Gradual Global Recovery Expected for First Quarter 2010

NEW YORK and LONDON, December 16, 2009 - In its quarterly currency and commodity markets forecast, FOREX.com, a division of GAIN Capital Group, LLC, is predicting a gradual global recovery as investors continue to seek returns in risky assets in 1Q 2010.
Chief Currency Strategist for FOREX.com, Brian Dolan, believes that risk sentiment will mostly be in the "on" position throughout the first quarter, but obviously subject to hiccups on data disappointments or credit surprises.
"U.S. dollar weakness is likely to fade as a driving theme, as U.S. data may prove slightly more upbeat than reports out of Europe, the U.K. and Japan. Additionally, marginally higher U.S. market rates may induce further unwinding of short-USD positioning," stated Mr. Dolan in the report. "Overall, we think trading conditions will favor short-term mini-trends and anticipate another target-rich environment as market correlations remain high."
Other first quarter predictions from the report include:

• High unemployment will continue to restrain consumer activity throughout the G10, resulting in further uneven economic data overall

• Currencies that are most likely to outperform are those where growth has returned most solidly and where interested rates are being raised such as AUD, closely followed by the NOK

• The risk of a double dip recession will recede and, as the impact of the fiscal stimulus tapers off, growth in 2010 will likely be slow in much of the G10

The FOREX.com research team also highlights expected ranges for key pairs for the first quarter, such as:

• EUR/USD: 1.4300/1.5000; risk to 1.3800 if below 1.4300
• Gold: 1050/1150; risk to 1250 if above 1150/70

"FOREX.com Markets Outlook" provides commentary and market forecasts with its view of the direction of the world's major currencies as well as key commodities including gold, silver and oil. In addition to Brian Dolan, the report was prepared by UK Research Director Jane Foley and Currency Strategist Jacob Oubina.

About GAIN Capital
GAIN Capital Holdings, Inc. is a global provider of online trading services, specializing in foreign exchange (forex or FX) and contracts for difference (CFDs). Customers and trading partners in more than 140 countries have utilized the company's award-winning trading platform which transacts nearly $200 billion per month.
A pioneer in online forex trading, GAIN Capital operates FOREX.com, one of the largest and best-known brands in the retail forex industry. It also provides execution, clearing, custody and technology products and services to an institutional client base including asset managers, broker/dealers and other financial services firms.
With offices in New York City; Bedminster, New Jersey; London; Seoul; and Tokyo, GAIN Capital and its affiliates are regulated by the Commodity Futures Trading Commission (CFTC) in the United States, the Financial Services Authority (FSA) in the United Kingdom and the Financial Services Authority (FSA) in Japan.

Balloon boy parents get jail time, tough probation

FORT COLLINS, Colo. – The parents who carried out the balloon boy hoax were sentenced to jail Wednesday and given strict probation conditions that forbid them from earning any money from the spectacle for four years.

Richard Heene was sentenced to 90 days in jail, including 60 days of work release that will let him pursue his job as a construction contractor while serving his time. His wife, Mayumi, was sentenced to 20 days in jail.

Richard Heene choked back tears as he said he was sorry, especially to the rescue workers who chased down false reports that his 6-year-old son had floated away in a balloon on Oct. 15. It was a stunt designed to generate attention for a reality TV show.

"I do want to reiterate that I'm very, very sorry. And I want to apologize to all the rescue workers out there, and the people that got involved in the community. That's it," said Richard Heene, whose wife did not speak at the hearing.

Larimer County District Judge Stephen Schapanski then ordered Heene to begin a 30-day jail term on Jan. 11, delaying the start of the sentence for two weeks so he can spend the holidays with his family. Schapanski allowed Heene to serve the remaining 60 days of his jail term under work release, meaning he can work during the day but spend his nights in jail.

The Heenes' probation will be revoked if they are found to be profiting from any book, TV, movie or other deals related to the stunt.

"This, in simple terms, was an elaborate hoax that was devised by Mr. and Mrs. Heene," the judge said.

The Heenes pleaded guilty to charges that they carried out the balloon hoax, with deals that called for up to 90 days in jail for the husband and 60 days for his wife.

Schapanski ordered Mayumi Heene to serve 20 days in jail after her husband completes his sentence. Her time served is flexible — she can report to jail on 10 weekends, for example — so the children are cared for, the judge said.

Prosecutors asked for the maximum sentence for the husband, saying that a message needs to be sent to promoters who attempt to carry out hoaxes to generate publicity. Chief Deputy District Attorney Andrew Lewis also asked for full restitution to reimburse authorities for the cost of investigating the hoax — an amount that could exceed $50,000.

"People around the world were watching this unfold," he said. "Mr. Heene wasted a lot of manpower and a lot of money in wanting to get himself some publicity."

He added, "Jay Leno said it best when he said, 'This is copycat game.' And people will copycat this event. (The Heenes) need to go to jail so people don't do that."

He portrayed the Heenes as growing increasingly desperate as their pitches for a reality TV show kept getting turned down by networks — and the family fell deeper into a financial hole. Lewis said the Heenes set in motion the balloon hoax in early October as a way to jumpstart the effort and get some attention.

They chose Oct. 15 because the weather was cooperating and the kids were home for school with parent-teacher conferences, allowing the Heenes to report that 6-year-old Falcon had floated away, Lewis said.

Once the parents were brought in for questioning, Richard Heene feigned sleep during the lie-detector test, claiming it was some sort of diabetic episode, Lewis said.

David Lane, Richard Heene's attorney, pleaded for leniency with the judge and said that the couple "have learned a lesson they will never forget for the rest of their lives." He also said that if someone has to go to jail, let it be Richard Heene and not his wife.

"That is his plea. That would be something of a Christmas miracle if that can occur," he said.

Microsoft Word sale prohibited as of Jan. 11, fix promised

Office workers of America, enjoy your Christmas break. Because come the new year, things could get a little hairy around the office. Microsoft Word is now scheduled to be prohibited from sale beginning January 11, 2010. That's less than three weeks away. The good news: Microsoft has promised a fix, one which will be rolled out before the deadline arrives.

If you don't understand, you might have simply missed this story, or dismissed it as something that Microsoft would ultimately use its considerable clout to have pushed under a legal rug.

But it's no joke. In August of this year, a court sided with a small Canadian company called i4i that holds a 1998 patent on the way the XML language is implemented, finding that Microsoft was in violation of that patent. The result: Microsoft was told to license the code in question from i4i or reprogram it, or else Microsoft Word would have to be removed from sale in the market. The original ruling gave Microsoft until October to get its legal affairs in order, but appeals pushed that out a bit.

Now a federal court has upheld that original ruling -- plus a fat, $290 million judgment against the company -- imposing the new January 11 D-Day on the matter. Microsoft Word and Microsoft Office will both be barred from sale as of that date -- though naturally you'll still be able to use copies of Word and Office that you already own, and Microsoft will be allowed to keep supporting those copies.

Unless Microsoft ships the promised technical workaround very quickly, things are going to get extremely dicey in the computer world, and fast. Not only will retail outlets selling shrinkwrapped copies of the software be affected, computer manufacturers (who complained loudly about this injunction when it was announced) who bundle Word and Office on the computers they sell will also be seriously impacted by the ruling.

There's always a chance things will change again as the January 11 deadline approaches, but if your company requires Word or Office to keep operations running, it might not be a bad idea to stock up on a few extra copies now.

Brittany Murphy death cause pending autopsy

According to reports from Los Angeles, the cause of death for Brittany Murphy is not foul play, and there are no suspicions of illicit drug use. The cause of death is pending autopsy results that are being performed today.

So far, the cause of death for Brittany Murphy has been ruled as natural. The actress was reportedly diabetic, and was taking flu medications before she collapsed in the shower, suffering cardiac arrest. She had been vomiting. The cause of death is not completely understood yet, has been ruled "naural", and cardiac arrest is the only finding so far.

Diabetics with flu symptoms are especially vulnerable to complications. Vomiting can be a sign of diabetic complications, or flu-related. Multiple prescription medications were found in the home of Brittany Murphy that included medications for her husband, the actress, and Murphy's mother. Until toxicology and autopsy reports are completed, there can only be speculation as to exactly why Brittany Murphy died at the age of 32.

Diabetes, combined with flu can lead to serious complications. When blood sugar levels rise from illness and fever, dehydration and electrolyte imbalances can occur, which may have played a role in the cause of death for Brittany Murphy. Vomiting can occur as the result of diabetic ketoacidosis. Vomiting is also a symptom of influenza, though the current pandemic has caused mostly respiratory symptoms.

Until an autopsy is completed, the cause of death for Brittany Murphy cannot be known. There are multiple reasons for cardiac arrest in young people. The tragedy of the young actress' demise is no doubt a source of unrest for fans as the cause of Brittany Murphy's death at such a young age.

So far the coroner has ruled the Brittany Murphy cause of death as natural. We only know she died from cardiac arrest at a young age. A final report stating how Brittany Murphy died may take up to eight weeks.

Dubai's financial crisis: a Q&A

Dubai, the gulf emirate that has grown explosively over the last decade, is now at the centre of markets' attention on fears that it could struggle to repay its debt.

Q. Where did Dubai go wrong? I thought it was in the "oil-rich Gulf"?

A. Dubai is part of the United Arab Emirates, seven city-states which have separate ruling families, separate budgets, but security, immigration and foreign policies in common. Abu Dhabi has nearly all the UAE's oil. To keep up, Dubai from the 1950s on diversified its economy into ports, trade, services and finance, largely successfully. But its liquidity-fuelled real estate and tourism binge in the last decade may have been one step too far.

Q. What is the extent of its problems?

A. The emirate has said it has $80bn of debts, though some analysts say the true figure could be double that. Dubai World, the state-owned holding company whose bail-out plans triggered the current crisis, has liabilities of about $60bn, though only part of that is debt. The main problem is its real estate subsidiary Nakheel, which has huge bonds coming due, including an Islamic bond for $3.5bn in December. It appears to have little cash flow to meet payments - as well as relying on debt, it also sold most developments off-plan, with new developments now on hold.

Q. The big market crash after Lehman Brothers folded was more than a year ago. Why has Dubai only just been hit?

A. The property crash hit Dubai at the time - house prices fell 50 pc in six months. Nakheel was known to be in trouble. But investors assumed that as a state-owned company it would not default on its debt. The government refused to issue detailed statements of how it was to handle Dubai World's debt problems, and rounded on those who said that the crash had undermined Dubai's development model.

This encouraged a belief that a rescue package was already in place, probably funded by Abu Dhabi. The statement on Wednesday that the government was asking for a six-month standstill on repayments implied the rescue was in doubt.

Q. Why hasn't Abu Dhabi come to Dubai's aid? It has the world's largest sovereign wealth fund.

A. Abu Dhabi has, via the federal central bank, bought one $10bn bond issued by the Dubai government earlier this year, and, via its own banks, bought another $5bn bond this week. But the latter came with a rider that it was not to be used for the Dubai World bail-out. This raises two questions: what are the other debts for which it is to be used? And how is the Dubai World debt to be met, even after the six-month delay, if Abu Dhabi will not fund the rescue package?

Q. What about other Dubai companies? How are they doing?

A. Dubai World owns DP World, the successful ports operator which bought P&O. Other arms of the Dubai government, and the ruling family's directly owned holding companies, also own successful companies such as Emirates Airlines and Jumeirah Hotels, as well as stakes in buildings and businesses around the world, including the London Stock Exchange. But the emirate's lack of transparency and relatively untested financial legal system means that no-one knows if these can be demanded as collateral against Dubai World and other government debts.

Q. Nevertheless, exposure of western banks to the debt seems quite small compared to the trillions of dollars to which we have become accustomed. Why the panic?

A. At the most basic level, fears that exposed banks will have to write down losses, and that both Dubai and Abu Dhabi may have to sell worldwide assets, has hit prices everywhere. At an "animal spirits" level, the disclosure of significant unforeseen problems in Dubai has refocused attention on where else might have hidden "black holes". The health of sovereign debt worldwide, already seen as the major financial issue for the next decade, is also being reexamined.

Q. Can Dubai survive?

A. Dubai is still seen as the premier place to do business in the Middle East and beyond. It is a preferred base for not just Arab but Pakistani, Iranian and even Indian businesses, due to the wider region's political uncertainty. Its reputation for liberal attitudes helps. But events this week have damaged its reputation for economic competence, which the emirate's rulers will now have to work hard to restore.

Markets crash on Dubai default fears

Dubai is shaking investor confidence across the Persian Gulf after it sought a six-month reprieve on debt payments that risked triggering the biggest sovereign default since Argentina in 2001. The move caused a drop on world markets on Thursday and raised questions about Dubai's reputation as a magnet for international investment.

In Europe, the FTSE 100, Germany's DAX and the CAC-40 in France opened sharply lower. Earlier in Asia, the Shanghai index sank 119 points, or 3.6%, in the biggest one-day fall since August 31. Hong Kong's Hang Seng shed 1.8%. Wall Street was closed for the Thanksgiving holiday and most markets in the Middle East were silent because of a major Islamic feast.

Stocks, bonds and currencies fell across developing countries. The MSCI Emerging Markets Index of stocks dropped 1.1%, led by declines in China and Russia.

The fallout came swiftly after Wednesday's statement that Dubai's main development engine, Dubai World, would ask creditors for a standstill on paying back its $60 billion debt until at least May. The company's real estate arm, Nakheel -- whose projects include the palm-shaped island in the Gulf -- shoulders the bulk of money due to banks, investment houses and outside development contractors.

In total, the state-backed networks nicknamed Dubai Inc are $80 billion in the red and the emirate needed a bailout earlier this year from its oil-rich neighbour Abu Dhabi, the capital of the United Arab Emirates.

``Nakheel is now standing on the brink of failure given the astonishing amount of cash Dubai would have to inject into it in order to see the enterprise survive,'' said Luis Costa, emerging-market debt strategist at Commerzbank AG in London. ``Events like this are a perfect storm.''

``Dubai's standstill announcement ... was vague and it remains difficult to discern whether the call for a standstill will be voluntary,'' said a statement from the Eurasia Group, a Washington-based research group that assesses political and financial risk

for foreign investors interested in Dubai. ``If it is not, Dubai World will be going into default and that will have more serious negative repercussions for Dubai's sovereign debt, Dubai World and market confidence in the UAE in general,'' the statement added.

``There is nothing investors dislike more than this kind of event,'' said Norval Loftus, the head of convertible bonds and Islamic debt at Matrix Group Ltd. in London, which manages $2.5 billion of assets including Dubai credits. ``The worst-case scenario will of course be involuntary restructuring on the Nakheel security that brings into question the entire nature of the sovereign support for various borrowers in the region.''

Moodys Investors Service and Standard & Poor's cut the ratings on state companies yesterday, saying they may consider state-controlled Dubai World's plan to delay debt payments a default. The sheikhdom, ruled by Sheikh Mohammed Bin Rashid Al Maktoum, borrowed $80 billion in a four-year construction boom that reduced its reliance on falling oil supplies and created the region's tourism and financial hub.

``Dubai is the most indicative of the huge global liquidity boom and now in the aftermath there will be further defaults to come in emerging markets and globally,'' said Nick Chamie, head of emerging-market research at Toronto-based RBC Capital Markets.

Famous Forex Quotes

1. “If you get in on Jones’ tip; get out on Jones’ tip”. If you are riding another person’s idea, ride it all the way.
   
   
2. Run early or not at all. Don't be an eleven o'clock bull or a five o'clock bear.
   
   
3. Woodrow Wilson said, "a governments first priority is to organize the common interest against special interests". Successful traders seek out market opportunities capitalizing on the reality that government's first priority is rarely achieved.
   
   
4. People who buy headlines eventually end up selling newspapers.
   
   
5. If you do not know who you are, the market is an expensive place to find out.
   
   
6. Never give advice-the smart don't need it and the stupid don't heed it.
   
   
7. Disregard all prognostications. In the world of money, which is a world shaped by human behavior, nobody has the foggiest notion of what will happen in the future. Mark that word-nobody! Thus the successful trader bases no moves on what supposedly will happen but reacts instead to what does happen.
   
   
8. Worry is not a sickness but a sign of health. If you are not worried, you are not risking enough.
   
   
9. Except in unusual circumstances, get in the habit of taking your profit too soon. Don't torment yourself if a trade continues winning without you. Chances are it won't continue long. If it does console yourself by thinking of all the times when liquidating early preserved gains you would otherwise have lost.
   
   
10. When the ship starts to sink, don't pray-jump!
    
    
11. Life never happens in a straight line. Any adult knows this. But we can too easily be hypnotized into forgetting it when contemplating a chart. Beware of the chartist's illusion.
    
    
12. Optimism means expecting the best, but confidence means knowing how you will handle the worst. Never make a move if you are merely optimistic.
    
    
13. Whatever you do, whether you bet with the herd or against, think it through independently first.
    
    
14. Repeatedly reevaluate your open positions. Keep asking yourself: would I put my money into this if it were presented to me for the first time today? Is this trade progressing toward the ending position I envisioned?
    
    
15. It is a safe bet that the money lost by (short term) speculation is small compared with the gigantic sums lost by those who let their investments "ride". Long term investors are the biggest gamblers as after they make a trade they often times stay with it and end up losing it all. The intelligent trader will . By acting promptly-hold losses to a minimum.
    
    
16. As a rule of thumb good trend lines should touch at least three previous highs or lows. The more points the line catches, the better the line.
    
    
17. Volume and open interest are as important to the technician as price.
    
    
18. The clearest and easiest way to determine a trend is from previous highs and lows. Higher highs and higher lows mark an uptrend, lower highs and lower lows mark a downtrend.
    
    
19. Don't sell a quiet market after a fall because a low volume sell-off is actually a very bullish situation.
    
    
20. Prices are made in the minds of men, not in the soybean field: fear and greed can temporarily drive prices far beyond their so called real value.
    
    
21. When the market breaks through a weekly or monthly high, it is a buy signal. When it breaks through the previous weekly or monthly low, it is a sell signal.
    
    
22. Every sunken ship has a chart.
    
    
23. Take a trading break. A break will give you a detached view of the market and a fresh look at yourself and the way you want to trade for the next several weeks.
    
    
24. Assimilate into your very bones a set of trading rules that works for you.
    
    
25. The final phase in a bull move is an accelerated runaway near the top. In this phase, the market always makes you believe that you have underestimated the potential bull market. The temptation to continue pyramiding your position is strong as profits have now swelled to the point that you believe your account can stand any setback. It is imperative at this juncture to take profits on your pyramids and reduce the position back to base levels. The base position is then liquidated when it becomes apparent that the move has ended.

Swiss Franc Hits 9-Month High Versus Euro

The Swiss franc, considered a refuge currency, benefited today from a rather risk averse scenario and gained versus several currencies, declining below less than 1.50 line versus the euro for the first time since March. Even if the Swiss currency is at rather considerably high levels, different from the last time it traded below 1.50 against the euro the Swiss National Bank did not intervened, as the outlook for the European single currency remained rather frustrating for another week. EUR/CHF traded at 1.4930 as of 19:41 GMT from a previous rate of 1.5015 yesterday.

Yen Falls on BOJ Low Rates Policy
The Japanese currency fell today versus the 6 main traded currencies in foreign-exchange markets after the nation's financial authority followed the global trend among wealthy nations and ruled out rate hikes for the short-term future, declining attractiveness for the Asian currency. After statements this week in the U.S. and the Eurozone affirming that interest rates will be maintained at very low levels for an extended period of time, this time, in Japan, the national central bank declared that interest rates are likely to remain at the current levels since inflation in the country still did not meet the targets which could provide grounds for a more hawkish monetary policy. The yen dropped versus all of the 16 main traded currencies, and still remains as the first option to fund carry trades, when an investors borrows money at a low cost to inject the capital in higher-yielding positions overseas. The Bank of Japan position following the European Central Bank and the Federal Reserve regarding borrowing costs is certainly affecting the yen's outlook, according to analysts. Even if such statements don't show up as a big surprise, the reaction on the yen charts was obviously negative. USD/JPY traded at 90.38 from an intraday rate of 89.94. EUR/JPY rose to 129.59 from 129.20.

The Nobel Peace Prize for 2009

The Norwegian Nobel Committee has decided that the Nobel Peace Prize for 2009 is to be awarded to President Barack Obama for his extraordinary efforts to strengthen international diplomacy and cooperation between peoples. The Committee has attached special importance to Obama's vision of and work for a world without nuclear weapons.

Obama has as President created a new climate in international politics. Multilateral diplomacy has regained a central position, with emphasis on the role that the United Nations and other international institutions can play. Dialogue and negotiations are preferred as instruments for resolving even the most difficult international conflicts. The vision of a world free from nuclear arms has powerfully stimulated disarmament and arms control negotiations. Thanks to Obama's initiative, the USA is now playing a more constructive role in meeting the great climatic challenges the world is confronting. Democracy and human rights are to be strengthened.

Only very rarely has a person to the same extent as Obama captured the world's attention and given its people hope for a better future. His diplomacy is founded in the concept that those who are to lead the world must do so on the basis of values and attitudes that are shared by the majority of the world's population.

For 108 years, the Norwegian Nobel Committee has sought to stimulate precisely that international policy and those attitudes for which Obama is now the world's leading spokesman. The Committee endorses Obama's appeal that "Now is the time for all of us to take our share of responsibility for a global response to global challenges."

Oslo, October 9, 2009

US says bin Laden sometimes slips into Afghanistan

Al-Qaida leader Osama bin Laden may periodically slip back into Afghanistan from his remote hideout in neighboring Pakistan, a senior White House official says, adding a new twist to the mystery of the elusive terrorist's whereabouts.

President Barack Obama's national security adviser, James Jones, said bin Laden, believed hiding mainly in a rugged area of western Pakistan, may be spending some time in Afghanistan, where he was based while plotting the Sept. 11 attacks on the United States.

But Obama's Pentagon chief, Robert Gates, said the U.S. has lacked good intelligence on bin Laden for a long time — "I think it has been years" — and did not confirm that he'd slipped into Afghanistan.

Jones and Gates spoke Sunday on separate TV interview shows as part of an administration effort to explain and defend Obama's new Afghan war strategy, which Gates said includes a focus on preventing al-Qaida from again gaining a foothold inside Afghanistan. A concern is that the Taliban, if permitted to regain power in Kabul, could facilitate a return of al-Qaida's leadership.

The failed hunt for bin Laden has been one of the signature frustrations of the global war on terrorism that former President George W. Bush launched after the Sept. 11 attacks. When U.S. forces ousted the Taliban regime in late 2001, bin Laden fled into Pakistan from his mountain redoubt. Despite being isolated, bin Laden has managed to periodically issue audio messages.

The main explanation given by both the Bush and Obama administrations for not getting bin Laden is that they simply don't know where he is.

"If we did, we'd go get him," Gates said Sunday.

Jones, a retired Marine general, stressed the urgency of targeting bin Laden and spoke of a renewed campaign to capture or kill him.

Asked on CNN's "State of the Union" whether the administration has reliable intelligence on bin Laden's whereabouts, Jones replied, "The best estimate is that he is somewhere in North Waziristan, sometimes on the Pakistani side of the border, sometimes on the Afghan side of the border."

Jones did not comment on the intelligence behind that estimate, nor did he cite a time period or describe more specifically bin Laden's apparent border crossings.

Gates told ABC's "This Week" that "we don't know for a fact where Osama bin Laden is," although he agreed that his likely location is North Waziristan.

That's part of the loosely governed Federally Administered Tribal Areas of northwest Pakistan where the border with Afghanistan is largely unrecognized and unmarked. There is little Pakistani government or military control in this remote region, and militants affiliated with al-Qaida can move freely across the frontier into Afghanistan.

The U.S. has targeted North Waziristan and other areas on the Pakistan side of the border with drone-launched missile strikes, killing substantial numbers of militants as well as Pakistani civilians. The Pakistani army has undertaken an offensive against Taliban militants in South Waziristan but it has not expanded the effort into North Waziristan.

Obama administration officials have often asserted, as did the Bush administration, that they believe bin Laden is being sheltered on the Pakistani side of the border, along with other senior al-Qaida leaders. But Jones broke new ground by saying publicly that the al-Qaida chief may at times have slipped back into Afghanistan.

Sen. John McCain, R-Ariz., made a somewhat similar, if less specific, remark Sunday about bin Laden's movements. He told NBC's "Meet the Press" that knowledgeable people have told him that bin Laden "moves back and forth."

Two Afghan provinces in the country's northeast held particular attraction for bin Laden in the 1990s: Kunar and Nuristan. The towering mountains there hid bin Laden training camps that date back to the Soviet occupation of Afghanistan in the 1980s. A longtime bin Laden ally, Gulbuddin Hekmatyar, holds sway in the area. U.S. troops have targeted Hekmatyar's security chief, Kashmir Khan, in Kunar.

During his years in Afghanistan as a guest of the Taliban, bin Laden operated mainly in the southern region around Kandahar.

Gates said he does not blame a lack of Pakistani cooperation for the absence of intelligence on bin Laden.

"No, I think it's because if, as we suspect, he is in North Waziristan, it is an area that the Pakistani government has not had a presence in, in quite some time," Gates said, adding that although the Pakistani government has its own priorities, any pressure it brings on the Taliban is helpful because it is in league with al-Qaida.

During a visit to Pakistan in late October, Secretary of State Hillary Rodham Clinton caused a stir by chiding Pakistani officials for failing to press the hunt for al-Qaida inside their borders. She said she found it "hard to believe" that no one in Islamabad knows where the al-Qaida leaders are hiding and couldn't get them "if they really wanted to."