Tomorrow's Newspapers Online 10-01-2013 |

Just months after Edward Snowden controversially lifted the lid on digital surveillance being conducted by the U.S. and other governments, the issue of online privacy is back in the spotlight.

Earlier this month Facebook CEO Mark Zuckerberg expressed concern that users' trust in internet companies had been damaged by the revelations. Google's Eric Schmidt also called for greater transparency from the U.S. government over surveillance.

Sang Mun's response was more direct -- the Korean designer has created four new fonts called ZXX that aim to disrupt the Optical Character Recognition (OCR) systems used by Google and others to analyze text.

"I decided to create a typeface that would be unreadable by text scanning software (whether used by a government agency or a lone hacker)," Mun told CNN via email, "misdirecting information or sometimes not giving any at all."

Mun, who worked with the NSA during his time in the Korean military, says that a number of global developments motivated him to act: "The news about the NSA secretly building the country's biggest data center; the House passing the controversial Cyber Intelligence Sharing and Protection Act (CISPA); the social network media accumulating abundant information on every individual's life; Google announcing its work-in-progress Glass project -- and the list goes on."

"Sometimes these ideas about privacy can feel large and abstract to the average person. I thought that addressing these issues through the design of a typeface -- a building block of language and communication -- would bring home the conversation to the average person," Mun says.

The four different fonts -- Camo, False, Noise and Xed -- were developed through a rigorous process of drawing a testing, Mun says: "The challenge was to make the OCR legible typeface illegible to computer vision, while keeping it readable to the human eye." Each font uses a different optical trick to make them difficult to scan: 'Camo' adds camouflage-like patterns over letters, 'Noise' overlays the letters with dots, 'Xed' puts a neat X across each character, and 'False' uses a small letter beneath a larger 'false' one.

Twitter, which is expected to be valued at up to $15 billion, filed with U.S. regulators on September 12 to go public, but did so confidentially and without providing a timeline under a process available to emerging growth companies.

Quartz said that Twitter's IPO could still be delayed by a variety of factors, from changes to the prospectus to market conditions, to a potential shutdown of the U.S. government. Representatives for Twitter did not immediately respond to a request seeking comment on the Quartz report.

Twitter is leaning toward picking the New York Stock Exchange over Nasdaq for its highly anticipated initial public offering, a person familiar with the matter said last week.

"We are now working closely with the tax authorities to ensure that the parties will find a comprehensive solution to the remaining open issues, and discussions have been constructive," the Finnish company said in a statement, declining to comment further.

Analysts have begun cutting third-quarter profit estimates for banks including Goldman Sachs Group Inc (GS.N) and Morgan Stanley (MS.N), citing an industry-wide fixed-income trading revenue decline of 20 to 30 percent compared with a year ago. The quarter's lull has made at least some Wall Street professionals nervous that a fresh round of job cuts may be coming, a trader said.

The third quarter is typically a weak period for banks' trading businesses, but the Fed's decision to keep its program of bond buying intact has hurt trading revenue even more than usual and weighed on the value of the bonds that dealers keep on hand for trading, bankers and analysts said.

Traders in some of the biggest fixed-income markets - including Treasury bonds, mortgage bonds, interest-rate derivatives and foreign exchange - were burned by their wrong assumptions about when the Fed would pull back from its massive bond-buying program. Many investors had expected the Fed to start gradually winding down the program, but instead the central bank in its September 18 policy statement said that it would maintain its $85 billion monthly purchases for the time being.

The decision led investors to hit the brakes on plans to adjust their portfolios, traders and analysts said, and less activity meant less money for banks' fixed-income trading desks.

"From what I can see, it's mainly weaker activity levels - activity levels are just very low," said Richard Ramsden, an analyst who covers banks for Goldman Sachs.

There are already signs of poor third-quarter results.

The investment bank Jefferies Group LLC said earlier this month that its fixed-income trading revenue plunged 88 percent in the three months ended August 31, to $33 million from $266 million a year earlier. Jefferies is not directly comparable to bigger Wall Street banks because of its size and because it reports on a fiscal calendar whose quarters are a month earlier, but the results were still surprisingly poor.

Last week, Deutsche Bank AG (DBKGn.DE) co-CEO Anshu Jain said at a conference that he expected bond-trading revenue would "decline significantly" in the third quarter due to weak volumes. Bank executives from JPMorgan Chase & Co (JPM.N), Morgan Stanley and Barclays PLC (BARC.L) have also recently warned in public comments that they expected trading revenues to be soft.

There were few bright spots in other capital markets businesses.

The Pope said in July that he would canonise his two predecessors, after approving a second miracle attributed to John Paul.

Polish John Paul, the first non-Italian pope for more than 400 years, led the Catholic Church from 1978-2005.

Pope John was pontiff from 1958-1963, calling the Second Vatican Council that transformed the Church.

The decision to canonise the two at the same time appears designed to unify Catholics, correspondents say.

John Paul II is a favourite of conservative Catholics, while John XXIII is widely admired by the Church's progressive wing.

'The good pope'

John Paul stood out for his media-friendly, globetrotting style. He was a fierce critic of communism, and is credited with helping inspire opposition to communist rule in eastern Europe.

John Paul has been on a fast track to sainthood since his death, when crowds in St Peter's Square chanted "santo subito" ("sainthood now").

During his own papacy he simplified the process by which people are made saints, and created more of them than all previous popes combined.

John XXIII is remembered for introducing the vernacular to replace Latin in church masses and for creating warmer ties between the Catholic Church and the Jewish faith.

He has a big following in Italy, where he is known as Il Papa Buono, the good pope.

The BBC's David Willey reports from Rome that Pope John was in many ways similar to Pope Francis, a humble, down-to-earth man with a fine sense of humour.

Two living popes are expected to be present at the canonisation ceremony: Francis, who will officiate, and Pope Benedict, who retired earlier this year.

The double canonisation will be the first in the Church's history.

Deadlock in the U.S. Congress has made it increasingly possible the government will run out of money from midnight, while a split in Italy's ruling coalition has heightened the prospects of fresh elections that could delay economic reforms.

Ten-year Italian government bond yields jumped 31 basis points to 4.73 percent.

"We have a bit of a nasty combination of U.S. and Italian political problems," said Arne Lohmann Rasmussen, head of FX research at Danske Bank.

Adding to market worries was a surprise downward revision to activity in China's factory sector for September, suggesting Asia's economic powerhouse is still struggling to stabilize after a period of slower growth.

Combined with month-end and quarter-end caution among big investors, the end result was a shift out of equities and oil. MSCI's world equity index .MIWD00000PUS was down 0.8 percent and Brent oil fell to less than $108 a barrel.

MSCI's global index, which tracks shares in 45 countries, still remains on course for its best quarter since March 2012 and its best month since January as the loose monetary policies of major central banks and signs of modest global economic recovery favor equities over alternative investments.

However, the hunt for safety on Monday saw low-risk German bond yields drop 3 basis points to 1.69 percent. U.S. Treasuries also benefited from a view that the economic damage from a government shutdown would be yet another reason for the Federal Reserve to keep interest rates low for longer.

ITALY DIVIDES

The euro touched a three-week low against the yen at 131.38 yen and was down 0.2 percent versus the Swiss franc at 1.2225 on concern political shifts in Rome would lead to new elections just seven months after the last inconclusive vote.

The worries have grown following Silvio Berlusconi's move to pull his ministers out of the ruling coalition at the weekend forcing Prime Minister Enrico Letta to go before parliament on Wednesday to hold a confidence vote.

"It seems like they're going to try their best to work out a new coalition government and if that doesn't happen its new elections, and if there's new elections there's going to be a lot of worries in the market," said Ishaq Siddiqi, market strategist at ETX Capital.

The Republican-controlled House of Representatives early on Sunday passed a measure that ties government funding to a one-year delay of President Barack Obama's landmark healthcare restructuring law. Senate Democrats have vowed to quash it.

If a stop-gap spending bill for the new fiscal year is not passed before midnight on Monday, government agencies and programs deemed non-essential will begin closing their doors for the first time in 17 years.

In a sign that lawmakers increasingly view that as inevitable, the House unanimously approved a bill to ensure that U.S. soldiers would be paid no matter what happened.

The high-stakes chess match in Congress will resume on Monday when the Democratic-controlled Senate reconvenes at 2 p.m. Senate Democrats will then attempt to strip two Republican amendments from the spending bill: the one that delays the 2010 healthcare law known as Obamacare and another to repeal a medical device tax that would help pay for the program.

They would then send a bill with a simple extension of government spending back to the House, putting the legislative hot potato back in Republican House Speaker John Boehner's lap as the shutdown looms.

"Tomorrow, the Senate will do exactly what we said we would do and reject these measures," said Adam Jentleson, a spokesman for Senate Majority Leader Harry Reid. "At that point, Republicans will be faced with the same choice they have always faced: put the Senate's clean funding bill on the floor and let it pass with bipartisan votes, or force a Republican government shutdown."

Harvard scholar Ben Urwand is a mild-mannered man in his mid-30s whose new book, The Collaboration: Hollywood’s Pact with Hitler, has provoked some strong criticism – and to be fair – some praise too.

“It’s a disgrace,” says The New Yorker’s David Denby, one of America’s top film critics. “I’ve called for Harvard University Press to withdraw it. It’s full of unproved assertions,” he claims.

“Slanderous and ahistorical” is how another of Ben Urwand’s detractors, Brandeis University historian Thomas Doherty, describes the book in remarks published in the trade publication The Hollywood Reporter. Doherty, who is the author of the recently published competing narrative Hollywood and Hitler: 1933-1939, has been among Urwand’s most vocal critics.

What Ben Urwand has attempted to do in his book, based on ten years of research in Germany and the United States, is shift the narrative on Hollywood in the 1930s. He makes the case that the men who ran the studios, far from being saintly figures opposed to Hitler’s growing power in Europe, acquiesced to the demands of the Nazis and even collaborated with them.

One of the most audacious charges is that one studio even financed German weaponry. “MGM, to get its money out of Germany, was investing in the production of German armaments – that was the single most shocking find,” says Urwand.

“The studio executives wanted to preserve business in Germany all through the 1930s,” says the author. “And what they did was they invited the Nazi German consul in Los Angeles to their studios and showed him pictures that could be potentially offensive to Germany and they would allow him to make cuts to their pictures.”

Hitler’s man in Hollywood

The Third Reich’s diplomatic representative in LA, Georg Gyssling, who has been referred to as ‘Hitler’s Hollywood consul’ had a specific brief to monitor the activities of the studios. By all accounts he was extremely diligent in his duties.

The Nazis, according to Urwand, could also prevent movies from being made. He claims a Hollywood film about Hitler’s treatment of the Jews was never produced because of Nazi pressure. “In 1933 the great Hollywood screenwriter, Herman Mankiewicz, who wrote Citizen Kane, came up with a script about Hitler’s persecution of the Jews in which he predicted that this would lead to the killing of the Jews. The Nazi German consul told studio executives that if any studio made this picture then all of the Hollywood studios would be banned from the German market.”

Asked about their interest in dedicated game devices, 26 percent of 1,297 people surveyed online last week say they are likely to purchase the new PlayStation 4 when available, versus 15 percent opting for the Xbox One.

The rift widens among those below the age of 40. Of that group of 408 people, 41 percent picked Sony's PS4 versus 27 percent for Microsoft's Xbox One, according to a Reuters/Ipsos poll conducted from Sept 23 to Sept 27.

Though based on a limited sample, the results potentially point to a lopsided battle during the crucial holiday season, with Microsoft and Sony hoping to get their newest consoles into U.S. households. Apart from games, they act as conduits for living-room entertainment, from TV shows to music.

Microsoft came under fire from gamers after initially saying it would set restrictions on used games, and require an Internet connection to play. After a flurry of complaints, the company reversed its policies in June. In contrast, Sony has consistently touted support for used games and offline gameplay at industry events. And the PS4 comes $100 cheaper.

Sony said at video game industry trade show in Germany that it had received more than 1 million pre-orders for its upcoming console, while Microsoft has revealed only that preorders for the Xbox One exceeded those of its predecessor, the 360, eight years ago.

Microsoft "couldn't make up their mind and Sony hadn't wavered from the beginning," said 26-year-old gamer Christopher Turner from Salem, Alabama, who intends to spend his cash on the PS4. "The PlayStation 4 is for both hardcore and casual gamers."

But 56-year-old participant Jon Leigh, who plays six to 10 hours of video games a week and lives in Harlan, Kentucky, thinks the Microsoft controversy won't sway Xbox fans.

"People who use Microsoft products will continue to use them, he said. Leigh will go with the Xbox One because of its upgraded "Kinect" motion sensor, and because he's more familiar with the Xbox than the PlayStation.

The $399 PS4 and $499 Xbox One represent the first major upgrades of mainstream gaming hardware in years, setting game developers scrambling to put out new releases that take advantage of better graphics and faster processors.

A diplomatic charm offensive by new Iranian President Hassan Rouhani has suddenly opened up a gap between the White House and Netanyahu's government. How they respond could have far-reaching implications for their political legacies as well as the future stability of the Middle East.

Coming three days after Obama and Rouhani had a historic phone call, which was the highest-level contact between the two countries in three decades, Monday's White House meeting between the U.S. and Israeli leaders is shaping up as perhaps their most consequential encounter.

Obama and Netanyahu will try to avoid any repeat of previous clashes as they seek to project unity. But behind closed doors, their differences over Iran may prove hard to bridge.

Unnerved by the pace of the U.S. outreach to Iran and deeply skeptical of Rouhani, Netanyahu will push Obama for specific steps and deadlines to prevent Tehran from using talks to "run out the clock" while it advances toward making a nuclear weapon.

"I will speak the truth. Facts must be stated in the face of the sweet talk and the blitz of smiles," Netanyahu said at the airport in Tel Aviv before departing for Washington on Saturday night.

Obama will press Netanyahu for time to test Rouhani's intentions, while trying to reassure Israel he will not ease sanctions prematurely. He is likely, however, to resist Israeli pressure for a precise time limit for diplomacy with Iran to produce a deal, according to a source close to the White House.

"American and Israeli officials like to say there's no daylight between them on Iran," a former U.S. official said. "But with his words alone, Rouhani has opened a window."

Looming large is the question of military action against Iran if diplomacy fails to prevent Tehran from pressing ahead with what Israel and the West suspect is a drive to develop nuclear weapons. Iran denies it is seeking a bomb.

Some Israeli officials doubt whether Obama has the stomach for attacking Iran after he pulled back earlier this month from a threat to bomb Syria over its suspected use of chemical weapons.

"It totally suggests that for the president, all options are not on the table with Iran," said Elliott Abrams, a Middle East adviser under Republican former President George W. Bush, now at the Council on Foreign Relations think tank.

It will cut about 4% of its 370,000-strong workforce but aims to avoid compulsory redundancies, according to a company spokesman.

The firm will shed 5,000 jobs in Germany and another 10,000 jobs abroad.

It comes after Siemens axed its former chief executive, Peter Loescher, earlier this year over falling profitability.

Siemens and its unions have reached an agreement over about half of the job cuts and a deal on the other half will follow, the spokesman told news agencies.

The firm has issued two warnings about profit margins during the last fiscal year, sending shares lower.

Interior Minister Joseph Ole Lenku delivered the sharp diplomatic rebuke to Washington when he updated reporters on a government investigation eight days after the assault by Islamist militants on the upmarket Westgate mall in the Kenyan capital.

Although Kenyan police assisted by U.S., Israeli and European experts are still poring over the partially wrecked building, Ole Lenku said the death toll from the attack still stood at 67. Five attackers were also killed.

Nine suspects were in custody over the raid, one of them arrested on Sunday, he added. The minister declined to give any information about the suspected attackers or those arrested, saying "we do not discuss intelligence matters in public".

Ole Lenku expressed strong objections to an updated travel advisory issued by the U.S. government to its citizens urging them to "evaluate their personal security situation in light of continuing and recently heightened threats from terrorism" in the east African country.

"We believe issuing the travel advisory is counter-productive in the fight against global terrorism," Ole Lenku said.

"We request the United States, as a friend of Kenya, to lift the travel advisory," he added.

Kenya's government believed that no hostages were left in the building after the attack, "unless forensic evidence shows otherwise," the interior minister said.