Analysis: Gold stocks to outsparkle gold in post-QE2 world

(Reuters) - Gold's performance has eclipsed that of gold mining stocks this year, but gold equities now are likely to take the upper hand as the flow of cheap U.S. cash slows and miners boast juicy margins and good growth prospects.

Gold's status as a quasi-currency and safe haven has helped pushed the price of the metal up about 20 percent since the start of the year to above $1,520 an ounce, making it one of the top performing asset classes of 2011.

That compares with an 8 percent drop in the ARCA Gold Bugs index, which includes shares in some of the world's largest gold miners.

The U.S. Federal Reserve's $600 billion bond-buying program, which has kept down interest rates and the dollar; the disaster in Japan and the violence in the Middle East, which have shaken investor confidence; and evidence of sluggish U.S. growth and concerns about China have all boosted gold but dented global stocks. And gold shares have not been immune.

Now that the Fed's easing program has come to an end, Japan is recovering and China has managed to stave off some of the biggest fears about price pressures, there is some doubt that gold can keep up that strong performance.

Gold stocks, meanwhile, are supported by a gold price near record highs and may benefit from improving sentiment for equities markets. They also appear relatively cheap at the price.

Catherine Raw, who helps manage BlackRock's $4.7 billion Gold & General Fund, said the rise in the gold price has outpaced cost inflation in the industry, meaning that gold miners are likely to see their margins and their profits increase this year.

"I, as an investor, would say that in the end, given that believe the world isn't going to collapse, while there maybe a good few months of volatility left, if you're prepared to be patient, then I would see now as a very good buying opportunity," she said.

"The fundamentals of gold companies have improved, and yet their shares have fallen, and you've seen valuations now much more comparable to the rest of the mining sector. So you're not having to pay a ridiculous premium as you would have done say five or six years ago, and yet margins are growing significantly, in a way that they weren't five or six years ago," Raw added.

VALUE SHINES

Shares in Barrick Gold, the world's largest gold miner, trade at nearly 14 times anticipated earnings, while second-largest Newmont and third-largest AngloGold Ashanti trade at roughly 12 times expected earnings.

This compares with base metal producer BHP Billiton, which trades at nearly 17 times expected earnings, or Anglo American, which trades at 40 times earnings.

HSBC Global Asset Management, which recently unloaded most of its holdings of physical gold in favor of gold shares, said gold equities are two-thirds shares and one-third gold price.

An environment of uncertainty, negative real interest rates and turbulent stock markets will cause gold equities to underperform, even while they benefit from a rise in the gold price, HSBC said.

Historically, gold has outperformed gold mining shares in times of financial market stress and instability. The ARCA Gold Bugs fell by 29 percent in 2008, the low-point of the global financial crisis, while the gold price rose by 6.05 pct.

The index fell 44 percent in 2000, when the dot.com bubble burst, while spot gold fell by just 6.3 pct in that time.

But over the past 10 years while gold has been consistently rising, for a gain of over 400 percent, the Gold Bugs index has risen by 770 percent.

Daniel Sacks, who co-manages Investec's $750 million Global Gold Fund, said gold miners are generally looking much healthier than they did in 2008, because many have issued equity to cancel out debt.

He added that gold miners, as a rule, tend to avoid taking on debt as their lenders encourage them to hedge their future production as some form of guarantee.

"They still don't compare to high-yielding industrial or financial stocks, but compared to their history, gold shares are yielding a lot more than they used to. It's just an indication of the width of their margins," Sacks said.

Sacks said gold equities tend to outperform in the northern hemisphere summer months, largely because of the lull in consumer buying of physical gold. This was not the case last year when the eruption of the euro zone debt crisis prompted an investor push into gold and out of equities.

In summer 2009, however, gold rose 7.7 percent compared with a 31 pct rise in the Gold Bugs index. In 2007, as the extent of the credit crunch was becoming apparent, gold rose 12.6 pct between June and September, while gold stocks gained 18 percent.

"After a rip-roaring 2010 as the metal went mainstream, gold has become the gift that has stopped giving for some investors," said JPMorgan Chase in a recent note. "We feel gold still has a very significant role in portfolios. However, it has become apparent that the metal and the equities act differently."

The U.S. bank added, "Gold equities will remain under pressure while investors remain fearful. Once investors feel that the risk of another leg down in general markets passes, or after a downswing in the markets, we feel the gold equities will do some catching up."

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Euro lifted by Trichet's Portugal comments

(Reuters) - The euro gained against the dollar for the first time in three sessions on Thursday after ECB President Jean-Claude Trichet said the central bank would relax rules and keep providing liquidity to struggling Portugal, helping allay worries about Europe's debt crisis.

At a news conference after the central bank raised its benchmark interest rate by 25 basis points to 1.50 percent, the European Central Bank's chief said the ECB had decided to suspend the application of the minimum credit rating threshold in Portuguese collateral.

"While to some extent this is a reaction to the recent downgrade of Portuguese debt, it also does show that the ECB position remains flexible, which could be important for ongoing discussions on a Greek debt rollover," said Vassili Serebriakov, currency strategist at Wells Fargo in New York.

While Trichet did not use the term "strong vigilance" when speaking about monetary policy, a wording historically used by the central bank to communicate another rate hike is near, he did use the phrase "monitor very closely," which indicates further tightening could emerge in months ahead.

In late morning New York trade, the euro was at $1.4342, up 0.2 percent on the day and far above the session low of $1.4219 hit immediately after Trichet started his news conference.

"The ECB chief is clearly trying to walk the tightrope as the central bank attempts to normalize monetary policy for the core euro zone where real rates remain negative while at the same time providing liquidity for the troubled periphery economies," said Boris Schlossberg, director of currency research at GFT Forex in New York.

Analysts said that while the decision on Portugal is not entirely surprising, it indicates some degree of flexibility on the part of the ECB as euro zone policymakers struggle to reach agreement on solving the region's spreading debt crisis.

Portugal's debt has come under scrutiny after Moody's this week downgraded the country's credit rating to junk.

Meanwhile, U.S. private employers stepped up hiring in June and the number of Americans filing for jobless benefits fell last week, strengthening views the economy is positioned for a pick-up in the second half.

"What is good news for risk and the U.S. economy is bad news for the yen, as this currency pair (dollar versus yen) is largely driven by interest rate differentials," said Andrew Cox, G10 strategist at CitiFX, a division of Citigroup in New York.

"The data certainly backs the risk-on trade and revisions higher in Friday's payrolls report can be expected."

The dollar was up 0.4 percent at 81.28 yen. Against a basket of currencies .DXY the dollar was down 0.2 percent at 74.974.

Prior to the ADP employment report on private sector payrolls, the U.S. government had been expected to report on Friday that non-farm payrolls increased 90,000 last month, according to a Reuters survey, after rising only 54,000 in May. However, the ADP report had some economists bumping up their forecasts.

The euro rose 0.8 percent to 1.2116 francs, holding above a record low of 1.1800 francs on June 24. The dollar last traded up 0.6 percent to 0.8442 francs.

The safe-haven Swiss franc had benefited smartly from the flare-up in sovereign debt concerns but tends to fall as investors embrace risk.

(Additional reporting by Wanfeng Zhou and Steven C. Johnson in New York and Nia Williams in London; Editing by Kenneth Barry)

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At least 91 dead in Norway shooting, bomb attack

(Reuters) - A gunman dressed in police uniform shot dead at least 84 people at a youth summer camp of Norway's ruling political party, hours after a bomb killed seven in the government district in the capital Oslo.

Witnesses said the gunman, identified by police as a 32-year-old Norwegian who they believed was also linked to the bombing, moved across the small, wooded Utoeya holiday island on Friday firing at random as young people scattered in fear.

Norwegian television TV2 said the gunman detained by police was tall and blond and had links to right-wing extremism. Police said on Saturday the man had been charged for the bomb blast and the shooting.

"A paradise island has been transformed into a hell," Prime Minister Jens Stoltenberg told a news conference on Saturday.

He said he did not want to speculate on the motives of the attacks, but added: "Compared to other countries I wouldn't say we have a big problem with right-wing extremists in Norway. But we have had some groups, we have followed them before, and our police is aware that there are some right-wing groups."

Teenagers at the lakeside camp fled screaming in panic, many leaping into the water to save themselves, when the attacker began spraying them with gunfire, witnesses said.

"I just saw people jumping into the water, about 50 people swimming toward the shore. People were crying, shaking, they were terrified," said Anita Lien, 42, who lives by Tyrifjord lake, a few hundred meters (yards) from Utoeya.

"They were so young, between 14 and 19 years old."

Survivor Jorgen Benone said: "It was total chaos...I think several lost their lives as they tried to get over to the mainland.

"I saw people being shot. I tried to sit as quietly as possible. I was hiding behind some stones. I saw him once, just 20, 30 meters away from me. I thought 'I'm terrified for my life', I thought of all the people I love.

"I saw some boats but I wasn't sure if I could trust them. I didn't know who I could trust any more."

"We had all gathered in the main house to talk about what had happened in Oslo. Suddenly we heard shots. First we thought it was nonsense. Then everyone started running," one survivor, a 16-year-old called Hana, told Norway's Aftenposten.

"I saw a policeman stand there with earplugs. He said 'I'd like to gather everyone'. Then he ran in and started shooting at people. We ran down toward the beach and began to swim."

Hana said the gunman fired at people in the water.

Many sought shelter in buildings as shots echoed across the island that was hosting the annual camp for the youth wing of the Labour Party, the dominant force in politics since World War Two. Others fled into the woods or tried to swim to safety.

Boats searched for survivors into the night, searchlights sweeping the coast. Rescue helicopters flew overhead.

EXPLOSIVES FOUND ON ISLAND

The bomb, which shook Oslo's center in mid-afternoon, blew out the windows of the prime minister's building and damaged the finance and oil ministry buildings.

Police seized the gunman, named by local media as Anders Behring Breivik, and later found undetonated explosives on the island, a pine-clad strip of land about 500 meters long.

Breivik's Facebook page appeared to have been blocked by late evening. Earlier, it had listed interests including bodybuilding, conservative politics and freemasonry.

Norwegian media said he had set up a Twitter account a few days ago and posted a single message on July 17 saying: "One person with a belief is equal to the force of 100,000 who have only interests."

About 10 police officers were outside the address registered to his name in a four-story red brick building in west Oslo.

The Norwegian daily Verdens Gang quoted a friend as saying he became a right-wing extremist in his late 20s. It said he expressed strong nationalistic views in online debates and had been a strong opponent of the idea that people of different cultural backgrounds can live alongside each other.

With police advising people to evacuate central Oslo, and some soldiers taking up positions on the streets, the usually sleepy capital was gripped by fear of fresh attacks. Streets were strewn with shattered masonry, glass and twisted steel.

OKLAHOMA BOMBING

Right-wing militancy has generated sporadic attacks in other countries, including the United States. In 1995, 168 people were killed when Timothy McVeigh detonated a truck bomb at a federal building in Oklahoma City.

NATO member Norway has been the target of threats before over its involvement in conflicts in Afghanistan and Libya.

Violence or the threat of it has already come to the other Nordic states: a botched bomb attack took place in the Swedish capital Stockholm last December and the bomber was killed.

Denmark has received repeated threats after a newspaper published cartoons of the Prophet Mohammad in late 2005, angering Muslims worldwide.

In Oslo, the building of a publisher which recently put out a translation of a Danish book on the cartoon controversy was also affected, but was apparently not the target.

The Oslo district attacked is the very heart of power in Norway. Nevertheless, security is not tight in a country unused to such violence and better known for awarding the Nobel Peace Prize and mediating in conflicts, including the Middle East and Sri Lanka.

(Additional reporting by Gwladys Fouche, Victoria Klesty, Henrik Stoelen and Ole Petter Skonnord in Oslo, William Maclean in London and Patrick Lannin in Stockholm; Writing by Myra MacDonald; Editing by Diana Abdallah and Alistair Lyon)

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Troops sit down for chin wag, even as leaders won't

Thai and Cambodian soldiers eat together at Ta Kwai temple in Surin’sPhanomDong Rak district, about 140kmfrom thePreah Vihear temple. The two sides engaged in deadly border clashes in April. TAWATCHAI KEMGUMNERD

23/07/2011
Wassana Nanuam
Bangkok Post

SURIN : Thailand and Cambodia's leaders may not be talking about their border problems, but on the ground, troops from both sides are already forging bonds.

Thai soldiers have invited their Cambodian counterparts to spend time with them at temples they have occupied on their side of the border.

Col Mang Mao, the commander of Cambodia's 423th Infantry Brigade is one of two Cambodian soldiers sent to spend 24 hours with two Thai soldiers at the Ta Kwai temple in Ban Ta Miang of Surin's Phanom Dong Rak district.

This is a measure to ensure Thai and Cambodian troops stationed in the disputed area have a chance to talk first to prevent any conflicts breaking out.

Col Mang Mao said border tension in Surin has eased since the July 3 election in Thailand.

"Cambodian soldiers hope that after Thailand has a new government, negotiations will resume. Then soldiers from both sides can stop fighting each other.

"In the past, in April in particular, the clashes were very violent. Soldiers of both countries suffered losses," he said.

Col Nat See-in, the commander of the Thai 26th Ranger Division, said two Thai soldiers and two Cambodian soldiers would be stationed at the Ta Kwai temple together around the clock.

Thai troops have occupied the nearby Ta Muan temple, but have allowed five unarmed Cambodian soldiers who are part of the Cambodian military's coordination team to spend six hours a day with the troops there as a trust-building measure.

These steps, intended to ease tension and prevent unnecessary armed confrontation between the two countries' soldiers, are in line with the policy of Cambodian Prime Minister Hun Sen and Cambodian military leaders, said Col Mang Mao.

"They wanted Cambodian unit chiefs at the border to solve any disagreements through negotiations, not the use of force or shooting as in the past. They don't want the dispute to escalate."

Col Nat said the border tension lately has eased markedly.

"But we must not be reckless. We must be disciplined and stringently abide by the agreements between troops of the two countries," he said.

Several battalions of troops from both sides are still camped around Ta Muan temple and trouble could break out.

Capt Sen Nee of the Cambodian army who has been stationed at the Ta Muan temple said Cambodian soldiers were happy that Pheu Thai Party won the general election. They believed Pheu Thai would focus on holding truce talks with Cambodia rather than waging war.

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Norway’s capital, Oslo, hit by deadly blast, shootings

Friday, July 22, 2011
By Michael Birnbaum
Washington Post

BERLIN — A massive explosion rocked a government district in Norway’s capital Friday, killing seven people and injuring many more, and a shooter at a political convention on an island north of Oslo appeared to have inflicted more casualties, in incidents police are treating as connected, a police spokesman said.

“Central Oslo looks more like a battlefield,” said Runar Kvernen, a spokesman for the police directorate who was reached by telephone. “The headquarters of the Norwegian government is almost destroyed. It damaged a lot of a of buildings.”

The downtown target appeared to have been the Ministry of Petroleum and Energy, according to a police officer on the scene who spoke to the Dagbladet newspaper.

Smoke could be seen billowing from a high-rise government building on video images of central Oslo, though Kvernen said that the fires were under control. There were several injured people dripping with blood, and documents, broken glass and debris littered the ground. Reporters on the scene said that the area had not been crowded on a Friday afternoon when many people were on vacation.

Kvernen said that police had shut down central Oslo and were urging people to “get home and stay inside. “We are not 100 percent sure what we are dealing with here,” he said.

The Norwegian news agency NTB quoted police as saying that a bomb caused the explosion. Kvernen said he could not confirm that a bomb was the cause.

Prime Minister Jens Stoltenberg, speaking on NRK television, said he was safe and had not been in the area at the time of the explosion. He said no cabinet ministers had been hurt.

Kvernen also described “another very dramatic situation” on an island north of Oslo where a youth political conference of the ruling Labor Party was being held. Shots had been fired on the island, he said, and one gunman arrested.

“This is really bad,” he said. “The police have reason to believe that these incidents are connected.”

An eyewitness to the shootings on Utoya Island, about 25 miles from the capital, said in an interview on NRK television that he had seen at least 20 bodies at the camp. A video feed from a helicopter over the island broadcast on the TV2 channel showed dozens of small colorful tents at a campground that appeared to be about the length of a football field.

Norwegian news media earlier reported dozens of ambulances streaming toward the island from Oslo.

Kvernen said that a number of injured people had been evacuated by helicopter and that Norway’s equivalent of SWAT teams were searching the island for explosives “and everything.” He said that there was not yet a confirmed count of dead and injured at the camp.

Norwegian media cited witnesses who said that the shooter on the island was blond and wearing a police uniform, but Kvernen said that there was not yet an official police description of the man who was brought into custody.

Norwegian news agency NTB said that former prime minister Gro Harlem Brundtland had been present at the conference and that Stoltenberg was scheduled to speak there tomorrow.

Chatter on online jihadist forums praising the attacks — and in one instance asserting responsibility for them — started almost immediately afterward, terrorism analysts said, but it remained unclear whether those claims had any substance.

A prominent jihadist who goes by the name Abu Suleiman al-Nasser on the Shmukh al-Islam jihadist forum said that the incident was “another message arriving in the countries of Europe from the mujahideen,” according to a translation by the SITE Intelligence Group, a terrorism-monitoring organization. He said that Norway had been targeted because of its involvement in Afghanistan and because a Norwegian newspaper had reprinted controversial Danish cartoons of the prophet Muhammad.

The U.S. ambassador to Norway, Barry White, said in a telephone interview Friday afternoon that investigators in Norway were still assembling information about the attacks and had not reached any conclusions on who was responsible.

“They’re still looking at it,” White said. “Oftentimes the early answers are the wrong ones.”

White said that the United States has offered to assist the Norwegian government. “It’s a tragedy,” he said. “One of the things this demonstrates is there’s no place that is safe from a potential incident of this nature. Norway is considered a fairly safe place, and it is, but this demonstrates that things can happen anywhere.”

In Washington, President Obama expressed his condolences to Norway and offered U.S. support as Norwegian authorities investigate the incidents, which he described as terrorist attacks.

Speaking to reporters after an Oval Office meeting with the visiting prime minister of New Zealand, Obama said the events in Norway serve as a “reminder that the entire international community has a stake in preventing this kind of terror from occurring and that we have to work cooperatively together, both on intelligence and in terms of prevention of these kinds of horrible attacks.”

A spokeswoman for Oslo University Hospital said that 11 injured people had been admitted by Friday evening, some of them in serious condition. It was not immediately clear what kind of bomb had exploded in the capital or where it had been, but NRK television broadcast images of a blackened, damaged vehicle turned on its side near the site of the blast.

Norway has been better known for the Nobel Peace Prize than for any warlike demeanor, and the attack appeared to shock residents and the government establishment of the country. Unlike fortified capitals in other cities, central Oslo is open and unsecured; few barriers prevent cars from approaching government buildings.

The blast appeared likely to change that.

Other Scandinavian countries have been the targets of terrorism, most recently Sweden in December, when two explosions hit Stockholm; in one of the blasts, a suspected terrorist bomber killed himself and injured two other people in a central area of the city. The suspect had made recordings condemning Sweden’s involvement in Afghanistan.

Norway has also contributed significantly to the NATO-led effort to protect civilians in Libya, sending several F-16 jets that had been carrying out 10 percent of the strikes on the country since March, according to the Norwegian Air Force. The aircraft are scheduled to return home at the end of the month.

Earlier this month, Libyan leader Moammar Gaddafi threatened Europe with suicide bombings as revenge for the NATO campaign.

Norway had also filed charges last week against an Iraqi-born cleric, Mullah Krekar, a founder of the Kurdish militant group Ansar al-Islam, for threatening Norwegian officials with death if he was deported from the country.

Staff writers Greg Miller and William Branigin in Washington contributed to this report.

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Army aided loggers: US cable

Royal Cambodian Armed Forces soldiers patrol in Oddar Meanchey province earlier this year. (Photo by: Sovan Philong)

Friday, 22 July 2011
Vong Sokheng and James O’Toole
The Phnom Penh Post

An American diplomatic cable from the United States embassy in Bangkok claims that armed Cambodian soldiers have been used to protect loggers working illegally in Thai territory.

The cable, made public this month and originally obtained by the anti-secrecy organisation WikiLeaks, dates from December of 2009 and recounts an incident near the border from that month during which one Cambodian logger was killed by Thai troops.

Then-US Ambassador to Thailand Eric John wrote in the cable that a source had told the embassy “that Cambodian soldiers were protecting the loggers when shots were exchanged between the two sides, resulting in the death of one of the loggers, who suffered from shotgun and grenade wounds”.

“Patches confiscated from the Cambodians involved suggested involvement by security personnel, who were presumably moonlighting in this other role,” John wrote.

Dy Phen, director of the Cambodian-Thai border relations office in Banteay Meanchey province, yesterday denied allegations of military involvement in illegal logging across the border.

“As a soldier at the border, I can assure you that individual soldiers would not dare to cross the border illegally to protect loggers because that is a violation of the sovereignty of Thailand,” he said.

“I think those allegations are just to defend Thai soldiers who performed their duties wrongly and shot unarmed Cambodian civilians.”

The shootings of Cambodian loggers near the Thai border have been a persistent problem in recent years.

Chan Soveth, a senior investigator with the local rights group Adhoc, said yesterday that his group had confirmed the deaths of 22 Cambodian loggers shot by Thai forces in 2010, and is investigating roughly a dozen cases from this year.

In January of 2010, just over a month after the shooting described in the US cable, Minister of Foreign Affairs Hor Namhong accused Thai forces who fire on Cambodian loggers of breaching international law.

“If Cambodian people do something wrong, [Thai authorities] can punish them by using international law and the principle of human rights,” he said, adding that Cambodia had sent Thailand “many diplomatic notes” on the issue.

Last week, WikiLeaks released all 777 diplomatic cables from the American embassy in Phnom Penh that the group has in its cache of over 250,000 leaked US State Department documents.

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Brent crude falls in late gasoline, spread sell off

Brent crude fell on Thursday, dragged down in an aggressive late sell off in gasoline and spreads due in part to U.S. demand concerns.

After trading positive for most of the day, Brent tumbled in late afternoon activity as crude and gasoline trading volumes jumped.

Market players said growing concerns about U.S. gasoline demand, which has been lagging year-ago levels by 2.2 percent over the last four weeks in the midst of the summer driving season, helped spark the sell off.

"I think part of what we are seeing here is a recognition of where we are in the summer driving season -- we don't have that much driving season demand in front of us," said Tim Evans, energy analyst for Citi Futures Perspective in New York.

Brent, considered a better benchmark of market conditions globally and in the giant U.S. Gulf Coast refining region than U.S. crude, had been traded up for most of the U.S. trading session on optimism about a possible deal to bail out Greece and news that the world's biggest oil consuming nations would not release more crude.

Gasoline futures tumbled 1.5 percent and the RBOB crack spread fell 13 percent. Brent crude fell 64 cents to settle at $117.51 a barrel.

U.S. crude held on to gains to settle up 73 cents at $99.13 a barrel, after earlier rising above $100 a barrel and breaking out of the $93 and $99 a barrel trading range seen for most of July.

U.S. crude traded volume was around 703,200 contracts, almost 23 percent below the 30-day average, as of 4:50 p.m. EDT (2050 GMT) while Brent volume hit 437,000 lots, down almost 34 percent from the 30-day average.

Additional pressure came from spread selling between the two futures contracts, with the premium of Brent to U.S. crude narrowing $1.15 to $18.50 a barrel in late activity, traders said.

The recent drawdowns in inventories at the Cushing, Oklahoma delivery point for the U.S. contract, which last week hit the lowest level since December 24, helped prompt the sell off, according to market participants.

The premium of Brent to U.S. crude hit a record over $23 a barrel earlier this month, supported by rising flows of Canadian crude into Cushing and other parts of the Midwest.

EARLY SUPPORT FROM IEA, GREECE HOPES

Crude earlier found support from news euro zone leaders were set to give their financial rescue fund new powers to help Greece overcome its debt crisis that eased concerns that have weighed on oil and other markets in recent weeks.

Further support came from upbeat data showing factory activity in the U.S. Mid-Atlantic region bounced back in July, as well as news members of the IEA decided against releasing more oil stockpiles despite the threat of high prices to the economic recover.

The IEA shocked oil markets in June, announcing it would release 60 million barrels of oil to help replace disruptions of Libyan supply and bring down prices. Prices initially plunged, but in the month since the announcement, Brent prices have climbed back more than $10 a barrel.

But on Thursday, the energy watchdog for the industrialized nations confirmed what many analysts had expected, saying not a single one of its 28 members had asked for more oil to be released, including the United States, one of the architects of the first release a month ago.

In addition, the United States has no plans to do a unilateral release of its own strategic reserves right now, the Department of Energy said.

In Asian trading, crude prices fell on news that manufacturing in China contracted for the first time in a year in July, as monetary tightening and sluggish global demand weighed on the economy. China is seen as a major source of future oil demand growth.

(Reporting by Gene Ramos, Janet McGurty, Selam Gebrekidan and Matthew Robinson in New York; Barbara Lewis in London: Seng Li Peng in Singapore; Editing by Marguerita Choy)

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A U.S. connection to Britain's tabloid scandal?

Rupert Murdoch is an attractive target for politicians on both sides of the Atlantic. Allegations that investigators for his flagship London tabloid, the News of the World, hacked into telephones — including one belonging to a missing girl later found dead — are appalling. So are allegations that News of the World staffers paid the police for confidential information.

But does the scandal have an American angle? Some members of Congress think so, and they succeeded in persuading the FBI to open a preliminary probe. But they may find themselves disappointed. "Americanizing" the scandal may prove a difficult task.

One supposed connection between the scandal and the United States is that News of the World employees reportedly sought the phone records of 9/11 victims and survivors in this country. Rep. Peter T. King (R-N.Y.) said he was aware of reports that they had solicited a New York police officer "to gain access to the content of private phone records" of 9/11 victims. But for the moment at least, there is scant evidence that such activity took place.

Another attempt to create a connection with the United States involves the Foreign Corrupt Practices Act, a law that forbids U.S. businesses to bribe foreigners. The theory is that because Murdoch's parent company is located in the United States, British reporters might have run afoul of the act if they bribed British police. It's an ingenious but unpersuasive idea.

On Friday, another tenuous tie to the U.S. seemed to emerge when Les Hinton, chief executive of the Murdoch-owned Dow Jones & Co. and publisher of the Murdoch-owned Wall Street Journal, stepped down. His resignation was not the result of activity that took place in the U.S., however, but because of his longtime role as head of Murdoch's British publishing subsidiary.

The final tie between the scandal and the United States is Murdoch himself. Some of his American detractors object not only to what allegedly happened at the News of the World but also to Murdoch's politics or the extent of his empire. The scandal provides them with an opportunity to accuse him of illegality as well as arrogance.

If the practices that allegedly occurred at the News of the World also took place at Murdoch's operations in this country, then of course a thorough federal investigation and prosecution would be necessary. But some of the outrage in Congress over a British scandal is a case of "everybody's gotta get into the act."

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Welcome to Cambodia Town in the Heart of Long Beach, Calif.

Welcome to Cambodia Town
in the Heart of Long Beach, Calif.

See the Press Telegram Photos of the Cambodia Town Sign unveiling ceremony.

As the home to the largest concentration of Cambodian families and businesses in Long Beach, our vibrant neighborhood is where Cambodian American history florished.

“Cambodia Town” is viewed by many to be the heart of the Cambodian American community. Cambodian-Americans from the greater Los Angeles County, Orange County, and as far away as San Diego, Fresno, Stockton, Oakland, and San Jose come to this area on a regular basis to shop, eat, and do business. Cambodians from all over the world know about Long Beach, California.

The official recognition of this section of Long Beach as “Cambodia Town” will improve the business client for current stores, attract new businesses, bring in tourists, and increase civic pride. It will elevate the economic well-being of the neighborhood adjacent to the corridor.

We are a neighborhood that cherishes diversity, dignity, safety and well-being, and business opportunity and success for all Long Beach residents.

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Long Beach, Cambodia Town USA

Long Beach, California… A “suburb” of Los Angeles (just 20 miles away), on the Pacific coast. Long Beach is a city of nearly half a million people, the most ethnically diverse city in the United States. Besides this, Long Beach has one of the world’s largest shipping ports (for my whole life I had never seen such a wide huge massive extended port!), with a large oil industry since oil in the area is found both underground and offshore.

Long Beach Asian community includes a large Cambodian community, considered the second-largest Cambodian community outside of Asia (after Paris, France) with 50 000 Cambodian American people or Americans from Cambodian descent. The Cambodian community of Long Beach is mostly visible in a neighborhood along Anaheim Street, between Atlantic and Junipero Streets. In 2007, the “Little Phnom Penh” became “Cambodia Town” - http://www.cambodiatown.org/ - with an official recognition from the city of Long Beach.

Long Beach is a place that makes Cambodian people proud! Even though the integration has not always been easy, even though some people in the Cambodian community still face big challenges to be able to make it here in the USA (language, jobs, wages, health, studies, education, “weight” of the past, identity struggle…), the Cambodian people in the US are proud of Long Beach for the actions, the results and the impacts that the community here has built in the city…

. .

See more stories about the Cambodian Americans in the archives of this blog! ..

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ICJ orders all troops out - [Thai] PM says Thailand is not put at a disadvantage

19/07/2011
Bangkok Post

The International Court of Justice's decision to set up a "provisional demilitarised zone" around the Preah Vihear temple and order Thailand and Cambodia to immediately withdraw their troops from it will not have a binding effect on Thai sovereignty, Prime Minister Abhisit Vejjajiva says.

"The ruling is a temporary provisional measure and it will not have a binding commitment to Thai sovereignty and the ruling does not place Thailand at a disadvantage," Mr Abhisit said smilingly to reporters yesterday evening after learning of the ruling.

He said he would meet the army chief, the defence and foreign ministers, and representatives of the National Security Council and the Council of State today to discuss measures to be followed in the wake of the ICJ ruling.

"The withdrawal of soldiers is not a simple walk because there are procedures and it requires the prevention of infiltration," Mr Abhisit said.

As part of the ruling, Cambodia must also withdraw its troops from the Preah Vihear temple and the Keo Sikha Kiri Svara pagoda, the prime minister said.

However, a practical mechanism is needed to facilitate the withdrawal and the Thai-Cambodian General Border Committee (GBC) is the most suitable forum for negotiations about the matter, said Mr Abhisit.

"I believe the ruling relieves tension."

The court yesterday read its ruling on Cambodia's request for indication of provisional measures filed on April 28 when it asked the court to order Thailand to withdraw its soldiers and stop all military activity around the Preah Vihear temple.

Foreign Minister Kasit Piromya led the Thai team to hear the ruling while Cambodian Deputy Prime Minister and Foreign Minister Hor Nam Hong led the Cambodian side.

While the court rejected Thailand's request for the case introduced by Cambodia to be thrown out, it went beyond Cambodia's demand that Thai troops be ordered out of the area.

The court drew a "provisional demilitarised zone" around the Preah Vihear temple and ordered both Thailand and Cambodia to immediately withdraw their troops from the zone.

The ICJ ordered both sides to refrain from any military presence within the zone and from any armed activity directed at it. It also ordered the two parties to refrain from any action which might aggravate or extend the dispute or make it more difficult to resolve.

The court ordered Thailand not to obstruct Cambodia's free access to the Preah Vihear temple or the provision of fresh supplies to its non-military personnel there.

It also called on the two nations to continue cooperating with Asean and allow the appointed observers to monitor the ceasefire and to gain access to the demilitarised zone.

In addition, each party was required to inform the court about their compliance with the provisional measures.

Both sides said they were satisfied with the decision.

Mr Kasit said he was satisfied because the court did not comply with Cambodia's request that Thailand unilaterally withdraw its military.

"The provisional demilitarised zone will not put Thailand at a disadvantage. Neither does the court decision in any way prejudice its further consideration of another request, the court's pending interpretation of the 1962 judgment on the Preah Vihear temple," he said.

Mr Kasit said the court's decision was in line with what Thailand had anticipated and the military withdrawal would be discussed at the GBC meeting led by the military.

Cambodia's Hor Nam Hong meanwhile welcomed the court decision.

"This provisional demilitarised zone means there will be a permanent ceasefire. It will be tantamount to the cessation of aggression by Thailand against Cambodia," he said.

Second Army chief Thawatchai Samutsakhon said he thought that the ICJ ruling would lead to many problems in the near future.

"It's not easy to withdraw troops from the area," said Lt Gen Thawatchai.

Second Army spokesman Prawit Hukaeo denied a report that the Cambodian army has deployed more troops and weapons to the disputed area.

Noppadon Pattama, a former foreign minister and a legal adviser to deposed premier Thaksin Shinawatra, said the Thai government should seek clarification from the ICJ over its ruling that Thailand may not obstruct Cambodian authorities from accessing Preah Vihear.

"If they built a road through the disputed area, the Thai government should protest against the construction," said Mr Noppadon.

Meanwhile, the yellow shirt People's Alliance for Democracy (PAD) yesterday demanded that the government refuse to withdraw troops from the disputed area and reject the ICJ ruling.

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Washington crafts fall-back debt plan as clock ticks

(Reuters) - With time running short, the White House said on Monday it was pursuing a last-ditch plan with Congress to raise the U.S. debt ceiling and avert a default that could plunge global financial markets into chaos.

While President Barack Obama insists he is focused on a comprehensive long-term deficit reduction deal, debt talks are stalled and there are just two weeks left until the United States runs out of money to pay its bills.

The vast ideological divide between Obama's Democrats and Republicans over tax increases and spending on popular social programs has driven a shift in focus in Washington to a backup plan that would give Obama responsibility, and potentially blame, for raising the $14.3 trillion limit on U.S. borrowing.

In the Senate, Democrats and Republicans are working on the fall-back plan proposed by Mitch McConnell, the top Republican in the chamber, that would authorize Obama to raise the debt ceiling in three stages through the November 2012 election.

"We must pursue a fall back or last ditch option if you will and conversations about that have been ongoing," White House spokesman Jay Carney said.

"We don't have the luxury anymore of pursuing one (option) only. We have to make sure there is a mechanism in place to be sure that no matter what happens the United States does not default," he said.

The stalemate on debt talks in Washington, along with debt problems in Europe, is unnerving financial markets worldwide amid fears of a descent into a global crisis. World stocks dipped and gold prices hit record highs above $1,600 an ounce as investors sought a safe haven.

Obama met House of Representatives Speaker John Boehner and his deputy Eric Cantor for private talks over the weekend but their offices said no progress was made toward a deal.

Instead, Republicans said they will push for a measure to cut and cap government spending and amend the U.S. Constitution to require a balanced budget even though Obama has already promised to veto it should Congress send it to his desk.

The symbolic vote on Tuesday gives conservative Republicans a chance to argue their position on the need for deep spending cuts. That could give Boehner the political cover to pursue a compromise that includes less dramatic cuts to spending that Republicans have so far sought.

The United States will default on its financial obligations by August 2 if Congress does not allow the U.S. Treasury to sell more debt by then. That would increase interest rates and could force the U.S. economy back into recession.

POLITICAL BLAME

The proposal by McConnell, who has said he wants to make Obama a one-term president, could shift any political blame for increasing the debt burden to the president ahead of an election in which U.S. deficits will be a key issue.

But many conservative Republicans in the House oppose McConnell's plan, saying it does not offer deep enough spending cuts. It could also backfire by giving Obama the opportunity to show voters leadership in crisis.

Carney said Obama and administration officials were working closely with both parties in the Senate to ensure the fail-safe plan could pass Congress.

The White House insists that talks are continuing with congressional leaders in pursuit of a long-term deficit reduction deal but there has been little evidence of discussions of anything beyond the "Plan B" alternatives.

Obama has set a Friday deadline for congressional leaders to agree on a budget deal. The White House says the July 22 deadline would give Congress enough leeway to write and pass legislation before August 2.

Credit rating agencies have signaled they may cut the top-notch AAA U.S. rating if the borrowing limit is not raised. Even if Congress increases the borrowing limit in time, without serious deficit reduction measures in place, the United States would still be under pressure, the agencies have said.

Fitch Ratings said on Monday if the debt ceiling was not raised before August 2 it would place the AAA rating on "watch negative," which means it could downgrade it within a three-to-six-month period. This echoed similar warnings last week from the other two big rating agencies, Moody's and S&P.

Worries about the impasse pushed Wall Street stocks lower, with the Standard & Poor's 500 index at its lowest in three weeks.

"There's a perfect storm happening on a global macroeconomic basis with no debt deal here and the ongoing issues in Europe, and the market is looking at all these things and is fairly anxious," said Oliver Pursche, president of Gary Goldberg Financial Services in Suffern, New York.

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ICJ orders troops withdrawn

From left: Thailand's Ambassador to the Netherlands Virachai Plasai, Foreign Minister Kasit Piromya, counsel Donald McRae and former ambassador Asda Jayanama are seen in the courtroom on July 18, 2011 in the dispute over the ownership of Preah Vihear temple. (Photo REUTERS)

From right: Cambodia's Deputy Prime Minister Hor Namhong, Deputy Agent Var Kimhong, Secretary of State Long Visalo of Cambodia and their counsel Rodman Bundy are seen in the courtroom on July 18, 2011 in the dispute over the ownership of Preah Vihear temple. (Photo REUTERS)

18/07/2011
Bangkok Post

Foreign Minister Kasit Piromya said in The Hague, the Netherlands, that he was satisfied with the court's ruling.

THE HAGUE - The International Court of Justice on Monday voted 11 to 5 to order both Thailand and Cambodia to withdraw their troops from the 4.6 square kilometre disputed area around the Preah Vihear temple to reduce military confrontation along their border.

The ruling was in response to Cambodia's petition to the ICJ on April 28 for an interpretation of the 1962 verdict awarding sovereignty over the Preah Vihear temple to Cambodia.

The 1962 verdict says the ancient Hindu temple belongs to Cambodia, but the area around it has remained in dispute, causing frequent cross-border clashes between the two countries.

In the petition to the ICJ, Phnom Penh also asked the United Nations' highest court to issue provisional measures that include an immediate withdrawal of Thai troops from areas around the temple, a ban on all Thai military activity in the area, and that Thailand refrain from any act which could interfere with Cambodia's rights over the temple.

Thailand argued during oral testimony to the ICJ on May 30 and 31 that the two countries had no conflict over the scope and meaning of the 1962 verdict.

The Thai side said the court therefore has no jurisdiction to interpret its verdict, to which Thailand had fully complied with since it was issued in 1962.

Today, the ICJ first unanimously rejected Thailand's request for it to drop Cambodia's petition.

The court then agreed with a vote of 11- 5 to endorse provisional measures for Thailand and Cambodia to immediately withdraw their troops from the disputed area which is to be designated a provisional demilitarised zone, and to refrain from a military presence within the zone and from armed activity directed at it.

The court also voted 15 to 1 for both sides to continue their cooperation within Asean and allow observers to have access to the zone.

Lastly, the ICJ decided by a vote of 15 to 1 that the two countries in dispute shouold comply with the provisional measures issued today until it has completed consideration of Cambodia's petition for an intepretation of the 1962 verdict.

Foreign Minister Kasit Piromya said in The Hague, the Netherlands, that he was satisfied with the court's ruling.

Earlier today, Army Region 2 spokesman Prawit Hukaew said there would not be any immediate troop withdrawal from the disputed area, regardless of what the ICJ decision might be.

Col Prawit commented ahead of the ICJ's scheduled announcement at the Peace Palace in The Hague.

"No matter what the ICJ's ruling is, troops of Army Region 2 will remain in the area [around Preah Vihear] to protect the land and sovereignty of our country.

"The army will wait for instructions from Gen Prayuth Chan-ocha [the national army chief]," the spokesman said.

He said if the court ruled in favour of Cambodia and the Cambodian army attacked the Thai side, the Thai army would be ready to retaliate.

"The number of Thai troops in the area is adequate to deal with any situation that might occur along the Thai-Cambodian border," Col Prawit added.

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ICJ's Map of Provisional Demilitarized Zone

Thailand, Cambodia ordered to withdraw troops

July 18, 2011
The Nation

The International Court of Justice Monday voted 9:5 to order both Thailand and Cambodia to withdraw their troops from the disputed plot around Preah Vihear Temple.

Praj Iampongsan, a Nation Channel reporter, reported from Hague that the ICJ would proceed with the case to interpret the 1962 ruling on the Preah Vihear temple. Pending the ruling, both countries are required to pull out their troops from the area.

He said the court rejected Thailand's request to throw out the case.

Should the Thai government decide to comply with the court order and withdraw the troops from the 4.5 disputed area, it would be seen favourable for Cambodia.

Without Thai troops deployed in the disputed area, Cambodia could proceed to develop Preah Vihear as a world heritage site without obstacle.

Military observers expect that the Thai government would never comply with the order or else Thailand could be seen as being the wrong side during the past two years.

Earlier, the second Army area commander declared that he would never withdraw troops from the disputed area as doing so would be tantamount to giving the land to Phnom Penh.

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UN orders Thai, Cambodian troop withdrawal

Mon Jul 18 2011
9News (Australia)

The UN's highest court on Monday ordered Thailand and Cambodia to immediately withdraw their troops from a disputed area around an ancient temple on the border between the two Asian neighbours.

"Both parties should immediately withdraw their military personnel currently present in the provisional demilitarised zone and refrain from any military presence within that zone," said the order, read by International Court of Justice president Judge Hisashi Owada at a sitting in The Hague.

Cambodia in late April launched a bitter legal battle before the ICJ in which it asked for an interpretation of a 1962 ICJ ruling around the 900-year-old Preah Vihear temple.

It also asked the court, while judges were pondering the request, to approve provisional measures including an immediate Thai troop withdrawal and a ban on all Thai military activity there.

Although Thailand do not dispute Cambodia's ownership of the temple, secured by the 1962 ruling, both Phnom Penh and Bangkok claim the 4.6-square-kilometre area surrounding the Khmer complex.

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UN court orders Thai, Cambodia troops out of temple area [-A victory for Thailand?]

Reporting by Aaron Gray-Block

THE HAGUE, July 18 (Reuters) - The highest U.N. court ordered Thailand and Cambodia on Monday to pull their soldiers out of a newly defined demilitarised zone around a temple and to restart talks in order to resolve the decades-long conflict.

The recent fighting between Cambodia and Thailand has resulted in 18 deaths and forced the relocation of tens of thousands of villagers on both sides since February, when tensions flared over ancient Hindu temples.

In its ruling, the court said the situation "remains unstable" and "could deteriorate" as it defined a demilitarised zone around the temple and urged Thailand and Cambodia to engage in talks.

The court also ordered both states to allow observers from the Association of South East Asian Nations to enter the area.

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UN court draws DMZ for Thai, Cambodia troops

Monday, July 18, 2011

THE HAGUE, Netherlands (AP) — The U.N.'s highest court has ordered troops from both Thailand and Cambodia to immediately withdraw military forces from disputed areas around a World Heritage temple straddling their border.

The International Court of Justice was acting on Cambodia's request to order Thai troops out of the area, where at least 20 people have died in clashes since 2008.

But the court went beyond that request and drew a "provisional demilitarized zone" free of military and police from both countries.

It also called Monday on the two nations to allow ASEAN officers into the area to observe a cease-fire.

The court ruled in 1962 that the Preah Vihear temple is in Cambodian territory.

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UN court orders Thai, Cambodia troops out of temple area

07.18.11
Reuters

The highest UN court ordered Thailand and Cambodia on Monday to pull their soldiers out of a newly defined demilitarised zone around a temple and to restart talks in order to resolve the decades-long conflict.

The recent fighting between Cambodia and Thailand has resulted in 18 deaths and forced the relocation of tens of thousands of villagers on both sides since February, when tensions flared over ancient Hindu temples.

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Rebekah Brooks arrested by hacking police

Ex-News International chief executive Rebekah Brooks has been arrested by police investigating phone hacking and bribery at the News of the World.

The 43-year-old was arrested by appointment at a London police station and remains in custody.

She was arrested on suspicion of conspiring to intercept communications and on suspicion of corruption.

She quit News International on Friday as pressure mounted over her role in the deepening scandal.

Mrs Brooks was editor of the paper between 2000 and 2003, during which time the phone belonging to murdered schoolgirl Milly Dowler was tampered with.

BBC Business Editor Robert Peston said News International was not aware that Mrs Brooks would be arrested when her resignation was being discussed at the company on Tuesday and Wednesday of last week. She eventually resigned on Friday.

Mr Peston added: "It's certainly the most extraordinary development. Rebekah Brooks is incredibly close to the most powerful people in the UK - the current prime minister, the previous prime ministers Tony Blair and Gordon Brown. More or less every senior person of influence within Britain."

He said it could now potentially jeopardise her appearance at the Culture, Media and Sport Select Committee on Tuesday, where she is due to answer MPs questions on the hacking scandal.

"I would assume having been arrested it's now almost impossible for her to appear. It's very difficult for MPs to ask her questions that wouldn't be seen to be impinging on the police investigation," Peston said.

'Conspiracy theories'

A spokesman for Mrs Brooks says the Met police notified her on Friday, after her resignation had been agreed, that she would be arrested.

He also said her arrest would make her appearance at the committee "pretty tricky".

Continue reading the main story

“Start Quote

If this is designed to take the spotlight off the police at the same time giving a shield to Rebekah Brooks, that's a very serious matter indeed”

Adrian Sanders Liberal Democrat MP

She had been offering to speak to police on voluntary basis since January, so she was "very surprised" to learn she would be arrested, he added.

Her former boss, News Corp chairman Rupert Murdoch, and his son James Murdoch, chairman of News International, are also due to appear before MPs.

In other developments:

• Home Secretary Theresa May is to tell MPs about her "concerns" over the Metropolitan Police's hiring of ex-News of the World journalist Neil Wallis, who is currently on bail over phone hacking allegations
• Labour leader Ed Miliband calls for new media ownership rules to limit Rupert Murdoch's "dangerous" and "unhealthy" concentration of power

Liberal Democrat MP Adrian Sanders, a member of the select committee, questioned the timing of the latest arrest.

"In whose interest was it for this arrest to take place before Tuesday? Because if it does impede what we can ask, that's not going to go down well with my fellow committee members.

Rupert Murdoch is due to appear before MPs on Tuesday to answer questions on phone hacking

"Quite why now, just a few hours before our select committee meets, an arrangement has been made for an arrest. A lot of people are going to think this is very, very odd.

"If this is designed to take the spotlight off the police at the same time giving a shield to Rebekah Brooks, that's a very serious matter indeed. We don't know how much this is going to impede our questioning until we've been able to sit down and talk it through with the parliamentary counsel."

Another member of the select committee, Labour MP Jim Sheridan, said he hoped her arrest would not affect her appearance before MPs.

"The police will do whatever it is they feel necessary to do, and if they feel it's necessary to arrest Rebekah Brooks at this time, then so be it.

"I don't buy into the conspiracy theories that the police are doing something underhand. I think it's just that if they feel it necessary, then so be it. Their inquiry, it's far, far more important than any other inquiry."

Labour MP Chris Bryant, who believes his phone was hacked, also has concerns about the timing of the arrest.

"It may be that the police are wanting to protect evidence so that... they can lead to successful prosecutions, but there will be plenty of people who are saying, right, this is an opportunity for her to get out of saying things to the culture committee.

"In the end, of course, the police investigation is the most important part of what we've been trying to seek for a long time, so we do get to the bottom of the criminality at the News of the World."

Tenth arrest

Mrs Brooks's arrest is the tenth made by Operation Weeting police, who are conducting the current investigation into phone hacking.

Others arrested and bailed have included ex-NoW editor Andy Coulson, ex-NoW assistant editor Ian Edmondson, ex-NoW chief reporter Neville Thurlbeck, senior ex-NoW journalist James Weatherup, freelance journalist Terenia Taras, Press Association journalist Laura Elston, an unnamed 63-year-old man, and ex-NoW royal editor Clive Goodman.

Officers from Operation Elveden were also involved with this latest arrest. They are investigating allegations of inappropriate payments to police, under the supervision of the Independent Police Complaints Commission.

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Habsburg: Austro-Hungarian heir's heart to be buried

The heart of the last heir to the Austro-Hungarian Empire, Otto von Habsburg, is set to be buried in central Hungary.

The funeral of the last crown prince took place on Saturday in the Austrian capital Vienna, where his body was buried alongside those of his ancestors in the Imperial crypt.

His heart is being buried separately in accordance with Habsburg tradition.

The event is also an echo of medieval aristocratic custom.

Continue reading the main story

HEART BURIAL

Burying the heart separately to the body was a custom used by a number of medieval European aristocrats:

• Richard I (Richard the Lionheart): The English king's heart was buried at Rouen in Normandy after he died in 1199. His body was buried in Anjou
• Robert the Bruce: The king of the Scots, who died in 1329, is buried in Dunfermline Abbey but his heart is buried in Melrose Abbey
• The House of Habsburg has practised heart burial for centuries

But the practice was not limited to monarchs.

• English writer Thomas Hardy's body is interred in Poet's Corner in Westminster Abbey but his heart is buried in the grave of his first wife Emma in Dorchester.

Mr Habsburg, the son of the last emperor, died earlier this month at the age of 98.

His family fled Austria when their empire collapsed at the end of World War I, and he spent many decades in exile before giving up his claim to the throne in 1961.

As a member of the European parliament for two decades, Mr Habsburg was a passionate advocate of European unity who dedicated himself to having former communist-ruled states brought into the EU.

European Commission President Jose Manuel Barroso paid tribute to him as "a great European... who gave an important impetus to the European project throughout his rich life".

His heart will be buried in a private ceremony at 1900 local time (1700 GMT) in the Benedictine Abbey in Pannonhalma, near Budapest, after a requiem mass.

Mr Habsburg said he wanted his heart buried in Hungary to show the affection he held for the country, Austria's 19th-century partner in the Austro-Hungarian empire.

Click to play

Mourners gathered on the streets of Vienna for the funeral

The hearts of other members of the Habsburg dynasty have been kept in urns in Vienna's Imperial crypt, where their bodies have been taken for burial since 1632.

On Saturday thousands of Austrians and tourists lined the streets of Vienna's city centre ahead of a procession into St Stephen's Cathedral, where about 1,000 mourners had gathered.

Vienna's Cardinal Christoph Schoenborn presided over a funeral mass, attended by European royals including Sweden's King Carl Gustaf and Queen Silvia, Grand Duke Henri of Luxembourg and Prince Hans-Adam II of Liechtenstein.

Among the political figures at the ceremony were Austrian President Heinz Fischer, and the prime ministers of Croatia and Macedonia.

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