Cairo, Egypt (The Media Line) – Egypt faces a risk-laden game of Beat the Clock as it tries to get its political house in order before its foreign currency reserves sink much more.

Reserves fell to $16.4 billion in January from about $36 million a year earlier, a drop that economists all agree imperils the economy and requires Egypt to seek support from external sources and make difficult decisions to cut back government spending and subsidies. But that will be difficult given the political situation.

Presidential elections are now scheduled for late May, preceded by a six-week election season. Meanwhile, a parliament dominated by Islamists is tussling over who will control the government with the interim military council. A dispute with the United States over foreign human rights activists detained in Egypt is threatening vital American aid to the country. In the meantime, no U.S. assistance is being transferred to the country.

The timetable looks even more challenging when the role of the International Monetary Fund (IMF) is factored in. Egypt’s Ministry of Finance is reportedly counting on the IMF’s executive board to approve a $3.2 billion facility towards mid-March, which will then go to parliament for approval about the time the presidential campaign is getting under way.

“Time is not on Egypt’s side and politics could be the prime suspect to derail or delay an IMF program or exacerbate dollarization and [foreign currency] outflows,” Bank of America Merrill Lynch analyst Jean-Michel Saliba said in a note to investors last week.

Concerns that Egypt’s political trajectory looks to be on a collision course with its financial needs came in the form a downgrade in its bond rating by Standard & Poor’s (S&P) on Feb. 10. S&P lowered its ratings to B from B+ on Friday, five notches into junk territory, and said further downgrades could be on the way.

“The negative outlook reflects our view that a further downgrade is possible if the government fails to stem the decline in reserves, or an uncertain policy environment and weak institutions emerge from the ongoing political transition,” S&P said. Moody’s and Fitch, two other bond-rating agencies, cut their ratings on Egypt earlier.

Diminishing foreign reserves may be the most immediate threat to Egypt’s economy, but it is not the only one. More than a year after the revolution that brought down Hosni Mubarak, economic growth has stalled, the number of visiting tourists has plummeted and foreign investment has evaporated, all of which is exerting huge economic pressure on the government at a time of political flux.

Bank of America Merrill Lynch estimated that Egypt’s drawdown of its foreign currency would slow to what it called a “more manageable” $500 million a month because the foreign capital that has been responsible for much of the decline has been nearly drained out of the country.

On the other hand, Egypt could also get a boost from a rare instance of foreign investment if France Telecom goes ahead with the purchase of a $2 billion stake in the Egyptian Company for Mobile Service, popularly known as Mobinil, which it agreed to buy from Egyptian entrepreneur Naguib Sawiris last week. If the transaction goes through, that money might be transferred to Egypt in March.

But Merrill also noted that Egypt’s finances look more precarious than the headline foreign reserves figures show. Taking out Egypt’s holdings of gold, reserves fall to $13.6 billion, which are equal to just 2.8 months of imports, Saliba wrote in the Feb. 16 note. Meanwhile, Egypt’s external financing needs could reach some $11 billion through June 2013, Finance Minister Momtaz el-Saieed said Feb. 10.

But accepting aid is politically problematic because the public looks askance at foreign assistance, especially from the U.S. Only 26 percent favor accepting American aid, according to a Gallup poll taken in December. The proportion willing to accept international aid rises to 50 percent (with 42 percent opposing) and those willing to accept it from fellow Arabs reaches 68 percent (28 percent opposing), Gallup found.

Egyptians don’t like aid because it usual comes with strings attached, such as unpopular economic reforms in the case of the IMF and maintaining the 1979 peace treaty with Israel, in the case of American assistance. Political opposition to foreign assistance caused the interim military government to reject the original offer of an IMF credit last spring, a decision many economists say has exacerbated the financial troubles in which Egypt now finds itself.

Parliament must approve an IMF loan, but Essam el-Erian, a leader of the Muslim Brotherhood’s Freedom and Justice Party, which dominates parliament, said his group may vote against it because it might impinge on Egyptian sovereignty. “Look at Greece,” el-Erian said in an interview with Bloomberg News this week. “Everybody is telling it what to do.”

Above and beyond accepting foreign financial assistance, the other remedies for Egypt’s foreign reserves ailment are all painful for politicians and the public alike.

One is bringing down the budget deficit. As the economy has shrunk and the government boosted handouts in the early days of the revolution to try and palliate the population, Egypt’s fiscal deficit has ballooned. Officials recently revised upward their forecast for the budget deficit for the fiscal year ending June 30 to 9.4 percent of gross domestic product.

The solution would be to cut spending, particularly costly and wasteful subsidies on food and energy. Indeed, the military government recently announced plans for $4 billion in spending cuts and the IMF and others providing aid will have their own list of fiscal measures. But political analysts suggest that will inevitably mean cuts to popular energy and food subsidies of the kind that have set off riots in the past.

Another remedy is devaluing the Egyptian pound. In spite of Egypt’s mountain of economic woes, the pound had shed only about 1 percent of its value over the past year as the central bank acted to shore up its value by raising interest rates and drawing down on reserves. But the bank’s options are narrowing as it is forced to devalue the pound, which will almost certainly lead to higher inflation.

Analysts see some positive elements in the Egyptian political scene. Saliba notes that the decision to move up the presidential vote to May reduces the length of the campaign season and the opportunity for grandstanding by candidates. Ahmed Galal, managing director of the Economic Research Forum in Cairo, maintains that the Muslim Brotherhood has taken a pragmatic line on subsidiary reform and supports free markets.

©2012. The Media Line. All Rights Reserved.

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Dallas, TX, United States (AHN Sports) – Radim Vrbata’s 25th goal of the season snapped a 1-1 tie late in the second period, and the Phoenix Coyotes added third period tallies by Raffi Torres and Derek Morris in the third to secure a crucial 4-1 victory over the Dallas Stars Tuesday night at the American Airlines Center.

The win is the third in a row for the Coyotes and fourth in the last five games, despite the fact they were playing their third game in four nights. They gain two ultra-important points in the Western Conference playoff chase and moves from a 10th-place tie with Dallas into a tie with Minnesota for the eighth and final playoff slot.

“That’s three games we’ve played how we want to play or how we have to play,” said Coyotes coach Dave Tippett. “We’ve got a lot of people really committed into doing things that make you win hockey games. We come in here on a back-to-back, I give our guys a lot of credit. They competed hard. They did a lot of little things right that make you win games.”

“I think we do the little things right,” added Vrbata, who also added an assist. “We had that break there but we regrouped and had a couple days of practice. I think that helped us a lot. Now we pay more attention to the details and you have everybody contributing. That’s the key to our group I think.”

The Stars had been 3-1-0 in their previous four, but had a difficult time generating offense against Phoenix goaltender Mike Smith, who made 28 saves for his 21st triumph of the season, already well-past his previous career-high of 15.

“Awful, atrocious, I don’t know,” said Dallas defenseman Sheldon Souray of the Stars’ performance. “We just didn’t rise to the occasion, and it’s frustrating and disappointing because we know what’s riding on the line here. We’re fighting that team for a playoff spot and we weren’t good enough tonight.”

“We weren’t very good again,” added Stars coach Glen Gulutzan. “Even with a real good goalie performance, we got outworked by a team that played last night. If you put up 45 shots and lost 2-1 because of an outstanding goaltender, you can live with those, but when you get outplayed and outworked and your goaltender stands on his head to keep it close, I got a big problem with that.”

Keith Yandle also scored for the Coyotes, while Michael Ryder found the back of the net for Dallas.

With Phoenix up 2-1 in the third period, Torres’ ninth goal of the season at 5:41 sealed the Stars’ fate. On a 3-on-2 rush into the Dallas zone, Michal Rozsival fed a nice pass from the right sideboards to Torres low in the left circle, and Torres’ wrist shot beat Stars goaltender Kari Lehtonen over the blocker.

Morris completed the scoring with his first goal of the season at 16:09 when Vrbata stole the puck from Dallas defenseman Philip Larsen behind the net and fed a pass out into the high slot, where Morris drilled a one-timer over Lehtonen’s glove.

“Before the third period, we talked that this is a good test for our team, how we’re going to react in a tight game, points that we have to have against a team that we want to leapfrog in the standings,” Tippett said. “Our guys came out and played accordingly and we got the win.”

Yandle put the Coyotes on the board first with his seventh goal of the season just 4:43 into the opening period when his slap shot from the left point deflected off one of several bodies causing a screen in front and bounced through Lehtonen’s pads.

The Stars tied it on Ryder’s team-leading 19th of the year at 2:34 of the second, on a shot that Smith would probably like to have back. Ryder sliced his way through several Coyotes before unleashed a quick wrist shot from the right face-off circle that squeezed under Smith’s blocker arm and in.

Later in the second, the Stars enjoyed a four-minute power play, but were unable to capitalize, despite generating three shots during the advantage.

“Every time a team kills a four-minute, it gives a big boost to that team, it kind of gives them some momentum,” said Dallas defenseman Stephane Robidas. “I thought we had good movement and we just couldn’t get one in.”

The Coyotes drew a spark from the penalty kill and wound up going ahead 2-1 on Vrbata’s 25th goal at 14:30. Seconds after an Eric Nystrom giveaway led to sustained Phoenix pressure in the Dallas zone, Rostislav Klesla threaded a nice pass from the left face-off circle to Vrbata in front for a re-direction that beat Lehtonen over the glove.

“I think it was a big momentum booster for us,” Tippett said of the big penalty kill. “I thought we were still doing some things very well in the game. Lehtonen made a big save on Whitney and then we ended up taking the four-minute minor. But getting the kill there and exhausting ourselves doing it was a boost to the rest of the guys on the bench.”

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Beijing, China Arieh O’Sullivan / The Me – The capture of Chinese construction workers by rebels in Sudan has presented China with an opportunity to flex its muscles and show it not so shy to use military force to protect its citizens abroad.

With literally millions of citizens abroad, the capture of some two dozen road workers in the Sudanese frontier seems hardly significant. But the Chinese government is taking it very seriously and Beijing immediately dispatched a “task force” to Sudan to “assist the rescue work,” a Chinese Foreign Ministry statement said.

Rebels in southern Sudan have taken hostage 29 Chinese workers building a highway. Conflicting reports said that some had been freed and that another 18 had evaded capture, but some may have been wounded in a firefight on Saturday between government troops and the rebel Sudan People’s Liberation Movement-North (SPLM-N) in South Kordofan.

The Chinese media, which are giving the affair wide coverage, have highlighted the fast-rising superpower’s shyness about protecting its citizens and investments abroad. Juxtaposed with the United States’ dramatic commando raid last week to free hostages held by pirates in nearby Somalia, the crisis puts Beijing in an uneasy position.

“The United States will not tolerate the abduction of our people,” U.S. President Barack Obama said succinctly after the raid by U.S. Navy seals.

China is in the midst of establishing its own version of protecting its citizens. The rethink over its traditional policy of non-interference emerged last year when it dispatched military aircraft and warships to rescue 30,000 of its citizens trapped in Libya’s civil war. So far, it has reacted to the current hostage crisis by calling on the relevant parties “to keep calm and exercise restraint, ensure the safety of the Chinese nationals and release them as soon as possible on the basis of humanitarianism,” in the words of the Foreign Ministry.

But it has also exerted enormous diplomatic pressure on Sudan to free the workers of the state-owned Power Construction Corp. of China, affiliated with Sinohydro Corp. In Beijing, Vice Foreign Minister Xie Hangsheng summoned a senior diplomat at Sudan’s embassy to deliver the message, the official Xinhua news agency said in a brief bulletin.

A statement from the workers’ employers, Sinohydro, said that it and the Chinese Embassy would “spare no effort in ensuring the personal safety of those abducted and rescuing them.”

“It is important for them not to lose credit. Something will happen,” Mirza David, chief executive officer of International Security Academy, which trains body guards to work in the Arab world, told The Media Line.

“They have the forces right there in the Gulf of Aden. Something will happen, not because they care about their citizens, but it’s an attempt to show force,” David said.

China has more than 100 companies and 10,000 personnel working in both north and south Sudan, according to Xinhua. Not showing concern for their lives would not go well back home.

Further, the evacuation of Chinese citizens out of Libya set a precedent for the Chinese government that it will take bigger steps to rescue its citizens from harmful situations. The Chinese have special forces available right there in the Gulf of Aden with its 10th naval task force with over 700 commandos aboard. They are there performing anti-piracy patrols and ship escorts.

David of the ISA said he has seen an increase in risk assessment by Chinese firms working abroad. Some of his graduates have opened personal protection schools in China where there has been surge in demand from the private sector for bodyguards, he said.

“Their attitude toward life is different than in the West. The fate of some two dozen Chinese being held hostage doesn’t move them so much. In Somalia there are lots of Chinese who have been held by pirates but the Chinese haven’t been so inclined to take any action there,” David said. “But now there could be some operation because their image might be shaken.”

David, a former Israeli commando, said this could prove to be an opportunity for China to shine since the forces holding the hostages were not likely professionals.

“An operation would probably be easy. They aren’t ‘big cannons’ there, and a raid would likely be successful. This is a chance to show that they are a superpower and they could do something for the image that you shouldn’t mess with the Chinese,” David said.

China is Sudan’s major trading partner, the largest buyer of Sudanese oil, and a key military supplier to the regime in Khartoum.

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Kabul, Afghanistan (AHN) – Allied forces suffered a day of heavy losses in Afghanistan Thursday in a helicopter crash that killed six U.S. Marines, and an attack Friday that killed four French service members, raising the possibility of France withdrawing its troops early.

The Marines were killed after their CH 53 helicopter crashed in Helmand province, according to military officials. The NATO-lead forces reported no enemy activity in the areas, but the Taliban claimed credit for bringing the copter down.

In a separate incident, an Afghan soldier killed four French service members and injured 15 others in eastern Afghanistan, French officials reported. French President Nicolas Sarkozy said he was suspending French training operations and combat help as a result.

Friday’s latest attack was the latest in a series of attacks on NATO forces by members of the Afghan army.

The cause of the helicopter crash, that occurred around midnight Kabul time (2:30 p.m.EST Thursday), is still under investigation.

NATO Secretary General Anders Fogh Rasmussen paid homage to those killed and injured, saying it was a “very sad day” for ISAF troops in Afghanistan and for France.

NATO is scheduled to withdraw its forces from Afghanistan by the end on 2014.

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Rome, Italy (AHN) – Italy’s banking system has a new “boss.”

Thanks to the country’s ballooning debt crisis, the Mafia is Italy’s biggest “bank,” according to a study by Confesercenti.

The country’s four mafia groups have expanded from their storied strongholds in the sun-baked “Mezzogiomo” south of Rome, and have spread their tentacles across the entire country, taking advantage of the economic crisis to purchase ailing businesses, “juice” others and charge large “vigs” to most.

Organized crime in Italy has generated an annual turnover of about $178.89 billion in profits and more than $100 billion euro in profits, making it the head “Capo” or biggest bank in Italy, the study found.

The country’s top crime groups, like the Sicilian Cosa Nostra, the Naples Camorra and the Calabrian “Ndrangheta, have long had a stranglehold on the Italian economy, generating profits equivalent to some 7 percent of national output.

Extortionate lending has become a sophisticated and lucrative source of income, alongside drug trafficking, arms smuggling, gambling and racketeering, according to the report released Tuesday.

The old style gangsters hanging out in bars, lurking in dark alleys and hiding in big black cars have been replaced by “reputable” bankers, lawyers and notaries, the report noted.

Small businesses, which have struggled to get credit during the economic recession, have turned to the mafia for loans, seeing no other choice.

The typical victims of extortionate lending are small businessmen and middle-aged shopkeepers.

The exorbitant “vigs” (interest) the Mafia charges for loans have many pushed against a wall and worried they might be “clipped.”

As the Mafia chiefs moved into new areas in Italy, they also moved into new businesses such as public health, transport and logistics.

Confescercenti, which represents 270,000 small-to-medium businesses, said the new technocrat government of Mario Monti must work to help firms retake territory occupied by the Mafia.

But it will be tough going as organized crime in Italy controls everything from gambling to construction to the disposal of industrial and residential waste.

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New York, NY, United States (AHN) – Verizon Wireless has announced plans to charge many customers a $2 convenience fee every time they pay their monthly bill.

The charge applies to any customer who pays their bill for that month by phone or online using a one-time payment on a debit or credit card. However, customers who agree to have an automatic recurring charge to their debit or credit card every month will not pay a fee.

In addition, customers can avoid the fee by paying at a Verizon store; mailing a check or by paying online or over the phone with an electronic check, or Verizon gift or rebate card.

Verizon (VZ, Fortune 500) is the nation’s largest wireless company with 91 million customers. Company officials said the fee would help to address the costs incurred by the company for customers who make single bill payments on their debit or credit cards.

Analysts say that payments by debit and credit cards cost more to process than other payment methods because of bank fees. The new fee takes effect on Jan. 15.

Although other wireless companies do not have a similar program, several do charge fees under certain circumstances.

Sprint charges certain customers who have a spending limit on their accounts a $5 monthly fee if they don’t enroll in a program to have automatic payments. T-Mobile charges customers a $5 fee if they make phone payments that involve speaking to a company representative.

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Las Vegas, NV, United States (AHN Sports) – Floyd Mayweather Jr. avoided trial on felony allegations stemming from a domestic disputed with his former girlfriend and their two children last year after striking a plea deal.

On Wednesday, Mayweather was sentenced to 90 days in a Las Vegas jail after pleading guilty to a reduced battery domestic violence charge and no contest to two harassment charges.

Mayweather also was ordered to complete 100 hours of community service and pay a $2,500 fine.

Mayweather was facing an evidence hearing Wednesday regarding charges of domestic violence brought by his ex-girlfriend, Josie Harris, who claimed that the 34-year-old undefeated American boxer hit her and threatened two of their children during an argument at her home in Sept. 2010.

The other charges in the case include felony counts of grand larceny, coercion and robbery.

Mayweather could have faced up to 34 years in prison had the case had gone into a full-blown trial.

Mayweather is set to report to jail on Jan. 6.

The sentence is light enough that the American prizefighter may be able to keep his target date of a super bout planned against Manny Pacquiao May 5.

Mayweather should be released from his sentence early if he gets credit for good behavior.

But observers have noted that the much-awaited clash penciled against the Filipino boxing icon could be delayed if Mayweather opts for some extra time to train.

Mayweather is 42-0 with 26 knockouts in his 15-year career.

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New York, NY, United States (AHN) – Wall Street stocks fell on the open Monday as doubts continued to linger that a deal over economic integration in Europe will not be enough to keep the region’s two-year sovereign debt crisis from spreading farther.

Last week’s summit in Brussels did not produce decisive initiatives, leaving the eurozone, and the rest of the world, prone to more shocks to already shaky financial systems.

Last week, Standard & Poor’s put 15 eurozone countries on a credit watch for a potential downgrade. The European Union had agreed to set stricter budget rules for the eurozone area and to provide up to €200 billion in bilateral loans to the International Monetary Fund in response to the crisis. But many still believe it is too little too late.

Just after 9:30 a.m., the Dow Jones Industrial Average fell 70 points, the Standard and Poor’s 500 Index dropped 8 points and the NASDAQ was off 31 points. Financials, oils and commodity related equities all tumbled.

Commodities also fell hard. Oil was down $1.43 to $97.95 a barrel, and gold was down $42. 80 in heavy selling to $1,674 a troy ounce.

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Washington, DC, United States (AHN) – Some struggling homeowners who are in foreclosure proceedings are getting a gift from an unlikely source: no eviction over the holidays.

Fannie Mae (FNMA, Fortune 500), Freddie Mac (FMCC, Fortune 500) say they will not evict anyone from Dec. 19 through Jan. 2. Joining in the moratorium are Chase (JPM, Fortune 500) Mortgage and Wells Fargo (WFC, Fortune 500), which will suspend evictions from Dec. 22 to Jan. 2.

Wells Fargo says that while it will suspend evictions on properties for which it wrote mortgages, it might not do so on mortgages from other banks that it services.

Bank of America (BAC, Fortune 500) did not give specific dates but said that it would avoid foreclosure sales, as well as evictions of homeowners or tenants, around the holidays of Thanksgiving and Christmas.

Terry Edwards, executive vice president of credit portfolio management for Fannie Mae, explained the rational for the moratorium in a statement.

“The holidays are meant for families to spend time together, especially if they’ve gone through the stress of financial challenges and foreclosure,” said Edwards. “No family should have to give up their home during this holiday season. Fannie Mae is committed to helping borrowers avoid foreclosure whenever possible and we encourage any homeowner who is having difficulty making their payment to reach out for help.”

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Chicago, IL, United States (AHN) – Antoin “Tony” Rezko, a former fundraiser and adviser to ex-Illinois Gov. Rod Blagojevich, has been sentenced to more than 10 years in prison after a lengthy extortion trial in Chicago.

Rezko, who also helped raise money for President Barack Obama, was convicted of extorting millions of dollars from state businesses in a “pay to play” scheme predicated on his close ties to the governor’s mansion.

Tuesday, Rezko was apologetic saying, “there are no words to describe the pain and regret” he feels.

“I come to ask for God’s forgiveness and the court’s mercy,” Rezko begged.

U.S. District Judge Amy St. Eve nonetheless sentenced him to 10 and a half years in prison, but he will get credit for almost five years already served behind bars while the trial dragged on.

The trial and conviction comes after a lengthy legal battle for Blagojevich who was accused to attempting to “sell off” President Barack Obama’s former U.S. Senate seat that became vacant when the Chicagoan moved into the White House. Blagojevich was the first governor in state history to be impeached, and the state Senate removed him from office in 2009. A retrial found him guilty on 17 counts including lying to the FBI.

“We clearly have a problem with public corruption in Illinois,” Assistant U.S. Attorney Christopher Niewoehner told the court.

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