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The message is “an invitation” from bin Laden to take part in “jihad to stop the aggression against Gaza.”

The audio message was posted on a radical Islamist Web site known for posting statements from bin Laden.

The rating company affirmed the rating, though revised the outlook to negative from stable, according to a statement today. The AAA local-currency rating is affirmed with a stable outlook.

New Zealand’s dollar fell to a four-week low after the statement, which adds to signs that investors may turn away from an economy that is in a prolonged recession. A report earlier today showed business confidence has slumped to a 34-year low and the government last month forecast widening budget deficits over the next five years.

“It’s not going to be easy for New Zealand,” said Adam Carr, a senior economist at ICAP Australia Ltd. in Sydney. “They have a massive current account deficit and a sizeable budget deficit. These are two things that aren’t good to have in an environment when it’s a struggle to raise capital.”

The fate of the first eurozone bond auction of 2009 signals trouble ahead as governments around the world hope to issue an estimated $3,000bn in debt this year, three times more than in 2008.

The 10-year bonds failed to attract enough bids to reach the €6bn the German government wanted. Bids of €5.24bn, a cover of only 87 per cent, amounted to the second worst auction on record in terms of demand.

Such developments were rare before the credit crisis. Before the seven German bond auctions that failed last year, the last German bond auction to fail was in July 2000 after the dotcom crash.

Analysts said the vast amount of supply is deterring investors and a growing number of countries, including those with deep and mature bond markets, such as Germany, the UK and Italy, are struggling to attract buyers.

The Netherlands has seen bond auctions fail, the UK and Italy have been forced to offer investors higher yields to meet their auction targets, while Spain and Belgium have cancelled offerings because of a lack of demand.

The German finance agency admitted that investor appetite for government debt had waned, although insisted the auction was “not a disappointment”.

Meyrick Chapman, a UBS fixed-income strategist, said when a German bond auction failed it “does suggest there may be trouble ahead for other governments wanting to raise money in the debt markets. Before the financial crisis, German bond auctions just did not fail.”

However, analysts stress the heavy supply is being offset by fears of deflation and recession, which are typically supportive to government bonds and have depressed yields, which have an inverse relationship with price, to historical lows.

With a house purchase near Denver in the works, the 38-year-old engineering contractor plans to move his family 1,200 miles away from his home state’s lemon groves, sunshine and beaches. For him, years of rising taxes, dead-end schools, unchecked illegal immigration and clogged traffic have robbed the Golden State of its allure.

Is there something left of the California dream?

“If you are a Hollywood actor,” Reilly says, “but not for us.”

…

Why are so many looking for an exit?

Among other things: California’s unemployment rate hit 8.4 percent in November, the third-highest in the nation, and it is expected to get worse. A record 236,000 foreclosures are projected for 2008, more than the prior nine years combined, according to research firm MDA DataQuick. Personal income was about flat last year.

With state government facing a $41.6 billion budget hole over 18 months, residents are bracing for higher taxes, cuts in education and postponed tax rebates. A multibillion-dollar plan to remake downtown Los Angeles has stalled, and office vacancy rates there and in San Diego and San Jose surpass the 10.2 percent national average.

Median housing prices have nose-dived one-third from a 2006 peak, but many homes are still out of reach for middle-class families. Some small towns are on the brink of bankruptcy. Normally recession-proof Hollywood has been hit by layoffs.

The country’s acting finance minister, Patrick Chinamasa, made the announcement in a government gazette released Saturday.

Although Chinamasa did not give the date on which the $50 billion and new $20 billion notes would come into circulation, an official at the Reserve Bank of Zimbabwe said the notes would be distributed to all banks by the end of Monday.

Zimbabwe is grappling with hyperinflation now officially estimated at 231 million percent, and its currency is fast losing its value. As of Friday, one U.S. dollar was trading at around ZW$25 billion.

When the government issued a $10 billion note just three weeks ago, it bought 20 loaves of bread. That note now can purchase less than half of one loaf.

Realizing the worthlessness of the currency, the RBZ has allowed most goods and services to be charged in foreign currency. As a result, grocery purchases, government hospital bills, property sales, rent, vegetables and even mobile phone recharge cards are now paid for in foreign currency, as the worthless Zimbabwe dollar virtually ceases to be legal tender.

Once a regional economic model, Zimbabwe is in the throes of an economic crisis, with unemployment running at more than 80 percent and many families unable to afford a square meal. President Robert Mugabe’s critics blame his policies for the economic meltdown, but he says the West is sabotaging his efforts.

In order to attract foreign currency, Zimbabwe’s central bank has, since September, licensed at least 1,000 shops to sell goods in foreign currency. All mobile phone service providers are now licensed to accept foreign exchange for airtime and other services.

John Robertson, an economist in Zimbabwe, said he’s puzzled by the introduction of the $50 billion and $20 billion notes.

“I am not really sure what these notes would be for,” he said. “No one now accepts the local currency. It is a waste of resources to print Zimbabwe dollar notes now. Who accepts a currency that loses value by almost 100 percent daily?”

In August, the RBZ slashed ten zeros from the currency. But the zeroes have bounced back with more vigor.
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A power-sharing deal between Mugabe and opposition leader Morgan Tsvangirai signed in September, and brokered by former South African leader Thabo Mbeki, raised hopes of halting Zimbabwe’s plunge into economic destruction.

But Mr. Obama also said prosecutions would proceed if the Justice Department found evidence that laws had been broken.

As a candidate, Mr. Obama broadly condemned some counterterrorism tactics of the Bush administration and its claim that the measures were justified under executive powers. But his administration will face competing demands: pressure from liberals who want wide-ranging criminal investigations, and the need to establish trust among the country’s intelligence agencies. At the Central Intelligence Agency, in particular, many officers flatly oppose any further review and may protest the prospect of a broad inquiry into their past conduct.

In the clearest indication so far of his thinking on the issue, Mr. Obama said on the ABC News program “This Week With George Stephanopoulos” that there should be prosecutions if “somebody has blatantly broken the law” but that his legal team was still evaluating interrogation and detention issues and would examine “past practices.”

Details of the illicit transfers came to light on Friday when New York State and federal authorities announced that a large British bank had agreed to pay $350 million to settle accusations that it had helped the Iranian banks hide the transactions.

The British bank, the Lloyds TSB Group, “stripped” information that would have identified the transfers in order to deceive American financial institutions, which are barred from doing business with Iranian banks, Robert M. Morgenthau, the Manhattan district attorney, said. Lloyds acknowledged its conduct and agreed to turn over detailed records of the transactions.

“They went to great lengths to obliterate any identification,” Mr. Morgenthau said.

The district attorney’s office was still investigating nine major banks that might be engaging in similar conduct, but prosecutors declined to name them. Mr. Morgenthau said, however, that money in one transaction was used to buy a large amount of tungsten, an ingredient for making long-range missiles. He said he suspected that other funds might have been used to finance Iran’s nuclear program.

In the current case, investigators were unsure what the money was used for, said Daniel J. Castleman, the chief assistant district attorney. The stripping made it impossible to determine where the money was going, he said. “We don’t know of any money that has gone to any terrorist organizations, individuals or anything like that,” he said.

Lloyds has agreed to examine all of the transactions it stripped to try to determine where the money was headed. In all, Lloyds hid the source of billions of dollars that passed through the United States, prosecutors said. Lloyds also hid transfers from banks in Sudan, which are also banned from doing business with American institutions.

Half of the $350 million Lloyds has agreed to pay will go to the federal government and the rest to Mr. Morgenthau’s office, which will divide the money between the city and the state.

Mr. Morgenthau said he hoped the money, the largest financial penalty his office has ever collected, would provide a boost to tight city and state budgets.

Although prosecutors did not identify specific individuals at Lloyds responsible for the fraud, Mr. Castleman said, “It was a systemic, wide-ranging scheme.” The training manual given to employees of Lloyds even included a section on how to strip transactions, prosecutors said.

Banks in several nations are banned from doing business with American institutions, but the United States is particularly concerned about Iran, which it says finances terrorists and runs an illicit nuclear weapons program. Iran denies those accusations.

The investigation into Lloyds goes back to 2006. It was conducted jointly by Mr. Morgenthau’s office and the Justice Department, with the assistance of the Treasury and banking regulators.

According to a deferred prosecution agreement, Lloyds handled $300 million of Iranian transfers and $20 million of Sudanese transfers that ended at American banks. Mr. Morgenthau said billions of dollars of transactions went through American banks but ended outside the country.

Several employees in Lloyds’ international payment processing unit in London removed from the bank’s central system orders from certain foreign banks, according to the agreement released Friday by Mr. Morgenthau’s office. Employees struck out identifying information about the originating banks on printed copies of the payment instructions, which someone then re-entered into the payments system. When American banks received the transfers, they seemed to have originated at Lloyds.

Worried that they might be violating American law, senior officials at Lloyds stopped the stripping operation for Iranian banks in 2004, but transfers from Sudan were stripped as recently as 2007.

Under the agreement between Lloyds and Mr. Morgenthau, no employees, officers or the bank will be charged with a crime unless evidence emerges that the bank or its employees and officers knew that specific transfers were sent to or by terrorist groups or “proliferators of weapons of mass destruction.” The agreement lasts for two years.

In recent years, officials in the Treasury have stepped up a campaign to have foreign banks sever links with Iranian banks, which they accuse of providing support for groups like Hezbollah and Hamas, in addition to financing Iran’s own nuclear ambitions.

In November, the Treasury barred American financial institutions from handling certain money transfers for Iranian interests that had been previously allowed, closing what it described at the time as the “the last general entry point for Iranian banks.” Certain exceptions are still allowed for humanitarian aid and remittances.

In December, federal authorities moved to seize the assets of the Assa Corporation, which the Treasury says is a front for Bank Melli, Iran’s largest bank. Assa owns a stake in a Midtown Manhattan office tower.

The U.S. Navy’s Military Sealift Command (MSC) said the ship was to carry 325 standard 20-foot containers of what is listed as “ammunition” on two separate journeys from the Greek port of Astakos to the Israeli port of Ashdod in mid-to-late January.

A “hazardous material” designation on the manifest mentions explosive substances and detonators, but no other details were given.

“Shipping 3,000-odd tonnes of ammunition in one go is a lot,” one broker said, on condition of anonymity.

“This (kind of request) is pretty rare and we haven’t seen much of it quoted in the market over the years,” he added.

The U.S. Defense Department, contacted by Reuters on Friday in Washington, had no immediate comment.

The MSC transports armour and military supplies for the U.S. armed forces aboard its own fleet, but regularly hires merchant ships if logistics so require.

The request for the ship was made on Dec. 31, with the first leg of the charter to arrive no later than January 25 and the second at the end of the month.

The tender for the vessel follows the hiring of a commercial ship to carry a much larger consignment of ordnance in December from the United States to Israel ahead of air strikes in the Gaza Strip.

A German shipping firm which won that tender confirmed the order when contacted by Reuters but declined to comment further.

CHARTERS “RARE”

Shipping brokers in London who have specialised in moving arms for the British and U.S. military in the past said such ship charters to Israel were rare.

Israel is one of America’s closest allies and both nations regularly sell arms to each other.

A senior military analyst in London who declined to be named said that, because of the timing, the shipments could be “irregular” and linked to the Gaza offensive.

The ship hired by the MSC in December was for a much larger cargo of arms, tender documents showed.

That stipulated a ship to be chartered for 42 days capable of carrying 989 standard 20-foot containers from Sunny Point, North Carolina to Ashdod.

The tender document said the vessel had to be capable of “carrying 5.8 million pounds (2.6 million kg) of net explosive weight”, which specialist brokers said was a very large quantity.

The ship was requested early last month to load on December 15.

In September, the U.S. Congress aproved the sale of 1,000 bunker-buster missiles to Israel. The GPS-guided GBU-39 is said to be one of the most accurate bombs in the world.