Jobs Data Is Strong, but Not Too Strong, Easing Fed Fears

New jobs data on Friday offered hope for this elusive middle ground in
the economy, as the Federal Reserve wrestles with when to ease its
stimulus efforts without endangering the recovery and the markets.

The pace of job creation in June was sufficient to please investors
and keep the central bank on course to slowly begin pulling back on
its major bond-buying program this fall. But the job gains were muted
enough to calm worries of an abrupt exit by the Fed, a fear that has
weighed on the markets lately.

The employment report, which showed the economy added 195,000 jobs,
was the first since the Fed chairman, Ben S. Bernanke, said in June
that policy makers were ready to begin tapering the stimulus later
this year if the labor market continued to improve. The jobless rate
was unchanged, at 7.6 percent.

The timing of the Fed action is critical. The central bank's program
of buying $85 billion a month in Treasury securities and
mortgage-backed bonds has not only kept long-term interest rates low
for borrowers, including big companies as well as individual home
buyers, it has also helped prop up Wall Street.

The possibility that the Fed might move more quickly than expected to
dial back the program has prompted investors to sell both stocks and
bonds in the last six weeks and has raised rates on mortgages and
other loans.

Buoyed by the promise of moderate economic growth and a slow but
steady tapering on the part of the Fed, traders pushed the stock
market higher on Friday, with major indexes gaining about 1 percent.

The 195,000 jobs added in June was significantly above the 165,000
monthly pace analysts had been expecting. And the government sharply
revised upward figures for job gains in April and May, increasing the
average monthly gain in the first half of 2013 to 202,000 jobs.

But the picture painted by the data hardly reflected a booming economy.

The unemployment rate, which is based on a different survey from the
one that tracks job creation, remained stuck at 7.6 percent, far
higher than the historical pattern for this stage of a recovery. Other
measures of joblessness actually rose, with the broadest one that
includes workers forced to accept part-time positions jumping to 14.3
percent, from 13.8 percent.

"Beyond the headline numbers for job growth, it gets a little more
mixed," said Jan Hatzius, chief economist at Goldman Sachs. "There is
still a lot of slack in the labor market."

Although the economy has held up better than some analysts expected in
the face of tax increases and automatic cuts in federal spending this
year, overall growth in economic output has also been tepid. The
economy grew at an annual rate of 1.8 percent in the first quarter,
short of what's needed to quickly lower the unemployment rate.

Still, the job figures for June were enough to prompt Mr. Hatzius and
other leading economists on Wall Street to predict that the Fed could
announce a shift in policy in September, rather than waiting until
December.

"This was a solid report and it will be seen by the Fed as fully
consistent with tapering in September," said Dean Maki, chief United
States economist at Barclays.

In addition, Mr. Maki noted, average hourly earnings rose 2.2 percent
year-over-year, a pace that is near a high for this recovery. Before
setting a firm date, Fed policy makers will be closely watching to see
if the job market maintains momentum through July and August. "It's
not a done deal in September, just more likely," Mr. Hatzius said.

That was benign enough for traders on Friday. The Standard & Poor's
500-stock index rose 16.48, or 1.02 percent, to 1,631.89, while the
Dow Jones industrial average jumped 147.29, or 0.98 percent, to
15,135.84, and the Nasdaq gained 35.71, or 1.04 percent, to finish the
day at 3,479.38.

In the bond market, interest rates moved higher, as investors dumped
debt on anticipation of faster growth and quicker Fed action. The
10-year Treasury note fell 1 30/32, to 91 17/32, while its yield
jumped to 2.74 percent, from 2.50 percent late Wednesday.

The Fed's stance has bolstered long-term rates, but the central bank
is expected to keep short-term rates low at least until 2015.

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Photo of fallen firefighters stirs controversy

PRESCOTT, Ariz. -- A photograph of 19 flags, apparently draped over
body bags on a patch of charred earth, was published Thursday on a
social-media page devoted to the Granite Mountain Hotshots, the
firefighters who died in the Yarnell Hill Fire on Sunday.

The image appears to show the scene of where the 19 firefighters died,
after an honor guard draped the body bags with flags while preparing
to remove them from the hill the day after the fire.
The image turned up on a Facebook page at midafternoon Thursday with
no comment, no credit and no explanation about its source. Within a
few hours, almost 1,000 people had shared it on their own Facebook
pages.

The picture immediately triggered a debate on the page over the
sensitivity of posting the photo. It drew a claim from at least one
family member that the image was intended to stay private, though it
was unclear who would have made that commitment. It also elicited
outrage from a fire department official.

The bodies of the 19 members of the hotshot crew were removed Monday
and taken to Phoenix to undergo autopsies.

The photo was posted on a page devoted to the team, although under the
"about" section, it is described as "a community, news, and donation
page (that) is not directly related to the Granite Mountain Hotshots
personally."

The page was created Monday and includes a long series of links and
photos of the firefighters, mourning family members, along with
information about donation efforts. The page also includes a link to
the Prescott Fire Department's website and includes the name and
office telephone number of the department's wildland division chief,
Darrell Willis.

Contacted by The Republic late Thursday, Willis said he had no
connection to the page and said he did not post the photo or authorize
its posting.

"This is totally unauthorized. It's totally against anything we
committed to," Willis said

He confirmed the authenticity of the photo but said he was upset that
someone would attach his name to a page with the image.

Prescott Fire Chief Dan Fraijo said he was unaware of the post, but
said, "If it was any of our people who (posted) this, I am sure that
they intended it to be in good taste."

After the firefighters were killed Sunday night, investigators and
other fire workers oversaw the area and gathered evidence. On Monday,
a team of fellow Prescott firefighters went to the scene to recover
the bodies. In interviews with The Republic, members of that team
described a solemn ceremony they performed to honor their colleagues:

When the recovery crew arrived, the fallen crew members had already
been placed in body bags. The recovery crew draped each one with an
American flag. An honor guard stood watch as the team prepared for the
trip to the Maricopa County Medical Examiner's Office.

The Republic chose to republish the photo because it depicts the
respect given to these men who gave their lives to protect others.

Robert Steele, a professor of journalism ethics at DePauw University
in Indiana, said the questions about how the photo came into the
public sphere could detract from a powerful image from the tragedy.

The debate "puts a lot of emphasis on how and why this photo became
public and who made it public rather than the photo itself," he said.
"It takes away from the real meaning of the image itself, the pain and
loss and the community agony that comes with the deaths of these 19
firefighters. It becomes a story about the who and why."

The photo started a lively discussion on the Facebook page, with
arguments for and against posting the image publicly. Many commenters
simply offered condolences or saluted the firefighters. Others
criticized the page owner for posting the photo.

"This picture is very overwhelming," one person wrote. "This is a
picture that should be kept private. This does not show respect for
these heroes or their families. I would hope this picture would be
removed."

But others said they appreciated the photo as a show of respect.

"As a firefighter of more than 25 years, I have witnessed tragedies
such as this," one wrote. "I feel that this picture ... is a
meaningful reminder of the sacrifice that these brave, unselfish souls
gave of themselves, and paid the ultimate price."

Several people said that firefighters' families knew about the photo
earlier and were told that it would remain private. A woman who
identified herself in the comments as a relative of one of the dead
firefighters repeated that claim.

Juliann Ashcraft, whose husband, Andrew, was among the fallen
firefighters, said Thursday that she appreciated all that was done to
honor the bodies. She said she knew they were going to be photographed
as a group, but the photos were to be "exclusive to the family."

She hadn't seen the photo online late Thursday, but when she heard
about it, she said: "It makes me sad. But it doesn't make or break
things in the end."

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Madeleine McCann: New leads spark Met formal inquiry

The Met Police said it still believed there was a chance Madeleine was
alive and it was investigating 38 "persons of interest" after
reviewing the evidence.

Madeleine's parents, Gerry and Kate McCann, said the shift from review
to investigation was "a big step forward".

Madeleine was almost four when she disappeared in Portugal in May 2007.

She went missing from her family's holiday flat in the Algarve resort
of Praia da Luz, as her parents dined out with friends at a nearby
restaurant.

Portuguese authorities dropped their investigation into her
disappearance in 2008, but Scotland Yard started a review in May 2011,
after Prime Minister David Cameron had responded to a plea from the
McCanns, of Rothley, Leicestershire.
New theories

Det Ch Insp Andy Redwood, who is heading what has been called
Operation Grange, said: "The review has given us new thinking, new
theories, new evidence and new witnesses."
His 37-strong police team is two-thirds of the way through examining
30,500 documents from files held by the Portuguese, private
investigators and British police. Some fresh interviews have also
taken place.

"Over the last two years what the review has told me is that there is
no clear, definitive proof that Madeleine McCann is dead," Det Ch Insp
Redwood said.

"So on that basis, I still genuinely believe that there is a
possibility that she is alive."

He added: "It is a positive step in our hunt for Madeleine that our
understanding of the evidence has enabled us to shift from review to
investigation."

Scotland Yard's decision to formally open its own investigation -
which, like the review, will be funded by the Home Office - follows
extensive discussions with UK prosecutors and the Portuguese.

BBC home affairs correspondent Danny Shaw said: "It's highly unusual -
although not unprecedented - for a British police force to launch its
own inquiry into an incident abroad."

In a statement, the McCanns said: "Kate and Gerry warmly welcome the
shift in the Met's emphasis from review to investigation.

"It is clearly a big step forward in establishing what happened and,
hopefully, towards bringing whoever is responsible for Madeleine's
abduction to justice."

Det Ch Insp Andy Redwood: "There is no clear, definitive proof that
Madeleine McCann is dead"

The Met said the 38 "persons of interest," who include 12 British
nationals, are from five European countries - Portugal, the UK and
three unnamed others.

Detectives say they need to find out more information and collect
evidence on them and are not anticipating any immediate arrests.

The 12 UK nationals, who are not all currently in the UK, are believed
to have been in Portugal at the time of Madeleine's disappearance.
Portuguese assistance

The Met said it was "at an advanced stage of dialogue" with the other
countries involved, and enquiries would be continuing with their
assistance in the months ahead "to establish more information about
the individuals concerned and any potential involvement".

A foreign national resident abroad could not be prosecuted in the UK
for any possible crime that may be linked to Madeleine's
disappearance.
Detectives say Madeleine's parents, the friends the McCanns were with
in Portugal and people known to the family before they went away are
not suspects or people they need to investigate.

The investigation is currently closed in Portugal and as part of the
country's criminal justice system it cannot be reopened unless judges
are convinced there are solid grounds to do so.

British police have formally asked the Crown Prosecution Service to
submit an international letter of request to Portuguese authorities
for assistance in obtaining evidence relating to their inquiries.

The Met has asked for a small number of its officers to be present in
Portugal for the inquiries there.

As part of the review, a computer-generated image of how Madeleine
might have looked at the age of nine was created with the help of her
family. They marked her 10th birthday on 12 May.

By May 2012 - one year into the review - the Home Office's costs had
reached £1.9m. The Met Police said a more up-to-date figure for the
cost of the review would be released in due course.

The former head of the National Police Improvement Agency Peter
Neyroud said it was a difficult investigation because it involved two
countries, possibly more.

"It was always going to be an expensive inquiry and it is a fine
judgement as to how far you go on but if, as appears, there are fresh
lines of inquiry and a case worth pursuing, there is a young lady out
there who deserves to be reunited with her parents - or a murder case
that deserves to be pursued."

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James Bulger killer Jon Venables to be freed

One of the men who, as a child, killed Liverpool toddler James Bulger
has been freed on parole.

Jon Venables, now in his 30s, was sent back to jail in 2010 for
accessing child pornography.

He got two years in prison after admitting downloading and
distributing indecent child images.

Earlier this year James's mother, Denise Fergus, and father, Ralph
Bulger, both addressed Venables' parole hearing and pushed for him to
remain in prison.

But according to the Press Association, sources today say Venables has
been granted parole.

In 1993 the 10-year-old Venables and friend Robert Thompson abducted
and murdered the two-year-old.

They were jailed for life but released on licence with new identities in 2001.

A Ministry of Justice spokesman said: "The re-release of life-licensed
offenders is directed by the independent Parole Board once they are
satisfied they can be safely managed in the community.

"Their life licence lasts for the rest of their lives, and they may be
recalled to prison at any time for breaching their licence conditions.
Additionally, they will be subject to strict controls and restrictions
for as long as their risk requires them."

A spokesman for the Parole Board said: "We've had confirmation that
all parties have been told and we can confirm that it was a release
decision. He will be released."

Mrs Fergus tweeted: "Just don't believe what I've got 2 go through. AGAIN."

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Pakistan, IMF agree to $5.3 billion bailout

ISLAMABAD (AP) — Pakistan and the International Monetary Fund have
reached an initial agreement on a bailout of at least $5.3 billion.

Pakistani Finance Minister Muhammad Ishaq Dar and IMF mission chief
Jeffrey Franks announced the agreement at a press conference Thursday.

The deal has been approved by the Pakistani government and IMF
staffers in the country. It still needs to be approved by IMF
officials in Washington and the institution's board of directors.

The $5.3 billion loan will be disbursed over a three year period and
will have an interest rate of roughly 3%.

It will be repaid over 10 years after an initial grace period of four years.

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Adly Mansour Is Sworn In as Egypt's Interim President

CAIRO—Adly Mansour, Egypt's new interim president, swore the oath of
office in front of Egypt's Supreme Constitutional Court on Thursday
morning, formalizing a whirlwind insurrection that brought millions of
Egyptians onto the streets and overturned an Islamist president that
only days ago had seemed immutable.

Mr. Mansour swore his oath hours after Egyptian security forces moved
briskly to arrest and detain hundreds of Muslim Brotherhood
leaders—the powerful Islamist organization that has dominated Egyptian
elections over the past two years.

Mohammed Morsi, Egypt's ousted president, was reportedly in police
custody on Thursday morning after he refused to step down from his
post on the orders of Gen. Abdel Fattah Al Sisi on Wednesday night.
Mr. Mansour took two oaths on Thursday morning: The first made him
chief justice of the Supreme Constitutional Court and the second
elevated him to the presidency.

Mr. Mansour has been the head of Egypt's Supreme Constitutional Court
since Monday, but the court's own swearing-in ceremony was delayed for
several days due to massive street protests against Mr. Morsi's rule.

The leader of Egypt's military ousted Mr. Morsi from office and
replaced him with Mr. Mansour late Wednesday evening. The presidential
palace immediately branded the move a "complete military coup."

The announcements capped days of political crisis that brought
millions of Egyptians out to the country's streets, spurring bellicose
rhetoric from Mr. Morsi's backers and Egypt's military, and sparking
deadly violence. Ten people were killed and 481 injured in clashes
around the country on Wednesday, the health ministry said.

Two years after the biggest tremor of the Arab Spring ousted Hosni
Mubarak, and a year after his elected replacement took office,
Egyptian streets again thronged with protesters calling for the
removal of a despot, the stark divides between their celebration and
anger suggesting a new period of political uncertainty lies ahead.

Egypt's acting attorney general on Thursday issued arrest warrants for
Muslim Brotherhood supreme leader Mohamed Badie and his deputy Khairat
al Shater on charges of inciting the killing of protesters, according
to MENA, the state news agency.

The two are wanted on charges of inciting the killing of eight
protesters in front of the Muslim Brotherhood's headquarters in Cairo.
The prosecutor's decision came after eyewitnesses in the neighborhood
said they were able to testify against the Brotherhood leaders,
according to MENA.

The military overthrow poses a new challenge for Washington. The U.S.
has a deep relationship with Egypt's military, which is budgeted to
receive some $1.3 billion in U.S. aid this year. But congressional
legislation demands the U.S. suspend assistance to allied militaries
that are certified as having overthrown democratically elected
governments.

Two powerful U.S. senators on a visit with troops in Afghanistan on
Thursday affirmed that continued assistance from Washington would
hinge on a swift restoration of civilian rule.

"We view with great concern the events that are taking place in
Egypt," said Sen. John McCain (R., Ariz.). "I believe that the defense
minister and the military have to show us and the world that they are
making a rapid transition back to democracy. And that will be, I
think, the indicator to the level of support that we would provide to
Egypt."

Sen. Lindsey Graham (R., S.C.), who serves on the Senate
Appropriations Committee, said the Egyptian military had to abide by
the rule of law as a condition of aid.

"If the democratically elected government is overthrown by the
military, you would suspend all assistance," he said. "It looks like a
coup, it sounds like a coup, but I'm in the camp with Sen. McCain:
Let's look and see how this unfolds."

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Oil price spike could hurt stocks, economy

Oil price spike could hurt stocks, economy
The price of crude oil was trading above $102 a barrel Wednesday --
highest level in over a year — as embattled Egyptian President
Mohammed Morsi vowed not to yield to demands of millions of protesters
that he resign immediately.

The price of crude oil hit $102 a barrel, up 2.4% for the day. The
benchmark crude oil contract for August delivery traded on the New
York Mercantile Exchange gained $1.61 to close at $99.60 a barrel
Tuesday.

The political crisis in Egypt is not only causing heightened
uncertainty in markets, but it is also raising fears that oil prices
could spike if the crisis leads to a supply disruption if the
all-important Suez Canal suffers a blockage or bottleneck, says Don
Rissmiller, an economist at Strategas Research Partners.

"It is certainly fair to put the recent events in Egypt in the 'highly
uncertain' category," Rissmiller told clients in an early-morning
research note Wednesday.
While direct global economic impact of these events is not necessarily
large, "the secondary effects on energy markets and other countries in
the region is worth watching given the location of the Suez canal,"
Rissmiller adds.

So far, he adds, market impact looks relatively muted, in part because
the "Arab Spring" story is not as surprising as it was several years
ago. Broad political upheaval and street demonstrations in the summer
of 2011, dubbed the "Arab Spring," sparked market angst back then.

The stock market could start to suffer if a barrel of oil climbs above
$105 per barrel, warns Andrew Busch, editor and publisher of the Busch
Update newsletter.

"Oil spiking above $105 is problematic," Busch says, adding at those
elevated levels it starts to act as a tax on consumers and "hurt their
spending" on goods and services. Consumer spending accounts for
roughly 70% of economic activity.

The potential combination of rising oil prices and rising interest
rates simultaneously would be a further drag on economic growth. Crude
oil supplies in the U.S. fell last week, the government said
Wednesday. Supplies declined by 10.3 million barrels, or 2.6%, to
383.8 million barrels. That's just 0.2% above year-ago levels, the
Energy Department's Energy Information Administration said.

Scott Anderson, chief economist at Bank of the West, says the economy
can withstand a move above $100 a barrel, assuming it is above that
level for a short time. And, more important, any oil disruption would
cause an economic drain only if it translated into higher costs at the
gas pumps for U.S. consumers.

Anderson says that "$100 a barrel oil would be an unwelcome outcome
for U.S. consumers if we stayed above that level for awhile."

"We need to have had follow through with gas prices to cause major
problems. Gas prices have been better behaved then oil prices,"
Anderson adds.

Egypt's military has drawn up a plan to suspend the Islamist-backed
constitution, dissolve the Islamist-dominated legislature and set up
an interim administration headed by the country's chief justice if
Morsi fails to reach a solution with his opponents by the end of a
Wednesday deadline, Egypt's state news agency reported.
Morsi has rejected the ultimatum, and clashes between his supporters
and opponents have steadily intensified. Well over a dozen people were
killed in a single incident of fighting outside Cairo University on
Tuesday night.

Egypt is not an oil producer but its control of the Suez canal, one of
the world's busiest shipping lanes which links the Mediterranean with
the Red Sea, gives it a crucial role in maintaining global energy
supplies.

Around 2.5 million barrels of crude oil pass through the Suez Canal or
the SUMED pipeline each day, according to Capital Economics.

Despite the recent instability in Egypt, Julian Jessop, an analyst at
Capital Economics, says he is sticking with his call that oil prices
will finish 2013 below $100 a barrel.

His market call is based on his belief that global demand will remain
sluggish due to a weak global economy, oil supplies will remain ample,
and Middle East worries will fade once again.

Even if oil supplies from the region were threatened due to
Egypt-related causes, Jessop stresses that "any fall-out for global
oil markets to be more than offset by releases from the vast strategic
reserves held by the U.S. and its allies."

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