North Korea to target U.S. with nuclear, rocket tests


SEOUL (Reuters) - North Korea said on Thursday it would carry out further rocket launches and a nuclear test that would target the United States, dramatically stepping up its threats against a country it called its "sworn enemy".


The announcement by the country's top military body came a day after the U.N. Security Council agreed to a U.S.-backed resolution to censure and sanction North Korea for a rocket launch in December that breached U.N. rules.


North Korea is not believed to have the technology to deliver a nuclear warhead capable of hitting the continental United States, although its December launch showed it had the capacity to deliver a rocket that could travel 10,000 km (6,200 miles), potentially putting San Francisco in range, according to an intelligence assessment by South Korea.


"We are not disguising the fact that the various satellites and long-range rockets that we will fire and the high-level nuclear test we will carry out are targeted at the United States," North Korea's National Defence Commission said, according to state news agency KCNA.


North Korea is believed by South Korea and other observers to be "technically ready" for a third nuclear test, and the decision to go ahead rests with leader Kim Jong-un, who pressed ahead with the December rocket launch in defiance of the U.N. sanctions.


China, the one major diplomatic ally of the isolated and impoverished North, agreed to the U.S.-backed resolution and it also supported resolutions in 2006 and 2009 after Pyongyang's two earlier nuclear tests.


Thursday's statement by North Korea represents a huge challenge to Beijing as it undergoes a leadership transition, with Xi Jinping due to take office in March.


China's Foreign Ministry called for calm and restraint and a return to six-party talks, but effectively singled out North Korea, urging the "relevant party" not to take any steps that would raise tensions.


"We hope the relevant party can remain calm and act and speak in a cautious and prudent way and not take any steps which may further worsen the situation," ministry spokesman Hong Lei told reporters at a regular press briefing.


North Korea has rejected proposals to restart the talks aimed at reining in its nuclear capacity. The United States, China, Russia, Japan and the two Koreas are the six parties involved.


"After all these years and numerous rounds of six-party talks we can see that China's influence over North Korea is actually very limited. All China can do is try to persuade them not to carry out their threats," said Cai Jian, an expert on Korea at Fudan University in Shanghai.


Analysts said the North could test as early as February as South Korea prepares to install a new, untested president or that it could choose to stage a nuclear explosion to coincide with former ruler Kim Jong-il's Feb 16 birthday.


"North Korea will have felt betrayed by China for agreeing to the latest U.N. resolution and they might be targeting (China) as well (with this statement)," said Lee Seung-yeol, senior research fellow at Ewha Institute of Unification Studies in Seoul.


U.S. URGES NO TEST


Washington urged North Korea not to proceed with a third test just as the North's statement was published on Thursday.


"Whether North Korea tests or not is up to North Korea," Glyn Davies, the top U.S. envoy for North Korean diplomacy, said in the South Korean capital of Seoul.


"We hope they don't do it. We call on them not to do it," Davies said after a meeting with South Korean officials. "This is not a moment to increase tensions on the Korean peninsula."


The North was banned from developing missile and nuclear technology under sanctions dating from its 2006 and 2009 nuclear tests.


A South Korean military official said the concern now is that Pyongyang could undertake a third nuclear test using highly enriched uranium for the first time, opening a second path to a bomb.


North Korea's 2006 nuclear test using plutonium produced a puny yield equivalent to one kiloton of TNT - compared with 13-18 kilotons for the Hiroshima bomb - and U.S. intelligence estimates put the 2009 test's yield at roughly two kilotons


North Korea is estimated to have enough fissile material for about a dozen plutonium warheads, although estimates vary, and intelligence reports suggest that it has been enriching uranium to supplement that stock and give it a second path to the bomb.


According to estimates from the Institute for Science and International Security from late 2012, North Korea could have enough weapons grade uranium for 21-32 nuclear weapons by 2016 if it used one centrifuge at its Yongbyon nuclear plant to enrich uranium to weapons grade.


North Korea has not yet mastered the technology needed to make a nuclear warhead small enough for an intercontinental missile, most observers say, and needs to develop the capacity to shield any warhead from re-entry into the earth's atmosphere.


North Korea gave no time-frame for the coming test and often employs harsh rhetoric in response to U.N. and U.S. actions that it sees as hostile.


The bellicose statement on Thursday appeared to dent any remaining hopes that Kim Jong-un, believed to be 30 years old, would pursue a different path from his father, Kim Jong-il, who oversaw the country's military and nuclear programs.


The older Kim died in December 2011.


"The UNSC (Security Council) resolution masterminded by the U.S. has brought its hostile policy towards the Democratic Peoples Republic of Korea (North Korea) to its most dangerous stage," the commission was quoted as saying.


(Additional reporting by Christine Kim in SEOUL, Ben Blanchard and Sui-Lee Wee in Beijing; Writing by David Chance; Editing by Raju Gopalakrishnan and Ron Popeski)



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Asian shares fall, choppy after China PMI, North Korea threat

TOKYO (Reuters) - Asian shares fell on Thursday in choppy trade, as positive Chinese manufacturing data was eclipsed by North Korea threatening a nuclear test and on below-view results from Apple Inc .


"Markets see a global economic recovery trend but there is no consensus on the strength of growth, capping many markets. Equities have been clearly benefiting from accommodative monetary conditions," said Koichiro Kamei, managing director at financial research firm Market Strategy Institute.


China's HSBC flash purchasing managers' index (PMI) rose to 51.9 in January to a two-year high, signaling a rebound in manufacturing activity and confirming a recovery in the world's second largest economy was on track.


However, while the data briefly spurred markets higher, geopolitical uncertainty on the Korean peninsula and Apple's disappointing earnings dented overall demand.


The MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> was down 0.4 percent after rising as much as 0.2 percent earlier. The index briefly touched a fresh 17-1/2-month high the day before, exposing many bourses to profit taking pressures ahead of the regional earnings season set to start in earnest later this month.


The pan-Asia index's technology sector <.miapjit00pus> and the region's Apple suppliers fell after the world's largest technology company missed revenue forecast for the third straight quarter after iPhone sales undershot expectations, sending its shares down over 10 percent in after-hours trading.


A sharp drop in Apple's component suppliers such as South Korea's LG Display and Taiwan's Hon Hai dragged South Korean shares <.ks11> down 0.9 percent and Taiwan stocks <.twii> down 0.6 percent.


China shares <.ssec> surrendered strong early gains, weighing on Hong Kong <.hsi>, after North Korea said it would carry out a nuclear test that would target the United States, dramatically stepping up its threats against a country it called its "sworn enemy".


Bucking the trend, Australian shares rose 0.5 percent <.axjo> to a fresh 21-month high after reversing morning losses after the data from China, Australia's top export market.


The data also helped push Japan's Nikkei stock average <.n225> up 1.3 percent, as firms with high exposure to the Chinese economy notching up gains. Most Japanese suppliers to Apple also recouped earlier losses.


"The underlying tone is still bullish, so even bad news about Apple or whatever doesn't hit stocks too hard," said Masato Futoi, head of cash equity trading at Tokai Tokyo Securities, adding that three days of losses spurred dip-buying. <.t/>


European markets are seen easing, with financial spread-betters predicting London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> would open down as much as 0.1 percent. U.S. stock futures were down 0.3 percent, pointing to a softer Wall Street start. <.l><.eu><.n/>


YEN BUYING HALTED


The two-day yen buying spree came to a pause. The currency's recent rebound came after the Bank of Japan's latest policy easing steps on Tuesday failed to provide immediate stimulus as expected by some investors. The BOJ pledged to achieve a 2 percent inflation target and promised to start open-ended asset buying from 2014.


The dollar rose 0.8 percent to 89.33 yen while the euro also advanced 0.8 percent to 118.93 yen. The yen is still down 12 percent from its mid-November levels, when markets began pricing in strong monetary accommodation from the BOJ.


Many market players believe the yen's weakness will persist due to widespread expectations the BOJ will continue pursuing aggressive monetary easing policies to beat the country's stubborn deflation.


"I think we will struggle to break 91, but I will still keep looking for us to trade above 90 in the short-term," said Jesper Bargmann, Asia head of G11 spot FX for RBS in Singapore, referring to the outlook for the dollar versus the yen over the next week or so.


Data on Thursday confirming a deteriorating Japanese trade balance also encouraged yen selling, traders said. Japan logged a record annual trade deficit in 2012.


Investors were aalso reminded of the challenges facing the global economy on Wednesday when the International Monetary Fund predicted that an unexpectedly stubborn euro zone recession and weakness in Japan will hurt world growth. A Reuters poll also showed Asian economies will see weaker growth this year despite expected policy easing by central banks.


U.S. crude rose 0.4 percent at $95.57 a barrel while Brent steadied at $112.78.


London copper was down 0.3 percent at $8.076 a tonne and spot gold fell 0.4 percent to $1,678.81 an ounce, slipping from a recent one-month high.


(Additional reporting by Sophie Knight in Tokyo and Masayuki Kitano in Singapore; Editing by Shri Navaratnam)



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No. 1 Duke routed by No. 25 Miami 90-63


CORAL GABLES, Fla. (AP) — With a steady din coming from the sea of orange behind the visitors' basket, No. 1 Duke had a tough time making a shot.


The Blue Devils went more than 8 minutes without a field goal in the first half Wednesday night, and a sellout became a blowout for No. 25 Miami, which delighted a boisterous crowd with a 90-63 victory.


The defeat was the third-worst ever for a No. 1 team. The last time Duke lost a regular-season game by a bigger margin was in January 1984.


"It wasn't demoralizing; they played better," Blue Devils guard Rasheed Sulaimon said. "I believe we have them on the schedule again."


"We expected them to be terrific, and we have to match terrific, and then you have a terrific game," Duke coach Mike Krzyzewski said. "What you had was a terrific win for them, but not a terrific game. We didn't hold our end of the bargain."


Miami (14-3, 5-0 Atlantic Coast Conference) beat a No. 1 team for the first time, taking control with a stunning 25-1 run midway through the opening half. The Blue Devils missed 13 consecutive shots despite numerous good looks, while four Hurricanes hit 3-pointers during the run that transformed a 14-13 deficit into a 38-15 lead.


Duke (16-2, 3-2) fell to 0-2 when playing on an opponent's court. The Blue Devils' other loss came at North Carolina State, a defeat that cost them the No. 1 ranking.


They regained the top spot this week but seemed rattled by the capacity crowd, only the 10th in 10 years at Miami's on-campus arena. Students began lining up for seats outside the arena almost 24 hours before tipoff, a rarity for the attendance-challenged Hurricanes.


"I don't know how you can sit outside for a basketball game for that long," Miami guard Durand Scott said. "That made me want to win for them even more."


The Hurricanes, who are alone atop the league standings, won their sixth consecutive game. They beat Duke for the second straight time — but only the fourth time in the 19-game series.


Miami had been 0-6 against No. 1 teams. Coach Jim Larranaga also beat a No. 1 team for the first time.


"This is a great memory," Larranaga said.


Scott scored a season-high 25 points for the Hurricanes, and Kenny Kadji added a season-high 22. Shane Larkin had 18 points, 10 rebounds and five assists, and Durham, N.C. native Julian Gamble had 10 rebounds and four blocked shots.


Miami senior center Reggie Johnson came off the bench in his first action since being sidelined with a broken left thumb Dec. 18. He had two points and five rebounds in 16 minutes.


The Hurricanes, ranked this week for the first time in three years, improved to 8-0 at home.


Seth Curry, Tyler Thornton and Quinn Cook went a combined 1 for 29 for the Blue Devils, who shot a season-low 30 percent. Sulaimon led them with 16 points.


Duke went 4 for 23 from 3-point range, while Miami went 9 for 19 and shot 57 percent overall.


"Especially in the first couple of minutes, we got a lot of great shots," Blue Devils forward Mason Plumlee said. "You're going to miss some, but you have to keep shooting. The biggest mistake you can make is questioning your shot because you're missing open shots."


Kadji made two 3s during the Hurricanes' first-half spurt, then capped it with a three-point play. Duke shot 22 percent in the first half, including two for 11 on 3-pointers, and trailed 42-19 at halftime.


There was no letup by the Hurricanes to start the second half. They scored the first seven points for a shocking 49-19 lead, and punctuated the drubbing with five dunks in the final 10 minutes.


"Some teams come out in the second half flat and think they have the game won," Larkin said, "but we stayed with it with the same energy in the second half. We played great the whole game."


A Duke mistake — one in a long series — early in the second half had Krzyzewski red-faced and on the court, screaming at his team. But he couldn't inspire a turnaround.


"Over-rated," fans chanted with 3 minutes left. When the game ended, they poured onto the court and mobbed their team.


"The crowd I'm sure helped them some," Krzyzewski said. "But they didn't need much help."


Back in North Carolina, fans of the Tar Heels savored the loss by their rivals. When the final score of the Duke game was posted on the video board at the North Carolina-Georgia Tech game, students chanted, "Go to hell, Duke!"


___


AP Sports Writer Joedy McCreary in Chapel Hill, N.C., contributed to this report.


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Starchy Diets May Have Given Ancient Dogs a Paw Up






Dogs may have become man’s best friend thanks, in part, to their ability to stomach a starchy diet.


According to new genetic research, domestic dogs’ genomes better equip them to handle starches than wolves. Domestic dogs also show differences from wolves in portions of the genome linked to brain development, perhaps hinting at behavioral changes that occurred as canines became less wild.






The findings are particularly fascinating given that humans who live off farmed foods show similar genetic changes as dogs compared with humans who survive mostly by hunting and gathering, said study researcher Erik Axelsson of the department of medical biochemistry and microbiology at Uppsala University in Sweden.


“It’s cool that we’ve shared an environment for such a long time and we’ve eaten the same kind of food for such a long time, that we have started to become more similar in that way,” Axelsson told LiveScience. [10 Things You Didn't Know About Dogs]


The DNA of domestication


Dogs have been intertwined with humans for thousands of years, but no one is sure how far back the bond stretches. Humans were buried with dogs some time between about 11,000 and 12,000 years ago in Israel, perhaps the oldest agreed-upon archaeological evidence for domestication, though the remains of a possible domestic dog dating back 33,000 years were uncovered in 2012 in a cave in Siberia.


Understanding domestication is interesting in its own right, Axelsson said, but comparing wild and domesticated animals can also help researchers track down the functions of individual genes that change during the domestication process. The results may even affect research on human health. In the case of dog diet, for example, canines might be a good model for human diabetes. Dogs are already treated for cancer with experimental drugs that might someday help humans.


Axelsson and his colleagues analyzed the entire genetic codes of 12 wolves from  across the globe, as well as the genomes of 60 individual domestic dogs from 14 different breeds. They pooled the domestic pups’ results so that the genetic traits of individual breeds wouldn’t skew the findings and then compared the pet dogs to the wolves, looking for places where the genomes diverged.


This game of “spot the differences” led the scientists to focus on 36 different regions. They found that 19 of these regions contained genes crucial for brain functioning, including eight important for the development of the nervous system.


It was no surprise to see differences in brain genetics, Axelsson said, given that dogs had to modify their behavior to fit into human society. What did surprise the researchers, however, were 10 regions held genes involved with diet, specifically the breakdown of starches. Humans are well-equipped for starchy diets: Human saliva contains an enzyme called amylase, which starts breaking down starches as soon as food hits the mouth. Dog drool doesn’t have this advantage, but dogs do excrete amylase from their pancreases, allowing for the digestion of starches in the gut.


The researchers found that dogs have more copies of a gene called AMY2B, crucial for amylase production, than wolves. And in dogs, this gene is 28 times more active in the pancreas than in wolves.


Dogs also showed changes in specific genes that allow for the breakdown of maltose into glucose, another key starch digestion step, and in genes allowing for the body to make use of this glucose.


How did wolves become dogs?


The findings can’t pin down exact dates for dog domestication, but they do lend weight to one hypothesis, which is that wolves were drawn to early human settlements in order to scavenge at waste dumps, Axelsson said. Theorists have speculated that wolves that were less shy would have had an advantage, as they wouldn’t have run when humans were around. The proximity could have been the first step in domestication.


“We think that our results regarding starch digestion fit really neatly with that idea,” Axelsson said. “Being an efficient scavenger didn’t only take a special type of behavior but also a digestive system that could cope with the food that was present at the dump.”


The researchers are trying to pinpoint in more detail when the starch gene changes occurred. They’re also taking a closer look at the behavioral genes that differ between dogs and wolves.


“Now we’re also trying to take the behavioral side of the story further to try to pinpoint the genes, the individual mutations, to understand exactly how they might have changed the dog brain and dog behavior,” Axelsson said.


The researchers report their results Thursday (Jan. 24) in the journal Nature.


Follow Stephanie Pappas on Twitter @sipappas or LiveScience @livescience. We’re also on Facebook & Google+.


Copyright 2013 LiveScience, a TechMediaNetwork company. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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STORY HIGHLIGHTS


  • Anthony Cordesman: Questions for Hillary Clinton on Benghazi attack inevitable, important

  • But political blame game useless, a discouraging message to diplomats, military advisers, he says

  • He says in hindsight, warnings, pleas for support mistakenly make crisis seem obvious

  • Writer: U.S. must focus forward: encourage, support risk-takers doing crucial work in field




Editor's note: Anthony H. Cordesman holds the Arleigh A. Burke Chair in Strategy at the Center for Strategic and International Studies. Follow CSIS on Twitter.


(CNN) -- Politics are politics, and partisan congressional challenges over the death of Ambassador Chris Stevens and other Americans in Benghazi, Libya, last September were inevitable.


But while some of the questions Secretary of State Hillary Clinton was asked in her appearance before the Senate Foreign Relations Committee bordered on politics at their worst, some represented democracy at its best: A legitimate challenge of how the government works. The fact is, we do need to ask serious questions about the way our diplomats function, how they are deployed and protected.


In her responses, Clinton took responsibility, as the top official in every department always must. The question now, however, is what, if anything, will we really learn from the events that led to the deaths of Stevens and his colleagues?



Anthony H. Cordesman

Anthony H. Cordesman



Do we actually learn something from their courage and sacrifice, and the similar experience of other American diplomats and officers that have faced similar attacks in the past? Or do we go on playing a pointless blame game, creating a climate that discourages our diplomats, U.S. military advisory teams and intelligence officers from taking necessary risks -- and relies even more on fortifying our embassies.


Three lessons here. The first: Virtually every post mortem that relies on the blame game has the same result. There is always someone who asked for more resources and warned of the risk before the event. There are always enough intelligence indicators so that once you go back -- knowing the pattern of actual events -- it becomes possible to predict the past with 20-20 hindsight.


The problem is that the post mortems and hearings tend to be useless. Every prudent security officer has always asked for more; the indicators that could provide warning with 20-20 hindsight will still be buried in a flood of other reporting that warns of crises that don't take place; U.S. officials will still have to deal with what intelligence experts call "noise" -- the vast amount of reporting and other data that make it impossible to sort out the right information until the event actually occurs and the patterns are known. All of this makes it hard to know what request or warning ever matters.


Opinion: Algeria hostage crisis shows jihadists on rise


Yes, intelligence and warning can always be improved if the post mortem is realistic and objective. But the resulting improvements will never be enough. No one will ever assess all the risks correctly, U.S. diplomats and other Americans will be vulnerable when they operate in a hostile environment, and risk-taking will remain inevitable.



The second lesson is that we cannot deal with crises like the political upheavals in the Arab world, or the more direct threats that countries like Iran and North Korea can pose, unless our diplomats and military advisers take risks -- and more casualties -- in the process.


Stevens and those around him did what had to be done. These are the teams that can help lead unstable countries towards democracy and stability. They are the crucial to our counterterrorism efforts in the field and to building up the military security capabilities of developing states. They are key to uniting given factions, creating effective governance, and persuading states to move toward development and greater concern for human rights.


They can only be effective if they are on the scene, work with the leaders and factions involved, and often go into harms way where there are terrorist and military threats. Like Stevens, they cannot wait for perfect security, stay in a safe area, or minimize risks and deal with the realities of Libya, filled with local power struggles, extremist elements and potential threats.


We need risk-takers. We need them in any country that is going through the kind of upheavals taking place in Libya, as well as in countries where our enemies operate, and semi-war zones like Afghanistan, Iraq, Somalia, Syria, and Yemen. We need diplomats, U.S. military advisory teams, and intelligence officers that reach far beyond our embassies and go into high risk zones. We need to reward and honor those risk-takers, not those who shelter in safety and avoid the risks they should take or fear their career will be damaged if anyone is killed or hurt.


Opinion: Algeria crisis is a wakeup call for America








The third lesson is that we do need to steadily strengthen our ability to provide secure mobility, better intelligence, better communications, and better protection for those diplomats, U.S. military advisory teams and intelligence officers. We need to be able to better provide emergency help to those American NGO personnel and businessmen who take similar risks.


We need both an administration and a Congress that look beyond the blame game and understand that some things are worth spending money on. We need them to understand that what we once called the Arab Spring is clearly going to be the Arab Decade, and we face different but equally real risks in the field in Asia, Africa, and Latin America.


It is far better -- and cheaper even, in the medium term -- to fund strong U.S. country teams, military advisers, counterterrorism teams and development efforts than to let nations collapse, to let extremists take over, to lose allies, and see American NGOs and businesses unable to operate.


We need to see what new methods and investments can protect our people in the field and reduce the risks they should be taking. The answer may be special communications, intelligence system, helicopters and armored vehicles, emergency response teams and new career security personnel to replace contractors and foreign nationals.


What the answer is not is partisan blame, risk avoidance, punishing those who do take risks for the result, and failing to make the improvements in security for risk takers -- while building larger fortress embassies. If you want to honor the Americans lost in the line of duty, focus on the future and not the past.


The opinions expressed in this commentary are solely those of Anthony Cordesman






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North Korea to target U.S. with nuclear, rocket tests


SEOUL (Reuters) - North Korea said on Thursday it would carry out further rocket launches and a nuclear test that would target the United States, dramatically stepping up its threats against a country it called its "sworn enemy".


The announcement by the country's top military body came a day after the U.N. Security Council agreed a U.S.-backed resolution to censure and sanction the country for a rocket launch in December that breached its bans.


"We are not disguising the fact that the various satellites and long-range rockets that we will fire and the high-level nuclear test we will carry out are targeted at the United States," North Korea's National Defence Commission said, according to state news agency KCNA.


North Korea is believed by South Korea and other observers to be "technically ready" for a third nuclear test, and the decision to go ahead rests with leader Kim Jong-un who pressed ahead with the December rocket launch in defiance of the U.N. sanctions.


China, the one major diplomatic ally of the isolated and impoverished North, agreed to the U.S.-backed resolution and it also supported resolutions in 2006 and 2009 after Pyongyang's two earlier nuclear tests.


Thursday's statement by North Korea represents a huge challenge to Beijing as it undergoes a leadership transition with Xi Jinping due to take office in March.


North Korea has rejected proposals to restart the so-called six-party talks aimed at reining in its nuclear capacity.


"After all these years and numerous rounds of six-party talks we can see that China's influence over North Korea is actually very limited. All China can do is try to persuade them not to carry out their threats," said Cai Jian, an expert on Korea at Fudan University in Shanghai.


Analysts said the North could test as early as February as South Korea prepares to install a new, untested president or that it could choose to stage a nuclear explosion to coincide with former ruler Kim Jong-il's Feb 16 birthday.


"North Korea will have felt betrayed by China for agreeing to the latest U.N. resolution and they might be targeting (China) as well (with this statement)," said Lee Seung-yeol, senior research fellow at Ewha Institute of Unification Studies in Seoul.


U.S. URGES NO TEST


Washington urged North Korea not to proceed with a third test just as the North's statement was published on Thursday.


"Whether North Korea tests or not is up to North Korea," Glyn Davies, the top U.S. envoy for North Korean diplomacy, said in the South Korean capital of Seoul.


"We hope they don't do it. We call on them not to do it," Davies said after a meeting with South Korean officials. "This is not a moment to increase tensions on the Korean peninsula."


The North was banned from developing missile and nuclear technology under sanctions dating from its 2006 and 2009 nuclear tests.


A South Korean military official said the concern now is that Pyongyang could undertake a third nuclear test using highly enriched uranium for the first time, opening a second path to a bomb.


North Korea's 2006 nuclear test using plutonium produced a puny yield equivalent to one kiloton of TNT - compared with 13-18 kilotons for the Hiroshima bomb - and U.S. intelligence estimates put the 2009 test's yield at roughly two kilotons


North Korea is estimated to have enough fissile material for about a dozen plutonium warheads, although estimates vary, and intelligence reports suggest that it has been enriching uranium to supplement that stock and give it a second path to the bomb.


According to estimates from the Institute for Science and International Security from late 2012, North Korea could have enough weapons grade uranium for 21-32 nuclear weapons by 2016 if it used one centrifuge at its Yongbyon nuclear plant to enrich uranium to weapons grade.


North Korea gave no time-frame for the coming test and often employs harsh rhetoric in response to U.N. and U.S. actions that it sees as hostile.


Its long-range rockets are not seen as capable of reaching the United States mainland and it is not believed to have the technology to mount a nuclear warhead on a long-range missile.


The bellicose statement on Thursday appeared to dent any remaining hopes that Kim Jong-un, believed to be 30 years old, would pursue a different path from his father Kim Jong-il, who oversaw the country's military and nuclear programs.


The older Kim died in December 2011.


"The UNSC (Security Council) resolution masterminded by the U.S. has brought its hostile policy towards the Democratic Peoples Republic of Korea (North Korea) to its most dangerous stage," the commission was quoted as saying.


(Additional reporting by Christine Kim in SEOUL, Ben Blanchard and Sui-Lee Wee in Beijing; Writing by David Chance; Editing by Raju Gopalakrishnan)



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Asian shares retreat, Nikkei hit hard as yen stays firm

TOKYO (Reuters) - Asian shares retreated from multi-month highs on Wednesday amid caution as the earnings season gathers pace, with Tokyo stocks falling to three-week closing lows in response to a firm yen.


"Asian markets have been climbing steadily and it's natural for investors to want to book profits as the region's earnings season begins in full force later this month," said Hirokazu Yuihama, a senior strategist at Daiwa Securities in Tokyo.


"The uptrend remains intact given improving fundamentals globally, so selling like this is a healthy correction that may lead to putting a solid floor to prices," he said.


The MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> fell 0.3 percent after earlier reaching a 17-1/2-month high. The index has risen nearly 30 percent since a low touched in June, 2012.


The yen held firm against the dollar and the euro as monetary easing announced on Tuesday by the Bank of Japan failed to provide an immediate stimulus as some had hoped, though many analysts acknowledged the BOJ's resolve to tackle Japan's stubborn deflation and economic stagnation.


The stronger yen hurt Japanese exporters, dragging the benchmark Nikkei average <.n225> down 2.1 percent to a three-week closing low. The yen has weakened by around 12 percent since mid-November against the dollar, and boosted the Nikkei by more than 20 percent as a weaker yen improved exporters' earnings outlook. <.t/>


The BOJ on Tuesday doubled its inflation target to 2 percent and adopted an open-ended commitment to buy assets starting 2014, sparking an unwinding of yen short positions from speculators looking for more immediate easing step.


The dollar fell 0.6 percent to 88.20 yen while the euro slid 0.7 percent to 117.45 yen. The dollar hit a 2-1/2-year high of 90.25 yen on Monday.


Many still believe the yen will resume its recent downtrend, seeing the latest rebound in the Japanese currency as a correction to its rapid and sharp decline.


With the BOJ joining the continued push by global central banks to support growth, Morgan Stanley said in a research note that policy easing by central banks was positive for emerging markets, with more bond portfolio inflows increasingly towards local markets.


"Our key themes for 2013 are rebalancing and reflation, with both prevalent so far this year. Even given a migration towards global equities and away from fixed income, emerging market fixed income remains well-placed," it said.


Elsewhere, Hong Kong and Chinese shares were among the hardest hit as investors took profits from recent gains, with indexes faltering at technical resistances. Hong Kong <.hsi> shares slipped from a 19-1/2-month high and were down 0.4 percent while Shanghai shares <.ssec> fell 0.5 percent, moving further away from a 7-1/2 month high.


"We have risen by quite a bit in a very short time, so investors have been taking some profit in the last week or so, looking for new ideas to rotate into," said Larry Jiang, chief strategist at Guotai Junan International Securities.


Australian shares <.axjo> bucked the trend to edge up 0.2 percent to their highest close in almost 21 months after miner BHP Billiton gained after reporting a rise in quarterly iron ore production.


BETTER ENVIRONMENT


European markets are seen rising, with financial spread-betters predicting London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> would open as much as 0.4 percent higher. U.S. stock futures were down 0.2 percent, pointing to a softer Wall Street start. <.l><.eu><.n/>


On Tuesday, hopes of an improvement in the global economy led the Standard & Poor's 500 Index <.spx> to a five-year high.


Investors were also cheered by easing worries over the U.S. budget crisis.


Republican leaders in the House of Representatives said they aim to pass on Wednesday a nearly four-month extension of the U.S. debt limit to May 19.


U.S. crude was down 0.1 percent to $96.59 a barrel and Brent eased 0.2 percent to $112.23.


Spot gold was at $1,692.66 an ounce, near Tuesday's one-month high of $1,695.76, while London copper traded down 0.3 percent at $8,107 a metric ton but clinging near a one-week high of $$8,144.50 hit on Tuesday.


(Additional reporting by Clement Tan in Hong Kong; Editing by Shri Navaratnam)



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Williams loses in quarters, Azarenka into semis


MELBOURNE, Australia (AP) — Serena Williams' dominating run at the majors is over. American teenager Sloane Stephens is headed to the semifinals of the Australian Open.


Williams hurt her back in the eighth game of the second set, hampering her serve. She had treatment and recovered well enough to give herself a shot at winning the match, but the 19-year-old Stephens kept her composure in a 3-6, 7-5, 6-4 victory on Wednesday.


It was the first loss since Aug. 17 for the 15-time Grand Slam winner, ending a run of 20 consecutive wins. She hadn't lost a match at a Grand Slam tournament since the French Open, where her first-round exit sparked a resurgence in the second half of 2012 that included titles at Wimbledon, the London Olympics, the U.S. Open and the WTA Championship.


After winning her first Grand Slam quarterfinal, Stephens next plays defending champion Victoria Azarenka.


Williams walked around the net to congratulate Stephens, who then clapped her hand on her racket and waved to the crowd, a look of disbelief on her face.


She then went to her tennis bag, pulled out her phone and started checking for any text messages from her mother.


"I was hoping she had texted me right away. I thought maybe she was texting me during the match," Stephens said. "I'm sure my grandparents are like freaking out."


Stephens has said she had a photo of Williams up in her room when she was a child, and had long admired the Williams sisters.


"This is so crazy. Oh my goodness," Stephens said, wiping away tears in her post-match TV interview. "I think I'll put a poster of myself (up) now."


For her part, Williams said the bad back was just another problem to contend with at a Grand Slam event that had been "absolutely" her worst for injuries.


"Everyone at this stage in the locker room has something wrong with them. It's no excuse," she said. "I went for this drop shot and it just locked up on me. I couldn't really rotate after that.


"It was a little painful, but it's OK."


Williams was up a set and a break before Stephens settled in. In the eighth game of the second set, Williams was chasing a drop shot to the net when she appeared to jar her back. She needed a medical timeout after the set, and then slowly started to regain the speed in her serve.


But she was clearly frustrated at times, smashing her racket into the court in the third set and then flinging it toward the chairs on the side of the court. She looked to the sky occasionally and yelled at herself.


Azarenka, with her most famous fan sitting in the crowd wearing a shirt reminding her to keep calm, overcame some early jitters to beat Svetlana Kuznetsova 7-5, 6-1 in the earlier quarterfinal match at Rod Laver Arena.


After dropping serve in a long fourth game that went to deuce 10 times, Azarenka recovered to dominate the rest of the match against Kuznetsova, a two-time major winner who was floating dangerously in the draw with a No. 75 ranking as she recovers from a knee injury.


Azarenka's American rapper friend, Redfoo, returned from a concert in Malaysia to attend Wednesday's quarterfinal match.


Wearing a red sleeveless T-shirt that read "Keep Calm and Bring Out the Bottles," the name of his next single, Redfoo stood, clapped and yelled "Come on, Vika!" during the tight first set.


Asked if it helped to have her No. 1 fan wearing a keep calm logo, Azarenka said "I was looking more at the part that says 'Bring out the bottles.'"


Of her game, she added, "I'm just glad I could produce my good tennis when it was needed."


Williams' loss was a boost for Azarenka, who lost all five head-to-heads against the American in 2012 and is 1-11 in their career meetings.


In the men's quarterfinals, 17-time major winner Roger Federer was playing No. 7 Jo-Wilfried Tsonga in a night match and U.S. Open champion Andy Murray was to meet Jeremy Chardy of France.


Novak Djokovic is already through to the semifinals after his 6-1, 4-6, 6-1, 6-4 win over fifth-seeded Tomas Berdych on Tuesday night.


The 2-hour, 31-minute victory took exactly half the time of his five-set, fourth-round win against Stanislas Wawrinka.


"It was a great performance. I was hoping to have a shorter match ... just not to go over 5 hours," Djokovic said, in a comparatively subdued mood after a more routine victory. "It's always going to be tough against Tomas; he's an established player. He has a big game, big serve. He can compete against anyone on any surface."


Djokovic will meet No. 4-seeded David Ferrer in the semifinals.


Ferrer survived a quarterfinal battle with fellow Spaniard Nicolas Almagro. Almagro had three chances to serve for the match, but Ferrer broke back each time and went on to win 4-6, 4-6, 7-5, 7-6 (4), 6-2.


Maria Sharapova had a 6-2, 6-2 quarterfinal win over Ekatrina Makarova on Tuesday, and has conceded only nine games in five matches — a record in Australia.


"To be honest, those are not the stats you want to be known for," Sharapova said.


She'll play Li Na, who reached the semifinals for the third time in four years at Melbourne Park after beating Agnieszka Radwanska 7-5, 6-3.


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Boehner Pressures Senate to Pass Budget or Have Pay Withheld






WASHINGTON – Despite President Obama’s call for Congress to prioritize issues like immigration reform and address climate change during his inaugural address Monday, House Speaker John Boehner said that the House of Representatives will instead continue its focus on fiscal responsibility, including a plan to balance the budget over the next decade.


“There are a lot of priorities for the Congress [and] a lot of priorities for the president, but right now the biggest issue is the debt that’s crushing the future for our kids and our grandkids,” Boehner, R-Ohio, said. “Taxpayers understand that you can’t keep spending money that you don’t have, so we’re going to continue to focus, especially here over this next 90-, 120-day period, on bringing some fiscal responsibility to Washington.”






Boehner, who conducted his first news conference since Dec. 21 this evening, said the House will move forward on its No Budget No Pay act, which directs both chambers of Congress to adopt a budget resolution for FY 2014 by April 15, 2013. If either body fails to pass a budget, members of that body would have their paychecks put into an escrow account starting on April 16 until that body adopts a budget. But, because of the 27 th Amendment, any pay that is withheld would eventually be released at the end of the current Congress, even if a budget doesn’t ever pass.


“Over the last four years, House Republicans have offered plans, our budget plans. We’ve done our budgets but it’s been nearly four years since the Senate has done a budget,” he said. “Most Americans believe you don’t do your job you shouldn’t get paid. That’s the basis for No Budget, No Pay. It’s time for the Senate to act.”


The bill, H.R. 325, also temporarily suspends the statutory debt limit until May 18, granting the Treasury Department the additional borrowing authority to meet obligations that require payment over the next three months.


Facing trillion dollar annual budget deficits, Boehner told the House Republican Conference this afternoon that the GOP will advance a budget that becomes balanced over the next 10 years.


“It’s time for us to come to a plan that will in fact balance the budget over the next 10 years,” he added. “It’s our commitment to the American people and we hope the Senate will do their budget as they should have done over the last four years.”


Still, the country’s growing $ 16 trillion federal deficit would not balance by then, and Boehner stressed that Republicans are not open to new tax revenue as part of a comprehensive plan to reduce the deficit.


“We are not going to raise taxes on the American people,” Boehner insisted. “Nobody on our side is interested in raising taxes on the American people. It’s time to deal with the serious problem that we have, which is spending.”


That is sure to be a point of contention among Democrats. House Minority Whip Steny Hoyer rejected the GOP’s doggedness that new revenue would not be part of a package to reduce the deficit.


“We absolutely reject that. The president absolutely rejects it, I reject it, period,” Hoyer, D-Md., said during a pen and pad briefing with reporters Tuesday. “Going forward, revenues are going to still need to be part of the solution, as are cuts and restraints and reduction of growth. All are going to have to be part of it.”


The House is expected to vote Wednesday on a three-month increase to the debt limit, a move intended to sync up the next slate of fiscal deadlines facing Congress and provide lawmakers with more time to work out a so-called “Big Deal” on deficit reduction.


As he left the news conference, Boehner ignored a question about whether he believes the measure will pass. Still, the president has promised not to veto it and many congressional Democrats appear open to supporting it.


“This bill is a game bill. It’s not a substantive response to a serious problem,” Hoyer said. “Having said that, I’ve made it very clear that defaulting is not an option. All the Republicans leaders believe it’s not an option. And so I think, in that context, I’ll have to look at it.”


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Defterios: What keeps Davos relevant






STORY HIGHLIGHTS


  • Since the late 20th Century, the ski resort of Davos has been synonymous with the World Economic Forum

  • Defterios: I first came to Davos as a relatively junior correspondent, two months after the Berlin Wall fell

  • Fall of Communism, China's opening, removal of apartheid in South Africa unfolded in the 90s


  • It's the inter-play between geo-politics and business is what keeps the forum relevant




Davos (CNN) -- Veterans of Davos often refer to nature's awe-inspiring work as the Magic Mountain.


The name comes from an early 20th century novel by Thomas Mann -- reflecting on life in an alpine health retreat, and the mystery of time in this breath-taking setting.


Read more from John Defterios: Why Egypt's transition is so painful


Since the late 20th century, this ski resort has been synonymous with the World Economic Forum, which represents networking on its grandest scale.


This year nearly 40 world leaders -- a record for this annual meeting -- 2000 plus executives and it seems an equal number of people in the media, like yours truly, are in pursuit of them all. The setting is certainly more chaotic then a decade ago. The agendas of the Fortune 500 chief executives are to filled with bi-lateral meetings and back door briefings to allow for the spontaneity that made this venue unique.











Davos gets ready for leaders' gathering











HIDE CAPTION









I first came to Davos as a relatively junior correspondent in 1990, two months after the fall of the Berlin Wall. It was arguably then, after nearly two decades in the conference business, when the forum became a fixture on the global calendar.


Quest: U.S. economy to dominate Davos 2013


I can remember, quite vividly, working out of a bunker (like we do today) in the Davos Congress Centre. West German Chancellor Helmut Kohl sat side-by-side with his East German counterpart Hans Modrow. That meeting before the global community helped set the stage for monetary union, a huge unification fund for what became Eastern Germany and shortly thereafter German elections.


The early 90s at Davos were dominated by European reconstruction after the fall of communism. Former party bosses came to the forum to convince business leaders that a transition to market economics could be delivered. Boris Yeltsin made his Davos appearance during that chaotic transition from the USSR to today's Russia.


Davos 2013: New year, same old problems?


In 1992, Chinese Premier Li Peng used the setting here in the Alps to articulate plans for the country's economic opening up to the world. Not by chance, the architect of Washington's engagement with Beijing, the former U.S. Secretary of State Henry Kissinger also took a high profile that year.



Again only two years later in 1994, Yasser Arafat and Shimon Peres walked hand in hand on stage, holding a public dialogue leading up to the creation and recognition of the Palestinian Authority.


The World Economic Forum, as the saying goes, was positioned to be in the right place at the right time. While the author of the Magic Mountain talked about the complexity of time around World War I, in the 1990s time was compressed here.


The fall of communism, the lowering of global trade barriers, the opening up of China, the removal of apartheid in South Africa and the proliferation of the internet all unfolded in that decade.


Interactive: How's your economic mood?


As those events came together, so too did the major players as they made the journey to Davos. Michael Bloomberg, evolving as a global name in financial data and now the Mayor of New York City, sat alongside Microsoft CEO Bill Gates. U.S. President Bill Clinton outlined his party's historic move to the political center before a packed audience of global business executives.


To spice things up, rock stars and actors, as they became activists, chose the Davos platform: Bono, Richard Gere, Sharon Stone, Brad and Angelina would have the wealthiest and most powerful corporate titans freeze in their tracks.


Earlier this week, I walked into the main plenary hall as workers put the final touches on the stage and lighting. It is a venue which has welcomed countless political leaders and business executives, during internet booms and banking busts, in the midst of a Middle East crisis and even during the lead up to two Gulf Wars.


But that inter-play between geo-politics and business -- during the best and worst of times -- is what keeps the forum relevant. It allows this setting at the base of the Magic Mountain to endure and recreate something unique during what Mann rightly described as the ongoing complexity of our times.







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