Sandy weakens to tropical storm

SANDY weakened from hurricane to a tropical storm early Saturday as it inched toward the US East Coast with sustained winds of 110 kilometers an hour, US forecasters said.

On Friday, the storm packed maximum sustained winds of 120 kilometers an hour, enough to classify it as a Category 1 hurricane.

"Sandy weakens, but is expected to remain a large storm with widespread impacts into early next week," the Miami-based National Hurricane Centre said.

It said the storm was expected to continued moving "parallel to the southeast coast of the United States through the weekend."

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End of an era for Berlusconi

ITALIAN newspapers splashed the news of former prime minister Silvio Berlusconi's jail sentence for tax fraud across their front pages on Saturday, heralding the end of an era dominated by the man one anti-Berlusconi paper called a "natural-born delinquent".

"The mirages and alibis are finished," said La Stampa.

"An entire generation of Italians born after 1975 will for the first time vote in elections next spring that are not a pro- or anti-Berlusconi referendum."

Berlusconi, 76, had already announced last week he would not stand in next year's elections, but his sentencing on Friday to four years in jail - quickly reduced to one under an amnesty law designed to reduce overcrowding in prisons - put an emphatic punctuation mark on the end of his domination of the Italian political scene.

"And so ends a Titanic affair, born in television and finished in court, with a clear, very tough and above all insulting punishment," wrote the editor of the centre-left daily La Repubblica, Ezio Mauro, saying the case highlighted Berlusconi's fall from grace.

Left-leaning daily Il Fatto Quotidiano, which had waged war on Berlusconi's government during his three stints as prime minister from 1994 to 2011, said the media tycoon had a "natural capacity for delinquency".

The verdict "is the proof that Italy was governed for nine years by a tax cheat", said the paper.

During the trial, Berlusconi was accused of artificially inflating the price of distribution rights bought by his Mediaset empire and creating foreign slush funds to avoid paying taxes in Italy.

Scandal-hit Berlusconi condemned his sentence as "intolerable judicial harassment".

The disgraced former premier looked alternately distraught and defiant in front-page photos.

In some shots he wearily pressed a hand to his eye or stared sullenly into space; in others he raised his hands in a protestation of innocence or briskly straightened the lapels of his suit.

Some papers stuck strictly to the facts.

The country's main newspaper, the centre-right Corriere della Sera, said only "Berlusconi convicted" in its headline, and did not run an editorial on the sentence.

Berlusconi's lawyers have said they will appeal by November 10. Italy's lengthy appeals process will likely ensure he never sees the inside of a jail cell.

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Syria ceasefire in tatters, 150 killed

SYRIAN rebels on Saturday declared the failure of a truce declared for Eid al-Adha, as fighting raged, warplanes buzzed key cities and at least 150 people were reported killed since a ceasefire came into effect.

The truce conditionally agreed by President Bashar al-Assad's regime and the rebel Free Syrian Army (FSA) on Thursday had raised the prospect of the first real halt to the fighting after 19 months of conflict.

But Friday, the first day of Eid - one of the most sacred holidays in Islam - saw the ceasefire shattered by fresh fighting, deadly car bombings and a new regime vow to hunt down "armed terrorists", its term for rebel fighters.

Fighting raged again on Saturday and regime warplanes were reportedly seen flying over the embattled northern city of Aleppo after a brief lull for the start of Eid.

An AFP correspondent said a warplane was also seen flying over Damascus on Saturday.

A rebel commander in Aleppo said there was no doubt the ceasefire initiative, proposed by UN-Arab League envoy Lakhdar Brahimi, had fallen apart.

"This is a failure for Brahimi. This initiative was dead before it started," Abdel Jabbar al-Okaidi, head of the FSA military council in Aleppo, told AFP by telephone.

He insisted the FSA had not broken the ceasefire and was only carrying out defensive actions.

The Eid holiday had started with a slowdown in the fighting - and state television footage of al-Assad smiling and chatting with worshippers at a Damascus mosque - but quickly degenerated.

The Syrian Observatory for Human Rights, a key monitor of the conflict, said 146 people were killed in bombings and fighting on Friday, including 53 civilians, 50 rebels and 43 members of al-Assad's forces.

On Saturday, fresh violence killed at least 13 people, the observatory said, amid clashes and attacks in Damascus province, Aleppo, Daraa in the south and the eastern city of Deir Ezzor.

Among them were five killed in a car bomb attack in Deir Ezzor, it said. State television blamed the attack on "terrorists" and said the bomb had gone off in front of a church, causing significant damage.

According to the observatory, more than 35,000 people have been killed in the conflict, which began as an anti-regime uprising but is now a civil war pitting mainly Sunni rebels against al-Assad's regime, which is dominated by his minority Alawite sect, an offshoot of Shi'ite Islam.

The Britain-based observatory relies on a countrywide network of activists, lawyers and medics in civilian and military hospitals. It says its tolls take into account civilian, military and rebel casualties.

Al-Assad's forces and the FSA had agreed to a call by Brahimi to lay down their arms for the four-day Eid, but both also reserved the right to respond to attacks.

Brahimi had hoped the truce might lead to a more permanent ceasefire during which he could push for a political solution and bring aid to stricken areas.

Al-Okaidi, the FSA commander in Aleppo, said the ceasefire had been doomed from the start and that the international community needed to stop putting faith in the regime.

"The Syrian people have become guinea pigs," he said.

"Every time there is an envoy who tries an initiative, while we know the regime will not respect it."

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Asian markets fall ahead of US growth data

ASIAN markets are lower as dealers look ahead to the release of US economic growth figures, while Hong Kong eased on profit-taking after posting 10 straight days of gains.

The Nikkei was also hit on Friday as the dollar eased back after hitting four-month highs against the yen, which has come under pressure owing to expectations for fresh monetary easing by the Bank of Japan and upbeat US data.

Tokyo fell 1.35 per cent, or 122.14 points, to 8,933.06 and Sydney closed 0.84 per cent, or 38.1 points, lower at 4,472.4.

Hong Kong slipped 1.21 per cent, or 264.66 points, to 21,545.57, bringing an end to a run that had been fuelled by huge inflows of foreign cash.

Shanghai tumbled 1.68 per cent, or 35.57 points, to 2,066.21 with weak Chinese corporate earnings dragging on mainland sentiment.

Seoul lost 1.72 per cent, or 33.07 points, to close at 1,891.43 after data showed South Korea's economy grew in the third quarter at its slowest pace in three years.

The United States will later on Friday release its third-quarter growth figures, with investors looking for signs of improvement in the world's biggest economy.

The results come a day after the Labour Department said initial jobless claims fell by 23,000 to 369,000 in the week ending October 20 - below the average estimate of 375,000.

Durable goods orders - products expected to last at least three years - also rose 9.9 per cent from August, well above the average analyst estimate of 8.0 per cent.

On Wall Street the Dow climbed 0.20 per cent, the S&P 500 advanced 0.30 per cent and the Nasdaq added 0.15 per cent.

However, a rally fuelled by monetary easing moves by central banks in the United States, Japan and Europe has seen markets post healthy gains in recent weeks and dealers are taking the opportunity to cash in.

In Hong Kong, shares have surged more than eight per cent since the US Federal Reserve unveiled its third round of quantitative easing in mid-September, as the extra US dollars flood into higher-yielding markets.

The huge inflows of cash have also sent the Hong Kong dollar surging - leading the city's de facto central bank to step into currency markets to weaken the unit against the greenback, to which it has been pegged for 29 years.

The Hong Kong market has also been lifted by recent data showing that China's economic slowdown was bottoming out.

On forex markets the dollar was changing hands at Y79.92 in afternoon trade, compared with Y80.26 in New York late on Thursday, where it jumped to a four-month high of Y80.34 at one point.

Investors have been selling the Japanese unit ahead of a BoJ meeting next week, at which many hope it expand an asset-purchasing scheme to lift the economy and pump more money into the market.

The euro bought $US1.2923 and Y103.30 against $US1.2930 and Y103.78.

Oil prices were mixed. New York's main contract, light sweet crude for delivery in December fell 89 US cents to $US85.07 a barrel and Brent North Sea crude for December delivery fell $US1.10 to $US107.39.

Gold was at $US1,702.84 at 1910 AEDT, compared with $US1,715.50 late on Thursday.

In other markets:

- Taipei fell 1.76 per cent, or 128.02 points, to 7,134.06.

Taiwan Semiconductor Manufacturing Company rose 2.95 per cent to $Tw87.3 while HTC fell 4.84 per cent to $Tw236.0.

- Wellington fell 0.17 per cent, or 6.71 points to 3,983.78.

Fletcher Building ended down 1.3 per cent at $NZ7.12 and Telecom shed 0.2 per cent to $NZ2.47.

- Singapore, Kuala Lumpur, Jakarta and Manila were all closed for public holidays.

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Romney adviser raises race card

AN outspoken surrogate for Mitt Romney's White House campaign has suggested that race was a factor in former secretary of state Colin Powell's endorsement of President Barack Obama.

Former New Hampshire governor John Sununu told CNN late on Thursday that the re-endorsement of Obama by Powell - a Republican who served in both Bush presidencies but backed Obama in 2008 - was possibly due to both men being African-Americans.

"Frankly, when you take a look at Colin Powell you have to wonder whether that's an endorsement based on issues or whether he's got a slightly different reason for preferring President Obama," Sununu told CNN host Piers Morgan.

"When you have somebody of your own race that you're proud of being president of the United States, I applaud Colin for standing with him."

The remarks by Sununu, a prominent and often flamboyant supporter of Romney, could inject race into a campaign the Republican challenger has tried to keep focused on the sluggish US economy.

The remarks came just two days after Republican Senate candidate Richard Mourdock, explaining his anti-abortion stance, sparked controversy by saying that pregnancies caused by rape are "something God intended to happen".

Those remarks threatened to slow Romney's progress in winning over vital women voters in key swing states and gave Obama an opening to brand Republicans as extremists when it comes to women's rights.

Sununu's remarks could prove less damaging - as Obama already enjoys overwhelming support among African-American voters - but may further distract from Republicans' central argument against the president's economic policies.

The two presidential candidates are locked in a virtual tie less than two weeks ahead of the November 6 election, with Romney enjoying a slight lead in national polls but Obama holding a narrow edge in vital states.

Powell, who served as chairman of the Joint Chiefs of Staff under President George H. W. Bush and secretary of state under President George W. Bush, is a moderate Republican once seen as a promising presidential prospect.

In his re-endorsement of Obama on Thursday, Powell credited the president with recent improvements in the economy and praised him as a steely commander-in-chief who had wound down the wars in Iraq and Afghanistan.

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One in four Spaniards out of work

ONE Spaniard in four is now officially out of work as the economic crisis tightens its grip on the country.

The National Statistics Institute said on Friday that 85,000 more people joined the ranks of the unemployed between July and September, raising the total to 5.78 million.

The figures increased the country's unemployment rate by about 0.4 percentage points in the third quarter to 25.02 per cent.

For those under 25 years of age, the unemployment rate edged down marginally to 52 per cent from 53 per cent in the previous quarter.

The institute said that over the past 12 months some 800,000 people had lost their jobs.

Spain is in its second recession in three years and is under pressure to ask for outside aid to help it deal with its debts.

It has already been granted a 100 billion euro ($A125 billion) bailout facility for its troubled banks, while many of its regional governments are also in bad financial shape.

In September, the European Central Bank said it would buy unlimited amounts of bonds in countries struggling with their debts if they formally apply for aid.

This has helped Spain by lowering its borrowing costs, but conservative Prime Minister Mariano Rajoy has held off triggering the actual purchases.

Spain is one of the focal points in Europe's debt crisis because if it defaulted or needed a full-blown bailout, the finances of the 17-country group that uses the euro could be severely stretched.

Rajoy's government, which pledged to reduce unemployment in its electoral campaign last year, has introduced austerity measures and financial and labour reforms to convince investors it has a grip on its accounts but they have yet to show any positive effect on the economy.

The measures, in particular the labour reform that makes it easier to dismiss workers, have led to many strikes and protests. The country faces its second general strike in a year on November 14.

On Friday, yet another rush-hour go-slow by subway workers caused traffic chaos in Madrid.

Organisations such as the Spanish Red Cross and the Catholic Church charity organisation Caritas say unemployment and the austerity measures are leaving tens of thousands of people in need of food and financial help.

On Thursday, Caritas said the foundation run by Amancio Ortega, founder of the Zara store parent company Inditex, would donate 20 million euro to help buy food, medicines and school materials.

The statistics institute said Spain now has 1.8 million households in which no one has work.

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Albany bushfire investigation imminent

AN investigation into a bush blaze near Albany that left a firefighter with life-threatening burns is set to begin within a week.

The bushfire at Two Peoples Bay began on October 12 and was fully extinguished five days later.

A 45-year-old firefighter was badly hurt in the blaze, suffering burns to 60 per cent of her body, and was in a critical condition for several days.

She is now in a critical but stable condition, a Royal Perth Hospital spokesman said.

Another firefighter, a 24-year-old woman, received burns to 40 per cent of her body and remains in a stable condition.

Emergency Services Minister Troy Buswell said on Thursday the Fire and Emergency Services Authority, Department of Environment and Conservation and local government in Albany had appointed an independent person to undertake an investigation into fire.

"This person will be commencing work within the week," Mr Buswell said in an emailed statement.

It's already known that a sudden change in wind direction turned the fire on the truck carrying the two firefighters.

Mr Buswell told parliament on Thursday that the women would have been trained to stay inside the truck and cover themselves in a fire blanket, but training and resourcing for bushfires was constantly evolving.

He said he was "absolutely sure" lessons could be learnt from the Albany fire.

"Fires of that nature are a dynamic and volatile environment," he said.

"I believe that from just about every single fire event that we attend, we can learn something new so we do it better next time."

Mr Buswell warned that conditions were dry as the bushfire season approached.

"It's dry in the Great Southern, it's dry in the South West, it's dry across the metropolitan area," he said.

"In Mundaring, they are on the verge of stopping controlled burns because controlled burns in October are starting to crown - that's when the fire goes up into the top of the trees.

"So we have some big challenges."

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WA economic outlook doesn't faze Buswell

WESTERN Australia should maintain its AAA credit rating if steps being taken by the Barnett government are as effective as hoped, Treasurer Troy Buswell says.

Mr Buswell made the comments after ratings agency Standard & Poor's (S&P) revised downwards its outlook for the WA economy from stable to negative and warned that there was a one-in-three chance of a ratings downgrade in the next two years.

S&P said the revision reflected its expectation that the state's balance sheet could weaken as a result of lower mining royalties, which would take some time to be reflected in its share of GST revenues.

WA's budget had become increasingly reliant on the royalties, which were volatile as commodity prices fluctuated, S&P said.

The WA government currently receives 20 per cent of its revenue from mining royalties.

Mr Buswell downplayed the outlook downgrade, saying S&P's comments were consistent with his own commentary on the state economy.

He said he was confident the steps the government was taking would ensure WA maintained its AAA rating.

In response to a recent plunge in iron ore royalties and a strong Australian dollar, Mr Buswell last month announced sweeping public-sector cost-cutting measures in a desperate bid to keep the budget in surplus.

But on Thursday, he warned the government against responding "too harshly" to a "cyclical movement" in exchange rates and commodity prices.

"It's still my view that we're dealing with a cyclical set of events in and around a high dollar and a relative fall in commodity price," he said.

While revenues from stamp duty and GST had fallen, and notwithstanding short-term fluctuations in commodity prices, mining royalties were on an uptrend, he said.

But they were almost at their peak.

The value of mining royalties would start to plateau at around $6 billion per annum, compared to a projected $4.8 billion in 2012/13, he said.

Even after mining royalties plateaued, there would be continued growth from property and GST as the population continued to rise, he said.

Mr Buswell also confirmed the state government would announce more cost cutting at the forthcoming Mid-Year Economic Review, as flagged last month, to combat the state's vulnerability to exchange rate and commodity price fluctuations.

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Thai hotel brews coffee from elephant dung

FOR those who like their coffee with a strong nose Thailand could be the ideal destination, after a blend made from elephant dung was put on sale by an upmarket hotel chain.

The Black Ivory blend, made from coffee beans digested and excreted by Thai elephants, is billed as producing a particularly smooth cup.

But it is not cheap, with Anantara Hotels saying the "naturally refined" coffee costs a staggering $US1100 ($A1067) a kilogram, making it one of the most expensive blends in the world.

"Research indicates that during digestion the enzymes of the elephant break down coffee protein," the Thai-based hotel group, which is selling the pungent brew at about $US50 for two cups, said in a statement sent to AFP on Thursday.

"Since protein is one of the main factors responsible for bitterness in coffee, less protein means almost no bitterness."

Once the elephants have digested the coffee berries, the beans are picked out of their dung by mahouts - their trainers - and then sun-dried.

The process is carried out at the hotel's elephant rescue centre in Thailand's north where 30 of the beasts live along with mahouts and their families.

Black Ivory is not the first novelty blend to hit the market in recent years. Coffee passed through the civet, a tree-dwelling mammal in the Philippines, Vietnam and Indonesia, sells for a similar price.

One New York coffee shop sells the civet coffee for $US748 a kilo.

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Driver arrested after north shore crash

A MAN is in hospital under police guard after crashing a car into traffic lights and a van on Sydney's north shore, police say.

The driver was allegedly seen speeding in a Mitsubishi near Thornleigh just after 5pm (AEDT) on Wednesday, sparking a short police chase.

Officers ended the pursuit because of concerns about speed.

A police spokesman said the man then crashed into a set of traffic lights and a van at the intersection of Pennant Hills Road and the F3 freeway.

He was arrested and taken under police guard to the Royal North Shore Hospital with minor injuries.

The man, whose age was not immediately clear, is expected to be interviewed on Wednesday night.

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UK downgrades threat posed by IRA

THE threat posed by Northern Ireland-related terrorism to the British mainland has been downgraded from substantial to moderate - the second lowest setting on the five-point scale, Home Secretary Theresa May says.

May, the country's top domestic security official, said in a statement on Wednesday that the latest assessment was that a "terrorist attack is possible, but not likely" to be carried out in England, Scotland or Wales by Irish Republican Army dissidents.

However, she warned the threat of attacks by IRA dissidents in Northern Ireland itself remained set at severe, the second highest point on the scale, which indicates an attack is highly likely.

May said Britain's domestic spy agency, MI5, responsible for setting the terrorist threat levels, had made the decision "based on the very latest intelligence, considering factors such as capability, intent and timescale."

Dissidents from the Real IRA faction last attacked the British capital in August 2001, when a midnight car bomb in a West London nightspot wounded 11 people.

Over the previous year the Real IRA had car-bombed a BBC building, bombed a bridge spanning the River Thames and fired a Russian anti-tank rocket at the headquarters of Britain's overseas spy agency, MI6.

Experts suggest the failure of IRA dissidents' to attack London since then reflects the increased resources handed to British police and security agencies in the wake of the September 11, 2001, attacks on the United States and the 2005 suicide bombings on London's transport network.

The downgrading of the threat level follows a successful operation by British police and intelligence agencies to protect the London Olympics - despite fears that the high-profile event would be a target for al-Qaeda linked terrorists or Republicans dissidents.

"Despite the change which has been made today, there remains a real and serious threat against the United Kingdom from terrorism and I would ask the public to remain vigilant and to report any suspicious activity to the police," May told MPs in her statement.

Britain issues separate assessments of the threat from al-Qaeda-related or international terrorism, and for risks linked to dissident Irish Republican Army members.

It also publishes separate alert levels for the threat to mainland Britain, and to Northern Ireland itself.

May said the threat to the entire UK from international terrorism was regarded as substantial - the third point on the scale, meaning an attack is a strong possibility.

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Key German optimism indicator falls

BUSINESS confidence in Germany has dropped for the sixth month in a row, a closely watched survey shows, amid growing indications the financial crisis is taking an increasing toll on Europe's largest economy.

Munich's Ifo institute said on Wednesday its key business climate figure dropped to 100 in October, from 101.4 in September.

Economists had been predicting a slight increase to 101.6, and the euro dropped to a one-week low versus the US dollar of $1.2920 following the report.

Ifo president Hans-Werner Sinn said even though businesses reported that their expectations for the next six months remained unchanged at 93.2 points, their assessment of their current situation dropped sharply from 110.3 points in September to 107.3 in October.

"The clouds over the German economy are darkening," Sinn said.

Germany has been doing better than debt-burdened European countries such as Spain and Italy, but has lost momentum as the debt troubles on its doorstep have weighed on economic confidence.

Germany's economy, which was worth a little under 2.6 trillion euros ($A3.31 trillion) last year, in comparison with the US's 12 trillion euros, has seen two consecutive years of robust growth.

Its economy expanded by 4.2 per cent in 2010 and 3 per cent last year.

But the Economy Ministry last week cut its growth forecast for 2013 to 1 per cent from 1.6 per cent, though increased this year's outlook slightly from 0.7 per cent to 0.8 per cent.

The economy grew 0.3 per cent in the second quarter and the ministry said indicators point to "further moderate growth" in the third quarter as well.

ING economist Carsten Brzeski warned, however, that the Ifo survey indicates businesses have growing concerns about the economy and is "clear evidence that recessionary risks in the German economy are increasing."

"The sharp drop in the current assessment component shows that the good times are, at least for now, over," he said in a research note. "The industry's safety net has become very fragile."

Germany's export-driven economy has managed to make up for weakening support from other European Union nations, several of which are in recession, with growth elsewhere including to Russia and China.

It is now, however, feeling not only the problems of the European Union but also elsewhere, Brzeski said.

"The slowdown of the German economy is not only a consequence of the euro crisis, but also of the global economic cooling," he said.

"As long as the main economic blocs outside Europe can pick up steam again, Germany should be able to escape the current fate of most of its eurozone peers."

The Ifo index is based on a survey of 2,500 businesses about their views on how the economy is doing and how they see things in the future.

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Young boy dies after TV falls on him in WA

A FIVE-YEAR-OLD boy has died after a television set fell on him at his home in Collie, in the southwest of Western Australia.

WA Police say the tragic accident happened about 10.30am (WST) on Tuesday.

"The circumstances surrounding the death will form part of the coronial investigation," a spokeswoman said.

She said there were no suspicious circumstances.

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Greenpeace slams Japan's radiation count

GOVERNMENT radiation monitoring in areas near Japan's crippled Fukushima nuclear plant is unreliable, Greenpeace says, with heavily populated areas exposed to 13 times the legal limit.

The environmental group said on Tuesday authorities were wasting time cleaning up evacuated areas and should prioritise decontamination efforts in places where people live, work and play.

Greenpeace found that in some parks and school facilities in Fukushima city, home to 285,000 people, radiation levels were above three microsieverts per hour.

Japan's recommended radiation limit is 0.23 microsieverts per hour.

"We also found that official monitoring posts placed by the government systematically underestimate the radiation levels," said Rianne Teule, Greenpeace's radiation expert, adding that some machines are shielded from radiation by surrounding metal and concrete structures.

"Official monitoring stations are placed in areas the authorities have decontaminated. However, our monitoring shows that just a few steps away the radiation levels rise significantly," she said.

"Decontamination efforts are seriously delayed and many hot spots that were repeatedly identified by Greenpeace are still there," Teule said.

"It is especially disturbing to see that there are many hot spots around playground equipment, exposing children who are most vulnerable to radiation risks," she said.

In tests carried out over four days last week, Greenpeace also found that radiation levels in Iitate village, where the government is hoping to soon return evacuated residents, are still many times over the limit, with decontamination efforts patchy.

Greenpeace's Japan nuclear campaigner Kazue Suzuki said attempts to clean up were "misguided".

"One home or office may be cleaned up, but it is very unlikely that the whole area will be freed of radiation risks within the next few years," given the mountainous and heavily forested nature of the region, she said.

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Dagong to unveil new ratings agency

CHINESE ratings agency Dagong says it is tying up with US and Russian partners to form a new "independent" group to rival US-based agencies it claims have "proven inadequate".

The Chinese firm will set up the joint venture with Egan-Jones Ratings Co (EJR), based in Pennsylvania, and Russia's RusRating JSC, it said in an invitation for a press conference on Wednesday to unveil the new company.

The joint venture, called Universal Credit Rating Group, will engage in global ratings affairs "as an entirely independent rating service provider", Dagong said in the letter on Tuesday.

"The current international credit rating system has proven inadequate to the task of producing responsible and reliable ratings," it said, adding a new institution is needed to "mitigate economic risk in the development of human civilisation".

The three partners "do not represent the interest of any particular country or group" and Universal Credit Rating Group will "provide impartial rating information to the global capital markets", it said.

US-based agencies Fitch, Standard & Poor's and Moody's - responsible for giving risk assessments to investors - were widely criticised for failing to warn about the impending global financial crisis in 2008.

Many of the debt instruments linked to the US housing market that sparked the crisis were given the highest possible rating by the groups.

Dagong chairman Guan Jianzhong insists his agency is fully independent - and stands by his criticism of his rivals, whose ratings are crucial in determining the interest rates at which countries and companies can borrow.

EJR was granted status as a "nationally recognised statistical rating organisation" by the US Securities and Exchange Commission at the end of 2007, according to the SEC website.

EJR says on its website that it exclusively serves "buy side institutional investors".

RusRating, based in Moscow, focuses on ratings for the banking sector.

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Govt 'was warned' about trawler risk

FISHERIES Minister Joe Ludwig received confidential advice that banning the controversial super-trawler Abel Tasman would be a "significant risk" for the federal government.

ABC TV's Four Corners has revealed that Senator Ludwig was briefed by officials who warned against trying to stop the ship fishing in Australian waters.

"In our view none of the arrangements available to you or AFMA (the Australian Fisheries Management Authority) provide the capacity to prevent the (formerly named) FV Margiris from fishing," a briefing note concluded.

"Any attempt to prevent the FV Margiris from operating would result in significant risk to the commonwealth, to Australia's fisheries management credibility and to the proper operation of commercial fishing businesses."

Environment Minister Tony Burke and Senator Ludwig last month announced legislation to increase Mr Burke's powers, and effectively ban the 142-metre factory ship.

It allows Mr Burke to stop the renamed Abel Tasman fishing in Australian waters for two years while more scientific work is completed.

The vessel has been left languishing at Port Lincoln after a massive campaign from environmentalists and recreational fishers, most strongly in Tasmania, caused the government to act.

A final declaration on the two-year ban is due from Mr Burke next month and the operator, Seafish Tasmania, has indicated it will sue the government if the ban goes ahead.

Damages could reportedly be as high as $10 million.

Four Corners reveals that Mr Burke asked his department to "secretly" begin working on legislation even as he was publicly saying he had "signed off" on the vessel.

Mr Burke made that announcement on the ABC's Q&A program early last month, saying he had imposed whatever restrictions were in his power at the time.

"I felt when I made that announcement on Q&A that my hands had been tied in a way that I wasn't happy with," he told Four Corners.

"I didn't know whether cabinet and the caucus would end up supporting me in a legislative pathway, so I wasn't able to announce it at that point.

"But I had the department working on it straight away."

The initial announcement had been met with relief by Seafish director Gerry Geen, whose company and its partners had spent seven years and millions of dollars negotiating the journey of the ship from Europe.

But Mr Burke announced that new legislation would be introduced a week later.

Tasmanian independent MP Andrew Wilkie, who campaigned against the trawler, says the stability of the federal government in the hung parliament came into play in the decision to ban it.

"At some point in there the Labor Party leadership would have understood people are going to start crossing the floor on this," Mr Wilkie has told the program.

"It was an absolutely toxic issue and particularly in Tasmania with Tasmanian Labor members."

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German economy could contract in 4Q

THE German economy, Europe's biggest, will see a sharp slowdown in growth or may even contract at the end of the year as the eurozone crisis bites, the country's central bank has warned.

Germany has so far held up to Europe's long-running sovereign debt crisis much better than its eurozone neighbours.

While many eurozone countries slipped into recession, Germany notched up growth of 0.5 per cent in the first quarter and 0.3 per cent in the second quarter.

However, "there are increasing signs that, following a noticeable expansion in output in the third quarter, we might see stagnation or even a slight contraction in gross domestic product (GDP) in the fourth quarter," the Bundesbank wrote in its latest monthly report, released on Monday.

Earlier, the finance ministry in a separate report had similarly warned of a sharp slowdown in growth at the end of this year.

"In the third quarter, too, the economy is likely to have expanded again," the ministry said, without providing any concrete forecast.

Industrial output grew in the months of July and August, providing unexpectedly strong impulses for overall growth.

"Nevertheless, in the final quarter of 2012, growth is likely to slow substantially as economic weakness in a number of eurozone countries puts the brakes on growth," the ministry predicted.

Such an interpretation was backed up by the drop in investor sentiment, as seen in the fifth consecutive monthly decrease in the ZEW's monthly confidence index, the ministry said.

Last week, the German government fractionally upgraded its growth forecast for the current year to 0.8 per cent, but slashed its prognosis for next year to just one per cent.

Germany's economic performance in the first six months of this year had turned out better than thought, said Economy Minister Philipp Roesler when presenting the forecasts.

"But with the European sovereign debt crisis and the economic weakening in developing countries in Asia and Latin America, Germany is in stormy economic waters," he said.

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BBC to air show about Savile scandal

THE BBC plans to air a show reporting on its own editorial decision to pull the plug on a Newsnight segment about sexual abuse charges against the late entertainer Jimmy Savile.

In the latest development Newsnight editor, Peter Rippon, has stepped aside.

The Panorama documentary to be broadcast on Monday night deals with a deepening scandal over the BBC's relationship to Savile, who died last year at the age of 84 after a long television career.

In recent weeks, dozens of women have said they were abused by the entertainer, including some who said they were sexually abused on BBC property. Police say there may be more than 200 potential victims.

Various inquiries are in progress, and attention has focused on the BBC's decision not to air a Newsnight segment about Savile's abuse last December.

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Nepalese minister quits over bribe charges

AN official says the Nepalese prime minister has asked his labor minister to resign for allegedly seeking bribes for registering private companies offering jobs abroad.

Such companies are mushrooming in Nepal with thousands of younger Nepalese seeking jobs in the oil-rich Gulf and other countries.

Prashant Lamichhane, a media officer in the prime minister's office, said on Sunday Prime Minister Baburam Bhattarai asked for Labor and Employment Minister Kumar Belbase's resignation after television news channels showed clips of one of his aides asking job agencies' representatives for more than 250,000 rupees ($A2,900) each to register their business.

The minister sent his resignation to the prime minister on Saturday, which has been accepted, Lamichhane told The Associated Press.

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Blast hits Damascus, at least 10 dead

AN explosion has rocked the Old City of Damascus, killing at least 10 people and wounding dozens of other civilians, Syrian activists say.

The blast erupted on Sunday as President Bashar Assad discussed the civil war in his country with visiting UN peace envoy Lakhdar Brahimi.

The blast targeted a police station in the Bab Touma neighbourhood, a Syrian official said, insisting on anonymity because he is not allowed to make press statements.

Bab Touma, a popular attraction for shoppers, is inhabited mostly by members of Syria's Christian minority.

The Britain-based Syrian Observatory for Human Rights reported the death toll.

It said it was not immediately clear if the victims were civilians or policemen. But it described the blast as "strong" and said ambulances and police cars were rushing to the area.

No other details were immediately available.

Brahimi, who represents the UN and the Arab League, met with Assad in another part of the capital.

Brahimi has appealed for a truce between Assad's forces and rebels for the four-day Muslim holiday of Eid al-Adha, which begins October 26.

Brahimi arrived in Damascus on Friday after a tour of Middle East capitals to drum up support for the ceasefire, which he hopes will pave the way for a longer-term truce.

A range of countries including Iran, Iraq, Turkey and Germany have thrown their support behind the idea, but neither the Syrian government nor the rebels have signed on.

Brahimi met Foreign Minister Walid al-Moallem on Saturday.

A Foreign Ministry statement released after the meeting did not mention the proposed truce, but said the two men discussed "objective and rational circumstances to stop the violence from any side in order to prepare for a comprehensive dialogue among the Syrians."

Syrian government forces and rebels have both agreed to, and then promptly violated, internationally brokered ceasefires in the past, and there is little indication that either is willing to stop fighting now.

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Icelanders support revising constitution

A MAJORITY of Icelanders have voted in favour of revising the country's constitution, preliminary results of a referendum show.

Some 66 per cent have supported the draft constitution with about 88,000 votes counted.

Turnout in Saturday's vote was estimated at 50 per cent of the almost 237,000 eligible voters, public broadcaster RUV reported.

Voters were asked to answer each of six questions put forward by a constitutional committee of 25 ordinary citizens with a yes or a no.

The committee asked the public for feedback on constitutional proposals, including via social networking websites Facebook and Twitter, prompting the media to dub the new basic law as the world's first "crowdsourced constitution".

Icelanders also voted for making the island's natural resources public property and in favour of allowing the Evangelical Lutheran Church to retain its role as state church.

The council presented its draft to parliament in July 2011.

The process to draft a new constitution began after the country's 2008 financial meltdown prompted calls for reforms.

A left-leaning coalition comprising Prime Minister Johanna Sigurdardottir's Social Democrats and the Left-Green Movement took office after disenchanted voters ousted the conservative-led government in 2009.

The new government vowed to revise the constitution, which dates from 1944.

The results showed many people want change, opposition leader Bjarni Benediktsson, head of the conservative Independence Party, said.

Low turnout and the fact a third of the electorate opposed changing the constitution posed challenges for parliament, Benediktsson added.

His party has favoured a more traditional approach to re-working the constitution in parliament before consulting voters.

Parliament will be dissolved in April ahead of an election.

Changes to the constitution must be approved by two parliaments, with a general election held in between.

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