Obama's chance to lead?

STORY HIGHLIGHTS

• John Avlon: President Barack Obama is well-positioned to help solve debt problem


• He says Obama should avoid temptation favored by some Democrats to put off action


• Relatively modest changes in entitlements could help ensure their survival, Avlon says


• Avlon: Obama can rally his party behind deficit cuts that won't hurt economy

Editor's note: John Avlon is a CNN contributor and senior political columnist for Newsweek and The Daily Beast. He is co-editor of the book "Deadline Artists: America's Greatest Newspaper Columns." He is a regular contributor to "Erin Burnett OutFront" and is a member of the OutFront Political Strike Team. For more political analysis, tune in to "Erin Burnett OutFront" at 7 ET weeknights.

(CNN) -- "What we have done is kicked this can down the road. We are now at the end of the road and are not in a position to kick it any further. ... We have to signal seriousness in this by making sure some of the hard decisions are made under my watch, not someone else's."

So said President-elect Barack Obama at a Washington Post editorial board meeting in January 2009, just days before taking his first oath of office. He was talking about the importance of dealing with the long-term deficit and debt.

The rhetoric hasn't met the record -- debt has exploded under Obama's watch. Reasonable people can forgive the president for expenses incurred while confronting the worst financial crisis since the Great Depression -- and, let's be honest, alternative paths of austerity have not worked that well across the Atlantic. But now is the time to get serious about reigning in our long-term debt, which now exceeds an unsustainable 70% of gross domestic product.

At this moment of maximum political capital, Obama is perfectly positioned to act on his original impulse in the State of the Union on Tuesday night.

But there is a dangerous bit of hubris sweeping the Democratic Party, which says that dealing with deficits and debt is a sucker's bet, best left to the next Republican president.

Instead, the Keynesians are riding high and arguing that deficit and debt is not a primary concern to most voters and irrelevant to economic growth. And so the pregame expectation setting comes: White House minions told The Washington Post not to expect the president to present "an ambitious new plan to rein in the debt" in the State of the Union.

Opinion: Obama needs to lay out a plan on climate crisis

This would be a major mistake and a costly lost opportunity.

With an eye toward his legacy, Obama should follow his original instincts and put the power of presidency behind a balanced long-term plan to deal with deficits and debt -- including spending cuts, tax reform and, most importantly, entitlement reform.

This is the time for Obama to pull a Nixon in China.

Just as only a committed anti-communist such as Nixon could establish relations with communist China, Obama is perfectly positioned to do what he knows is necessary to preserve the long-term strength and solvency of the social safety net: Medicare and Social Security.

This does not mean draconian cuts or a voucherization of the existing system as imagined by Rep. Paul Ryan and many House Republicans. But it does mean following through on the president's previous negotiated offers to consider "chained CPI," which would lower inflation-related increases in Social Security benefits, and to raise the eligibility age for Medicare.

Formula adjustments such as these can save billions of dollars over the next 10 years, keeping these popular programs solvent. Other solutions, such as raising the Social Security payroll tax cap to more than the current income cutoff of $110,000, are worth consideration as part of a package. This is an idea that liberals love because it extends the progressivity of the tax code to the wealthiest Americans.

Alternatively, we could means-test Social Security to make sure it serves primarily as a safety net -- or (gasp!) raise the retirement age. When the Bowles-Simpson commission suggested raising the retirement age to 69 in 2075, it was met with howls of outrage from unions in particular. This makes no sense, especially if common-sense exemptions are made for manual labor.

Beltway cynics say that the bipartisan deficit and debt reduction plans that are often cited have no chance of passing Congress. When you look at the pathetic support for Bowles-Simpson when it was actually put to a vote in the House last March -- 16 Republicans and 22 Democrats supported it -- you see why cynicism is always a safe bet in Washington.

But take a step back, and you'll see much broader support among the American people. The Pew Research Center found that the top three issues are "strengthening the economy" (at 86%), "improving the jobs situation" (79%) and "reducing the budget deficit" (at 72%). Crucially, the deficit has shown the biggest increase as an issue over the past four years -- up 19 percentage points from 2009. This is evidence of a pent-up demand for action -- but it will require presidential leadership.

Of course the devil is in the details, and politicos will point out that when confronted with tough medicine to deal with deficits and debt, even alleged tea party supporters balk (hence the classic "Government Get Your Hands Off My Medicare!" sign that I saw at one 2009 rally).

But strengthening America to remain competitive in the 21st century will require getting our long-term debt under control along with other important but less poll-prioritized policies such as comprehensive immigration reform and a public-private infrastructure bank to fund nation-building "here at home."

The State of the Union is a chance for the president to put forward a balanced bipartisan solution that contrasts with radical conservatives who believe that increased tax revenues from closed tax loopholes can't be part of a big deal to bring down our debt. Wall Street lawyers will fight to protect every loophole they embedded in our tax code, but their argument doesn't begin to make sense to people on Main Street.

Obama will probably point out Tuesday night that economic growth is the essential X Factor to reducing long-term deficits and debt. On this point at least, he and some conservatives might agree. But dumb meat cleaver cuts such as the looming sequestration could push our economy back into recession.

That's why a smart balanced alternative plan is necessary. But it will require presidential leadership and putting some Democratic sacred cows on the table.

This doesn't just make practical sense in a divided government (a reality some Democrats seem to forget) -- it makes compelling political sense as well. By seizing the mantle of fiscal responsibility -- in contrast to fiscal conservatism -- Obama will build on his post-election bump among centrists and some independents.

The more Machiavellian Democrats might argue that this outreach could only serve to isolate Republicans more. Nonpartisan strategists might argue that this approach would drive a wedge between reasonable Republicans and the House radicals.

But the real reason for Obama to address the need to reduce long-term deficits and debt directly is because it's the right thing to do for our country -- and he is uniquely positioned to achieve it. Just as Nixon could go to China, a Southern Democrat such as Lyndon Johnson was needed to pass civil rights legislation and Bill Clinton was able to sign welfare reform after decades of Republicans talking about it, Obama can put our country on a balanced path of long-term economic growth and fiscal responsibility.

Bottom line: Obama has the political opportunity, but does he have the political will? We'll all find out in real time if he decides to lead on this issue or just be the latest in a long line to kick the can further down the road.

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The opinions expressed in this commentary are solely those of John Avlon.

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Dorner case: Human remains found in debris of burned cabin

Charred human remains have been found in the debris of the burned-out Big Bear area cabin where police believe fugitive ex-cop Christopher Dorner was holed up, authorities said.

Investigators will attempt to identify the remains through forensic means, the San Bernardino County Sheriff’s Department said in a statement.

Dorner, whose alleged crimes have kept Southern California on edge for days, is wanted for the slayings of an engaged couple and two law enforcement officers. He was believed to have shot at pursuing law enforcement officials, then fled into a cabin shortly before it ignited Tuesday afternoon near ski resorts in the San Bernardino Mountains.

Authorities had lost track of Dorner since late last week. Then, on Tuesday, two maids stumbled upon a man resembling Dorner as they arrived to clean a vacant cabin.

The suspect was found close to where law enforcement officials had held news conferences over the weekend concerning their search for Dorner, 33, and near where Dorner’s car was set aflame last week.

The suspect tied the two maids up, took a car from the residence and left, according to a law enforcement official. One of the maids was eventually able to break free at the residence in the 1200 block of Club View Drive, close to Snow Summit and Bear Mountain Resort, and called 911 at 12:20 p.m.

Then, at 12:45 p.m., according to state Fish and Wildlife officials, the suspect was allegedly driving a purple Nissan on California 38 when he passed a marked vehicle driven by the agency’s law enforcement officers.

The officers recognized the suspect as he passed and swung their vehicle around in pursuit.

The suspect attempted to evade them by turning off onto Glass Road, and at some point crashed and abandoned the small car.

With officers still in pursuit, the suspect then stopped a truck driven by another resident and ordered him out of the vehicle.

Behind the wheel of the stolen truck, the suspect was once again careening down Glass Road, and once again he passed a Fish and Wildlife vehicle coming from the opposite direction. Again an officer recognized the suspect. That driver radioed his colleagues traveling behind him that the suspect was heading in their direction in a silver pickup.

When the suspect saw the second Fish and Wildlife truck approaching, he rolled down his window and took aim. The suspect opened fire into the cab as the vehicles passed just two feet apart, shattering the driver's side window and strafing the state truck with a handgun.

The badly damaged truck skidded to a halt and a game warden, a 35-year-old former Marine, fired 20 rounds from a high-powered rifle as the suspect fled in the hijacked truck.

The suspect subsequently crashed that truck and ran into the woods. He ended up in the cabin. A firefight ensued. Two San Bernardino County sheriff’s deputies were shot; one was pronounced dead at a hospital, while another is undergoing surgery. Hundreds of rounds were fired in the firefight.

For days, multiple law enforcement agencies from across Southern California laid out a dragnet for the man accused of going on a revenge-fueled rampage following his termination from the LAPD in 2008. In addition to the San Bernardino County sheriff’s deputy who was fatally wounded Tuesday, Dorner allegedly killed the 28-year-old daughter of a former LAPD captain, her fiance and a Riverside police officer.

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Pope asks for support after decision to resign, says strength diminishing

VATICAN CITY (Reuters) - Pope Benedict, in his first public comments since he announced that he would become the first pontiff in centuries to resign, on Wednesday said he was fully aware of the gravity of his decision but confident that it would not hurt the Church.

"Continue to pray for me, for the Church and for the future pope," he said in unscripted remarks at the start of his weekly general audience, one of his last public appearances before he resigns on February 28.

The pope, who looked and sounded strong, was interrupted several times by thunderous applause from the some 8,000 faithful and tourists who packed the vast audience hall.

In brief, prepared remarks that mirrored those he read to stunned cardinals when he announced his decision on Monday, the pope said God would continue to guide the Church because it was much more than its earthly leader.

"I took this decision in full freedom for the good of the Church after praying for a long time and examining by conscience before God," he said.

He said he was, "well aware of the gravity of such an act but at the same time aware of not being able to carry out my (papal) ministry with the physical and spiritual force that it requires".

Benedict said he was sustained by the "certainty that the Church belongs to Christ, who will never stop guiding it and caring for it".

He said that "he felt almost physically" the affection and kindness he had received since he announced the decision.

Later on Wednesday, an Ash Wednesday Mass that was originally scheduled to have taken place in a small church in Rome, has been moved to St Peter's Basilica so more people can attend.

Unless the Vatican changes the pope's schedule, it will be his last public Mass.

(Reporting By Philip Pullella; editing by Barry Moody)

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Yen steady, euro dips after G7 urges against FX war

LONDON (Reuters) - The yen hovered near three-year lows against the dollar and the euro fell on Tuesday after the G7 nations urged countries to refrain from competitive devaluations and a U.S. official backed Japan's new anti-deflation policies.

The Group of Seven industrialized nations published a statement saying it remained committed to "market-determined" exchange rates, reacting to weeks of concern that Japan's monetary easing policy, which has also weakened its currency, could trigger far-reaching currency wars.

"We reaffirm that our fiscal and monetary policies have been and will remain oriented towards meeting our respective domestic objectives using domestic instruments, and that we will not target exchange rates," the group said.

Japan's Finance Minister Taro Aso welcomed the G7 statement, saying it showed the group recognized Japan's new anti-deflation policy was not aimed at affecting foreign exchange markets.

By 5:30 a.m. ET the yen was close to a three-year low of 94.31 to the dollar. The euro was down 0.2 percent versus the dollar and 0.5 percent lower at 125.90 yen after rising over 2 percent on Monday.

Treasury Undersecretary Lael Brainard said on Monday the United States supported Japanese efforts to end deflation, but also noted the G7 has long been committed to exchange rates determined by market forces.

The euro, the main riser among major currencies over the last few months as confidence in the euro zone has rebounded and the yen has slumped, was back at $1.3405 following the G7 statement.

It had risen briefly earlier after ECB Vice President Vitor Constancio said the bank's employment growth and inflation forecasts next month were likely to be close to the December figures.

The comments doused rate cut hopes, only re-kindled last week by the head of the bank, Mario Draghi, who said it was looking to see whether the euro's recent rise risked pushing inflation below its comfort zone.

SPAIN FOCUS

Having started the day down 0.2 percent, European shares were almost level again by 5:30 a.m. ET as London's FTSE 100 <.ftse> and Paris's CAC-40 <.fchi> recovered, though Frankfurt's DAX <.gdaxi> remained down 0.2 percent.

In the bond market, Spanish and Italian bonds inched up as domestic buyers took advantage of a recent sell-off, but the recovery looked fragile given political uncertainty in both countries.

Spain sold 5.6 billion euros ($7.5 billion) of 6- and 12-month Treasury bills, beating the top end of the target amount, but paid a higher yield on the longer-term paper as a political corruption scandal weighed on shaky confidence.

The ECB's Draghi is due to address Spanish lawmakers later on Tuesday to explain and defend the ECB's current monetary policy strategy against a backdrop of heightened concerns about the strong euro.

Draghi is also expected to meet Prime Minister Mariano Rajoy, but the market does not expect them to discuss whether Madrid might need financial aid, which would trigger the ECB's bond purchase scheme.

Financial markets showed a muted reaction, meanwhile, to the news that North Korea has conducted a nuclear test.

The nuclear test monitoring agency said the blast was double the size of its 2009 test. NATO condemned the move, calling it an "irresponsible act" that posed a grave threat to world peace.

"The test was not something that makes your heart pound as much as a pressing situation between Iran and Israel," said Kaname Gokon, research manager at brokerage Okato Shoji, referring to the threat of possible military action to prevent Iran from developing nuclear weapons.

Brent oil dipped to just under $118 a barrel, copper was flat, while spot gold stayed near a one-month low.

(Editing by Will Waterman)

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AP Source: IOC drops wrestling from 2020 Olympics

LAUSANNE, Switzerland (AP) — IOC leaders dropped wrestling from the program for the 2020 Olympics on Tuesday, an official familiar with the decision told The Associated Press.

In a surprise move, the IOC executive board decided to retain modern pentathlon — the sport considered most at risk — and remove wrestling instead, the official said.

The official spoke on condition of anonymity because the decision hadn't been announced yet.

The IOC board acted after reviewing the 26 sports on the current Olympic program. Eliminating one sport allows the International Olympic Committee to add a new sport to the program later this year.

Wrestling combines freestyle and Greco-Roman disciplines. It had 11 medal events in freestyle and seven in Greco-Roman at last year's London Olympics.

Wrestling will now join seven other sports in applying for inclusion in 2020. The others are a combined bid from baseball and softball, karate, squash, roller sports, sport climbing, wakeboarding and wushu. They will be vying for a single opening in 2020.

The IOC executive board will meet in May in St. Petersburg, Russia, to decide which sport or sports to propose for 2020 inclusion. The final vote will be made at the IOC general assembly in September in Buenos Aires, Argentina.

The last sports removed from the Olympics were baseball and softball, voted out by the IOC in 2005 and off the program since the 2008 Beijing Games. Golf and rugby will be joining the program at the 2016 Games in Rio de Janeiro.

The IOC program commission report analyzed more than three dozen criteria, including television ratings, ticket sales, anti-doping policy and global participation and popularity. With no official rankings or recommendations contained in the report, the final decision by the 15-member board was also subject to political, emotional and sentimental factors.

Previously considered under the closest scrutiny was modern pentathlon, which has been on the Olympic program since the 1912 Stockholm Games. It was created by French baron Pierre de Coubertin, the founder of the modern Olympic movement.

Modern pentathlon combines fencing, horse riding, swimming, running and shooting — the five skills required of a 19th century cavalry officer. The sport's governing body, the UIPM, has been lobbying hard to protect its Olympic status, and the efforts apparently paid off.

UIPM President Klaus Schormann had considered traveling from Germany to Lausanne for the decision, but decided to stay away.

"The Olympic movement always needs history," Schormann told the AP ahead of the IOC decision. "You cannot just say we look only at the future. You can have a future when you are stable on the basic part of history. We are continuing to develop, to renovate, to be innovative and creative. We are very proud of what we achieved so far and want to deliver this as well for the next generations in 2020."

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Why pope will long be remembered

Tim Stanley says Pope Benedict will be seen as an important figure in church history.

STORY HIGHLIGHTS

• Timothy Stanley: Benedict XVI's resignation is historic since popes usually serve for life


• He says pope not so much conservative as asserting church's "living tradition"


• He backed traditionalists, but a conflicted flock, scandal, culture wars a trial to papacy, he says


• Stanley: Pope kept to principle, and if it's not what modern world wanted, that's world's problem

Editor's note: Timothy Stanley is a historian at Oxford University and blogs for Britain's The Daily Telegraph. He is the author of "The Crusader: The Life and Times of Pat Buchanan."

(CNN) -- Journalists have a habit of calling too many things "historic" -- but on this occasion, the word is appropriate. The Roman Catholic Church is run like an elected monarchy, and popes are supposed to rule until death; no pope has stepped down since 1415.

Therefore, it almost feels like a concession to the modern world to read that Benedict XVI is retiring on grounds of ill health, as if he were a CEO rather than God's man on Earth. That's highly ironic considering that Benedict will be remembered as perhaps the most "conservative" pope since the 1950s -- a leader who tried to assert theological principle over fashionable compromise.

Timothy Stanley

The word "conservative" is actually misleading, and the monk who received me into the Catholic Church in 2006 -- roughly a year after Benedict began his pontificate -- would be appalled to read me using it. In Catholicism, there is no right or left but only orthodoxy and error. As such, Benedict would understand the more controversial stances that he took as pope not as "turning back the clock" but as asserting a living tradition that had become undervalued within the church. His success in this regard will be felt for generations to come.

He not only permitted but quietly encouraged traditionalists to say the old rite, reviving the use of Latin or receiving the communion wafer on the tongue. He issued a new translation of the Roman Missal that tried to make its language more precise. And, in the words of one priest, he encouraged the idea that "we ought to take care and time in preparing for the liturgy, and ensure we celebrate it with as much dignity as possible." His emphasis was upon reverence and reflection, which has been a healthy antidote to the 1960s style of Catholicism that encouraged feverish participation bordering on theatrics.

Nothing the pope proposed was new, but it could be called radical, trying to recapture some of the certainty and beauty that pervaded Catholicism before the reforming Vatican II. Inevitably, this upset some. Progressives felt that he was promoting a form of religion that belonged to a different century, that his firm belief in traditional moral theology threatened to distance the church from the people it was supposed to serve.

If that's true, it wasn't the pope's intent. Contrary to the general impression that he's favored a smaller, purer church, Benedict has actually done his best to expand its reach. The most visible sign was his engagement on Twitter. But he also reached out to the Eastern Orthodox Churches and spoke up for Christians persecuted in the Middle East.

In the United Kingdom, he encouraged married Anglican priests to defect. He has even opened up dialogue with Islam. During his tenure, we've also seen a new embrace of Catholicism in the realm of politics, from Paul Ryan's nomination to Tony Blair's high-profile conversion. And far from only talking about sex, Benedict expanded the number of sins to include things such as pollution. It's too often forgotten that in the 1960s he was considered a liberal who eschewed the clerical collar.

The divisions and controversies that occurred under Benedict's leadership had little to do with him personally and a lot more to do with the Catholic Church's difficult relationship with the modern world. As a Catholic convert, I've signed up to its positions on sexual ethics, but I appreciate that many millions have not. A balance has to be struck between the rights of believers and nonbelievers, between respect for tradition and the freedom to reject it.

As the world has struggled to strike that balance (consider the role that same-sex marriage and abortion played in the 2012 election) so the church has found itself forced to be a combatant in the great, ugly culture war. Benedict would rather it played the role of reconciler and healer of wounds, but at this moment in history that's not possible. Unfortunately, its alternative role as moral arbiter has been undermined by the pedophile scandal. Nothing has dogged this pontificate so much as the tragedy of child abuse, and it will continue to blot its reputation for decades to come.

For all these problems, my sense is that Benedict will be remembered as a thinker rather than a fighter. I have been so fortunate to become a Catholic at a moment of liturgical revival under a pope who can write a book as majestic and wise as his biography of Jesus. I've been lucky to know a pope with a sense of humor and a willingness to talk and engage.

If he wasn't what the modern world wanted -- if he wasn't prepared to bend every principle or rule to appease all the people all the time -- then that's the world's problem rather than his. Although he has attained one very modern distinction indeed. On Monday, he trended ahead of Justin Bieber on Twitter for at least an hour.

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The opinions expressed in this commentary are solely those of Timothy Stanley.

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Hadiya's dad: 'Thanking God that these two guys are off the streets'

Two reputed gang members were out for revenge from a previous shooting when they opened fire on a group of students in a South Side park last month, killing 15-year-old Hadiya Pendleton in a heartbreaking case that has brought national attention to Chicago's rampant gun violence, police said.

Michael Ward, 18, and Kenneth Williams, 20, were each charged with first-degree murder, attempted murder and aggravated battery with a firearm in the Jan. 29 attack that also left two teens wounded.

Ward confessed to police that he and Williams mistook a Pendleton companion for rivals who had shot and wounded Williams last July, police Superintendent Garry McCarthy said at a news conference Monday night at the Area Central police headquarters.

Ward told police that he and Williams got out of their car, crept up on the group and opened fire in Harsh Park, McCarthy said. Williams then drove them from the scene, he said.

"The offenders had it all wrong. They thought the group they shot into included members of a rival gang. Instead it was a group of upstanding, determined kids who, like Hadiya, were repulsed by the gang lifestyle," said McCarthy, flanked by two dozen detectives and gang investigators who worked the case.

Detectives arrested the two Saturday night as the suspects were on their way to a suburban strip club to celebrate a friend's birthday, McCarthy said. Pendleton had been buried only hours earlier in a funeral attended by first lady Michelle Obama.

"I don't even know what to say about that," McCarthy said. "They were going out to celebrate at a strip club."

Williams did not confess and police have not recovered a weapon, McCarthy said. Both are due in bond court Tuesday.

Hadiya's father, Nathaniel Pendleton, said Monday night that news of the charges marked the first time since his daughter's slaying that he had a "legitimate" smile on his face.

"I'm ecstatic that they found the two guys," he told the Tribune during a brief telephone interview from Washington, D.C., where he and wife Cleopatra Cowley-Pendleton will attend the State of the Union address Tuesday as guests of President Barack Obama. "(I'm) thanking God that these two guys are off the streets, so that this doesn't happen to another innocent person."

Danetria Hutson, 15, who held Hadiya in her arms after she was shot, said she and others in the group have had nightmares since the shooting.

In addition to waking up in the middle of the night, Hutson, also a sophomore at King, said she and other in that group also haven't been able to bring themselves to hang out at parks since that day.

"A lot of us were actually paranoid because the guys were still out there," Hutson said in a telephone interview. "They knew where we went to school."

On Monday night, Hutson was a little frustrated because of the "ignorance" portrayed in social media, where some people are suggesting that Ward and Williams weren't involved in Hadiya's slaying. But Hutson felt a sigh of relief today when charges were announced against them.

"I just want to see how her family reacts," she said. "It gave me some closure, but I don't think (Hadiya's) family will get closure."

McCarthy said that two days before the killing, police had stopped Ward in his Nissan Sentra as part of a routine gang investigation. That information wound up being the starting point for detectives when witnesses in the shooting described seeing a similar car driving away from the shooting scene, he said.

Through surveillance and interviews — including several fruitful interviews with parolees in the neighborhood — detectives were able to home in on Ward and Williams, McCarthy said. On Saturday night, the decision was made to stop the two if they were spotted. Police watched as they departed in a caravan of cars headed to the strip club in Harvey. They were stopped near 67th Street and South King Drive and taken in for questioning.

McCarthy said Williams was shot July 11 at 39th Street and South Lake Park Avenue, and an arrest was made. But that gunman was let go after Williams refused to cooperate, McCarthy said.

McCarthy also noted that at the time of Hadiya's slaying, Ward was on probation for a weapons conviction. McCarthy said weak Illinois gun laws allowed Ward to avoid jail time because of the absence of mandatory minimum sentences.

"This incident did not have to occur," McCarthy said. "And if mandatory minimums existed in the state of Illinois, Michael Ward would not have been on the street to commit this heinous act."

In announcing the charges, McCarthy praised the "meticulous" detective work that led to the arrests, but he also expressed frustration that despite a $40,000 reward for information in the shooting, no one who had knowledge of the crime came forward.

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North Korea conducts third nuclear test, drawing new sanctions threat

SEOUL (Reuters) - North Korea conducted its third nuclear test on Tuesday in defiance of existing U.N. resolutions, angering the United States and Japan and prompting its only major ally, China, to call for calm.

The North said the test had "greater explosive force" than the 2006 and 2009 tests that were widely seen as small-scale. Its KCNA news agency said it had used a "miniaturized" and lighter nuclear device, indicating that it had again used plutonium which is more suitable for use as a missile warhead.

North Korean leader Kim Jong-un, the third of his line to rule the country, has presided over two long-range rocket launches and a nuclear test during his first a year in power, pursuing policies that have propelled his impoverished and malnourished country closer to becoming a nuclear weapons power.

U.S. President Barack Obama labeled the test a "highly provocative act" that hurt regional stability and he and other states that are members of U.N. Security Council pressed for new sanctions on the isolated country.

"The danger posed by North Korea's threatening activities warrants further swift and credible action by the international community. The United States will also continue to take steps necessary to defend ourselves and our allies," Obama said in a statement.

The Security Council will meet later on Tuesday to discuss its reaction to the test, although North Korea is already one of the most heavily sanctioned states in the world and has few external economic links that can be targeted.

Japanese Prime Minister Shinzo Abe said the test was a "grave threat" that could not be tolerated. U.N. Secretary-General Ban Ki-moon said the test was a "clear and grave violation" of U.N. Security Council resolutions.

China, which has shown signs of increasing exasperation with its neighbor, repeated calls for the "denuclearization" of the Korean peninsula and urged its client state and others to react calmly, while pressing Pyongyang not to ramp up tension further, something the North had threatened in the run-up to the test.

"We strongly urge North Korea to abide by its non-nuclear commitment and not to take any further actions that would worsen the situation", it said in a statement.

China is a permanent member of the Security Council.

South Korea, still technically at war with the North after the 1950-53 civil war ended in a mere truce, said the size of the seismic activity indicated a nuclear explosion slightly larger than the North's two previous tests at 6-7 kilotons, although that is still relatively small. The Hiroshima bomb was around 20 kilotons.

The U.S. Geological Survey said that a seismic event measuring 5.1 magnitude had occurred on Tuesday, with North Korea later confirming the nuclear test.

"It was confirmed that the nuclear test that was carried out at a high level in a safe and perfect manner using a miniaturized and lighter nuclear device with greater explosive force than previously did not pose any negative impact on the surrounding ecological environment," KCNA said.

Despite China's tame response, it likely to be a major embarrassment for Beijing, the North's sole major economic and diplomatic ally.

"The test is hugely insulting to China, which now can be expected to follow through with threats to impose sanctions," said Mark Fitzpatrick of the International Institute for Strategic Studies think tank.

North Korea trumpeted the announcement on its state television channel to patriotic music against the backdrop of an image of its national flag.

It linked the test to its technical prowess in launching a long-range rocket in December, a move that triggered the U.N. sanctions, backed by China, that Pyongyang said prompted it to take Tuesday's action.

The North's ultimate aim, Washington believes, is to design an intercontinental ballistic missile capable of carrying a nuclear warhead that could hit the United States. North Korea says the program is aimed merely at putting satellites in space.

North Korea used plutonium in previous nuclear tests and prior to Tuesday there had been speculation it would use highly enriched uranium so as to conserve its plutonium stocks as testing eats into its limited supply of the material that could be used to construct a nuclear bomb.

"VICIOUS CYCLE"

Despite its three nuclear tests and long-range rocket tests, North Korea is not believed to be close to manufacturing a nuclear missile capable of hitting the United States.

South Korea's Yonhap news agency said Pyongyang had informed China and the United States of its plans to test on Monday, although this could not be confirmed.

When North Korean leader Kim, 30, took power after his father's death in December 2011, there were hopes the he would bring reforms and end Kim Jong-il's "military first" policies.

Instead, the North, whose economy is smaller than it was 20 years ago and where a third of children are believed to be malnourished, appears to be trapped in a cycle of sanctions followed by further provocations.

"The more North Korea shoots missiles, launches satellites or conducts nuclear tests, the more the U.N. Security Council will impose new and more severe sanctions," said Shen Dingli, a professor at Shanghai's Fudan University. "It is an endless, vicious cycle."

But options for the international community appear to be in short supply, as North Korea is already one of the most heavily sanctioned states on earth.

Tuesday's action appeared to have been timed for the run-up to February 16 anniversary celebrations of Kim Jong-il's birthday, as well as to achieved maximum international attention.

Significantly, the test comes at a time of political transition in China, Japan and South Korea, and as Obama begins his second term. He will likely have to tweak his State of the Union address due to be given on Tuesday.

Japanese Prime Minister Shinzo Abe is bedding down a new government and South Korea's new president, Park Geun-hye, prepares to take office on February 25.

China too is in the midst of a once-in-a-decade leadership transition to Xi Jinping, who takes office in March. Both Abe and Xi are staunch nationalists.

The longer-term game plan from Pyongyang may be to restart talks aimed at winning food and financial aid. China urged it to return to the stalled "six-party" talks, hosted by China and including the two Koreas, the United States, Japan and Russia.

Its puny economy and small diplomatic reach mean the North struggles to win attention on the global stage - other than through nuclear tests and attacks on South Korea, last made in 2010.

"Now the next step for North Korea will be to offer talks... - any form to start up discussion again to bring things to their advantage," said Jeung Young-tae, senior research fellow at the Korea Institute for National Unification in Seoul.

EU member Denmark called on China to step up to the plate and use its influence at the Security Council to rein in its ally, using unusually blunt language.

"This deserves only one thing and that is a one-sided condemnation," said Foreign Minister Villy Sovndal.

"North Korea is likely the most horrible country on this planet."

(Additional reporting by Jack Kim, Christine Kim and Jumin Park in SEOUL; Linda Sieg in TOKYO; Louis Charbonneau at the UNITED NATIONS; Fredrik Dahl in VIENNA; Michael Martina in BEIJING; Mette Fraende in COPENHAGEN; Editing by Nick Macfie)

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Stock index futures signal higher open

PARIS (Reuters) - Stock index futures pointed to a higher open on Wall Street on Monday, with futures for the S&P 500 up 0.07 percent, Dow Jones futures up 0.08 percent and Nasdaq 100 futures up 0.03 percent at 03.44 a.m. EST.

European stocks fell, reversing Friday's rebound as simmering worries over Spain and Italy continued to spook investors. <.eu> Most Asian bourses, including those in Japan, China, Hong Kong, Singapore and South Korea, were closed for the Lunar New Year holiday.

US Airways Group Inc and AMR Corp are nearing an $11 billion merger that would create the world's largest airline and could announce a deal within a week, after resolving key differences on valuation and management structure, people familiar with the matter said.

Google Inc Executive Chairman Eric Schmidt is selling roughly 42 percent of his stake in the Internet search company, a move that could potentially net the former chief executive a $2.51 billion windfall.

Three of Dell Inc's largest investors joined Southeastern Asset Management on Friday in objecting to a $24.4 billion buyout of the No. 3 PC maker led by Chief Executive Michael Dell, sources said, as opposition grows to the largest buyout since the start of the financial crisis.

Boeing Co completed what it called an uneventful flight on Saturday of a test 787 Dreamliner, its first since the airplanes were grounded more than three weeks ago after a series of battery-related problems.

Apple Inc. is experimenting with the design of a device similar to a wristwatch that would operate on the same platform as the iPhone and would be made with curved glass, the New York Times reported on Sunday.

The Nasdaq composite stock index closed at a 12-year high and the S&P 500 index at a five-year high, boosted by gains in technology shares and stronger overseas trade figures.

The Dow Jones industrial average <.dji> ended up 48.92 points, or 0.35 percent, at 13,992.97. The Standard & Poor's 500 Index <.spx> was up 8.54 points, or 0.57 percent, at 1,517.93. The Nasdaq Composite Index <.ixic> was up 28.74 points, or 0.91 percent, at 3,193.87, its highest closing level since November 2000.

(Reporting by Blaise Robinson; editing by Patrick Graham)

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Snedeker on the rise with Pebble win

PEBBLE BEACH, Calif. (AP) — Everything about Brandt Snedeker moves at warp speed, including his rapid rise into golf's elite.

He talks so fast that he always seems to be a few words short of a complete sentence. He plays fast, giving his hips a quick swivel to set his position before pulling the trigger. Even his putts go into the hole quickly, most of them struck with purpose instead of hope.

But when he reached the 18th tee box at Pebble Beach, he had to wait for the fairway to clear before taking a victory stroll up one of the prettiest closing holes in golf.

And that was OK with him.

"There's not much better place to be on the planet with a three-shot lead on that tee box," Snedeker said Sunday. "It felt pretty special there."

Indeed, Snedeker is in a special place.

With his 10th consecutive round in the 60s, Snedeker finally had a trophy to show for his astounding start to the 2013 season. He knew the opening seven holes were critical, and he made an eagle and three birdies to build a quick lead. He realized a late birdie would give him a cushion, and he fired at the flag on the par-3 17th to 10 feet below the cup and holed the putt. He closed with a 7-under 65 for a two-shot win over Chris Kirk in the Pebble Beach National Pro-Am.

It was the fifth win of his career, and his fourth in the last 22 months. But it's the last six months that have really turned heads.

He captured the $10 million FedEx Cup prize with a win at the Tour Championship, where he held off the likes of Rory McIlroy, Tiger Woods and Luke Donald going into the final round. He played in his first Ryder Cup. He started this year with a third-place at Kapalua, and runner-up finishes in consecutive weeks to Woods and Phil Mickelson, both of whom had big leads going into the final round.

Go back to the start of the FedEx Cup playoffs last August and Snedeker now has six top 3s in his last nine starts. Since missing the cut at the PGA Championship, he has broken par in 33 out of 37 rounds. No wonder he now is No. 4 in the world, the best ranking of his career.

"Just hard to put into words, to have a stretch of golf like I had the last couple of months," Snedeker said. "Something you dream about. Something you think that you can do, but you don't really know until you actually put it together. And I have.

"I'm really enjoying this, and hopefully can parlay this into the best year of my career."

Snedeker set the tournament record at 19-under 267, one shot better than Mickelson (2007) and Mark O'Meara (1997), who each had a 20-under 268 when Poppy Hills (par 72) was part of the rotation. It has been replaced by Monterey Peninsula, which is a par 70.

Chris Kirk closed with a 66 to finish alone in second, though he was never closer than two shots of the lead on the back nine and finished with a birdie. Kirk finished on 269, a score that would have been good enough to win all but four times at Pebble Beach since this tournament began in 1937.

"We've had a lot of tournaments like that on tour this year where somebody has really just kind of blitzed the field," Kirk said. "I felt like I played well enough to win a golf tournament and came up a little bit short."

Snedeker could have said the same thing — except for Woods at Torrey Pines, and Mickelson going obscenely low to win the Phoenix Open.

He wasn't about to take a back seat to anyone at Pebble Beach.

Snedeker started the final round tied with James Hahn, a 31-year-old rookie from the Bay Area, with Kirk one shot behind. He set the tone early with a 4-iron into the par-5 second hole that was on the edge of the left green. It hit the collar and kicked slightly to the right, rolling toward the pin until it settled 4 feet behind the cup.

"Kind of lucky, but it was a good shot, and to end up where it did was a great way to start the day," he said.

Hahn hit his approach high and pure, and it nearly hit Snedeker's ball before stopping 6 feet away. Hahn missed. Snedeker made. It was like that over the front nine.

Snedeker started to pull away with a 3-wood that came off the edge of the green, ran by the cup and stopped 20 feet away for a two-putt birdie. Then, he holed a 15-foot birdie putt on the seventh and was on his way.

Most impressive about Snedeker this week was bouncing back from bogey. He made five bogeys for the entire week, and four times made birdie on the next hole. On Sunday, his lone mistake was knocking an 18-foot birdie off the green and three-putting for bogey at No. 9.

The answer, like everything else about him, was fast and furious.

He knocked in a 25-foot birdie putt on the 10th, and then holed from 15 feet for birdie on the 12th. Right when it looked as though he would make another bogey on the par-3 12th, he made par from just short of 10 feet.

There's a reason Snedeker led the PGA Tour in putting last year, though it's his driving that has vastly improved. Snedeker studied some statistics last year that showed his odds of hitting the green go way up when he starts in the fairway. And once he's on the green, he's tough to beat.

Hahn, who shot 70 and tied for third, was looking forward to learning something from his debut in the final group, and he saw Snedeker put on a clinic.

"I learned that he is a better guy than he is a golfer. The dude is world class," Hahn said. "He's obviously one of the best, if not the best golfer right now, and possibly for the last year. But how he conducts himself as a person on an off the golf course, that's also world class. He deserved to win today. ... I'm sure if you ask him, it was never a doubt that he was going to win the golf tournament."

Snedeker concurred.

"I definitely didn't want to do anything but win today," he said. "I was out there for one purpose and one purpose only, and I was extremely focused all day. I did a great job of staying patient and I did a great job of playing the golf course the way you're supposed to play it."

And the outcome was just what he expected. The way he has been playing, it shouldn't have been any surprise to anyone.

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