Fitch Ratings warns US over budget fighting

WASHINGTON: Ratings agency Fitch warned Washington on Wednesday that continued political fighting over the government budget and deficit-cutting measures could lead to the US losing its AAA grade.

With the government two days away from enacting the harsh "sequester" budget cuts because political parties cannot agree a more moderate compromise, Fitch said that the policy deadlock could lower confidence in the world's largest economy.

It pointed out that after the $85 billion sequester cuts that begin to take effect Friday comes a battle over a six-month budget, which has to be concluded by March 31 or the government could be shut down.

And shortly after that, on May 19, the country will hit its statutory borrowing limit.

"Implementation of the automatic spending cuts -- the sequester -- and a government shutdown would not prompt a negative rating action," Fitch said in a statement.

"But such an outcome would further erode confidence that timely agreement will be reached on additional deficit-reduction measures necessary to secure the 'AAA' rating."

Fitch, like other rating agencies focused mainly on how the US will reduce its massive deficit and debt burdens over the medium term, said that the sequester itself was not bad.

It called the 2011 poison-pill deal between Democrats and Republicans, originally aimed at scaring them into a more moderate deficit-cutting plan, the government's "only substantive agreement on medium-term deficit reduction" so far.

But it acknowledged projections that implementing the sequester's $85 billion in targeted cuts over the next seven months, and $110 billion in reductions for the 2014 fiscal year, would slow economic growth.

"A re-profiling of the spending cuts would support the economic recovery," Fitch said.

"But eliminating the sequester without putting in place equivalent deficit-reduction measures would imply higher deficits and debt than currently projected by Fitch and increase the pressure on the US sovereign ratings."

- AFP/al

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LG's 4K phone upscaling squeezes Ultra HD from your mobile, wirelessly (video)

LG's 4K smart phone upscaling revealed in video

BARCELONA, Spain--LG is showing off a new smart phone system, that transforms your smart phone into a 4K media hub.

The South Korean company is calling the new platform the 'world's first wireless Ultra HD transmission technology'. If you've got a game or video playing on your mobile in HD, the new platform will upscale the feed to a 4K resolution, before beaming it out wirelessly to another device.

In this situation that second device was an LG 4K television, acting as a simple monitor for the 4K feed that the phone was pumping out.

We played with Epic Citadel, a graphically intensive tech demo that -- in this case -- was running on one of LG's Optimus G smart phones. The process of upscaling the feed to 4K is an intensive one, and the phone felt very warm when we touched it, but nevertheless the Optimus G's quad-core processor was handling the task with relative ease.

Games ran with a little judder, but as this technology is still months away from being released I'm prepared to withhold judgement for now. I was told the proprietary system would be cropping up in smart phones at the start of next year, or possibly the end of 2013.

It seems that tech companies want to control your living room, turning your smart phone into a portable media centre.

For me, the system demonstrates how powerful smart phone processors have become in just a few short years. If the Optimus G can handle it, I've no doubt that other mobiles emerging in the next year or two will be equally capable.

What do you think of 4K? Let me know in the comments below, and be sure to examine the rest of our coverage from Mobile World Congress.

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A History of Balloon Crashes

A hot-air balloon exploded in Egypt yesterday as it carried 19 people over ancient ruins near Luxor. The cause is believed to be a torn gas hose. In Egypt as in many other countries, balloon rides are a popular way to sightsee. (Read about unmanned flight in National Geographic magazine.)

The sport of hot-air ballooning dates to 1783, when a French balloon took to the skies with a sheep, a rooster, and a duck. Apparently, they landed safely. But throughout the history of the sport, there have been tragedies like the one in Egypt. (See pictures of personal-flight technology.)

1785: Pioneering balloonist Jean-Francois Pilatre de Rozier and pilot Pierre Romain died when their balloon caught fire, possibly from a stray spark, and crashed during an attempt to cross the English Channel. They were the first to die in a balloon crash.

1923: Five balloonists participating in the Gordon Bennett Cup, a multi-day race that dates to 1906, were killed when lightning struck their balloons.

1924: Meteorologist C. LeRoy Meisinger and U.S. Army balloonist James T. Neely died after a lightning strike. They had set off from Scott Field in Illinois during a storm to study air pressure. Popular Mechanics dubbed them "martyrs of science."

1995: Tragedy strikes the Gordon Bennett Cup again. Belarusian forces shot down one of three balloons that drifted into their airspace from Poland. The two Americans on board died. The other balloonists were detained and fined for entering Belarus without a visa. (Read about modern explorers who take to the skies.)

1989: Two hot air balloons collided during a sightseeing trip near Alice Springs, Australia. One balloon crashed to the ground killing all 13 people on board. The pilot of the other balloon was sentenced to a two-year prison term for "committing a dangerous act." Until today, this was considered the most deadly balloon accident.

2012: A balloon hit a power line and caught fire in New Zealand, killing all 11 on board. Investigators later determined that the pilot was not licensed to fly and had not taken  proper safety measures during the crash, like triggering the balloon's parachute and deflation system.

2012: A sightseeing balloon carrying 32 people crashed and caught fire during a thunderstorm in the Ljubljana Marshes in Slovenia. Six died; many other passengers were injured.

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Bring on the Cuts: Some Want the Sequester

Mark Lucas wouldn't mind seeing America's defense budget cut by billions.

"There's quite a bit of waste within the military," Lucas, who serves as Iowa state director for the conservative group Americans for Prosperity (AFP), told ABC News. "Being in there for 10 years, I've seen quite a bit of it."

With the budget sequester set to kick in on Friday, the former Army ranger is among a small chorus of conservatives saying bring on the cuts.

Read more: Bernanke on Sequester Cuts: Too Much, Too Soon

Lucas cited duplicative equipment purchases, military-run golf courses and lavish food on larger bases -- unlike the chow he endured at a combat operations post in Afghanistan with about 120 other soldiers.

"These guys would have very good food, and I'm talking almost like a buffet style, shrimp and steak once a week, ice cream, all this stuff," Lucas said. "They had Burger Kings and Pizza Huts and McDonald's. And I said to myself, 'Do we really need this?'"

Lucas and AFP would like to see the sequester modified, with federal agencies granted more authority to target the cuts and avoid the more dire consequences. But the group wants the cuts to happen.

"We're very supportive of the sequestration cuts but would prefer to see more targeted cuts at the same level," said the group's spokesman, Levi Russell.

As President Obama and his Cabinet members are sounding the sequester alarm bells, AFP's willingness shows that not everyone is running for the hills.

Charles Dharapak/Pool/AP Photo

Speaker Boehner Hopes Senate 'Gets Off Their Ass' Watch Video

Sequester Showdown: Automatic Spending Cuts Loom Watch Video

President Obama Details Consequences of Sequester Cuts Watch Video

Read more: 57 Terrible Consequences of the Sequester

Obama traveled to Norfolk, Va., on Tuesday to speak at a shipyard about cuts and layoffs to defense contractors. In his most recent weekly radio address, he told Americans that the Navy has already kept an aircraft carrier home instead of deploying it to the Persian Gulf. And last week, he spoke before national TV cameras at the White House, warning that first responders would be laid off.

Homeland Security Secretary Jane Napolitano has warned that the sequester will "leave critical infrastructure vulnerable to attacks." Transportation Secretary Ray LaHood has warned that air travel will back up after the Federal Aviation Administration furloughs air traffic controllers. And the heads of 18 other federal agencies told Congress that terrible things will happen unless the sequester is pushed off.

Some Republicans have accused the president of scaremongering to gin up popular support for tax hikes. Obama has warned of calamity and demanded compromise in the next breath, and a few Republicans have rejected this as a false choice.

Read more: Boehner Hopes Senate 'Gets Off Their Ass'

"I don't think the president's focused on trying to find a solution to the sequester," House Speaker John Boehner told reporters at a press conference on Tuesday. "For 16 months, the president's been traveling all over the country holding rallies, instead of sitting down with Senate leaders in order to try to forge an agreement over there in order to move the bill."

After Obama spoke to governors at the this week, Republican Louisiana Gov. Bobby Jindal told ABC News' Jonathan Karl outside the White House that the president is exaggerating the sequester's consequences.

"He's trying to scare the American people," Jindal said. "He's trying to distort the impact."

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Vulcan and Cerberus win popular Pluto moon-naming vote

Jacob Aron, reporter

First contact any time now (Image: CBS via Getty)

Nearly half a million votes are in, and Vulcan and Cerberus are the most popular names for the fourth and fifth moons of Pluto - currently known as P4 and P5.

The team that discovered the two moons asked the public to vote on 12 potential names, including Cerberus. But they also accepted write-in votes as long as they were taken from Greek and Roman mythology and related to Hades and the underworld - keeping to the theme used to name Pluto's three other moons.

"We have been overwhelmed by the world's response," says Mark Showalter of the SETI Institute in Mountain View, California, who led the discovery of P4 and P5.

Despite not being on the original list of 12, Vulcan is most popular with nearly 175,000 votes. The name was originally suggested by Star Trek actor William Shatner, in honour of a planet from the show. It just about fits the criteria: in Roman mythology, Vulcan, the god of lava and smoke, is Pluto's nephew. "Any connection to the Star Trek TV series is purely coincidental," Showalter said at the time

Cerberus got the second slot with just under 100,000 votes, while the next
favourite, Styx, trailed with fewer than 88,000. Showalter and the team
will now present the names to the International Astronomical Union,
which has final approval. If the IAU decides to
reject either name, it won't be the first time it has gone against
public opinion on Pluto - there were mass demonstrations following the union's decision to demote it to dwarf-planet status in 2006.

"Please
be patient now," says Showalter. "It could take one to two months for the
final names of P4 and P5 to be selected and approved. Stay tuned."

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Rental market for private homes may soften: analyst

SINGAPORE: Landlords of private homes may see the rental market softening when higher property taxes kick in next year, as these investors grapple with higher holding costs.

Owning luxury or investment homes will incur higher property taxes starting January 2014.

For private homes not occupied by owners, new marginal property tax rates of 12 to 20 per cent will be levied in addition to the current 10 per cent.

Coupled with the growing number of vacant apartments, industry players say Singapore's rental market is likely to soften.

Colin Tan, research head at Chesterton Suntec International said: "With the taxes especially, on vacant properties, which means you cannot seek relief from the taxman, investors now have to be a bit more cautious in trusting what the agents or sellers are telling them. What the tax does is to increase holding costs for investors.

"Going forward, I see rentals could soften because even at today's statistics - end of last year - there have been 12,000 vacant apartments. Can you imagine under the new tax regime, the landlord will have to start to look for tenants. And that makes a big difference."

The top one per cent of owner-occupied homes, about 12,000 units, will pay more taxes. This is on top of the various stamp duties imposed from the seven rounds of cooling measures.

But experts say Singapore properties remain attractive long-term investments for foreign buyers.

Kelvin Tay, regional chief investment officer at Southern APAC, UBS, said: "The number of foreign buyers as a proportion of total buyers, has actually dropped to 7 percent. If you are talking about the very high-end properties, you are talking about competition from other top global cities like London, San Francisco, New York, and not just Singapore. So you have to compare the real returns from the perspective of all these jurisdictions. Then you got to think about the regulatory regimes, the taxes that are in place."

Edmund Leow, head of tax and wealth management at Baker & McKenzie.Wong & Leow said: "We have to look at income tax, property, capital gain tax, estate duty and all kinds of other taxes. On an overall basis, Singapore is still fairly attractive to other foreigners, most other countries are also introducing similar measures."

- CNA/xq

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Illegal music downloads dropped in 2012, says report

Fewer people are illegally downloading and sharing music, NPD Group said in a new report out today.

Among those surveyed for NPD's "Annual Music Study 2012," 40 percent who illegally downloaded music via peer-to-peer services last year said they had stopped or downloaded less music this year.

Overall, the number of illegally downloaded songs from P2P services dropped by 26 percent this year from 2011.

Part of that was due to an overall decline in the use of P2P services. At the 2005 peek of P2P file sharing networks, 33 million people used them. For 2012, that number totaled 21 milllion.

But last year's trend extended beyond P2P services.

Songs burned and ripped from CDs owned by friends and family fell by 44 percent. The number of music files shared from hard drives decreased by 25 percent. And the amount of songs from digital lockers dropped by 28 percent, based on the people surveyed by NPD.

Why the drop in music sharing? NPD cited three reasons.

First and foremost, the rise of free music streaming services has sliced into the popularity of illegal music downloads. Half of the people polled who had stopped or cut back on their illegal downloads said they did so because of the increase in free and legal music streaming services.

Second, the music industry's legal tactics have forced many P2P sites to close shop. One of the most prominent examples was Limewire, which shut down almost two years ago after a lawsuit found the company liable of copyright infringement.

And third, a fair number of P2P sites have proven a bit too risky, offering viruses and spyware as part of the price to pay for free music.

Almost 20 percent of the P2P users surveyed said they stopped or reduced their downloads because their favorite site went offline or the sites they used created problems with viruses and spyware.

"In recent years, we've seen less P2P activity, because the music industry has successfully used litigation to shut down Limewire and other services," Russ Crupnick, NPD's senior vice president of industry analysis, said in a statement. "Many of those who continued to use P2P services reported poor experiences, due to rampant spyware and viruses on illegal P2P sites."

NPD's "Annual Music Study 2012" report was based on consumer surveys conducted last year.

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Sharks Warn Off Predators By Wielding Light Sabers

Diminutive deep-sea sharks illuminate spines on their backs like light sabers to warn potential predators that they could get a sharp mouthful, a new study suggests.

Paradoxically, the sharks seem to produce light both to hide and to be conspicuous—a first in the world of glowing sharks. (See photos of other sea creatures that glow.)

"Three years ago we showed that velvet belly lanternsharks [(Etmopterus spinax)] are using counter-illumination," said lead study author Julien Claes, a biologist from Belgium's Catholic University of Louvain, by email.

In counter-illumination, the lanternsharks, like many deep-sea animals, light up their undersides in order to disguise their silhouette when seen from below. Brighter bellies blend in with the light filtering down from the surface. (Related: "Glowing Pygmy Shark Lights Up to Fade Away.")

Fishing the 2-foot-long (60-centimeter-long) lanternsharks up from Norwegian fjords and placing them in darkened aquarium tanks, the researchers noticed that not only do the sharks' bellies glow, but they also had glowing regions on their backs.

The sharks have two rows of light-emitting cells, called photophores, on either side of a fearsome spine on the front edges of their two dorsal fins.

Study co-author Jérôme Mallefet explained how handling the sharks and encountering their aggressive behavior hinted at the role these radiant spines play.

"Sometimes they flip around and try to hit you with their spines," said Mallefet, also from Belgium's Catholic University of Louvain. "So we thought maybe they are showing their weapon in the dark depths."

To investigate this idea, the authors analyzed the structure of the lanternshark spines and found that they were more translucent than other shark spines.

This allowed the spines to transmit around 10 percent of the light from the glowing photophores, the study said.

For Predators' Eyes Only

Based on the eyesight of various deep-sea animals, the researchers estimated that the sharks' glowing spines were visible from several meters away to predators that include harbor seals (Phoca vitulina), harbor porpoises (Phocoena phocoena), and blackmouth catsharks (Galeus melastomus).

"The spine-associated bioluminescence has all the characteristics to play the right role as a warning sign," said Mallefet.

"It's a magnificent way to say 'hello, here I am, but beware I have spines,'" he added.

But these luminous warning signals wouldn't impede the sharks' pursuit of their favorite prey, Mueller's bristle-mouth fish (Maurolicus muelleri), the study suggested. These fish have poorer vision than the sharks' predators and may only spot the sharks' dorsal illuminations at much closer range.

For now, it remains a mystery how the sharks create and control the lights on their backs. The glowing dorsal fins could respond to the same hormones that control the belly lights, suggested Mallefet, but other factors may also be involved.

"MacGyver" of Bioluminescence

Several other species use bioluminescence as a warning signal, including marine snails (Hinea brasiliana), glowworms (Lampyris noctiluca) and millipedes (Motyxia spp.).

Edith Widder, a marinebiologist from the Ocean Research and Conservation Association who was not involved in the current study, previously discovered a jellyfish whose bioluminescence rubs off on attackers that get too close.

"It's like paint packages in money bags at banks," she explained.

"Any animal that was foolish enough to go after it," she added "gets smeared all over with glowing particles that make it easy prey for its predators."

Widder also points out that glowing deep-sea animals often put their abilities to diverse uses. (Watch: "Why Deep-Sea Creatures Glow.")

"There are many examples of animals using bioluminescence for a whole range of different functions," she said.

Mallefet agrees, joking that these sharks are the "MacGyver of bioluminescence."

"Just give light to this shark species and it will use it in any possible way."

And while Widder doesn't discount the warning signal theory, "another possibility would be that it could be to attract a mate."

Lead author Julien Claes added by email, "I also discovered during my PhD thesis that velvet belly lanternsharks have glowing organs on their sexual parts."

And that, he admits, "makes it very easy, even for a human, to distinguish male and female of this species in the dark!"

The glowing shark study appeared online in the February 21 edition of Scientific Reports.

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'93 WTC Bombing Crushed Lives, Not Memories

Edward Smith remembers vividly the call from the morgue 20 years ago today, that his pregnant wife had died in the World Trade Center bombing hours before she was supposed to start her maternity leave.

"It seems like kind of yesterday sometimes," he told ABC News, "but it seems like a long time ago, too."

Today marks the 20th anniversary of the 1993 WTC bombing, which was overshadowed eight years later by the 9/11 attacks. Six people died and about 1,000 were injured after terrorists detonated a truck bomb in the parking garage of the World Trade Center's North Tower Feb. 26, 1993.

Four of the six killed -- Robert Kirkpatrick, 61, Stephen A. Knapp, 47, William Macko, 57, and Monica Rodriguez Smith, 35 -- were employees of the Port Authority of New York and New Jersey, which owned the buildings. John DiGiovanni, 45, a dental-supply salesman visiting the World Trade Center, and Wilfredo Mercado, 37, a purchasing agent for Windows on the World restaurant, also died.

To commemorate the event, ABC News spoke with several people affected by the bombing -- a widower, a former Port Authority executive director, a plaintiff's attorney and a jury foreman -- to illustrate how the bombing resonates 20 years later.

EDWARD SMITH: Husband of pregnant Monica Rodriguez Smith, who died in the bombing.

Edward and Monica Rodriguez Smith on their wedding day, Aug. 31, 1990.

September 11: World Trade Center Time Lapse Watch Video

Edward Smith, 50, remembers where he was Feb. 26, 1993, when he heard the news.

"I was up in Boston, and I had heard there was a fire at the [World] Trade Center," Smith told ABCNews.com last week. "I turned the TV on, and eventually heard there was an actual bombing, and drove down as quickly as I could."

Smith said he couldn't reach his wife, Monica Rodriguez Smith, a secretary for a mechanical supervisor for the Port Authority of New York and New Jersey who worked in the World Trade Center, for "hours and hours."

He said he didn't hear from her or anything about her until he contacted the New York City morgue at 11:30 p.m. that evening.

"Obviously, I was informed that I should come there," Smith said.

He and his wife had been married for a little more than three years, he said, and Feb. 26 was to be Monica's last day of work before she went on maternity leave. They were expecting their first child, a boy, to be named Eddie.

"She had worked at the Port Authority for at least 12 years," Smith said. "And she had just gotten an award for never having a sick day. That was a little thing you remember."

Smith said the World Trade Center was where he met his wife the first time.

"I was a sales guy, selling to the Port Authority, and she was the admin [secretary] for one of the guys," he said. "For the first two years, she wouldn't go out with me.

"She said, 'Do you know how many knuckleheads come in here and ask me out? What makes you different?'" Smith recalled Monica's saying.

It took her two years to go out on a date with him, Smith said.

The couple tied the knot Aug. 31, 1990. Smith said he even bought the house in which he grew up on Long Island to raise their family.

But after the events of Feb. 26, 1993, Smith said, it was hard to stay in New York. Shortly after the bombing, he moved to Arizona and later to California.

"There were too many reminders, it was too much," he said.

Smith now resides in Phoenix, but makes a trip to New York every year for the memorial in February.
This year is no exception.

"It's kind of an interesting feeling," he said of the 20-year anniversary. "It seems like kind of yesterday sometimes, but it seems like a long time ago, too."

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Armband adds a twitch to gesture control

And you thought depth-sensing cameras were cool: well, now there's a gesture control device that looks like a sweatband. It lets you control everything from computers to flying drones just by moving the muscles in your forearm.

The Myo, built by Canadian startup firm Thalmic Labs, based in Kitchener, Ontario, aims to bring gestural interfaces right into the mainstream. Electrodes embedded in the band read electrical activity in a user's muscles as they contract or relax to make gestures with their hand and arm, and transmit it wirelessly to software that interprets the movements into commands.

"We really have this belief that technology can be used to enhance our abilities," says Stephen Lake, co-founder of Thalmic Labs. "This is a way of using natural actions that we've evolved to intuitively control the digital world."

Lake and his team built Myo using electrodes that work without making direct contact with the skin, unlike medical electrodes. The first generation can recognise around 20 gestures, some as subtle as the tap of a finger – and it is programmed to ignore random noise generated by other body movements.

Myo's creators envision it as an easy way to interact with everything from web browsers to video games to small drones. The first generation of the product, is expected to cost $149 and ship later this year. It will come with software that will allow any Windows or Apple Mac machine to recognise the gestures we use on touchscreens – like a vertical swipe to scroll down a page, or a pinch to zoom.

"It's not very often that a new, affordable and convenient interface technology comes along, so I think a lot of programmers are going to want to try it," says Trevor Blackwell, founder of robotics company Umbrella Research and a partner in Y Combinator. This startup incubator programme is based in Mountain View, California and has provided Thalmic Labs with funding in exchange for a 7 per cent stake in the company. "I think so far we've only thought of around 1 per cent of its potential applications."

Thalmic Labs is not the first firm to try making a device that recognises gestures by sensing muscle activity. In 2008, Microsoft created a prototype called MUCI that worked in a similar fashion to Myo, but needed medical electrodes, which are not feasible outside of a laboratory setting.

There are also devices that use cameras to precisely track users' hand motions, but they are either in early stages of development, or not portable. "Maybe this couldn't have been foreseen by early researchers working with cameras, but people don't like having cameras watching them all the time," Blackwell says. "Thalmic solves that problem nicely." Though the first generation of Myo is only just launching, the team is already imagining ways to integrate their rigs with augmented reality devices like the head-mounted display, Google Glass.

"If they combined with Google's Project Glass, I think it would be huge," says computer scientist Shahzad Malik, who co-founded the software company CognoVision of Toronto. "Something like Thalmic's technology is super-useful since you can do interactions in a subtle way, which is important when you're in a public venue."

"We're interested in seeing just how closely we can integrate technology into our daily lives and give people superpowers, if you like," says Lake.

Wear tech... look great?

Making wearable technology fashionable is tough – think belt-mounted cellphones, beepers, and bluetooth ear pieces. But iPod earbuds and headphones seem to work.

How do you get the mix right? Google is working hard to make Project Glass rigs look hip, even convincing clothing designer Diane von Fürstenberg and her models to wear prototypes of the head-mounted displays at Fashion Week in New York last year.

Myo bands (see main story) could be an easier sell , says computer scientist Shahzad Malik. "I could see these bands becoming smaller and smaller, or are made in different colours. Or there could be clothing with it built in," he says.

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