Apple claims Einhorn lawsuit tries to hold investors 'hostage'




Apple accused an activist hedge fund manager of attempting to hold investors "hostage" in his effort to get the electronics giant to share more of its massive cash reserves with investors.


The charge came today in Apple's response to a lawsuit filed last week by Greenlight Capital, which asserts that the company needed to distribute preferred stock to current shareholders and that Apple had balked at the idea when it was first discussed. The filing comes a day after Apple CEO Tim Cook called the lawsuit a "silly sideshow."


"Shareholders should not be held hostage to plaintiffs' attempts to coerce Apple into an agreement that serves plaintiffs' financial interests," Apple said in its 27-page response (see below), adding that "the proposed injunction would harm the public interest."


Apple's latest proxy statement, which details items up for a vote at its February 27 shareholder meeting, includes a proposal that would eliminate "blank check" preferred stock. Greenlight Capital, which is run by the famed short seller David Einhorn, seeks an injunction to prevent Apple from bundling that provision with several other items. He wants each item to be voted on separately.


Apple claims in its response that the proposal does not constitute "improper bundling" because though the proxy identifies separate aspects of the proposal, shareholders are being asked only whether to amend the articles.


"There are numerous examples of proxy proposals that combine multiple changes to a single corporate document, including elimination of the 'blank check' authority to issue preferred stock," Apple stated.


Apple also called the suggestion of issuing an amended proxy "unworkable" because it would impose "millions of dollars" in administrative costs and delay a shareholder meeting.



"In short, plaintiffs cannot show any hardship of not obtaining injunctive relief, much less hardship that is greater than the financial harm to Apple and its shareholders of not having Proposal No. 2 put to a vote," Apple said in its filing, which noted that the proxy filing was submitted to the Securities and Exchange Commission for review but raised no red flags.


Apple Chief Financial Officer Peter Oppenheimer stated in a court declaration that during a conference call on February 6 Einhorn referred to the necessity of shareholder approval for issuance of new stock a "roadblock" that would just "make it harder." Einhorn said during the call that he wanted to "take the risk away," Oppenheimer said.


CNET has contacted Greenlight Capital for comment on the filing and will update this report when we learn more.


Einhorn has described Apple as a phenomenal company but one that's too cautious with its cash.


"It has sort of a mentality of a depression," Einhorn said during a CNBC interview last week. "In other words, people who have gone through traumas -- and Apple's gone through a couple traumas in its history -- they sometimes feel they can never have enough cash."


Speaking during a Goldman Sachs conference in San Francisco yesterday, Cook disputed those claims and said the company makes "bold and ambitious" bets on products while being conservative financially. He noted that Apple invested about $10 billion in capital expenditures last year and that it will spend a similar amount this year along with investing in retail stores, distribution, R&D, supply chain, and acquisitions.


"I don't know how a company with a Depression-era mindset would have done all those things," Cook said.


The company has defended its management of its cash reserves, which totaled more than $137 billion in cash and securities as of December, saying it has already delivered $10 billion of its plan to return $45 billion to shareholders over three years. It reinitiated a dividend last year and also has plans to buy back stock.


Apple Response to Einhorn suit by CNET News


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American, US Airways set to clinch merger

(MoneyWatch) American Airlines and US Airways (LCC) are set to announce a merger that would create the world's biggest carrier.

Under the deal, which is expected to be unveiled Thursday if the timeline isn't moved up sooner and there are no last-minute snags, the combined airline would keep the "American" name. It would still require federal approval, although that is virtually ensured. US Air CEO Doug Parker is expected to lead the combined company.

A merger of US Air and American would surpass a 2010 tie-up between United Airlines (UAL) and Continental and a 2008 deal joining Delta (DAL) and Northwest. The merged American would be the largest carrier and sport a market valuation of roughly $10 billion.

Although airlines tout such consolidation as a way to cut costs and expand service amid intense competition, whether industry mergers raise fares is an open question. Many analysts say yes because reduced competition in any business often results in higher prices. One study found that ticket prices went up more than 20 percent between Detroit and Atlanta after Delta bought Northwest. Fares went up more than 30 percent on routes between Chicago and Houston, as well as Newark to San Francisco, after the United-Continental deal.

In seeking to run more efficiently, merging airlines also often cut capacity and eliminate routes. 



Play Video


American close to merger with U.S. Airways



Other analysts are more optimistic about the potential benefits to travelers. They say the three largest U.S. airlines still must compete with discount carriers such as Southwest (LUV), which has flourished for years by offering low-cost flights and no-frills service.

The consolidation trend is largely blamed on the price of fuel. Oil now costs so much more per barrel than it did 10 years ago that one analyst says the margin of profit on many flights has shrunk to the value of a single seat. That means an airline can lose money if it flies with one single empty middle seat. The days of elbow room are over.

American Airlines has been operating under court supervision since declaring bankruptcy in November 2011.

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Ship Stranded: Love Boat to Horror Honeymoon













A Texas couple's fantasy wedding quickly turned into a nightmare honeymoon when the fire-damaged Carnival Cruise ship carrying them became stranded in the Gulf of Mexico.


Rob Mowlam, 37, and Stephanie Stevenson, 27, of Nederland, Texas, got married on the Carnival Triumph on Saturday. The four-day cruise was meant to be back to shore on Monday, but was left disabled by an engine fire on Sunday.


The ship is being slowly towed to shore and is expected to dock in Mobile, Ala., on Thursday if weather permits. The vessel is without air conditioning, many working toilets and some restaurant service. Passengers, many who are sleeping in tents on deck, have told ABC News the smell on the ship is foul.


That is the honeymoon setting for Mowlam and Stevenson.


"[Rob Mowlam] had been with his girlfriend, or fiance, for a long period of time and they just took the next step," Mowlam's brother James Mowlam III told ABCNews.com. "The captain is the king of the world when they're on the boat and he hitched them up."


James Mowlam said he was shocked when he heard about the stranded boat and the increasingly dire conditions on the ship.


"It is an atrocious scene to be subjected to," he said.


Mowlam said he has not been able to communicate with his brother, but that his father has had sporadic communication with him.


"It would be my guess that this would probably not be on anyone's great list of memorable wedding experiences," Mowlam said with a laugh. "Although, my mom told him that she was hoping they had a memorable wedding and I think this would classify as a memorable wedding experience."






Lt. Cmdr. Paul McConnell/U.S. Coast Guard/AP Photo











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The bride's brother, Justin Davis, told ABCNews.com that his sister works for a doctor's office and the cruise was a gift from the doctor to the staff.


Davis has not been able to speak to Stevenson but said that her two young sons are being cared for by her mother. He said his sister is tough and he guesses she's probably not scared.


"She might be a little aggravated at the situation, but I'd say she's [probably] handling it really well," he said.


Others on the ship do not seem to be handling the situation so well.


Elderly and disabled passengers aboard the ship are struggling to cope with the worsening conditions, according to at least one passenger.


"Elderly and handicap are struggling, the smell is gross," passenger Ann Barlow text-messaged ABC News overnight. "Our room is leaking sewage."


The head of Carnival Cruise Lines said the British-U.S.-owned company was working hard to ensure the thousands of passengers stranded on the disabled ship were as comfortable as possible while the vessel was being towed to a port in Alabama.


"I need to apologize to our guests and to our families that have been affected by a very difficult situation," Carnival Cruise Lines president and CEO Gerry Cahill said at a news conference Tuesday evening.


It was the first time since a fire erupted in Triumph's engine room Sunday, knocking out its four engines, that a company representative had spoken publicly. The Triumph, with roughly 4,200 people on board, was left bobbing like a 100,000-ton cork for more than 24 hours. Giant sea-faring tugboats then hooked up to the ship and began towing the nearly 900-foot-long ship to land.


Carnival spokeswoman Joyce Oliva told The Associated Press Tuesday that a passenger with a pre-existing medical condition was taken off the ship as a precaution. Everyone else will likely have to weather conditions such as scarce running water, no air conditioning and long lines for food.


Back on land, passenger Barlow's 11-year-old twins told ABC News Tuesday they are worried as more passengers continue to talk about living with limited power and sanitation.






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Ovation for Pope Benedict at final public mass


VATICAN CITY (Reuters) - A capacity crowd in St Peter's Basilica gave Pope Benedict a thunderous standing ovation on Wednesday at an emotional last public Mass before he resigns at the end of the month.


"Thank you. Now, let's return to prayer," the 85-year-old pontiff said, bringing an end to several minutes of applause that clearly moved him. In an unusual gesture, bishops took off their mitres in a sign of respect and a few of them wept.


One of the priests at the altar, which according to tradition rests above the tomb of St Peter, took out a handkerchief to dry his tears.


The Mass was moved to St Peter's from a venue in Rome so more people could attend. Hundreds of others waited outside.


Hours earlier in the Vatican's modern audience hall, a visibly moved Benedict tried to assure his worldwide flock, saying he was confident his decision to step down would not hurt the Church.


The Vatican, meanwhile, announced that a conclave to elect his successor would start sometime between March 15 and March 20, in keeping with Church rules about the timing of such gatherings after the papal see becomes vacant.


"Continue to pray for me, for the Church and for the future pope," he said in unscripted remarks at the start of his weekly general audience, his first public appearance since his shock decision on Monday that he will step down on February 28.


It was the first time Benedict, 85, who will retire to a convent inside the Vatican, exchanging the splendor of his 16th century Apostolic Palace for a sober modern residence, had uttered the words "future pope" in public.


Church officials are still so stunned by the move that the Vatican experts have yet to decide what his title will be and whether he will continue to wear the white of a pope, the red of a cardinal or the black of an ordinary priest.


His voice sounded strong at the audience but he was clearly moved and his eyes appeared to be watering as he reacted to the thunderous applause in the Vatican's vast audience hall, packed with more than 8,000 people.


In brief remarks in Italian that mirrored those he read in Latin to stunned cardinals on Monday he appeared to try to calm Catholics' fears of the unknown.


He message was that God would continue to guide the Church.


EXAMINATION OF CONSCIENCE


"I took this decision in full freedom for the good of the Church after praying for a long time and examining my conscience before God," he said.


He said he was "well aware of the gravity of such an act," but also aware that he no longer had the strength required to run the 1.2 billion member Roman Catholic Church, which has been beset by a string of scandals both in Rome and round the world.


Benedict said he was sustained by the "certainty that the Church belongs to Christ, who will never stop guiding it and caring for it" and suggested that the faithful should also feel comforted by this.


He said that he had "felt almost physically" the affection and kindness he had received since he announced the decision.


When Benedict resigned on Monday, the Vatican spokesman said the pontiff did not fear schism in the Church after his resignation.


Some 115 cardinals under the age of 80 will be eligible to enter a secret conclave to elect his successor.


Cardinals around the world have already begun informal consultations by phone and email to construct a profile of the man they think would be best suited to lead the Church in a period of continuing crisis.


The conservative Benedict has appointed more than half of the cardinals who will elect his successor so it is unlikely the new man will tamper with any teachings such as the ban on artificial birth control or women priests.


But many in the Church have been calling for the election of someone who they say will be a better listener to other opinions in the Church.


The likelihood that the next pope would be a younger man and perhaps a non-Italian, was increasing, particularly because of the many mishaps caused by Benedict's mostly Italian top aides.


Benedict has been faulted for putting too much power in the hands of his friend, Secretary of State Cardinal Tarcisio Bertone. Critics of Bertone, effectively the Vatican's chief administrator, said he should have prevented some papal mishaps and bureaucratic blunders.


ILL-SERVED POPE


"These scandals, these miscommunications, in many cases were caused by Pope Benedict's own top aides and I think a lot of Catholics around the world think that he was perhaps ill-served by some of the cardinals here," said John Thavis, author of a new book, The Vatican Diaries.


Benedict's papacy was rocked by crises over sex abuse of children by priests in Europe and the United States, most of which preceded his time in office but came to light during it.


His reign also saw Muslim anger after he compared Islam with violence. Jews were upset over rehabilitation of a Holocaust denier. During a scandal over the Church's business dealings, his butler was accused of leaking his private papers.


"When cardinals arrive here for the conclave ... they are going to have this on their mind, they're going to take a good hard look at how Pope Benedict was served, and I think many of them feel that the burden of the papacy that finally weighed so heavy on Benedict was caused in part by some of this in-fighting (among his administration)," Thavis told Reuters.


Vatican spokesman Father Federico Lombardi urged the faithful to remain confident in the Church and its future.


"Those who may feel a bit disorientated or stunned by this, or have a hard time understanding the Holy Father's decision should look at it in the context of faith and the certainty that Christ will support his Church," Lombardi said.


Lombardi said that on his last day in office, Benedict would receive cardinals in a farewell meeting and after February 28 his ring of office, used to seal official documents, would be destroyed just as if he had died.


(Reporting by Philip Pullella; Editing by Giles Elgood)



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Zuckerberg owns nearly a third of Facebook: US regulators






SAN FRANCISCO: Mark Zuckerberg's stake in Facebook has climbed to nearly 30 percent since the leading social network made its dismal stock market debut, according to a filing Wednesday with US regulators.

Zuckerberg owns 632.65 million Facebook shares as compared with the slightly more than 500 million he held in September when the stock's sagging price prompted a promise he would not sell any for at least a year.

Zuckerberg sold about 30 million shares when the Menlo Park, California-based social network made its stock market debut in May at an opening price of $38.

Shares slid to a low of $17.55 in September but have regained ground, trading at $28.04 at the close of trading on the Nasdaq exchange on Wednesday.

Securities and Exchange Commission filings show Zuckerberg has been building his stake Facebook, the potential of which he contends is underestimated by the market.

One SEC filing showed that Zuckerberg acquired 18 million Facebook shares in mid-December at a price of zero, indicating they were tied to his compensation as chief of the social network.

-AFP/gn



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Shatner: J.J. Abrams a 'pig' for taking on 'Star Wars'



William Shatner

William Shatner speaks to Movie Fanatic.



(Credit:
Video screenshot by Amanda Kooser/CNET)


J.J. Abrams is a busy man. The director who breathed new life into the "Star Trek" film franchise recently agreed to helm the new "Star Wars" movie. This may have fueled geeky fever dreams of crossover "Star Trek"/"Star Wars" projects, but it also led to some head-scratching. Does Abrams really have time to head up two major sci-fi film series?


"Star Trek" did have Abrams first. His sudden commitment to "Star Wars" may have left a few Trekkies feeling like they've gotten involved in an unexpected cinematic menage a trois. That's why I have some sympathy for William Shatner's recent comments to Movie Fanatic.

When asked to share his thoughts on Abrams adding "Star Wars" to his resume, Shatner said, "He's being a pig. He's collecting the two franchises and holding them close to his vest. And he's probably the most talented director of that ilk we have, but he's gone too far this time."




It sounds like we have a little bit of sci-fi smack talk going on here. Shatner goes on to say that he thinks of Abrams as a buddy and they've had sushi together. Then, things take a turn toward the heart of the matter. Shatner says he needs to have another talk with Abrams about his foolhardiness in not employing Shatner for either franchise.


We all know Shatner has a sense of humor, but his body language and tone come across as pretty serious in the video of the interview. It looks like he's not satisfied with just doing Priceline commercials anymore. I'm trying to imagine what role he would play in "Star Wars." Darth Tiberius, anyone?



(Via GeekTyrant)


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State of the Union: "Act two" of Obama's 2nd term

When the curtain rises on President Obama's State of the Union speech tonight, the White House wants it viewed as "Act Two" - a follow-up to the national goals and policy objectives of which he spoke 22 days earlier on the West Front of the Capitol.

"The president has always viewed the two speeches, the inaugural address and the State of The Union, as two acts in the same play," said press secretary Jay Carney yesterday.

Though Mr. Obama has given more speeches this year on his proposals to stem gun violence and overhaul immigration policy, the "core emphasis" of his speech tonight is the economy.

"You'll hear from the president a very clear call for the need to take action to help our economy grow and help it create jobs," said Carney.

That includes the showdown with Congress over the mandatory spending cuts due to take effect starting March 1.




Play Video


Valerie Jarrett on SOTU: "An optimistic vision"



The president will urge Congress "not to shoot the economy in the foot," said Carney, by agreeing to his plan to avert the across-the-board spending cuts which the White House portrays as mindless and severe.

The president will again make it clear he wants a "balanced" plan that calls for additional tax revenue from America's top earners.

"My message to Congress is this: let's keep working together to solve this problem," the president said Saturday in his weekly address.

But Republican leaders say Mr. Obama already got his tax hikes as part of the "fiscal cliff" package, and now needs to focus exclusively on reductions in spending.


It'll be Mr. Obama's seventh appearance before a Joint Session of Congress and he'll be taking the rostrum aware that the national unemployment rate still hovers just under 8 percent and economic growth fell into negative territory at the end of 2012.

"The economy is not in a worse place than it was before," said Carney, pointing to the progress made since Mr. Obama's first State of the Union Address. "We were in economic freefall."

He said the president will make the case that "we are at a moment when the economy is poised to continue to grow...to build on the job creation that we've achieved -- over 6.1 million jobs created by our businesses over the past 35 or 36 months."

Carney added the president will propose further steps to grow the economy in a way that makes the middle class more secure and helps those trying to climb the ladder into the middle class.

"That is absolutely going to be his focus in the second term as it was in the first term," said Carney.


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Officer Dies After Dorner Shootout; Cabin on Fire













The remote California mountain cabin in which fugitive ex-cop Christopher Dorner has barricaded himself in tense standoff with police is on fire, following a shootout with police in which one officer was killed and another wounded.


A single shot was heard from inside the cabin before flames and a large column of black smoke was seen rising above the snow-covered trees near Big Bear, Calif., ABC station KABC-TV in Los Angeles reported.


Dorner is a former Navy marksman and Los Angeles Police Department officer charged with murdering a police officer and suspected in the deaths of two other people, including the daughter of a former LAPD captain, earlier this month.


Dozens of local, state and federal authorities are at the scene in the San Bernardino Mountains, and have the the cabin surrounded. Dorner has sworn to kill police and their family members in a manifesto discovered online last week.


FULL COVERAGE: Christopher Dorner Manhunt


The search for Dorner, one of the largest manhunts in recent memory, took a turn this afternoon when police received a call that a suspect resembling Dorner had broken into a home in the Big Bear area, taken hostages and stolen a car.


Police said the former cop, believed to be heavily armed and extremely dangerous, took two women hostage before stealing a car just around 12:20 p.m. PT, police said.






Los Angeles Police Department/AP Photo











Christopher Dorner Manhunt: Police Exchange Fire With Possible Suspect Watch Video









Fugitive Ex-Cop Believed Barricaded in Cabin, California Cops Say Watch Video









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The two hostages, who were tied up by Dorner but later escaped, were evaluated by paramedics and were determined to be uninjured.


Officials say Dorner crashed the stolen vehicle and fled on foot to the cabin where he barricaded himself and exchanged fire with deputies from the San Bernardino Sheriff's Office and state Fish and Game officers.


Two deputies were wounded in the firefight and airlifted to a nearby hospital, where one died, police said. The second deputy was in surgery and was expected to survive, police said.



PHOTOS: Former LAPD Officer Suspected in Shootings


Police have sealed all roads going into the area and imposed a no-fly zone above the cabin, nestled in a wooded area that has received several inches of snow in recent days.


Four Big Bear area schools were briefly placed on lockdown.


The San Bernardino County Sheriff's Department stopped all traffic leaving the area and thoroughly searched vehicles, as SWAT team and tactical units could be seen driving toward the cabin, their sirens blaring.


Authorities say they believe Dorner may be watching reports of the standoff and have asked media not to broadcast images of police surrounding the cabin.


"If he's watching this, the message ... is: Enough is enough. It's time to turn yourself in. It's time to stop the bloodshed. It's time to let this event and let this incident be over," said Los Angeles Police Department spokesman Andy Smith, told reporters at a press conference.


Dorner faces capital murder charges that involve the killing of Riverside police officer Michael Crain, who was gunned down in an ambush last Thursday.


Since then a massive manhunt has been under way, focused primarily in the San Bernardino Mountains, but extending to neighboring states and as far away as Mexico.


A capital murder charge could result in the death penalty if Dorner is captured alive and convicted. Crain was married with two children, aged 10 and 4.





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North Korean nuclear test draws anger, including from China


SEOUL (Reuters) - North Korea conducted its third nuclear test on Tuesday in defiance of U.N. resolutions, drawing condemnation from around the world, including from its only major ally, China, which summoned the North Korean ambassador to protest.


Pyongyang said the test was an act of self-defense against "U.S. hostility" and threatened stronger steps if necessary.


The test puts pressure on U.S. President Barack Obama on the day of his State of the Union speech and also puts China in a tight spot, since it comes in defiance of Beijing's admonishments to North Korea to avoid escalating tensions.


The U.N. Security Council held an emergency meeting at which its members, including China, "strongly condemned" the test and vowed to start work on appropriate measures in response, the president of the council said.


North Korean leader Kim Jong-un, the third of his line to rule the country, has presided over two long-range rocket launches and a nuclear test during his first year in power, pursuing policies that have propelled his impoverished and malnourished country closer to becoming a nuclear weapons power.


North Korea said the test had "greater explosive force" than those it conducted in 2006 and 2009. Its KCNA news agency said it had used a "miniaturized" and lighter nuclear device, indicating it had again used plutonium, which is suitable for use as a missile warhead.


China, which has shown signs of increasing exasperation with the recent bellicose tone of its reclusive neighbor, summoned the North Korean ambassador in Beijing and protested sternly, the Foreign Ministry said.


Foreign Minister Yang Jiechi said China was "strongly dissatisfied and resolutely opposed" to the test and urged North Korea to "stop any rhetoric or acts that could worsen situations and return to the right course of dialogue and consultation as soon as possible".


Analysts said the test was a major embarrassment to China, which is a permanent member of the Security Council and North Korea's sole major economic and diplomatic ally.


Obama called the test a "highly provocative act" that hurt regional stability.


"The danger posed by North Korea's threatening activities warrants further swift and credible action by the international community. The United States will also continue to take steps necessary to defend ourselves and our allies," Obama said.


U.S. Ambassador to the United Nations Susan Rice said Washington and its allies intended to "augment the sanctions regime" already in place due to Pyongyang's previous atomic tests. North Korea is already one of the most heavily sanctioned states in the world and has few external economic links that can be targeted.


Japanese Prime Minister Shinzo Abe said the test was a "grave threat" that could not be tolerated.


Russian Foreign Minister Sergei Lavrov urged North Korea to abandon its nuclear arms program and return to talks. NATO condemned the test as an "irresponsible act."


South Korea, still technically at war with North Korea after a 1950-53 civil war ended in a mere truce, also denounced the test. Obama spoke to South Korean President Lee Myung-bak on Tuesday and told him the United States "remains steadfast in its defense commitments" to Korea, the White House said.


MAXIMUM RESTRAINT


North Korea's Foreign Ministry said the test was "only the first response we took with maximum restraint".


"If the United States continues to come out with hostility and complicates the situation, we will be forced to take stronger, second and third responses in consecutive steps," it said in a statement carried by the official KCNA news agency.


North Korea - which gave the U.S. State Department advance warning of the test - often threatens the United States and its "puppet", South Korea, with destruction in colorful terms.


North Korea told the U.N. disarmament forum in Geneva that it would never bow to resolutions on its nuclear program and that prospects were "gloomy" for the denuclearization of the divided Korean peninsula because of a "hostile" U.S. policy.


Suzanne DiMaggio, an analyst at the Asia Society in New York, said North Korea had embarrassed China with the test. "China's inability to dissuade North Korea from carrying through with this third nuclear test reveals Beijing's limited influence over Pyongyang's actions in unusually stark terms," she said.


Mark Fitzpatrick of the International Institute for Strategic Studies think tank, said: "The test is hugely insulting to China, which now can be expected to follow through with threats to impose sanctions."


The magnitude of the explosion was roughly twice that of the 2009 test, according to the Vienna-based Comprehensive Nuclear-Test Ban Treaty Organization. The U.S. Geological Survey said that a seismic event measuring 5.1 magnitude had occurred.


U.S. intelligence agencies were analyzing the event and found that North Korea probably conducted an underground nuclear explosion with a yield of "approximately several kilotons", the Office of the Director of National Intelligence said.


Nuclear experts have described Pyongyang's previous two tests as puny by international standards. The yield of the 2006 test has been estimated at less than 1 kiloton (1,000 tons of TNT equivalent) and the second at some 2-7 kilotons, compared with 20 kilotons for a Nagasaki-type bomb.


Initial indications are that the test involved the latest version of a plutonium-based prototype weapon, according to one current and one former U.S. national security official. Both previous tests involved plutonium. If it turns out the test was of a new uranium-based weapon, it would show that North Korea has made more progress on uranium enrichment than previously thought.


The United States uses WC-135 Constant Phoenix "sniffer" aircraft to collect samples to identify nuclear explosions. These would need to be deployed quickly to detect whether highly enriched uranium rather than plutonium was used because uranium decays to undetectable levels within a matter of days. Plutonium takes much longer to decay.


North Korea trumpeted news of the test on its state television channel to patriotic music against a backdrop of its national flag.


"It was confirmed that the nuclear test that was carried out at a high level in a safe and perfect manner using a miniaturized and lighter nuclear device with greater explosive force than previously did not pose any negative impact on the surrounding ecological environment," KCNA said.


North Korea linked the test to its technical prowess in launching a long-range rocket in December, a move that triggered the U.N. sanctions, backed by China, that Pyongyang said prompted it to take Tuesday's action.


The North's ultimate aim, Washington believes, is to design an intercontinental ballistic missile capable of carrying a nuclear warhead that could hit the United States. North Korea says the program is aimed at putting satellites in space.


Despite its three nuclear tests and long-range rocket tests, North Korea is not believed to be close to manufacturing a nuclear missile capable of hitting the United States.


It used plutonium in previous nuclear tests and before Tuesday there had been speculation that it would use highly enriched uranium so as to conserve its plutonium stocks, as testing eats into its limited supply of materials to construct a nuclear bomb.


"VICIOUS CYCLE"


When Kim Jong-un, who is 30, took power after his father's death in December 2011, there were hopes that he would bring reforms and end Kim Jong-il's "military first" policies.


Instead, North Korea, whose economy is smaller than it was 20 years ago and where a third of children are believed to be malnourished, appears to be trapped in a cycle of sanctions followed by further provocations.


"The more North Korea shoots missiles, launches satellites or conducts nuclear tests, the more the U.N. Security Council will impose new and more severe sanctions," said Shen Dingli, a professor at Shanghai's Fudan University. "It is an endless, vicious cycle."


Options for the international community appear to be in short supply. Diplomats at the United Nations said negotiations on new sanctions could take weeks since China is likely to resist tough new measures for fear they could lead to further retaliation by the North Korean leadership.


Beijing has also been concerned that tougher sanctions could further weaken North Korea's economy and prompt a flood of refugees into China.


Tuesday's action appeared to have been timed for the run-up to February 16 anniversary celebrations of Kim Jong-il's birthday, as well as to achieve maximum international attention.


Significantly, the test comes at a time of political transition in China, Japan and South Korea, and as Obama begins his second term. The U.S. president will likely have to tweak his State of the Union address due to be given on Tuesday.


Japanese Prime Minister Shinzo Abe is bedding down a new government and South Korea's new president, Park Geun-hye, is preparing to take office on February 25.


China too is in the midst of a once-in-a-decade leadership transition to Xi Jinping, who takes office in March. Both Abe and Xi are staunch nationalists.


The longer-term game plan from Pyongyang may be to restart international talks aimed at winning food and financial aid. China urged it to return to the stalled "six-party" talks on its nuclear program, hosted by China and including the two Koreas, the United States, Japan and Russia.


Its puny economy and small diplomatic reach mean that North Korea struggles to win attention on the global stage - other than through nuclear tests and attacks on South Korea, the last of which was made in 2010.


"Now the next step for North Korea will be to offer talks... - any form to start up discussion again to bring things to their advantage," predicted Jeung Young-tae, senior research fellow at the Korea Institute for National Unification in Seoul.


(Additional reporting by Jack Kim, Christine Kim and Jumin Park in SEOUL; Linda Sieg in TOKYO; Louis Charbonneau and Michelle Nichols at the UNITED NATIONS; Fredrik Dahl in VIENNA; Michael Martina and Chen Aizhu in BEIJING; Mette Fraende in COPENHAGEN; Adrian Croft, Charlie Dunmore and Justyna Pawlak in BRUSSELS; Mark Hosenball, Paul Eckert, Roberta Rampton, Tabassum Zakaria and Jeff Mason in WASHINGTON; Editing by Nick Macfie, Claudia Parsons and David Brunnstrom)



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17 gunmen dead in Thai military base attack

 





BANGKOK, Thailand: Scores of heavily-armed gunmen stormed a military base in unrest-plagued southern Thailand, an army spokesman said on Wednesday, in a major assault that left at least 17 militants dead.

"Some 100 fully armed militants stormed the base, where there were 60 marines," Colonel Pramote Promin, southern army spokesman, told AFP.

He said the attack, one of the most ambitious in several years of violence in Thailand's three southernmost provinces, had left at least 17 assailants dead. No military casualties were reported.

- AFP/de




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