Asian shares fall on caution before earnings reports

 Asian shares fell on Tuesday as investors took a break from the new year's rallies, with caution setting in ahead of corporate earnings season for the last quarter of 2012 and the European Central Bank's policy meeting later in the week.
The euro remained firm against the dollar on speculation the ECB might refrain from signalling more interest rate cuts when it meets on Thursday.
The dollar paused from its rapid and sharp rally against the yen after rising more than 10 percent in less than two months on speculation the new Japanese government will push for aggressive monetary easing to beat deflation.
U.S. stock prices retreated from five-year highs on Monday, spurring selling of oil, gold and other risky investments and reviving some safety bids for U.S. and German government debt.
U.S. earnings season unofficially kicks off when aluminium maker Alcoa reports its results after Tuesday's market close.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.3 percent, after drifting lower the previous session when investors took profits from the new year rally, which lifted the index more than 2 percent in the first week of 2013.
South Korean shares were among the underperformers with a 0.4 percent drop, despite Samsung Electronics, the world's top maker of memory chips and handsets, estimating its October-December operating profit at a record 8.8 trillion won.
Samsung's guidance, coming ahead of full quarterly results by January 25, was in line with forecasts. A technical glitch and a worrying outlook for corporate results cooled investment appetite.
"Overall, fourth-quarter earnings are likely to be bad, except for some tech firms. However, the economy is turning around, so this is likely to be the worst of it," Kim Young-joon, an analyst at SK Securities, said of Seoul shares.
The dollar was down 0.2 percent to 87.60, trimming earlier losses.
Japan's benchmark Nikkei stock average fell 0.5 percent, after snapping a five-session winning streak on Monday when a pause in the yen's weakness triggered profit-taking on exporters.
The euro inched up 0.1 percent to $1.3129.
"Trading for the new year kicked off in full force yesterday and it is natural for investors to start cautiously with profit taking from the new year's rally," said Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo.
"I expect position adjustments to continue ahead of key events such as the ECB meeting and earnings reports starting with Alcoa," Saito said.
He said the euro could still push higher to around $1.3150 ahead of the ECB meeting.
Saito said the dollar may face selling pressure against the yen, having scaled its highest since July 2010 at 88.48 on Friday, up about 7 percent over the past month. But he said support was seen firm at 86.50 yen.
USEFUL LINKS:
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LIGHT DATA
Australia's trade deficit in November widened to its largest since early 2008 as imports again outpaced exports, though a recent meteoric rise in the price of iron ore suggests the worst of the trade pain is over for the resource-rich nation.
China's annual economic growth may have quickened to 7.8 percent in the fourth quarter, a Reuters poll showed, snapping seven straight quarters of weaker expansion, but the recovery is likely to be tepid and the economy may need continued policy support. The data is due out on January 18.
Before the growth data, China will release its trade data on Thursday, which includes initial estimates for metals imports and exports.
A firmer euro and hopes for the Chinese data underpinned London copper prices, which rose 0.3 percent to $8,096 a tonne, as China is the world's biggest copper consumer accounting for 40 percent of refined demand.
"It may be there is a sense that they (metals) have been oversold in the short term," said metals analyst Ivan Szpakowski at Credit Suisse in Singapore, adding that the euro's gains have also provided added support.
U.S. crude inched up 0.1 percent to $93.30 a barrel and Brent futures inched up 0.1 percent to $111.50.

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Asia stocks down ahead of US corporate earnings

 Asian stock markets headed lower Tuesday as investors turned cautious before U.S. earnings season kicks off this week.
Investors will get a feel for corporate America's outlook as earnings reports start coming. Aluminum producer Alcoa Inc. will launch the reporting season for the fourth quarter of 2012 on Tuesday after U.S. markets close. Events during the quarter such as Superstorm Sandy, the presidential election, and worries about the narrowly avoided "fiscal cliff" could lead to some unexpected results.
Japan's Nikkei 225 index fell 0.5 percent to 10,548.56 as the yen crept upward against the U.S. dollar. The rebound in the yen led to some investors to sell export shares that had surged as the currency weakened in recent weeks. Isuzu Motors Co. fell 3 percent while Mazda Motor Corp. lost 3.9 percent.
Hong Kong's Hang Seng fell 0.4 percent to 23,239.64. South Korea's Kospi lost 0.4 percent to 2,003.35 and Australia's S&P/ASX 200 shed 0.1 percent to 4,712.70. Benchmarks in Singapore, Taiwan and Thailand fell, while Indonesia and the Philippines rose. Mainland Chinese shares were mixed.
Major indexes surged last week after U.S. lawmakers passed a bill to avoid a combination of government spending cuts and tax increases that have come to be known as the fiscal cliff. The deal, however, remains incomplete. Politicians will face another deadline in two months to agree on more spending cuts.
"The looming budget battle in the US has also prompted some hesitancy to buy risk assets," said analysts at Credit Agricole CIB in Hong Kong.
Benchmark crude oil contract for February delivery was up 9 cents to $93.27 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 10 cents to close at $93.19 a barrel on the Nymex on Monday.
In currencies, the euro rose to $1.3129 from $1.3112 in New York late Monday. The dollar fell to 87.65 yen from 87.84 yen.

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Venezuela opposition: Chavez secrecy feeds rumors

CARACAS, Venezuela (AP) — Venezuela's opposition demanded that the government reveal specifics of President Hugo Chavez's condition Wednesday, criticizing secrecy surrounding the ailing leader's health more than three weeks after his cancer surgery in Cuba.
Opposition coalition leader Ramon Guillermo Aveledo said at a news conference that the information provided by government officials "continues to be insufficient."
Chavez has not been seen or heard from since the Dec. 11 operation, and Vice President Nicolas Maduro on Tuesday said the president's condition remained "delicate" due to complications from a respiratory infection.
Chavez's elder brother, Adan, arrived in Havana on Wednesday, said Jorge Arreaza, the president's son-in-law and science minister. "We're meeting with him, Vice President Maduro and Attorney General Cilia Flores," Arreaza said in a message on Twitter.
"The medical team explains to us that President Chavez's condition continues to be stable within his delicate state," Arreaza said in another message, adding that Chavez "continues battling hard and he sends all his love to our people."
Maduro and other government officials have urged Venezuelans not to heed rumors about Chavez's condition.
Aveledo said the opposition has been respectful during Chavez's illness, and said that "the secrecy is the source of the rumors, which increase the uncertainty and cause distress."
"They should tell the truth," Aveledo said, noting that Maduro had pledged to provide full reports about Chavez's condition. He reiterated the opposition's call for the government to release a medical report and said all indications are that Chavez won't be able to be sworn in to begin a new term Jan. 10.
If Chavez can't take office on that date, Aveledo said the constitution is clear that the National Assembly president should then take over temporarily until a new election is held. He said what happens next in Venezuela should be guided by "the truth and the constitution."
If Chavez dies or is unable to continue in office, the Venezuelan Constitution says a new election should be held within 30 days.
With rumors swirling that Chavez had taken a turn for the worse, Maduro said on Tuesday that he had met with the president twice and had spoken with him.
"He's totally conscious of the complexity of his post-operative state and he expressly asked us ... to keep the nation informed always, always with the truth, as hard as it may be in certain circumstances," Maduro said in the prerecorded interview in Havana, which was broadcast Tuesday night by the Caracas-based television network Telesur.
Both supporters and opponents of Chavez have been on edge in the past week amid shifting signals from the government about the president's health. Officials have reported a series of ups and downs in his recovery — the most recent, on Sunday, announcing that he faced the new complications from a respiratory infection.
Maduro said on Tuesday that Chavez faces "a complex and delicate situation." But he also said that when he talked with the president and looked at his face, he seemed to have "the same strength as always."
The vice president said he planned to return to Caracas on Wednesday, though there was no confirmation of a return trip as of Wednesday night.
His remarks about the president came at the end of an interview in which he praised Cuba's government effusively and touched on what he called the long-term strength of Chavez's socialist Bolivarian Revolution movement. He mentioned that former Cuban President Fidel Castro had visited the hospital where Chavez was treated.
In Washington, the U.S. State Department said procedures under the Venezuelan Constitution should be followed if Chavez is no longer able to carry out his duties as president.
"We want to see any transition take place in a manner that is consistent with the Venezuelan Constitution, that any election be fully transparent, democratic, free and fair," State Department spokeswoman Victoria Nuland told reporters on Wednesday.
Asked if Chavez being out of the picture would make it easier to improve long-strained ties between Venezuela and the U.S., Nuland said, "Obviously we will judge our ability to improve our relationship with Venezuela based on steps they are able to take."
The U.S. Embassy in Caracas has been without an ambassador since July 2010. Chavez rejected the U.S. nominee for ambassador, accusing him of making disrespectful remarks about Venezuela's government. That led Washington to revoke the visa of the Venezuelan ambassador.
But recently U.S. and Venezuelan diplomats began high-level conversations aimed at improving relations, a U.S. government official said. The official spoke on condition of anonymity because he wasn't authorized to speak publicly about the matter.
The official confirmed recent reports that Roberta Jacobson, assistant secretary of state for Western Hemisphere affairs, spoke by telephone with Maduro in November and discussed ways of improving relations. He also confirmed that U.S. diplomat Kevin Whitaker had a subsequent conversation with Roy Chaderton, Venezuela's ambassador to the Organization of American States.
Venezuelan diplomats could not be reached to comment about those recent contacts with U.S. officials.
In Bolivia, meanwhile, President Evo Morales said he is concerned about his friend and ally.
"I hope we can see him soon," Morales said at a news conference Wednesday. "But it's a very worrying situation."
"I've tried to make contact with the vice president, and it's been difficult. I hope all of their aims are achieved to save President Chavez's life."
Before his operation, Chavez acknowledged he faced risks and designated Maduro as his successor, telling supporters they should vote for the vice president if a new presidential election were necessary.
Maduro didn't discuss the upcoming inauguration plans, saying only that he is hopeful Chavez will improve.
"Someone asked me yesterday by text message: How is the president? And I said, 'With giant strength,'" Maduro said. He recalled taking Chavez by the hand: "He squeezed me with gigantic strength as we talked.

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Venezuelan gov't: Chavez fighting lung infection

CARACAS, Venezuela (AP) — Venezuela's government says President Hugo Chavez is being treated for a respiratory deficiency after complications from a severe lung infection.
Information Minister Ernesto Villegas provided the update on the ailing president's condition Thursday night. He read from a statement saying that Chavez's lung infection had led to "respiratory deficiency" and required strict compliance with his medical treatment.
The government expressed confidence in the medical team treating Chavez in Cuba.

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Disputes brewing over Hugo Chavez's inauguration

CARACAS, Venezuela (AP) — President Hugo Chavez is due to be sworn in for a new term in less than a week and his closest allies still aren't saying what they plan to do if the ailing leader is unable to return from a Cuban hospital to take the oath of office.
The Venezuelan government on Thursday night described Chavez's lung infection as "severe" and said he is now being treated for "respiratory deficiency."
Chavez hasn't been seen or heard from since his Dec. 11 cancer surgery, and speculation has grown that his illness could be reaching its final stages. The president's elder brother Adan and National Assembly President Diosdado Cabello joined a parade of visitors who saw Chavez in Havana this week, and then returned to Caracas on Thursday along with Vice President Nicolas Maduro.
"In the past hours, we've been accompanying President Hugo Chavez and taking him the courage and strength of the Venezuelan people," Maduro said on television. Appearing next to Cabello visiting a government-run coffee plant in Caracas, he said they had been with Chavez together with the president's brother, his son-in-law Jorge Arreaza, Oil Minister Rafael Ramirez and Attorney General Cilia Flores.
Chavez's health crisis has raised contentious questions ahead of the swearing-in set for Jan. 10, including whether the inauguration could legally be postponed, whether Supreme Court justices might travel to Havana to administer the oath of office, and, most of all, what will happen if Chavez can't begin his new term.
The main fault lines run between Chavez's backers and opponents.
But while the president's allies so far appear united, analysts have speculated that differences might emerge between factions led by Maduro, Chavez's chosen successor, and Cabello, who is thought to wield power within the military and who would be in line to temporarily assume the presidency until a new election can be held.
Standing together on Thursday, Maduro and Cabello said they are more united than ever.
"We've sworn before commander Hugo Chavez, and we've ratified the oath today before commander Chavez, that we're going to be united, together with our people, with the greatest loyalty," Maduro said.
He and Cabello dismissed rumors of divisions waiting to erupt, calling such talk lies cooked up by their adversaries.
"They're going to spend 2,000 years waiting for that to happen," Cabello said, urging Venezuelans: "Don't fall for the opposition's rumors."
"We aren't going to betray the nation," Cabello added.
The former military officer has been making similar assurances on Twitter and suggesting that the socialist party has its plans for the coming days all thought out.
"We Chavistas are very clear on what we will do," Cabello said in one message.
But the plans of Chavez's allies remain a mystery.
The Venezuelan Constitution says the presidential oath should be taken Jan. 10 before the National Assembly, and officials have raised the possibility that Chavez might not be well enough to do that, without saying what will happen if he can't.
Information Minister Ernesto Villegas provided the latest update on Chavez's condition Thursday night.
"Chavez has faced complications as a result of a severe respiratory infection. This infection has led to respiratory deficiency that requires Commander Chavez to remain in strict compliance with his medical treatment," Villegas said, reading from a statement.
The government expressed confidence in Chavez's medical team and condemned what it called "a campaign of psychological warfare" in the international media regarding the president's condition.
Chavez said before his fourth cancer-related operation that if his illness prevented him from remaining president, Maduro should finish his current term and be his party's candidate to replace him in a new election.
The constitution says that if a president or president-elect dies or is declared unable to continue in office, presidential powers should be held temporarily by the president of the National Assembly, who is now Cabello. It says a new presidential vote should be held within 30 days.
Opposition leaders have argued that Chavez, who was re-elected to a six-year term in October, seems no longer fit to continue as president and have demanded that a new election be held within 30 days if he isn't in Caracas on inauguration day.
But some of Chavez's close confidants dismiss the view that the inauguration date is a hard deadline, saying Chavez could be given more time to recover from his surgery if necessary.
Cabello noted last month that the constitution says if a president is unable to be sworn in by the legislature, he may be sworn in by Supreme Court justices, who were appointed by the mostly pro-Chavez legislature.
"When? It doesn't say. Where? It doesn't say where," Cabello recently told a crowd of government supporters. His indication that the constitution does not specify where a president-elect should be sworn in by the Supreme Court has led to speculation that justices could travel to Cuba for the ceremony.
Opposition leaders chafe at the suggestion that Chavez could take office from a foreign country, saying the president made it clear before he left for the operation that his health was deteriorating by designating Maduro as his successor.
Aristobulo Isturiz, a state governor and leader of Chavez's United Socialist Party of Venezuela, said Thursday that if Chavez's swearing-in isn't held Jan. 10, it will be up to the Supreme Court to determine the place and date of the ceremony.
"The president has a right to recover," Isturiz said in remarks published by the state-run Venezuelan News Agency.
More than three weeks after Chavez's cancer surgery, government officials have been providing vague and shifting updates on his condition. Maduro announced over the weekend that Chavez had suffered complications due to a respiratory infection and was in "delicate" condition.
The vice president initially had said he would return from Cuba to Venezuela on Wednesday, but stayed another day while visiting Chavez along with Cabello and others.
Maduro said Chavez's respiratory problems "have seriously affected him."
Still, Maduro expressed hope: "In our hearts, we feel it, sooner rather than later we're going to see commander Hugo Chavez here in his homeland, here with us."
Caracas Mayor Antonio Ledezma, an opposition politician, proposed earlier Thursday that a commission travel to Cuba to determine the state of Chavez's health. He said the delegation should be made up of doctors, lawmakers and other officials such as state governors, including opposition leader Henrique Capriles.
"I'm not asking for permission to go to Cuba. I think it's our right to go there and see what's going on," Ledezma said in comments reported by the television channel Globovision. "Enough mysteries. Venezuela isn't a colony of Cuba."
Some of the brewing disagreements could begin to be aired Saturday, when the National Assembly, which is controlled by a pro-Chavez majority, convenes to select legislative leaders. That session will be held just five days before the scheduled inauguration day.
Law professor Vicente Gonzalez de la Vega agrees with Cabello's view that the constitution is ambiguous regarding the time and place of a swearing-in ceremony before the Supreme Court.
Supreme Court President Luisa Estella Morales said following Cabello's proposal last month that justices could rule on whether it's constitutional to postpone the date of the swearing-in ceremony. The issue has not yet been brought before the court, but Morales said Dec. 20 that the court could take up such issues if asked and would have the final word.
Before Chavez's inauguration date could be postponed, Gonzalez said, lawmakers would have to approve a 90-day extension of Chavez's "temporary absence" granted for his trip to Cuba for surgery. The president of the National Assembly would then be sworn in as an interim president for 90 days, said Gonzalez, a professor at the Central University of Venezuela.
In order for that to occur, though, Gonzalez said the Supreme Court would need to appoint a panel of doctors to examine Chavez to determine whether his health could improve and whether he might be capable of continuing his duties as president.
Opposition leader Ramon Guillermo Aveledo on Wednesday reiterated demands for the government to provide a full medical report.
He said sending a medical team to Cuba to assess Chavez's condition would be an option, if necessary. In the meantime, he said, "There are two keys here to facing this and any situation, which are the truth and the constitution.

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Citigroup to seek permission to buy back shares - WSJ

NEW YORK (Reuters) - Citigroup Inc is planning to ask regulators for permission to buy back a "minimal" number of shares, the Wall Street Journal reported on Friday.
The bank is not planning to ask to increase its quarterly dividend, which is currently a penny a share, the newspaper reported, citing people familiar with the company's plans.
Citigroup Chairman Michael O'Neill and newly installed CEO Michael Corbat have told company executives that the capital plan the company submits to the Federal Reserve must be so conservative that it will not be rejected, the Journal said.
Big banks are due to submit their capital plans to the Fed on Monday.
Another bank, JPMorgan Chase & Co , has reason to be "cautiously optimistic" about its chances of winning approval to raise its dividend and buy back more stock, an official who asked not to be named told Reuters.
In November, JPMorgan won approval from the Fed to resume previously approved buybacks it had suspended in May after a multi-billion dollar loss surfaced on derivatives transactions in its London office. JPMorgan's operations have generated more than enough capital to cover those losses.
The Journal reported that Morgan Stanley will focus its plan for the Fed on using its capital to complete its purchase of Citigroup's minority stake of a joint venture the two companies have in a wealth-management business. A spokesman for the investment bank declined to comment.
Citigroup's last annual plan was rejected by the Fed in March after former CEO Vikram Pandit led analysts and investors to believe the company would be allowed to spend a few billion dollars on share buybacks and additional dividends. The rejection became a major embarrassment for the bank and contributed to the board's decision to replace Pandit.

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"Cliff" concerns give way to earnings focus

NEW YORK (Reuters) - Investors' "fiscal cliff" worries are likely to give way to more fundamental concerns, like earnings, as fourth-quarter reports get under way next week.
Financial results, which begin after the market closes on Tuesday with aluminum company Alcoa , are expected to be only slightly better than the third-quarter's lackluster results. As a warning sign, analyst current estimates are down sharply from what they were in October.
That could set stocks up for more volatility following a week of sharp gains that put the Standard & Poor's 500 index <.spx> on Friday at the highest close since December 31, 2007. The index also registered its biggest weekly percentage gain in more than a year.
Based on a Reuters analysis, Europe ranks among the chief concerns cited by companies that warned on fourth-quarter results. Uncertainty about the region and its weak economic outlook were cited by more than half of the 25 largest S&P 500 companies that issued warnings.
In the most recent earnings conference calls, macroeconomic worries were cited by 10 companies while the U.S. "fiscal cliff" was cited by at least nine as reasons for their earnings warnings.
"The number of things that could go wrong isn't so high, but the magnitude of how wrong they could go is what's worrisome," said Kurt Winters, senior portfolio manager for Whitebox Mutual Funds in Minneapolis.
Negative-to-positive guidance by S&P 500 companies for the fourth quarter was 3.6 to 1, the second worst since the third quarter of 2001, according to Thomson Reuters data.
U.S. lawmakers narrowly averted the "fiscal cliff" by coming to a last-minute agreement on a bill to avoid steep tax hikes this weeks -- driving the rally in stocks -- but the battle over further spending cuts is expected to resume in two months.
Investors also have seen a revival of worries about Europe's sovereign debt problems, with Moody's in November downgrading France's credit rating and debt crises looming for Spain and other countries.
"You have a recession in Europe as a base case. Europe is still the biggest trading partner with a lot of U.S. companies, and it's still a big chunk of global capital spending," said Adam Parker, chief U.S. equity strategist at Morgan Stanley in New York.
Among companies citing worries about Europe was eBay , whose chief financial officer, Bob Swan, spoke of "macro pressures from Europe" in the company's October earnings conference call.
REVENUE WORRIES
One of the biggest worries voiced about earnings has been whether companies will be able to continue to boost profit growth despite relatively weak revenue growth.
S&P 500 revenue fell 0.8 percent in the third quarter for the first decline since the third quarter of 2009, Thomson Reuters data showed. Earnings growth for the quarter was a paltry 0.1 percent after briefly dipping into negative territory.
On top of that, just 40 percent of S&P 500 companies beat revenue expectations in the third quarter, while 64.2 percent beat earnings estimates, the Thomson Reuters data showed.
For the fourth quarter, estimates are slightly better but are well off estimates for the quarter from just a few months earlier. S&P 500 earnings are expected to have risen 2.8 percent while revenue is expected to have gone up 1.9 percent.
Back in October, earnings growth for the fourth quarter was forecast up 9.9 percent.
In spite of the cautious outlooks, some analysts still see a good chance for earnings beats this reporting period.
"The thinking is you need top line growth for earnings to continue to expand, and we've seen the market defy that," said Mike Jackson, founder of Denver-based investment firm T3 Equity Labs.
Based on his analysis, energy, industrials and consumer discretionary are the S&P sectors most likely to beat earnings expectations in the upcoming season, while consumer staples, materials and utilities are the least likely to beat, Jackson said.
Sounding a positive note on Friday, drugmaker Eli Lilly and Co said it expects profit in 2013 to increase by more than Wall Street had been forecasting, primarily due to cost controls and improved productivity.

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Fed officials suggest possible end to asset purchases in 2013

SAN DIEGO (Reuters) - The Federal Reserve could halt its asset purchases this year, two top Fed officials suggested on Friday, a view also gaining traction among economists at Wall Street's top financial institutions.

St. Louis Fed President James Bullard, a voting member of the Fed's monetary policy panel in 2013, said a drop in the unemployment rate to 7.1 percent would probably constitute the "substantial improvement" in the labor market that the central bank seeks.

That's the bar for the Fed's policy-setting committee to halt the current round of asset purchases that it began in September. The Fed is currently buying $40 billion in mortgage-backed securities and $45 billion in Treasuries each month in a bid to push down borrowing costs and spark faster growth.

"If we get even moderately good growth this year I would expect unemployment to continue to tick down," Bullard later told reporters. "I would say that that would put the committee in a good position to think about doing a pause with the balance sheet policy."

Bullard also acknowledged that he had a more optimistic view on unemployment than some other Fed officials, and sees it in the "low 7's" by year-end.

Thousands of economists have gathered in San Diego for the annual American Economic Association meeting, drawing some of the biggest names in the profession as well as top policymakers.

Bullard stressed that the Fed would decide about changing its bond-buying program on the basis of the outlook for the labor market, and said that if it decided to pause, and then saw conditions weaken, it might resume the purchases.

The Fed has also promised to keep interest rates at their current near-zero level until unemployment drops to 6.5 percent, as long as inflation does not threaten to rise above 2.5 percent.

Philadelphia Fed Bank President Charles Plosser, who spoke separately at the conference, said he expects unemployment to drop to between 6.8 percent and 7.0 percent by the end of 2013.

As a result, he hopes the Fed will stop buying bonds before the 6.5 percent threshold, implying he anticipates the asset purchases could halt this year. Unemployment registered 7.8 percent last month.

Economists at nine of 16 primary dealers -- the large financial institutions that do business directly with the Fed -- told Reuters on Friday they expect the Fed to end its Treasuries purchases in 2013.

Fed policymakers are increasingly concerned about the impact of their monthly purchases, which currently total $85 billion.

Minutes from their December policy meeting showed that "several" top officials expected to slow or stop the so-called quantitative easing program, dubbed QE3, "well before" the end of the year - news that surprised some on Wall Street and prompted a drop in stocks and bonds, and a rise in the dollar.

CREDIBILITY

Meanwhile, another top Fed official warned the U.S. central bank's aggressive easing plan threatens the Fed's credibility.

Jeffrey Lacker, president of the Richmond Fed, on Friday held his ground opposing QE3, arguing that continued monetary policy is not the appropriate way to tackle the problem.

"It is unlikely that the Federal Reserve can push real growth rates materially higher than they otherwise would be, on a sustained basis," Lacker, who dissented on all Fed easing moves last year, told a meeting of the Maryland Bankers Association.

The U.S. economy expanded 3.1 percent in the third quarter on an annualized basis, but growth is believed to have slowed sharply to barely above 1.0 percent in the last three months of the year.

"I see an increased risk, given the course the committee has set, that inflation pressures emerge and are not thwarted in a timely way," he said.

Bullard, speaking on a panel in San Diego, warned that central bankers, in fighting to stabilize financial markets, have sacrificed some of their cherished independence, an attribute many Fed historians and policymakers argue is key to keeping inflation under control.

Bullard singled out the European Central Bank as one of the worst offenders, but warned more broadly about the "creeping politicization" of central banking globally -- something that he said would deliver disappointing economic results.

EYEING 7.1 PERCENT UNEMPLOYMENT

While Lacker and Plosser are outspoken policy hawks, Bullard is more of a centrist who is nonetheless toward the hawkish end of the spectrum of Fed officials. The three were the first top central bank officials to speak publicly since the minutes were unveiled on Thursday.

After the December meeting, the Fed said it would continue buying bonds until the labor market outlook improves "substantially," which Fed Chairman Ben Bernanke has characterized as a "sustained" decline in the unemployment rate.

Government data released on Friday showed the U.S. jobless rate held steady from November to December. Bullard called the December jobs number - a boost of 155,000 in new non-farm jobs - "reasonably good.

Fed Vice Chair Janet Yellen, a proponent of aggressive Fed easing, also spoke at the conference on Friday, but confined her comments to how regulators are tackling risks to financial stability.

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Gunman kills 3 people, injures 2 in Swiss village

A shooting in southern Switzerland has left three women dead, two men wounded and highlighted the ease of access to firearms in gun-loving nations.
The shooting — which came on the eve of students' return to classes in Newtown, Connecticut, after a horrific school shooting — also raised questions about why a troubled suspect was able to go on a rampage with an old military rifle.
The suspect, a 33-year-old unemployed man living on disability payments, fired about 20 shots Wednesday night in the village of Daillon, authorities in the Swiss canton (state) of Valais said Thursday.
He opened fire from his apartment and pursued people in the street, police said. Armed with a Swiss military rifle and a handgun, the man then threatened to shoot the elite troops that were sent in to stop him, police said.
"The shooter pointed his weapon at our colleagues, so they had to open fire to neutralize him, to avoid being injured themselves," police spokesman Jean-Marie Bornet told Swiss radio.
The suspect, who police did not identify, was arrested and taken to the hospital with serious wounds. Bornet said the shooter lived in Daillon but the motive for the shooting was not clear.
The suspect was using a military rifle that was once standard issue in the Swiss army, interim cantonal police chief Robert Steiner said.
Guns are popular among the Swiss — the Alpine country has at least 2.3 million weapons among a population of less than 8 million. Gun clubs are popular in rural areas, with children as young as 10 taking part in shooting competitions.
Authorities say firearms are involved in nearly a quarter of the 1,100 suicides a year in Switzerland — which don't include another 300 cases a year of assisted suicide — but shooting rampages are rare in peaceful, prosperous Switzerland.
A gunman who killed 14 people at a city meeting in Zug in 2001 was the nation's worst such rampage, leading to calls to tighten national gun-buying laws. Friedrich Leibacher used a commercial version of the Swiss army's SG 550 assault rifle for the rampage, then killed himself.
Buying a firearm in a Swiss shop requires a permit, a clean criminal record and no psychiatric disability, but buying a firearm from another person is less restrictive. Most types of ammunition can be bought, while automatic firearms generally require a special police permit.
The police said they are still unclear about the shooter's motive — or where he got the guns — but old-style Army rifles are often sold at military surplus markets. Prosecutor Catherine Seppey said the shooter knew several of the victims but "he was not known for making threats."
The suspect was unemployed and had been receiving psychiatric care since at least 2005, when he was first admitted to a psychiatric hospital, and was under the care of the cantonal agency for the disabled, Seppey said.
The victims were three women aged 32, 54 and 79 who died at the scene, and two injured men, aged 33 and 63, who were taken to the hospital, Seppey said. The two youngest victims were a couple with small children.
"We have no words to express ourselves after an event like this," Christophe Germanier, head of the Conthey district where the shooting occurred, told a news conference.
All able-bodied Swiss men who are required to perform military duty often take their army-issued rifle home with them after completing military service. In 2007, the government began requiring that nearly all army ammunition is kept at secure army depots.
In 2011, voters rejected a proposal to tighten the gun laws.
Many in Switzerland believe that distributing guns to households helped dissuade a Nazi invasion during World War II.
"This is part of Switzerland's self-defense, where the entire army can be mobilized in 24 hours, said Daniel Warner of the Geneva Center for the Democratic Control of Armed Forces. "I don't think (the latest shooting) is going to cause a change in attitude here.

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Briton on trial for hurling abuse and bottle at Usain Bolt

LONDON (Reuters) - A British man went on trial on Thursday accused of screaming abuse at Usain Bolt and hurling a beer bottle onto the track as the Olympic men's 100 metres final was starting, a climactic moment of the London Games in August.
The court heard that the packed 80,000-seat Olympic Stadium had fallen silent in anticipation of the race when Ashley Gill-Webb, 34, began shouting insults like "Usain I want you to lose, Usain you are bad, you are an arsehole".
The Jamaican sprinter did not hear the abuse or see a green Heineken bottle land behind the starting line, and went on to win the race in 9.63 seconds, the second-fastest time recorded.
Gill-Webb did not have a ticket to attend the 100 metres final but had somehow pushed his way to the front of an exclusive seating area, among members of the Dutch Olympic team.
After his outburst, Gill-Webb was confronted by Dutch judoka Edith Bosch, an Olympic bronze medallist, then restrained by volunteer workers and arrested.
He has pleaded not guilty to a public order offence, the Press Association (PA) reported from Stratford Magistrates' Court in east London, without saying what penalties he might face.
"In the stadium, along with the many thousands who should have been there legitimately and were watching the race in hushed anticipation, was also Mr Gill-Webb who it is now accepted was unwell at the time," said prosecutor Neil King.
"This bottle landed extremely close to the athletes and it's probably luck rather than Mr Gill-Webb's judgment that it did not do anything far more serious," said King, quoted by the PA.
In a written witness statement read out in court, Bosch said Gill-Webb's taunts against Bolt had gone on for about two minutes. As he started to move away after tossing the beer bottle, she confronted him, saying: "Dude, are you crazy?"
"He was trying to walk away so I pushed him hard to stop him," Bosch said in her statement. "I was angry with what he had done which was so disrespectful."
"I was sad to miss the 100 metres," she added.
The court heard that Gill-Webb's behaviour after he was escorted to a police station had been "somewhat unusual".
He gave some "no comment" answers to police questions but also handed over a prepared statement signed "Alan Cumming", the name of a Scottish actor.
He maintained he had nothing to do with throwing the bottle but said he had been "quite hyper" in the stadium.
Prosecutor King said although it was accepted Gill-Webb was unwell at the time, he knew what he was doing and intentionally caused distress to those around him.

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