Yahoo shares reach 18-month high as investors warm to new CEO

SAN FRANCISCO (Reuters) – Yahoo Inc shares reached their highest level in a year and a half, as investor confidence grows that new Chief Executive Marissa Mayer can pull off a comeback that eluded three of her predecessors.

The Internet pioneer has yet to actually provide Wall Street with any hard evidence that its business is turning a corner – and she has warned that it will be a lengthy job – but investor faith in the ex-Google executive is running high.

Hedge funds Tiger Global Management and Greenlight Capital Management recently disclosed large stakes in Yahoo, accumulated during the third quarter.

“Money managers are staring to want to own this name again,” said Colin Gillis, an analyst with BGC Partners.

“For the amount of traffic they have, and the assets they have, they should be able to squeeze some value out of that,” Gillis said, referring to Yahoo. With Mayer at the helm, he said, Yahoo has “finally got somebody who the market believes can do that.”

Gravity Capital Management’s Adam Seessel said that Mayer’s recruitment of various Google Inc employees, including recently hired Yahoo Chief Operating Officer Henrique de Castro, has also helped burnish Yahoo‘s image.

“What the market is seeing is not (financial) numbers so much as they’re seeing people voting with their feet, people moving from Google to Yahoo,” said Seessel, whose firm owns Yahoo shares.

“All these people from Google wouldn’t be following her if they didn’t think that she didn’t have some good cards to play,” he said.

Shares of Yahoo finished Monday’s regular trading session up 2.8 percent at $ 18.36, amid a broad market rally. The last time Yahoo traded above $ 18.30 was in May 2011.

Yahoo ranks among the world’s most popular websites, with roughly 700 million monthly visitors. But the company’s revenue has eroded, amid competition from Google and Facebook and an industry-wide change in the online advertising market that has compressed prices for the online display ads that are key to its business.

The company has been rocked by internal turmoil: CEO Carol Bartz was fired over the phone and CEO Scott Thompson left after less than six months on the job due to questions about his academic credentials. Mayer, Google‘s first female engineer, took the top job at Yahoo in July.

In a conference call with investors last month, Mayer said that making Yahoo‘s online products more smartphone-friendly was her top priority.

Investors and analysts on Monday dismissed a weekend report in The Telegraph that said Yahoo was in discussions with Facebook about a search deal, particularly after Facebook issued a statement denying any such talks.

“People expect a better search experience on Facebook. We are working on improvements to better meet those expectations but are not in talks to enter into a new search partnership,” Facebook said in a statement on Monday.

Still, analysts say that search represents one of the key opportunities that Mayer will focus on as she moves to revive Yahoo‘s fortunes. A 2010 deal struck by former CEO Bartz outsourced the back-end technology of Yahoo‘s search to Microsoft Corp, but deal has failed to deliver an expected boost to Yahoo‘s search advertising revenue.

“Certainly search could be resuscitated,” said Gabelli & Company analyst Brett Harriss, who said Yahoo should be worth $ 26 a share based on a six-times multiple of its earnings before interest, taxes, depreciation and amortization.

“It was a disaster for a year and a half,” said Harris. “Everybody hated the board, you had a while of transition where you went through three or four CEOs quickly.”

Now, he said, there’s finally a CEO “that investors can believe in.”

(Reporting By Alexei Oreskovic; Editing by Steve Orlofsky)

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International Emmys honor Lear, Alda, South American shows

NEW YORK (Reuters) – Television legend Norman Lear and veteran actor Alan Alda received special honors at the International Emmy Awards on Monday, while programming from South America dominated the competition, with Argentina and Brazil each winning two Emmys.

Lear, best known as creator of the ground-breaking 1970s hit comedy “All in the Family,” which premiered during a time of social upheaval and tackled issues such as race and women’s rights, said “the world will, and needs to, come together through the arts” as he accepted the honor.

The producer and writer received a special 40th anniversary Founders Award from the International Academy of Television Arts & Sciences, as did Alda, star of the long-running Korean-war set comedy, M*A*S*H* about doctors on the front lines.

Alda paid tribute to “the men and women in the hospital tents,” referring to real-life medical personnel who struggle to treat war injured, who he noted usually go unmentioned at award shows.

“Glee” creator Ryan Murphy received the annual International Founders Award, which was presented by Oscar-winner Jessica Lange, a star of his current series “American Horror Story.”

Argentina won both acting categories, with honors going to actress Cristina Banegas for the dramatic series “Television x La Inclusion,” in which she plays the mother of an ailing child waging battle with health insurers; while Dario Grandinetti picked up the best actor award for his performance as a racist taxi driver in the same series.

It marked the first time both honors were won by actors from the same program.

Brazil scored wins for comedy series for “The Invisible Woman,” while “The Illusionist” was named outstanding telenovela.

In bestowing its prizes, the Emmys, which honor television produced outside the United States, extended their reach after years of domination and even sweeps by the United Kingdom, which this year won two, for best TV movie or miniseries “Black Mirror” and best documentary “Terry Pratchett: Choosing to Die.”

France, Germany and Australia each won one Emmy.

France took the best drama series prize for “Braquo season 2,” while Germany’s “Song of War” won for outstanding arts programming. The Australian franchise of the adventure competition “The Amazing Race” won the award for non-scripted, or reality, television.

The International Emmy directorate award went to Korean Broadcasting System president and CEO Dr. Kim In-Kyu.

Presenters at the ceremony, hosted by recently retired talk show host Regis Philbin, also included Victor Garber, Donnie Wahlberg, Cheyenne Jackson, Telenovela actress Edith González, German TV personalities Joko and Klaas and Indian actress Prerna Wanvari.

(Editing by Chris Michaud and Todd Eastham)

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Antibiotics in pregnancy tied to asthma in children: study

(Reuters) – Children whose mothers took antibiotics while they were pregnant were slightly more likely than other children to develop asthma, according to a Danish study.

The results don’t prove that antibiotics caused the higher asthma risk, but they support a current theory that the body’s own “friendly” bacteria have a role in whether a child develops asthma, and antibiotics can disrupt those beneficial bugs.

“We speculate that mothers’ use of antibiotics changes the balance of natural bacteria, which is transmitted to the newborn, and that such unbalance bacteria in early life impact on the immune maturation in the newborn,” said Hans Bisgaard, one of the study’s authors and a professor at the University of Copenhagen.

Previous research has linked antibiotics taken during infancy to a higher risk of asthma, although some researchers have disputed those findings.

To look for effects starting at an even earlier point, Bisgaard and his colleagues gathered information from a Danish national birth database of more than 30,000 children born between 1997 and 2003, and followed for five years.

They found that about 7,300 of the children, or nearly one quarter, were exposed to antibiotics while their mothers were pregnant. Among them, just over three percent, 238 children, were hospitalized for asthma by age five.

The study, which appeared in The Journal of Pediatrics, found that by contrast, about 2.5 percent, or 581 of some 23,000 children whose mothers didn’t take antibiotics, were hospitalized with asthma.

After taking into account other asthma risk factors, Bisgaard’s team calculated that the children who had been exposed to antibiotics were 17 percent more likely to be hospitalized for asthma.

Similarly, these children were also 18 percent more likely to have been given a prescription for an asthma medication than children whose mothers did not take antibiotics when they were pregnant.

His team also looked at a smaller group of 411 children who were at higher risk for asthma because their mothers had the condition. They found that these children were twice as likely as their peers to develop asthma too if their mothers took antibiotics during the third trimester of pregnancy.

Others said that it was possible that something besides the antibiotics was responsible, such as the illness the drugs were prescribed for.

“This study, it doesn’t tell us whether it’s the antibiotic use or whether it’s the infection. That’s one thing we can’t decipher,” said Anita Kozryskyj, a professor at the University of Alberta who also studies the antibiotics-asthma link but wasn’t involved in the new study.

The results don’t suggest that women should avoid antibiotics since some infections can be quite dangerous to a fetus, she said, adding that Bisgaard’s study suggests that the development of asthma might start before birth, something researchers hadn’t studied very closely.

“We’re beginning to appreciate that some of the origins of asthma and changes to the immune system, maybe they start earlier than right after birth,” she added. SOURCE: http://bit.ly/W9SnlJ (Reporting from New York by Kerry Grens at Reuters Health; editing by Elaine Lies)

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Five Steps to Fix Shadow Banking

International regulators did the world a service by reporting that shadow banking remains an enormous force in the global financial system. Firms in the sector had $ 67 trillion in assets last year, the Financial Stability Board has just reported. But given the importance of the lightly monitored companies, the regulators’ prescriptions seem cautious.

Shadow banking is lending outside the conventional banking system, done by firms such as money market mutual funds, hedge funds, and securities dealers. It’s far less regulated than lending by normal banks, which take insured deposits. Many economists and financial experts say shadow banking was responsible for triggering the global financial crisis of 2008-09.

Regulating it isn’t easy, for two very different reasons. One is that shadow banking can’t be shut down entirely because it does some real good. “Non-bank financial entities can … be sources of long-term and short-term credit to businesses and households,” the Financial Stability Board wrote in a report released on Nov. 18 (PDF). The second reason is that the sector has political muscle. “We’re already seeing a contest of wills” over attempts to tighten regulation, says Erik Gerding, a law professor at the University of Colorado, Boulder who specializes in banking regulation.

The board’s five-step plan to fix shadow banking, which was released in conjunction with the report on the sector’s size, didn’t exactly stick its neck out. The board is seeking comment on the plan and plans to publish final recommendations in September 2013. Here’s a boiled-down version:

1. Keep banks from being infected by problems in shadow banking. On this point, the board mostly just endorsed existing plans from the Basel Committee on Banking Supervision, which wants banks to keep thicker buffers of capital against potential losses on loans they make to shadow banking organizations.

2. Make money market mutual funds less vulnerable to runs. In the U.S., the new Financial Stability Oversight Council is continuing to press for making the funds let per-share values float in line with the value of the underlying securities, making them less rigid and breakable. The Financial Stability Board said funds should switch to floating net asset values “where workable”—a phrase that leaves room for funds to keep things as they are.

3. Put some teeth into the rules for other shadow banking organizations. The board lays out a long-term agenda for reducing risks, other than those posed by money market mutual funds. To make sure countries can’t simply ignore regulations they don’t like, the board said tougher policies should “eventually” become a “membership commitment subject to peer reviews.”

4. Regulate securitization. When it comes to bonds backed by assets such as credit-card receivables or mortgages, the board advocated greater disclosure and said countries should “converge” on the amount of risk that a securitizer must retain to make sure it has an incentive to sell only high-quality securities. But it didn’t give numerical targets.

5. Regulate securities lending and repo lending. Most of the recommendations on the businesses of loans backed by stock or bonds are standard-issue, such as making sure that the collateral posted is adequate. On the most controversial issue—the preferential treatment of repurchase agreements and securities loans in bankruptcy court, which has contributed to their explosive growth—the board said changes “may be viable theoretical options” but concluded, “they will not be pursued for now due to practical difficulties.”

Lena Komileva, chief economist of London-based G+ Economics, an investment advisory firm, described the balancing act regulators face. “Bringing shadow banking out of the shadows recognizes the systemic importance of non-bank finance for the health of the global economy,” she wrote in an e-mail. “But regulators need to apply a surgical scalpel not an ax, so that the benefit of avoiding another Lehman, AIG (AIG), or Reserve Primary Fund does not come at the cost of the long-term efficiency and productivity of the financial system.”

Businessweek.com — Top News

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Turbulence on Cuba-Italy flight leaves 30 bruised

ROME (AP) — An airliner flying from Havana to Milan abruptly plunged some 1,000 meters (3,300 feet) when it hit unusually strong turbulence over the Atlantic on Monday, terrifying passengers and leaving some 30 people aboard with bruises and scrapes, airline officials said.

The flight continued to Milan’s Malpensa airport after the plane’s captain determined that it suffered no structural damage and two passengers who are physicians found no serious injuries, Giulio Buzzi, head of the pilots division at Neos Air, told Sky TG24 TV.

The ANSA news agency quoted bruised passenger Edoardo De Lucchi as saying meals were being served when suddenly there was “10 seconds of terror.” He recounted how plates went flying and some passengers not wearing seatbelts bounced about.

Buzzi had said that the drop measured some 3,000 meters (10,000 feet) in a cloudless sky. But Milan daily’s Corriere della Sera’s web site, quoting Neos official Davide Martini, later reported that the plane first bounced up some 500 meters (1,650 feet), then dropped some 1,000 meters (3,300 feet) to some 500 meters (1,650 feet) below the original altitude.

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Shirtless photo a “joke,” says FBI agent who began Petraeus inquiry

WASHINGTON/NEW YORK (Reuters) – The FBI agent who began the investigation that led David Petraeus to resign as CIA director said that a shirtless photo he sent to a woman at the center of the probe was a “joke” sent to many friends, and was not meant to be sexual.

Frederick Humphries told the Seattle Times in an interview published Thursday that the photo in the unfolding adultery scandal that brought down Petraeus was sent to Tampa, Florida, socialite Jill Kelley in 2010.

Humphries, who has been identified in media reports on the scandal mainly as the “shirtless” FBI agent, was a “top-notch” operative, according to a prosecutor who worked with him on the “millennium bomber” case years ago.

Andrew Hamilton, now a senior deputy prosecutor for King County, Washington, said Humphries was assigned to the case partly because he spoke excellent French. Ahmed Ressam, who was convicted of plotting to bomb the Los Angeles International Airport on New Year’s Eve 1999, claimed to be from Quebec and spoke French.

“That’s the first time I met him, as a case agent,” Hamilton told Reuters. “We spent a lot of time together over the next couple years getting ready for trial, and I couldn’t have asked for more as a case agent. He was very, very thorough, and very honest. We always thought we were very lucky to have him.”

Five months ago, Kelley ignited the FBI investigation that led to Petraeus when she asked Humphries whether the bureau could look into harassing emails she had been receiving.

The investigation eventually revealed that the emails to Kelley were sent by Paula Broadwell, an Army reserve officer in military intelligence and co-author of a biography of Petraeus.

The FBI investigation revealed Broadwell’s affair with Petraeus, who cited the relationship when he resigned as CIA chief last week. The probe also ensnared General John Allen, the commander of NATO forces in Afghanistan, whom agents found had exchanged “flirtatious” emails with Kelley, law enforcement officials said.

(Editing by David Lindsey and Jim Loney)

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Justin Bieber dominates at American Music Awards

America proved its Bieber Fever was strong: The teen singer dominated the American Music Awards on Sunday night.

Bieber‘s wins included the show’s top award, artist of the year. His mom joined him onstage as he collected the trophy, beating out Rihanna, Maroon 5, Katy Perry and Drake.

“I wanted to thank you for always believing in me,” Bieber said, looking to his mom.

The 18-year-old also won the honor in 2010. He said it’s “hard growing up with everyone watching me” and asked that people continue to believe in him.

Bieber and Nicki Minaj performed together — and separately — at the AMAs, and were both multiple winners.

But another collaboration was the night’s most colorful performance: Korean rapper PSY and MC Hammer. Hammer joined the buzzed-about pop star for his viral hit “Gangnam Style.” PSY rocked traditional “Hammer” pants as they danced to his jam and to Hammer’s “Too Legit to Quit.”

Bieber won favorite pop/rock male artist in the first award handed out at Sunday’s show and gave a shout-out to those who didn’t think he would last on the music scene.

“I want to say this is for all the haters who thought I was just here for one or two years. I feel like I’m going to be here for a very long time,” he said.

He also won favorite pop/rock album for his platinum-selling third album, “Believe.” He gave a stripped down, acoustic performance of “As Long As You Love Me,” then transitioned to the dance-heavy “Beauty and a Beat,” where Minaj joined him onstage, grinding with the teen for a few seconds.

Minaj, who wore three different wigs and four outfits throughout the night, repeated her AMAs wins from last year, picking up trophies for favorite rap/hip-hop artist and album for “Pink Friday: Roman Reloaded.” She was in an all-white get-up, including fur coat and pink hair when she performed her new song “Freedom.” The scene was ghostly and snowy, as a choir — also in white — joined her onstage. One background singer stole the performance, belting semi-high notes as Minaj looked on.

As Bieber won his second award, he was kissed on the neck by Jenny McCarthy, who presented the award.

“Wow. I feel violated right now,” he said, laughing.

“I did grab his butt,” McCarthy said backstage. “I couldn’t help it. He was just so delicious. So little. I wanted to tear his head off and eat it.”

Bieber‘s red and black outfit seemed to be the night’s theme, as Taylor Swift and Usher wore similar ensembles.

Usher kicked off the three-hour show with green laser lights beaming onstage as he performed a medley of songs, including “Numb,” ”Climax” and “Can’t Stop, Won’t Stop,” which featured a smoky floor and a number of backup dancers, as Usher jammed in all black, with the exception of his red shoes. He won favorite soul/R&B male artist.

Swift won her fifth consecutive award for favorite country female artist.

“This is unreal. I want to thank the fans. You guys are the ones who voted on this,” she said.

Swift gave a masquerade-themed performance of the pop song “I Knew You Were Trouble.” She sang onstage in a light dress while dancers wore mostly black. But then she changed into a red corset and black skirt, matching their dark mood. She even danced and sang on the floor as lights flickered throughout the performance.

Dick Clark, who created the AMAs, was remembered by Ryan Seacrest and an upbeat performance by Stevie Wonder.

“What a producer he was,” said Seacrest, as Wonder sang his hits, including “My Cherie Amour.”

Carly Rae Jepsen, who performed early in the night, won favorite new artist.

“I am floored. Wow,” she said, thanking Bieber and his manager, Scooter Braun.

Party girl Ke$ ha was glammed up on the red carpet, rocking long, flowy blonde hair and a light pink dress. She switched to her normal attire when she performed her hit single “Die Young.” It was tribal, with shirtless dancers in skin-tight pants, silver hair and skeleton-painted faces, who also played the drums. Ke$ ha was pants-less, rocking knee-high boots and rolling on the floor as she finished up the song.

Minaj and Christina Aguilera were blonde bombshells, too: Minaj’s hair was busy and full of volume and she sported a neon strapless gown to accept her first award. Aguilera wore a blonde bob in a purple dress that matched her eyeshadow.

Aguilera performed a medley of material from her new album and joined Pitbull onstage.

Kelly Clarkson also hit the stage, making a nod to her “American Idol” roots with a number on her dress and three judges looking on as she sang “Miss Independent.” Then she went into “Since U Been Gone,” ”Stronger” and “Catch My Breath.” It’s worth noting that “Idol” judge Randy Jackson introduced Clarkson, the first-ever winner of the show. He also advised people to donate through Red Cross for Superstorm Sandy victims.

Fellow “Idol” winner Carrie Underwood won best favorite country album and performed, hitting the right notes while singing “Two Black Cadillacs.” She talked about singing competition shows backstage.

“These people that go on these shows are so talented, you know? And I would love to see if so many of the other artists that are out there today would go back and try out for these shows, because they might get their behinds kicked by some of the contestants,” she said.

Luke Bryan won favorite country male artist and Lady Antebellum favorite country group.

American Music Awards nominees were selected based on sales and airplay, and fans chose the winners by voting online. At this award show, even the stars were fans: Pink said on the red carpet that she’d like to collaborate with Lauryn Hill. Cyndi Lauper said her musical playlist includes Pink and Minaj. Boy band The Wanted said they were excited to see PSY and Colbie Caillat wanted to watch No Doubt.

“What makes the American Music Awards special is the fans choose the winning artists,” said Chester Bennington of Linkin Park, who won favorite alternative rock artist and performed “Burn It Down,” as Brandy sang along and Gwen Stefani, Usher and Phillip Phillips bobbed their heads.

David Guetta won the show’s first-ever electronic dance music award. Non-televised awards went to Katy Perry for pop/rock female artist, Beyonce for soul/R&B female artist, Adele for adult contemporary artist and Shakira for Latin artist.

Along with Rihanna, Minaj was the top nominee with four nominations.

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AP Entertainment Writer Sandy Cohen contributed to this report from Los Angeles.

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Follow Mesfin Fekadu on Twitter at http://twitter.com/MusicMesfin

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Online:

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Doping-Four year bans proposed under new WADA Code

Nov 18 (Reuters) – Athletes guilty of serious doping offenses will be suspended for four years from 2015 under proposals being considered by the World Anti-Doping Agency (WADA), but there are no plans for a specific rule to ban offenders from the Olympics.

Currently, athletes found guilty of a first major doping offense are handed a two-year ban with any subsequent positive test incurring a life-ban.

The longer ban would be introduced for offenses that include the use of anabolic steroids, human growth hormone, masking agents and trafficking, according to a second draft of the 2015 WADA code which was reviewed over the weekend.

“It is clear … there is a strong desire in the world of sport, from governments and within the anti-doping community to strengthen the sanction articles in the code,” WADA President John Fahey said in a statement.

“This second draft has done that, doubling the length of suspension for serious offenders and widening the scope for anti-doping organizations to impose lifetime bans.”

The draft does not, however, consider a former International Olympic Committee (IOC) rule regarding Olympic participation, which was ruled in non-compliance with the WADA Code in 2011 by sport’s highest court, the Court of Arbitration for Sport (CAS).

The IOC rule, introduced in 2008, banned athletes from participating at the next Olympic Games if they had been suspended for six months or longer.

After the rule was ruled non-compliant, Britain was forced to overturn lifetime Olympic bans on their drug cheats.

“The rational is if more four-year sanctions are delivered, then there won’t be any need for (the IOC rule) because the athletes will be missing the next Olympics,” WADA spokesman Terence O’Rorke said by telephone from Montreal.

The new WADA Code draft also includes a proposal that to be prohibited, substances or methods must be performance enhancing, contrary to the spirit of sport or contrary to the health of athletes.

The proposed code will undergo further review between now and March 2013, when it will be presented to the WADA Foundation Board before a final draft is prepared for ratification at the world anti-doping conference in Johannesburg next November.

“Athletes must know that there is a heavy price to pay for intentional doping,” Fahey said. “I am confident this draft will deliver that message loud and clear.”

WADA also said its funding would be frozen for a second successive year at approximately $ 28 million in 2013.

“This freeze is not ideal for the fight against doping in sport,” Fahey said. “It is widely accepted that doping is a major issue no longer restricted to the sporting world, and that it must be addressed by society as a whole.” (Reporting by Gene Cherry in Salvo, North Carolina, editing by Nick Mulvenney)

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PM targets ‘time-wasting’ appeals

18 November 2012 Last updated at 21:55 ET

The right to legally challenge government policies will be limited to help bolster the economy, David Cameron is expected to say later.

Opponents will have less time to apply for judicial review, face higher fees and will have their chances of appealing halved.

The minister will tell business leaders this is so “people think twice about time-wasting” to delay developments.

He will call for wartime thinking when “rules were circumvented”.

Wartime spirit

In a speech to the CBI in London on Monday, Mr Cameron will say the country is in the “economic equivalent of war” and needs the “same spirit.”

He will argue for less bureaucracy as the emphasis is put on the pursuit of economic growth.

The prime minister is expected to say the legal right to a judicial review of decisions, including major infrastructure projects, will be scaled back, insisting: “We urgently need to get a grip on this”.

It is unclear yet how much the fees would rise by for review applications or how far the three-month time limit for applications might be cut.

Continue reading the main story

When this country was at war in the 40s, Whitehall underwent a revolution”

End Quote David Cameron

But he will add that “instead of giving hopeless cases up to four bites of the cherry to appeal a decision, we will halve that to two.”

Downing Street figures show more than 11,000 applications for judicial review were made in 2011, compared to just 160 in 1975. Around one in six applications were granted.

He is expected to accept the government is “too slow in getting stuff done,” amid concern about interested parties and that civil servants in Whitehall must appreciate delays are felt in “businesses going bust, jobs being lost” and “livelihoods being destroyed.”

He will draw an analogy with how the country responded to fighting Hitler.

“When this country was at war in the 40s, Whitehall underwent a revolution.

“Normal rules were circumvented. Convention was thrown out. As one historian put it, everything was thrown at ‘the overriding purpose’ of beating Hitler.

“Well, this country is in the economic equivalent of war today – and we need the same spirit. We need to forget about crossing every ‘t’ and dotting every ‘i’ – and we need to throw everything we’ve got at winning in this global race.”

Earlier this year the government published a new planning framework designed to streamline planning.

But a draft version of the framework was amended, amid fears from countryside groups that swathes of green belt land were being put at risk.

Elsewhere at the conference Labour leader Ed Miliband is also due to make a speech in which he will warn Britain is “sleepwalking” into leaving the European Union, a move which could undermine the UK’s economy and leave it “voiceless and powerless”.

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Rebels in Congo reach door of Goma

GOMA, Congo (AP) — A Rwandan-backed rebel group advanced to within 3 kilometers (1.8 miles) of Goma, a crucial provincial capital in eastern Congo, marking the first time that rebels have come this close since 2008.

Congolese army spokesman Col. Olivier Hamuli said the fighting has been going on since 6 a.m. Sunday and the front line has moved to just a few kilometers (miles) outside the city. After more than nine hours of violent clashes the two sides took a break, with M23 rebels establishing a checkpoint just 100 meters (yards) away from one held by the military in the village of Munigi, exactly 3 kilometers (1.8 miles) outside the Goma city line.

Contacted by telephone on the front line, M23 rebel spokesman Col. Vianney Kazarama said the group will spend the night in Goma.

“We are about to take the town. We will spend the night in Goma tonight,” said Kazarama. “We are confident that we can take Goma and then our next step will be to take Bukavu,” he said mentioning the capital of the next province to the south.

The M23 rebel group is made up of soldiers from a now-defunct rebel army, the National Congress for the Defense of the People, or CNDP, a group made-up primarily of fighters from the Tutsi ethnic group, the ethnicity that was targeted in Rwanda‘s 1994 genocide. In 2008, the CNDP led by Rwandan commando Gen. Laurent Nkunda marched his soldiers to the doorstep of Goma, abruptly stopping just before taking the city.

In the negotiations that followed and which culminated in a March 23, 2009 peace deal, the CNDP agreed to disband and their fighters joined the national army of Congo. They did not pick up their arms again until this spring, when hundreds of ex-CNDP fighters defected from the army in April, claiming that the Congolese government had failed to uphold their end of the 2009 agreement.

Reports, including one by the United Nations Group of Experts, have shown that M23 is actively being backed by Rwanda and the new rebellion is likely linked to the fight to control Congo’s rich mineral wealth.

The latest fighting broke out Thursday and led to the deaths of 151 rebels and two soldiers. On Saturday U.N. attack helicopters targeted M23 positions in eastern Congo.

Also on Saturday, United Nations Secretary-General Ban Ki-Moon had called Rwandan President Paul Kagame “to request that he use his influence on the M23 to help calm the situation and restrain M23 from continuing their attack,” according to peacekeeping chief Herve Ladsous who spoke at the U.N. headquarters in New York on Saturday.

North Kivu governor Julien Paluku said Saturday that the Congolese army had earlier retreated from Kibumba, which is 30 kilometers (19 miles) north of Goma, after thousands of Rwandans, who he says were backing the rebels, attacked early Saturday.

“Rwandan forces bombarded our positions in Kibumba since early this morning and an estimated 3,500 crossed the border to attack us,” he said Saturday.

In downtown Goma, panicked residents had come out to try to get more information on what was happening. A 45-year-old mother of five said that she has nowhere to go.

“I don’t really know what is happening, I’ve seen soldiers and tanks in the streets and that scares me,” said Imaculee Kahindo. Asked if she planned to leave the city, she said: “What can we do? I will probably hide in my house with my children.”

Hamuli, the spokesman for the Congolese army, denied reports that soldiers were fleeing.

In 2008 as Nkunda’s CNDP rebels amassed at the gates of Goma, reporters inside the city were able to see Congolese soldiers running in the opposite direction, after having abandoned their posts. The Congolese army is notoriously dysfunctional with soldiers paid only small amounts, making it difficult to secure their loyalties during heavy fighting.

“We are fighting 3 kilometers from Goma, just past the airport. And our troops are strong enough to resist the rebels,” said Hamuli. “We won’t let the M23 march into our town,” he said. Asked if his troops were fleeing, he added: “These are false rumors. We are not going anywhere.”

U.N. peacekeeping chief Ladsous said that the rebels were very well-equipped, including with night vision equipment allowing them to fight at night.

Reports by United Nations experts have accused Rwanda, as well as Uganda, of supporting the rebels. Both countries strongly deny any involvement and Uganda said if the charges continue it will pull its peacekeeping troops out of Somalia, where they are playing an important role in pushing out the Islamist extremist rebels.

The U.N. Security Council called for an immediate stop to the violence following a two-hour, closed-door emergency meeting. The council said it would add sanctions against M23 rebels and demanded that rebels immediately stop their advance toward the provincial capital of Goma.

“We must stop the M23″ because Goma’s fall “would, inevitably, turn into a humanitarian crisis,” said France‘s U.N. Ambassador, Gerard Araud. He added that U.N. officials would decide in the coming days which M23 leaders to target for additional sanctions.

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Associated Press writer Maria Sanminiatelli at the United Nations and Rukmini Callimachi in Dakar, Senegal, contributed to this report.

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