion Friday, which also wounded more than 60 people, a “terrorist” attack and accused opposition groups of being behind the killings. It also vowed to “strike back with an iron fist” against the perpetrators.
But opposition activists deny any involvement in the bombing and have suggested the authorities staged the explosion to create a backlash against those calling for a government removal.
Most of those killed in the attack Friday appeared to be policemen riding on a bus that was shattered by the blast. Syrian state media quoted an Interior Ministry official as asserting that a male suicide bomber triggered the blast in the central Midan district, but few other details were available.
Opposition activists said the Syrian regime's crackdown on protesters continued in several parts of the country late Friday in which 17 civilians were killed.
Arab League ministers are to meet in Cairo Sunday to review the work of an observer mission the league has sent to Syria two weeks ago. The observers were tasked with finding out whether the Assad government has lived up to its pledge that its long-running crackdown on civilian protesters was at an end.
Mr. Assad has pledged to withdraw security forces from cities, release political prisoners and allow anti-government protests. Government reports of mass prisoner releases have not been verified, in part because almost all foreign journalists are barred from access to the country.
A global, online activist group that supports “people-power” movements worldwide, Avaaz, says nearly 7,000 people were killed since March 2011, when the Syrian unrest began. Avaaz says its casualty count was confirmed through contacts with multiple sources in Syria.
The United Nations estimates 5,000 people have been killed in Syria, while the Damascus government accuses armed terrorists of driving the revolt and killing 2,000 security personnel.
Kenya: Airstrikes Kill 60 Militants in Somalia
Kenya said Saturday that airstrikes have killed at least 60 al-Qaida-linked militants in southern Somalia, as part of an ongoing effort to force them out of the country.
A military spokesman told reporters that al-Shabab militants were killed in Friday's airstrikes in the town of Garbaharey in Somalia's Gedo area. He said the military was tipped off about the militants' whereabouts, and that he expects the death toll from the attack to rise.
In a related development, Britain said Saturday that London believes there is a heightened terrorist threat in Kenya. A Foreign Office statement says Britain believes terrorists may be “in the final stages of planning attacks.”
The statement warns that terrorist attacks may be indiscriminate and could target places frequented by expatriates and tourists.
Somalian media reported Saturday that al-Shabab forces had withdrawn from Buurdhuubo District of Gedo Region in southwestern Somalia. The reports quote witnesses as saying that insurgents carrying weapons moved out of the area together with their armored vehicles. Reports also say that transitional government troops backed by Kenyan forces have advanced to the area.
Also Saturday, international aid group Doctors Without Borders made a renewed call for the safe release of two Spanish workers who were kidnapped in Somalia in October. The Swiss-based group is currently considering whether to continue its humanitarian work in Somalia, one of the world's most dangerous places for humanitarian workers.
Al-Shabab is known for enforcing a strict brand of Islam in the areas under its rule. The group has blocked most international aid workers from accessing parts of Somalia suffering from drought and famine. Kenya has accused it of kidnappings of foreigners on its soil.
Kenyan forces entered Somalia in October to push back al-Shabab, which controls large sections of southern and central Somalia, and is blamed by Kenya for a series of cross-border kidnappings.
US Republican Presidential Hopefuls Focus on New Hampshire
As the U.S. Republican Party presidential nomination race moves to New Hampshire, the two frontrunners are turning their verbal fire toward President Barack Obama.
At campaign events Thursday, former Massachusetts governor Mitt Romney and former Pennsylvania senator Rick Santorum accused the president of steering the United States away from its tradition of self-reliance and free enterprise.
Santorum said the health care reform Mr. Obama championed shows he does not trust Americans to take care of themselves. And, speaking in South Carolina, Romney accused the president of giving favors to his friends instead of allowing everyone to earn opportunities based on their own merits.
Santorum lost by just eight votes to Romney in Tuesday's Iowa caucuses, the first nominating contest of the 2012 presidential election. It was a surprisingly strong performance for Santorum, launching him to the forefront of the race.
The six remaining candidates' next challenge is the January 10 primary in New Hampshire, a state where Romney has a wide lead, and another the following week in South Carolina.
Romney got a boost after his narrow victory in Iowa, with an endorsement from Senator John McCain, the 2008 Republican presidential candidate. However, he has struggled to get more than 25 percent support in national opinion polls.
Ron Paul, a Texas congressman and anti-war advocate, placed a close third in Iowa, and has been finishing second behind Romney in the polls in New Hampshire.
Former House speaker Newt Gingrich continues his campaign, making stops at four town halls Thursday in New Hampshire. Gingrich finished in fourth place in Iowa.
Texas Governor Rick Perry also vowed to continue his campaign despite a poor showing in Iowa, while Minnesota Congresswoman Michele Bachmann withdrew her candidacy after placing sixth there.
Former U.S. ambassador Jon Huntsman came in last with 1 percent in the Iowa polls, but he hopes to do better in New Hampshire, where he has been focusing his efforts.
President Obama made his first campaign stop of 2012 in Ohio on Wednesday. The president faces a difficult campaign to win a second term because of the sluggish economy.