In giant “garage sale”, Japan’s TV giants hawk $3 billion of assets

TOKYO (Reuters) – Panasonic Corp, Japan‘s struggling maker of Viera brand TVs, owns more than 10 million square meters of office and factory space, dormitories for its workers and sports facilities for its rugby, baseball and women’s athletics teams.

As it battles for Christmas shoppers’ wallets in the year-end holiday season, the sprawling electronics conglomerate is also seeking buyers for some of those properties to trim its fixed costs and improve cashflow at a time of intense competition, particularly from South Korean rivals such as Samsung Electronics Co.

Japan’s other troubled TV makers, Sony Corp and Sharp Corp, are also selling buildings and businesses in a giant ‘garage sale’ that could raise a combined $ 3 billion.

Panasonic plans to raise $ 1.34 billion from offloading property and shares in other Japanese companies by end-March, the group’s chief financial officer Hideaki Kawai told Reuters.

“We have a lot of land and buildings in Japan and overseas,” he said in an interview at the company’s head office in Osaka, in western Japan. He declined to list which properties would go on the block, but said most are in Japan.

Included is a 24-storey central Tokyo block – built in 2003 with more than 47,300 square meters and housing 2,000 Panasonic workers – a source familiar with the plan told Reuters.

Kawai added that Panasonic would raise about a quarter of the sell-off funds by getting rid of shares it owns in other companies – a common practice of cross-shareholdings in Japan.

The proceeds would help bolster free cashflow to 200 billion yen ($ 2.43 billion) for the business year to March, Kawai said, and allow Panasonic to reduce its debt and maintain its crucial research and development effort as it revamps its business portfolio.

It will sell more assets in the year starting in April if cashflow dips below 200 billion yen, Kawai added. Panasonic President Kazuhiro Tsuga has promised to shut or sell businesses operating at below a 5 percent margin. Those sales could start as soon as April.

Panasonic’s fixed assets of $ 21 billion are around 30 percent more than those of Apple Inc, and are almost double the company’s market value. The company, founded almost a century ago as a small electrical extension socket maker, trades at around half its book value – which includes intangible assets such as patents. Sony trades at 39 percent of book, Sharp at 30 percent.

The fixed assets – buildings, land and machinery – of the three companies that were not so long ago a byword for innovation in household gadgetry total around $ 42 billion, while their combined market value is $ 24 billion.

CASHFLOW IS KING

The three firms have been downgraded by credit ratings agencies, making it tougher to raise funding on capital markets, and making asset sales more urgent.

Selling assets “is good in terms of their credit ratings because, for all three, it will lower fixed costs and they can reduce their capex requirements. Eventually, this could improve operating margins and, more importantly, cashflow,” said Alvin Lim, an analyst at Fitch Ratings in Seoul.

Fitch, which makes its ratings without input from company management, last month cut Panasonic to BB and Sony to BB minus, the first time one of the major agencies has relegated either company to junk status. Sharp is ranked B minus, adding to its borrowing costs.

“We rate Panasonic as investment grade, and it should have various funding options. Selling assets it can do without, to avoid raising additional borrowing, can be an option,” said Osamu Kobayashi, an analyst at Standard & Poor’s.

While Korean rivals have also benefited from a weaker local currency, data from the Japan Electronics and Information Technology Industries Association shows that Japanese production of consumer electronic equipment fell to just above $ 15 billion last year from more than $ 19 billion a decade ago. Output in September was just $ 980 million, half last year’s level.

“The gap with Korean makers seems to be widening. It’s going to be very difficult for them to regain their top-tier position,” said Fitch’s Lim.

As the three Japanese firms, all under new leadership, have sketched out restructuring plans, the cost of insuring their debt against defaulting in 5 years has dropped from spikes just a month ago. Credit default swaps for Sharp and Sony are down to levels last seen 3 months ago, while Panasonic’s have dropped 40 percent in the past month.

THREE PATHS

While Panasonic is looking to revamp its business around batteries, auto parts and household appliances, Sony is doubling down on smartphones, gaming and cameras. Sharp, meanwhile, is focusing on display screens and is forging alliances with the likes of Taiwan’s Hon Hai Precision Industry and U.S. chipmaker Qualcomm Inc.

Sony may also take the real estate sale route to raise much-needed cash, with a possible sale of its 37-storey New York headquarters, dubbed by New Yorkers as the ‘Chippendale’ because of its design that is reminiscent of the period English furniture. Selling that jewel could raise $ 1 billion, media have reported.

The maker of Vaio laptops, PlayStation gaming consoles and Bravia TVs may also sell its battery business, which makes lithium ion power packs for tablets, PCs and mobile phones. The company has been approached by investment banks offering to sell the unit, which employs 2,700 people and has three factories in Japan and two overseas assembly plants. Sony values the business’s fixed assets at $ 636 million.

Potential buyers could include BYD Co Ltd, a Chinese carmaker backed by billionaire investor Warren Buffett, and Taiwan’s Hon Hai – which part owns Sharp’s advanced LCD panel plant in Sakai, western Japan, and is in talks to buy TV assembly plants in China, Malaysia and Mexico for $ 667 million, Japan’s Sankei newspaper has reported.

Sharp has mortgaged nearly all its properties to secure a $ 4.6 billion bailout from Japanese banks and so has few assets to offer in a grand garage sale.

Instead, it’s selling part of the garage.

Qualcomm has agreed to buy a 5 percent stake in Sharp, making it the largest shareholder. Hon Hai, which earlier this year agreed to invest in Sharp – before its stock slumped in the wake of record losses – has said it remains interested in taking a stake.

“Whatever they can get to get through this fiscal period by scaling down their operation is a critical step for them to remain afloat,” said Fitch’s Lim.

($ 1 = 82.4700 Japanese yen)

(Additional reporting by Reiji Murai; Editing by Ian Geoghegan)

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UK hospital says royal prank call appalling after nurse death

LONDON/PERTH, Australia (Reuters) – The London hospital that treated Prince William‘s pregnant wife Kate condemned on Saturday an Australian radio station that made a prank call seeking information about the duchess, after the apparent suicide of a nurse who answered the phone.

There has been renewed soul-searching over media ethics after Jacintha Saldanha, 46, the nurse who was duped by the station’s call to the King Edward VII hospital, was found dead in staff accommodation nearby on Friday.

The owners of Sydney’s 2DayFM said it had done nothing wrong and no one could have foreseen the tragic outcome of the stunt, but two leading Australian firms suspended their advertising.

The hoax, in which the radio hosts – posing as Britain‘s Queen Elizabeth and Prince Charles despite Australian accents – successfully inquired after Kate’s medical condition, has made worldwide headlines.

The hospital’s chairman Lord Glenarthur urged the station’s owners to ensure that such an incident could never happen again.

“It was extremely foolish of your presenters even to consider trying to lie their way through to one of our patients, let alone actually make the call,” he said in a letter to Southern Cross Austereo Chairman Max Moore-Wilton.

“Then to discover that, not only had this happened, but that the call had been pre-recorded and the decision to transmit approved by your station’s management, was truly appalling.”

The immediate consequence had been the humiliation of two “dedicated and caring” nurses, he said. “The longer term consequence has been reported around the world and is, frankly, tragic beyond words,” Glenarthur added.

Australians from Prime Minister Julia Gillard to people in the street expressed their sorrow and cringed at how the hoax had crossed the line of acceptability.

Two large companies suspended their advertising from the popular Sydney-based station and a media watchdog said it would speak with 2DayFM’s owners.

The hoax raised concerns about the ethical standards of Australian media, as Britain’s own media scramble to agree a new system of self-regulation and avoid state intervention following a damning inquiry into reporting practices.

Southern Cross Austereo Chief Executive Rhys Holleran told a news conference in Melbourne on Saturday that the company would work with authorities in any investigation. He said he was “very confident” that the radio station had done nothing illegal.

“This is a tragic event that could not have been reasonably foreseen and we are deeply saddened by it. Our primary concern at this stage is for the family of Nurse Saldanha.”

Holleran added that 2DayFM radio hosts Mel Greig and Michael Christian were “completely shattered” by Saldanha’s death. The pair will stay off the air indefinitely, he said.

London detectives have sent a request to Sydney police to question the two presenters, Britain’s Sunday Times said.

“Officers have been in contact with Australian authorities,” a spokesman for London’s Metropolitan Police said.

Two high-profile Australian firms, the Coles supermarket group and phone company Telstra, said they were suspending advertising with the station.

Austereo said all advertising on 2DayFM had been shelved until at least Monday in a mark of respect to advertisers whose Facebook pages were inundated with thousands of hate messages.

The Twitter accounts of Greig and Christian were removed shortly after news of the tragedy in London broke.

SOCIAL MEDIA OUTRAGE

Social media were inundated with angry messages to the radio station in what has become the latest shock radio story to rile the Australian public. Earlier this year 2DayFM was reprimanded by Australia’s independent communications regulator after a radio host talked a 14-year-old girl into revealing on air that she had been raped.

So-called “shock jock” radio announcers are frequently denounced in Australia for their deeply personal and often derogatory attacks on politicians and ordinary citizens.

Communications Minister Stephen Conroy said that the independent broadcast regulator, the Australian Communications and Media Authority, had received complaints about the hoax.

The media fallout from the tragedy could extend beyond Australia’s shores, said British radio presenter Steve Penk, who has made a career out of prank calls.

“I think it will probably be the death of the wind-up phone call. I think (British media regulator) Ofcom will wrap it in so much red tape that it will make it almost impossible to get these things on the air,” he told Sky News.

Saldanha lived with her husband and two children in the western English city of Bristol. She moved to Britain from India around 10 years ago, British media reports said.

Her husband’s family, who live in the southern Indian state of Karnataka, told news agency Asian News International they would miss their “good-natured and beautiful” relative.

“At eight o’clock in the morning, he (Saldanha’s husband) rang up to say that she is no more, more than that we do not know about what actually happened. She is dead, that’s all,” said Camril Barboza, Saldanha’s mother-in-law.

The British royal family has long had an uneasy relationship with the media, which sank to its lowest after the 1997 death of Prince William’s mother Diana in a Paris car crash.

Palace officials acted swiftly this summer when a French magazine printed topless photos of Kate on holiday, taking legal action to curb republication.

Saldanha’s death threatens to cast a pall over the enthusiastic public welcome given to Kate’s pregnancy, which dominated newspaper front pages this week.

(Writing by Tim Castle and Jeremy Laurence; Editing by Mark Heinrich and Stephen Powell)

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Obama met Boehner on Sunday over fiscal cliff: aides

WASHINGTON (Reuters) – President Barack Obama met with Republican Speaker of the House of Representatives John Boehner on Sunday at the White House to negotiate ways to avoid the “fiscal cliff,” according to White House officials and a congressional aide.

The two sides declined to provide further details about the unannounced meeting. Obama and Boehner aides used the same language to describe it.

“This afternoon, the president and Speaker Boehner met at the White House to discuss efforts to resolve the fiscal cliff,” White House spokesman Josh Earnest said.

“We’re not reading out details of the conversation, but the lines of communication remain open,” he said.

An aide to Boehner emailed an identical quote.

The two sides are trying to reach an agreement that would stop automatic spending cuts and tax increases from going into effect at the beginning of the year. Analysts say if that so-called “fiscal cliff” occurs, the U.S. economy could swing back into a recession.

Obama has made clear he will not accept a deal unless tax rates for the wealthiest Americans rise. Boehner and many of his fellow Republicans say any tax increases would hurt a still fragile economy.

Last week Boehner and Obama spoke by phone, a conversation that the Republican leader described as pleasant but unproductive.

The common language used by both men’s aides suggests an agreement to keep details about their discussions private, which could help both of them sell less politically palatable aspects of an eventual deal to lawmakers in their respective parties.

(additional reporting by Rachelle Younglai; editing by Stacey Joyce)

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Obama, Boehner meet face-to-face on 'fiscal cliff'

For the first time in more than three weeks, President Obama and House Speaker John Boehner met face-to-face today at the White House to talk about avoiding the fiscal cliff.

White House Principal Deputy Press Secretary Josh Earnest would offer no details saying only, "The lines of communication remain open."

Erskine Bowles, the co-creator of a debt reducing plan, who was pessimistic a couple weeks ago, said he likes what he's hearing.

"Any time you have two guys in there tangoing, you have a chance to get it done," Bowles said on CBS's "Face the Nation."

The White House afternoon talks, conducted without cameras or any announcement until they were over, came as some Republicans were showing more flexibility about approving higher tax rates for the wealthy, one of the president's demands to keep the country from the so-called fiscal cliff -- a mixture of across-the-board tax increases and spending cuts that many economists say would send the country back into recession.

"Let's face it. He does have the upper hand on taxes. You have to pass something to keep it from happening," Sen. Bob Corker of Tennessee said on "FOX News Sunday."

This comes after the White House moderated one of its demands about tax rate increases for the wealthy.

The administration was demanding the rate return to its former level of 39.6 percent on income above $250,000. The so-called Bush tax cut set that rate at 35 percent. But Friday, Vice President Joe Biden signaled that rate could be negotiable, somewhere between the two.

"So will I accept a tax increase as a part of a deal to actually solve our problems? Yes," said Oklahoma Republican Tom Coburn on ABC's "This Week."

The problems the senator was referring to are the country's entitlement programs. And there was some progress on that front, too.

A leading Democrat said means testing for Medicare recipients could be a way to cut costs to the government health insurance program. Those who make more money would be required to pay more for Medicare.

"I do believe there should be means testing, and those of us with higher income and retirement should pay more. That could be part of the solution," Sen. Dick Durbin of Illinois said on NBC's "Meet the Press."

But Durbin said he would not favor raising the eligibility age from 65 years old to 67 years old, as many Republicans have suggested.

The White House and the speaker's office released the exact same statement about the negotiating session. Some will see that as a sign of progress, that neither side is talking about what was said behind closed doors.

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Anger at Australian radio station over royal hoax

LONDON (AP) — It started out as a joke, but ended in tragedy.

The sudden death of a nurse who unwittingly accepted a prank call to a London hospital about Prince William‘s pregnant wife Kate has shocked Britain and Australia, and sparked an angry backlash Saturday from some who argue the DJs who carried out the hoax should be held responsible.

At first, the call by two irreverent Australian DJs posing as royals was picked up by news outlets around the world as an amusing anecdote about the royal pregnancy. Some complained about the invasion of privacy, the hospital was embarrassed, and the radio presenters sheepishly apologized.

But the prank took a dark twist Friday with the death of nurse Jacintha Saldanha, a 46-year-old mother of two, three days after she took the hoax call. Police have not yet determined Saldanha‘s cause of death, but people from London to Sydney have been making the assumption that she died because of stress from the call.

King Edward VII’s Hospital, where the former Kate Middleton was being treated for acute morning sickness this week, wrote a strongly-worded letter to the 2DayFM radio station’s parent company Southern Cross Austereo, condemning the “truly appalling” hoax and urging it to take steps to ensure such an incident would never happen again.

“The immediate consequence of these premeditated and ill-considered actions was the humiliation of two dedicated and caring nurses who were simply doing their job tending to their patients,” the letter read. “The longer term consequence has been reported around the world and is, frankly, tragic beyond words.”

The hospital did not comment when asked whether it believed the prank call had directly caused Saldanha’s death, only saying that the protest letter spoke for itself.

DJs Mel Grieg and Michael Christian, who apologized for the prank on Tuesday, took down their Twitter accounts after they were bombarded by thousands of abusive comments. Rhys Holleran, CEO of Southern Cross Austereo, said the pair have been offered counseling and were taken off the air indefinitely.

No one could have foreseen the tragic consequences of the prank, he stressed.

“I spoke to both presenters early this morning and it’s fair to say they’re completely shattered,” Holleran told reporters on Saturday.

“These people aren’t machines, they’re human beings,” he said. “We’re all affected by this.”

Details about Saldanha have been trickling out since the duty nurse’s body was found at apartments provided by the private hospital, which has treated a line of royals before, including Prince Philip, who was hospitalized there for a bladder infection in June.

The nurse, who was originally from India, had lived with her partner Benedict Barboza and a teenage son and daughter in Bristol, in southwestern England, for the past nine years. The hospital praised her as a “first-class nurse” who was well-respected and popular among colleagues during her four years working there.

Just before dawn on Tuesday, Saldanha was looking after her patients when the phone rang. A woman pretending to be Queen Elizabeth II asked to speak to the duchess, and, believing the caller, Saldanha transferred the call to a fellow nurse caring for the duchess, who spoke to the two DJs about Kate’s condition live on air.

During the call — which was put online and later broadcast on news channels worldwide — Grieg mimicked the Britain’s monarch’s voice and asked about the duchess’ health. She was told Kate “hasn’t had any retching with me and she’s been sleeping on and off.” Grieg and Christian, who pretended to be Prince Charles, also discussed with the nurse when they could travel to the hospital to check in on Kate.

Three days later, officers responding to reports that a woman was found unconscious discovered Saldanha, who was pronounced dead at the scene. Police didn’t release a cause of death, but said they didn’t find anything suspicious. A coroner will make a determination on the cause.

In the aftermath of Saldanha’s death, some speculated about whether the nurse was subject to pressure to resign or about to be punished for the mistake. Royal officials said Prince William and Kate were “deeply saddened,” but insisted that the palace had not complained about the hoax. King Edward VII’s Hospital also maintained that it did not reprimand Saldanha.

“We did not discipline the nurse in question. There were no plans to discipline her,” a hospital spokesman said. He declined to provide further details, and did not respond to questions about the second nurse’s condition.

The Australian Communications and Media Authority, which regulates radio broadcasting, said it has received complaints about the prank and is discussing the matter with the Sydney-based station, which yanked its Facebook page after it received thousands of angry comments.

Holleran, the radio executive, would not say who came up with the idea for the call. He only said that “these things are often done collaboratively.” He said 2DayFM would work with authorities, but was confident the station hadn’t broken any laws, noting that prank calls in radio have been happening “for decades.”

The station has a history of controversy, including a series of “Heartless Hotline” shows in which disadvantage people were offered a prize that could be taken away from them by listeners.

Saldanha’s family asked for privacy in a brief statement issued through London police.

Flowers were left outside the hospital’s nurse’s apartments, with one note reading: “Dear Jacintha, our thoughts are with you and your family. From all your fellow nurses, we bless your soul. God bless.”

Officials from St. James’s Palace have said the duchess is not yet 12 weeks pregnant. The child would be the first for her and William.

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Synacor partners with Zynga to bring social games to pay TV

(Reuters) – Synacor Inc, partly owned by Intel Corp, said it partnered with Zynga Inc to allow pay TV and broadband providers offer social games to their customers.

Zynga shares rose about 3 percent to $ 2.30 in premarket trading, while Synacor shares were up about 5 percent at $ 6.60.

Synacor said certain pay-TV subscribers will get in-game currency each month as part of their subscription that can be redeemed for popular Zynga games such as Zynga Poker and FarmVille2.

The partnership comes days after Zynga revised its pact with Facebook Inc to lower its dependence on the social network.

Synacor, which debuted on the Nasdaq in February, offers authentication and management services to companies offering on-demand content, primarily cable and telecom service providers and consumer electronics brands.

(Reporting by Chandni Doulatramani in Bangalore; Editing by Sriraj Kalluvila)

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Lupus forces singer Toni Braxton into LA hospital

LOS ANGELES (AP) — Singer Toni Braxton has been hospitalized in Los Angeles.

The R&B performer says in a Tweet on Friday that she’s been hospitalized because of “minor health issues” related to Lupus. A spokeswoman confirmed the hospitalization but had no other details. “But no worries!,” Braxton wrote to fans. “I will be out any day now.”

The 45-year-old singer of “Un-break My Heart” revealed two years ago she has Lupus, a potentially deadly autoimmune disease that killed Braxton’s uncle. She also suffers from a narrowing of the blood vessels in her heart.

Braxton said in a recent “20/20″ interview that doctors told her the Lupus diagnosis meant her performing career would likely be diminished and the disease helped push her into a recent bankruptcy.

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Online:

http://tonibraxton.com

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Venezuela’s Chavez to have another cancer operation

CARACAS (Reuters) – Venezuelan President Hugo Chavez said on Saturday he would undergo another cancer operation in the coming days after doctors in Cuba found a third recurrence of malignant cells in his pelvic area.

The news is a big blow for his supporters in South America’s biggest oil exporter, who elected him in October to a new six-year term in power. Chavez has twice said he was cured, and then had to return to Cuba for more surgery.

In a televised broadcast flanked by ministers at the Miraflores presidential palace, Chavez said that if anything happened to him and a new vote had to be held, his supporters should vote for Vice President Nicolas Maduro – the first time the socialist leader has named a successor.

Chavez returned to Venezuela on Friday from having medical treatment in Cuba, ending a three-week absence from public view.

“Unfortunately, during these exhaustive exams they found some malignant cells in the same area … . It is absolutely necessary, absolutely essential, that I have to undergo a new surgical intervention,” the 58-year-old said, looking resolute.

“With God’s will, like on the previous occasions, we will come out of this victorious.”

The president has already had three cancer operations in Cuba since the middle of last year. News of more surgery will likely raise new doubts about his future and the fate of his self-styled “revolution” in the OPEC nation.

Chavez, who has dominated Venezuelan politics since taking power 14 years ago, said he would return to Havana on Sunday.

Under Venezuela’s constitution, an election would have to be held within 30 days if Chavez were to leave office within the first four years of his next term, due to begin on January 10.

The president has been receiving treatment at the Cimeq hospital in Havana as a guest of his friend and political mentor, former Cuban leader Fidel Castro.

(Additional reporting by Eyanir Chinea and Diego Ore; Editing by Xavier Briand)

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North Korea considers delaying rocket launch

SEOUL, South Korea (AP) — North Korea may postpone the controversial launch of a long-range rocket that had been slated for liftoff as early as this week, state media said Sunday, as international pressure on Pyongyang to cancel the provocative move intensified.

Scientists have been pushing forward with final preparations for the launch from a west coast site, slated to take place as early as Monday, but are considering "readjusting" the timing, an unidentified spokesman for the Korean Committee for Space Technology told North Korea's state-run Korean Central News Agency.

It was unclear whether diplomatic intervention or technical glitches were behind the delay. A brief KCNA dispatch said scientists and technicians were discussing whether to set new launch dates but did not elaborate.

Word of a possible delay comes just days after satellite photos indicated that snow may have slowed launch preparations, and as officials in Washington, Seoul, Tokyo, Moscow and elsewhere urged North Korea to cancel a liftoff widely seen as a violation of bans against missile activity.

Commercial satellite imagery taken by GeoEye on Dec. 4 and shared Friday with The Associated Press by the 38 North and North Korea Tech websites showed the Sohae site northwest of Pyongyang covered with snow. The road from the main assembly building to the launch pad showed no fresh tracks, indicating that the snowfall may have stalled the preparations.

However, analysts believed rocket preparations would have been completed on time for liftoff as early as Monday.

In Seoul, officials at the Defense Ministry, Joint Chiefs of Staff and the Foreign Ministry said Sunday they were looking into what might be behind the possible delay.

North Korea announced earlier this month that it would launch a three-stage rocket mounted with a satellite from its Sohae station southeast of Sinuiju sometime between Dec. 10 and Dec. 22. Pyongyang calls it a peaceful bid to send an observational satellite into space, its second attempt this year.

The launch announcement captured global headlines because of its timing: South Korea and Japan hold key elections this month, President Barack Obama begins his second term next month and China has just formed a new leadership.

The United States, Japan, South Korea and others have urged North Korea to refrain from carrying out the launch, calling it a violation of U.N. Security Council resolutions on nuclear activity because the rocket shares the same technology used for firing a long-range missile.

China, the North's main ally and aid provider, noted its "concern." It acknowledged North Korea's right to develop its space program but said that had to be harmonized with restrictions including those set by the U.N. Security Council.

Past launches have earned North Korea international condemnation and a host of sanctions.

South Korean analysts said North Korea's announcement of a possible delay suggests the country wants to resume talks with the U.S. on receiving much-needed aid, or has yielded to diplomatic pressure by China.

North Korea may not fire the rocket if the U.S. actively engages in talks with Pyongyang and promises to ship stalled food assistance to the country, said Koh Yu-hwan, a professor of North Korean studies at Seoul's Dongguk University.

In February, the U.S. agreed to provide 240,000 metric tons of food aid to North Korea in exchange for a freeze in nuclear and missile activities. The deal collapsed after North Korea launched a long-range rocket in April.

Analyst Baek Seung-joo of the South Korean state-run Korea Institute for Defense Analyses in Seoul said China must have sent a "very strong" message calling for the North to cancel the launch plans.

"North Korea won't say it would delay the launch due to foreign pressure so that's why they say scientists and technicians are considering delaying it," he said.

The unexpected launch announcement was issued Dec. 1 as North Koreans began mourning late leader Kim Jong Il, who died on Dec. 17, 2011.

An April launch from the same new launch pad was held on April 13, two days before the centennial of the birth of his father, North Korea founder Kim Il Sung. That rocket broke up just seconds after liftoff.

The U.S. and other nations see the launches as covers for illicit tests of missile technology. North Korea has unveiled missiles designed to target U.S. soil, and has tested two atomic bombs in recent years, but has not shown yet that it has mastered the technology for mounting a nuclear warhead to a long-range missile.

Six-nation negotiations to offer North Korea much-needed aid in exchange for nuclear disarmament have been stalled since 2009.

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Protesters surge around Egypt’s presidential palace

CAIRO (Reuters) – Tens of thousands of Egyptian protesters surged around the presidential palace on Friday and the opposition rejected President Mohamed Mursi‘s call for dialogue to end a crisis that has polarized the nation and sparked deadly clashes.

The Islamist leader’s deputy said he could delay a December 15 referendum on a constitution that liberals opposed, although the concession only partly meets a list of opposition demands that include scrapping a decree that expanded Mursi‘s powers.

“The people want the downfall of the regime” and “Leave, leave,” crowds chanted after bursting through barbed wire barricades and climbing on tanks guarding the palace of Egypt‘s first freely elected president.

Their slogans echoed those used in a popular revolt that toppled Mursi’s predecessor Hosni Mubarak in February 2011.

Vice President Mahmoud Mekky said in a statement sent to local media that the president was prepared to postpone the referendum if that could be done without legal challenge.

The dialogue meeting was expected to go ahead on Saturday in the absence of most opposition factions. “Tomorrow everything will be on the table,” a presidential source said of the talks.

The opposition has demanded that Mursi rescind a November 22 decree giving himself wide powers and delay the vote set for December 15 on a constitution drafted by an Islamist-led assembly which they say fails to meet the aspirations of all Egyptians.

The state news agency reported that the election committee had postponed the start of voting for Egyptians abroad until Wednesday, instead of Saturday as planned. It did not say whether this would affect the timing of voting in Egypt.

Ahmed Said, leader of the liberal Free Egyptians Party, told Reuters that delaying expatriate voting was made to seem like a concession but would not change the opposition’s stance.

He said the core opposition demand was to freeze Mursi’s decree and “to reconsider the formation and structure of the constituent assembly”, not simply to postpone the referendum.

The opposition organized marches converging on the palace which elite Republican Guard units had ringed with tanks and barbed wire on Thursday after violence between supporters and opponents of Mursi killed seven people and wounded 350.

Islamists, who had obeyed a military order for demonstrators to leave the palace environs, held funerals on Friday at Cairo’s al-Azhar mosque for six Mursi partisans who were among the dead. “With our blood and souls, we sacrifice to Islam,” they chanted.

“ARM-TWISTING”

In a speech late on Thursday, Mursi had refused to retract his November 22 decree or cancel the referendum on the constitution, but offered talks on the way forward after the referendum.

The National Salvation Front, the main opposition coalition, said it would not join the dialogue. The Front’s coordinator, Mohamed ElBaradei, a Nobel peace laureate, dismissed the offer as “arm-twisting and imposition of a fait accompli”.

Murad Ali, spokesman of the Brotherhood’s Freedom and Justice Party (FJP), said opposition reactions were sad: “What exit to this crisis do they have other than dialogue?” he asked.

Mursi’s decree giving himself extra powers sparked the worst political crisis since he took office in June and set off renewed unrest that is dimming Egypt’s hopes of stability and economic recovery after nearly two years of turmoil following the overthrow of Mubarak, a military-backed strongman.

The turmoil has exposed contrasting visions for Egypt, one held by Islamists, who were suppressed for decades by the army, and another by their rivals, who fear religious conservatives want to squeeze out other voices and restrict social freedoms.

Caught in the middle are many of Egypt’s 83 million people who are desperate for an end to political turbulence threatening their precarious livelihoods in an economy under severe strain.

“We are so tired, by God,” said Mohamed Ali, a laborer. “I did not vote for Mursi nor anyone else. I only care about bringing food to my family, but I haven’t had work for a week.”

ECONOMIC PAIN

A long political standoff will make it harder for Mursi’s government to tackle the crushing budget deficit and stave off a balance of payments crisis. Austerity measures, especially cuts in costly fuel subsidies, seem inevitable to meet the terms of a $ 4.8-billion IMF loan that Egypt hopes to clinch this month.

U.S. President Barack Obama told Mursi on Thursday of his “deep concern” about casualties in this week’s clashes and said “dialogue should occur without preconditions”.

The upheaval in the most populous Arab nation worries the United States, which has given billions of dollars in military and other aid since Egypt made peace with Israel in 1979.

The conflict between Islamists and opponents who each believe the other is twisting the democratic rules to thwart them has poisoned the political atmosphere in Egypt.

The Muslim Brotherhood’s spokesman, Mahmoud Ghozlan, told Reuters that if the opposition shunned the dialogue “it shows that their intention is to remove Mursi from the presidency and not to cancel the decree or the constitution as they claim”.

Ayman Mohamed, 29, a protester at the palace, said Mursi should scrap the draft constitution and heed popular demands.

“He is the president of the republic. He can’t just work for the Muslim Brotherhood,” Mohamed said of the eight-decade-old Islamist movement that propelled Mursi from obscurity to power.

(Additional reporting by Omar Fahmy; Writing by Edmund Blair and Alistair Lyon; Editing by Giles Elgood)

World News Headlines – Yahoo! News

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